Opinion
1:22-CV-00254-SPB-RAL
03-22-2023
DWAYNE BYBEE, Plaintiff v. FIFTH THIRD BANK, CHEX SYSTEMS, INC., JOHN DOES 1-5, Defendants
SUSAN PARADISE BAXTER UNITED STATES DISTRICT JUDGE
REPORT AND RECOMMENDATION ON FIFTH THIRD BANK'S MOTION TO DISMISS
ECF NO. 3
RICHARD A. LANZILLO CHIEF UNITED STATES MAGISTRATE JUDGE
I. Recommendation
It is respectfully recommended that Defendant Fifth Third Bank's MOTION to dismiss (ECF No. 3) be GRANTED.
II. Report
A. Introduction and Procedural History
Plaintiff Dwayne Bybee (“Bybee”) commenced this action in the Court of Common Pleas of Erie County, Pennsylvania, against Fifth Third Bank (“Fifth Third”), Chex Systems, Inc. (“ChexSystems”), and five Doe Defendants. Bybee's complaint alleged that all Defendants violated his rights under “the Fair Credit Reporting Act 15 U.S.C 1681h(c),” “Debt Collection Act,” and “Consumer Protection Act 15 U.S.C 1691, 1692,” and demanded relief in the form of compensatory and punitive damages as well as the removal of the contested debt from his credit report. ECF 1-2, ¶¶ 7-13. The action was removed to this Court pursuant to 28 U.S.C. § 1441 based on federal question subject matter jurisdiction conferred by 28 U.S.C. § 1331.
In Bybee's brief in opposition, he also asserts “defamation of Defendants financial character” and “negligence Defendant's failure to correct the inaccurately reported information.” ECF No. 12, ¶ 6. But Bybee cannot bring new claims in his opposition brief. To add related claims to his complaint, Bybee must file an amended complaint pursuant to Fed.R.Civ.P. 15. Accordingly, the Court will not address these added claims in its Report and Recommendation on Fifth Third Bank's motion to dismiss.
Thereafter, Fifth Third moved to dismiss the complaint pursuant to Fed.R.Civ.P. 12(b)(6). ECF No. 3. Bybee filed a brief in opposition to Fifth Third's motion. ECF No. 12. For the reasons discussed herein, the motion to dismiss should be GRANTED.
B. Factual Background
The factual allegations of Bybee's complaint are sparce and, for purposes of the pending motion, accepted as true. See Victor v. Overmyer, 2020 WL 2220541, at *2 (W.D. Pa. Mar. 16, 2020), report and recommendation adopted, 2020 WL 2220128 (W.D. Pa. May 7, 2020) (citing Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).
A report of Bybee's credit history generated by ChexSystems lists a charge off amount of $335.81 on Fifth Third account -9125. Bybee alleges that because he has never done business with Fifth Third, Fifth Third fraudulently reported this debt to ChexSystems. He also contends that Fifth Third “did not conduct a due diligence verification investigation to insure [sic] that [he] was” the actual person responsible for the debt. ECF No. 1-2, ¶ 6.
C. Standard of Review
A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of the complaint. See Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993). In deciding a Rule 12(b)(6) motion to dismiss, the court must accept as true all well-pled factual allegations in the complaint and views them in a light most favorable to the plaintiff. See U.S. Express Lines Ltd. v. Higgins, 281 F.3d 383, 388 (3d Cir. 2002). The “court[] generally consider[s] only the allegations in the complaint, exhibits attached to the complaint, matters of public record, and documents that form the basis of a claim” when considering the motion to dismiss. Lum v. Bank of Am., 361 F.3d 217, 222 n.3 (3d Cir. 2004) (citing In re Burlington Coat Factory Sec. Litig, 114 F.3d 1410, 1426 (3d Cir.1997)).
In making its determination under Rule 12(b)(6), the court is not opining on whether the plaintiff is likely to prevail on the merits; rather, the plaintiff must only present factual allegations sufficient “to raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007) (citing 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, pp. 235-36 (3d ed. 2004)). See also Iqbal, 556 U.S. 662. Furthermore, a complaint should only be dismissed pursuant to Rule 12(b)(6) if it fails to allege “enough facts to state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570 (rejecting the traditional Rule 12(b)(6) standard established in Conley v. Gibson, 355 U.S. 41, 78 (1957)).
While a complaint does not need detailed factual allegations to survive a motion to dismiss, a complaint must provide more than labels and conclusions. See Twombly, 550 U.S. at 555. A “formulaic recitation of the elements of a cause of action will not do.” Id. (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). Moreover, a court need not accept inferences drawn by a plaintiff if they are unsupported by the facts as explained in the complaint. See California Pub. Emp. Ret. Sys. v. The Chubb Corp., 394 F.3d 126, 143 (3d Cir. 2004) (citing Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997)). Nor must the court accept legal conclusions disguised as factual allegations. See Twombly, 550 U.S. at 555; McTernan v. City of York, Pennsylvania, 577 F.3d 521, 531 (3d Cir. 2009) (“The tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.”).
