Campbell v. Toyota Motor Credit

MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM

E.D. Pa.January 11, 2017

IN THE UNITED STATES DISTRICT COURT EASTERN DISTRICT OF PENNSYLVANIA STEVE CAMPBELL, Plaintiff, v. TOYOTA MOTOR CREDIT, Defendant. Civil Action No. 2:17-cv-00034-GAM O R D E R AND NOW, this day of , _______ upon consideration of the Motion of Defendant Toyota Motor Credit Corporation (“TMCC”), incorrectly named as Toyota Motor Credit, to Dismiss Complaint of Plaintiff Steve Campbell (the “Motion”), it is ORDERED and DECREED that the Motion is GRANTED and the Complaint is DISMISSED WITH PREJUDICE. BY THE COURT: GERALD A. MCHUGH, J. Case 2:17-cv-00034-GAM Document 5 Filed 01/11/17 Page 1 of 13 IN THE UNITED STATES DISTRICT COURT EASTERN DISTRICT OF PENNSYLVANIA STEVE CAMPBELL, Plaintiff, v. TOYOTA MOTOR CREDIT, Defendant. Civil Action No. 2:17-cv-00034-GAM MOTION OF DEFENDANT TOYOTA MOTOR CREDIT CORPORATION TO DISMISS THE COMPLAINT OF PLAINTIFF STEVE CAMPBELL Defendant Toyota Motor Credit Corporation (“TMCC”), incorrectly named as Toyota Motor Credit, moves this Court to dismiss the Complaint of Plaintiff Steve Campbell pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure and on the grounds set forth in the accompanying Memorandum of Law (incorporated herein by reference). s/Daniel P. Wotherspoon Daniel P. Wotherspoon REED SMITH LLP Three Logan Square 1717 Arch Street, Suite 3100 Philadelphia, PA 19103 (215) 851-8100 (215) 851-1420 (fax) dwotherspoon@reedsmith.com Counsel for Toyota Motor Credit Corporation Dated: January 11, 2017 Case 2:17-cv-00034-GAM Document 5 Filed 01/11/17 Page 2 of 13 IN THE UNITED STATES DISTRICT COURT EASTERN DISTRICT OF PENNSYLVANIA STEVE CAMPBELL, Plaintiff, v. TOYOTA MOTOR CREDIT, Defendant. Civil Action No. 2:17-cv-00034-GAM MEMORANDUM OF LAW IN SUPPORT OF THE MOTION OF DEFENDANT TOYOTA MOTOR CREDIT CORPORATION TO DISMISS THE COMPLAINT OF PLAINTIFF STEVE CAMPBELL I. INTRODUCTION Plaintiff Steve Campbell (“Plaintiff”) filed a Complaint against Toyota Motor Credit Corporation (“TMCC”), incorrectly named as Toyota Motor Credit, raising claims that TMCC violated the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (“FDCPA”), the Fair Trade Commission Act, 15 U.S.C. § 41 et seq. (“FTCA”), and the Fair Credit Reporting Act, 15 USC § 1681 et seq. (“FCRA”). It is clear on the face of the Complaint that Plaintiff’s claims fail as a matter of law. There is no private right of action under the FTCA and TMCC cannot be liable under the FDCPA because it is a creditor rather than a debt collector. As for Plaintiff’s FCRA claim, the Complaint is exceedingly sparse and contains only one sentence detailing his allegations. To the extent that Plaintiff bases his FCRA claim on his allegation that he directly disputed entries on his credit report to TMCC, the claim is legally deficient since TMCC’s obligation to act under the FCRA does not begin to run until it was advised by a credit reporting agency that Plaintiff had raised a dispute. Plaintiff’s FCRA claim that his credit reports contained inaccurate negative Case 2:17-cv-00034-GAM Document 5 Filed 01/11/17 Page 3 of 13 2 credit information is otherwise legally deficient since the Complaint contains no facts whatsoever demonstrating that the information provided by TMCC, negative or otherwise, was inaccurate in any respect. In short, the Court should dismiss the Complaint with prejudice as it fails to state a claim for violations of the FDCPA, FTCA, or the FCRA. II. FACTUAL AND PROCEDURAL BACKGROUND On or about November 28, 2016, Plaintiff Steve Campbell (“Plaintiff”) initiated this action by filing a Complaint in the Magisterial District Court 07-1-10, Fallsington, Bucks County (the “State Court”) a No. MJ-07110-CV-0000311-2016.1 A true and correct copy of the Complaint is attached hereto as Exhibit 1. Plaintiff’s Complaint contained a single allegation that TMCC “negligent[ly] and willful[ly] fail[ed] to reinvestigate the disputed entries and provide copy of any viable evidence bearing my signature in violation of” the FCRA and further alleged that TMCC had been “non compliant with various sections of the FDCPA, FTCA, and the FCRA. (See Compl.) There is nothing more to Plaintiff’s Complaint.2 On January 4, 2017, TMCC removed this action to this Court, and it now files its Motion to Dismiss the Complaint. 