Scott M. Pearson

Partner

Manatt Financial Services

Contact

spearson@manatt.com
Phone: 310.312.4283

Services

Industries

Regulatory Enforcement Actions

Favorably settled a Consumer Financial Protection Bureau (CFPB) enforcement action against an automobile finance company alleging deceptive marketing of ancillary products. In announcing the settlement, the CFPB lauded the client's "responsible" and "proactive" handling of the CFPB's concerns and attributed its decision to impose limited redress (including no civil monetary penalty) to the handling of the case.
Represented credit card issuers in several separate groups of enforcement actions brought by the CFPB, FDIC, OCC and several state attorneys general challenging the marketing and suitability of debt suspension, identity theft and other fee products.
Represented several companies responding to CFPB civil investigative demands concerning payroll card practices.
Represented a national retailer in an investigation by a state attorney general concerning weights and measures issues.
Represented a student loan company in a state attorney general investigation concerning marketing practices.

Lending

Credit Card

Represented several issuers in separate groups of competing class actions concerning debt suspension and other "add-on" fee products. Reached a favorable global settlement for one issuer after successfully consolidating the cases in an MDL, and compelled multiple individual arbitrations for others.
Favorably settled numerous simultaneous class actions brought against a major credit card issuer alleging inadequate disclosure of foreign currency conversion practices. Obtained final approval of class settlement over objections from plaintiffs in competing cases.
Favorably settled class actions against issuers alleging damages based on use of cutoff time for crediting payments by mail. One of the cases, Boehr v. Discover Bank, settled after the plaintiff was compelled to arbitrate on an individual basis after years of highly publicized arbitration appeals, and Discover prevailed at the arbitration hearing.
Represented a major credit card issuer in a putative class action alleging improper expiration of frequent flyer miles. Obtained summary adjudication of the principal claim and then defeated a motion for attorneys' fees after remaining claims were voluntarily dismissed.
Favorably settled a class action alleging inadequate disclosure of interest compounding practices.
Favorably settled numerous separate class actions seeking to invalidate credit card debt incurred through Internet or other gambling activities.
Other successful credit card representations include class actions challenging termination of card reward benefits, gift card expiration practices, and convenience and balance transfer check disclosures.

Residential Mortgage

Favorably settled several separate class actions against large banks alleging systematic misadjustment of adjustable interest rates.
Successfully defended putative class action challenging propriety of prepayment penalties.
Numerous representations of large banks in disputes with other banks or investors over mortgage servicing transfers, indemnification obligations and securitization issues.
Successfully represented national mortgage lenders in class actions and individual cases challenging the lenders' entitlement to earthquake insurance proceeds. One case resulted in a key published opinion on the issue, JEM Enterprises v. Washington Mutual Bank, 99 Cal. App. 4th 638 (2002).
Extensive experience managing portfolios of routine litigation for large banks and mortgage servicers.

Commercial Lending

Obtained a published opinion in Weiss v. Washington Mutual Bank, 147 Cal. App. 4th 72 (2007), confirming that the Home Owners' Loan Act and related regulations pre-empted the plaintiffs' challenge to certain prepayment penalties.
Successfully defended a national bank against RICO and other claims arising out of a dispute between partners in a commercial redevelopment project financed by the bank.
Other successful representations include enforcement of commercial loans and related guaranties, disputes between syndicated loan participants and agent bank, and various lender liability claims.

Marketplace Lending and Alternative Finance

Successfully defended or settled multiple usury class actions alleging that merchant cash advances were disguised loans.
Numerous successful defenses of usury cases alleging "true lender" claims.
Favorably settled class action against a payday lender alleging failure to comply with certain California disclosure requirements.
Favorably settled a class action against a specialty finance firm challenging marketing of ATM lease financing.

Regulatory Compliance Advice

Extensive experience advising participants in marketplace lending programs on bank partnership structures, Madden and true lender risk, state licensing, and other compliance matters.
Extensive experience drafting arbitration agreements with enforceable class action waivers.
Drafted, redrafted or substantially revised agreements for consumer and small business financial products including credit cards and other open-end consumer loans, closed-end unsecured loans, prepaid cards, automobile leases, retail installment sale contracts, business installment loans, merchant cash advances, and payday loans.
Extensive experience advising on compliance systems, including revision of policies, procedures and internal controls.
Advised banks, retailers and other companies on customer loyalty programs and related advertising issues.
Regularly advise national retailers, banks and other consumer-focused companies on privacy-related issues, including Gramm-Leach-Bliley Act and Telephone Consumer Protection Act compliance and issues associated with various marketing practices.
Regularly review advertising materials for FTC compliance issues such as "up to" claims.
Conduct regulatory due diligence for acquisition of financial services companies.

Unfair and Deceptive Business Practices Litigation

Numerous successful representations of defendants other than financial institutions in class and representative actions alleging false or misleading advertising of, or use of unfair business practices with, a wide variety of products and services.
Extensive experience defending claims brought under California Business and Professions Code Section 17200, the California Consumers Legal Remedies Act, and other state UDAP statutes.
Played significant role in the drafting of Proposition 64, a major reform of California's Unfair Competition Law.
Multiple successful representations of companies whose names had been used without permission by scam artists for various illegal purposes, such as to steal money from consumers or generate fraudulent sales leads.