Expounding on the Twombly!Iqbal line of cases, the Third Circuit has articulated the following three-step approach:
First, the court must ‘tak[e] note of the elements a plaintiff must plead to state a claim.' Second, the court should identify allegations that, ‘because they are no more than conclusions, are not entitled to the assumption of truth.' Finally, ‘where there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement for relief'Burtch v. Milberg Factors, Inc., 662 F.3d 212, 221 (3d Cir. 2011) (quoting Santiago v. Warminster Twp., 629 F.3d 121, 130 (3d Cir. 2010)). This determination is “a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Iqbal, 556 U.S. at 679.
Finally, because Plaintiff is proceeding pro se, the allegations in the complaint must be held to “less stringent standards than formal pleadings drafted by lawyers.” Haines v. Kerner, 404 U.S. 519, 520-521 (1972). If the court can reasonably read a pro se litigant's pleadings to state a valid claim upon which relief could be granted, it should do so despite the litigant's failure to cite proper legal authority, confusion of legal theories, poor syntax and sentence construction, or unfamiliarity with pleading requirements. See Boag v. MacDougall, 454 U.S. 364 (1982); United States ex rel. Montgomery v. Bierley, 141 F.2d 552, 555 (3d Cir. 1969) (petition prepared by a prisoner may be inartfully drawn and should be read “with a measure of tolerance”).
D. Analysis
Bybee alleges that Fifth Third has falsely reported and continues to falsely report that he has a balance of $335.81 on Fifth Third bank account -9125, and that it has failed to conduct a proper investigation into the person actually responsible for this charge. He asserts that Fifth Third's alleged conduct violates his federal rights under “the Fair Credit Reporting Act 15 USC 1681h(ec),” the “Debt Collection Act,” and “Consumer Protection Act 15 USC 1691, 1692.” Fifth Third argues that the complaint does not allege facts sufficient to support any of Bybee's claims, and, alternatively, that Bybee's Consumer Protection Act claim should be dismissed for failure to comply with Fed.R.Civ.P. 8's pleading standard. The Court agrees that the factual alleges of the complaint fail to support any of Bybee's claims against Fifth Third.
1. Bybee has not alleged facts to support a plausible claim under the Fair Credit Reporting Act
Bybee argues that Fifth Third's actions violate the Fair Credit Reporting Act, 15 U.S.C. § 1681. Congress passed the FCRA “to ensure fair and accurate credit reporting, promote efficiency in the banking system, and protect consumer privacy.” Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 52 (2007). See 15 U.S. Code § 1681(b). “[T]o satisfy the ‘consumer oriented objectives'” of the FCRA, the Third Circuit construes the Act liberally. Lewis v. Cap. One Bank, 2022 WL 17364641, at *4 (E.D. Pa. Dec. 1, 2022) (quoting Harris v. Pa. Higher Educ. Assistance Agency/Am. Educ. Servs., 2016 WL 3473347, at *4 (E.D. Pa. June 24, 2016), aff'd by Harris v. Pa. Higher Educ. Assistance Agency/Am. Educ. Servs., 696 Fed.Appx. 87, 90 (3d Cir. 2017) (citing S.Rep. No. 91-517, at 3 (1969))). The FRCA places varying obligations on three types of entities: “(1) consumer reporting agencies, (2) users of consumer reports, and (3) furnishers of information to consumer reporting agencies.” Id. (citing 15 U.S.C. § 1681, et seq.). Bybee's claims against Fifth Third concern its alleged inaccurate or fraudulent reporting of information to a consumer reporting agency. Bybee is therefore alleging that Fifth Third acted as a “furnisher.” See id. (citing Donohue v. C. Blosenski Disposal Co., 2006 WL 3423888, at *3 (E.D. Pa. Nov. 28, 2006)) (“A ‘furnisher' is an entity which transmits information about a particular debt owed by a particular consumer to a consumer reporting agency.”).
“Among other things, the FCRA requires consumer reporting agencies to ‘follow reasonable procedures to assure maximum possible accuracy of consumer reports, § 1681e(b); to notify providers and users of consumer information of their responsibilities under the FCRA, § 1681 e(d); and to limit the circumstances in which such agencies provide consumer reports ‘for employment purposes, § 1681b(b)(1).'” Ebrahimzadeh v. Sharestates Invs., LLC, No. CV 181659,2018 WL 6065419, at *8 (E.D. Pa. Nov. 20,2018).
