Alston v. Freedom Plus/Cross River

YVONNE ALSTON, Plaintiff, v. FREEDOM PLUS/CROSS RIVER, ADVANCEPOINT CAPITAL,FIRST NATIONAL BANK OF OMAHA, CNU ONLINE CASHNETUSA,GECRB/SYNCHRONY BANK, MONTGOMERY WARD,SUNTRUST BANK, POWER WINDOW AND SIDING,PRIMARY RESIDENTIAL MORTGAGE, INC. and IDS CASUALTY INSURANCE CO. Defendants.

Civil Action No. TDC-17-0033

UNITED STATES DISTRICT COURT DISTRICT OF MARYLAND

February 7, 2018

MEMORANDUM OPINION

Plaintiff Yvonne Alston has brought this civil action alleging that Defendants accessed her credit report without a permissible purpose and failed to respond properly when Alston disputed information they provided to various consumer reporting agencies ("CRAs"), in violation of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. §§ 1681-1681x (2012). Presently pending before the Court are six Motions to Dismiss filed by Defendants First National Bank of Omaha ("FNBO"), CNU Online Cashnet USA ("CNU"), GECRB/Synchrony Bank ("Synchrony"), IDS Casualty Insurance Company ("IDS"), SunTrust Bank ("SunTrust"), and Primary Residential Mortgage, Inc. ("PRMI") (collectively, "the Moving Defendants"). At the same time, three Defendants, Montgomery Ward, Power Window and Siding, and Advancepoint Capital (collectively, "the Unserved Defendants") have not been served with process, and one Defendant, FreedomPlus/Cross River ("Cross River") has been served but has not filed a responsive pleading to Alston's Second Amended Complaint. Having reviewed the pleadings, briefs, and supplemental filings, the Court finds that no hearing is necessary. See D. Md. Local R. 105.6. For the reasons set forth below, the Motions to Dismiss are GRANTED IN PART and DENIED IN PART, and the claims against the Unserved Defendants are DISMISSED.

BACKGROUND

The following facts are presented in the light most favorable to Alston, the nonmoving party. In 2016, Alston obtained her credit reports from CRAs TransUnion and Experian, companies which aggregate credit information relating to individual consumers throughout the United States. Upon inspecting the reports, Alston noticed several credit inquiries by various entities, including Defendants, with whom Alston had no business relationship. In September 2016, Alston sent letters to TransUnion and Experian informing them that the credit inquiries were not authorized. Alston further requested that each CRA investigate whether Defendants had a permissible purpose for obtaining her credit report. These letters specifically stated that the inquiries were "not authorized, did not result in a firm offer of credit, were not account reviews, and were not done for purposes of collecting a debt." Second Am. Compl. ¶ 27, ECF No. 211-1. Although TransUnion and Experian were required to notify Defendants of Alston's concerns, Alston did not receive a response from any Defendant.

On April 27, 2017, Alston contacted five of the Moving Defendants and spoke with a representative from each company about the reason that her credit report was accessed. According to Alston, a Synchrony representative "confirmed that Synchrony only had a permissible purpose to pull her report in September 6, 2016, but not [o]n May 14, 2016." Id. ¶36. A PRMI representative stated that he did not know the reason why PRMI pulled Alston's credit report but acknowledged that the company had not made an offer of credit to Alston. A CNU representative informed Alston that CNU does not make credit offers to Maryland residents and would not have pulled her report to make a firm offer of credit. FNBO's representative confirmed that FNBO did not make an offer of credit to Alston. A representative of IDS told Alston that it had no record of making an offer of credit to her. Finally, Alston spoke with several SunTrust representatives on May 1, 2017, who stated they were unable to find any record of pulling Alston's credit report for a promotional inquiry.

According to Alston, as a result of the unauthorized acquisitions of her credit report, she incurred costs to correct her credit reports, "mental anguish and emotional distress" from the "invasion of her privacy," and an increased risk of identity theft. Id. ¶ 62.

DISCUSSION

In the Second Amended Complaint, Alston alleges violations of three provisions of the FCRA: 15 U.S.C. § 1681b(f) ("§ 1681b(f)"), which prohibits a person from obtaining a credit report without a permissible purpose; 15 U.S.C. § 1681q ("§ 1681q"), which prohibits obtaining "information on a consumer from a consumer reporting agency under false pretenses"; and 15 U.S.C. § 1681s-2(b) ("§ 1681s-2(b)"), which imposes duties upon "furnishers of information" once they are notified of inaccurate information in a consumer's credit report.

