Missouri Court of Appeals for the Eastern District in St. Louis
ST. LOUIS — A Missouri appeals court has revived a proposed class action accusing Santander Consumer USA of failing to promptly release a lien on a customer’s vehicle after his auto loan was paid off, holding that state law gives the customer standing to seek statutory damages even without proof of a concrete financial loss.
On August 25, the Missouri Court of Appeals for the Eastern District reversed a St. Louis County Circuit Court decision dismissing Robert J. Gallagher’s lawsuit and returned the case for further proceedings.
The three-judge panel held that Missouri’s standing rules, rather than the more restrictive federal test adopted by the U.S. Supreme Court in Spokeo Inc. v. Robbins, govern Gallagher’s claim under Missouri law.
Gallagher alleges Santander kept its lien on his 2007 Chevrolet Trailblazer for too long after he made his final payment in April 2017. Santander held a valid lien on the vehicle, but Gallagher paid off the loan April 11, 2017, and the company did not release the lien until April 30, according to the court’s opinion.
Gallagher filed the proposed class action in St. Louis County in June 2020, alleging Santander violated Missouri’s lien-release law, Section 301.640.1. The statute requires lienholders to release a vehicle lien within five business days after the debt is satisfied.
The law provides escalating statutory damages: $500 when a lienholder does not comply within five business days, $1,000 after 10 business days and increasing amounts for continuing noncompliance.
The case already had traveled through federal court. Santander removed it in August 2020 under the federal Class Action Fairness Act, and a federal judge later granted summary judgment to the company. But the 8th U.S. Circuit Court of Appeals, on its own initiative, found that Gallagher lacked Article III standing in federal court because the claimed statutory violation did not meet the federal “concrete injury” standard described in Spokeo. The appeals court directed that the matter be sent back to St. Louis County Circuit Court.
After the remand, Santander argued that the same Spokeo standard required dismissal in state court. Judge Kristine Allen Kerr agreed and dismissed the suit without prejudice for lack of standing.
Judge Thomas C. Clark II, writing for a unanimous appellate panel, said the circuit court applied the wrong standard.
“Spokeo establishes standing requirements in federal cases and does not apply to Missouri state law,” Clark wrote. Missouri courts have broad jurisdiction under the state constitution, the opinion said, unlike federal courts, whose authority is confined by Article III.
The decision said a Missouri plaintiff has standing when the person has a personal stake stemming from an actual or threatened injury, including an invasion of an interest protected by statute.
Gallagher’s asserted interest is statutory: Missouri lawmakers expressly authorized damages for lienholders’ failure to meet the five-business-day deadline. The court held that Section 301.640.4 therefore gives him standing “independent of a showing of damage.”
The panel rejected Santander’s argument that Missouri courts generally follow Spokeo. It said Missouri cases applying the federal rule involved claims under the federal Fair Credit Reporting Act, which can be brought in either federal or state court, rather than claims arising exclusively under Missouri statutes.
The ruling does not decide whether Santander violated the lien-release law or whether a class should be certified. It addresses only Gallagher’s ability to pursue the lawsuit in Missouri court.
The court said accepting Santander’s argument would improperly limit the General Assembly’s authority to create legal rights and remedies. A contrary ruling, the panel wrote, “would essentially strike down the provisions of section 301.640.4 RSMo and create artificial constraints on the legislature’s ability to make new law in Missouri.”
Chief Judge Renée D. Hardin-Tammons and Judge Angela T. Quigless concurred in the ruling. Gregory David Vescovo Jr. represented Gallagher. Jonathan Barton Potts represented Santander.
Missouri Court of Appeals Eastern District case number ED113806
