Littlejohn v. Phoenix Title Loans LLC

          ORDER

          HONORABLE SUSAN M. BRNOVICH, UNITED STATES DISTRICT JUDGE.

         Pending before the Court is Defendant Phoenix Title Loans LLC's Motion to Dismiss. (Doc. 28, “Mot.”) Plaintiff Jennifer Littlejohn responded, (Doc. 35, “Resp.”), but Defendant did not reply. Neither party requested oral argument and the Court elects to resolve this Motion without it. See LRCiv 7.2(f). Defendant moves to dismiss for lack of subject matter jurisdiction. (Mot. at 7 (“[Defendant] respectfully requests that Plaintiff's complaint . . . be dismissed pursuant to Article III of the United States Constitution.”.) Having considered the pleadings and applicable law and accepting the allegations in the complaint as true, the Court grants the Motion as explained below.

         I. BACKGROUND

         Plaintiff obtained an automobile title loan from Defendant for unidentified personal, family or household purposes around April 24, 2018. (Doc. 1, “Compl.” ¶¶ 12-13, 16-17.) Attached to her loan was a Truth in Lending Act disclosure statement (“disclosure statement”). (Id. ¶¶ 20-22.) The disclosure statement listed the loan's terms at 156% APR, a $118.30 finance charge, a $700.00 total amount charged, and $791.00 in total payments. (Id. ¶¶ 21-22, 25.) At issue here, the disclosure statement “failed to disclose the number, amount, and due dates or period of payments scheduled to repay the total of payments.” (Id. ¶¶ 26.) The disclosure statement also incorrectly identified the “‘total of payments' as $791.00, when the actual ‘total of payments' is $818.30.” (Id. ¶¶ 30.)

         Plaintiff now brings this lawsuit “seek[ing] to recover monetary damages [including statutory and actual damages, attorneys' fees, and pre- and post-judgment interest] for Defendant's violation of the TILA.” (Id. ¶¶ 2, 26(b)-(e), 30(b)-(e).) No actual damages or source of damages is alleged other than procedural violations. The Complaint specifically alleges Defendant violated the TILA's statutory disclosure requirements as outlined in 15 U.S.C. §1638(a)(5) & (6) for omitting a payment schedule and incorrectly identifying the total payments. (Id. ¶¶ 23-30.) Defendant now moves to dismiss for lack of Article III standing for failing to identify a concrete injury. (See Mot. at 1.)

         II. LEGAL STANDARD

         Under Federal Rule of Civil Procedure 12(b)(1), a party may move to dismiss for lack of subject matter jurisdiction. See Carijano v. Occidental Petroleum Corp., 643 F.3d 1216, 1227 (9th Cir. 2011) (“Article III standing is a species of subject matter jurisdiction.” Id.). Article III of the United States Constitution “endows the federal courts with the ‘judicial Power of the United States.'” Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1547 (2016) (citing U.S. Const. Art. III, § 1). “The judicial Power of the United States” only extends to “Cases” and “Controversies.” U.S. Const. Art. III, §§ 1-2. Undoubtedly, “[n]o principal is more fundamental to the judiciary's proper role in our system of government than the constitutional limitation of federal-court jurisdiction to actual cases or controversies.” Raines v. Byrd, 521 U.S. 811 (1997). “Standing to sue is a doctrine rooted in the traditional understanding of a case or controversy . . . [that] developed in our case law to ensure that federal courts do not exceed their authority as it has been traditionally understood.” Spokeo, 136 S.Ct. at 1547 (citing Raines, 521 U.S. at 820). Plaintiff bears the responsibility of establishing standing, Lujan v. Defs. Of Wildlife, 504 U.S. 555, 560-61 (1992), and must do so for each claim brought as well as the type of relief sought. Summers v. Earth Island Inst., 555 U.S. 488, 493 (2009); see also DaimlerChrysler Corp., 547 U.S. at 352. To do this, “[P]laintiff must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision. Id. “[A]t the pleading stage, the plaintiff must ‘clearly . . . allege facts demonstrating' each element.” Spokeo, 136 S.Ct. at 1547.

         III. DISCUSSION

         A. Injury-in-Fact

         A plaintiff does not “automatically satisf[y] 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.” Id. at 1549.^[1] “In other words, even when a statute has allegedly been violated, Article III requires such violation to have caused some real-as opposed to purely legal-harm to the plaintiff.” Robins, 867 F.3d 1108, 1112 (9th Cir. 2017). Thus, in evaluating harm, courts look to “(1) whether the statutory provisions at issue were established to protect [plaintiff's] concrete interests (as opposed to purely procedural rights), and if so, (2) whether the specific procedural violations alleged in this case actually harm, or present a material risk of harm to, such interests.” Id. at 1113.

         Sometimes, a defendant's “alleged procedural violation [of a statute] can by itself manifest concrete injury where Congress conferred the procedural right to protect a plaintiff's concrete interests and where the procedural violation presents ‘a risk of real harm' to the concrete interest.” Strubel v. Comenity Bank, 842 F.3d 181, 190 (2nd Cir. 2016) (citing Spokeo, 136 S.Ct. at 1549). As the Supreme Court put it: “[defendant's] violation of a procedural right granted by statute [to plaintiff] can be sufficient in some circumstances to constitute injury in fact . . . [and] a plaintiff in such a case need not allege any additional harm beyond the one Congress has identified.” Spokeo, 136 S.Ct. at 1549 (emphasis in original). The Supreme Court specifically identified these circumstances. Id. at 1549-50 (citing Fed. Election Comm'n v. Akins, 524 U.S. 11, 20-25 (involving voters' inability to access information that Congress made public); Pub. Citizen v. Dep't of Justice, 491 U.S. 440, 449 (1989) (involving inability of two advocacy groups to obtain information subject to disclosure under Federal Advisory Committee Act). “But 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.” Strubel, 842 F.3d at 190 (citing Spokeo, 136 S.Ct. at 1549). We begin with identifying the interests that the TILA's procedural rights protect, which is not disputed between the parties, before addressing whether a violation of those procedural rights harmed or presented a material risk of harm Plaintiff.^[2]

         1. The TILA's Protected Interests

         Both parties agree that the TILA generally protects consumers' informed use of credit in an effort to strengthen the economy. (Mot. at 4 (“Congress enacted TILA . . . to promote the informed use of credit through fair and transparent lending practices (citing 15 U.S.C. § 1601(a)); Resp. at 4 (“TILA was ‘designed to protect consumers from inaccurate and unfair credit practices, and ‘to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit'” (citing Fairley v. Turan-Foley Imports, Inc., 65 F.3d 475, 479 (5th Cir. 1995) (quoting 15 U.S.C. § 1601(a)).

         In Congress's own words, it passed the TILA as a consumer protection act to “assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit, and to protect the consumer against inaccurate and unfair credit billing and credit card practices.” 15 U.S.C. § 1601(a). In a more general sense, the TILA was enacted to promote “economic stabilization” through “the informed use of credit[, ] . . . [which] results from an awareness ...