Litigation Successes

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The NC Justice Center has a long and proud record of successful litigation on behalf of North Carolinians with low incomes. Justice Center lawyers have led or provided critical assistance in dozens of high-impact cases that have secured millions of dollars for North Carolinians and validated numerous important rights. The following are examples of such cases. 

Lawsuits Challenging the Collection Practices of Debt Buyers

The NC Justice Center brought two landmark class actions against Portfolio Recovery Associates, LLC (“PRA”), the nation’s second largest debt buyer, to enforce North Carolina laws that restrict debt buyers’ collection activity in this state.  The two cases resulted in a combined recovery of nearly $10 million for more than 40,000 class members, as well as the dismissal of PRA’s pending debt collection cases and the cancellation of approximately $35 million in judgment debt. The NC Justice Center co-counseled these cases with attorneys Jerry Hartzell, Travis Collum, Suzanne Begnoche, and Adrian Lapas. 

In Portfolio Recovery Associates, LLC v. Houston (Iredell County Case No. 12-CVS-642), PRA had sued Ms. Houston for the collection of a debt, and the NC Justice Center—with co-counsel Travis Collum, Adrian Lapas, and Suzanne Begnoche—asserted counterclaims on behalf of Ms. Houston and all similarly situated persons, alleging that PRA had failed to comply with North Carolina law that specifically regulated debt-buyer collection activity.  After six years of litigation, the case settled, with PRA agreeing to pay $4 million into a settlement fund for distribution to class members and to dismiss all lawsuits that were pending against class members. 

In Pounds, et al. v. Portfolio Recovery Associates, LLC (Durham County Case No. 16-CVS-5190), the NC Justice Center—with co-counsel Jerry Hartzell, Travis Collum, and Adrian Lapas—brought a second class action against PRA to challenge the way that PRA had obtained default judgments against North Carolina debtors.  The case resulted in a settlement in which PRA agreed to pay $5.75 million into a settlement fund for distribution to class members and agreed to cancel approximately $35 million worth of default judgments owed by class members to PRA. Read the Final Judgment. 

The case also resulted in a big win for consumers regarding the issue of forced arbitration.  PRA had attempted to get rid of the case by arguing that the plaintiffs had agreed to arbitrate any issues relating to their credit cards, based on the terms and conditions of the underlying credit card agreements, and that PRA could enforce the arbitration provisions because they had purchased the credit card debts and stood in the shoes of the original creditor.  The NC Justice Center successfully defeated PRA’s motion to compel arbitration in superior court, and the trial court’s ruling was upheld by the North Carolina Court of Appeals in a unanimous opinion. Read the full opinion.    

Additionally, in Townes v. Portfolio Recovery Associates, LLC (Mecklenburg County Case No. 18-CVS-18069), the NC Justice Center represented Ms. Townes in a further challenge to PRA’s debt-collection practices, including the manner in which it obtains default judgments in North Carolina.  The NC Justice Center obtained a unanimous published ruling by the NC Court of Appeals, holding that PRA was liable to the NC Justice Center’s client on all four of her claims.  PRA then appealed to the Supreme Court of North Carolina, which affirmed the ruling by a 3-3 decision.  Unfortunately, the 3-3 deadlock meant that the Court of Appeals’ ruling lost its precedential value. 

Challenges to Payday Lenders

Kucan v. Advance America
In late 2010, NC Justice Center attorneys settled three class action lawsuits against payday lending companies, for a total of $43.75 million for more than 364,000 class members. The settlements in these cases are higher than any other settlement against a payday lender in the entire country. NC Justice Center attorney Carlene McNulty and co-counsel received an award from Public Justice for this litigation effort, and Carlene received the National Consumer Law Center’s Vern Countryman Award, which honors the top consumer law attorney in the country. 

In 2013, Justice Center attorneys paid the final settlement proceeds to victims of illegal payday loans recovered in these major class action lawsuits. Settlements in these cases also resulted in the payment of over $1 million to the state’s Indigent Defense and IOLTA programs to support the provision of legal representation for the poor. 

Other Important Cases:

Hyatt v. Barnhart
The settlement order in this state-wide class action requires the Social Security Administration to review more than 75,000 disability cases that were wrongfully denied or terminated in the 1980s. The NC Justice Center monitored the enforcement of this order, which has resulted in hundreds of millions of dollars in back benefits for claimants. The lawsuit, originally filed by Legal Services of Southern Piedmont, was co-counseled with the law firms of Cox, Gage & Sasser and Robinson, Bradshaw & Hinson. 

Davis, et al. v. Winston-Salem Housing Authority
This case, with a class of current and former tenants of the Winston-Salem Housing Authority as plaintiffs, involved the housing authority’s failure to implement the federal income exclusion rule. A settlement provides the named plaintiffs with full compensation for the rent they overpaid, ensures class members receive the benefit of the federal income exclusion rule, and requires that the rule be applied correctly in the future. The NC Justice Center co-counseled this case with the law firm of Eliott, Pishko, Gelbin & Morgan. 

Tomlin et al v. Chase Mortgage Brokers
This is a class action involving borrowers who obtained home loans through a mortgage broker that charged excessive and improper fees and premiums. The case resulted in an average award of $5,100 for 1,300 borrowers. The NC Justice Center co-counseled with the law firms of Hartzell & Whiteman; Gulley & Calhoun; Mallam Maynard; and Patterson, Harkavy & Lawrence.