Despite the strong petition and amici briefs, the Second Circuit
denied the request to rehear the Madden v. Midland Funding
case. With the denial of the petition on August 12 (order attached
here), it is now clear that Madden is the law of the
Circuit and will remain so unless and until the Supreme Court steps
in.
There are several important state law issues that the court of
appeals in Madden left open that will be addressed by the
district court on remand – such as whether the district court
will honor the choice of law designation of the parties
(designating Delaware law as governing the loans) and, if New York
law applies, whether New York law would assess the legality of the
rate by looking to whether it was lawful at the inception of the
loan. The denial of the en banc petition, however, does not mean
that we are likely to get those answers soon.