Real Estate

Successfully defended a large REIT against antitrust claims including an allegation that it conditioned lease opportunities at one mall on agreement to lease at another. The plaintiff voluntarily dismissed before the preliminary injunction hearing in response to the demand letter accompanying opposition papers.
Multiple representations of developers in disputes over development fees and profit participations, including a multimillion-dollar recovery in 2012 for a publicly traded real estate developer.
Multiple representations of buyers and sellers of commercial real estate in disputes ranging from breach of purchase agreements to whether broker commissions were owed.
Prevailed after two trials and multiple appeals in a declaratory relief action brought by a bank landlord against a law firm tenant that claimed waiver of a significant market-rent increase. The bank recovered 100 percent of the relief it sought and all of its attorneys' fees and costs before reaching settlement.
Significant experience with judicial and nonjudicial foreclosures, enforcement of guaranties, lot-line adjustments, title issues, ground leases, easement disputes, and California's antideficiency statutes and "one action" rule.

Investment-Related Litigation

Multiple successful representations of private equity firm portfolio companies in "bet the company" cases ranging from a claim that a company's sole product violated applicable building codes to class actions alleging that the company's principal business is prohibited by the federal Fair Debt Collection Practices Act.
Multiple successful representations of private equity firms and their principals in cases brought against directors and shareholders arising out of portfolio company activities.
Multiple successful representations of large financial institutions sued together with the actual wrongdoers in investment fraud cases.
Successfully defended arbitration against a large broker-dealer and broker alleging churning of extremely large municipal bond portfolio.
Extensive experience advising private equity firms and hedge funds on appropriate predistribution litigation reserves.

Privacy and Data Security (Including Telemarketing)

Obtained summary judgment and avoided draconian statutory penalties for a major credit card issuer in a putative class action challenging customer service call recording practices.
Favorably settled a call recording class action on behalf of a national merchant services provider. Client paid (with large insurance contribution) substantially less than 1 percent of $1.7 billion in potential exposure.
Numerous successful representations of defendants in class and individual actions alleging violations of the Telephone Consumer Protection Act.
Represented a major Internet retailer in numerous proceedings arising from the massive theft of customer data by a hacker, including state attorney general statutory notifications and investigations, PCI DSS (payment card network data security rules) compliance, and defense of numerous resultant consumer class actions.
Successfully settled a series of putative class actions brought against national banks and their affiliates challenging the sharing and/or use of customer information for marketing purposes.

Sports and Entertainment

Successfully represented a concert promoter in a class action challenging the marketing of a major music festival.
Represented an NHL club in a grievance proceeding against another club arising out of representations made prior to player trade.
Counsel to NFL, MLB, NHL and MLS clubs on various regulatory compliance issues associated with ticketing and other business operations.
Advised an NHL club on various confidential player issues.
Counsel to entertainment companies on regulatory compliance issues associated with ticket sales and other direct-to-consumer operations.

Intellectual Property and Trade Secrets

Successfully represented an aerospace manufacturer that discovered a former employee had copied voluminous product data onto a thumb drive before taking a job with a competitor. Obtained temporary, preliminary and permanent injunctive relief preventing any use of the data; the court made a criminal referral after a six-week jury trial based on defendants' destruction of evidence.
Represented multiple clients in different industries in trademark infringement actions, employee raiding cases, licensing matters and Internet domain name disputes.

Legal Process Engineering

Worked with a national bank and its outside counsel to re-engineer the process for a category of litigation, resulting in multimillion-dollar annual performance improvement for the bank, as measured by legal spend, recovery on investment and other metrics.
Regularly employ process mapping and other Lean Six Sigma techniques to effect continuous improvement of litigation and other legal processes.

Pro Bono Experience

Clients have included the Green Beret Foundation and the Exotic Feline Conservation Center.

Speaking Engagements

Moderator, “Legal and Regulatory Issues – Next Wave of Regulatory Policy,” Marketplace Lending and Alternative Financing Summit, December 9, 2019.

Panelist, “Compliance to Litigation: Finding the Disruptive Balance,” IMN 5th Annual ABS Tech Conference, New York, November 20, 2019.

Speaker, “Federal and State Legislative and Policy Updates Small Business Lenders Need to Know,” LEND360 2019, Dallas, September 26, 2019.

Co-chair and speaker, “State Regulatory Insights on the Latest Developments, Investigations and Enforcement Actions," and “Insights from the Plaintiffs’ Bar and Consumer Advocates,” American Conference Institute’s 31st National Forum on Consumer Finance Class Actions and Government Enforcement, Chicago, July 23–24, 2019.

Speaker, “A More Purposeful Approach to Technology Adoption,” American Banker Digital Banking Conference, Austin, June 20, 2019.

Speaker, "Current Legal Issues/Strategies for Addressing Debt Relief Companies," ARDA webinar, June 5, 2018.

Speaker, "The Impact of Regulation and Policy on Online Lending," Lend360 webinar, June 21, 2017.

