FEDERAL TRADE COMMISSION v. AMG CAPITAL MANAGEMENT, LLC
No. 16-17197
United States Court of Appeals, Ninth Circuit
December 3, 2018
FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
FEDERAL TRADE COMMISSION,
Plaintiff-Appellee,
v.
AMG CAPITAL MANAGEMENT, LLC;
BLACK CREEK CAPITAL
CORPORATION; BROADMOOR
CAPITAL PARTNERS, LLC; LEVEL 5
MOTORSPORTS, LLC; SCOTT A.
TUCKER; PARK 269 LLC; KIM C.
TUCKER,
Defendants-Appellants.
No. 16-17197
D.C. No. 2:12-cv-00536-GMN-VCF
OPINION
Appeal from the United States District Court
for the District of Nevada
Gloria M. Navarro, Chief Judge, Presiding
Argued and Submitted August 15, 2018
San Francisco, California
Filed December 3, 2018
Opinion by Judge O’Scannlain;
Concurrence by Judge O’Scannlain;
Concurrence by Judge Bea
SUMMARY**
Federal Trade Commission
The panel affirmed the district court’s summary judgment, and relief order, in favor of the Federal Trade Commission (“FTC”) in the FTC’s action alleging that Scott Tucker’s business practices violated
Tucker’s businesses offered high-interest, short-term payday loans through various websites that directed approved borrowers to hyperlinked documents that included the “Loan Note” and the essential terms of the loan as mandated by the Truth in Lending Act (“TILA”). The FTC alleged that Tucker violated
The panel held that the Loan Note was deceptive because it did not accurately disclose the loan’s terms. Specifically, the panel held that the TILA box’s “total of payments” value was deceptive, and the fine print’s oblique description of the loan’s terms did not cure the misleading “net impression” created by the TILA box. The panel concluded that the Loan Note was likely to deceive a consumer acting reasonably under the circumstances.
The panel held that the district court had the power to order equitable monetary relief under
The panel held that the district court did not abuse its discretion in calculating the $1.27 billion award. The panel applied the burden-shifting framework of Commerce Planet, and concluded that the district court did not abuse its discretion when calculating the amount it ordered Tucker to pay.
The panel held that the district court did not err in permanently enjoining Tucker from engaging in consumer lending.
Judge O’Scannlain, specially concurring, joined by Judge Bea, wrote separately to suggest that the court rehear the case en banc to reconsider Commerce Planet and its predecessors, and the court’s interpretation of
pay monetary judgments styled as “restitution.” He would hold that this interpretation wrongly authorized a power that the statute did not permit.
Judge Bea concurred in the opinion because precedent compelled him to do so, but he wrote separately because he believed that this court’s precedent was wrong in that it allowed the panel to decide that the Loan Note was deceptive as a matter of law. See FTC v. Cyberspace.com, LLC, 453 F.3d 1196, 1200 (9th Cir. 2006). Judge Bea would hold that courts should reserve questions such as whether the Loan Note was “likely to deceive” for the trier of fact.
COUNSEL
Paul C. Ray (argued), Paul C. Ray Chtd., North Las Vegas, Nevada, for Defendants-Appellants.
Imad Dean Abyad (argued) and Theodore P. Metzler, Attorneys; Joel Marcus, Deputy General Counsel; David C. Shonka, Acting General Counsel; Federal Trade Commission, Washington, D.C.; for Plaintiff-Appellee.
FEDERAL TRADE COMMISSION v. AMG CAPITAL MANAGEMENT, LLC
No. 16-17197
United States Court of Appeals, Ninth Circuit
December 3, 2018
OPINION
O’SCANNLAIN, Circuit Judge:
We must decide whether the Federal Trade Commission Act can support an order compelling a defendant to pay $1.27 billion in equitable monetary relief.
I
A
Scott Tucker controlled a series of companies that offered high-interest, short-term loans to cash-strapped customers. He structured his businesses to offer these payday loans exclusively through a number of proprietary websites with names like “500FastCash,” “OneClickCash,” and “Ameriloan.” Although these sites operated under different names, each disclosed the same loan information in an identical set of loan documents. Between 2008 and 2012, Tucker’s businesses originated more than 5 million payday loans, each generally disbursing between $150 and $800 at a triple-digit interest rate.
