Tenant Evicted Without Proper Notice After Bank Foreclosure Does Not Have a Private Right of Action to Bring a Lawsuit Under the Protecting Tenants At Foreclosure Act of 2009 ("PTFA")

In Logan v. U.S. Bank National Association (--- F.3d ----, C.A.9 (Cal.), July 16, 2013), the Ninth Circuit Court of Appeals considered whether a tenant evicted from a foreclosed property could bring a lawsuit against the foreclosing party in federal court for improper noticing under the Protecting Tenants at Foreclosure Act of 2009 ("PTFA").  The court ruled that the language of the PTFA did not show Congressional intent to create a private right of action and the lawsuit was dismissed.

Facts

Karen Logan was a tenant living on property that was foreclosed upon by U.S. Bank National Association ("U.S. Bank").  U.S. Bank served Logan with a three-day notice of termination and then immediately initiated an unlawful detainer action against Logan.  Logan filed action in federal district court alleging the bank's actions violated the PTFA, which requires giving a tenant 90 days notice to vacate a foreclosed property.  Logan sought injunctive relief and damages against U.S. Bank.  The district court dismissed Logan's complaint claiming that the PTFA does not create a private right of action.  Logan appealed.

Decision

The court said that the question before it was whether Congress intended to create a private right of action when it enacted the PTFA.  The court found that the plain language of the statute does not explicitly provide for a private right of action, nor does it implicitly reflect a clear and unambiguous intent to create that right.  Rather, the court said, the PTFA focuses on the obligations of the regulated party, the foreclosing bank, and refers to the tenant only as the object of those obligations.  The court also noted that the PTFA was part of a larger statutory framework designed to help residents of foreclosed properties and that other statutes did specifically create private rights of action that allow "any person" to sue violators of those statutes.  The fact that such language does not appear in the PTFA supports an inference that no private right of action was intended under the PTFA.

The court concluded that the PTFA's language appears intended to protect tenants by providing them a defense in eviction proceedings, rather than a basis for offensive lawsuits in federal court. Because the court could not infer a congressional intent to create a private right of action from the language, structure, or any other source, the court reasoned it must conclude that the private right of action does not exist.  Therefore, the district court's dismissal of Logan's complaint was affirmed.