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granting a motion to dismiss where the plaintiff "allege[d] no facts that, if true, would demonstrate that the FCRA was violated willfully or negligently"
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10 CV 03760 (GBD)
02-01-2011
FLORENCE OGBON, Plaintiff, v. BENEFICIAL CREDIT SERVICES, INC., BANK OF AMERICA, N.A., TRANS UNION, LLC, EXPERIAN INFORMATION SOLUTIONS, INC., and EQUIFAX INFORMATION SERVICES, LLC, Defendants.
MEMORANDUM DECISION AND ORDER
:
Plaintiff Florence Ogbon brings this action arising from the allegedly fraudulent opening of a credit card account in her name. Without specifically identifying any individual conduct or distinguishing among the Defendants, Plaintiff alleges that collectively the Defendants opened an account without Plaintiff's signature or request and then sent the benefits to a fraudster. Plaintiff further alleges that Defendants reported false data regarding the account to consumer reporting agencies, including Defendants Trans Union, Experian, and Equifax (collectively, "CRA Defendants"), and attempted to collect payment from Plaintiff. The Defendants, according to Plaintiff, reported the false data to third parties and used the false data to make creditworthiness determinations that adversely affected Plaintiff's credit score and standing with legitimate creditors.
Plaintiff alleges that these events unfolded despite her repeatedly informing the Defendants, both orally and in writing, that the account was fraudulent. As a result, Plaintiff asserts numerous claims (1-10, 14) for violations of the Truth in Lending Act ("TILA"), 15 U.S.C. § 1692 et seq., Fair Credit Reporting Act ("FCRA"), 15 U.S.C. 1681 et seq., New York Fair Credit Reporting Act § 380 et seq., General Business Law Art. 25 § 380 et seq., and Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq. Plaintiff also asserts claims for: (11, 12, 16) defamation; (12, 17) invasion of privacy; (13) breach of contract; (15) emotional distress; (18) negligent supervision, education, and training; and (19) common law fraud and deceit. Defendants Trans Union, Experian, and Equifax jointly moved pursuant to Fed. R. Civ. P. 12(b)(6) to dismiss Plaintiff's Complaint for failure to state a claim upon which relief can be granted. Defendant Bank of America joined the aforementioned motion and also asserted additional grounds to dismiss Plaintiff's Complaint.
The Complaint incorrectly identifies the provisions as "Unfair and Deceptive Acts and Practices (UDAP)." Complaint ¶ 1.
There is no indication that Beneficial Credit Services has been served with process or otherwise brought in as a defendant.
STANDARD OF REVIEW
"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007) (complaint must contain enough factual allegations "to raise a right to relief above the speculative level.")). This standard is met "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. A court should not dismiss a complaint for failure to state a claim if the factual allegations sufficiently "raise a right to relief above the speculative level." Twombly, 550 U.S. at 555.
The task of the court in ruling on a motion to dismiss is to "assess the legal feasibility of the complaint, not to assay the weight of the evidence which might be offered in support thereof." In re Initial Pub. Offering Sec. Litig., 383 F. Supp. 2d 566, 574 (S.D.N.Y. 2005) (internal quotation marks and citation omitted). The court must accept all well-pleaded factual allegations in the complaint as true, and draw all reasonable inferences in the plaintiffs favor. Chambers v. Time Warner. Inc., 282 F.3d 147, 152 (2d Cir. 2002). In deciding a motion to dismiss, the Court is not limited to the face of the complaint. The Court "may [also] consider any written instrument attached to the complaint, statements or documents incorporated into the complaint by reference, . . . and documents possessed by or known to the plaintiff and upon which it relied in bringing the suit." ATSI Commc'ns v. Shaar Fund. Ltd., 493 F.3d 87, 98 (2d Cir. 2007)
MOTION TO DISMISS
The Complaint is devoid of specific factual allegations regarding the wrongful conduct of each of the individual Defendants with respect to any of the nineteen claims. The Complaint primarily consists of unsupported conclusory allegations regarding Defendants as a collective group. Plaintiff directly alleges that Defendants violated various laws and are liable pursuant to the statutory eligibility requirements. Plaintiff also recites the requisite elements for certain causes of action. Plaintiff never alleges individual conduct that, if proven, would demonstrate that a law was violated or would otherwise state a claim for relief against any particular Defendant. The facts alleged are inconsistent and do not support the individual claims asserted against the Defendants. Accordingly, the Complaint must be dismissed as insufficient.
Plaintiff alleges that she was a victim of identity theft, yet Plaintiff asserts a TILA claim based upon the disclosure statement being "not clear and conspicuous" and a breach of contract claim based upon a contract into which she never entered. See Complaint ¶¶ 12, 38, 151.
See Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949-50(2009) ("[T]he pleading standard Rule 8 announces does not require 'detailed factual allegations,' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation. A pleading that offers 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action will not do.' Nor does a complaint suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.' . . . Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. Rule 8 marks a notable and generous departure from the hyper-technical, code-pleading regime of a prior era, but it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions.) (citations omitted).
A. FEDERAL CLAIMS
Plaintiff has failed to state a federal cause of action under any of the federal statutes identified in the Complaint.
1. TILA Claim
Putting aside the awkwardness of asserting a claim for failure to make required disclosures regarding the terms of a credit transaction when allegedly a fraudster opened the credit card account, Plaintiff's TILA claim is untimely. A claim under TILA is subject to a one-year statute of limitation "from the date of the occurrence of the violation." 15 U.S.C. § 1640(e). The Complaint never indicates when the account was opened and thus when the alleged violations of 15 U.S.C. § 1638 occurred. However, by alleging that Plaintiff reported the identity theft to the police, see Complaint ¶ 12, the Complaint incorporates by reference the police report offered by Plaintiff in opposition to the motions to dismiss. See Pl.'s Exhibits, at 10. The police report is dated May 28, 2008. Id. Thus, even if the account had been opened on the same date as the police report, and not at a prior date, the latest date on which Plaintiff could have asserted a TILA claim was May 28, 2009. Plaintiff, however, commenced the instant action on May 6, 2010. Plaintiff's TILA claim as alleged is therefore time-barred.
2. FCRA Claims
A plaintiff may bring a private action for the negligent, see 15 U.S.C. § 1681o, or willful, see 15 U.S.C. § 1681n, violation of the duties or requirements imposed under the FCRA. Here, the Complaint asserts that Defendants violated three provisions: (1) § 1681e(b) (requiring reasonable procedures to assure accuracy); (2) § 1681i(a) (requiring reinvestigation of disputed information; and (3) § 1681s-2(b) (imposing requirements upon a furnisher of information who receives notice of a consumer dispute from a credit agency).
With respect to the § 1681e(b) and § 1681i(a) claims, there is no federal cause of action alleged against Defendant Bank of America. See, e.g., Okocha v. HSBC Bank USA, N.A., 700 F. Supp. 2d 369, 374 (S.D.N.Y. 2010). Both provisions impose requirements on consumer reporting agencies. Plaintiff, however, never alleges that Bank of America satisfies the requirements of § 1681a(f) to be considered a consumer reporting agency under the FCRA. Plaintiff actually excludes this Defendant when alleging that Trans Union, Experian, and Equifax are consumer reporting agencies. See Complaint ¶ 16. Plaintiff has not identified language within these provisions or case law construing the provisions to provide for a private cause of action over defendants who are not consumer reporting agencies. The section 1681e(b) and 1681i claims are therefore dismissed against Defendants Bank of America.
Plaintiff similarly asserts unsupported claims against Beneficial Credit Services, who apparently was not served as a defendant, and who also is not alleged to be a credit reporting agency.
A private cause of action against the CRA Defendants under § 1681e(b) and/or § 1681i(a) is feasible. Here, however, Plaintiff has pled insufficient facts to do so. First, the Complaint lacks factual allegations that, if true, demonstrate that any of the CRA Defendants violated either provision at issue. Plaintiff, with respect to both claims, does not identify the inaccurate information reported by each CRA Defendant, or when the information was reported or to whom. Plaintiff also does not allege if and when she provided each CRA Defendant proper notice of the dispute. Plaintiff does not provide any facts suggesting that each CRA Defendant failed to conduct a reinvestigation within thirty days after receiving proper notice. The § 1681e(b) is also defective because Plaintiff does not provide any facts suggesting that each CRA Defendant failed to follow reasonable procedures. The Complaint lacks factual allegations regarding the nature of each CRA Defendant's alleged noncompliance. Plaintiff asserts that Defendants acted willfully, but alleges no facts that, if true, would demonstrate that the FCRA was violated willfully or negligently. The section 1681e(b) and 1681i claims are therefore dismissed against all of the CRA Defendants.
