Koons Buick Pontiac GMC, Inc. v. Nigh

PETITIONER:Koons Buick Pontiac GMC, Inc.
LOCATION:Texas State Capitol

DOCKET NO.: 03-377
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: United States Court of Appeals for the Fourth Circuit

CITATION: 543 US 50 (2004)
GRANTED: Jan 20, 2004
ARGUED: Oct 05, 2004
DECIDED: Nov 30, 2004

A. Hugo Blankingship III – argued the cause for Respondent
Donald B. Ayer – argued the cause for Petitioner

Facts of the case

Bradley Nigh bought a car from Koons Buick Pontiac GMC. Nigh later sued the dealership for intentionally charging him for a car feature for which he did not agree to pay. Nigh sued under the federal Truth in Lending Act (TILA). A federal district court awarded Nigh about $24,000. Koons Buick appealed and argued the district court ignored TILA’s cap on damages to $1,000. A Fourth Circuit held that a 1995 amendment to the act removed the $1,000 cap on recoveries involving loans secured by personal property.


Could parties who suffered no actual damages recover more than the Truth in Lending Act’s original $1,000 cap because of subsequent amendments to the act?

Media for Koons Buick Pontiac GMC, Inc. v. Nigh

Audio Transcription for Oral Argument – October 05, 2004 in Koons Buick Pontiac GMC, Inc. v. Nigh

Audio Transcription for Opinion Announcement – November 30, 2004 in Koons Buick Pontiac GMC, Inc. v. Nigh

John Paul Stevens:

Justice Ginsburg has an opinion to announce.

Ruth Bader Ginsburg:

This case presents a question of statutory interpretation thus the truth in Lending Act as amended in 1995 caps statutory damages in addition to any proven actual damages and $1,000.00 for violation of the Act’s requirements for consumer loans secured by personal property in this case a motor vehicle.

The truth and Lending Act instruct lenders to disclose certain information to borrowers and imposes civil liability on lenders who fail to do so.

As originally enacted in 1968 the Act set double the amount of the finance charge as statutory damages with this exception.

For each violation Congress specify the minimum recovery of $100.00 and maximum damages of $1,000.00.

Congress amended the Act in the 1970’s dividing the statutory damages provision in two clauses: Clause (i) sets statutory damages for long transaction at double the amount of the finance judge, and clause (ii) set damages for lease transactions at 25% of the monthly payment.

Congress retained the $100.00 floor and $1,000.00 dollar ceiling on recovery, and courts consistently held that these limits apply to all consumer financing transactions whether lease or loan.

In 1995, Congress again amended the act by adding a new clause (iii) which increase the limit on recovery but only for violations relating to closed-end mortgage loans commonly home acquisition loans.

In lieu of the $100.00 minimum and $1,000.00 maximum Congress substituted $200.00 and $2,000.00.

Bradley Nigh the respondent here plaintiff below maintains that the 1995 amendment had a further more dramatic effect.

Elimination of the $1,000.00 cap on damages recoverable under clause (i).

Nigh attempted to buy a truck from petitioner Koons Buick the financing for the truck well through causing Nigh to lose both that truck and the vehicle Nigh has traded for it.

Nigh commence suit asserting that Koons Buick among other wrongs has violated the Truth in Lending Act by falsely listing a charge of $965.00 for a car alarm Nigh did not order or received.

A jury returned a verdict ordering Nigh double the amount of the finance charge in dollars approximately $24,000.

The US Court of Appeals for the Fourth Circuit affirmed that award holding as Nigh urged that the 1995 amendment removed the $1,000.00 cap on recoveries under clause (i) of the statutory damages provision.

We reverse the Court of Appeals judgment and hold that the 1995 amendment left unaltered the $100.00 floor and $1,000.00 ceiling on recoveries under clause (i).

Less than meticulous drafting of the 1995 amendment created and ambiguity the phrase prescribing the $100.00 floor and $1,000.00 ceiling located at the end of clause (ii) reads, except that liability under this subparagraph shall not be less than $100.00 nor greater than $1,000.00.

Congress ordinarily follows a hierarchical scheme in subdividing statutes.

The word subparagraph generally refers to a division preceded by a capital letter the word clause to a division preceded by a lower case roman number.

The three clauses at issue, all in lower case roman numbers, appear in a subparagraph preceded by capital “a”.

Had congress meant to restrict the $100.00 floor and the $1,000.00 ceiling to clause (ii) of subparagraph “a”?

It likely would have flagged that substitute change at least Congress might have stated in clause (ii) liability under this clause.

The statutory history cast lie down on Congress’s meaning the $100.00 floor and $1,000.00 ceiling from the start have applied to loans in the clause (i) category.

The new clause (iii) removes closed-end mortgage loans from clause (i)’s governance only to the extent that clause (iii) raises the minimum and maximum recoveries.

There is scant indication that by raising the minimum and maximum recoveries for mainly home acquisition mortgage loans Congress meant thereby to repeal the dollar limitation on all other loans.

We therefore conclude that the $100.00 floor and $1,000.00 ceiling continue to apply to recoveries for Truth In Lending Act violations involving loans described in clause (i) and leases described in clause (ii).

Indicating the large interest the statutory construction case has generated Justice Stevens has filed a concurring opinion in which Justice Breyer joins.

Justice Kennedy has filed a concurring opinion in which the Chief Justice joins; Justice Thomas has filed an opinion concurring in the judgment, and Justice Scalia has filed a dissenting opinion.