United States District Court, D. Arizona
A. Teilborg Senior United States District Judge
Omar Vallejo Dominguez (“Plaintiff”) filed this
action under the Fair Credit Reporting Act
(“FCRA”), 15 U.S.C. § 1681s-2 (2012),
against Defendants Macy's Retail Holdings, Inc.
(hereinafter, for purposes of this Order only,
“Defendant”), Famsa, Inc., Chase Bank, USA, N.A.,
and Synchrony Bank. Pending before the Court is
Defendant's Motion to Dismiss Plaintiff's Complaint
for Failure to State a Claim, (“Defendant's Motion,
” Doc. 19). The Court now rules on Defendant's
November 25 and December 1, 2015, Plaintiff obtained both his
Equifax and Experian credit files. (Doc. 1 at ¶¶
17, 18). These credit reports described Plaintiff's
consumer credit account with Defendant as being
“charged off.” (Id. at ¶¶ 9, 10,
17, 18). Around March 17, 2016, Plaintiff sent letters to
Experian, Equifax, and Trans Union disputing the charge off.
(Id. at ¶ 19). Although Plaintiff does not
state the contents of these letters, Plaintiff does not
appear to have disputed the accuracy of Defendant's
charge-off designation but, rather, disputed the practice of
reporting the charge off monthly, as opposed to just once.
(Id. at ¶¶ 25-28, 32-33). Plaintiff
alleges that his disputes were forwarded to Defendant.
(Id. at ¶ 20). Despite Plaintiff's dispute,
Defendant continued to monthly report the charge off on
Plaintiff's consumer account. (Id. at
¶¶ 23, 24). Plaintiff alleges that no date was
clearly attributable to the charge off, thus making it appear
that Defendant was “charging off the account again,
month after month.” (Id. at ¶¶ 14,
SUBJECT MATTER JURISDICTION
Court must raise issues concerning its subject matter
jurisdiction, including Article III standing, sua
sponte. Biggs v. Best, Best & Krieger, 189
F.3d 989, 998 n.7 (9th Cir. 1999). Article III standing is an
“indispensable part” of a plaintiff's case.
Lujan v. Defenders of Wildlife, 504 U.S. 555, 561
(1992). To demonstrate Article III standing, a plaintiff must
show: “(1) an injury-in-fact, (2) causation, and (3) a
likelihood that the injury will be redressed by a decision in
the plaintiff's favor.” Human Life of Wash. v.
Brumsickle, 624 F.3d 990, 1000 (9th Cir. 2010)
injury-in-fact is “an invasion of a legally protected
interest which is (a) concrete and particularized, and (b)
actual and imminent, not conjectural or hypothetical.”
Lujan, 504 U.S. at 559-60 (citations and quotations
omitted). In Spokeo, Inc. v. Robins, the Supreme
Court further emphasized that “an injury in fact must
be both concrete and particularized, ” even in
the context of a statutory violation. 136 S.Ct. 1540, 1548
injury is particularized if it “affect[s] the plaintiff
in a personal and individual way, ” while an injury is
concrete if it is “real, and not abstract.”
Id. (quotations and citations omitted). Both
tangible and intangible injuries can be concrete.
Id. at 1549. Within the realm of statutory rights,
although Congress' judgment is “instructive and
important, . . . Congress' role in identifying and
elevating intangible harms does not mean that a plaintiff
automatically satisfies 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
distinction between a statute simply conferring a
right-to-sue as opposed to designating an injury-in-fact for
Article III standing purposes is particularly prevalent where
the right is procedural rather than substantive. Id.
at 1549-50. For example, in Spokeo, the defendant
allegedly violated the FCRA by willfully failing to
“follow reasonable procedures to assure maximum
possible accuracy of consumer reports.” Id. at
1545 (citing 15 U.S.C. § 1681e(b)). The FCRA authorizes
“either ‘actual damages' or statutory damages
of $100 to $1, 000 per violation, costs of the action and
attorney's fees, and possibly punitive damages.”
Id. (citing 15 U.S.C. § 1681n(a)). While the
Supreme Court rendered no opinion as to whether the at-issue
procedural FCRA violation constituted a “concrete
injury” sufficient to confer standing on the plaintiff,
the Court indicated that some statutory violations could be
sufficiently procedural or technical to fail the
“concrete injury” requirement. Id. at
Strubel v. Comenity Bank, the Second Circuit Court
of Appeals (the “Second Circuit”) interpreted
Spokeo to mean “even where Congress has
accorded procedural rights to protect a concrete interest, a
plaintiff may fail to demonstrate concrete injury where
violation of the procedure at issue presents no material
risk of harm to that underlying interest.” No.
15-528-cv, 2016 WL 6892197, at *5 (2d Cir. Nov. 23, 2016)
(emphasis added). Applying this principle, the Second Circuit
decided whether a plaintiff, suing for the violation of four
procedural disclosure rights guaranteed by the Truth in
Lending Act, alleged an injury-in-fact. Id.
Second Circuit held that the plaintiff demonstrated a
concrete injury in response to the defendant's failure to
provide notice that: “(1) certain identified consumer
rights pertain only to disputed credit card purchases not yet
paid in full[;] and (2) a consumer dissatisfied with a credit
card purchase must contact the creditor in writing or
electronically.” Id. The Court held that these
disclosure requirements “do not operate in a
vacuum” but, rather, serve “to protect a
consumer's concrete interest in ‘avoid[ing] the
uninformed use of credit, ' a core object of the
TILA.” Id. (quoting 15 U.S.C. § 1601(a)).
The Court noted that a creditor's failure to give such
notice gives rise to a “‘risk of real harm'
to the consumer's concrete interest in the informed use
of credit.” Id. (citing Spokeo, 136
S.Ct. at 1549). Thus, the plaintiff's bare procedural
allegations were enough to demonstrate the “concrete
injury necessary for standing.” Id.
the plaintiff failed to demonstrate a concrete injury
resulting from the defendant's failure to provide notice
pertaining to: (1) billing-error claims under automatic
payment plans; and (2) the defendant's 30-day response
obligations to reported billing errors. Id. at *6-7.
As to the first notice, the plaintiff never alleged that she
agreed to an automatic payment plan-and the defendant did not
offer an automatic payment plan during the time at issue.
Id. at *6. Thus, the plaintiff failed to allege a
“material risk of harm” as a result of the
defendant's nondisclosure of the information.
Id. As to the second notice, the defendant's
response obligation only arose upon a consumer's
complaint of a billing error. Id. at *7. Because the
plaintiff never had a reason to complain of a billing error,
she could not show a concrete injury because she never had
use for the information. Id.
Second Circuit's reasoning was paralleled by the Eleventh
Circuit Court of Appeals (the “Eleventh Circuit”)
in Nicklaw v. CitiMortgage, Inc., 839 F.3d 998 (11th
Cir. 2016). In Nicklaw, New York law provided a
cause of action against a mortgagee who failed to timely file
a certificate of discharge with a county once a mortgage was
satisfied. 839 F.3d at 1000. The Eleventh Circuit held that
the plaintiff failed to allege a concrete injury because:
His complaint does not allege that he lost money because [the
defendant] failed to file the certificate. It does not allege
that his credit suffered. It does not even allege that he or
anyone else was aware that the certificate of discharge ...