Belyea v. GreenSky, Inc. et al

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United States District Court
Northern District of California
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
ELIZABETH BELYEA, et al.,
Plaintiffs,
v.
GREENSKY, INC., et al.,
Defendants.
Case No. 20-cv-01693-JSC
ORDER RE: MOTION FOR PARTIAL
SUMMARY JUDGMENT
Re: Dkt. No. 338
Plaintiffs’ certified class action alleges GreenSky, which partners with contractors and
banks to provide point-of-sale loans to consumers, charges fees in violation of California
consumer protection statutes. (Dkt. No. 216.)1 The Court previously concluded “GreenSky is
entitled to summary judgment on all performance fee-related claims” because Plaintiffs agreed to
dismiss Plaintiff David Ferguson’s claims related to performance fees and did not present
evidence Plaintiff Heidi Barnes was injured by performance fees. (Dkt. No. 294 at 28.) Plaintiffs
subsequently asserted the California Credit Services Act (“Credit Act”) permits them to “recoup
the money they paid toward performance fees—even if those fees did not injure Plaintiffs.” (Dkt.
No. 341 at 7.) Pending before the Court is GreenSky’s motion for partial summary judgment on
the issue of “performance fee recoveries sought by named Plaintiff Heidi Barnes.” (Dkt. No. 338
at 6.) Having carefully reviewed the parties’ submissions, and with the benefit of oral argument
on September 18, 2025 and supplemental briefing, the Court GRANTS GreenSky’s motion for
partial summary judgment. The Credit Act does not permit recovery of amounts paid that did not
result in injury and are unrelated to the injury conferring statutory standing to sue.
1 Record citations are to material in the Electronic Case File (“ECF”); pinpoint citations are to the
ECF-generated page numbers at the top of the documents
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BACKGROUND
The Court’s January 2, 2025 order contains a detailed summary of the factual and
procedural history in this case. (Dkt. No. 279 (sealed); Dkt. No. 294 (unsealed).) Briefly,
Greensky partners with contractors (“merchants”) and banks to provide point-of-sale loans to
consumers for home-improvement and home-maintenance projects. (Dkt. No. 294 at 1.)
GreenSky collects two types of fees. (Id. at 2.) First are “transaction fees,” which the merchant
pays GreenSky when a consumer uses a GreenSky Program loan to pay the merchant. (Id.)
Second are “performance fees,” which GreenSky receives from bank partners. (Id.) Performance
fees are calculated across all loans in the lender’s portfolio at the end of the month:
The [performance fee] includes “all amounts billed to the borrowers,
fees and finance charges, less the fixed servicing fee, less all credit
losses, [and] less the bank margin or the yield that . . . the servicing
fee sets forth that is due to the lender.” (Dkt. No. 235-7 at 33.) “[T]o
the extent that the result of that calculation is a positive number,”
GreenSky is due the remainder as a performance fee.
(Id.)
Plaintiffs filed a putative class action against GreenSky, alleging the company’s business
practices violate California consumer protection statutes. The amended complaint alleges (1)
violations of the Credit Act, Cal. Civ. Code §§ 1789.10; (2) violations of California’s Unfair
Competition Law (“UCL”), Cal. Bus. & Prof. Code § 17200, including for predicate California
Financing Law (“Financing Law”), Cal. Fin. Code § 22000, violations; and (3) unjust enrichment.
(Dkt. No. 216.) The amended complaint alleges entities that make or broker consumer loans in
California and assist consumers in obtaining extensions of credit are regulated by the Financing
Law and the Credit Act, respectively. (Id. ¶¶ 15-18.) Both laws require entities to register with
the California Department of Justice or Department of Business Oversight and disclose specified
information to consumers. (Id. ¶ 19.) Both laws “also limit the nature and amount of fees that
lenders, brokers, and credit services organizations may charge.” (Id. ¶ 20.) The amended
complaint alleges GreenSky fails to comply with the Financing Law’s and Credit Act’s
requirements. As a result, “Plaintiffs and Class members have suffered injury and damages,
including that they paid more in connection with their GreenSky-serviced loans than they
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otherwise would have.” (Id. ¶ 111.)
GreenSky moved for “summary judgment on each of Plaintiffs’ claims,” asserting
Plaintiffs “failed to adduce any evidence to show that (a) their GreenSky Program merchants
passed through to them any portion of the ‘transaction fee’ the merchants paid GreenSky related to
Plaintiffs’ loans, or (ii) they paid any part of an ‘incentive payment’ that Program banks paid to
GreenSky pursuant to negotiated contracts between GreenSky and those lenders.”2 (Dkt. No. 254
at 7.) Essentially, GreenSky argued Plaintiffs could not prove they were injured by paying
transaction fees or performance fees, so “Plaintiffs’ claims relating to such payments [could not]
survive summary judgment.” (Id. at 22.)
