Barrer v. Chase SECOND AMENDED COMPLAINT FOR VIOLATION OF THE TRUTH IN LENDING ACT AND BREACH OF CONTRACT

Case 3:06-cv-00415-HA Document 67 Filed 03/10/2010 Page 1 of 17
JUSTINE FISCHER
OSB: 81224
e-mail: JFAttyOR@aol.com
Attorney at Law
720 SW Washington Street, Suite 750
Portland, OR 97205
Telephone: (503) 222-4326
Facsimile: (503) 222-6567
Liaison Counsel for Plaintiffs Cheryl Barrer

and Walter Barrer
[Additional Counsel on Signature Page]
UNITED STATES DISTRICT COURT
DISTRICT OF OREGON
CHERYL BARRER and WALTER BARRER, CASE NO. 06-CV-415-HA

on Behalf of Themselves and Those Similarly
Situated, CLASS ACTION
Plaintiffs, SECOND AMENDED COMPLAINT FOR

VIOLATION OF THE TRUTH IN
v. LENDING ACT, 15 U.S.C. §1601, ET SEQ.
AND BREACH OF CONTRACT
CHASE BANK USA, N.A. and DOES 1
through and including 100, DEMAND FOR JURY TRIAL
Defendants.
SECOND AMENDED COMPLAINT Page 1

Plaintiffs, by their attorneys, allege upon personal knowledge as to their own acts, and as
to all other matters upon information and belief based upon, inter alia, the investigation made by
and through their attorneys:
NATURE OF THE CASE
1. This is a class action on behalf of all Chase Bank USA, N.A. (“Chase” or
“Defendant”) credit card customers who were improperly subjected to increases of the annual
percentage rates of interest (“APR”) included in the terms of their Chase Card Member
Agreements (“CMA”).
2. Pursuant to the Truth in Lending Act (“TILA”), 15 U.S.C. § 1601, et seq., and
Regulation Z 12 C.F.R. § 226, et seq. promulgated thereunder, a creditor must disclose the terms
of the legal obligation between the parties. TILA requires, among other things, that the creditor
clearly and conspicuously disclose any APR that it may (is permitted to) charge. Barrer v. Chase
Bank USA, N.A., 566 F.3d 883, 890 (9th Cir. 2009) (“Regulation Z also requires that creditors
disclose any APR ‘that may be used to compute the finance charge,’ and that they do so ‘clearly
and conspicuously.’”) (citing 12 C.F.R. §§ 226.6(a)(2) & 226.5(a)(1)) (emphasis added by Ninth
Circuit).
3. Chase’s CMAs include a “Finance Charges” section which disclose that Chase
may charge “Preferred” and “Non-Preferred” APRs. The Preferred APR may be a fixed rate,
which does not fluctuate, or it may be a variable rate that changes based upon a specific
mathematical formula tied to a variable index. Chase also discloses that any fixed or variable
Preferred APR may change to a much higher “default” or “Non-Preferred” rate upon the
occurrence of certain specified events, such as: (a) late or missed payment to Chase or any other
creditor; (b) charges in excess of a credit limit; or (3) a returned payment. Finally, Chase

generally reserves the right to make “special rate” offers for cash advances, balance transfers and
other types of transactions.
4. Chase does not clearly and conspicuously disclose any other manner or
circumstance that could potentially lead to a change in the Preferred APR. Nor does it clearly
and conspicuously disclose any other APR that it may charge.
5. Unbeknownst to Plaintiffs and the proposed class, Chase employs a practice,
sometimes referred to as “Adverse Action Repricing” (“AAR”), pursuant to which it unilaterally
raises its cardmember’s Preferred APRs based on a wide variety of factors, events and/or
circumstances that are not disclosed in its CMAs. In violation of TILA, Chase fails to clearly
and conspicuously disclose in its CMAs the APRs that it may charge as a result of its AAR
practice. Barrer, 566 F.3d at 892.
6. Chase’s failure to clearly and conspicuously disclose the APRs that it may apply
as a result of its AAR practice or for any other reason (other than default or special rate offers) is
in violation of TILA, and its practice of changing its cardmember’s APRs in ways that are not
disclosed or agreed to in the CMAs is in breach of contract, including the implied covenant of
good faith and fair dealing. As a result of Chase’s conduct, unwary consumers have been
charged and paid finance charges in excess of the rates disclosed and promised in Chase’s
CMAs, thereby incurring in damages.
JURISDICTION AND VENUE
7. This Court has jurisdiction over the subject matter of this action pursuant to 28
U.S.C. §§ 1331 and 1367; and 15 U.S.C. 1640(e).
8. The federal claim asserted herein arises under TILA, 15 U.S.C. §§ 1601, et seq.,
and Regulation Z promulgated thereunder. 12 C.F.R. § 226.