Section 1681 s-2(b) of the FCRA “imposes certain duties on a fumisher/creditor who has been notified by a consumer credit reporting agency that a consumer has disputed information furnished by that fumisher/creditor.” See Harris v. Pa. Higher Educ. Assistance Agency/Am. Educ. Servs., 696 Fed.Appx. 87, 90 (3d Cir. 2017).
Section 1681s-2 of the FRCA imposes two categories of legal obligations on furnishers: (1) liability under § 1681s-2(a) arises following a consumer's notice directly to the furnisher of inaccurate information, and (2) liability under § 1681s-2(b) arising upon a consumer's notice to the CRA of inaccurate information, and the CRA's subsequent notice to the furnisher of the inaccurate information. See 15 U.S.C. §§ 1681s-2(a)(1),(b)(1). But a private individual cannot “assert a claim for a violation of § 1681s-2(a), as such claims are available only to the Government.” SimmsParris v. Countrywide Fin. Corp., 652 F.3d 355, 358 (3d Cir. 2011) (citing 15 U.S.C. § 1681s-2(c) (“[S]ections 1681n and 1681o of this title do not apply to any violation of-(1) subsection (a) of this section....”); id. § 1681s-2(d) (“The provisions of law described in paragraphs (1) through (3) of subsection (c) of this section ... shall be enforced exclusively ... by the Federal agencies and officials and the State officials identified in section 1681s of this title.”)). Accordingly, 15 U.S.C. § 1681s-2(b) is “the only section that can be enforced by a private citizen seeking to recover damages caused by a furnisher of information.” Id. (citing Chiang v. Verizon New England Inc., 595 F.3d 26, 35 (1st Cir. 2010); Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147,1154 (9th Cir. 2009); Saunders v. Branch Banking & Trust Co. of Va., 526 F.3d 142,149 (4th Cir. 2008)).
A viable § 1681 s-2(b)(1) claim requires a consumer to allege facts to plausibly support that he: “[1] filed a notice of dispute with a consumer reporting agency; [2] the consumer reporting agency notified the furnisher of information of the dispute; and [3] the furnisher of information failed to investigate and modify the inaccurate information.” Lewis, 2022 WL 17364641, at *5 (alteration in original) (quoting Harris, 2016 WL 3473347, at *6) (citing 15 U.S.C. §§ 1681s-2(b), 1681n& § 1681o).
As Fifth Third points out, the complaint includes no factual allegations relating to the § 1681 s-2(b)(1) elements. Bybee pleads that Fifth Third is reporting inaccurate and fraudulent information against him to Chex Systems, that Chex Systems, Inc.'s is consequentially reporting inaccurate and fraudulent information, and that neither Defendant “d[id] their due diligence and insure [sic] that [he] was the actual person being reported.” ECF No. 1-2, ¶ 4. But he does not allege that he ever notified Chex System that he disputed this information or that a CRA notified Fifth Third of his dispute. Accordingly, the complaint fails to state a FCRA claim against Fifth Third.
The Court notes that the handwritten complaint appears to assert a FCRA claim against Fifth Third under either section 168lh(c) or 168 lh(e). Yet, § 168lh(c) imposes liability on CRAs for failing to “provide trained personnel to explain to the consumer any information furnished to him pursuant to section 1681g of' the FCRA, and § 168 l(h)(e) sets forth the standard for federal preemption of state law claims and § 1681 (h)(e). Nevertheless, the Court, drawing all inferences in favor of the pro se litigant and liberally construing his complaint, will look beyond this erroneous citation and assess whether Bybee has pled facts sufficient to state a claim under, 15 U.S.C. § 168Is-2(b), the only FCRA provision potentially available to him. See Haines, 404 U.S. 519, 520; Lewis, 2022 WL 17364641, at *5.
2. Bybee has not alleged facts sufficient to establish Fifth Third as a debt collector under the Federal Debt Collector Protection Act.
Bybee also claims that Fifth Third's actions violate the Federal Debt Collector Protection Act (“FDCPA”). The FDCPA was established to target abusive practices used by debt collectors and, consistent with that purpose, imposes liability on “any debt collector who fails to comply with” the FDCPA. 15 U.S.C. §§ 1692(e), 1692k. Fifth Third argues that Bybee's FDCPA claim against it fails as a matter of law because it is a “creditor” under the FDCPA, not a “debt collector.” ECF No. 4. The statute defines a “debt collector” as, inter alia, “any person .. . in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.” 15 U.S.C. § 1692a(6). A “creditor” is defined as “any person who offers or extends credit creating a debt or to whom a debt is owed,” but not “any person to the extent that he receives an assignment or transfer of a debt in default solely for the purpose of facilitating collection of such debt for another.” 15 U.S.C. § 1692a(4). “Through this distinction between creditors and debt collectors, the FDCPA ‘exempts entities engaged in no more than the enforcement of security interests from the lion's share of its prohibitions.'” Belfi v. USAA Fed. Sav. Bank, 2022 WL 4097325, at *4 (E.D. Pa. Sept. 7, 2022) (quoting Obduskey v. McCarthy & Holthus LLP, 139 S.Ct. 1029, 1040 (2019)) (internal quotation marks omitted).