The application process was simple. Potential borrowers would navigate to one of Tucker’s websites and enter some personal, employment, and financial information. Such information included the applicant’s bank account and routing numbers so that the lender could deposit the funds and—when the bill came due—make automatic withdrawals. Approved borrowers were directed to a web page that disclosed the loan’s terms and conditions by hyperlinking to seven documents. The most important of these documents was the Loan Note and Disclosure (“Loan
Note”),1 which provided the essential terms of the loan as mandated by the Truth in Lending Act (“TILA”). See
B
In April 2012, the Federal Trade Commission (“Commission”) filed suit against Tucker and his businesses in the District of Nevada.2 The Commission’s amended complaint alleged that Tucker’s business practices violated
that Tucker actually enforced. Thus, the Commission asked the court permanently to enjoin Tucker from engaging in consumer lending and to order him to disgorge “ill-gotten monies.”
In December 2012, the parties agreed to bifurcate the proceedings in the district court into a “liability phase” and a “relief phase.” During the liability phase, the Commission moved for summary judgment on the FTC Act claim, which the district court granted. In the relief phase, the court enjoined Tucker from assisting “any consumer in receiving or applying for any loan or other extension of Consumer Credit,” and ordered Tucker to pay approximately $1.27 billion in equitable monetary relief to the Commission. The district court instructed the Commission to direct as much money as practicable to “direct redress to consumers,” then to “other equitable relief . . . reasonably related to the Defendants’ practices alleged in the complaint,” and then to “the U.S. Treasury as disgorgement.” Tucker timely appeals and challenges both the entry of summary judgment and the relief order.
II
Tucker first argues that the district court wrongly granted the Commission’s motion for summary judgment finding Tucker liable for violating
A
Section 5 of the FTC Act prohibits “deceptive acts or practices in or affecting commerce.”
omitted). This consumer-friendly standard does not require the Commission to provide “[p]roof of actual deception.” Trans World Accounts, Inc. v. FTC, 594 F.2d 212, 214 (9th Cir. 1979). Instead, it must show only that the “net impression” of the representation would be likely to mislead—even if such impression “also contains truthful disclosures.” FTC v. Cyberspace.com LLC, 453 F.3d 1196, 1200 (9th Cir. 2006).
1
In this case, the Commission argues that Tucker violated
But the fine print below the TILA box was essential to understanding the loan’s terms. This densely packed text set out two alternative payment scenarios: (1) the “decline-to-renew” option and (2) the “renewal” option. Beneath the TILA box, the Loan Note stated: “Your Payment Schedule will be: 1 payment of [the ‘total of payments’ number] . . . if you decline* the option of renewing your loan.” The asterisk
By contrast, the “renewal” option would end up costing a borrower significantly more. Importantly, renewing the loan did not require the borrower to take any affirmative action at all; it was the default payment schedule. On the third line below the TILA box, the Loan Note read: “If renewal is accepted you will pay the finance charge . . . only.” And with each “renewal,” the borrower would “accrue new finance charges”—that is, an additional 30-percent premium. After the fourth renewal, Tucker would begin to withdraw the “finance charge plus $50,” and he would withdraw another such payment each subsequent period until the loan was paid in full.
To illustrate, consider again the example of the customer who wanted to borrow $300. The Loan Note’s TILA box would indicate that his “total of payments” would be $390, equaling $300 in principal plus a $90 finance charge. But he would be required to pay much more than that, unless he took the affirmative steps to “decline” to renew the loan.
Once again, these steps required him to wait three days after getting the cash, follow a link in a separate email, and agree at least three days before the due date to pay the full balance. If he failed to perform this routine, then he would owe yet another finance change (equaling another 30 percent of the borrower’s remaining balance) at the next due date. And if he simply let Tucker automatically withdraw the payments for the course of the loan, he would owe the $300 principal, plus ten separate finance charges, each equaling 30 percent of the borrower’s remaining balance. Altogether, a borrower following the default plan would pay $975 instead of $390.
2
We agree with the Commission that the Loan Note was deceptive because it did not accurately disclose the loan’s terms. Most prominently, the TILA box suggested that the value reported as the “total of payments”—described further as the “amount you will have paid after you have made the scheduled payment”—would equal the full cost of the loan. In reliance on this information, a reasonable consumer might expect to pay only that amount. But as we have described, under the default terms of the loan, a consumer would be required to pay much more. Indeed, under the terms that Tucker actually enforced, borrowers had to perform a series of affirmative actions in order to decline to renew the loan and thus pay only the amount reported in the TILA box.
