*1 (1986)). Pa. compel
Nieves asks this Court in partic- to exercise its discretion
Board him way by granting parole.
ular concludes,
majority correctly, that Nieves deny to such relief. I would entitled petition
his on that basis and omit what is
essentially regarding dicta the merits of policy challenge
his Board’s restrict-
ing places paroled where sex offenders
may reside.
PENNSYLVANIA DEPARTMENT OF
BANKING, and Commonwealth
Pennsylvania, Acting by Attorney Corbett, Jr.,
General Thomas W.
Plaintiffs
v. DELAWARE, LLC, OF
NCAS Ad- d/b/a Centers,
vance America Cash Advance
and Advance America Cash Advance
Centers, Inc., Defendants. Pennsylvania. Court of
Argued Nov. April
Decided *3 Abel,
John M. Deputy Attorney Sr. Gen- eral, Harrisburg Byer, and Robert L. Pittsburgh, plaintiffs. Pittinsky, David H. Philadelphia, for de- fendants. LEADBETTER,
BEFORE:
President
McGINLEY,
Judge,
Judge,
PELLEGRINI, Judge, COHN
JUBELIRER,
SIMPSON,
Judge,
Judge,
LEAVITT,
BUTLER,
Judge, and
Judge.
BY Judge
OPINION
McGINLEY.
Presently before this
pre
Court are the
(P.O.s)
liminary objections
NCAS
Delaware,
(NCAS)
LLC
Advance Amer
(Advance
ica Cash Advance Centers
Amer
ica) 2, and Advance America Cash Advance
Centers,
(AA)3 (collectively,
Inc
Defen
liability
plaint,
NCAS is a
limited
Paragraph
“Delaware
com-
at
pany
engaged
lending
Department
Banking’s
that was
in the
(Department)
business
alle-
Commonwealth_”
throughout
gations
against
Amend-
are
“Advance America” in
16, 2008,
Complaint,
Paragraph
ed
December
Count 1 and Count 2 of the Amended Com-
Therefore,
8 at 4.
plaint.
this Court shall use the
“Depart-
word "Advance America” and the
2. Advance America is a fictitious name used
addressing
ment” when
to those
P.O.s
by
NCAS to conduct loans in
counts.
registered
foreign
"and
corpo-
as a
business
Pennsylva-
ration with the
corporation
Commonwealth of
3.AA is a "Delaware
cor-
nia,
State,
Department
porate
Corporations
headquarters
135 North
at
Church
Street,
Opposition
Spartanburg,
Bureau ...” See Plaintiffs' Brief in
South Carolina 29306.”
Preliminary Objections
Complaint, Paragraph
Defendants’
to the
Amended
"Ad-
wholly
subsidiary
at 4 and Amended Com-
vance America is a
owned
contracting for or
dants)
charging, collecting,
filed
complaint
amended
receiving
charges
‘interest ....
fees
and the
Department
Plaintiffs).4
which aggregate
or other consideration’
(collectively,
of the maximum allowable in-
excess
Complaint.
Original
Matter:
I. Prior
terest
rate that an unlicensed lender
permitted
charge
under
Sep-
would
first commenced on
This matter
Pennsylvania law on the amount loaned
when the
tember
Department avers
or advanced. The
Cash
complaint against
NCAS
filed
d/b/a
product
credit
offered
line of
Ad-
alleged
Cash
Advance Centers
*4
Advance
is a loan or ad-
Cash
Centers
Dis-
vance
violated
Consumer
Centers
or credit
money
vance of
within
(CDCA)5
Act
Company
count
3(A)
CDCA,
of
of the
7
meaning
section
Protection Law
Loan
Interest
6203(A).
§
Advance
P.S.
Cash
Centers
(LIPL).6
has not obtained a license from the Sec-
that on
alleges
further
complaint
The
to the
retary
Banking pursuant
20, 2006, the
Advance Cen-
June
Cash
CDCA.
line of credit
began to offer a new
ters
Additionally,
Department
alleges
was not in
Pennsylvania
in
product
LIPL,
pursuant to Section 201 of the
41
with a bank. Under Cash
partnership
201,
§
P.S.
Advance Centers
Cash
line of credit
Advance Centers’ new
charging
from
for its line of
prohibited
is
line
provided
credit
is
product,
$500
interest, fees,
products
charges
credit
or
borrowers.
qualifying
Pennsylvania
aggregate
other
in
consideration
charges interest
Advance Centers
Cash
(6%). (footnote
percent
excess of six
simple
in the form of
on the advances
omitted).
daily periodic rate that
interest at a
Pennsylvania Department
Banking v.
percentage
to an annual
corresponds
(NCAS I),
Delaware,
931
NCAS
LCC
addition,
5.98%.In
Cash Advance
rate of
771,
(Pa.Cmwlth.2007), affirmed,
A.2d
monthly
borrowers a
charges
Centers
(2008).
638,
596 Pa.
vides a credit connection with advance. It is requested injunc- has charge inextricably related permanently enjoin tive relief to Cash actually ‘amount loaned or advanced.’ continuing Advance Centers from Accordingly, Advance Centers’ un- Cash lending activities in the Commonwealth lending practices licensed violate Section collecting and from on 3(A) 6203(A). CDCA, currently lines of credit or loans out judgment motion on Department’s standing in the Commonwealth of pleadings regard to the CDCA Pennsylvania pursuant to the vi CDCA granted and Cash Advance Centers’ Department’s requested olation. The *5 cross-motion [Advance America’s] for injunctive granted long relief is for as judgment pleadings on the is denied as continues.[ as the 7 ] of violation the CDCA to the CDCA. (emphasis original and added and omitted). footnote 3(A) CDCA, Unlike which Id. at 779-81. provides aggregation for the and offees charges, the plain language of Section II. Present Matter: Amended LIPL, 201 of the makes Complaint. aggregation no mention of the of fees 16, 2008, On December Plaintiffs filed an charges, and but instead refers complaint alleged: amended ’. ‘lawfulrate of interest development Without the an eviden- of 11. AA has conducted trade or com- record, tiary this Court is constrained to Pennsylvania merce in through Ad- conclude at early stage pro- through vance America and another ceedings, the record does not establish subsidiary using the “Advance Amer- Monthly Participation Fee ica” brand (“Subsidiary”), (emphasis should be considered sham in- $119.95 which, terest combined with the stated 5.98%, interest rate establishes a vio- LIPL, 27, 2006, lation Section 201 15. operated Until March AA II P.S. Therefore, 201. the Department’s Pennsylvania through Subsidiary judgment motion pleadings on the registered that had as a loan broker Act[8] regard to the LIPL is denied. under the Credit Services ... 73 Similarly, 2181-2192, §§ this Court does not have suffi- P.S. capacity AA cient information before it to having operated conclude described itself as “as that the LIPL does prohibit marketing, processing, servicing Cash I, permanent injunction In NCAS en- ed the maximum interest rate or fee limita- joined Pennsylvania Cash Advance Centers Amer- tions under law. [Advance charging from ica] consumers Monthly Participation engag- Fees and from 8. Act of December ing practice other business violat- amended. charged interest on these advances in Deposit Insurance of a Federal agent (“FDIC”) daily supervised simple insti- the form Corporation periodic corresponds cash advances rate that to an an- payday tution that offered (Quoting loans.” from rate of percentage and installment nual 5.98%. addi- 8-K, tion, filed with United States charged AA Form Advance America borrow- Exchange Commission “Monthly Participation Securities Fee” of ers 2006). June month. per $149.95 FDIC-supervised institution 15, above, was a paragraph described in 22. At all times Advance America of- located the Commonwealth bank outside product its line credit in Penn- fered Pennsylvania, AA operated sylvania, acting Advance America was theory manner on the above-described agent, (emphasis as AA’s location of the bank that the out-of-state directed, controlled, AA supervised, Subsidiary to broker permit would authorized, formulated, approved, rati- loans with interest rates deter- payday fied, from, and participated benefitted than mined the laws of a state other prac- in Advance America’s acts and Pennsylvania pur- the Commonwealth Pennsylvania, tices in add- law and to avoid inter- suant to federal ed). caps imposed rate and fee Penn- est 24. Advance America the line sylvania payday law on loans offered product acting credit in concert with Subsidiary offered to resi- AA in furtherance of their ef- common using this method. dents *6 pursuant forts and to a common design ... reported 17. As in the AA Form AA to with circumvent the maximum lending bank “the FDIC instructed interest rate and fee limitations under Pennsylvania for ... to discontinue of- law, Pennsylvania and with AA’s sub- and alter- fering payday cash advances assistance objective, stantial toward this they native credit if could not products added). (emphasis con- adequately address the FDIC’s in- response In to the FDIC’s cerns. 25. Both Advance America and AA structions, lending Pennsyl- for bank financially through Advance benefited payday vania ceased its cash advance offering America’s the line credit of of originations loan as of installment products Pennsylvania, (emphasis the close of business on March 2006.” added).