Bybee actually asserts a cause of action under the “Debt Collection Act,” but no such act exists. That said, he cites to the FDCPA when asserting a different legal claim, and the FDCPA is the only statute that tangentially relates to his allegations. Given Bybee's pro se status, the Court will construe his complaint liberally as asserting a claim under the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. (“FDCPA”).
Here, the complaint alleges no facts to support that Fifth Third is a debt collector within the meaning of the FDCPA. To the contrary, Bybee's allegations make it clear that Fifth Third is a creditor. Bybee contends that Fifth Third falsely reported to a CRA that he owes a balance on a Fifth Third account, which, if true, would establish Fifth Third as a company “to whom a debt is owed.” Bybee does not allege that Fifth Third acquired this debt from an assignment or transfer, or that Fifth Third has attempted to collect this debt from him. Thus, the complaint does not support a plausible inference that Fifth Third is a “business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect... debts owed or due ... another.” 15 U.S.C. § 1692a(6). See also Henson v. Santander Consumer USA Inc., 137 S.Ct. 1718, 1721 (2017). The complaint therefore fails to state a FDCPA claim against Fifth Third.
3. Bybee has not alleged facts to support a plausible inference that Fifth Third discriminated against him in connection with any application for credit in violation of the Equal Credit Opportunity Act.
Lastly, Bybee asserts that Fifth Third's actions violated the “Consumer Protection Act, 15 U.S.C. 1691,1692.” ECF No. 1-2, ¶ 7. Fifth Third retorts that the “Consumer Protection Act” does not exist, and it cannot discern from the pleadings the cause of action Bybee intended to assert. Fifth Third argues that this claim should therefore be dismissed for failure to comply with the requirements of Fed.R.Civ.P. 8 because Bybee has “not provide[d] Fifth Third with fair notice of the wrongs allegedly committed.” ECF No. 4. Alternatively, Fifth Third asserts that “[e]ven if [Bybee] had clearly identified a statute upon which he could seek relief, the aforementioned lack of factual averments in the Complaint would fail to support any such claim.” ECF No. 4.
The complaint makes three factual allegations against Fifth Third: (1) Fifth Third inaccurately and fraudulently informed a CRA that Bybee owed money on a Fifth Third account; (2) Fifth Third failed to adequately investigate this debtor's identity before reporting the debt to a CRA; and (3) Bybee has never done business with Fifth Third. Bybee then asserts that these allegations constitute, inter alia, a “violation of the Consumer Protection Act 15 U.S.C. 1691, 1692.” ECF No. 1-2, ¶ 7. Fifth Third correctly notes that the Consumer Protection Act does not exist. Fifth Third further argues that the statutory citations “muddles the identity of the cause of action” because 15 U.S.C. § 1691 refers to the Equal Credit Opportunity Act (“ECOA”) and 15 U.S.C. § 1692 refers to the FDCPA. Giving Bybee every benefit of the doubt based on his pro se status, and since he expressly asserts a FDCPA claim also, the most reasonable interpretation of Bybee's claim is one asserting a violation of the Equal Credit Opportunity Act. Thus, though the undersigned agrees that Bybee's complaint fails to allege facts “to raise a right to relief [against Alston v. Parker, 363 F.3d 229, 235 (3d Cir. 2004). In this case, Bybee may be able to amend his complaint to allege facts sufficient to cure certain of its deficiencies, particularly with respect to his FCRA claim. Accordingly, it is recommended that the Court grant Fifth Third's motion to dismiss Bybee's complaint against it and dismiss his claims without prejudice and with leave to file an amended complaint within twenty days. If Bybee fails to file an amended complaint within this time, the Court should enter an order dismissing his claims against Fifth Third with prejudice.
III. Conclusion
For the foregoing reasons, it is respectfully recommended that Fifth Third's motion to dismiss (ECF No. 4) be GRANTED.
IV. Notice
In accordance with 28 U.S.C. § 636(b)(1) and Fed.R.Civ.P. 72, the parties may seek review by the district court by filing Objections to the Report and Recommendation within fourteen (14) days of the filing of this Report and Recommendation. Any party opposing the objections shall have fourteen (14) days from the date of service of objections to respond thereto. See Fed.R.Civ.P. 72(b)(2). Failure to file timely objections may waive appellate rights. See Brightwell v. Lehman, 637 F.3d 187, 194 n.7 (3d Cir. 2011); Nara v. Frank, 488 F.3d 187 (3d Cir. 2007).