Document: 452 U.S. 233 101 S.Ct. 2281 68 L.Ed.2d 803 AMERICAN EXPRESS COMPANY, Petitioner,v.Louis R. KOERNER, Sr. No. 80-202. Argued April 20, 1981. Decided June 8, Syllabus Section 161(a) of the Truth in Lending Act (TILA), as added by Fair Credit Billing Act, provides that whenever a creditor sends an obligor statement obligor's account "in connection with extension consumer credit" and believes contains billing error, may send written notice. If such notice is sent, then must acknowledge receipt it, investigate matter, either correct or explanation its belief original was correct. 103(h) TILA adjective "consumer," used reference to credit transaction, characterizes transaction one which party whom offered extended "is natural person" money, property, services are subject "primarily for personal, family, household, agricultural purposes." A corporation respondent officer applied petitioner "company account" designed business customers asked issue cards other officers. Respondent required sign form, agreeing be jointly severally liable company all charges incurred through use card issued him. Cards were on company's rating. dispute arose between respect flight insurance certain trips made employees renewal claimed no longer desired, refused pay amount dispute. Company officers wrote several times about this, but it does not appear ever responded. Subsequently, when attempted his card, he informed had been canceled because delinquency payment. filed action Federal District Court, alleging, inter alia, respondent's refusal disputed charges, seeking damages petitioner's failure comply § 161(a). The Court granted summary judgment petitioner, holding did apply opened name reliance corporation's credit. Appeals reversed. Held : applicable these parties, hence follow procedures mandated threshold requirement 161(a)—an "extension credit"—was satisfied. covered 103(h)'s definition primarily purposes Similarly, transactions giving rise cannot characterized extensions credit, since they transactions. Pp. 240-246. 615 F.2d 191, Ronald J. Greene, Washington, D.C., petitioner. Louis Koerner, Jr., New Orleans, La., respondent. Justice BLACKMUN delivered opinion Court. 1 question presented whether requirements specified 1974 Pub.L. 93-495, Tit. III, 88 Stat. 1511, correction errors, both individual debt. 2 * number provisions 90-321, I, 82 146. primary provision, at this case, 161(a), so added. 1512, 15 U.S.C. 1666(a).1 This section applies transmits "a credit." error,2 setting forth belief, indicating error reasons supporting error. receives within 60 days transmitting account, imposes two separate obligations upon creditor. Within 30 days, acknowledgment has received And, 90 daysor complete cycles, whichever shorter, matter make appropriate corrections sent before making any attempt collect amount. 3 fails forfeits right first $50 including finance charges. 161(e), 1666(e). In addition, 161(d) that, pursuant regulations Reserve Board, operating "open end plan" restrict close due until 4 Every under disclose protections available 161 obligor. disclosure occur time semiannual intervals thereafter. See 127(a)(8), 1637(a)(8). II 5 case presents over applicability 161. relevant facts, noted, largely undisputed. On November 16, 1965, prior enactment TILA, John E. Koerner & Co., Inc., American Express Company. application customers. App. 27a. bearing Sr., four corporation. would Id., 28a. Express, issuing cards, investigated rating, 6 billed arising from five account. It monthly showing total listing subtotals each users. Although employed mostly business-related expenses, occasionally personal expenses. When so, paid items sending check Express. Charges expenses company. 7 1975, concerning appeared three employees, fees desired. dispute, pay, $55. officials this. record indicate responded way 1976.3 8 September 28, 1976, purchase plane ticket trip. After getting touch agent requested speak telephone employee. employee She instructed cut return 9 Shortly thereafter, United States Eastern Louisiana. He alleged Company's retaliation many complaints resolve Jurisdiction based 130 1640, recovery actual sustained person result creditor's various 161, grants jurisdiction actions federal district courts. complaint sought $25,000 "inconvenience, mental anguish, grief, aggravation, humiliation." 20a.4 Respondent, invoking diversity jurisdiction, also Louisiana law. 10 Express' motion judgment. 444 F.Supp. 334 (1977). held only "an credit," 104(1), 1603(1), exempts "[c]redit involving commercial purposes" most TILA,5 conclusion established do credit.6 11 Fifth Circuit 191 (1980). Noting debts court concluded: "If [American Express] can recover consumer, abide [§ 161] errors consumer's statement. have ways. . ." 195. 12 Because significance enforcement we certiorari. 449 1076, 854, 66 798 (1981). III 13 inquiry transmitted there "consumer obligation creditor, free adopt own responding customer's We conclude undisputed facts failed show him transaction. therefore, parties.7 14 order "credit." TILA's "credit" contained 103(e), 1602(e): "The term 'credit' means debtor defer payment debt incur payment."8 Thus, extends organization opens renews well cardholder actually uses purchases. renewed, "to payment" ; used, allowed debt." An if conditions statute's "consumer" 1602(h), defines follows: 16 'consumer,' person, 17 Two elements thus present every transaction: purposes."9 therefore erred without deciding 103(h). considered issue, permissible reach establish credit"—has satisfied none entered into "primarily" purposes. 