With respect to the 15 U.S.C. § 1681s-2(b) claim, the Complaint contains insufficient factual allegations to state a right to relief against any Defendant. Absent from the Complaint, as previously discussed, are factual allegations regarding the inaccurate information reported by any Defendant. The Complaint also fails to allege facts demonstrating that any of the Defendants furnished fraudulent information about Plaintiff's account, or received proper notice of Plaintiff's dispute, see, e.g., Neblett v. Chase Bank, 2010 U.S. Dist. LEXIS 101067, at *12 (S.D.N.Y. Sept. 28, 2010) (collecting cases), and subsequently engaged in conduct inconsistent with the requirements of 15 U.S.C. § 1681s-2(b)(1). The § 1681s-2(b) claim is therefore dismissed against all of the Defendants.
What Plaintiff alleges - namely, that she "complain[ed] of false reporting issued by the furnishers to the agencies and then from the agencies onto third party subscribers who then denied credit to plaintiff and took other adverse action," Pl.'s Mem., at 7 - falls under 15 U.S.C. § 1681s-2(a). See 15 U.S.C. § 1681s-2(a)(1)(B); see, e.g., Weich-Pulaski v. Wells Fargo Bank Minn., Nat'l Ass'n, 2010 U.S. Dist. LEXIS 139406, at *8-10 (E.D.N.Y. Dec. 9, 2010). In any event, only government agencies and officials may enforce that provision. See 15 U.S.C. § 1681s-2(d) ("subsection (a) . . . shall be enforced exclusively under § 1681s of this title by the Federal agencies and officials and the State officials identified in that section."); Redhead v. Winston & Winston, P.C., 2002 U.S. Dist. LEXIS 17780, at *12 (S.D.N.Y. Sept. 20, 2002) (collecting cases). A federal private cause of action under § 1681s-2(a)(1)(B) does not exist for the conduct alleged by Plaintiff.
3. FDCPA Claim
To state a FDCPA claim, a plaintiff must show that: "(1) she has been the object of collection activity arising from consumer debt, (2) the defendant is a debt collector as defined by the FDCPA, and (3) the defendant has engaged in an act or omission prohibited by the FDCPA." Carringiton v. Chrysler Fin., 2010 U.S. Dist. LEXIS 33995, at *3 (E.D.N.Y. Apr. 5, 2010) (citations omitted); see also 15 USCS § 1692e. Here, Plaintiff alleges that Defendants violated the Act. See Complaint ¶ 156. Plaintiff also recites the prohibition in 15 U.S.C. § 1692e(2)(A)(10), alleging that Defendants "made false representation [sic] of the character, amount, or legal status of the purported debt." Complaint ¶ 156. Plaintiff, however, offers no factual allegations in support of the claim. There are no facts in the Complaint indicating that any of the Defendants are "debt collectors" as defined in 15 U.S.C. § 1692a(6) and thus subject to the civil liability under the FDCPA. There are not even facts in the Complaint that, if true, would demonstrate that any of the Defendants engaged in prohibited collection activity. Plaintiff never identifies any creditor, inquirer, collector, amount, late payment, inaccurate representation, etc. Accordingly, the FDCPA claim is dismissed against all of the Defendants.
B. STATE LAW CLAIMS
None of the state and common law claims are legally sufficient.
1. Breach of Contract
A breach of contract claim requires: "(1) the existence of an agreement, (2) adequate performance of the contract by the plaintiff, (3) breach of contract by the defendant, and (4) damages." Harsco Corp. v. Segui, 91 F.3d 337, 348 (2d Cir. 1996); Clearmont Prop., LLC v Eisner, 58 A.D.3d 1052, 1055 (N.Y. App. Div. 2009). Here, the Complaint neither identifies a legally enforceable agreement between Plaintiff and each Defendant, nor alleges any facts establishing the existence of such an agreement. The Complaint provides no factual allegations regarding Plaintiff's performance, the performance obligations of any Defendant, or the circumstances surrounding each Defendant's alleged non-performance. The breach of contract claim is dismissed.
2. Deceptive Practices, N.Y. G.B.L. § 349
"To state a claim under § 349, a plaintiff must allege [that]: (1) the act or practice was consumer-oriented; (2) the act or practice was misleading in a material respect; and (3) the plaintiff was injured as a result." Spagnola v. Chubb Corp., 574 F.3d 64, 74 (2d Cir. 2009); Stutman v. Chem. Bank, 731 N.E.2d 608, 611 (N.Y. 2000). The Complaint never identifies any Defendant's alleged conduct, or makes factual allegations demonstrating that such conduct was "misleading in a material way." Stutman v. Chemical Bank, 95 N.Y.2d 24, 29 (2000). The Complaint never alleges specific facts demonstrating that any of the Defendants' alleged conduct was recurring or involved "acts or practices hav[ing] a broader impact on consumers at large." Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, N.A., 85 N.Y.2d 20, 25 (1995). Plaintiff also fails to plead that she was injured as a result of the alleged deceptive acts. Rather, with allegations that Defendants "made false representation[s] of the character, amount, or legal status of the purported debt," Complaint ¶ 156, it appears that Plaintiff's claim is premised upon a private dispute between the parties, and thus "would not fall within the ambit of the statute." Oswego Laborers', 85 N.Y.2d at 25 (citation omitted); see also Wilson v. Northwestern Mut. Ins. Co., 625 F.3d 54, 64 (2d Cir. 2010) (citations omitted). The deceptive practices claim is dismissed.