DEFENDANTS’ BUSINESS PRAC- I: COUNT TICES VIOLATION OF THE CONSUMER DISCOUNT COMPANY ACT 20, 2006, Advance Amer- 18. On June a began offering ica (Commonwealth Defendants) vs. All product, part- new line credit not in of bank, place with a its nership of products, (emphasis
prior payday loan product 28. The line credit of offered added). Advance a loan or ad- by America was money or credit within the 19. Advance America’s line of vance Under of meaning A product, provid- Advance America Section 3. the Consumer credit of of Act, ... 7 P.S. qualifying Company credit line to Penn- Discount ed $500 added). § sylvania (supp.2006). (emphasis Advance America 6203.A borrowers. II: America has never ob- COUNT 29. Advance Secretary a license tained THE VIOLATION OF LOAN INTER- of from to the Dis- Banking pursuant Consumer EST AND PROTECTION LAW added). (emphasis Act. Company count (Commonwealth Defendants) or federal
30. No other vs. All to Advance America au- applicable law charge thorized Advance America to 42. Section 201 of the Loan Interest “Monthly Participation Fee” of $149.50 Law, § ... and Protection interest rate of
together approx- with an provides that the maximum rate lawful line imately 5.98% to consumers for a of of annual interest for the loan or use of product. credit $50,000 money an amount of or less is Advance 31. Because was not America 6 per cent. pursuant
licensed Consumer Dis- Act, Company Advance America count fact, 44. the interest Advance Amer- prohibited charging was from charged ica under the line credit interest, product fees, credit line of product higher was much an than an- charges ag- or other consideration with percentage nual rate 5.98% because gregate in excess the annual “Monthly Participation Fee” awas per cent rate under Section sham, the true nature which was Law, the Loan Interest and Protection illegal, usurious interest in violation of January Act P-L. P.S. II the maximum allowable annual interest (emphasis rate under Section 201 the Loan In- Law, terest and Protection P.S. II 36. AA is bound claims or is- [July determined sues Order 45. AA rendered substantial assistance
2007], privity because AA is in to Advance America to establish loan America Advance and because Advance centers and prod- line credit offer *7 AA, agent America acted as the un- that, uct in knowing of the Commonwealth control, der AA’s authority, AA’s through product, line credit Ad- of direction, added). and at (emphasis AA’s charging vance America was illegal,
usurious violation of (em- Loan Interest and Protection Law. 38. the Commonwealth en- Until added). phasis July tered the Order of Ad- vance America continued to do business throughout loan centers the Common- III: COUNT Pennsylvania.
wealth of VIOLATION OF THE CONSUMER
PROTECTION LAW By illegally 39. charging consumers of Defendants) (Attorney General vs. All product “Monthly
its line of credit a Participation together Fee” of $149.50 approximately
with an interest rate of 49. Advance America’s violation of 5.98%, injured Advance America has Act, Company Consumer Discount as economic health and well-being of Court, by the Commonwealth found Commonwealth’s citizens. well as the violations the Loan Inter- of Law, est and Protection as set forth represented 58. Defendants to consum- above, se violations per constitute of charge the finance under the Protection ers Consumer of when in product line of credit was 5.98% Law, 201-2. higher the rate was much and was fact “Monthly Par- disguised as the $149.95 practices and con The above acts ticipation higher Fee” to hide the actual competition methods stitute unfair of rate of interest. deceptive prac acts and unfair 201-3 by Section prohibited tices of the eco- injured 61. Defendants have Law[9] among by, Protection Consumer well-being nomic health and of the Com- added): things (emphasis other by illegally charg- monwealth’s citizens (a) or Causing likelihood of confusion an interest ing consumers source, misunderstanding as to the rate in excess of that allowed under the certification approval or sponsorship, Interest Protection Law and Loan services; goods or rate as by disguising actual interest (b) of confusion or Causing likelihood “Monthly Participation Fee” affiliation, misunderstanding as to $149.50. with, cer- or association or connection 62. Advance America and AA have another; by, tification financially, benefited to the detriment of (c) goods or ser- Representing that consumers, by operating approval, sponsorship, vices have and have illegally the Commonwealth uses, characteristics, ingredients, ben- unjustly. retained these benefits they not quantities or do efits person sponsor- have that a has or practices The above acts and con- status, affiliation, or ship, approval, competition methods stitute unfair have; connection that he does deceptive acts or and/or unfair and, prohibited by Section 201-3 practices (d) in other or Engaging fraudulent by, Protection Law the Consumer which creates a deceptive conduct added): among things (emphasis other or misun- likelihood of confusion (a) or Causing likelihood of confusion derstanding. (emphasis source, misunderstanding as to the certification sponsorship, approval or and AA have 56. Advance America services; goods or Advance America’s unfair benefited (b) Causing likelihood of confusion *8 competition and methods unfair of affiliation, as to misunderstanding practices in the Com- deceptive acts with, or cer- connection or association ben- and have retained these monwealth another; by, tification added). (emphasis unjustly, efits (c) ser- Representing goods that or COUNT IV: sponsorship, approval, vices have THE OF CONSUMER VIOLATIONS uses, characteristics, ben- ingredients, LAW PROTECTION quantities they or do efits person sponsor- that a has a have or Defendants) All (Attorney General vs. status, affiliation, or approval, ship, have; that he does not connection amended, § 201-1-201-9.3. 73 P.S. 9. Act of December (d) goods when Representing or ser- awarded in connection with an standard, brought by particular are of a action vices an individual bor- acting grade, goods or that quality or are of rower on his or her own behalf model, particular style they or if are and not on behalf of other borrowers another; .... The LIPL also relieves individual obligation pay borrowers of the inter- (e) Advertising goods and services outstanding est on an loan excess of advertised; with intent to sell them as permitted by Additionally, law.... and, permits the LIPL [Attorney the AG (f) Engaging any other fraudulent injunctive relief, to seek but General] deceptive conduct which creates a not monetary damages declaratory or a likelihood or misun- of confusion judgment, when such relief is added). derstanding. (emphasis necessary compliance “to secure (ix) 201-2(4)(n), (iii), (v), (vii), §§ 73 P.S. (emphasis this act” .... in original and (xxi). & omitted). added and citations The above conduct on the [sic]10 4. The other statutes cited in the part illegal and in of Defendants Amended in connection with violation Section 201-3 the Con- I similarly Counts and II Law, provide no sumer Protection 201-3 authority for the relief the Common .... [Department] wealth seeks. The De Complaint, Amended December Code[11] partment Banking 11, 15-19, 22-25, 28-31, Paragraphs merely authorizes an action the De 38-39, 42, 44-45, 49, 52, 56, 58, 61-62, and partment injunction an to restrain for 4-11,13-14, 65-66 at and 16-18. a violation the laws under Preliminary III. Defendants’ Department’s jurisdiction.... The Objections. way DOB Code no authorizes suits monetary damages or declaratory Defendants preliminarily objected to the judgments. Similarly, the Common complaint amended and asserted: Attorneys
