WASHINGTON -- A Virginia dealer's persistence paid off in a U.S. Supreme Court victory that will benefit thousands of lenders, including other dealers.
The high court ruled 8-1 last week that a disgruntled used-car buyer is entitled to no more than $1,000 in damages because of a lending law violation by the dealership.
Lower courts had awarded the plaintiff, Bradley Nigh, more than $24,000.
But the court majority accepted the argument of Mike Field, the president of the dealership, which now does business as Field Auto City of Alexandria, Va. The store was Koons Buick-Pontiac-GMC when Nigh brought his suit.
Field contended that various amendments had obscured the federal lending over the years. But he asserted that Congress never intended to remove the $1,000 ceiling on damages for wronged vehicle buyers and other consumer borrowers.
The National Automobile Dealers Association, the American Bankers Association and other business groups supported Field's argument. Consumer groups lined up behind Nigh.
Writing for the court majority, Justice Ruth Bader Ginsburg concluded that rejecting Field's argument would have led to an absurd result.
The lending law would impose a cap on damages for violations involving larger loans such as mortgages, she said, but would permit nearly unlimited damages in disputes over vehicle loans.
The sole dissenting justice, Antonin Scalia, said the court should not be responsible for correcting congressional drafting errors.
The Supreme Court did not rule on whether the dealership had mistreated Nigh.
The plaintiff persuaded lower courts that the store tricked him to get more money and mishandled his finance contract when he tried to buy a 1997 Chevrolet Blazer four years ago. The deal ultimately fell through.
NADA Chairman Charley Smith said he was "pleased the Supreme Court corrected the erroneous decision by the lower court, especially in light of the increasing regulatory burden facing dealers."
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