In its Order, the Court observed Plaintiffs’ Credit Act, UCL, and unjust enrichment claims
all “require[] proof of injury.” (Dkt. No. 294 at 13.) On this issue, “Plaintiffs presented evidence
creating a dispute of fact as to injury resulting from transaction fees, but Plaintiffs [did] not
present[] evidence creating a dispute of fact as to performance fees.” (Id.) Regarding transaction
fees, Plaintiffs’ theory was that Ms. Barnes, Mr. Ferguson, and every class member paid GreenSky
transaction fees because the merchants “passed through a portion of the transaction fee to them . . .
in the form of inflated project costs.” (Id.) Plaintiffs contend the imposition of transaction fees
violates Credit Act section 1789.13(d)(2) because the fees “are derived from payments made by
buyers to GreenSky’s bank partners for costs, fees, finance charges, or principal,” as well as
Financing Law section 22305, because—at least as to Mr. Ferguson—GreenSky “charge[d]
administrative fees in excess of $50 for loans of $2500 or less, and $75 for loans more than
$2500.” (Dkt. No. 216 ¶¶ 109(a), 116(f).)3 As evidence, Plaintiffs filed an expert report
“conclud[ing] every class member paid transaction fees in the form of inflated project costs.”
(Dkt. No. 294 at 35.) So, Plaintiffs argued, GreenSky’s imposition of the transaction fee via a
pass through injured consumers. (Id.; Dkt. No. 235-3 at 29 (class certification motion arguing
2 “Transaction fees” are also referred to as “merchant fees,” and “performance fees” are also
referred to as “incentive payments.” (Dkt. No. 294 at 2.)
3 The Court held GreenSky was entitled to summary judgment on Ms. Barnes’s section 22305
claim because “Ms. Barnes’s loan was more than $5,000, and the Financing Law cap does not
apply to loans over $5,000.” (Dkt. No. 294 at 20 (citing Cal. Fin. Code § 22250(b)).)
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“[t]he fact that GreenSky’s unlawful transaction fees were passed through to the class, inflating
the prices of their projects, constitutes an injury under California law”).) Because Plaintiffs
presented evidence creating a dispute of fact, the Court denied GreenSky’s summary judgment
motion as to the transaction fee claims. (Dkt. No. 294 at 19.)
Regarding performance fees, Plaintiffs argued GreenSky’s collection of performance fees
also violated Credit Act § 1789.13(d)(2). (Dkt. No. 294 at 15.) Section 1789.13(d)(2) prohibits a
credit services organization from:
Charg[ing] or receiv[ing] any money or other valuable consideration
for referral of the consumer to a retail seller or other credit grantor
who will or may extend credit to the consumer, if . . . The money or
consideration is paid by the credit grantor or is derived from the
consumer’s payments to the credit grantor for costs, fees, finance
charges, or principal.
Cal. Civ. Code § 1789.13(d)(2). While Plaintiffs presented evidence from which a factfinder
could conclude the performance fees Ms. Barnes’s lender paid GreenSky were derived, in part,
from interest Ms. Barnes paid her lender, the payment of interest on the loan GreenSky generated
did not, by itself, constitute injury. (Dkt. No. 294 at 16.) And Plaintiffs’ theory “GreenSky set the
interest rate on Ms. Barnes’s loan at a rate higher than the bank would otherwise require, so Ms.
Barnes spent money she would not have spent absent GreenSky’s allegedly unlawful conduct—
lack[ed] sufficient evidentiary support.” Furthermore:
Nor does the evidence support a finding Ms. Barnes in particular paid
more interest than InTrust (or any other bank) would have charged
her for a similar loan, let alone that the higher rate was caused by the
performance fees. There are no documents from InTrust reflecting
interest rates. No deposition testimony. And no expert regression
analysis. And, indeed, Ms. Barnes herself thought she received a
good interest rate. (Dkt. No. 241-54 at 50 (“I don’t think the interest
rate is too high. It’s a good interest rate.”).
(Id. at 17.) So, the Court granted GreenSky’s “motion for summary judgment on the performance
fee claims.” (Id. at 19.)
Plaintiffs subsequently filed a motion for clarification “ask[ing] that the Court clarify its
summary-judgment ruling to confirm that the Court did not construe the [Credit Act]’s damages
provision or otherwise rule on the scope of damages available under the [Credit Act].” (Dkt. No.