wealth Act authorizes [Attorney AG represent General] 3.No statute authorizes the Common- lawsuits, the Commonwealth in but [Department wealth to seek the mone- ] provide does not any affirmative au tary associated with the violations relief thority to damages seek or declaratory alleged in I Counts and II (citations judgments, omitted and em Complaint. The statute un- phasis I, CDCA, derlying Count does not provide the Commonwealth [Depart- object of the Commonwealth’s with the authority ment] to seek mone- [Department’s] requested declaratory tary relief in i.e., a civil proceeding. judgment, preventing [Ad- NCAS II, LIPL, statute underlying Count vance collecting principal from America] monetary authorizes damages, includ- per- the amount of 5.98 *9 ing triple loans, the any amount completely excess cent on its also lacks of charges interest may pay, statutory borrower support. and case The CDCA costs, attorneys’ fees, only and court but does not create a civil cause action in of amended, Following 10. sequence paragraphs, May the of the 11. Act of as appropriate paragraph §§ would be 66. 733-1-733-1101. standing inappro- is patriae 15. Parens [Depart- the Commonwealth favor recogni- the priate this case because authorizes merely LIPL and the ment] interest under quasi-sovereign tion of a to seek an [Attorney General] the AG expose could NCAS pled the facts as compliance with “to secure injunction ” liability. to double (and America] prohibit [Advance to the this act interest) already customers who have Individual principal collection lawful au- to sue [Advance DOB sued or seek NCAS _Similarly, Code there surely argue an in- will is America] to seek thorizes the them and the pre- privity restrain and no between Com- necessary to junction and, a re- engaging [Department] “from as regulated party monwealth vent a sult, any judgment litigation in this [any law under activity violating any .... would not limit remedies available jurisdiction]” Department’s litigation permit the Com- such individual these statutes While bring to lend- [Department] monwealth compliance into with CDCA ers TO PRELIMINARY OBJECTIONS LIPL, they do not authorize THE ATTORNEY GENERAL’S de- sweeping to seek the Commonwealth III AND IN COUNTS IV OF CLAIMS claratory judgment Commonwealth THE AMENDED AL- COMPLAINT citations (emphasis added and
requests, LEGING VIOLATIONS OF THE UN- omitted). TRADE AND FAIR PRACTICES LAW CONSUMER PROTECTION [Department] 10. The Commonwealth Pa. R. P. Demurrer Under Civ. parens pat- to sue in capacity lacks the 1028(a)(1): III and Fail Counts IV quasi-sovereign it has no riae because the UTPCPL State Claims Under such justifies at stake that interest standing, (emphasis In III and IV of the 18. Counts bring- law clear that a state 11. The is [Attorney Complaint, the AG patriae must estab- ing parens a suit in violations of the Unfair alleges General] apart lish a quasi-sovereign Practices and Protec- Trade Consumer single the individual interests a from (“UTPCPL”).... Specifically, tion Law (empha- group citizen or citizens III, [Attorney General] the AG Count citations original and added and sis alleges that violation of the NCAS’ omitted). Court, CDCA, found as has Commonwealth failed LIPL, on alleged violation NCAS’ remotely interest that is articulate ruled, “consti- which this Court has not justify parens quasi-sovereign to per [the UTPCPL]” tute se violations (citations .... omitted patriae standing _(citations omitted). emphasis potential If the claims of NCAS’ III the Amended Com- Count borrowers are set America] [Advance alleg- plaint, [Attorney the AG General ] aside, patriae case law parens and the es that a violation CDCA directs, left per LIPL is a se violation “concrete,” and “di- “independent” no .... UTPCPL (citations .... protect rect” interests omitted). previously rejected 21. This Court has [Attorney theory ]
the AG’s General’s *10 a consumer credit stat- that violation of a violation per
ute constitutes se [Truth-in-Lending 34. Pursuant to TILA of (citations .... omitted and UTPCPL t][12], require state law disclosure Ac added). emphasis preempted are they ments to the extent
are inconsistent with TILA [Truth-in- Assembly 24. The General ensured Lending require Act] disclosure under the rights that consumers’ CDCA .... ments the LIPL could be vindicated (and laws including Depart- those 38. if the AG poten- Even had asserted Code) Banking variety ment a of en- tially misrepresentations actionable un- mechanisms, including pri- forcement a UTPCPL, der the he would still need to action for right vate consumers who allege misrepresentations that these ac- charges in pay interest or excess of tually made a difference in the decision Pennsylvania permitted those under law. consumers to obtain a See, However, §§ 41 P.S. 501-504. e.g., loan from NCAS. He has done so. CDCA, the LIPL nor neither Banking provides Code 43. The pled that a violation one those laws Commonwealth has not is automatically and without more a vio- and cannot show the necessary facts .... (emphasis lation the UTPCPL permit this Court to exercise personal AA, and, jurisdiction over Inc. as a re-
sult, AA, Inc. should be dismissed from 26. This has made clear Court this case. particular
where a is provision omitted provided from a statute but for in other 47. general specific Neither nor juris- statutes, pro- similar the omission of the AA, AA, diction over Inc. exists. Inc.’s vision deemed intentional.... contacts are far from systematic” “continuous and or even 30. The AG claims NCAS [.Ad- They completely “minimum”: are non- vance America “held out” ] as itself existent .... original). offering lender credit lawful lawful 48. single Given the absence of a fact hereto, product, see Exhibit A at [Para- the Amended that would 50-51, graphs] by doing and that so AA, show some minimal contact between employed NCAS America an [Advance ] Inc. and Pennsylvania, the Common- deceptive practice act or unfair necessarily wealth must argue that (v) (ii),(iii), subparagraphs defined AA, personam jurisdiction over Inc. can (xxi) 201-2(4.). See id. be premised alleged on the actions of its [Paragraph] claim This is com- However, subsidiary, NCAS. the Com- merit, (1) pletely legal without since: monwealth plead has failed to and will the AG has not identified —and cannot be unable to requisite demonstrate the identify any representation that NCAS — showing facts the improper relationship made opera- about the lawfulness of its separate between the two entities neces- (2) tion or product; repre- such a sary justify imputed jurisdiction. implied sentation cannot be from NCAS’ (em- market, placing Pennsylvania Supreme product on the phasis has a strong instructed “there is TILA, 1610(a)(1) 1610(a)(1). 15 U.S.C.
