Koons Buick Pontiac GMC, Inc. v. Nigh

On February 4, 2000, Bradley Nigh (defendant) tried to buy a used 1997 truck from Koons Buick Pontiac GMC (plaintiff). On October 3, Nigh filed suit against Koons Buick, alleging a violation of the Truth in Lending Act (TILA). TILA originally contained a provision in § 1640(a)(1) providing for statutory damages of twice the finance charge in connection with the transaction and imposing limits that indicated “liability under this paragraph shall not be less than $100 nor greater than $1,000.” In 1974 the statutory-damages provision was moved from § 1640(a)(1) to § 1640(a)(2)(A), and the $100/$1,000 limits were retained. Additionally, the language was changed from “under this paragraph” to “under this subparagraph.” In 1976 § 1640(a)(2)(A) was further amended to add protections to consumer leases. The section provided statutory damages: (i) twice the amount of a finance charge in connection with a transaction, or (ii) 25 percent of the total monthly payment under a consumer lease, except that liability under this subparagraph could not be less than $100 or more than $1,000. Courts held that the $100/$1,000 limits applied to all consumer-financing transactions. In 1995 Congress further amended TILA’s statutory-damages provision and added (iii) at the end of § 1640(a)(2)(A), which set a $200/$2,000 limit for statutory damages relating to a closed-end transaction secured by real property. In 1997 the Seventh Circuit said that addition of this clause did not change the statutory-damage limits in (i) or (ii). Under § 1603(3), TILA did not apply if the total amount financed exceeded $25,000, unless the security interest was real property or personal property used as a dwelling. Nigh sought recovery of twice the finance charge, equivalent to $24,192.80, but Koons Buick argued that he was limited to $1,000 in statutory damages. The district court awarded Nigh $24,192.80. A divided Fourth Circuit affirmed. Koons appealed to the United States Supreme Court.