305 at 8.) Plaintiffs contended because the performance fees are derived from the interest Ms.
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Barnes and class members paid, the performance fees constitute amounts the class paid to
GreenSky and therefore can be recovered as damages for GreenSky’s Credit Act violation even if
the performance fees did not injure Ms. Barnes or class members. (Id. at 4-5.) In response, the
Court “clarifie[d] it did not decide whether the Credit Services Act permits Plaintiffs—should they
prevail—to recover performance fee damages even though the Court granted summary judgment
as to Plaintiffs’ performance fee claims.” (Dkt. No. 320 at 1.) “[T]he Court decline[d] to go
further by ruling on whether Plaintiffs are entitled to such fees, as that issue was not before the
Court when it issued the summary judgment order.” (Id.)
At a further case management conference, the parties stated they were “at a discovery
impasse on performance fee damages.” (Dkt. No. 332 at 3.) The Court informed GreenSky it
could move for partial summary judgment on whether performance-fee damages are recoverable
under the Credit Act and granted the parties’ subsequent stipulated briefing schedule. (Id. at 6-7;
Dkt. No. 334.) GreenSky now moves for partial summary judgment on whether performance-fee
damages are recoverable under the Credit Act. (Dkt. No. 338.)
DISCUSSION
GreenSky raises three arguments in its motion for partial summary judgment. Its first two
arguments are based on the Credit Act’s language, which provides:
Any consumer injured by a violation of this title or by the credit
services organization’s breach of a contract subject to this title may
bring any action for recovery of damages, or for injunctive relief, or
both. Judgment shall be entered for actual damages, but in no
case less than the amount paid by the consumer to the credit
services organization, plus reasonable attorney’s fees and costs. An
award, if the trial court deems it proper, may be entered for punitive
damages.
Cal. Civ. Code § 1789.21(a) (emphasis added). GreenSky argues Plaintiffs cannot recover
performance-fee damages because (1) “nothing in the statute permits Plaintiffs to recover free-
floating ‘performance-fee damages’ when they no longer have a live claim based on performance
fees;” and (2) “performance fees are paid exclusively by banks to GreenSky, not by Plaintiffs to
GreenSky, and, therefore, such fees cannot be recovered by Plaintiffs under the express language
of the” Credit Act permitting recovery of “the amount paid by the consumer to the credit services
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organization.” (Dkt. No. 338 at 5-6, 11 (citing Cal. Civ. Code § 1789.12(a)).) In the alternative,
GreenSky argues Ms. Barnes’s “lack of standing to raise ‘performance fee-related claims’
necessarily means that Barnes cannot recover performance fees, whether characterized as
‘damages’ or otherwise.” (Id. at 5.) As described below, the Court concludes the Credit Act’s
language precludes recovery of amounts paid that did not result in injury and are unrelated to the
injury conferring statutory standing to sue. For this reason, Plaintiffs are not entitled to recover
performance-fee damages, and the Court need not consider GreenSky’s second and third
arguments.
I. STATUTORY CONSTRUCTION
The parties dispute whether the Credit Act permits Plaintiffs to recover performance-fee
damages. To resolve this question of statutory construction, courts begin with “the statutory
language, giving it a plain and commonsense meaning.” Niedermeier v. FCA US LLC, 15 Cal. 5th
792, 804 (2024) (quotation marks and citation omitted). The Court “examine[s] the entire statute
to construe the words in context.” Id. (quotation marks and citation omitted). “If the language is
unambiguous, ‘then the Legislature is presumed to have meant what it said, and the plain meaning
of the language governs.’” Id. (citation omitted). But “if the statutory language permits more than
one reasonable interpretation, courts may consider other aids, such as the statute’s purpose,
legislative history, and public policy.” Id. (cleaned up). “When more than one statutory
construction is arguably possible, [the] policy is to favor the construction that leads to the more
reasonable result.” Id. (cleaned up).
A. Plain Language
Under the Credit Act, “[a]ny consumer injured by a violation of this title . . . may bring any
action for recovery of damages.” Cal. Civ. Code § 1789.21(a). When a consumer is injured, the
statute provides “for actual damages, but in no case less than the amount paid by the consumer to
the credit services organization.” Id. The statute thus sets forth two possible measures of
recoverable damages if the consumer is injured by a violation of the Act. First, the injured
consumer can recover “actual damages,” Cal. Civ. Code § 1789.21(a), which “are those which
compensate someone for the harm from which he or she has been proven to currently suffer or
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from which the evidence shows he or she is certain to suffer in the future.” DeLisi v. Lam, 39 Cal.