1 This case is one of two near identical matters filed by Plaintiff in the Bucks County Magisterial District Court, both of which were removed to this Court on the same day. The other matter (Bucks County Magisterial District Court No. MJ-07110-CV-0000312-2016) is currently pending at 2:17-cv-00035-GEKP. 2 TMCC regrets that the Court is burdened with this matter. After receiving the Complaint by certified mail on December 5, 2016, counsel for TMCC reached out to Plaintiff for more information about his claims, and specifically requested Plaintiff’s Toyota account number or the VIN number for the subject vehicle so that TMCC could look up Plaintiff’s account. This information was needed because there are other TMCC customers with the same name as Plaintiff and TMCC has been unable to locate in its system any customers with the P.O. Box address provided on Plaintiff’s Complaint. Despite informing counsel for TMCC on December 12, 2016 that he would send a packet of materials, including correspondence with TMCC, Plaintiff never provided any information with which TMCC could locate his account. Case 2:17-cv-00034-GAM Document 5 Filed 01/11/17 Page 4 of 13 3 III. ARGUMENT A. Legal Standard Rule 12(b)(6) provides that a party may file a motion to dismiss a claim for “failure to state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). With a motion to dismiss, the Court must determine if, taking the factual allegations as true, the plaintiff is entitled to relief. Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009) (quoting Phillips v. Cnty. of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008)). Thus, a complaint may only survive a motion to dismiss if it contains sufficient factual matter, accepted as true, to “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). To make this determination, the Court must engage in a two-part analysis. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949-50 (2009); Fowler, 578 F.3d at 210-11. First, the Court must separate factual allegations from legal conclusions. Iqbal, 129 S.Ct. at 1949. “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. Second, the Court must determine whether the factual allegations are sufficient to show that plaintiff has a “plausible claim for relief.” Id. at 1950. A complaint cannot survive where a court can only infer that a claim is merely possible rather than plausible. Id. Where a plaintiff’s allegations, “however true, could not raise a claim of entitlement to relief,” then “this basic deficiency should . . . be exposed at the point of minimum expenditure of time and money by the parties and the court.” Twombly, 550 U.S. at 558. B. Plaintiff’s Claim Under The Fair Debt Collection Practices Act (“FDCPA”) Fails Because It Is Insufficiently Pled In his Complaint, Plaintiff alleges that TMCC is liable for a violation of the Fair Debt Collection Practices Act (“FDCPA”). To state an FDCPA claim, Plaintiff must allege: (1) he is a consumer who has been harmed by violations of the FDCPA; (2) the “debt” arises out of a Case 2:17-cv-00034-GAM Document 5 Filed 01/11/17 Page 5 of 13 4 transaction entered into primarily for personal, family, or household purposes; (3) the defendant collecting the debt is a “debt collector”; and (4) the defendant has violated, by act or omission, a provision of the FDCPA. 15 U.S.C.A. §§ 1692a-1692o; Berk v. JPMorgan Chase Bank, N.A., No. 11-2715, 2011 BL 244952 (E.D. Pa. 2011). Critically, the FDCPA only applies to “debt collectors” who regularly collect “or [attempt] to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.” 