The Loan Note’s fine print does not reasonably clarify these terms because it is riddled with still more misleading statements. First, the explanation of the process of declining to renew the loan is buried several lines below where the option to decline is first introduced. Second, nothing in the fine print explicitly states that the
which seems to require the borrower to perform some affirmative action. Third, between the sentence that introduces the decline-to-renew option and the sentences that explain the costly consequences of renewal, there is a long and irrelevant sentence about what happens if a pay date falls on a weekend or holiday. Thus, the fine print’s oblique description of the loan’s terms fails to cure the misleading “net impression” created by the TILA box.
3
Tucker suggests, however, that the Loan Note is not deceptive because it is “technically correct.” But the FTC Act’s consumer-friendly standard does not require only technical accuracy. In Cyberspace, we held that a solicitation was deceptive even though “the fine print notices . . . on the reverse side of the” solicitation contained “truthful disclosures.” 453 F.3d at 1200. Indeed, Cyberspace held that it was irrelevant that “most consumers [could] understand the fine print on the back of the solicitation when that language [was] specifically brought to their attention.” Id. at 1201. Just as in Cyberspace, consumers acting reasonably under the circumstances—here, by looking to the terms of the Loan Note to understand their obligations—likely could be deceived by the representations made there. Therefore, we agree with the Commission that the Loan Note was deceptive.
B
Tucker further contends that the district court erred because its narrow focus on the Loan Note fails to capture the “net impression” on consumers. The district court found that “any facts other than the terms of the Loan Note . . . and their presentation in the document are immaterial to a summary judgment determination.” But according to
Tucker, the court should have considered all of his loan disclosures and all of his communications regarding those disclosures.
Tucker’s argument wrongly assumes that non-deceptive business practices can somehow cure the deceptive nature of the Loan Note. The Act prohibits deceptive “acts or practices,”
C
Tucker next argues that summary judgment was also inappropriate because he demonstrated a genuine issue of material fact by presenting affirmative evidence from which a jury could find in his favor.
First, Tucker claims that the Commission introduced evidence that “contradicted” its theory of deception because four deposed consumers “had not read the loan disclosures” and “understood the disclosures upon reading them at their depositions.” Thus, Tucker argues that there is some evidence that consumers may not have regularly read the supposedly deceptive Loan Note. And if customers were not likely to read the Loan Note in the first place, the argument goes, then it cannot be likely to deceive them.
But Tucker once again misunderstands the consumer-friendly standards of
Second, Tucker claims that the expert testimony offered by Dr. David Scheffman demonstrated an “absence of confusion or deception.” Tucker’s counsel retained Dr. Scheffman, who earned his doctorate in economics at the Massachusetts Institute of Technology, to “opine on whether the economic evidence regarding borrower behavior” was consistent with the Commission’s theory of liability. He
designed his analysis “to test for any material difference in the behavior of inexperienced consumers that would indicate their understanding of the loan terms was different from highly experienced consumers.” In other words, he wanted to determine whether first-time borrowers behaved like those who took out multiple loans. If first-time borrowers behaved just like the repeat borrowers, Dr. Scheffman reasoned, then the first-time borrowers could not have been misled about the loan terms. Because there was a “near-perfect . . . correlation between payoff behavior” among borrowers, Dr. Scheffman concluded that the data were “inconsistent with the allegation that borrowers were misled.”
But Dr. Scheffman’s reasoning begs the question. Consistent payoff patterns among classes of consumers show, at best, that the consumers were similarly aware of their obligations. While Dr. Scheffman concludes that first-time borrowers were just as well informed as the repeat ones, it is equally plausible that the repeat borrowers were just as confused as those taking out their first loans. As the district court noted, the expert’s analysis simply assumed that repeat borrowers “plainly understood the loan terms.” He did not, however, offer any evidence “that repeat borrowers across loan portfolios knew they were dealing with the same enterprise.” To survive summary judgment, Tucker must identify some specific factual disagreement that could lead a fact-finder to conclude that the Loan Note was not likely to deceive. See Stefanchik, 559 F.3d at 929. Dr. Scheffman’s testimony offers only speculative analysis that could cut either way. See McIndoe v. Huntington Ingalls Inc., 817 F.3d 1170, 1173 (9th Cir. 2016) (“Arguments based on conjuncture or speculation are insufficient . . . .” (internal
quotation marks omitted)). Therefore, Dr. Scheffman’s testimony does not raise a genuine issue of material fact.4
D
We conclude that the Loan Note was likely to deceive a consumer acting reasonably under the circumstances. We are therefore satisfied that the district court did not err in entering summary judgment against Tucker as to the liability phase.