9. The matter in controversy exceeds the minimum jurisdictional amount required by
12 C.F.R. § 1332.
10. Venue is proper in this District because Defendant transacts business in this
District, and many of the acts and transactions constituting the violations of law alleged herein
occurred in this District.
THE PARTIES
11. During the class period (defined below), Plaintiff Walter Barrer (“W. Barrer”), an
Oregon resident, held a credit card account with Chase (“Chase Account”).
12. Plaintiff Cheryl Barrer (“C. Barrer”), an Oregon resident, was added as an
authorized user to W. Barrer’s Chase Account at or near the same time it was opened.
13. Defendant Chase Bank USA, N.A. is incorporated and headquartered in
Delaware. The company is a significant participant in the financial services and credit card
industry both in the United States and abroad.
BACKGROUND
14. The terms of credit governing Chase’s credit cards are encompassed in the CMAs
that Chase provides to its customers when they obtain a credit card from Chase. The CMAs are,
therefore, written contracts.
15. The CMAs are drafted by Chase and presented to consumers, such as the Barrers,
on a take-it-or-leave-it basis.
16. APR is a fundamental term upon which credit is offered. It is the cost of credit
expressed as a yearly rate and is designed to provide consumers with a fundamental basis for
comparing the cost of credit.

17. TILA was promulgated to, among other things, protect consumers against
inaccurate and unfair credit billing and credit card practices.
18. TILA and its implementing regulation, 12 C.F.R. §§ 226, et seq, require detailed
disclosures by lenders in connection with open-ended credit arrangements such as those that
exist between Chase and its credit card customers. Such disclosures must, among other things,
reflect the existing terms of the legal obligation of the parties and clearly, conspicuously, and
accurately disclose any APR “that may be used to compute the finance charge.” 12 C.F.R.
§§ 226.6(a)(2) & 226.5(a)(1).
FACTUAL ALLEGATIONS
19. Chase generally offers credit to customers on either a Preferred (more favorable)
rate, or a Non-Preferred (less favorable) rate, which respectively appear in a pricing schedule in
the “Finance Charges” section of its CMAs.
20. With respect to Preferred rates, Chase employs either a fixed rate, or a variable
rate which is based on an objective, mathematical formula (i.e., a variable index plus a margin).
21. The applicable APRs appear on the consumer’s monthly bill as finance charges.
22. During the class period, Chase’s CMAs included a default provision that provided
that a customer would be in “default” and could lose eligibility for Preferred or special rates
upon the following circumstances: (1) if the consumer failed to make at least the required
minimum payments when due on their Chase account and on all other loans or accounts with
Chase; (2) if the consumer exceeded their credit limit on their Chase account; or (3) if any
payment on the Chase account was returned unpaid.1 The CMAs used during this time period
1
At the beginning of the class period, Chase employed a “universal default” provision which
was triggered if a customer made a late payment to any creditor. This policy was abandoned at
some point during the class period.