15 U.S.C § 1692(a)(6), Prince v. NCO Financial Systems, Inc., 346 F. Supp. 2d 744, 747 (E.D. Pa. 2004) (stating that the FDCPA generally applies only to “debt collectors”). Here, Plaintiff’s claim fails for a multitude of reasons. First, he has not alleged any violation of the FDCPA other than the conclusory statement that TMCC was “non compliant” with the FDCPA, which is insufficient to survive a motion to dismiss. See Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). Even if he had alleged a violation of the FDCPA, Plaintiff has not alleged that TMCC is a debt collector. In fact, to the contrary, TMCC is not a debt collector, but a creditor, as recognized by numerous federal courts across the country. See, e.g., Lee v. Toyota Motor Sales USA Inc, No. 16-CV-03195-JCS, 2016 WL 4608220, at *5 (N.D. Cal. Sept. 6, 2016); Reid v. Toyota Motor Credit Corp., No. 12 CIV. 7436 PAC JLC, 2013 WL 1397143, at *7 (S.D.N.Y. Apr. 8, 2013), report and recommendation adopted, No. 12 CIV. 7436 PAC JLC, 2013 WL 3776201 (S.D.N.Y. July 18, 2013); Melendez-Febus v. Toyota Credit De Puerto Rico Corp., No. CIV. 08-1702JAF, 2009 WL 2950369, at *3 (D.P.R. Sept. 9, 2009). Because Plaintiff’s claim for an FDCPA violation hinges completely on a bare legal conclusion – which this court need not accept as true for purposes of the within Motion – and Plaintiff fails to allege any facts sufficient to establish an FDCPA claim, it is clear that this claim Case 2:17-cv-00034-GAM Document 5 Filed 01/11/17 Page 6 of 13 5 should be dismissed in its entirety with prejudice. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1950 (2009). C. The Federal Trade Commission Act (“FTCA”) Does Not Create a Private Right of Action Plaintiff alleges that TMCC was “non compliant with the Federal Trade Commission Act 15 U.S.C. 41, et seq.” (Compl.) However, even if Plaintiff’s allegations are true – and Plaintiff has not pled any facts to indicate that they are – this claim must fail because Plaintiff has no private right of action under the FTCA. Section 57b(a)(1) of the FTCA states that “[i]f any person, partnership or corporation violates any rule under this subchapter respecting unfair or deceptive acts or practices, then the Commission may commence a civil action against such person, partnership or corporation . . . .” 15 U.S.C. § 57b(a)(1) (emphasis added). Further, Courts in this Circuit have found that “[t]he FTCA does not provide such a private right of action.” Kaiser v. Dialist Co. of Texas, 603 F. Supp. 110, 111 (W.D. Pa. 1984) (“A fair reading of the statute and its legislative history evinces a plain intent by Congress to make the administrative program for enforcing the Federal Trade Commission Act an exclusive one.”); see also Vino 100, LLC v. Smoke on the Water, LLC, 864 F. Supp. 2d 269, 281 (E.D. Pa. 2012) (“Private parties, however, are not permitted to enforce § 5 of the Federal Trade Commission Act. Only the FTC may do so.”); Carpenter v. Kloptoski, No. CIV.A. 1:08-CV-2233, 2010 WL 891825, at *11 (M.D. Pa. Mar. 10, 2010) (“There is no private right of action under Federal Trade Commission Act.”). Accordingly, there is no mechanism for private enforcement of the FTCA, and any claim alleged by Plaintiff under this statute must fail. Case 2:17-cv-00034-GAM Document 5 Filed 01/11/17 Page 7 of 13 6 D. Plaintiff’s Complaint Fails to State a Claim for Violation of the Fair Credit Reporting Act (“FCRA”) Plaintiff’s Complaint contains a single allegation of wrongdoing related to the FCRA. Plaintiff claims that TMCC “negligent[ly] and willful[ly] fail[ed] to reinvestigate the disputed entries and provide copy of any viable evidence bearing my signature in violation of” the FCRA. (See Compl.) Plaintiff’s Complaint also contains the bald legal conclusion that TMCC was “non compliant” with FCRA 15 U.S.C. § 1681s-2. Though Plaintiff