Johnson v. West Suburban Bank
United States Court of Appeals for the Third Circuit
225 F.3d 366 (2000)
- Written by Alexander Hager-DeMyer, JD
Facts
Terry Johnson (plaintiff) entered into a loan agreement with West Suburban Bank (West) (defendant) for a short-term loan. The agreement imposed a high rate of interest on the two-week loan and included an arbitration clause. Johnson filed suit in federal district court on behalf of a putative class, claiming that West violated the Truth in Lending Act (TILA) by failing to disclose the interest rate. West filed a motion to dismiss the action and asserted that the dispute was subject to arbitration under the loan agreement. Johnson argued that the arbitration clause should not be enforced because TILA was intended to encourage class-action suits and because the legislative history of the act indicated that class-action suits were meant to further public-policy goals and serve as deterrents to creditors who might violate the act. The district court ruled in favor of Johnson and denied West’s motion. West appealed to the United States Court of Appeals for the Third Circuit.
Rule of Law
Issue
Holding and Reasoning (Becker, C.J.)
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