433 in 1 alleged the LIPL as Count against CDCA or presumption ” (cita- Complaint Amended of the .... Count corporate veil the piercing Department monetary to afford the fails emphasis omitted and tions recovery damages.13
relief and the to has failed The 52. Alleged Vio- A. Did Advance America’s show) (and that will not be able allege Depart- The The lation CDCA Afford Of AA, Inc. and relationship between Monetary Requested ment The Relief? in- justifies America] NCAS [Advance “sanctity corpo- of the trusion into 1 of Department alleges The Count structure”_There allega- are no rate Complaint Amended that Advance tions in the CDCA, America violated Section 3.A of the AA, failed to follow cor- Inc. NCAS 6203.A, when it offered “loans or formalities, operated without porate money on credit” without “ob- advanees of intermingled capital, levels of proper Secretary a license from the taining form corporate or used the their affairs seeks, in Department The ad- Banking.” fraud. Nor does Com- perpetrate injunctive granted relief dition to AA, Inc. allege [Department] monwealth I, that “Advanced America is NCAS and controlled completely dominated collecting any principal, from inter- barred merely a that the latter was such NCAS est, charges or other in connection with corporation. sham product [and] the line of credit [dis- Advanced of all revenues gorgement Defendants, Preliminary Objections America and AA earned Advance 8-5, 10-13, 13, 2009, Paragraphs February ” illegal operations.... America’s Count 47-49, 30, 34, 38, 43, 15, 18, 20-21, 24, 26, Complaint, of the Amended Wherefore 17-19, 12, 14-15, 2-6, 8-9, and 52 A. and at 10. Clauses C. opposition a brief in Plaintiffs filed object preliminarily Defendants objections to the preliminary Defendants’ provision in the and assert that there is no complaint. amended monetary for the re provides CDCA for Ad requested by Department lief Re- Can Whether IY. vance America’s violation CDCA. Damages Advance From cover agrees. This Court America For Of Violation Alleged (Penalties) As CDCA, And The LIPL CDCA And 2? Count 1 Count 6218, provides: P.S. not obtained a Any person America as who has
Initially, Advance Banking Secretary of either license serts violation from "And, (Pa.Cmwlth.2002). deciding wheth- objec- preliminary This Court’s review of demurrer, this Court is not limited to er to sustain nature of a demurrer is tions conclusions, accept legal required to as true on the facts al- of whether a determination inferences, allegations certainty factual that no unwarranted leged the law states with argument, opinion.” or mere recovery necessary. by Hawks v. that constitute Hawks "Moreover, Livermore, a demurrer will not be Id at 912. 629 A.2d 157 Pa.Cmwlth. Further, (1993). the Court finds that on must sustained unless this Court 271 n. 3 facts, complaint the law will not allow face of the well-pled which are accept "true all as furthermore, relevant, recovery; any doubts are to be well as all infer- material against sustaining the demurrer.” reasonably Co- resolved deducible therefrom.” ences Philadelphia, Id at 912. City hen v. *12 provisions “[djisgorgement in accordance with the of and all of revenues Ad- act, shall engage and who vance America ...” and AA earned Count making or negotiating business of loans 2 of the Complaint, Amended Wherefore credit, money or in the or advances of Clauses C. and D. at 12. of amount or value fifteen thousand dol- preliminarily Defendants object and as- less, ($15,000) collect, charge, or lars sert individual borrowers can interest, discount, contract for or receive against institute an action Advance Amer- bonus, fees, fines, commissions, charges ica for interest on the loan in excess of the which aggregate or other considerations percent six maximum mandated under the interest that the excess of lender LIPL, § of Section 201 41 P.S. permitted by be
would otherwise
law to
charge if
licensed
not
under this act on
(Individual
Initially, Section 504
ac-
actually
advanced,
the amount
loaned or
permitted)
LIPL,
tions
of the
41 P.S.
unpaid principal
or on the
balances when
504,
§
provides:
payable by
the contract is
stated install-
“Any person
by a violation
affected
ments,
guilty
shall he
a misdemean-
the act shall have the substantive right
or, wpon conviction
shall be sen-
thereof
bring
an action on behalf of himself
pay
tenced to
less than
not
afine of
five
individually
damages by reason of
for
($500)
hundred dollars
or more than
violation,
such
together
conduct
with
($5,000),
thousand dollars
and/or
five
including
costs
attorney
reasonable
fees
imprisonment not less than six
suffer
and such other
per-
relief to which such
(6)
(3)
months nor more than three
may
son
(empha-
entitled under law.”
years,
in the discretion
the court.
added).
sis
added).
(emphasis
Further,
(Usury
Section 502
and excess
Clearly,
CDCA,
Section 18 of the
7 P.S.
recoverable)
charges
LIPL,
41 P.S.
§
only provides for criminal sanc-
§
provides:
tions for a violation of the CDCA
monetary remedy in the nature of dam-
person
A
paid
who has
a rate of interest
ages
requested by
Department.
for the
money
loan or use of
at a rate in
Therefore, this Court sustains Defendants’
provided
by
excess
for
this act or
preliminary objections to Count 1 of the
by
otherwise
paid
law or has
charges
Complaint.
Amended
prohibited or in excess of those allowed
by this act or
otherwise
law
B. Would Advance
Alleged
America’s
Vi-
recover triple the amount
such excess
LIPL,
Established,
olation
The
Of
If
interest or charges in a suit at
law
Authorize The Requested Monetary
against
person
who has collected
Relief?
such
charges
excess interest or
.... Re-
Department alleges
in Count 2 of
covery
triple
the amount of such ex-
Complaint
that Advance
cess interest or charges, but not the
LIPL,
America violated Section 201 of the
actual amount of such excess interest or
when it charged interest on
charges, shall be
four-year
limited
loans in excess
per
of “six
cent per an-
contract,
period of the
(emphasis
seeks,
num.”
Department
among oth-
(Penalties)
things,
er
“damages in an
Finally,
amount three
Section 505
LIPL,
times the damages
sustained
provides
“[a]ny
Advance
P.S.
America’s
person
customers in connection
knowingly
intentionally
who
Advance America’s violation” of the LIPL
provisions
violates the
this act shall be
to cease and desist
viola-
person
the third de-
a misdemeanor
guilty
act and to make restitution
tion of this
gree.” (emphasis
damages
any aggrieved person.”
actual
object to
again preliminarily
Defendants
added). Here, the
2 of the Amended
Count
Assembly
that the General
statu-
contends
*13
also no promulgated
that there is
assert
torily
Department
authorized the
“to order
LIPL that authorizes
authority under the
Depart-
itself and therefore the
restitution
relief
declaratory
to seek
Department
the
may
judicial
ment
seek restitution as a
recovery
principal
of the
remedy in an enforcement action.” See
borrow-
earned from loans
Opposition
Plaintiffs’ Brief in
to Defen-
America.
ers from Advance
Preliminary Objections to
dants’
opposition
preliminary
to Defendants’
at 11.
disagrees.
This Court
2
objection to
of the Amended Com-
Count
presents a four-
plaint,
Department
the
506(c)(3)
First,
LIPL,
Section
41
support
position
of its
prong argument
506(c)(3),
§
by
P.S.
was added
the Act of
is entitled to mone-
Department
that the
824,
57,
July
No.
effective
the LIPL.
tary relief under
2008,
8,
days or
sixty
September
more
First,
Section
Department
cites to
year
than one
after Advance America
506(c)(8)
LIPL,
506(c)(3),
§
41
P.S.
operation
Pennsylvania.
ceased
See
statutory authority to seek mone-
for the
Complaint, Paragraph
Plaintiffs’ Amended
tary
damages
relief
in the nature of
(Advanced
38 at 10
America ceased doing
Second,
America.
against Advance
pursuant
business
to this
that
it
an
Department alleges
possesses
2007).
31,
July
Court’s order
“sovereign
protect
inherent
interest” to
Second,
application
the retroactive
Pennsylvania borrower and recover
506(c)(3)
LIPL,
Section
41 P.S.
Third,
damages from Advance America.
506(c)(3)
§
present
controversy
parens patriae
cites to
Department
expo-
would increase Advance America’s
authority
monetary
to seek
standing as
penalties.
sure to civil
Section 1926 of the
protect
relief in order to
the economic
1972(Act),
Statutory
Act of
Construction
well-being of the citizens of the Common-
“[njo
1926, provides
§
Pa.C.S.
statute
Fourth,
Department
claims
wealth.
shall be construed to be retroactive unless
declaratory judg-
it is entitled to a
clearly
manifestly
so intended
against
ment
Advance America. This
Assembly.”14 (emphasis
seriately
Depart-
shall
address the
Court
arguments.
ment’s
Department
In Morabito’s Auto Sales v.
552 Pa.
Transportation,
A.2d
506(c)(3)
1.
Section
The
Whether
Of
(1998),
Pennsylvania Supreme
our
LIPL,
506(c)(3),
§
Provides
P.S.
Jfl
Act,
reviewed Section 1926 of the
Court
The De-
Statutory Authority
For
§
Pa.C.S.
and noted:
Monetary
partment To Obtain
Relief?
settled, however,
506(c)(8)
legisla-
It is well
pro
of the LIPL
concerning
procedural mat-
purely
determines
tion
department
vides that “[i]f
applied
litigation
ters will be
not
person
provisions
that a
has violated the
act,
but
passage,
also to
department may
[o]rder
commenced after
contracts,
Also,
I,
Pennsylva-
gation
making
any
irrevocable
Section 17 of the
or
14.