did not identify any other grounds or basis upon which a consumer could lose eligibility for a
Preferred rate.
23. Throughout the class period, the CMAs did not clearly and conspicuously disclose
that Chase could change a cardmember’s Preferred APR in any other way, or to any rate other
than those described above. Nor did Chase disclose the existence or terms of its AAR.
24. Rather, in a section entitled “Changes to the Agreement,” which was entirely
separate and far removed from the disclosures related to Chase’s Preferred and Non-Preferred
rates, Chase obliquely stated that it “can change this agreement at any time, . . . by adding,
deleting, or modifying any provision. [The] right to add, delete, or modify provisions includes
financial terms, such as APRs and fees.” (the “Changes to the Agreement” section).
25. The Changes to the Agreement section of the CMA:
appears on page 10-11 of the Agreement, five dense pages after the disclosure of
the APR. It is neither referenced in nor clearly related to the ‘Finance Terms'
section. This provision, as part of the APRs allowed under the contract, is buried
too deeply in the fine print for a reasonable cardholder to realize that, in addition
to the specific grounds for increasing the APR listed in the ‘Finance Charges'
section, Chase could raise the APR for other reasons.
Barrer, 566 F.3d at 892. Accordingly, it is not a clear and conspicuous disclosure that Chase is
permitted to charge any other APR than those described in the “Finance Charges” section of the
CMA. Id.
26. The CMAs provide that Chase may review its customers’ accounts. In connection
with this review, Chase discloses that it may obtain consumer credit reports from a consumer
reporting agency which will be reviewed for two purposes: (1) to determine the account’s
eligibility for a Preferred rate; and (2) to establish a Non-Preferred rate for those customers
deemed in default. Neither the CMAs nor any other disclosure indicates that Chase will use the
information obtained from consumer reporting agencies for any other purpose.

27. Despite its self-imposed limitations for which it will use information obtained
from consumer credit reports, Chase routinely uses such information for other purposes.
Specifically, it uses the information as a basis upon which to employ its AAR practice and to
establish and impose new “Preferred” rates that are nearly as high as its Non-Preferred rates.
Chase does not limit its decision to employ its AAR practice to new credit information, but
rather, it sometimes uses old information that existed at or even prior to the time that the
customer opened a credit card account with Chase.
28. Mr. Barrer held a Chase credit card during the class period.
29. As of the March 22, 2005 statement closing date, Mr. Barrer enjoyed a Preferred
of 8.99%.
30. By the April 20, 2005 statement closing date, the APR on Mr. Barrer’s account
had inexplicably skyrocketed from 8.99% to 24.74%.
31. Shortly thereafter, the Barrers contacted Chase to inquire about the sudden and
dramatic APR increase.
32. On or about May 10, 2005, Chase responded to the Barrers’ inquiry stating that,
“[y]our account was selected for a change in interest rates because of the following reason(s):
a) The consumer credit report we received shows outstanding credit loan(s)
on revolving accounts that are too high.
b) The consumer credit report we received shows too many recently opened
installment/revolving accounts.
33. Chase’s letter further indicated that this information was obtained from Experian,
Inc., one of the country’s three largest consumer reporting agencies.

34. The Barrers’ credit report of April 26, 2005 did not reveal any basis for imposing
a default rate under the terms of the CMA. Indeed, the Barrer’s APR did not change because of
a default, and Chase does not consider the new APR a Non-Preferred rate. Rather, Chase raised
the Barrer’s Preferred APR as a result of its undisclosed AAR policy.
35. Chase never disclosed its AAR program to the Barrers, and it did not clearly and
conspicuously disclose that it could or would increase the Barrer’s Preferred APR for any reason
other than those specifically delineated in the CMA. Nor did Chase clearly and conspicuously
disclose that it could or would change the Barrer’s APR to any rate other than what was
disclosed in the “Finance Charges” section of the CMA. Chase’s failure to clearly and
conspicuously disclose such terms is a violation of TILA and its practice of changing APRs for
reasons and to rates that are not disclosed in its CMA violates the express or implied terms of its
contracts.
36. At the time the Barrers’ APR was increased from 8.99% to 24.74%, they carried a
balance of $3,704.88. The Barrers made the excess interest payments in April, May and June,
2005, and were damaged thereby. They subsequently paid off the remaining balance.
37. Unfortunately, the Barrers’ experiences are not unique, as Chase has employed
the same practices on thousands of its customers across the United States. Many consumers, like
the Barrers, have confirmed that their APR increases were due to reasons never articulated by
Chase and to rates that were never clearly and conspicuously disclosed in their CMAs. Below
are a sampling of messages from www.my3cents.com:
I was checking my account online and my APR had suddenly gone up from 0% to
26.99%. I called to ask why since I was guaranteed zero percent for one year and
I had never missed or made a late payment. I was told that they had found
something negative on my credit report. I've been with them for ten months and
now all of a sudden they've "found something negative?"