Speaker, "Live Event Ticketing Litigation and Business Update," Sports Lawyers Association 43rd Annual Conference, Denver, May 19, 2017.

Speaker, "Risks and Opportunities for Marketplace Auto Lending," The Center for Auto Finance Excellence webinar, June 6, 2016.

Conference co-chair and speaker, "The Latest Class Action Claims and Defense Strategies," American Conference Institute's 24th National Conference on Consumer Finance Class Actions and Litigation, Miami, January 26–27, 2016.

Speaker, "Managing Small Business Banking Regulatory and Class Action Risk," American Banker Small Business Banking Conference, Nashville, November 16, 2015.

Speaker, "Regulatory and Class Action Risks in Marketplace Lending," Lend360, Atlanta, October 15, 2015.

Speaker, "CFPB: What Can We Expect This Year?” Association of Consumer Vehicle Lessors Annual Conference, San Diego, September 29, 2015.

Speaker, "Important Developments in the Settlement of Class Actions," American Conference Institute's 18th National Forum on Residential Mortgage Litigation & Regulatory Enforcement, Dallas, September 18, 2015.

Conference co-chair and moderator, "Regulatory and Enforcement Roundtable: The View from Federal and State Agencies on New and Emerging Initiatives, Enforcement Actions, Examination Procedures, and Investigations," American Conference Institute's 23rd National Conference on Consumer Finance Class Actions and Litigation, Chicago, July 27–28, 2015.

Speaker, "Important Developments in the Settlement of Class Actions," American Conference Institute's 17th National Forum on Residential Mortgage Litigation and Regulatory Enforcement, Washington, D.C., May 1, 2015.

Co-chair and speaker, "The Latest Regulatory, Supervision, Investigation, and Enforcement Initiatives, Examination Procedures and Attorneys General Lawsuits Against Financial Services Companies," American Conference Institute's 21st National Conference on Consumer Finance Class Action & Litigation, New York, January 29–30, 2015.

Honors & Awards

BTI Client Service All-Star

Fellow, American College of Consumer Financial Services Lawyers

The Legal 500 United States, Financial Services Regulation

AV Peer Review Rating, Martindale-Hubbell

2014 Felitarian of the Year, Exotic Feline Breeding Compound

Admitted to practice in the state of California

Admitted to practice in the U.S. District Court, District of Arizona; the U.S. District Courts, Central, Southern, Northern and Eastern Districts of California; the U.S. District Court, District of Colorado; the U.S. District Court, Eastern District of Michigan; the U.S. District Court, Eastern District of Wisconsin; the U.S. Court of Appeals, Sixth Circuit; the U.S. Court of Appeals, Ninth Circuit; the U.S. Court of Appeals, 11th Circuit; and the Supreme Court

Board member, Cedars-Sinai Board of Governors, 2007–Present

Member, Advisory Board, USC Institute for Corporate Counsel

Member, Consumer Financial Services Committee, Business Law Section, State Bar of California, 2012–2016

Board member, Green Beret Foundation, Advisory Board, 2010–2015

Quoted, “Bank Regulators' Madden Fixes May Not Be Quick Ones,” Law360, November 22, 2019.

Co-author, Consumer Financial Services Answer Book (2020 Edition), Practising Law Institute, September 2019.

09.25.19

Fourteen Manatt Lawyers Contribute to the 2020 Edition of PLI’s ...

Fourteen Manatt professionals contributed to the 2020 edition of the leading desk reference in consumer financial services law, Practising Law Inst...
09.12.19

Pearson Speaks With American Banker on Potential Firing of CFPB ...

Manatt financial services partner Scott Pearson spoke with American Banker on the possibility of a Democratic victor in the 2020 presid...
08.19.19

California’s New Business Loan Disclosure Law Sparks Debate

Manatt’s Scott Pearson, a partner in the firm’s financial services group, spoke with American Banker on new guidance from the ...
07.01.19

Manatt’s Donna Wilson Assumes Position of CEO and Managing Partner

Manatt is thrilled to announce that Donna L. Wilson has officially assumed the role of Chief Executive Partner and Managing Partner. Elected to the...

Show More

01.24.20

Alert: CFPB Issues Policy Statement on Abusive Acts or Practices

The Consumer Financial Protection Bureau (CFPB or Bureau) today issued an important policy statement on how it intends to apply the ...
01.23.20

California DBO Challenging Transactions as Disguised Loans

Potentially redefining the nature of a “loan,” the California Department of Business Oversight (DBO) is pursuing multiple enforcement ...
01.16.20

Two Powerful New State CFPBs? California, New York Proposals May Rock ...

Joining Pennsylvania, California looks to be the next state to create a state version of the federal Consumer Financial Protection Bureau.
12.31.19

CFPB Happenings: Workshop, TRID Guidance, Constitutionality Briefs

To close out a busier-than-expected 2019, the Consumer Financial Protection Bureau (CFPB or Bureau) held a workshop in conjunction with the Federal ...

Show More

10.03.19

2019 Update: Changes and Challenges Impacting Fintech Companies

This past year, significant efforts have been made by the SEC, FINRA, state regulators and CSBS to streamline regulations and processes for all ...