EAST ST. LOUIS - Chief U.S. District Judge Nancy Rosenstengel ruled on Feb. 11 that national class action law doesn’t allow St. Clair County jurisdiction for a claim that a buyer of automobile financing contracts takes advantage of borrowers who lack clear titles.
She found the amount in controversy plausibly exceeds a $5 million limit on class actions in state courts and the class plausibly exceeds a limit of 100 members.
Now she must decide whether to keep the action or enforce arbitration.
Plaintiff Crystal Brown of St. Louis bought a 2016 Honda Pilot from Frank Leta Honda in O’Fallon, Mo. in 2021.
She signed a payment contract which Leta sold to Santander Consumer USA.
In January 2024, her counsel Benjamin McIntosh of St. Louis sued Santander at St. Clair County circuit court.
He alleged violation of consumer protection statutes in 48 states, breach of warranty of title and negligent misrepresentation.
He claimed Brown tried to register the Pilot in Missouri and received a certificate showing two other owners and a bank as first lien holder.
He claimed Brown requested a release of her lien so she could resolve the bank’s lien.
“Santander refused to provide a lien release until the car was paid off,” he wrote.
“Santander also demanded that Brown continue making regular payments on her car loan even though she was unable to register it.”
He claimed she paid Santander more than $9,000.
He claimed Santander knew or should have known about the lien.
He proposed two classes, one seeking damages for similar collections and the other seeking an injunction against future collections.
He moved for a preliminary injunction, claiming “thousands of people may be unnecessarily and irreparably thrust into financial catastrophe.”
Santander removed the complaint to district court last March and moved to stay the proceedings pursuant to arbitration law.
Brown moved to remand the complaint to St. Clair County.
Magistrate Judge Reona Daly granted the stay.
The parties didn’t consent to magistrate jurisdiction and the clerk assigned Rosenstengel.
She heard argument on the remand motion on Feb. 11 and entered an order that day.
She found Santander collection director Randy Brockenstedt stated in an affidavit that in four years Santander purchased more than three million contracts like Brown’s.
She found Santander tracks when its liens are not perfected within 90 days and it identified 61,390 such cases in four years.
She found Santander posited that if 1% of those cases were attributable to a dealer’s failure and if damages were about $10,000 each, aggregate damages would be $6,319,000.
She found Brown dismissed the calculation as guesswork but offered no facts of her own.
She quoted the line about thousands of people in Brown’s motion for preliminary injunction and stated she’d take Brown at her word.
She found the Seventh Circuit has endorsed the types of calculations and assumptions based on evidence that Santander submitted.
She lifted the stay and directed Santander to refile its motion to stay by Feb. 18.
Robert Brener of New Jersey represents Santander.