This is a class action by borrowers alleging that a payday lending company violated New York civil rights and usury laws by targeting low-income and predominantly African-American communities for the marketing and issuance of short-term loans with annual interest rates in excess of 900%. A New York state trial court held that the payday lender’s mandatory arbitration clause barring claims for class-wide relief was enforceable, and ordered the plaintiffs to arbitrate their claims. The plaintiffs appealed.  In February of 2009, the U.S. Court of Appeals for the Third Circuit held that the Federal Arbitration Act does not preempt -- or wipe away -- state laws that protect consumers from abusive contract terms.

Then-Public Justice Attorneys Michael Quirk and Richard Frankel wrote the amici brief with input from Public Justice’s Paul Bland and co-counsel Deborah Zuckerman of AARP, Russ Hayes of New York Public Interest Research Group, and Rachel Weintraub of Consumer Federation of America.

Briefs and Documents for the Homa Case

Decision. (U.S. Court of Appeals for the Third Circuit, February 24, 2009) 

Reply Brief of Appellant. Reply brief argues that New Jersey law governs whether charge card issuer's contract is unconscionable, as it respects New Jersey state customers raising claims under New Jersey state law.  The brief argues that American Express's ban on class actions is unconscionable under New Jersey law, and that the Federal Arbitration Act does not preempt that law. (U.S. Court of Appeals for the Third Circuit, January 25, 2008 )

Brief of Plaintiff-Appellant. This brief urges the court to certify to the New Jersey Supreme Court the question of whether New Jersey law providing that an exculpatory class action ban embedded in an arbitration clause is unconscionable represents a fundamental policy of the state, or alternatively urges the court to strike such a contract provision as unenforceable under New Jersey law. (U.S. Court of Appeals for the Third Circuit, No. 07-2921, filed November 13, 2007)