* * *
I always paid more than the minimum due, always paid early and defaulted on no
other creditor. Then without warning, they jacked my APR from 8.46% to a
whopping 29.45%.
* * *
Out of the blue last November, I noticed one of my cards interest went from 17%
to 26%, and another went from 19% to 29%. When I called to ask for a reason,
the reps were rude and stated that my interest rate had been raised because a credit
report was run and I was found to have high revolving credit balances. What!?!
* * *
I opened my Chase credit card account Feb 2003 because they were advertising a
5.95% balance transfer rate for the life of the balance. I transferred several
balances and I have paid all my payments on time. I was shocked to find Chase
increased my interest rate from 5.95% to 17.24% in Feb 2005. (I didn’t notice
until 2 months passed). This action was taken, according to their reply based on a
negative report from a credit bureau. I received a copy of my credit report and
there is not one negative comment or late payment showing on any of my
creditors. Chase is citing not late or delinquent payments, rather that I have high
balances and low available credit.
* * *
I just received my statements from Bank One First USA Chase and they raised my
rate to 29.45% last month. I have perfect credit and have never been late on any
payments. I took advantage of their offer on a low promotional rate of 5.9% for 6
months last year to pay off some bills.
At the end of the promotional period they increased my rate to 12% which I felt
was fair based on competing credit card issuers. I have been making all payments
on time with no derogatory or late payments with Bank One or any reflecting on
my credit report. I pay Bank One approximately $1,500 per month on these three
accounts. They originally issued me three cards based on my perfect credit
history with $30,000, $20,000, and $10,000 limits which I used based on their
offer to pay off bills utilizing their competitive interest rates with the
understanding if I made payments on time I would be charged a reasonable
interest rate. . . .
. . . I contacted Bank One by telephone and asked why such an extreme increase
without notice. They said based on a review of my credit report I was carrying
exceptionally high balances and instructed me to contact Equifax and Esperian
[sic].

I contacted the credit reporting agencies which sent me a copy of my report and I
became aware the high balances they mentioned were the balances I carry with
Bank One. They issued the credit and are now using the credit they approved
which is reflected on my credit report as a reason to now charge me 29.45%. . . . I
am furious!
* * *
The representative stated the increase was due to an increase in our Revolving
Accounts as shown in our Credit Report. A review of our CardMember
Agreement did not list this as an option in determining Finance Charges. A
review of our current Credit Report and one dated a year ago shows less than 1%
increase/decrease in the ratio between Income and Revolving Accounts.
* * *
Their “EXCUSE” for doing this is because we have a lot of debt. Well guess
what?, we had a lot of debt when the offered us their cards. Our current credit
scores are in the high 600’s and low 700’s. We are not having any trouble getting
qualified for another mortgage.
* * *
I was . . . really surprised when the interest rate on the account was increased to
29%! After several attempts at getting information from "customer service", I
managed [sic]to reach a "Rate Specialist" by the name of Roy who told me that I
simply had too much debt, and that is why I was being hit with a default rate.
Apparently, neither my FICO score (which is good), nor my 13 years of unfailing
(and timely) payment of my debts to this company have any bearing on this
interest rate.
38. The Barrers, like many other consumers, carried a balance on their Chase card
and were improperly subjected to an APR increase that was not authorized or disclosed in
Chase’s CMAs. As a result of Chase’s conduct, the Barrers and the members of the class paid
excessive finance charges and were damaged thereby.
CLASS ACTION ALLEGATIONS
39. Plaintiffs bring this action as a class action pursuant to Rule 23(a) and (b)(3) of
the Federal Rules of Civil Procedure on behalf of themselves and members of a proposed
nationwide Plaintiff class (the “Class”). The proposed Class, which Plaintiffs seek to represent,

