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Consumer Arbitration Agreements: 5.4.2.4 Narrow Clauses

Narrowly written clauses, by contrast, do not cover claims that are not clearly encompassed by the contract.147 Thus, “[w]here the arbitration clause is narrow, a collateral matter generally will be beyond its purview.”148 For instance, those courts that have construed “arising under” language narrowly have limited its reach to claims relating to the interpretation and performance of the contract itself.149

Consumer Arbitration Agreements: 5.4.4 Whether One Contract’s Arbitration Clause Applies to Claims Arising from Another Contract

Another issue is whether an arbitration agreement contained in one contract applies to claims arising out of a second contract between the same parties (whether entered into before, after, or contemporaneously with the first contract).201 Generally, unless the agreement with the arbitration clause specifically references the other contract, the arbitration agreement should not apply to disputes arising out of the other contract.202 This is true even if the two contracts are closely intertwined.

Consumer Arbitration Agreements: 5.5.1 Overview

This section addresses whether a non-signatory is subject to an arbitration clause: can a non-signatory invoke an arbitration clause and can a signatory invoke such a clause against a non-signatory? Because arbitration is a matter of contract, it should be compelled only when it is consistent with the intent of the contracting parties. Parties generally intend that the contracts they sign apply only to the parties enumerated in the agreement.

Student Loan Law: 3.5.3.9.1 Forgiveness period

Income-driven repayment (IDR) plans provide that the remaining loan balance will be forgiven after the borrower makes qualifying payments under the plan for a specified number of years. This period is twenty years for borrowers in PAYE or IBR with loans taken out on or after July 1, 2014.209 The period is twenty-five years for borrowers in IBR with loans taken out prior to July 1, 2014.210

Student Loan Law: 3.5.3.9.3 One-Time IDR account adjustment

In recognition of the historical failures in income-driven repayment (IDR) servicing that has led many borrowers to unfairly miss out on earning qualifying time toward forgiveness, the Department announced a one-time, retroactive adjustment to how it will count what past time in repayment qualifies toward the twenty- or twenty-five year period required for forgiveness under the IDR plans (i.e., IBR, PAYE, REPAYE/SAVE, and ICR).231 As of February 2024, two policy institutes—the Cato Institute and the Mackinac C

Student Loan Law: 3.5.3.9.4 Forgiveness process

Although borrowers have to apply (or request) to enroll in IDR, they do not have to do anything to apply for or secure forgiveness once they have met the requirements for IDR forgiveness by making the requisite number of qualifying payments.

Student Loan Law: 3.5.3.9.5 Tax consequences of IDR forgiveness

Under current tax law, when the balance of a student loan is forgiven, the amount forgiven will be treated as income for tax purposes.246 However, the American Rescue Plan Act of 2021 (American Rescue Plan Act), temporarily removes federal income tax consequences for all federal student loan cancellations—including income-driven repayment (IDR) forgiveness—that occur between January 1, 2021 and December 31, 2025.247

Consumer Class Actions: 2.4.4.4 Parens Patriae Enforcement Suits by the State

A parens patriae or “parent of the country” action is rooted in the English common-law concept of the “royal prerogative,” which included the power of the king to act “as guardian of persons under legal disabilities to act for themselves.”230 In the Unites States, the “royal prerogative” and the king’s parens patriae power passed to the states, and the scope of parens patriae suits has expanded beyond what existed in England.231 A state will have standing to sue as

Consumer Class Actions: 2.5.1.1 Cases Originally Filed in Federal Court

For both the Class Action Fairness Act of 2005 (CAFA) and ordinary diversity jurisdiction, there are two general rules with respect to establishing the amount in controversy: (1) the amount in controversy claimed by a plaintiff in good faith is determinative on the issue of jurisdictional amount unless it appears otherwise “to a legal certainty”;259 and (2) the party that chooses federal court must set out the basis of federal jurisdiction and generally bears the burden of proof “by a preponderance of the evidence” on any contested factual al

Consumer Class Actions: 2.5.2 Removal Jurisdiction

The burden of establishing federal jurisdiction is on the party seeking removal.287 The removal statute is strictly construed against removal jurisdiction, with a strong presumption against such jurisdiction.288 Despite a small amount of legislative history289 suggesting that the CAFA altered this presumption, most courts initially relied on the statutory text and found that the presumption applied with equal force to CAFA cases.

Consumer Class Actions: 2.5.3 Exceptions to CAFA Jurisdiction

If it is shown that the basic prerequisites of the CAFA for federal court jurisdiction are satisfied because the amount in controversy exceeds $5 million and there is minimal diversity, the CAFA nevertheless provides for exceptions to federal jurisdiction for cases that are truly local in nature.301 When a party seeks to avail itself of an express statutory exception to federal jurisdiction granted under the Act, the burden is on the party invoking the exception—whether it be the defendant seeking dismissal of an action originally filed in fe

Consumer Class Actions: 6.1 Introduction

This chapter examines the steps consumer lawyers can take to protect the class efficiently and effectively throughout the different stages of litigation. The steps can be divided into three timeframes: before the complaint is filed, after the complaint is filed but before the class has been certified, and after the class is certified. With that framework in mind, this chapter discusses:

Consumer Class Actions: 6.3.2 Preliminary Actions to Preserve Documents and ESI Before Filing

Abraham Lincoln said, “[g]ive me six hours to chop down a tree and I will spend the first four sharpening the axe.” As with all litigation, much of the most important work on a case begins long before the complaint is filed. In order to protect the class, it is good practice for a consumer lawyer to spend a significant amount of time doing pre-suit investigation, which will enable class counsel to start the case in a strong position and with a good command of key evidence.