Holland v. Chase Bank USA, N.A.

475 F.Supp.3d 272

Steven W. HOLLAND, Plaintiff,

v.CHASE BANK USA, N.A., Defendant.

19 Civ. 233 (PAE)

United States District Court, S.D. New York.

Signed July 28, 2020

David Patrick Mitchell, Morgan & Morgan Complex Litigation Group, Tampa, FL, for Plaintiff.

Arjun Rao, Stroock & Stroock & LaVan LLP, Los Angeles, CA, Ali Fesharaki (Pro Hac), Stroock & Stroock & LaVan LLP, Los Angeles, CA, for Defendant.

OPINION & ORDER

PAUL A. ENGELMAYER, District Judge:

This case involves alleged violations of the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq. ("FCRA"), and the Telephone Consumer Protection Act, 47 U.S.C. § 227 et seq. ("TCPA"). Plaintiff Steven W. Holland asserts that, beginning in August 2012, he received repeated telephone calls concerning debts relating to five credit card accounts held with Chase Bank USA, N.A. ("Chase"). Holland disputed the debts, and he so notified Chase. Holland alleges that, despite his objections, Chase continued to furnish negative and inaccurate information about his accounts to consumer reporting agencies, in violation of the FCRA. Holland also alleges that Chase repeatedly used an automated telephone dialing system to place robocalls to Holland's personal and office telephone numbers, without his prior express consent, in violation of the TCPA.

Before the Court is Chase's motion to strike Holland's Amended Complaint, Dkt. 47 ("AC"), pursuant to Federal Rule of Civil Procedure 12(f), or, in the alternative, to dismiss Holland's FCRA claim pursuant to Rule 12(b)(6). Chase argues that Holland did not file the AC, in a timely manner; that the AC exceeds the scope of amendment authorized by the Court in its prior opinion dismissing Holland's initial complaint; and that Holland's FCRA cause of action fails to state a claim on which relief can be granted. For the reasons that follow, the Court grants Chase's partial motion to dismiss but denies Chase's motion to strike.

I. Background

A. Factual Background¹

Holland is a physical therapist who resides in Harrison County, Mississippi. AC ¶¶ 5–6. Chase is a national banking association with its principal offices in New York. Id. ¶ 8.

Holland held five credit card accounts with Chase, opened between 2005 and 2007, and all closed by October 2009. Id. ¶¶ 11–12. Holland thereafter registered the accounts for an automatic payment program to pay off outstanding balances on a monthly basis. Id. ¶ 12. In October 2011, a payment error occurred, resulting in missed payments on Holland's accounts for that month. Id. ¶ 13. Although payments on the cards resumed the following month, Chase treated the missed payments as a default, charging late fees on the balance. Id. Chase applied each of Holland's subsequent automatic payments exclusively toward paying these late fees. Id. In August 2012, Chase allegedly initiated a "barrage" of robocalls regarding Holland's accounts to his cellular telephone number and his physical therapy office telephone number. Id. ¶ 14.

On October 10, 2012, Holland sent a letter to Chase demanding that the calls stop. Id. ¶ 16; see Dkt. 47-1 ("Oct. 2012 Ltr."). The robocalls persisted, prompting Holland to send another letter to Chase on August 28, 2013, again demanding that Chase cease calling his cellular and office telephone numbers. AC ¶ 17; see Dkt. 47-2 ("Aug. 2013 Ltr."). Holland also repeatedly, when answering the robocalls, instructed the callers that the collection calls were in error and demanded that the calls stop. AC ¶ 15.

According to Holland, during the same period in which he received these phone calls, Chase also furnished "negative information" about him to three consumer reporting agencies—Transunion, Equifax, and Experian. Id. ¶ 36 at 6.² Specifically, Chase represented to the agencies that Holland was severely delinquent on debts tied to all five credit cards. Id. However, as reviewed below, Holland contends that his debts were legally extinguished by the running of the applicable Mississippi statute of limitations and therefore were reported inaccurately. Id. ¶¶ 37–41 at 6–7. Holland, believing that Chase's view of the debts was in error, sent written disputes to both Chase and the three agencies. Id. ¶¶ 32–33. Chase, however, continued to furnish information about Holland's debts to those agencies. Id. ¶ 34.

Holland alleges that, due to Chase's furnishing of allegedly inaccurate information about his outstanding debts to the consumer reporting agencies, he "has suffered injuries and damages, including but not limited to denials of credit and financing opportunities, limited access to credit, increased cost of credit, and increased costs for services factoring credit rating in pricing, making day to day life more expensive." Id. ¶ 35.