App. 5th 663, 681 (2019). “‘[A]ctual damages’ is a term synonymous with compensatory
damages.” Id. (cleaned up). Second, the injured consumer can recover “the amount paid by the
consumer to the credit services organization.” Cal. Civ. Code § 1789.21(a). This second measure
of damages acts as a floor: if the amount of actual damages to compensate the injured consumer
for the harm suffered is less than the amount the consumer paid the credit services organization,
then the consumer recovers the amount paid to the credit services organization.
So, under the Credit Act’s plain and unambiguous language, a plaintiff can recover “the
amount paid by the consumer to the credit services organization” even if that amount exceeds the
“actual damages.” The parties largely agree on this issue. However, they disagree about whether
a consumer who suffers an injury under the Credit Act may recover all amounts paid, including
payments unrelated to the predicate underlying injury. According to Plaintiffs, a consumer is
entitled “no less than the amount paid by the plaintiff to the defendant.” (Dkt. No. 341 at 13.) So,
Plaintiffs contend, so long as they prove the transaction fees violated the Credit Act and injured
Plaintiffs, Plaintiffs can recover not only all the transaction fees paid, but also any performance
fees paid.
In contrast, GreenSky argues “[a] plaintiff ‘injured by a violation’ can recover ‘actual
damages,’ i.e., harm suffered ‘as a result of the unlawful act,’ De Lisi, 39 Cal. App. 5th at 681,
subject to a floor on such causally related damages in ‘the amount paid by the consumer to the
credit services organization.’” (Dkt. No. 342 at 5.) So, according to GreenSky, Plaintiffs can
recover transaction fees, but not the performance fees which are wholly unrelated to any injury
caused by the transaction fees.
GreenSky has the stronger textual argument. The Court “do[es] not consider statutory
language in isolation; instead, [it] examine[s] the entire statute to construe the words in context.”
Niedermeier, 15 Cal. 5th at 804. The statute begins with an injury requirement. Cal. Civ. Code §
1789.21(a) (“Any consumer injured by a violation of this title . . . may bring an action for recovery
for damages.”). To read “amounts paid by the consumer” as any and all amounts—regardless of
their relationship to the injury—would ignore the language confining eligibility for recovery to
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consumers who have demonstrated injury arising from a specific violation of the Act.
Plaintiffs argue GreenSky’s reading “identifies no situation in which ‘but in no case less
than the amount paid’ takes effect.” (Dkt. No 341 at 12.) Not so. On reply, GreenSky sets forth
the following scenario:
Suppose a CSO [credit services organization] promises to improve a
consumer’s credit score by 100 points, charges $1,000 for the service,
but then improves the score by only 25 points. The CSO’s violation
would cause damages, namely, the consumer’s payment for services
that were not fully rendered. If the “amount paid” proviso did not
exist, the CSO would be liable for $750 because it failed to deliver
only 75% of the promised results. But because the proviso does exist,
the CSO must refund the full $1,000, i.e., the “amount paid by the
consumer to the credit services organization.”
(Dkt. No. 342 at 3.) Thus, reading the Credit Act to require “amount paid” be related to the
underlying injury does not nullify any statutory text. In the scenario GreenSky offers, the “amount
paid” language results in a greater recovery than damages that would compensate the consumer.
B. Reasonable Result
Even if the statute’s plain language were ambiguous, the Court must “favor the
construction that leads to the more reasonable result.” Niedermeier, 15 Cal. 5th at 804 (cleaned
up). Here, reading Credit Act section 1789.21(a) to not include as damages monies the consumer
paid which are unrelated to the conduct that injured the consumer produces the more reasonable
result. Consider a hypothetical: a credit services organization helps a consumer obtain two
different home-improvement loans—one for roof repairs and one to remodel the patio. For the
roof repair loan, the credit services organization renders services in compliance with the Credit
Act. But for the patio remodel loan, the credit services organization violates the Credit Act by
charging and receiving payment from the consumer one day before completing performance of its
services. See Cal. Civ. Code § 1789.13(a) (prohibiting “[c]harg[ing] or receiv[ing] any money . . .
prior to full and complete performance of the services the credit services organization ha[d] agreed
to perform”). Under Plaintiffs’ interpretation, the consumer could nevertheless recover all
amounts paid to the credit services organization, including amounts paid for services fully and
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lawfully rendered for the roof repair loan.4 When no injury resulted from those services, this is
not a reasonable result.