does not specify under which subsection of § 1681s-2 he asserts his claim, it is clear from the face of the Complaint that he has not alleged a viable claim under either subsection, and his FCRA claim must therefore fail. 1. Plaintiff Fails To State a Claim Under 15 U.S.C. § 1681s-2(a) of the FCRA, Which Does Not Provide For a Private Cause Of Action Plaintiff fails to state a claim against TMCC, a credit furnisher, under Sections 15 U.S.C. § 1681s-2(a), and 15 U.S.C. § 1681(n) and 1681(o) of the FCRA3. Section 1681s-2(a) does not provide for a private cause of action and a private plaintiff cannot pursue a civil complaint based upon either willful or negligent violations of § 1681s-2(a). While 15 U.S.C. § 1681s-2(a) dictates that the furnisher of credit information has a duty to provide accurate information, the Third Circuit has been clear that “this section cannot be used by a private individual to 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). Moreover, while 15 U.S.C. § 1681n and 1681o provide civil liability for willful and negligent noncompliance of any provision of the Act, it is well settled that a plaintiff cannot pursue a private cause of action under these two Sections which is predicated upon a violation of § 1681s-2(a). Id. citing Chiang v. Verizon New England Inc., 595 F.3d 26, 35 (1st Cir. 2010); 3 15 U.S.C. § 1681(n) and 1681(o) provide civil liability for willful or negligent noncompliance with other provisions of the FCRA. Therefore, a plaintiff seeking to assert a claim under §§ 1681(n) and 1681(o) must point to another provision of the FCRA permitting a private cause of action. Case 2:17-cv-00034-GAM Document 5 Filed 01/11/17 Page 8 of 13 7 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). In the case at bar, interpreting the pro se Complaint as broadly as possible for the sake of giving Plaintiff the benefit of the doubt, it appears that Plaintiff may seek to assert claims against TMCC for willful and negligent violations of Section 1681s-2(a). (See Compl.) Section 1681s- 2(a) does not provide a private cause of action and any claims under 15 U.S.C. § 1681(n) and 1681(o) for negligent or willful violations of 1681s-2(a) against TMCC should therefore be dismissed with prejudice. 2. Plaintiff’s Claims For Violations of 15 U.S.C. § 1681i Fail as This Section Sets Forth the Duties of Credit Reporting Agencies and Not Credit Furnishers Interpreting Plaintiff’s blanket citations to section § 1681i of the FCRA as his intention to assert a claim under that section, his FCRA claim nevertheless fails as a matter of law. (See Compl.) Section 1681i of the FCRA applies only to credit reporting agencies, not credit furnishers, such as TMCC. Plaintiff has failed to assert a viable claim against TMCC for violations of 15 U.S.C. § 1681i, which requires a credit reporting agency to reinvestigate items on a credit report when a consumer disputes the validity of those items. See 15 U.S.C. § 1681i(a)(1)(A) (“if the completeness or accuracy of any item of information contained in a consumer’s file at a consumer reporting agency is disputed by the consumer and the consumer notifies the agency directly, or indirectly through a reseller, of such dispute, the agency shall, free of charge, conduct a reasonable reinvestigation. . . .”) (emphasis added). Section 1681i does not apply to credit furnishers, and any purported claims against TMCC under 15 U.S.C. § 1681(n) and 1681(o) for negligent or willful violations of § 1681i should be missed with prejudice. See Seamans v. Temple Univ., 744 F.3d 853, 865 (3d Cir. 2014) (“[i]f a CRA fails to Case 2:17-cv-00034-GAM Document 5 Filed 01/11/17 Page 9 of 13 8 provide 'all relevant information' to a furnisher, then the consumer has a private cause of action against the CRA, 15 U.S.C. §§ 1681i(a)(2)(A), 1681n-o, but not against the furnisher.”). 