III
Tucker next challenges the relief phase determination that he must pay the Commission $1.27 billion. He urges that the district court did not have the power to order equitable monetary relief under
A
Tucker contends that the Commission “improperly use[d]
“injunction[s].”
Tucker’s argument has some force, but it is foreclosed by our precedent. We have repeatedly held that
Tucker responds that we should revisit Commerce Planet in light of the Supreme Court’s recent decision in Kokesh v. SEC, 137 S. Ct. 1635 (2017). In Kokesh, the Court determined that a claim for “disgorgement imposed as a sanction for violating a federal securities law” was a “penalty” within the meaning of the federal catch-all statute of limitations. 137 S. Ct. at 1639. Much like the equitable monetary relief at issue in this case, disgorgement in the securities-enforcement context is “a form of restitution measured by the defendant’s wrongful gain.” Id. at 1640 (citing Restatement (Third) of Restitution and Unjust Enrichment
Tucker suggests that Kokesh severs the line of reasoning that links “injunctions” to “equitable monetary relief.” We said in Commerce Planet, for instance, that by “authorizing the issuance of injunctive relief,” the statute “invoked the court’s equity jurisdiction.” 815 F.3d at 598 (citing Porter v. Warner Holding Co., 328 U.S. 395 (1946)). Therefore, we concluded,
A three-judge panel may not overturn prior circuit authority unless it is “clearly irreconcilable with the reasoning or theory of intervening higher authority,” Miller v. Gammie, 335 F.3d 889, 893 (9th Cir. 2003) (en banc), and such threshold is not met here. First, Kokesh itself expressly limits the implications of the decision: “Nothing in this opinion should be interpreted as an opinion on whether courts possess authority to order disgorgement in SEC enforcement proceedings.” Kokesh, 137 S. Ct. at 1642 n.3. Second, Commerce Planet expressly rejected the argument that
B
Tucker next argues that the district court abused its discretion in calculating the amount of the award. Under our
case law, we apply a burden-shifting framework. See Commerce Planet, 815 F.3d at 603–04. The Commission “bears the burden of proving that the amount it seeks in restitution reasonably approximates the defendant’s unjust gain,” which is measured by “the defendant’s net revenues . . . , not by the defendant’s net profits.” Id. at 603. If the Commission makes such showing, the defendant must show that the Commission’s approximation “overstate[s] the amount of the defendant’s unjust gains.” Id. at 604. Any “risk of uncertainty at this second step falls on the wrongdoer.” Id. (internal quotation marks omitted).
Tucker argues that the $1.27 billion judgment overstates his unjust gains. The court arrived at such figure based on the calculations of one of the Commission’s analysts. The analyst relied on data from Tucker’s loan management software to determine how much money Tucker received from consumers in excess of the principal disbursed plus the initial 30-percent finance charge. This surplus represented the amount of money that Tucker had received over-and-above the amount disclosed in the TILA box, which the Commission argued represented Tucker’s ill-gotten gains. The district court agreed, so the final sum it ordered Tucker to pay was calculated as follows: the sum of each consumer’s payments to Tucker, minus the sum of each consumer’s “total of payments” as disclosed in the TILA box, and minus certain other payments already made or to be made by other defendants.
Tucker responds that the district court erred because it ignored evidence of non-deception that should have reduced
however, Tucker has not pointed to specific evidence that indicates one way or another whether repeat customers were actually deceived. See supra Part II.C. Further, Tucker has not offered “a reliable method of quantifying what portion of the consumers who purchased [the product] did so free from deception.” Commerce Planet, 815 F.3d at 604. Therefore, the district court did not abuse its discretion when calculating the amount it ordered Tucker to pay.5
IV
Finally, Tucker challenges the district court’s decision to enjoin him from engaging in consumer lending. The text of
V
The judgment of the district court is AFFIRMED.
O’SCANNLAIN, Circuit Judge,
I write separately to call attention to our circuit’s unfortunate interpretation of the Federal Trade Commission Act. We have construed
I respectfully suggest that such interpretation is no longer tenable.