At oral argument, Plaintiffs attempted to distinguish this hypothetical by referring to Credit
Act section 1789.13 which prohibits “[a] credit services organization and its salespersons, agents,
representatives, and independent contractors who sell or attempt to sell the services of a credit
services organization” from conducting certain activities. Cal. Civ. Code § 1789.13(a). Plaintiffs
argue “the services of” in section 1789.13(a) limits recovery in section 1789.21(a) to amounts paid
to the credit services organization for a particular set of services. The Court is not persuaded “the
services of” language in a separate provision can draw the line Plaintiffs are attempting to draw
here, wherein performance fees—paid separately through a different mechanism by a different
entity than transaction fees—can be recovered as an “amount paid,” but in the hypothetical
described above, the fee for services on the roof repair loan—made at the same time by the same
credit services organization to the same consumer—cannot be recovered as an “amount paid.” In
this hypothetical, the credit services organization is rendering the same “services” for both loans.
Setting aside these hypotheticals, this case itself demonstrates the unreasonableness of
Plaintiffs’ interpretation. On GreenSky’s prior motion for summary judgment, acknowledging the
Credit Act contains a threshold injury requirement, Plaintiffs vigorously argued Ms. Barnes was
injured by both transaction fees and by performance fees. Those arguments were very different.
Transaction fees are paid by merchants to GreenSky, so Plaintiffs presented an expert report
opining “every class member paid transaction fees in the form of inflated project costs.” (Dkt. No.
294 at 35.) In contrast, performance fees are paid by bank partners to GreenSky, so Plaintiffs
argued Ms. Barnes was injured because “GreenSky set the interest rate on Ms. Barnes’s loan at a
rate higher than the bank would otherwise require.” (Id. at 16.) The Court concluded a reasonable
4 Plaintiffs’ supplemental briefing relies on the California Civil Practice Business Litigation
treatise, which provides for a violation of section 1789.13(a), in which the credit services
organization charges payment before services are provided, a plaintiff may seek actual damages
“equal to or more than the total amount paid by plaintiff.” See Cal. Civ. Prac. Bus. Litig. § 56:96.
However, the treatise does not support Plaintiffs’ interpretation of section 1789.21(a); applying it
to the Court’s hypothetical, for example, the treatise only supports the plaintiff’s recovery of the
total amount paid for the patio remodel loan, not the roof repair loan as well.
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trier of fact could find Ms. Barnes was injured by GreenSky having charged merchants transaction
fees but not by the banks paying GreenSky performance fees. To permit Ms. Barnes to
nevertheless recover all performance-fee related sums by reading “amount paid” as any and all
amounts paid would create a workaround to the Credit Act’s injury requirement and contravene
the legislature’s decision to limit suits to “any consumer injured by a violation of this title or by
the credit services organization’s breach of a contract subject to this title.” Cal. Civ. Code §
1789.21(a).
Plaintiffs’ interpretation would also impermissibly penalize GreenSky. “[A] penalty,
unlike damages, is a fine assessed for a violation of a statute without regard to the actual injury
suffered.” Cuviello v. City of Oakland, No. C 06-5517 MHP, 2010 WL 3063199, at *6 (N.D. Cal.
Aug. 3, 2010) (citing Black’s Law Dictionary definitions of “penalty” and “damage”). In this
case, Plaintiffs’ expert estimated classwide damages from GreenSky performance fees at
$67,251,816—which is slightly less than his estimate of $67.8 million in classwide damages for
transaction fees. (Dkt. No. 294 at 6, 12.) To interpret the Credit Act to allow Plaintiffs—should
they prevail as to the unlawfulness of transaction fees—to nearly double their recovery through
performance fees would result in recovery far exceeding Plaintiffs’ actual injury. Such
interpretation would thus rewrite the Credit Act to permit recovery of civil penalties, despite the
statute’s language limiting recovery to “actual damages, but in no case less than the amount paid
by the consumer to the credit services organization.” Cal. Civ. Code § 1789.21(a).
Plaintiffs, citing Wakefield v. ViSalus, Inc., 51 F.4th 1109, 1123 (9th Cir. 2022), argue
“[l]egislatures are empowered to prescribe purely punitive penalties for violations of statutes.”
(Dkt. No. 341 at 16.) But Wakefield was about the constitutionality of aggregated statutory
damages awards “where the prescribed per-violation award is constitutionally sound” but the
award “is unusually high” due to the large number of violations or class members. Wakefield, 51
F.4th at 1121. Wakefield thus addressed a different question: when an award of statutory damages
violates due process. Wakefield does not permit the Court to adopt a statutory interpretation
imposing a civil penalty when the legislature did not provide for one.
Plaintiffs also argue “[t]hat the [Credit Act] contemplates penalizing offenders should not
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be controversial” because “the statutory scheme espouses punitive and deterrent purposes.” (Dkt.