18 language distinguish types included them satisfy applicable. There possibilities. creation Under view, adopted F.Supp., 340, overall purpose considered. purposes, applies, even occasional nonconsumer purchase. hand, might interpreted call transaction-by-transaction approach. With approach, regardless third alternative combine approaches disputes arise one. 19 need choose among alternatives decide case,10 find unable succeed them. reveal obtained business, specific encompassed possible interpretation phrase 20 clear, Rather, using form supplied Respondent's supplementary same submitted form. references forms those Company, admitted 25a 30a. agree evidence sufficient 340. weaken conclusion. fact, confirms it. purposes.11 His answers interrogatories identified more than seven nonbusiness 1972 1976. 42a-43a.12 21 suggest always will easy determine opening involves noted often difficult characterize allows large F.2d, 195.13 however, requires creditors courts undertake task. n. 10, supra. record, 22 underlying These involved cost airline tickets purchased asserted wanted. None trips. 41a-42a. could As already seen, provided so. 23 Inasmuch establishes [respondent's] IV 24 Congress restricted operation concern be, is, 25 ordered. provides: sixty after having address disclosed 127(b)(11) (other stub medium stipulates 127(a)(8)) obligor— "(1) sets otherwise enables identify (if any) obligor, "(2) indicates "(3) (to extent applicable) shall, unless has, expiration limits herein specified, agreed correct— "(A) later thirty notice, acknowledgement thereof subparagraph (B) taken thirty-day period, "(B) cycles (in event ninety days) taking amount, part thereof, indicated paragraph (2) either— "(i) crediting amounts erroneously billed, transmit notification change and, requests, copies documentary indebtedness; "(ii) clarification conducted investigation, why correctly shown request provide indebtedness. where alleges reflects goods designee accordance agreement construe determines delivered, mailed, determination. complying subsection further responsibility continues substantially allegation error." "Billing error" defined 161(b), 1513, 1666(b): "For section, 'billing error' consists following: reflection or, made, reflected requests additional thereof. accepted "(4) reflect properly "(5) computation similar accounting nature "(6) Any described Board." Like 161(b) amended 1980 Simplification Reform 96-221, VI, 94 168. effective date amendments 1, 1982, see 625(a) 185, changes consequence cite currently throughout opinion. unclear, apparently credited $54.45 26, leaving balance 55 cents. 41a. represent class composed persons organizations who future, subclass cardholders utilize injured violations section. behalf classes, injunctive relief damages. obtain certification Rule Civil Procedure 23(c) Court's decision. By 135 410(a), 1519, 1645, exemption 104(1) generally 132, 1642 (prohibiting issuance unsolicited cards), 133, 1643 (limiting cardholder's liability unauthorized $50), 134, 1644 (imposing criminal penalties offenses cards). conceded claims state law, invoked amount-in-controversy 28 1332. 335, 342. view our 161(a)'s occasion broader argument except mentioned 135, inapplicable 1603(1). "creditor," 103(f) 1602(f). "debtor" contend "debtor." hereinafter equivalent "personal, clear some consideration merely transactions, necessary For example, itself classified (charges never payments computation) particular card. Furthermore, 161(d), prohibits operates open plan " (emphasis added) closing restricting complied "[b]efore added), twice year opened, clearly (the "plan") hesitant, preclude completely possibility approach Regulation Z Board includes detailed rules applying regulation entitled substantial deference. Anderson Bros. Ford v. Valencia, 205, 219, 2266, 2274, 783 (1981); Motor Co. Milhollin, 555, 100 790, 63 (1980); Mourning Family Publications Service, 411 356, 93 1652, 36 318 (1973). scope implementing stated CFR 226.14(g) (1980): "This [a include 226.2(x) (1980)], periodic mailed card." card" seems aware recently promulgated revision Z, 46 Fed.Reg. 20847 (Apr. 7, 1981), accompanying "cards non-consumer regarding liability." 20850. 45 80648, 80651 (1980) (statement proposed rules). ("[W]hen fact issuer statements, resolution, protections"). text, 1981 retroactively conflicts earlier version regulations, valid conflict. Regardless how answer questions, merits. Memorandum Support Plaintiff's Motion Hearing Alter Amend Judgment and/or Trial 1-2, Record 158-159. records period 1975 August 1976 (excluding February 1976), Exhibit Statement Uncontested Material Facts, Summary Judgment, Item 6. approximately during period. Airlines, Inc. Remis Industries, 494 196, 201 (CA2 1974); Card Service Corp. FTC, U.S.App.D.C. 424, 428, 495 1004, 1008 (1974).

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