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State v. Cross Country Bank9/13/2005
Respondent State of Minnesota sued appellants, a bank that issues credit cards and the company that collects payment on the cards, alleging violations of the Uniform Deceptive Trade Practices Act, Consumer Fraud Act, Automatic Dialing-Announcing Devices Act, and the tort of invasion of privacy by intrusion upon seclusion. In this appeal, appellants challenge the district court's denial of their motion to compel arbitration of the tort claim and grant of a temporary injunction governing collection procedures. We affirm in part and reverse in part.
FACTS
Appellant Cross Country Bank (CCB) is a Delaware-based, state-chartered bank that issues credit cards to consumers in the "subprime" market, i.e., people with a poor credit rating or low income. Appellant Applied Card Systems, Inc. (ACS) is a Delaware corporation that performs credit-card-servicing functions for CCB, including collection of delinquent accounts.
Respondent, the Minnesota Attorney General (the state), sued CCB and ACS, alleging that ACS's collection procedures violate the Deceptive Trade Practices Act (Minn. Stat. § 325D.44, subd. 1 (2004)) (DTPA); Prevention of Consumer Fraud Act (Minn. Stat. § 325F.69, subd. 1 (2004)) (CFA); and Automatic Dialing-Announcing Devices Act (Minn. Stat. § 325E.26 (2004)) (ADADA). The state also asserted a tort claim of invasion of privacy, specifically, intrusion upon seclusion.
The state requested relief in the form of: (1) a declaratory judgment that appellants violated the statutory provisions and committed tortious invasions of privacy on multiple occasions; (2) an injunction preventing appellants from engaging in the acts described in the complaint and/or otherwise violating the statutes invoked or committing further tortious invasions of privacy; (3) judgment for civil penalties under Minn. Stat. § 8.31, subd. 3 (2004), for each violation of the statutes and for each tortious invasion of the privacy of a Minnesota citizen; (4) "restitution under the parens patriae doctrine, Minn. Stat. § 8.31, the general equitable powers of this court . . . and any other authority for all persons injured by [appellants'] acts"; and (5) costs and attorney fees.
The state moved for a temporary injunction enjoining appellants' further violations of Minnesota statutes and acts of intrusion upon seclusion. The state submitted affidavits of CCB credit-card holders; card holders' family members, acquaintances, employers, and colleagues; people who assert that they received collections calls for CCB card holders whom they did not know, and former ACS employees. The affidavits describe a variety of allegedly unfair, deceptive or fraudulent, abusive, illegal, and intrusive practices by ACS debt collectors, including:
* calling consumers multiple times per day or multiple times within a very short period of time;
* calling consumers on holidays such as Easter and Labor Day;
* referring to consumers as "idiot," "assh----," "thief," "b----," or "liar" and telling a consumer that the collector was "more important than your f---ing child" or that the consumer "talk like a black person";
* ignoring or claiming not to have received multiple requests to stop calling for consumers unknown to the person answering the telephone or to stop calling card holders at their workplaces;
* tying up workplace phones in a hospital and a group home by making multiple calls in a short space of time;
* providing personal financial information to card holders' colleagues and work supervisors;
* calling homes as early as 6:30 a.m. and as late as 11:00 p.m.;
* using an auto-diali
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