Oregon District Court Holds FTC Holder Rule Does Not Afford Right to Attorneys’ Fees Against Assignee

In Griffor v. Airport Chevrolet, Inc., 2009 WL 151698 (D.Or. 2009), Judge Hogan ruled on GMAC’s Motion to Dismiss the plaintiff’s claim for attorneys fees, which plaintiff claim was afforded by the FTC (and Oregon) Holder Rule(s).  Judge Hogan granted GMAC’s Motion to Dismiss, holding:

Under the FTC Holder Rule, the amount plaintiffs can recover against an assignee of a contract cannot exceed the amounts paid on the underlying contract. In addition, under ORS § 83.820(2), assignees are only liable for the amount that would be owing under the contract. This motion is only directed to the assertion of attorneys fees based on derivative liability. Plaintiffs may not assert a claim for fees under the contract language based only on derivative liability and to that extent the motion is granted. Plaintiffs’ assertion that ORS § 20.096 allows for recovery fees because the contract has a fees clause is misplaced because that applies to a direct action on the contract to enforce the provision of the contract. As noted above, derivative claims are limited to the amounts paid on the contract.

Although not cited by the Court, this decision is consistent with the decisions in Riggs v. Anthony Auto Sales, Inc., 32 F.Supp.2d 411 (W.D.La. 1998); Simpson v. Anthony Auto Sales, 32 F.Supp.2d 405 (W.D. La. 1998); Alduridi v. Community Trust Bank, N.A., 1999 WL 969644, *9 (Tenn.Ct.App. 1999); State ex rel. Stenberg v. Consumer’s Choice Foods, Inc., 755 N.W.2d 583, 590 (Neb. 2008); Psensky v. American Honda Finance Corp., 875 A.2d 290, 295,(N.J.Super.A.D. 2005).