No. 341 at 17.) See Cal. Civ. Code § 1789.21(a) (“An award, if the trial court deems it proper,
may be entered for punitive damages.”). That the statute clearly authorizes punitive damages
suggests the legislature knew how to be explicit in this regard, which weighs against a statutory
construction inserting a penalty the legislature did not explicitly authorize. Plaintiffs’ argument
the statutory scheme espouses deterrent purposes is also belied by the statute’s language. The
legislature chose to require a consumer to establish injury in order to sue under the Credit Act,
even though many of the Act’s statutory violations are unlikely to result in injury. See, e.g., Cal.
Civ. Code § 1789.13(j) (prohibiting a credit services organization from advertising its services
“without being registered with the Department of Justice”). If deterrence were the legislature’s
goal, it would not have required a consumer to demonstrate injury to file suit.
Plaintiffs, citing Niedermeier, further argue the Credit Act’s imposition of a penalty (or a
windfall) is irrelevant when the Credit Act’s plain language provides for such. In Niedermeier, the
relevant statute “provide[d] a specific formula for calculating the amount of restitution.” 15 Cal.
5th at 806. That is, the statute provided:
[T]he manufacturer shall make restitution in an amount equal to the
actual price paid or payable by the buyer, including any charges for
transportation and manufacturer-installed options, but excluding
nonmanufacturer items installed by a dealer or the buyer, and
including any collateral charges such as sales or use tax, license fees,
registration fees, and other official fees, plus any incidental damages
to which the buyer is entitled under Section 1794, including, but not
limited to, reasonable repair, towing, and rental car costs actually
incurred by the buyer. The amount to be paid to the buyer may also
be reduced by the manufacturer by that amount directly attributable
to use by the buyer prior to the time the buyer first delivered the
vehicle to the manufacturer or distributor, or its authorized service
and repair facility for correction of the problem that gave rise to the
nonconformity.
Id. (cleaned up) (quoting Cal. Civ. Code § 1793.2(d)(2)). Because “[t]he statutory restitution
remedy has clearly enumerated exceptions, none of which include[d] the offset requested by [the
defendant],” the California Supreme Court concluded the defendant was not entitled to the
requested offset—even if it resulted in a windfall to the buyer. Id. at 806, 822.
Plaintiffs argue here, as in Niedermeier, the Credit Act’s “specific formula” for calculating
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damages should control, and “[a]ny argument about consumers ‘receiv[ing] windfalls’ under the
statutorily prescribed remedy [can]not outweigh the statute’s plain text.” (Dkt. No. 341 at 12-13,
16-17 (quoting Niedermeier, 15 Cal. 5th at 806-07).) But in Niedermeier, the court emphasized
the statute’s “defined restitution formula, including its express references to specific permissible
offsets.” Niedermeier, 15 Cal. 5th at 806; see also id. (“[T]he Act’s plain language lays out a
specific formula.”). Here, in contrast, the Credit Act provides no “formula” to calculate damages.
It merely provides an injured consumer can recover “actual damages” with an “amount paid”
floor. Moreover, at oral argument, Plaintiffs acknowledged “amount paid by the consumer to the
credit services organization” cannot be read literally and without limitation, otherwise absurd
results would follow. Niedermeier’s instruction to adhere to the plain text even if the result is a
windfall is thus inapposite.
Nevertheless, if Plaintiffs prevail on their transaction fees theory, their recovery may well
exceed their actual damages. As the Court’s prior Order noted, “[i]f Plaintiffs prevail and the
Court applies the 42.5% figure to the $107.79 transaction fee his contractor paid, . . . Mr. Ferguson
is entitled to approximately $46.” (Dkt. No. 294 at 41.) When accounting for the benefit Mr.
Ferguson received from obtaining GreenSky’s “point-of-sale loan,” Mr. Ferguson’s actual
damages may be less than his $46 “amount paid.” In such case, the statute would operate as the
legislature intended: the “amount paid” floor ensures Mr. Ferguson recovers the entire amount he
paid GreenSky related to the fee GreenSky imposed, which caused his injury.
II. OTHER COURTS
Plaintiffs’ assertion “every court that has interpreted similar language has interpreted it as
Plaintiffs do” is also unpersuasive. (Dkt. No. 341 at 13.) None of the cases Plaintiffs cite address
the interpretative question at issue on this motion.