are all Chase credit card customers who, from June 8, 2004 to the present (the “Class Period”),
were charged and paid finance charges based on a Preferred APR that was not disclosed in the
“Finance Charges” section of their CMA.
40. The members of the Class are so numerous that joinder of all members is
impracticable. While the exact number of Class members is unknown to Plaintiffs at this time,
and can only be ascertained through appropriate discovery, Plaintiffs are informed and believe,
and on that basis allege, that thousands of persons throughout the United States are members of
the Class. The precise number of Class members and their addresses are unknown to Plaintiffs,
and can be ascertained through appropriate discovery. Moreover, should it become necessary,
Class members may be notified of the pendency of this action by published and/or mailed notice.
41. Plaintiffs’ claims are typical of the claims of the members of the Class as all
members of the Class are similarly affected by Chase’s wrongful conduct complained of herein.
42. Plaintiffs have and will continue to fairly and adequately protect the interests of
the members of the Class and have retained counsel competent and experienced in class action
and consumer litigation. Plaintiffs have no interests that are adverse or antagonistic to those of
the Class.
43. Common questions of law and fact exist as to all members of the Class and
predominate over any questions affecting solely individual members of the Class. Among the
questions of law and fact common to the Class are:
a) whether Chase’s actions, as described herein, violate the Truth In Lending
Act and or Regulation Z promulgated thereunder;
b) whether Chase’s actions, as described herein, were in breach of contract,
including the implied covenant of good faith and fair dealing;

c) whether Plaintiffs and the Class are entitled to recover actual damages and
the proper measure of such damages;
d) the nature and extent of any other remedies to which proposed Class
members are entitled as a result of Chase’s wrongful conduct; and
e) whether Chase should be ordered to pay statutory damages.
44. A class action is superior to all other available methods for the fair and efficient
adjudication of this controversy, since joinder of all members is impracticable. Furthermore, as
the damages suffered by individual Class members may be relatively small, the expense and
burden of individual litigation make it impossible for members of the Class to individually
redress the wrongs done to them. There will be no difficulty in the management of this action as
a class action. Individual litigation presents the potential for inconsistent or contradictory
judgments. A class action presents far fewer management difficulties and provides the benefits
of single adjudication, economy of scale, and comprehensive supervision by a single court.
TOLLING OF STATUTE OF LIMITATIONS
45. TILA carries a one-year statute of limitations.
46. On June 8, 2005, a first amended proposed class action complaint based on
similar facts, circumstances and law as this case, was filed in the Superior Court of the State of
California for the County of San Bernardino. Hauk v. JPMorgan Chase Bank, Case
No. VCVVS037395. Accordingly, the statute of limitations applicable to all proposed class
members in Hauk has been, and continues to be, tolled since June 8, 2005.
47. Additionally, to the extent that each class member’s cause of action is based on
failure to clearly and conspicuously disclose the applicable terms of credit provided by Chase,
such class members were necessarily unable to discover and know, and did not discover and

know, that such disclosures were incomplete or inaccurate until such time that Chase disclosed
that it would change the class member’s respective APR to a rate that was not clearly and
conspicuously disclosed in the cardmember’s CMA.
FIRST CAUSE OF ACTION
(Violation of the Truth in Lending Act

[15 U.S.C. §§1601, et seq.])
48. Plaintiffs re-allege and incorporate herein by reference each of the foregoing
paragraphs, and further alleges as follows.
49. In enacting TILA, Congress found that economic stabilization would be enhanced
and the competition among the various financial institutions and other firms engaged in the
extension of consumer credit would be strengthened by the informed use of credit. The informed
use of credit results from an awareness of the cost thereof by consumers. It is the purpose of
[TILA] to assure a meaningful disclosure of credit terms so that consumers will be able to
compare more readily the various credit terms available to them and avoid the uninformed use of
credit, and to protect consumers against inaccurate and unfair credit billing and credit card
practices. 15 U.S.C. §1601(a). Thus, the purpose of TILA is to assure meaningful disclosures
that accurately reflect the credit terms to which parties are legally bound.
50. TILA and Regulation Z require a credit card issuer, such as Chase, to clearly,
conspicuously, and accurately disclose in writing the legal obligations of the parties, including
the corresponding APRs that may be charged. 15 U.S.C. §§ 1637(a)(1), (a)(3) and (a)(4); 12
C.F.R. §§ 226.5(a), (c) and 226.6(a). See also Barrer, 566 F.3d at 891.
51. By failing to clearly and conspicuously disclose that it could charge Plaintiffs and
the Class APRs other than those APRs that were specifically disclosed in the “Finance Charges”

