Share on LinkedInShare on LinkedIn

ARTICLE · 30 JULY 2021

Merchant Cash Advance Litigation Is Getting Wilder

Carter Ledyard & Milburn LLP
Explore more from Carter Ledyard & Milburn LLP

According to lore, the merchant cash advance (MCA) industry was born in New York, and its law continues to be the law of choice in many MCA agreements.

United StatesLitigation, Mediation & Arbitration
Jacob H. Nemon
Jacob H. Nemon
Jeffrey Boxer
Jeffrey Boxer

According to lore, the merchant cash advance (MCA) industry was born in New York, and its law continues to be the law of choice in many MCA agreements. This has led to extensive litigation because, unlike dozens of other states, New York has a criminal usury cap of 25% for loans to corporations. In many litigations, MCA funders maintain that MCA agreements are not loans, and are therefore exempt; while business customers (referred to as "merchants") seeking to avoid their obligations, unsurprisingly, argue that they are in fact loans subject to the cap.

There are now dozens of trial-level, and several appellate-level, decisions on this issue. This well-developed MCA jurisprudence has resulted in more careful MCA agreement drafting in recent years, but some recent decisions suggest that MCA litigation is about to get wilder.

We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.

Register for freeORLog in

View source

Related Articles

Legal Intelligence Newsletters: sign up for the latest legal and regulatory news on your chosen topics

Read more about

Related Comparative Guides

See more popular content from

Article

Tenth Circuit Stays Nationwide Eligibility Injunction For Class Of 2022 In Wisne v. NCAA

On August 21, 2026, the Tenth Circuit granted the NCAA’s stay request in Wisne v. NCAA, temporarily restoring the NCAA’s age-based eligibility rules pending resolution of the appeal. Three weeks earlier, Judge Sweeney of the District of Colorado had issued a nationwide injunction that permitted athletes in the Class of 2022 to pursue a fifth year of eligibility.
United StatesLitigation, Mediation & Arbitration
Buchanan Ingersoll & Rooney
Buchanan Ingersoll & Rooney
Article

Show Your Work: California Federal Court Denies Preliminary Approval Of Data Breach Class Action Settlement

A federal court in California denied preliminary approval of a $2.3 million data breach settlement affecting over 220,000 individuals, finding seven critical deficiencies in the proposed agreement. The decision highlights the rigorous scrutiny courts apply to class action settlements, particularly regarding claims-made distribution processes, inadequate documentation of settlement value, and unexplained disparate treatment among class members.
United StatesLitigation, Mediation & Arbitration
Duane Morris LLP
Duane Morris LLP
Article

California Federal Court Denies TikTok’s Motion To Dismiss Children’s Privacy Claims Based On Prior Class Action Settlements

A federal court rejected TikTok's attempt to use two prior nationwide class action settlements—totaling over $93 million—to dismiss new privacy claims brought by minors alleging violations of the Children's Online Privacy Protection Act. The ruling hinged on whether the current plaintiffs were demonstrably members of the earlier settlement classes based solely on the pleadings, raising critical questions about the scope and enforceability of broad settlement releases in successive privacy litiga
United StatesLitigation, Mediation & Arbitration
Duane Morris LLP
Duane Morris LLP
Video

MR. NUMBER 1 WINS AGAIN!: Concora Credit To Pay $9.375MM To Settle TCPA Wrong Number Class Action As Another Company Bows To Greenwald (Video)

Concora Credit has agreed to pay $9.375 million to settle a TCPA class action lawsuit over wrong number robocalls, with prominent TCPA attorney Mike Greenwald securing another major victory. The settlement includes over $5 million for approximately 147,000 class members, $3 million in attorney fees, and a commitment to spend at least $1 million on TCPA compliance over three years.
United StatesLitigation, Mediation & Arbitration
Troutman Amin LLP
Troutman Amin LLP
Article

Florida Federal Court Holds That The TCPA’s Do-Not-Call Provisions Do Not Apply To Cell Phone Users

A federal judge in Florida has ruled that cell phone users cannot sue under the TCPA's do-not-call provisions, determining that the FCC exceeded its authority when it extended protections to wireless subscribers in 2003. The decision challenges decades of regulatory interpretation and could fundamentally reshape telecommunications privacy litigation if adopted by other courts.
United StatesLitigation, Mediation & Arbitration
Duane Morris LLP
Duane Morris LLP
Article

Sterling v. City Of Jackson And The Limits Of Substantive Due Process In Environmental Harm Cases

The Fifth Circuit's en banc decision in Sterling v. City of Jackson tests whether residents exposed to lead-contaminated municipal drinking water can sue under Section 1983 for substantive due process violations. In a 10-5 ruling, the court held that environmental harms caused by government mismanagement belong to tort law and the political process, not constitutional claims, creating a significant circuit split with implications for how environmental compliance failures by public officials are litigated.
United StatesLitigation, Mediation & Arbitration
Arnold & Porter
Arnold & Porter
Article

It’s An Arbitration Agreement After All: Disney Compels Arbitration And Dismisses Class Claims In Antitrust Suit

A federal court granted Disney's motion to compel arbitration in an antitrust class action, allowing the company to invoke fuboTV's subscriber terms of service after acquiring a 70% stake in the streaming platform. The ruling demonstrates how corporate mergers can fundamentally alter litigation strategy by enabling non-signatories to enforce arbitration agreements containing "future affiliates" provisions.
United StatesLitigation, Mediation & Arbitration
Duane Morris LLP
Duane Morris LLP
Article

Rule 15a-6 Of The Securities Exchange Act: A Guide For Foreign Broker-dealers

SEC Rule 15a-6 creates a framework allowing non-U.S. broker-dealers to engage with American institutional investors and conduct certain securities activities without full SEC registration. The rule establishes specific exemptions and requirements, including the use of chaperoning broker-dealers, while balancing market access with regulatory oversight. Understanding these provisions is essential for foreign broker-dealers seeking compliant pathways to U.S. capital markets.
United StatesCorporate/Commercial Law
Carter Ledyard & Milburn LLP
Carter Ledyard & Milburn LLP
Article

New York’s Data Center Moratorium: A Practical Roadmap Through The One-Year Pause

New York has become the first U.S. state to implement a statewide moratorium on major data center development, halting discretionary environmental permits for facilities of 50-megawatts or more for one year. Governor Hochul's Executive Order #62 directs state agencies to study and establish new regulatory frameworks addressing environmental impacts, utility costs, and community benefits, while exempting projects with permits deemed complete before July 14, 2026.
United StatesEnvironment
Carter Ledyard & Milburn LLP
Carter Ledyard & Milburn LLP
Article

Schedule 13D and 13G: Elon Musk Saga Ends, and SEC Clarifies Rules

Recent SEC enforcement activity and new interpretive guidance highlight the agency's continued emphasis on beneficial ownership reporting under Schedules 13D and 13G. The settlement of the Elon Musk Twitter acquisition case, resulting in a $1.5 million penalty, demonstrates the SEC's focus on timely disclosure requirements. Updated Corporation Finance Interpretations clarify how derivatives and total return swaps may trigger reporting obligations when used to obscure voting influence.
United StatesCorporate/Commercial Law
Carter Ledyard & Milburn LLP
Carter Ledyard & Milburn LLP