Smith v. BAC Home Loans Servicing, LP
2011 U.S. Dist. LEXIS 26104
S.D.W. Va2011Background
- Plaintiff Marion Smith had a loan with Countrywide on June 26, 2007, secured by a Deed of Trust on her West Virginia home; BAC later serviced the loan.
- Plaintiff defaulted in October 2008; she received notices indicating impending foreclosure in May and June 2009.
- BAC purportedly approved a loan modification on July 11, 2009 and plaintiff signed and returned documents; BAC concedes it received them.
- Plaintiff contends she made timely payments under the modification beginning September 2009; BAC later claimed default in December 2009 and foreclosure was scheduled for February 2010.
- Plaintiff filed suit February 9, 2010 in Jackson County, WV federal court asserting breach of contract (later withdrawn) and WVCCPA claims under West Virginia Code §§ 46A-2-127 and 46A-2-128; BAC removed seeking federal preemption and, later, summary judgment.
- Court denied BAC’s summary judgment on WVCCPA claims, holding no obstacle preemption under NBA/OCC regulations was shown; case proceeded on remaining issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether WVCCPA claims are preempted by federal banking law | Smith argues WVCCPA claims are not preempted as they target general, non-field-specific consumer protections. | BAC argues NBA/OCC preempts WVCCPA claims as obstacle to real estate lending powers. | WVCCPA claims are not preempted; obstacle preemption not established. |
| What deference to OCC preemption regulation is appropriate post-Wyeth | Wyeth requires Skidmore-like deference to agency views on preemption. | OCC preemption regulation should be treated as controlling preemption law. | OCC view given Skidmore deference; not controlling, reducing weight of OCC preemption guidance. |
| Does the record show genuine disputes of material fact on WVCCPA claims | Documentation and communications show unresolved issues about default status and modification. | Disputes are not material; evidence supports preemption rationale. | There are genuine disputes on WVCCPA claims; summary judgment denied on that basis. |
Key Cases Cited
- Wyeth v. Levine, 555 U.S. 555 (U.S. 2009) (two cornerstones of preemption: congressional purpose and state police power presumption)
- Watters v. Wachovia Bank, N.A., 550 U.S. 1 (U.S. 2007) (national banks are subject to state laws of general application not conflicting with the NBA)
- Medtronic, Inc. v. Lohr, 518 U.S. 470 (U.S. 1996) (Congress's purpose as touchstone for preemption; structure and purpose show intent)
- Cipollone v. Liggett Grp., Inc., 505 U.S. 504 (U.S. 1992) (clear and manifest purpose required for preemption; historical context)
- Hillsborough County v. Automated Medical Labs., Inc., 471 U.S. 707 (U.S. 1985) (obstacle preemption; state law as obstacle to federal objectives)