or “Default” sections of the CMAs, Chase violated TILA and Regulation Z. TILA 15 U.S.C. §
1637(a); 12 C.F.R. §§ 226.5(a), (c) & 226.6(a).
52. As a result of its violations of TILA and Regulation Z, Chase is subject to the full
extent of civil liability prescribed by law.
SECOND CAUSE OF ACTION
(Breach of Contract, including the Implied Covenant of Good Faith and Fair Dealing)
53. Plaintiffs repeat and re-allege all paragraphs above as if set forth in full herein.
54. Chase’s CMAs constitute written, standard form contracts between Chase and its
cardmembers. The CMA’s obligated Chase to provide Plaintiffs and the other members of the
Class with Preferred APRs that were either fixed, or variable based on a pre-designated formula.
Under the terms of its CMAs, Chase was not authorized or permitted to charge its customer’s
any other APRs, except in instances of default. The fixed or variable APRs specifically
disclosed in Chase’s CMAs were material terms of the agreement and provided to Plaintiffs and
the Class on a take-it-or-leave-it basis.
55. Chase breached its contracts with Plaintiffs and the Class by engaging in its AAR
practice and changing its customer’s respective APRs to rates that were not otherwise disclosed
or authorized in the CMA.
56. Alternatively, to the extent that Chase argues that it was permitted to unilaterally
increase its customer’s Preferred APRs based in its sole and unfettered discretion pursuant to the
“Changes to the Agreement” section of its CMAs, such action was not clearly and conspicuously
disclosed and was contrary to the reasonable expectations of Plaintiffs and the Class in that it
unfairly, unreasonably and/or unconscionably interfered with Plaintiffs’ and the Class’ rights to
receive the benefits of their contract with Chase, including the APRs that were specifically

disclosed, promised and agreed to elsewhere in the CMAs. This is particularly true in light of
the fact that the CMAs only identify two limited purposes for which Chase will obtain and
review consumer credit reports: 1) to determine the account’s eligibility for a Preferred rate; and
2) to establish a Non-Preferred rate for those customers deemed in default. Accordingly, Chase
gave its customers no reason to suspect that the consumer reports might be used for some other
purpose, such as to re-price a Preferred APR.
57. Plaintiffs and members of the Class expressly bargained for credit at the fixed
and/or variable Preferred APRs as disclosed and set forth in the CMAs. Chase’s subsequent and
unilateral modification of the APRs to a rate other than what was disclosed in the CMA
represents a fundamental change to the most material term of the contracts and is clearly beyond
the reasonable expectations of Plaintiffs and the Class. That it was unilaterally imposed by
Chase, the party with superior bargaining power, and resulted in an effectively higher and more
costly APR on existing balances, solely to the detriment of Plaintiffs and the Class, makes the
conduct even more unreasonable and unconscionable by any objective standard.
58. Plaintiffs and the Class incurred damages and were injured as a result of paying
additional interest on their credit card balances due to Chase’s unilateral modification of APRs
in a manner that was contrary to the reasonable expectations of Plaintiffs and the Class and
contrary to the express terms of Chase’s CMAs.
PRAYER FOR RELIEF
WHEREFORE, Plaintiffs, on behalf of themselves and on behalf of the members of the
Class defined herein, pray for judgment and relief on all Causes of Action as follows:
A. An order certifying that the action may be maintained as a class action as defined
herein;

B. An order confirming that Chase is liable for the statutory and common law claims
asserted herein;
C. For actual damages for injuries suffered by Plaintiffs and the members of the
proposed Class;
D. For statutory damages under TILA;
E. For punitive damages in an amount sufficient to deter Chase from similar
misconduct in the future;
F. For distribution of any moneys recovered on behalf of members of the proposed
Class, via fluid recovery or cy pres recovery where necessary to prevent Chase from retaining the
benefits of its wrongful conduct;
G. Reasonable attorneys’ fees;
H. Costs of this lawsuit;
I. Pre- and post-judgment interest; and
J. Such other and further relief as the Court may deem necessary or appropriate.
JURY DEMAND
Plaintiffs demand a trial by jury.
DATED: ______________________ JUSTINE FISCHER

Attorney at Law
___________________________________
JUSTINE FISCHER
OSB: 81224
e-mail: JFAttyOR@aol.com
Attorney at Law
720 SW Washington Street, Suite 750
Portland, OR 97205
Telephone: (503) 222-4326
Facsimile: (503) 222-6567

