Kelen v. World Financial Network National Bank
763 F. Supp. 2d 391
S.D.N.Y.2011Background
- In January 2009, Kelen opened a dressbarn credit account with World Financial National Bank.
- In May 2010, Kelen amended the complaint asserting a TILA violation for lack of conspicuous disclosure of finance charge and APR in the initial disclosure statement.
- Plaintiff does not allege actual damages but seeks a permanent injunction and maximum statutory damages under 15 U.S.C. § 1640(a)(2).
- World Financial moved to dismiss under Rule 12(b)(6), arguing plaintiff cannot recover statutory damages for the alleged TILA violation.
- The court held that the relevant conduct is not recoverable as statutory damages and that plaintiff lacked an adequate remedy at law or irreparable harm for injunctive relief.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether statutory damages are available for the alleged TILA violation. | Kelen argues § 1632(a)/Regulation Z trigger damages under § 1640(a)(2). | World Financial contends § 1640(a) lists only specific violations, excluding § 1632(a) or § 226.5(a)(2). | Statutory damages not available; § 1640(a) is a closed list. |
| Whether the alleged Regulation Z 'more conspicuous' violation supports damages. | Kelen contends violation falls within § 1640(a) via Regulation Z. | World Financial argues § 226.5(a)(2) is not within the § 1640(a) enumerated list. | Not recoverable under § 1640(a); Regulation Z not on the enumerated damages list. |
| Whether § 1637(a) incorporation implies statutory damages for the alleged disclosure form issue. | Kelen argues § 1637(a) implicitly incorporates 'more conspicuous' requirement. | World Financial argues § 1637(a) does not require such conspicuity and reading it in would counter congressional intent. | No damages via implied incorporation; not supported by statute. |
| Whether plaintiff can obtain injunctive relief given lack of damages or irreparable harm. | Kelen seeks equitable relief despite no alleged injury. | World Financial argues irreparable harm requirement is not met and no adequate remedy at law exists. | Injunctive relief denied due to lack of meritorious claim and irreparable harm. |
Key Cases Cited
- Brown v. Payday Check Advance, Inc., 202 F.3d 987 (7th Cir.2000) (statutory damages under § 1640(a) limited to enumerated violations)
- McDonald v. Checks-N-Advance, Inc. (In re Ferrell), 539 F.3d 1186 (9th Cir.2008) (derivative form arguments rejected; § 1640(a) confines damages to specified violations)