District Court Holds that CFPB’s Claims Are Barred on Remand

A federal judge in the U.S. District Court for the Southern District of Florida recently held on remand that all of the CFPB’s claims against a national mortgage servicer were barred by res judicata.  The judge held that the nine claims were covered by an earlier consent judgment.

In 2014, the CFPB and the servicer entered into a consent judgment to resolve claims relating to the servicer’s conduct.  Under the consent judgment, the servicer was subject to a servicing-standard, monitoring, and enforcement regime to address any alleged violations that may have occurred between January 1, 2014, and February 26, 2017.  However, in April 2017, the CFPB brought the current lawsuit, alleging violations dating back to January 2014.  In its 2021 order, wherein it granted partial summary judgment in favor of the servicer, the district court held that the CFPB’s claims in the present action derived from the same nucleus of operative facts as those resolved by the consent judgment.

On April 6, 2022, the Eleventh Circuit held on appeal that the CFPB was barred from pursuing claims relating to the servicer’s conduct between January 2014, and February 26, 2017, that was previously covered by the consent judgment.  The CFPB would have to follow the servicing-standard, monitoring, and enforcement regime set forth in the consent judgment.  However, it held that the CFPB could pursue claims relating to conduct that occurred during that period which was not covered by the consent judgment.  Because the district court had not done a claim-by-claim analysis when dismissing the CFPB’s claims, the Eleventh Circuit remanded the case for the district court to determine which claims were barred.

On remand, the district court held that the CFPB was barred from pursuing all nine claims because the consent judgment had established a regime by which to address the alleged violations in the present action.  The court also noted that the CFPB’s consent judgment release had applied not only to claims relating to the servicer’s alleged mortgage servicing practices but those that it could have alleged. 

The case is Consumer Fin. Prot. Bureau v. Ocwen Fin. Corp., No. 17-CV-80495-MARRA, (S.D. Fla. May 2, 2023).

WBK’s previous coverage of this case can be found here.