Opinion ID: 74997
Heading Depth: 2
Heading Rank: 1

Heading: D.2d 1171, 1172, 404 N.Y.S.2d 201, 202 (1978)).

Text: On appeal, the plaintiffs argued that the district court had erred in ruling that to recover actual damages, each class member must show that but for the [TILA] violation, better credit on more favorable terms would have been obtained. Adiel, 810 F.2d at 1053. This Court affirmed the ruling of the district court, stating only that the district court did not abuse its discretion in awarding statutory damages rather than actual damages. Adiel, 810 F.2d at 1055. The opinion did not address the issue of reliance. Adiel only determined that the district court need not award actual damages when it has already provided a remedy through statutory damages and has taken into account, in considering the amount of statutory damages to award, the fact that no actual damages had been awarded. Id. at 1054-55. More relevantly, in Jones v. Bill Heard Chevrolet, Inc., 212 F.3d 1356 (11th Cir.2000), this Court directly rejected a defendant's argument that a TILA claim for actual damages fails if the plaintiff cannot demonstrate reliance on the defendant's misrepresentations. The defendant car dealership in Jones led its customers to believe that they were paying $2,495 to the General Motors Corporation for an extended service contract. In fact only $290 went to General Motors, while the dealer kept $2,205 as an upcharge. Id. at 1358-59. In Jones, the Court stated, we reject Heard Chevrolet's contention that Plaintiff's TILA claim fails because Plaintiff cannot demonstrate reliance on its misrepresentations. Id. at 1363, n. 7 (citing Charles v. Krauss Co., Ltd., 572 F.2d 544, 546 (5th Cir.1978)).5 The opinion in Charles does not state whether the plaintiff sought actual or statutory damages, but in stating that reliance is not a factor in TILA claims, Charles cites to McGowan v. King, Inc., 569 F.2d 845, 848 (5th Cir.1978). McGowan noted that [t]he basis of 5 In Bonner v. Prichard, 661 F.2d 1206, 1209 (11th Cir.1981) (en banc), the Eleventh Circuit adopted as binding precedent all Fifth Circuit decisions handed down prior to the close of business on September 30, 1981. Section 1640(a) liability is the failure to disclose information required to be disclosed; there is no requirement that the plaintiff himself be deceived in order to sue in the public interest. Id. at 848-49. However, the McGowan court also concluded that once such a failure to disclose is shown, the court must award [the plaintiff] the statutory penalty. Id. at 849 (citing Grant v. Imperial Motors, 539 F.2d 506, 510511 (5th Cir.1976) (emphasis added)), and the Fifth Circuit awarded only statutory damages in that case. Id. at 850. Beneficial argues that the Jones Court erred in relying on case law relating to claims for statutory damages under TILA in finding that there is no requirement that a plaintiff demonstrate detrimental reliance in order to be entitled to actual TILA damages. We agree with Beneficial, and with the other Courts of Appeals that have addressed the issue, that the plain language of TILA's actual damages provision requires a showing of detrimental reliance as part of any claim for actual TILA damages.6 However, we are bound by the holding of the first panel of this Court to address an issue of law, unless and until that holding is overruled en banc or by the Supreme Court. Hogan, 986 F.2d at 1369. As we recently noted, the prior panel precedent rule is not dependent upon a subsequent panel's appraisal of the initial decision's correctness. Nor is the operation of the rule dependent upon the skill of the attorneys or wisdom of the judges involved with the prior decision—upon what was argued or considered. Unless and until the holding of a prior decision is overruled by the Supreme Court or by the en banc court, that holding is the law of this Circuit regardless of what might have happened had other arguments been made to the panel that decided the issue first. Cohen, 204 F.3d at 1076. In any case, while the Fifth Circuit precedents upon which Jones relies may not clearly apply to a case involving TILA actual damages, Jones does. Under Jones, the law of this Circuit does not require that a plaintiff asserting a claim for actual damages under TILA demonstrate reliance. This panel is convinced that, to the extent that Jones, and possibly Ransom, so hold, they are wrongly decided, and this should be rectified by the en banc Court. Until that occurs, however, we are bound to follow the law of this Circuit. Accordingly, we find that the district court erred in holding that detrimental reliance is an element of a TILA claim for actual damages. 2. The RICO Claim In Count II of her complaint, Turner alleged that the crime underlying her RICO claim was a pattern 6 The legislative history behind the 1995 amendments to TILA lends further support to our reading of the actual damages provision: To recover actual damages, consumers must show that they suffered a loss because they relied on an inaccurate or incomplete disclosure. H. Rep. No. 193, 104 Cong., 1st Sess. (1995). of mail and wire fraud in violation of 18 U.S.C. §§ 1341 & 1343. A plaintiff alleging mail or wire fraud as the predicate act for a RICO violation must show not only that the mail or wire fraud statutes have been violated but that he has suffered injury as a result of the violation. Pelletier v. Zweifel, 921 F.2d 1465, 1499 (11th Cir.1991). The Pelletier Court noted that the Supreme Court requires that a civil RICO plaintiff must show that he or she was injured by reason of the defendant's acts of deception. Id. (citing Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479, 496, 105 S.Ct. 3275, 87 L.Ed.2d 346 (1985)). Moreover, as we stated in Pelletier, this Circuit has held that a plaintiff has standing to sue under section 1964(c) only if his injury flowed directly from the commission of the predicate acts. This means that, when the alleged predicate act is mail or wire fraud, the plaintiff must have been a target of the scheme to defraud and must have relied to his detriment on misrepresentations made in furtherance of that scheme. 921 F.2d at 1499-1500 (internal citation omitted). This substantive requirement applies to class actions. Andrews v. AT&T Co., 95 F.3d 1014, 1023-25 (11th Cir.1996). Accordingly, we conclude that the district court did not err in finding that reliance is an element of a RICO claim and in denying class certification on that basis. 3. The State Fraud Claim In order to establish a claim for fraudulent suppression, Turner must show that Beneficial knowingly suppressed a material fact that it had a duty to disclose and that, as a result of that suppression, Turner was induced to act or to refrain from acting, suffering damage as a proximate result. Ex parte Household Retail Serv., Inc., 744 So.2d 871, 879 (Ala.1999). See also, McGriff v. Minnesota Mutual Life Ins. Co., 127 F.3d 1410, 1415 (11th Cir.1997) (Under Alabama law, to succeed on a claim of fraudulent suppression, [plaintiff] must show that [defendant] failed to disclose a material fact, thereby creating a false impression on which [plaintiff] relied, believing it to be true, which proximately caused damages.). In a recent case involving a fraud by suppression claim, the Alabama Supreme Court stated that the duty to disclose, applicable in the case alleging suppression, is analogous to the element of reliance applicable in the case alleging a misrepresentation. Ex parte Government Employees Ins. Co., 729 So.2d 299, 305 (Ala.1999). Turner argues that this statement means that she can establish her fraud by suppression claim without showing reliance, so long as she can establish that Beneficial breached its duty to disclose. However, the Alabama Supreme Court has since clarified that a plaintiff's justifiable reliance is an essential element of a fraudulent suppression claim. Household Retail Serv., 744 So.2d at 879. As Turner cannot demonstrate that she relied on Beneficial's faulty disclosure statements, we conclude that the district court correctly found that Turner cannot satisfy Rule 23's typicality and adequacy requirements.