Because the text and structure of the statute unambiguously foreclose such monetary relief, our invention of this power wrests from Congress its authority to create rights and remedies. And the Supreme Court’s recent decision in Kokesh v. SEC, 137 S. Ct. 1635 (2017), undermines a premise in our reasoning: that restitution under
A
I would begin (and end) with the statute’s text. Section 13(b) states that “the Commission may seek, and after proper proof, the court may issue, a permanent injunction.”
If such text were not plain enough, the rest of
Further, “injunction” cannot reasonably be interpreted to authorize other forms of equitable relief, because Congress would have said so if it did. For example, the Employee Retirement Income Security Act (ERISA) authorizes litigants to seek both “to enjoin any act or practice” and “other appropriate equitable relief.”
If Congress could have used a broader phrase but “chose instead to enact more restrictive language,” then “we are bound by that restriction.” W. Va. Univ. Hosps., Inc. v. Casey, 499 U.S. 83, 99 (1991). Interpreting
B
1
Such sensible interpretation—that “injunction” means only “injunction”—makes good sense in the context of the “overall statutory scheme.” King v. Burwell, 135 S. Ct. 2480, 2490 (2015) (internal quotation marks omitted). While
Read together,
Worse still, awarding monetary relief under
Doubtless, Congress included
2
Commerce Planet’s attempt to reconcile its interpretation of
I would end the inquiry here, for “[w]hen the words of a statute are unambiguous,” the “judicial inquiry is complete.” Conn. Nat’l Bank v. Germain, 503 U.S. 249, 254 (1992) (internal quotation marks omitted). But even assuming arguendo that the word “injunction” authorizes “equitable relief,” that still does not answer the question.
The Supreme Court has held that statutes authorizing equitable relief limit federal courts only “to those categories of relief that were typically available in equity during the days of the divided bench.” Montanile v. Bd. of Trs. of Nat’l Elevator Indus. Health Benefit Plan, 136 S. Ct. 651, 657 (2016) (internal quotation marks omitted).2 And as the Supreme Court has noted, “not all relief falling under the rubric of restitution is available in equity.” Great-West, 534 U.S. at 212; see also Restatement (Third) of Restitution and Unjust Enrichment § 4, cmt. a (2011) (“The most widespread error is the assertion that a claim in restitution or unjust enrichment is by its nature equitable rather than legal.”). In this case, because restitution under
A
Under the Supreme Court’s decision in Kokesh v. SEC, 137 S. Ct. 1635 (2017), restitution under
public laws.” Id. at 1643. Second, disgorgement is “punitive” rather than “remedial.” Id. at 1644. With respect to this second characteristic, the Court elaborated that it is “ordered without consideration of a defendant’s expenses that reduced the amount of illegal profit,” so it “does not simply restore the status quo [but] leaves the defendant worse off.” Id. at 1644–45. Third, disgorgement is “not compensatory” because some “funds are dispersed [sic] to the United States Treasury.” Id. at 1644.
Restitution under
Restitution under
B
Nor does restitution under
Commerce Planet, however, refused to limit restitution under
The only traditional equitable remedy to which restitution under
a “fiduciary relationship” with such borrowers. More fundamentally, however, the Commission cannot possibly claim that it seeks to recover “monies owed by the fiduciary or other wrongdoer . . . which in equity and good conscience belong[] to the plaintiff”—here, the Commission. 1 Dobbs, § 4.3(b), at 608 (emphasis added). In sum, restitution under
C
Commerce Planet wholly avoided the historical analysis required by cases like Great-West and Montanile. Relying on the Supreme Court’s decision in Porter v. Warner Holding Co., 328 U.S. 395, 398 (1946), we reasoned that
But such reasoning conflicts with the Supreme Court’s repeated admonitions that the equitable powers of federal courts must be hemmed in by tradition. For instance, in Grupo Mexicano de Desarrollo, S.A. v. All. Bond Fund, Inc., the Court interpreted the scope of the equitable jurisdiction of the federal courts under the Judiciary Act of 1789. 527 U.S. 308 (1999). There, the Supreme Court squarely
rejected the dissenting Justices’ argument that the “grand aims of equity” allowed “federal courts [to] rely on their flexible jurisdiction in equity to protect all rights and do justice to all concerned.” Id. at 342 (Ginsburg, J., dissenting) (internal quotation marks omitted). In “the federal system,” the majority reasoned, “that flexibility is confined within the broad boundaries of traditional equitable relief.” Id. at 322. Indeed, the Court has reiterated similar concerns in other recent cases. E.g., North Carolina v. Covington, 137 S. Ct. 1624, 1625 (2017) (“Relief in redistricting cases is fashioned in the light of well-known principles of equity.” (internal quotation marks omitted)); eBay Inc. v. MercExchange, LLC, 547 U.S. 388, 394 (2006) (“[Equitable] discretion must be exercised consistent with traditional principles of equity, in patent disputes no less than in other cases governed by such standards.”). Such cases show that we may not simply
III
I acknowledge that several other federal courts have agreed with our circuit’s interpretation of
restitution under
IV
Just last year, Justice Kennedy explained in Ziglar v. Abbasi that the Supreme Court once “followed a different approach to recognizing implied causes of action than it follows now.” 137 S. Ct. 1843, 1855 (2017). Under this “ancien regime,” the Court described, it was assumed “to be a proper judicial function to provide such remedies as [were] necessary to make effective a statute’s purpose.” Id. (internal quotation marks omitted). Since those days, however, the Court has “adopted a far more cautious course before finding implied causes of action.” Id. at 1855. Under Ziglar, if “a party seeks to assert an implied cause of action under the Constitution itself” or “under a federal statute, separation-of-powers principles are or should be central to the analysis.”