3. Defamation
"The elements [of defamation] are a false statement, published without privilege or authorization to a third party, constituting fault as judged by, at a minimum, a negligence standard, and, it must either cause special harm or constitute defamation per se." Dillon v. City of New York, 261 A.D.2d 34, 38 (N.Y. App. Div. 1999) (citing Restatement of Torts, Second § 558). "Defamation . . . can take one of two forms - slander or libel. Generally speaking, slander is defamatory matter addressed to the ear while libel is defamatory matter addressed to the eye." Ava v. NYP Holdings, Inc., 64 A.D.3d 407, 411-12 (N.Y. App. Div. 2009). The Complaint never identifies the content or form of the alleged false statement made by a Defendant. Also absent from the Complaint are any factual allegations regarding when and to whom the statements were published, as well as whether each Defendant had the privilege or authority to do so. Finally, the Complaint lacks any factual allegations establishing the existence of at least a negligent standard of fault by each Defendant. The defamation claims are dismissed.
The Complaint lacks any averments as to when the alleged defamatory statements were made. To the extent that the statements were published prior to May 6, 2009, the defamation claims are untimely in light of the one-year statute of limitation. See N.Y. C.P.L.R. § 215(3); Firth v. State, 775 N.E.2d 463, 464-65 (N.Y. 2002).
4. Emotional Distress
A claim for intentional infliction of emotional distress requires a plaintiff to plead: "(1) extreme and outrageous conduct; (2) the intentional or reckless nature of such conduct; (3) a causal relationship between the conduct and the resulting injury; and (4) severe emotional distress." Mitchell v. Giambruno, 826 N.Y.S.2d 788, 789 (N.Y. App. Div. 2006); accord Howell v. New York Post Co., Inc., 81 N.Y.2d 115, 121 (1993). Where the infliction of emotional distress is alleged to be negligent, on the other hand, it may be established by either the "bystander theory" or the "direct duty theory." See Mortise v. United States, 102 F.3d 693, 696 (2d Cir. 1996). The Complaint does not specify the type of emotional distress claim being asserted. Regardless, the Complaint's factual allegations are insufficient to establish a causal relationship. Plaintiff does no more than list the injuries she allegedly suffered. See Complaint ¶ 162. The Complaint does not identify specific conduct by a Defendant that caused Plaintiff's alleged injuries. The Complaint lacks specific facts demonstrating that each Defendant's conduct was "extreme or outrageous" and performed intentionally or recklessly. Nor does the Complaint contain factual allegations that Plaintiff's injuries negligently stem from either a physical injury or threat of physical injury by a Defendant, or a breach of a special duty between Plaintiff and any particular Defendant. The emotional distress claim is dismissed.
"[A] defendant's conduct is negligent as creating an unreasonable risk of bodily harm to a plaintiff and such conduct is a substantial factor in bringing about injuries to the plaintiff in consequence of shock or fright resulting from his or her contemporaneous observation of serious physical injury or death inflicted by the defendant's conduct on a member of the plaintiff's immediate family in his or her presence." Bovsun v. Sanperi, 61 N.Y.2d 219, 230-31 (1984).
There is "an especial likelihood of genuine and serious mental distress, arising from . . . special circumstances, which serves as a guarantee that the claim is not spurious." Johnson v. State, 372 N.Y.S.2d 638, 642 (1975) (citation and internal quotation marks omitted); see also Kennedy v. McKesson Co., 58 N.Y.2d 500, 504 (1983).