BRAUN LAW GROUP PC

MICHAEL D. BRAUN
e-mail: mdb@braunlawgroup.com
10680 West Pico Boulevard, Suite 280
Los Angeles, CA 90064
Telephone: (310) 836-6000
Facsimile: (310) 836-6010
STANLEY • IOLA, LLP

MATTHEW J. ZEVIN
e-mail: mzevin@aol.com
525 B Street, Suite 760
San Diego, CA 92101
Telephone: (619) 235-5306
Facsimile: (825) 377-8419
Attorneys for Plaintiffs Cheryl Barrer

and Walter Barrer

Barrer v. Chase SECOND AMENDED COMPLAINT FOR VIOLATION OF THE TRUTH IN LENDING ACT AND BREACH OF CONTRACT

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Case 3:06-cv-00415-HA Document 67 Filed 03/10/2010 Page 1 of 17

Liaison Counsel for Plaintiffs Cheryl Barrer

[Additional Counsel on Signature Page]

UNITED STATES DISTRICT COURT

CHERYL BARRER and WALTER BARRER, CASE NO. 06-CV-415-HA

Plaintiffs, SECOND AMENDED COMPLAINT FOR

SECOND AMENDED COMPLAINT Page 1

and through their attorneys:

NATURE OF THE CASE

SECOND AMENDED COMPLAINT Page 2

other types of transactions.

and conspicuously disclose any other APR that it may charge.

5. Unbeknownst to Plaintiffs and the proposed class, Chase employs a practice,

sometimes referred to as “Adverse Action Repricing” (“AAR”), pursuant to which it unilaterally

practice. Barrer, 566 F.3d at 892.

CMAs, thereby incurring in damages.

JURISDICTION AND VENUE

U.S.C. §§ 1331 and 1367; and 15 U.S.C. 1640(e).

and Regulation Z promulgated thereunder. 12 C.F.R. § 226.

SECOND AMENDED COMPLAINT Page 3

9. The matter in controversy exceeds the minimum jurisdictional amount required by

occurred in this District.

13. Defendant Chase Bank USA, N.A. is incorporated and headquartered in

industry both in the United States and abroad.

therefore, written contracts.

comparing the cost of credit.

SECOND AMENDED COMPLAINT Page 4

inaccurate and unfair credit billing and credit card practices.

§§ 226.6(a)(2) & 226.5(a)(1).

the “Finance Charges” section of its CMAs.

SECOND AMENDED COMPLAINT Page 5

25. The Changes to the Agreement section of the CMA:

SECOND AMENDED COMPLAINT Page 6

customer opened a credit card account with Chase.

had inexplicably skyrocketed from 8.99% to 24.74%.

dramatic APR increase.

a) The consumer credit report we received shows outstanding credit loan(s)

on revolving accounts that are too high.

Inc., one of the country’s three largest consumer reporting agencies.

SECOND AMENDED COMPLAINT Page 7

the Barrer’s Preferred APR as a result of its undisclosed AAR policy.

are a sampling of messages from www.my3cents.com:

SECOND AMENDED COMPLAINT Page 8

SECOND AMENDED COMPLAINT Page 9

excessive finance charges and were damaged thereby.

CLASS ACTION ALLEGATIONS

SECOND AMENDED COMPLAINT Page 10

“Finance Charges” section of their CMA.

questions of law and fact common to the Class are:

a) whether Chase’s actions, as described herein, violate the Truth In Lending

Act and or Regulation Z promulgated thereunder;

b) whether Chase’s actions, as described herein, were in breach of contract,

including the implied covenant of good faith and fair dealing;

SECOND AMENDED COMPLAINT Page 11

the proper measure of such damages;

members are entitled as a result of Chase’s wrongful conduct; and

e) whether Chase should be ordered to pay statutory damages.

adjudication of this controversy, since joinder of all members is impracticable. Furthermore, as

of single adjudication, economy of scale, and comprehensive supervision by a single court.

TOLLING OF STATUTE OF LIMITATIONS

45. TILA carries a one-year statute of limitations.

SECOND AMENDED COMPLAINT Page 12

conspicuously disclosed in the cardmember’s CMA.

FIRST CAUSE OF ACTION