Id. at 1857. So too here, the principle that must guide our analysis is that Congress—not the courts—should dictate rights and remedies in our federal system. See id. (“The question is ‘who should decide’ whether to provide for a damages remedy, Congress or the courts? The answer most often will be Congress.” (internal quotation marks and citation omitted)); Armstrong v. Exceptional Child Ctr., Inc., 135 S. Ct. 1378, 1385 (2015) (“The power of federal courts of equity to enjoin unlawful executive action is subject to express and implied statutory limitations.”); Alexander v. Sandoval, 532 U.S. 275, 286 (2001) (“The judicial task is to interpret the statute Congress has passed to determine whether it displays an intent to create . . . a private remedy.”).
Heedless of such instruction, we have implausibly construed the word “injunction”
We should rehear this case en banc to revisit Commerce Planet and its predecessors.
BEA, Circuit Judge, specially concurring:
I concur in the opinion because our precedent1 compels me to, but I write separately to acknowledge that the question whether something is “likely to deceive” is inherently factual and should not be decided at the summary judgment stage.
Summary judgment is proper only when there exists no genuine issue of material fact. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). A dispute of a material fact is “genuine” if the “evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id. at 248. In other words, in this case, to affirm the district court’s grant of summary judgment, we must conclude from the proofs presented that no reasonable juror could find other than that a reasonable consumer would likely be deceived by the Loan Note. This is difficult to do when the whole of the Loan Note is read. It is undisputed that a careful reading of the Loan Note and its fine print reveals the automatic renewal feature, whereby borrowers’ loans would be automatically renewed unless they navigated to a link sent to their email and chose to pay their total balance. Because the Loan Note includes truthful disclosures, we can say it is “likely to deceive” as a matter of law only by positing two scenarios: (1) it is unreasonable as a matter of law to expect the average consumer to read all the words of the Loan Note, including the fine print, or (2) as a matter of law, it is unreasonable to expect the average consumer to understand all the words of the Loan Note in the manner in which they are displayed.
.As to the first point, I know of no authority that says consumers need not read the fine print of their contracts; such a holding would certainly imperil the validity of many insurance contracts. And as to the second point, to say it is unreasonable to expect the average consumer to understand the words of the Loan Note in the manner in which they are displayed, we would have to recognize either that the three judges of this panel are better text readers than is the average consumer or that judges are not average consumers. I don’t know of any authority for recognizing either assertion.
Indeed, we, a panel of three judges, have read and understood the terms of the Loan Note. We have not been deceived. Yet, we hold that the Loan Note is likely to deceive the average consumer as a matter of law.
Under this court’s precedent, I accept that we may decide that the Loan Note is deceptive as a matter of law under
If something is “likely to deceive,” it means it will more probably than not deceive. To predict what is “likely” to happen is to predict an event. An event is a fact, yet to occur. It did not occur when we read the Loan Note. I am at a loss to understand how we can find it would ineluctably occur in
the case of an average reasonable consumer. It seems the event may occur or may not occur. If so, whether it occurs in every case can be disputed. Disputed factual questions are reserved for juries, not for district judges acting alone nor for a panel of appellate judges. Thus, while our precedent obliges me to concur in this case, I think our precedent is wrong. Courts should reserve questions such as whether the Loan Note is “likely to deceive” for the trier of fact.