WASHINGTON — The Supreme Court ruled Monday consumers couldn't proceed with a lawsuit against Chase Bank USA for not providing written notice when it raised credit-card interest rates on account holders who were late on payments to creditors.
The court, in a unanimous opinion by Justice Sonia Sotomayor, said federal law at the time of the 2006 lawsuit did not require banks to give such notice of rate increases to cardholders.
The Federal Reserve Board changed the relevant regulation in 2009 and now requires banks to give advance notice when they plan to raise a cardholder's interest rate because of default, even if the default rate was already specified in the original contract. Sotomayor said the old version of the rule was unclear on whether bank notification of rate increases was required.
However, she said the court gave considerable weight to a legal brief filed by the Federal Reserve Board which said the old regulation did not require Chase and other banks to give the written notices.
Monday's ruling overturned a California federal court decision that revived a class-action lawsuit against the bank, a subsidiary of JPMorgan Chase & Co.
The case is Chase Bank USA v. McCoy, 09-329.
Also Monday, the Supreme Court decided a notable employment discrimination case in favor of a Kentucky plant worker who alleged he was fired because his fiancee, also a worker at the plant, had complained of gender discrimination. The case examined whether a third party could bring a retaliation lawsuit under a key federal civil-rights law.
Justice Antonin Scalia, writing for a unanimous court, said stainless-steel-plant worker Eric Thompson could sue his former employer, North American Stainless LP. The allegations, if proven true, would constitute a civil-rights violation, Scalia said.
Scalia said it was "obvious" that a reasonable worker might be dissuaded from complaining of sex discrimination if she knew that her fiance would be fired because she spoke up.