Several of the cases Plaintiffs cite merely recite section 1789.21’s language. See, e.g.,
Meza v. 30 Day Credit Repair Inc., No. EDCV 23-1166 JGB (KKx), 2024 WL 2037412, at *4
(C.D. Cal. Mar. 29, 2024) (stating “under the [Credit Act], a plaintiff may recover actual damages
(no less than the amount paid by the plaintiff to the defendant)”); Heitmeyer v. Am. Credit-Credit
Repair Ctrs., No. 2:23-CV-02303-RGK-MAA, 2023 WL 5505875, at *3 (C.D. Cal. July 11, 2023)
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(stating “under the [Credit Act], a consumer may bring any action for a statutory violation to
recover actual damages (nothing less than the amount paid by plaintiff to defendant)”); Jackson v.
Red Rock Credit Sols., LLC, No. 22-CV-04471-AGT, 2024 WL 3379663, at *2 (N.D. Cal. June 5,
2024), report and recommendation adopted, No. 3:22-CV-04471-JSC, 2024 WL 5058028 (N.D.
Cal. July 10, 2024) (concluding plaintiff could recover “damages[] equivalent to the service fee
she paid . . . under the . . . Credit Services Act”). Contrary to Plaintiffs’ assertion, the recitations
of section 1789.21’s language in Meza, Heitmeyer, and Jackson—all default judgment cases—do
not support Plaintiffs’ interpretation of the Credit Act: that consumers can recover amounts paid
that did not result in injury and are unrelated to the underlying injury. Instead, the courts
discussed the Credit Act in the context of weighing the factors set forth in Eitel v. McCool, 782
F.2d 1470, 1471 (9th Cir. 1986), such as “the sum of money at stake in the action.” There is no
indication the courts considered whether amounts paid unrelated to the injury are recoverable.
Nor did the courts have reason to. In Meza and Jackson, the courts awarded as damages the fee
paid for the defendant’s services. See Meza, 2024 WL 2037412, at *5 (awarding plaintiff the $350
payment she made to defendant “in connection to the credit repair services Defendant was to
perform on [her] account”); Jackson, 2024 WL 3379663, at *2 (awarding “$997.00 in damages,
equivalent to the service fee” plaintiff paid). And in Heitmeyer, the court denied without prejudice
plaintiff’s motion for default judgment because plaintiff “requested $1,300 in actual damages” but
“failed to prove up damages.” See 2023 WL 5505875, at *4 (“Regarding actual damages, the only
evidence Plaintiff offers is the attorney’s affidavit, which states that ‘Plaintiff is requesting’
$1,300, . . . [which], by itself, is insufficient.”).
Plaintiffs also cite cases in which Pennsylvania bankruptcy courts interpreted the
Pennsylvania Credit Services Act, which—like California’s Credit Act—provides “[j]udgment
shall be entered for actual damages, but in no case less than the amount paid by the buyer or
borrower to the credit services organization or loan broker.” 73 Pa. Stat. Ann. § 2191. While the
courts recited this language and awarded damages according to it, none opined on whether
consumers can recover amounts paid when such payments are unrelated to the injury-causing
conduct.
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For example, in In re Bell, 309 B.R. 139, 146 (Bankr. E.D. Pa. 2004), the court concluded
a broker fell within the Pennsylvania Credit Services Act’s definition of “credit services
organization” and violated the Act by not providing certain required disclosures. The court then
determined the debtor was “entitled to damages in the amount she paid to” the broker, which
included “a broker fee of $3,840,” “an application fee of $350 from the Borrower’s loan
proceeds,” and “a yield spread premium of $1,280 by the lender at settlement.” Id. at 163; see
also id. at 153 n.9 (“A Yield Spread Premium is a bonus paid to a broker when it originates a loan
at an interest rate higher than the minimum interest rate approved by the lender for a particular
loan.”). Upon reconsideration, the Bell court clarified because the loan had been rescinded, the
debtor “has no actual damages,” so the award “was made pursuant to the language of the CSA
which permitted actual damages ‘but in no case less than the amount paid by the buyer or
borrower to the credit services organization or loan broker.’” In re Bell, 314 B.R. 54, 60 (Bankr.
E.D. Pa. 2004) (quoting 73 Pa. Stat. Ann. § 2191). However, the court maintained its prior
holding the debtor “was entitled to damages for [the lender’s] violation of the CSA,” in other
words, the debtor had still been injured by the lender’s violating the statute by failing to disclose
the loan could be cancelled within 5 days. Id.
Similarly, the bankruptcy court in In re Barker, 251 B.R. 250, 260-61 (Bankr. E.D. Pa.
