In Jordan v. Paul Financial LLC, the District Court for the Northern District of California denied class certification for all classes of payment-option adjustable-rate mortgage (option ARM) purchasers sought in the action. Option ARM loans, which the plaintiff claimed were “deceptively designed,” typically have an adjustable interest rate and allow the borrower to make one of several payment amounts each month. Specifically, Plaintiff alleged that he was promised a low, fixed rate but was later charged a much higher rate and was misled about the potential for negative amortization created by some of the payment options. Plaintiff sought to represent three classes: a nationwide class in connection with claims brought under the Truth in Lending Act (TILA) and two classes based on claims under California law. The Court denied certification of the nationwide TILA class because plaintiff’s TILA claim was barred by the statute of limitations. The court denied certification of the California classes because plaintiff could not satisfy the “traceability” requirement for standing, finding that “members of the putative class own loans that are held and serviced by entities other than the companies that hold and service plaintiff’s loan.” The court also addressed whether plaintiff satisfied the typicality requirement of Rule 23(a)(3), concluding that plaintiff’s claims were not suitable for class certification because of unique circumstances in his case, including specific available defenses and contract terms. The Jordan opinion is the first to rule on class certification among the over 40 option ARM class actions currently pending nationwide.