A California federal judge has rejected the attempt of Castle & Cooke Mortgage, LLC, the mortgage company that entered into a consent order with the CFPB in November 2013 to settle charges that it violated the Regulation Z loan originator compensation rule, to dismiss two counts of an amended class action complaint filed against it by a consumer who received redress under the consent order.  The amended complaint alleged violations of TILA, violations of the Utah Residential Mortgage Practices and Licensing Act, unjust enrichment under Utah law, and as to a California subclass, violations of California’s Unfair Competition Law (UCL).  (The original complaint also included a RESPA claim.)

The mortgage company sought dismissal of the unjust enrichment and UCL claims.  The court rejected the mortgage company’s argument that the plaintiff could not pursue equitable relief because his TILA claim provided him with an adequate legal remedy.  According to the court, the plaintiff could alternatively plead unjust enrichment because it was too early in the case to determine if the plaintiff’s TILA claim was viable.

The mortgage company also argued that because the UCL only provides for equitable relief in the form of restitution or an injunction, the plaintiff’s UCL claim was precluded by his TILA claim.  In addition, it argued that the plaintiff had not shown any ongoing TILA violation that an injunction would prevent on a prospective basis or that restitution was available to force the mortgage company to give up something it was not entitled to and that plaintiff should have been allowed to keep.  In refusing to dismiss the UCL claim, the court indicated that resolution of such issues went beyond the confines of a motion to dismiss and “whether Plaintiff or any class member is entitled to restitution beyond that already paid by the CFPB is similarly not amenable to determination at the pleadings stage.”

The mortgage company appears not to have argued that the redress obtained by the plaintiff pursuant to the CFPB consent order barred the filing of the class action.  As we commented when the plaintiff filed his complaint, in the absence of releases from affected consumers, a company does not necessarily achieve finality as to issues involved in a CFPB enforcement action by entering into a CFPB consent order.