2000), did not consider whether a consumer can recover amounts paid unrelated to the underlying
injury which allows for the recovery of damages in the first place. After finding the loan broker
violated Pennsylvania’s Credit Services Act by “engag[ing] in common law fraud and violat[ing]
its fiduciary duties to the Debtor,” the court determined the debtor could recover the $1,950 fee
she paid the broker:
[T]he CSA [Credit Services Act] provides that, if any actual damages
whatsoever are proven, the offending loan broker is liable for an
amount no less than the amount of fees paid to it by the borrower, as
well as reasonable attorney fees and costs. Here, the Broker charged
the Debtor fees of $1950. It is therefore difficult to see how the
Broker’s damages for the pertinent CSA violation could be less than
that amount.
Id. The court later elaborated because “the CSA prohibits exactly the kind of deceptive behavior
engaged in by the Broker,” the Broker is “prohibited from retaining its commission received in the
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transaction because it engaged in intentional, improper practices.” Id. at 264. This unremarkable
proposition—that the statute permits a consumer to recover the fee she paid the broker when the
consumer was injured by services rendered in exchange for that fee—has no bearing on whether a
consumer can recover amounts paid when the consumer as a matter of law was not injured by
those amounts.
Plaintiffs’ supplemental briefing relies on the federal Privacy Act’s damages provision,
which allows recovery of “actual damages sustained by the individual as a result of the refusal or
failure, but in no case shall a person entitled to recover receive less than the sum of $1,000.” 5
U.S.C. § 552a(g)(4)(A). The Supreme Court has held the provision authorizes a plaintiff to
recover a “guaranteed minimum award of $1,000 for violations of the Act, but only if they prove
at least some ‘actual damages.’” FAA v. Cooper, 566 U.S. 284, 295 (2012) (citing Doe v. Chao,
540 U.S. 614 (2004)). But the Supreme Court has still required plaintiffs to “show[] some
pecuniary harm” before “recover[ing] the statutory minimum of $1,000,” id. at 296, and did not
address the question at issue here: whether Plaintiffs can recover amounts paid to GreenSky
unrelated to any injury or pecuniary harm.
***
In sum, the Court GRANTS GreenSky’s motion for partial summary judgment. As a
matter of law, Plaintiffs were not injured by performance fees. So, under the plain language of the
Credit Act and considering the most reasonable result, Plaintiffs are not entitled to recover
performance fee damages. Having so concluded, the Court need not consider GreenSky’s
alternative arguments.
III. PLAINTIFFS’ RULE 56(D) MOTION
In the alternative, Plaintiffs request relief under Federal Rule of Civil Procedure 56(d).
“Rule 56(d) offers relief to a litigant who, faced with a summary judgment motion, shows the
court by affidavit or declaration that ‘it cannot present facts essential to justify its opposition.’”
Michelman v. Lincoln Nat’l Life Ins. Co., 685 F.3d 887, 899 (9th Cir. 2012) (quoting Fed. R. Civ.
P. 56(d)). Under Rule 56(d), the Court may:
(1) defer considering the motion or deny it;
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(2) allow time to obtain affidavits or declarations or to take discovery;
or
(3) issue any other appropriate order.
Fed. R. Civ. P. 56(d).
Plaintiffs state they “prioritized expert testimony that established one class-wide injury
(from GreenSky’s transaction fees)” and “have yet to present expert evidence about how
GreenSky performance fees impacted interest rates.” (Dkt. No. 341 at 24.) Plaintiffs thus
“request time to finish developing” evidence performance fees “caused higher interest rates.” (Id.)
Plaintiffs’ corresponding declaration also attests “[t]o brief class certification as early [as is]
practicable, following the Ninth Circuit’s remand in late 2023, Plaintiffs prioritized developing a
limited amount of additional streamlined discovery.” (Dkt. No. 341-1 ¶ 8 (quotation marks
omitted).)
The Court DENIES Plaintiffs’ request for Rule 56(d) relief. Plaintiffs dismissed Mr.
Ferguson’s performance-fee claims because it was “undisputed Mr. Ferguson did not pay interest
on his loan.” (Dkt. No. 294 at 15.) As to the only other named plaintiff—Ms. Barnes—the Court
granted GreenSky’s motion for summary judgment and held as matter of law Ms. Barnes was not
injured by performance fees. As such, no named plaintiff has standing to seek the Rule 56(d)
relief Plaintiffs now request: time to develop further evidence establishing injury from
performance fees. Further, the appropriate time to make such a request was in response to
Greensky’s motion for summary judgment, not months after the Court granted the motion.
CONCLUSION
For the reasons stated above, the Court GRANTS GreenSky’s motion for partial summary
judgment.
This Order disposes of Docket No. 338.
IT IS SO ORDERED.
Dated: October 28, 2025
JACQUELINE SCOTT CORLEY
United States District Judge
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