B. Relevant Procedural History

On January 9, 2019, Holland initiated this action against Chase and JPMorgan Chase Bank, N.A. ("JPMC"), seeking to recover for an alleged violation of the TCPA. Dkt. 1 ("Compl."). On August 28, 2019, the Court granted Chase and JPMC's motion to dismiss. Dkt. 44. The Court held that Holland lacked standing to pursue his claim against JPMC, id. at 15–16; that Holland's claim, to the extent his initial complaint only alleged the receipt of robocalls in 2012 and 2013, was barred by res judicata pursuant to a prior class action settlement covering robocalls made on or before August 12, 2014, id. at 20–22; and that Holland's claim was barred by the TCPA's four-year statute of limitations, to the extent that it did not allege any calls after January 9, 2015, id. at 23–24. The Court, however, granted leave for Holland to replead "consistent with the parameters set in this decision," with any amended complaint due "within 14 days of this decision"—i.e. , by September 11, 2019. Id. at 24.

On September 11, 2019, the deadline for the amended complaint, Holland requested a one-day extension of his time to amend, Dkt. 45, which the Court granted, Dkt. 46. On September 14, 2019, two days after the extended deadline, Holland filed the AC, adding a new FCRA claim and naming Chase as the sole defendant. AC.

On September 30, 2019, Chase filed the instant motion to strike the AC, or in the alternative, to dismiss Holland's FCRA claim, Dkt. 49 ("Def. Mem."). The Court ordered that Holland oppose the motion by October 14, 2019. Dkt. 50. On October 14, 2019, Holland instead filed a last-minute request for an extension until October 28, 2019, Dkt. 51, which the Court granted the next day, Dkt. 52. On October 28, 2019, Holland filed a second last-minute request, this time for an extension until November 8, 2019, Dkt. 53, which the Court again granted the next day, Dkt. 54. On Friday, November 8, 2019—after 8:30 p.m. and, in violation of the Court's Individual Rules, without prior notice to Chase—Holland sought an additional four days to file his opposition. Dkt. 55. On the morning of November 12, 2019,³ the Court issued an order, via email and ECF, giving Holland until noon that day to file an opposition. Dkt. 56. The Court noted that in each of Holland's 11th-hour requests, he "has represented that he needs just a little bit more time to ‘finalize and file’ his response to defendant's motion," id. (quoting Dkts. 51, 53, 55), and that "plaintiff's repeated delinquency is particularly disturbing to the Court given that plaintiff's previous failure to timely file his amended complaint is at the heart of defendant's instant motion to strike," id. The Court "reluctantly" granted the extension to noon, explaining that it would "treat the motion as unopposed if plaintiff has not filed his response by that time." Id. Following an email exchange in which Holland's counsel requested, and the Court granted, a further extension until 5 p.m. that day, Holland filed his opposition at 5:08 p.m. on November 12, 2019. Dkt. 57 ("Pl. Opp'n"); see Dkt. 58 ("Def. Reply") at 2–3 (recounting Holland's counsel's procedural failures). On November 26, 2019, Chase filed a reply. Def. Reply.

II. Applicable Legal Standards

A. Motion to Dismiss for Failure to State a Claim Under Rule 12(b)(6)

To survive a motion to dismiss under Rule 12(b)(6), a complaint must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A claim will only have "facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). A complaint is properly dismissed where, as a matter of law, "the allegations in a complaint, however true, could not raise a claim of entitlement to relief." Twombly , 550 U.S. at 558, 127 S.Ct. 1955. Although the court must accept as true all well-pled factual allegations in the complaint and draw all reasonable inferences in the plaintiff's favor, Steginsky v. Xcelera Inc. , 741 F.3d 365, 368 (2d Cir. 2014), that tenet "is inapplicable to legal conclusions," Iqbal , 556 U.S. at 678, 129 S.Ct. 1937.

B. Motion to Strike

Under Rule 12(f), on a motion or sua sponte , a court "may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." Fed. R. Civ. P. 12(f). "Federal Courts have discretion in deciding whether to grant motions to strike." Capri Sun GmbH v. Am. Beverage Corp. , 414 F. Supp. 3d 414, 423 (S.D.N.Y. 2019) (citation omitted). However, motions to strike under Rule 12(f) are generally "disfavored and granted only if there is strong reason to do so." Anderson News, L.L.C. v. Am. Media, Inc. , No. 09 Civ. 2227 (PAC), 2013 WL 1746062, at *3 (S.D.N.Y. Apr. 23, 2013) ; see also FRA S. p. A. v. Surg-O-Flex of Am., Inc. , 415 F. Supp. 421, 427 (S.D.N.Y. 1976) ("Unless it is clear that the portion of the pleading has no bearing on the subject matter of the litigation and that its inclusion will prejudice the defendant, the complaint should remain intact.").

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