Article
immunities,
post
grant
special privileges
shall
provides that
ex
“[n]o
nia Constitution
law,
impairing
passed.” (emphasis
law
the obli-
nor
facto
costs,
existing
passage
monetary damages,
at the time
America for
litigation
attorney
pursuant
fees
to Section 504 of
LIPL,
41 P.S.
Additionally,
As stated in Galant [v.
Resources,
triple
individual borrowers
recover
534 Pa.
Environmental
(1993)
the amount of the
21-22,
],
excessive interest or
498-99
charges paid
pursuant
to Advance America
general
determining
rule
LIPL,
to Section 502 of the
applied
a statute will be
ret
whether
conclude,
This
will
without an
roactively
“Legislation
is as follows:
express legislative
intent
the General
rights will not be
con
affects
Assembly,
Department possesses
strued to be retroactive unless it is
legal rights
the same
as an individual bor-
But,
declared so in the act.
where it
*14
rower. The retroactive application of Sec-
merely the
proce
concerns
mode of
506(c)(3)
dure,
course,
tion
of the LIPL
would
unfair
applied,
it is
to
highly prejudicial
to Advance
litigation existing at the time
Amer-
its
Therefore,
rights.
ica’s
this
passage_”....
Court must
reject
argument.
this
21,
methods
which
are enforced
Department
The
alleges
ability
that its
Sales,
Morabito’s Auto
A basic (1935). reject This must the De- executive, legisla- ment is that argument. partment’s tive, independent, are judiciary and the *15 government. of Car- Has Parens
co-equal
Department
branches
The
Whether
Tate,
45,
442
dated the order for its U.S. parens patriae to have S.Ct. 3260.... standing: As noted States Su [United preme] in that opinion, within the key resolving question spectrum of interests that the Court has determining whether the Commonwealth regarded as quasi-sovereign is included pleaded quasi-sovereign
has
a state’s interest in the economic well-
simply representing
rather than
the in
being
people.
its
458 U.S. at
individuals who could
terests
have
(quoting Georgia
Pennsyl
S.Ct. 3260
v.
pursued their own claims. A “state
Co.,
R.
vania
324 U.S.
65 S.Ct.
injury
an
to what
must assert
has been
(1945) (in
physicians
drugs'to patients
who administer
(such
directly
drugs)
as intravenous cancer
LIPL,
three
right
with the
to claim
times
amounts for
inflated
drugs
pay
dants’
Defendants’,
charged
amount of unlawful interest
the
Id. at
drugs.”
LIPL,
finally,
Section 502 of the
under
determination
to this Court’s
Critical
attorney fees and costs under Section
parens patriae
had
the Commonwealth
503(a)
LIPL.
drug companies
that had the
standing was
the Common-
the AWPs
not “inflated
Last,-if this
were to conclude that
pro-
able to
wealth'may have
better
been
parens patriae
has
stand-
Department'
citizens
medications to more
vide needed
exposed
Advance America would be
ing,
” and that the
AWPs
it has
than
“inflated
liability
Department,
once from the
to which
the extent of benefits
affected
individual borrowers
second from
those covered under
Commonwealth’s
plan
filed an action or
to file an
have either
entitlement.” Id.
could claim
programs
Again,
par-
the LIPL mandates a
action.20
1144 n. 9.
wronged
remedy
party.
ticular
Here,
must conclude
statutory
this Court
a clear
rem-
there is
“Where
standing.
parens patriae
lacks
Department
adequate,
it is exclusive.”
edy, which is
II,
omitted).
First,
(footnote
fails
Department
TAP
Department
unlike
Envi-
Williams,
allege that the violations of
CDCA
v.
Pa.
ronmental Resources
(1981).
efficacy
affected the
or
and the LIPL
872-73
Cmwlth.
Commonwealth-sponsored bene-
reach of a
May
The
Seek
Department
Whether
A
government
entitlement.
program
fits
Declaratory
To
Relief
Enforce
Also,
allege
fails to
Department
LIPL?
CDCA And The
govern-
legitimate quasi-sovereign
other
if
Specifically,
poten-
mental interest.
Department alleges
in Count
America’s borrowers
tial claims of Advance
the Amended
that it is entitled
aside,
patriae case
parens
are set
as the
relief:
following
directs,
without
is left
law
(1)
declaratory judgment
A.
Ad-
concrete,
and direct inter-
independent,
vance America offered its line of credit
protect.
est to
product in violation of the Loan Interest
(2)
Law;
Second,
agree-
the loan
sought by the De-
and Protection
damages
*17
that
America entered
quasi-sover-
a
ments
Advance
partment
represent
do not
individual
into with consumers
con-
eign
[borrowers]
interest but that of the
products
its line of credit
monetary
relief the De-
nection with
borrower.
unenforceable;
void,
illegal,
2
were
seeks in Count of the Amended
partment
(3)
America is
from
on the numerous
and Advance
barred
Complaint
premised
is
interest, or oth-
collecting any principal,
borrowers
remedies available to individual
with the line of
charges
LIPL.
an action for
er
connection
Specifically,
under the
product.
credit
unlawful interest under Section 501
process
generated
program.”
Additionally,
America]
due
its loan
there are serious
America,
questions as to whether Advance America
Johnson v. Advance
Cash Advance
upon
07-3142,
may
litigation
Centers, Inc.,
time based
face
second
No.
441 LIPL either the CDCA or the consti- defendants against [Advance both quests se violation of the UTPCPL. per in the Amended Com- tutes and AA] America to Attorney America and General also fails direct The plaint, [Advance defendants to in the right provision waive the to such a clearly did not this Court AA] matter, Reply UTPCPL, any Mem- Objection.]” provision See or for that assert their CDCA, LIPL, rejects Banking at 20. This Court in the or the orandum and sustains argument final a violation of Department’s expressly that states Code objection preliminary Defendants’ constitutes a automatically these statutes Complaint. 2 the Amended Count of violation of the UTPCPL. per se contrary, Advance America di- To Attorney General Has V. Whether to numerous statutes24 rects this Court Adequately Pled A Per Se Violation a violation of specifically provide that that Trade Practices Of The Unfair amounts to a violation of a certain statute Law Protection Consumer 42 example, For Pa.C.S. UTPCPL. (UTPCPL) 3 Of the Under Count practice § for unauthorized (penalty Complaint? Amended law) (c) provides that addition to “[i]n Attorney alleges first General23 prosecution, practice criminal unauthorized that 3 of the Amended Count enjoined any county of law court CDCA, America’s violation Advance having personal jurisdic- pleas of common I, and this in NCAS as found ... violation ] tion over the defendant [a violation of the alleged America’s Advance (a) subsection is also a violation constitutes a present in the matter LIPL ... Trade Practices and Consum- Unfair See De- violation of the UTPCPL. per se ” (emphasis Law er Protection Support Memorandum of Law fendants’ (enforcement) 2905(g) pro- § 66 Pa.C.S. at 17 and Preliminary Objections (3) “[fjailure telephone that vides Paragraph 49 at 13. Complaint, with this sec- message comply service to alleges Attorney Specifically, a violation the ... tion shall be engaged provid- America that Advance Unfair Protection Trade Practices and Consumer loans to ing consumers/bor- (relating ... 39” Law Pa.C.S. Ch. charged an rowers without a license offenses), related to theft and Pennsylvania consum- rate to maximum in excess of the ers/borrowers in violation of percent
lawful rate of six (Lessor’s Also, § liabili- Pa.C.S. CDCA, § 7 P.S. Section 3 of (a) (violation of the ty noncompliance) LIPL, Section 201 of the law) provides that violation “[a ] respectively. a violation chapter shall constitute Trade Practices and Consum- provisions of the A review of the Unfair Law, subject and shall be that a violation er Protection fail to establish UTPCPL 201-4, UTPCPL, cite to nineteen other statutes P.S. 24. Defendants 23. Section 4 of the "[wjhenever particu- Gen- provides explicitly state a violation of that any person eral ... has reason believe See lar statute is a violation of UTPCPL. method, act or using about to use Support of Law in Memorandum Defendants’ *19 act to be practice declared section 3 of this Preliminary Objections at 21-22. unlawful, proceeding would be in the and that interest, bring may an action in the public he against per- such name of the Commonwealth ...” son 442 provisions private per enforcement and tute a se violation of the UTPCPL.25 rights of action contained in that act as Therefore, this reject Court must the At- (e) (counter- in this section” and limited torney position General’s and sustain De- defense) claim or lessee not take “[a] preliminary fendants’ objection per any action to offset amount for which allegations se violation in 3 Count a liable potentially lessor is under the Un- Complaint. Amended Trade Practices Consumer Pro-
fair ” tection Law .... Attorney VI. Whether The General Ad- principle statutory
“It is a
equately Pled A Violation Of The
legislature adopts
construction that when a
UTPCPL Under Count 3 And Count
presumed
statute it must be
that it does
Complaint?
