The Latest Curve In CFPB vs. Hanna

insideARM has been following and reporting on the continuing saga in the case of the Consumer Financial Protection Bureau (CFPB) vs. Frederick J. Hanna & Associates, P.C., et al.  Just last month insideARM reported on the trial court’s denial of Hanna’s motion to dismiss the complaint.

On Monday July 27, 2015 Hanna filed a “Motion to Certify [the case] for an Interlocutory Appeal.” An interlocutory appeal is an appeal of a specific ruling by a trial court, asking an appellate court to review a significant aspect of a case before the trial has concluded. This type of appeal is an extraordinary action as courts prefer a case proceed to conclusion on its merits and do not like to break up litigation into multiple parts.

For a court to certify a case for an interlocutory appeal two requirements must be met. First, the order must “involve a controlling question of law as to which there is substantial ground for difference of opinion.” The second is that an “immediate appeal from the order may materially advance the ultimate termination of the litigation.”

Hanna’s motion documents lay out their arguments for the need for an interlocutory appeal. Highlighting portions of the hearing transcript Hanna argues that the court has already recognized that the case “presents an issue of obvious public importance” and that there is a substantial difference of opinion with respect to the issues ostensibly resolved in the court’s order denying Hanna’s motion to dismiss.

Hanna focuses their motion on three issues they feel are the most important: 1) the practice-of-law exclusion; 2) the meaningful attorney involvement rule; and 3) the statute of limitations. It is Hanna’s position that all three of these issues are unique and/or critical and require an immediate appellate review to ultimately resolve the case in the most expeditious manner.

The CFPB now has the opportunity to file their own pleadings in response to this motion.  Normally the response would be due by Monday, August 10, 2015. However, the CFPB has filed a request for a two week extension to file their response.  That motion was not opposed by Hanna.

One final note; as part of the documents filed last week Hanna also filed their formal answer to the original CFPB complaint.  That document is available here.

insideARM Perspective

Throughout our coverage of this landmark case for collection lawyers insideARM has suggested that the case was likely to have a long life span. This motion is just another step in that process.

Statistics show that most litigation is settled prior to any trial.  What is a fascinating industry discussion in this case is whether any type of settlement is a viable option. The issues presented are vitally important not only to the Hanna law firm, but also all attorneys in the ARM space and all debt buyers that may look to pursue litigation as a collection tool. Hanna may not see a settlement as positive for them or their peers. Likewise, the CFPB has to decide whether any settlement would make sense for the Bureau.

insideARM will continue to monitor the case and report any new developments.