In their Motions to Dismiss, the Moving Defendants assert the following grounds for dismissal: (1) Alston lacks standing to sue under Article III of the United States Constitution; (2) Alston has failed to state a plausible claim of a violation of § 1681b(f) or § 1681q, including that Alston has failed to demonstrate an entitlement to a firm offer of credit necessary to allege a violation; (3) Alston has failed to allege sufficient facts to state a plausible claim for a violationof § 1681s-2(b) because that provision applies only to "furnishers of information," a term that does not include entities, such as the Moving Defendants, that merely obtain a credit report about a consumer.

I. Legal Standards

By challenging Alston's Article III standing, the Moving Defendants are contesting the Court's subject matter jurisdiction over this case. Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992). It is the plaintiff's burden to show that subject matter jurisdiction exists. Evans v. B.F. Perkins Co., Div. of Standex Int'l Corp., 166 F.3d 642, 647 (4th Cir. 1999). Federal Rule of Civil Procedure 12(b)(1) allows a defendant to move for dismissal based upon the belief that the plaintiff has failed to make that showing. When, as in this case, a defendant asserts that the plaintiff has failed to allege facts sufficient to establish subject matter jurisdiction, the allegations in the complaint are assumed to be true under the same standard as in a Rule 12(b)(6) motion, and "the motion must be denied if the complaint alleges sufficient facts to invoke subject matter jurisdiction." Kerns v. United States, 585 F.3d 187, 192 (4th Cir. 2009).

The Moving Defendants' remaining arguments seek dismissal under Rule 12(b)(6). To defeat a motion to dismiss under Rule 12(b)(6), the complaint must allege enough facts to state a plausible claim for relief. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A claim is plausible when the facts pleaded allow "the Court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. Although courts should construe pleadings of self-represented litigants liberally, Erickson v. Pardus, 551 U.S. 89, 94 (2007), legal conclusions or conclusory statements do not suffice, Iqbal, 556 U.S. at 678. The Court must examine the complaint as a whole, consider the factual allegations in the complaint as true, and construe thefactual allegations in the light most favorable to the plaintiff. Albright v. Oliver, 510 U.S. 266, 268 (1994); Lambeth v. Bd. of Comm'rs of Davidson Cty., 407 F.3d 266, 268 (4th Cir. 2005).

II. Standing

Article III of the Constitution limits the judicial power of the federal courts to actual "Cases" and "Controversies." U.S. Const. art. III, § 2, cl. 1. To invoke this power, a litigant must have standing. Hollingsworth v. Perry, 133 S. Ct. 2652, 2661 (2013). The plaintiff bears the burden of proving standing. Lujan, 504 U.S. at 561. A plaintiff must establish (1) an injury in fact (2) fairly traceable to the challenged conduct (3) that is likely to be "redressed by a favorable judicial decision." Hollingsworth, 133 S. Ct. at 2661. Beyond the requirements of Article III, to have standing to assert a statutory cause of action, plaintiffs must also show that they fall within "the zone of interests protected by the law invoked." Lexmark Int'l, Inc. v. Static Control Components, Inc., 134 S. Ct. 1377, 1388 (2014). The Moving Defendants limit their attack on Alston's standing to the first element: injury in fact. An injury in fact requires "an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical." Lujan, 504 U.S. at 561 (internal citations omitted). A "concrete" injury may be intangible, but it "must be 'de facto,' that is, it must actually exist." Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1548 (2016).

Alston alleges that she has suffered an injury from the release of her credit report to unauthorized recipients, an action which is specifically prohibited by the FCRA. See 15 U.S.C. § 1681b(f). The violation of a statute does not automatically satisfy the injury-in-fact requirement "whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right." Spokeo, 136 S. Ct. at 1549. Although such a violation may, "in some circumstances," be sufficient to establish an injury in fact, a plaintiff cannot "allege a bareprocedural violation, divorced from any concrete harm, and satisfy the injury-in-fact requirement of Article III." Id. For example, the Spokeo Court noted that a claim under the FCRA that the issuance of a credit report that wrongfully contained false information likely would not establish a concrete injury if the allegedly false information was merely an incorrect zip code. Id. at 1550. Rather, Article III standing based on a statutory cause of action depends on the nature of the statute and the alleged harm in question. In examining whether a statutory violation constitutes an injury in fact, a court must consider whether the violation resulted in "the type of harm Congress sought to prevent by requiring disclosure." Dreher v. Experian Info. Sols., Inc., 856 F.3d 337, 345-46 (4th Cir. 2017); see also Robins v. Spokeo, Inc., ...