4 Of The Amended
knowledge
so with full
of existing statutes
Next,
Attorney
alleges
General
(citations
relating
subject.”
to the same
Count 3 of the
Complaint
omitted).
v.
Seliga
Employes’
State
Re
Advance America “held itself out” as a
(Pa.
System,
tirement
682 A.2d
offering
prod-
lawful lender
a lawful credit
Cmwlth.1996). “Thus,
a section of a
where
uct and
aas
result Advance America em-
given provision,
statute contains a
ployed an unfair or deceptive
prac-
act or
provision
omission of that
from a similar
2(4)(ii)-(iii), (v),
tice as
defined
significant
section is
to show a different
(xxi)
UTPCPL,
(citation
§
omitted).
201-
intention existed.”
Id.
(xxi).
2(4)(ii)-(iii), (v),
at
79. This Court concludes the
See Amended
Assembly
Complaint,
did not intend for a
Paragraphs
violation of
Count
51 and 52
either the
or the LIPL
CDCA
to consti-
at 13-14.26
reply
Defendants
brief
good
memoran-
the ‘source’ of a
or service. 73 P.S.
persuasively distinguish
2(4)(ii)
dum
the four cases
].
201—
FNA,
Attorney
support
General cites in
Unlike the
neither the CDCA nor the
per
argument:
se violation
primary
prevention
LIPL has as its
aim the
[Attorney
of fraud or deceit. The AG
Gen-
[Attorney
The AG
relies on four
General]
this, acknowledging
eral] concedes
support
cases to
that ‘violation of other
protect
paying
these laws
consumers from
protection legislation
consumer
are deemed
interest, (footnotes
too much
and citations
(PI.
32.)
a violation of the CPL.'
Br.
None of
emphasis
original).
omitted and
cases, however,
those
stands for so broad a
Reply
See Defendants’
Sup-
Memorandum in
Nikol,
proposition.
v.
Hammer
659 A.2d
port
Preliminary Objections
to the Amend-
(Pa.Commw.Ct.1995), merely
held that
Complaint
ed
at 29.
conduct that is also
vio
unlawful
fraudulent
distinguish
Defendants also
the other cases
(conduct
lates the UTPCPL.
Id.
Attorney
support
cited
General in
city
violated a
ordinance also violated the
per
liability.
se
Reply
See Defendants'
Memo-
UTPCPL
because
trial court record
Support
randum in
Preliminary Objections
fraud).
showed all the elements of common
to the Amended
at 30-32.
cases,
remaining
And the three
Common
Services,
alleges
General also
in Count
Peoples
wealth v.
Benefit
(Pa.Commw.Ct.2007),
Complaint:
3 of the Amended
Tolleson,
v.
14 Pa.Cmwlth.
443
representation may
implied
a
not be
4 of the Amended
such
Additionally, in Count
placement
America’s
of its
alleges
from Advance
Attorney
the
General
Complaint,
This
dis-
product
on the market.
Court
represented
America
Advance
that
agrees.
that
Pennsylvania
consumers/borrowers
a
the loan was at
charge
finance
on
the
v.
Manor Personal
Feeney
In
Disston
a
in fact it was
interest when
at
5.98%
Home,
(Pa.Super.),
Care
after the
higher interest rate
$149.95
much
denied,
appeal
581 Pa.
was unfair and
or deceptive practices’
the
set
‘unfair
(xxi)
2(4)(ii)-(iii), (v), and
201-2(1)(i)-(xxi)
in 73 P.S.
forth
201-2(4)(ii)-(iii),
UTPCPL,
(v),
the
general purpose
UTPCPL is
(xxi).27
public
the
protect
from fraud
or
preliminarily object
deceptive
practices,
business
Defendants
unfair
Attorney
principal
General has
and the statute is the
means
and assert that
Commonwealth....[
doing
that Ad
so in the
representation
not identified
for
28 ](citations
emphasis
omitted and
concerning
made
the law
add
vance America
ed).
and that
operation
product
fulness of its
pleading
law
assistance to
than
common
fraud.
In Com
55. AA rendered substantial
Percudani,
(Pa.
operate
Advance
to establish and
v.
Benefit (Pa.Cmwlth.2007), this not 1236-37 Court also (iii) Causing likelihood of confusion or of ed: affiliation, misunderstanding as to con- deceptive is or practice An act or with, nection or association or certifica- ‘capacity tendency or unfair if it has another; by, tion the intention to to deceive’.... Neither deception nor actual must be deceive (v) Representing goods or services rather,
proved; it need be shown sponsorship, approval, have characteris- practices capable that the acts and are tics, uses, ingredients, quanti- or benefits being interpreted misleading they ties that do not have or that a .... The test for the court is to way person sponsorship, has a sta- approval, impression arising determine the overall tus, or connection that he affiliation said, totality of what is from the as well have; (emphasis does not reasonably implied, as what is advertisement or solicitation.... More- over, cognizant we are of our [S]upreme (xxi) Engaging other fraudulent directive UTPCPL is [C]ourt’s deceptive or conduct which creates a liberally
to be construed to effectuate its likelihood or misunder- of confusion objective protecting consumers of this added) standing. (emphasis Commonwealth from fraud and unfair or A reading fair of the Amended Com- (citations deceptive practices, business plaint states that injured Advance America emphasis omitted and well-being economic health and of the Here, Attorney specifically General by ille- consumer/borrower alleges offering that Advance America’s a gally charging sham interest. The Attor- product line of credit ney allegations General’s strike at the core at an excessive rate of consumer/borrower loan, of Advance America’s credit i.e. that interest was unfair deceptive conduct fee, the monthly participation aas matter 2(4)(ii)-(iii),(v), in violation of Section law, was tantamount to sham (xxi) UTPCPL, 201- Therefore, excess of six percent.29 2(4)(ii)-(iii),(v), (xxi). Court must overrule prelimi- Defendants’ 2(4) UTPCPL, 73 P.S. nary objections to Count 3 of the Amended 201-2(4), provides: Complaint. This Court concludes that the (ii) Causing likelihood Attorney adequately pled a viola- of confusion source, misunderstanding as to the tion of the UTPCPL. The same conclu- pre-1996 requirements de pleading position adopted by would ren- Bankruptcy deceptive espoused by Court is that which would der the words ‘or be conduct’ redun- Court, (citations Supreme omitted and superfluous, contrary dant and which is added) emphasis statutory the rules construction .... Id. at 746-47. merely Prior to the Law [UTPCPL] prohibited 'other fraudulent conduct.’ The General illustrates to this Legislature’s intervention in 1996 in con- deceptive Defendants conduct was