5. Fraud
A claim for fraud under New York law requires a showing of: "(1) a misrepresentation or material omission of fact which was false and known to be false by defendant, (2) made for the purpose of inducing the other party to rely upon it, (3) justifiable reliance of the other party on the misrepresentation or material omission, and (4) injury." Lama Holding Co. v. Smith Barney, Inc., 88 N.Y.2d 413, 421 (1996); accord Manning v. Utils. Mut. Ins. Co., 254 F.3d 387, 400 (2d Cir. 2001). Additionally, Fed. R. Civ. P. 9(b) requires that "the circumstances constituting fraud . . . be stated with particularity." Tellabs. Inc. v. Makor Issues & Rights. Ltd., 551 U.S. 308, 319 (2007). Plaintiff fails to plead sufficient specific facts to satisfy any of the aforementioned requirements. The Complaint never states a false or misleading statement made by or attributable to a Defendant, identifies the speaker of each statement, or states the location and timing of each statement. See Mills v. Polar Molecular Corp., 12 F.3d 1170, 1175 (2d Cir. 1993). There are no factual allegations establishing that any misrepresentation or material omission was known by any of the Defendants to be false, or that Plaintiff justifiably relied on and was induced by the any of the Defendants' statements. The fraud claim is dismissed.
The Complaint presently contains insufficient factual allegations to determine whether the fraud claim arises out of the same facts as the breach of contract claim. To the extent that this is the case, the fraud claim "will not lie." Telecom Int'l Am., Ltd. v. AT&T Corp., 280 F.3d 175, 196 (2d Cir. 2001) (citation omitted); see also River Glen Assocs., Ltd. v. Merrill Lynch Credit Corp., 295 A.D.2d 274, 275 (N.Y. App. Div. 2002). "[P]arallel fraud and contract claims may be brought if the plaintiff (1) demonstrates a legal duty separate from the duty to perform under the contract; (2) points to a fraudulent misrepresentation that is collateral or extraneous to the contract; or (3) seeks special damages that are unrecoverable as contract damages." Merrill Lynch & Co. Inc. v. Allegheny Energy, Inc., 500 F.3d 171, 183-184 (2d Cir. 2007); Deerfield Comm'ns Corp. v. Chesebrough-Ponds, Inc., 68 N.Y.2d 954, 956 (1986).
6. Invasion of Privacy
New York law does not recognize a cause of action for "false light" invasion of privacy or any other common law privacy tort. See Howell v. New York Post Co., 81 N.Y.2d 115, 123-24 (1993) ("[I]n this State the right to privacy is governed exclusively by sections 50 and 51 of the Civil Rights Law; we have no common law of privacy."); Pedraglio Loli v. Citibank, Inc., 1997 U.S. Dist. LEXIS 20070, at *12-13 (S.D.N.Y. Dec. 18, 1997), aff'd 173 F.3d 845 (2d Cir. 1999), cert. denied, 528 U.S. 1168 (2000); Chord Assocs., LLC v. Protech 2003-D, LLC, 2010 U.S. Dist. LEXIS 98918, at *13-14 (E.D.N.Y. Sept. 21, 2010) (collecting recent cases). Plaintiff's privacy claims allege that "Defendants Invaded the Privacy of the plaintiff, by holding him [sic] up in a false light." Complaint ¶¶ 165, 168. The privacy claims are dismissed.
7. Negligent Supervision, Education, and Training
"To state a claim for negligent supervision or retention under New York law, in addition to the standard elements of negligence, a plaintiff must show: (1) that the tort-feasor and the defendant were in an employee-employer relationship; (2) that the employer 'knew or should have known of the employee's propensity for the conduct which caused the injury' prior to the injury's occurrence; and (3) that the tort was committed on the employer's premises or with the employer's chattels." Ehrens v. Lutheran Church, 385 F.3d 232, 235 (2d Cir. 2004) (citing D'Amico v. Christie, 71 N.Y.2d 76, 87-88 (1987); quoting Kenneth R. v. Roman Catholic Diocese of Brooklyn, 654 N.Y.S.2d 791, 793 (App. Div. 1997)). The Complaint never identifies a tortfeasor or even alleges conduct by any Defendant or any agent of the Defendants that constitutes the tort of negligence. The negligent supervision, education, and training claim is dismissed.
Under New York law, "the elements of a negligence claim are: (i) a duty owed to the plaintiff by the defendant; (ii) breach of that duty; and (iii) injury substantially caused by that breach." Lombard v. Booz-Allen & Hamilton, Inc., 280 F.3d 209, 215 (2d Cir. 2002) (citations omitted); Solomon ex rel. Solomon v. City of New York, 66 N.Y.2d 1026, 1027 (1985).
CONCLUSION
Defendants' motions to dismiss are GRANTED. Plaintiff's Complaint is hereby DISMISSED with leave to file a motion to amend that attaches the Proposed Amended Complaint by February 25, 2011. Defendants may respond to oppose the application to amend by March 16, 2011, if any amendment as proposed would be futile. Dated: New York, New York
February 1, 2011
SO ORDERED:
/s/_________
GEORGE B. DANIELS
United States District Judge