Orosco v. Ovation Lending

Filing 20

ORDER GRANTING 16 Motion to Certify Order for Interlocutory Appeal; GRANTING 16 Motion to Stay Case, This case is STAYED pending further Order by the Court. Signed by Judge Robert Pitman. (wg)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION
DAVID LEONARD OROSCO,

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PLAINTIFF

V.
OVATION LENDING, LLC,
DEFENDANT

No. SA-14-CV-00897-RP

ORDER
Before the Court are Ovation Lending, LLC’s Opposed Motion to Certify Order for
Interlocutory Appeal and Stay Action Pending Appeal, filed on February 19, 2015 (Clerk’s Dkt. #16),
and Plaintiff’s Response to Defendant’s Motion to Certify Order for Interlocutory Appeal and for
Stay, filed on February 24, 2015 (Clerk’s Dkt. #18). Having reviewed the parties’ pleadings and
the applicable case law, the Court finds that Defendant’s motion should be granted.
This case is one of six (6) putative class action lawsuits filed in the Western District of
Texas by Plaintiff’s counsel against companies in the business of making property tax loans to
homeowners. Plaintiffs allege these companies, regulated and licensed by the State of Texas as
property tax lenders, violated the Truth in Lending Act (“TILA”) and the Home Ownership and
Equity Protection Act (“HOEPA”) when making these loans. Defendants contend the lawsuits
should be dismissed because Texas property tax loans are not consumer credit transactions
subject to the provisions of TILA and HOEPA.
In one related case, Judge Garcia agreed with the defendant’s reasoning and granted
dismissal for failure to state claim upon which relief can be granted.1 In another related case,
Judge Hudspeth rejected the defendant’s argument and denied the motion to dismiss.2 Both
1

See Billings v. Propel Financial Services, LLC, No. SA-14-CV-764-OLG.

2

See Torres v. Propel Financial Services, LLC, No. SA-14-CV-1040-HLH.

rulings are on appeal to the Fifth Circuit Court of Appeals.
In the present case, by Order dated February 9, 2015, this Court denied Defendant’s Motion
to Dismiss with respect to Plaintiff’s TILA and HOEPA claims, finding the statutes do apply to
property tax loans made under Texas law. Defendant seeks to appeal this Order, and asks the
Court to stay the proceedings until such time as the Fifth Circuit can resolve the issue.
Under 28 U.S.C. § 1292(b), a district court may certify an order for interlocutory appeal
when of the opinion such order “involves a controlling question of law as to which there is
substantial ground for difference of opinion and that an immediate appeal from the order may
materially advance the ultimate termination of the litigation.” Such certification is at the court’s
discretion. United States v. Caremark, Inc., 634 F.3d 808, 814 (5th Cir. 2011).
Whether Texas property tax loans are consumer credit transactions for purposes of TILA
and HOEPA is a controlling question of law presenting substantial ground for differences in opinion.
To date, three judges in the Western District of Texas have issued opinions on the matter, and
each came to a different conclusion regarding the correct interpretation of the law. As it stands
now, there is a conflict between the courts as to whether plaintiffs in these lawsuits state a claim
upon which relief can be granted under TILA and HOEPA. Because this threshold question is
potentially dispositive, an appeal of the issue would materially advance the ultimate termination of
the litigation.

In light of these factors, this Court is of the opinion that the Order denying

Defendant’s Motion to Dismiss should be certified for interlocutory appeal to the Fifth Circuit. In
the interests of judicial economy and efficiency, this Court is also of the opinion that the action
should be stayed pending resolution of the issue by the Fifth Circuit.
It is therefore ORDERED that the Court’s Order dated February 9, 2015 denying
Defendant’s Motion to Dismiss (Clerk’s Dkt. # 14) is hereby CERTIFIED for an immediate
interlocutory appeal to the Fifth Circuit Court of Appeals.

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It is further ORDERED that proceedings in this case are hereby STAYED pending further
Orders of this Court.
SIGNED on March 3, 2015.

ROBERT L. PITMAN
UNITED STATES DISTRICT JUDGE

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