junction Supreme pro- with the Court’s phony monthly partic- in that the use of the nouncement that the Law is to [UTPCPL] ipation fee "in resulted a real interest rate of liberally Superior construed and the plainly 368%” "unfair.” See Plain- continuing Court’s restrictive view Opposition tiffs' Brief in to Defendants’ Pre- the Law liminary Objections leads us to conclude that [UTPCPL] at 43. *22 (Defendants’) Centers, pre- 4 of the Advance Ine.’s regarding Count is reached sion the liminary objections, this Court enters Complaint.30 Amended (1) following prelimi- order: Defendants’ VII. Conclusion. nary objections to 1 and 2 of Count Count Pennsylvania Department Banking Defen- of this sustains Accordingly, Court objections Pennsylvania, to Count Act- preliminary dants’ and Commonwealth of Complaint. 2 of the Amended and Count ing by Attorney General Thomas W. Cor- sustains Defen- Additionally, (Plaintiffs’) this Court bett, Complaint Jr.’s Amended to 3 of preliminary objections Count (2) dants’ sustained; preliminary are Defendants’ that Advance Complaint the Amended objection to Count 3 of Plaintiffs’ Amended consti- violation of the UTPCPL America’s Complaint Attorney is sustained as to the and violation of the CDCA per tuted a se allegations General’s that Advance Amer- Last, De- overrules the LIPL. ica’s violation of the Unfair Trade Prac- objections to preliminary fendants’ Count tices Protection Law Consumer Complaint 4 of the Amended 3 and Count (UTPCPL) per was se violation of Attorney failed to ade- General Company Consumer Discount Act and the plead a violation of UTPCPL. quately (3) Law; Loan Interest Protection Defen- preliminary objection dants’ to Count 3 dissents. Judge BUTLER 4 of the Amended Count Attorney General failed to ade- ORDER quately plead a violation of the UTPCPL (4) overruled; are are Defendants di- NOW, day April, AND this 28th Delaware, responsive pleading rected to file a within consideration of NCAS upon (20) twenty days concerning of this order LLC, America Ad- Advance Cash d/b/a Centers, the violation of the and Advance America Cash UTPCPL. vance Z, Regulation provides § "any 12 C.F.R. 226.1 Defendants contend that disclosure by Monthly Participation Fee Advance regulation govern does not “[t]he part charge America as of the finance would charges (emphasis consumer credit.” for requirements of TILA violate the disclosure added). 226.5(b)], Reg § Z C.F.R. The AG’s [12 cogently responds therefore, [Attorney claim is General's] that there is "no claim that the Defendants Defendants’ preempted federal law." See comply [Advance America] failed Objections Preliminary to Plaintiffs' Amended Reg accompanying respect TILA the Z with or Complaint at 28. to its disclosure ... Defendants' [Advance TILA, 1610(b) U.S.C. argument assumes that the so- America's] 1610(b) provides: § 'Monthly Participation called Fee’ was in fact charge Except State credit statutes. ‘charged plan participation in a credit on provided USCS [15 in section ” monthly Op- Brief in basis.' See Plaintiffs' 1639], ... this title does not otherwise Preliminary Objec- position to Defendants' manner, annul, any scope alter or affect Commonwealth, "The on the tions State, any applicability laws or hand, other contends that this 'fee' was noth- to, relating including, limited laws but not ruse, artifice, ing more than a and a subter- charges, types, amounts or rates of fuge actually that was 'interest' as defined any charges, permissible un- element or Brief in law.” See Plaintiffs’ with the ex- der such laws in connection Preliminary Objec- Opposition to Defendants’ credit, this title tension or use nor does agrees with Attor- tions at 43. This Court applicability of those laws extend ney America General that Advance persons or transactions to class provisions a defense raise the of the TILA as they apply .... would otherwise liability to avoid under the UTPCPL. (emphasis regulation [Djepartment’s and DISSENTING within ju-
CONCURRING Judge BY SIMPSON. risdiction to OPINION administer or enforce. 733-508(C) thoughtful majority opin I concur in the provision This expressly grants the De- regarding ion III and Counts IV partment Banking authority to seek I Complaint. respectfully dis beyond injunctions remedies for statutes it (violation sent, however, I as Counts *23 required to administer. The is CDCA Company the Consumer Discount Act such statute. (CDCA) 1) (violation and II of the act com monly known as Loan Interest and Protec b. (LIPL)2). tion Law following For the rea Further, the Plaintiff Commonwealth sons, objections I would overrule to those parties statutory authority assert for their Counts, thereby allowing all the Counts to 506(a) claims under Section of the LIPL proceed through pleadings. (Enforcement), provides: part company I the majority with over (a) When the Attorney General has rea- Plaintiffs, whether the both of which are to any person son believe that has violat- parties, Commonwealth assert claims provisions act, ed of this or the declaratory recovery for relief and of ex- regulations hereunder, promulgated he cessive from loans to standing shall have bring civil action borrowers from Advance America. I be- injunctive and such other re- relief lieve claims for these types relief are as may appropriate to secure lief sufficiently stated. compliance with this act or regula- promulgated
tions hereunder. I. 506(a) P.S. This provision expressly gives a. authority beyond seek remedies Among other arguments, the Plaintiff injunctions. Commonwealth parties assert statutory c.
authority for their claims under Section 508(C) Banking Code majority concludes that remedies (Quo injunction proceed- warranto or beyond seeking compliance those are not ings; proceed- conduct of administrative authorized. prospective compli- Because ings relating to institutions and credit ance has been secured a previously unions).3 provides: That Section injunction, entered no further remedies are available. Respectfully, disagree. I [Djepartment may maintain an ac-
tion in any Commonwealth Court or oth- The Plaintiff parties Commonwealth er competent jurisdiction court of for an aver that Advance America collected tens injunction or other process against any illegal millions of dollars of revenue person to restrain prevent per- from thousands of residents. son from engaging any ¶¶21, activity Compl. violat- Am. early 25. At this act ing this other stage statute or of the litigation, we must accept 8, 1973, 262, amended, 15, 1933, April amended, May Act P.L. as 3.Act P.L. §§ P.S. 6201-6219. 733-503(C). January 2. Act of as amend- ed, P.S.§§ 101-605. Also, in TAP Pharmaceutical Products true. I believe averments as
these
heavily on a
America of
relied
United
by Advance
Court
ongoing retention
Supreme
of revenue col-
decision
of dollars
States
Court
tens of millions
Alfred
Son,
Rico,
and the
v. Puerto
Snapp
of the CDCA
L.
&
Inc.
