Opinion
No. 72-1797. Summary Calendar.
Rule 18, 5th Cir.; see Isbell Enterprises, Inc. v. Citizens Casualty Co. of N. Y., 431 F.2d 409, Part I (5th Cir. 1970).
August 4, 1972.
J. L. Covington, Brownsville, Tex., for plaintiffs-appellants.
Ralph L. Alexander, Edinburg, Tex., for Tropical.
Curtis Bonner, Harlingen, Tex., for Cabco. Inc.
Appeal from the United States District Court for the Southern District of Texas.
Before BELL, DYER and CLARK, Circuit Judges.
Genoveva R. Sosa brought this action to rescind a consumer credit transaction in which she had transferred a security interest in her principal residence. She alleged that defendant had failed to make certain disclosures required by Title I of the Federal Consumer Credit Protection Act (Truth-in-Lending), 15 U.S.C.A. § 1601 et seq., and contended that § 1635 guaranteed her the right to rescind the transaction. The district court first concluded, citing § 1633 that inasmuch as the State of Texas has disclosure requirements similar to those provided for in the Act, and provided adequate enforcement thereof, Sosa's transaction was exempted from coverage under the Act; it further concluded that, in any event, the federal court was without jurisdiction under the provisions of § 1640 and consequently could not entertain the claim. Being unable to agree with either of these conclusions, we reverse.
§ 1635. Right of rescission as to certain transactions — Disclosure of obligor's right to rescind
§ 1633. Exemption for State-regulated transactions
§ 1640. Civil liability — Failure to disclose
(1) twice the amount of the finance charge in connection with the transaction, except that the liability under this paragraph shall not be less than $100 nor greater than $1,000; and
(2) in the case of any successful action to enforce the foregoing liability, the costs of the action together with a reasonable attorney's fee as determined by the court.
The Act does not leave it to the judiciary to determine whether any given state's transactions are exempted from the federal disclosure requirements. Under § 1633, such an exemption can be granted only by the Federal Reserve Board and then only after proper application has been made to and reviewed by that agency. See 12 C.F.R. § 226.12. No such action has been taken regarding any class of transactions in the State of Texas.
A more difficult issue, and one we need not reach, is that of whether the Act itself affords the federal court the authority to grant rescission. Though language in several recent cases indicates that § 1640, the only explicit jurisdictional grant within the Act, empowers the court to vindicate at least all rights protected in the credit transaction portion of the Act, § 1635-44, we decline to follow these indications. Nor do we agree with the lower court that Sosa's jurisdictional claim must necessarily be grounded under the Act, if at all. Though it is true that general jurisdictional statutes do not confer jurisdiction where an applicable regulatory statute otherwise precludes it, Schilling v. Rogers, 363 U.S. 666, 80 S.Ct. 1288, 4 L.Ed.2d 1478 (1960); Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 70 S.Ct. 876, 94 L.Ed. 1194 (1950); United Electrical Contractors Association v. Ordman, 258 F. Supp. 758 (S.D.N.Y. 1965), there is nothing in § 1640(e) which indicates either that it was designed to bar access to other jurisdictional grants or to be the exclusive entree to federal judicial relief.
Douglas v. Beneficial Finance Co. of Anchorage, 334 F. Supp. 1166 (D.Alaska 1971); Bernard v. Richter's Jewelry Co., 53 F.R.D. 606 (S.D.N.Y. 1971); Wheeler v. Adams Co., 322 F. Supp. 645 (D.Md. 1971); see also Jordan v. Montgomery Ward Co., 442 F.2d 78 (8th Cir. 1971).
We therefore consider Sosa's invocation of jurisdiction under 28 U.S.C.A. § 1337, and find it to be well-taken. That section provides that the district courts shall have original jurisdiction of any civil action arising under any Act of Congress regulating commerce. This Act plainly qualifies as a jurisdictional base. It, like Title II of the same Act, was the result of an exercise of Congressional power under the Commerce Clause, see Perez v. United States, 402 U.S. 146, 91 S.Ct. 1357, 28 L.Ed.2d 686 (1971), and was designed to enhance economic stabilization and strengthen competition among institutions and firms engaged in the extension of consumer credit. 15 U.S.C.A. § 1601. Further, there can be no question that the "arising under" tests are met. Sosa's claim is a direct assertion of a federal statutory right, and a construction of the statute and its accompanying regulations will have a direct bearing on recovery. Gomez v. Florida State Employment Service, 417 F.2d 569 (5th Cir. 1969).
Our decision in no wise passes on the merits of Sosa's claim, her motion for summary judgment, or the motions and contentions of certain would-be interveners. We hold only that the court below had jurisdiction to hear Sosa's complaint, and we remand the case for further proceedings.
We by no means derogate the Congressional intention that compliance with the Act should be enforced by administrative agencies, and through regulations issued by the Board. 15 U.S.C.A. § 1607. However, it is not contended by defendant, nor does our research disclose, that any administrative procedure presently exists to guarantee enforcement of rescission rights. See, e. g., 12 C.F.R. 226.9.
Reversed and remanded.
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(e) Any action under this section may be brought in any United States district court, or in any other court of competent jurisdiction, within one year from the date of the occurrence of the violation.