California Case Is Not The First Class Action Involving Structured Settlement Factoring

California Case Is Not The First Class Action Involving Structured Settlement Factoring

In January, the California Court of Appeals issued its opinion in Ceron v. 321 Henderson Receivables, No. B224935, 2011 WL 240243, California Court of Appeals, Second District (Calif. Ct. App. Jan. 26, 2011), and, as discussed in this post, the case has been sent back to the trial court. 

At the trial court, the focus in Ceronwill be on the one remaining count that has to do with the plaintiff's allegations thet the factoring company, J.G. Wentworth (and its affiliates), engaged in continuing violations of the California Structured Settlement Protection Act.  The plaintiff had made other claims that Wentworthhad violated the structured settlement protection act (SSPA) requirements in past transactions, but those transactions were approved by California courts, and the trial court dismissed those claims, and the appeals court affirmed that decision.

Ceron is not the first case that involves class action claims that are aimed at overturning structured settlement factoring transactions.  The would-be class action claimants have, in the past, either had their claims dismissed, or settled, in the following (non-comprehensive) list of such actions:

  • Capela v. J.G. Wentworth, LLC, No. CV09-882, 2009 WL 3128003 (E.D.N.Y. Sept. 24, 2009) (recommending dismissal of complaint because the claims were barred by the doctrine of claim preclusion, and because the plaintiff had failed to state a claim under the Truth in Lending Act);
  • Commonwealth General Assignment Corp. v. Settlement Funding, LLC, No. 3:00CV-565-R (W.D.Ky. Nov. 18, 2004) (order approving settlement in class action involving pre-SSPA transactions); and
  • Magee v. J.G. Wentworth & Co., Inc., 761 A.2d 159 (Pa. Super. 2000) (holding that confessed judgments filed by Wentworth barred subsequent claims that challenged pre-SSPA transactions).
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