lected in violation
the stat-
compliance
ful II. ry to the welfare of its citizens suffices to give standing parens a State to sue as Furthermore, Plaintiff I believe patriae: injury whether the is one that the enjoy patri- parties parens State, could, likely attempt if it would monetary damages standing to recover ae through sovereign lawmaking address II on of the citizens I and behalf *24 Counts 607,102 Here, powers. Id. at S.Ct. 3260. recent Our Court of the Commonwealth. injury alleged, the excessive interest and standing in parens patriae ly discussed which the charges, related is one Common- v. TAP Pappert ex rel. Commonwealth through attempted wealth to address its Products, Inc. 885 A.2d Pharmaceutical sovereign lawmaking powers. Applying (suit (Pa.Cmwlth.2005) by 1143-44 by the suggested the indication United in on be Attorney parens patriae General Court, Supreme standing States to sue as injured by Pennsylvania citizens half of patriae sufficiently stated. parens alleg companies through pharmaceutical reasons, conduct that caused Com edly improper For all these I would overrule in pay entities and citizens to monwealth I objections to Counts and II preliminary pharmaceuticals). prices Complaint, allowing flated thus of the Amended proceed through plead- to all Counts Here, Pharmaceutical Prod- as in TAP ings. ucts, Amended Com- the Commonwealth’s supporting facts plaint alleges sufficient joins Judge President LEADBETTER position. Specifical- the Commonwealth’s in this dissent. contains aver- ly, the Amended brought ments that the Commonwealth Judge OPINION BY CONCURRING sovereign interest protect suit to LEAVITT. statutory by scheme enacted enforcing the majority’s opinion, I which I join Assembly regulation for the the General reasoned thorough admire for its and well quasi- lenders and the Commonwealth’s analysis. separately explain I write to fur- in the economic well- sovereign interest Attorney General does not why ther ¶4. Compl. Am. at being of its citizens. authority usury in a enjoy parens patriae further avers its belief The Commonwealth damages on behalf of individu- case to seek offered its line of that Advance America citizens, may pursue who wish to such al to thousands of customers product credit their own behalf. actions on by illegally Pennsylvania, and that Attorney General be- powers Monthly Partic- charging consumers the Constitution, gin with the product, line of credit ipation Fee on its states, part, in relevant as follows: and it 5.98%, interest rate of together with an by shall chosen Attorney An General be injured America the economic Advance electors of Common- qualified of the Common- well-being health and ¶¶ 21, shall be the chief law Am. wealth Compl. ...[.] [H]e wealth’s citizens. torney Attorney and shall when of the Commonwealth General’s officer perform powers exercise such such judgment may such action necessary. be imposed by law. duties as 30-31, Id. at 188 A. (emphasis at 530 add- Const, IV, § art. 4.1 Pa. ed). imposes powers those The law that Attorney General’s common law Attorneys is the duties powers were not limited to the power to 15, 1980, Act, Act of October supersede attorney. a district The Attor- amended, §§ 732-101—732-506. ney enjoyed General also the common law Further, that act is the exclusive source of power intervene charitable trust Attorney powers; General’s stated oth- Pennsyl- cases on behalf of the citizens of erwise, Attorney powers General’s See, e.g., vania. Commonwealth v. Barnes law, duties have no basis in the common Foundation, 398 Pa. parens patriae which is the source of the (1960) 500, 505 (holding doctrine.1 enjoys power common law always This was not the case. Article participate litigation involving charitable IV, 4.1 to the Pennsyl- section was added trusts). vania Constitution amendment in 1978. amendment, Prior the Attorney Supreme our Court overruled governor; appointed General was Minerd, finding “the reasoning in this line *25 he, she, served as a member of the ” of decisions to be erroneous.... Com governor’s Depart- cabinet as head of the Schab, 60, 55, monwealth v. 477 Pa. 383 Then, Attorney ment of Justice. the Gen- (1978). 819, A.2d 821 Accordingly, the eral’s were powers and duties set forth in Supreme Court held Attorney that the 1929, the Administrative Act Code power General lacked the supersede to 177, amended, April as 71 district attorney a criminal law enforce 51-732, §§ they augmented P.S. were ment year matter. That same the voters by powers. common law In a landmark IV, adopted Article section 4.1 to institute case, 17, v. Margiotti, Minerd 325 Pa. the selection of our Attorney General (1936), Supreme A. 524 our Court ex- election, opposed gubernatorial to ap pounded length at some on the historic pointment. Attorney antecedents of the General’s power. Thereafter, common law It concluded that newly the Attorney elected Pennsylvania’s Attorney General General attempted supersede to a district attorney case, in a arguing criminal powers clothed with the that attributes Attorneys holding the in Schab enveloped longer General at was no viable law, light
common
the
including
right
the constitutional amendment.
supersede and set aside the
Specifically,
Carsia,
district at-
in Commonwealth v.
origin
parens
patriae
legal
of the
colony,
doctrine can
as the chief
officer of a British
England.
be traced to
Conceptual-
medieval
enjoyed
power
bring
broad common law
ly, the
king's
doctrine is derived from the
parens patriae
suit
on behalf of colonial
royal prerogative
guardian
to act as the
of an
Himes,
Jay
citizens.
L.
State Parens Patriae
protect
individual unable to
his own interests.
Authority:
Attorney
The Evolution
the State
law,
attorney general,
The
at common
was the
1-2,
(The
Authority
General's
18-19
Institute
legal representative
sovereign
chief
of the
Policy Symposium
for Law and Economic
the courts and was the
officer who could
23, 2004),
paper, Apr.
http://www.
available at
prosecute
people
on behalf of the
in order to
abanet.org/antitrusl/at-committees/at-state/
protect
the interests of the crown.
inAs
pdf/publications/other-pubs/parens.pdf.
England,
attorney general, acting
a colonial
conclusion,
Supreme
(1986),
reaching
the Attor-
A.2d 956
Pa.
of the
expressly upon report
relied
Court
argued
ney General
State Government Commission
Joint
Attorneys Act is but one
need-
prepared
legislation
on the
had been
powers,
Attorney General’s
source
scope
powers
ed to establish
moreover,
Ar-
that,
language
The
Attorney
Office of
General.
new
4.1,
constitu-
of our state
ticle
section
report explained
final
Commission’s
the Act evidence an
and that of
tion
enacted
the General As-
[IJegislation
powers
common law
to retain the
intent
exclusive source
sembly is the
Attorney General.
the elected Attor-
powers and duties at 957-958
Id.
IV,
to Article
Sec-
ney
pursuant
re-
soundly
Supreme
Court
tion 4.1....
claim that
jected the
Comm’n,
Gov’t
Office Of
Joint
State
law
conferred
common
Constitution
RepoRT
Attorney GeneRal, Final
Elected
General.
Attorney
the elected
powers upon
(1978).
that was the
legislation
the mean-
Supreme
explained
Our
subject of the Joint State Government
IV,
4.1 of the Penn-
Article
section
ing of
report became
Common-
Commission’s
sylvania
as follows:
Constitution
Attorneys Act.
wealth
view,
language “as
the use of the
In our
Attorneys Act does
The Commonwealth
clearly shows an ex-
may
imposed”
Attorney
not invest the
General with the
legislature
to the
power
tension of
parens patriae power that
have exist-
statutorily
regulate
pow-
define and
prior
ed as a matter of common law
Attorney
duties of the
General.
ers and
However,
in-
Schab decision.
the Act has
Assembly
The General
utilized
type
General with this
vested
grant
powers
of constitutional
ie.,
power,
power
to initiate actions
*26
Attor-
and enacted the Commonwealth
citizens, in
on behalf of
two circumstances.
Act made it clear that the
neys Act. That
with au-
Attorney
General is invested
Attorney
the
are
powers
state
General
in charitable matters
thority to intervene
longer an emanation from some bed
no
of citizens. 71 P.S.
732-
on behalf
law
but are now
precepts,
of common
204(c).2 Likewise,
Attorney
the
General is
strictly
legislative designa-
a matter of
the
represent
authorized to
Common-
and enumeration.
tion
any
citizens in
action
wealth “and its
laws
513,
brought for violation of the antitrust
(emphasis
In considering
respondents’ prelimi-
citizens,”
behalf of
a parens patriae power,
II,
nary objections
but
TAP
Court re-
violations
Federal anti-
upon
parens patriae analysis
lied
trust
laws.5 Neither the Commonwealth
Rico,
Snapp v. Puerto
Attorneys
U.S.
Pennsylvania’s
Act nor
(1982),
usury
S.Ct.
enforcement authority from that Notably absent
laws. damages on behalf recover
is the power legis- this Absent
of individual borrowers. enumeration,” the “designation and
lative Attorney General lacks
conclusion case could authority
parens patriae our Court’s given Supreme clearer
not be Carsia, 509, 517 A.2d 512 Pa.
holding PRO
In Re: CONSERVATORSHIP BY the GER IN REM
CEEDING CONSERVANCY, INC.,
MANTOWN minimally properties
concerning 12th, 13th, 59th, 22nd and 9th
in the County City Phil
Wards in the
adelphia.
Appeal The Germantown of:
Conservancy, Inc. Pennsylvania. 5, 2010. on Briefs March
Submitted April
Decided