3. The Complaint Fails to Allege That TMCC is Liable Under 15 U.S.C. § 1681s-2(b) To the extent Plaintiff brings his FCRA claim under 15 U.S.C. § 1681s-2(b), the only section that affords a private right of action, it should nevertheless be dismissed with prejudice because Plaintiff has wholly failed to assert any facts to establish a violation of § 1681s-2(b). Plaintiff merely claims that TMCC failed to “reinvestigate the disputed entries” without any indication of with whom Plaintiff disputed these entries.4 Plaintiff’s FCRA claim against TMCC fails as a matter of law because the Complaint does not establish that TMCC had any obligation under § 1681s-2(b) to investigate a complaint from Plaintiff about inaccurate reporting. An entity that furnishes information to a consumer reporting agency does not owe any duty to investigate disputed reporting until a reporting agency notifies the furnisher of a dispute. SimmsParris, 652 F.3d at 359. The FCRA obligates a consumer to “first alert the consumer reporting agency that reported the allegedly erroneous information of a dispute,” after which it “is then up to the reporting agency to inform the furnisher of information that there has been a dispute, thereby triggering the furnisher’s duty to investigate.” Id. Only if “the furnisher fails to undertake a reasonable investigation following such notice” from a credit reporting agency does the furnisher “become liable to a private litigant under § 1681s-2(b).” Id. A consumer who lodges a dispute directly with a furnisher of information cannot assert a claim under § 1681s- 2(b). Horsch v. Wells Fargo Home Mortg., 94 F. Supp. 3d 665, 672 (E.D. Pa. 2015). 4 Plaintiff also fails to assert what these “entries” pertained to, where they appeared, or why and how they were disputed. Case 2:17-cv-00034-GAM Document 5 Filed 01/11/17 Page 10 of 13 9 Plaintiff’s allegations fail to state a claim against TMCC under 15 U.S.C. § 1681s-2(b), because they offer no basis to impose a duty on TMCC under that statute. Plaintiff does not claim that he ever contacted the credit reporting agencies to dispute the unspecified “entries,” he merely claims that the entries were “disputed.” Because Plaintiff’s FCRA claim under § 1681s- 2(b) requires notice to the credit reporting agencies before liability is imposed, and because Plaintiff fails to allege that he disputed the entries with the agencies, as opposed to disputing them directly with TMCC, TMCC cannot be liable under the FCRA as a matter of law. Therefore, Plaintiff’s FCRA claim should be dismissed with prejudice under Rule 12(b)(6). Even giving Plaintiff the benefit of every doubt and assuming that he is alleging that he disputed the “entries” with the credit reporting agencies, who then notified TMCC, and TMCC somehow failed to do an investigation, Plaintiff’s FCRA claim still fails as a matter of law because Plaintiff failed to demonstrate that any of the information that TMCC reported was inaccurate. To prevail on his FCRA claim, Plaintiff must demonstrate “(1) that he disputed the accuracy of an item in his credit file and (2) that a reasonable investigation by the agency could have uncovered the inaccuracy. Klotz v. Trans Union, LLC, 246 F.R.D. 208, 212 (E.D. Pa. 2007) (citing Cushman v. Trans Union Corp., 115 F.3d 220, 226 (3d Cir. 1997)). Implicit in Plaintiff’s obligation is the necessity of demonstrating that the item reported in his credit file is inaccurate. See Klotz, 246 F.R.D. at 212 (“A claim under 1681i will also fail if the consumer cannot show that the information in his or her file was inaccurate.”) (internal citation omitted). Instead of offering detailed information as to the nature of TMCC’s reporting, Plaintiff merely alleges that TMCC “failed to reinvestigate” and failed to “provide copy of any viable evidence bearing my signature.” (See Compl.) Missing from the Complaint is any allegation that the entries in his credit file were inaccurate or even negative. Plaintiff’s Complaint is devoid Case 2:17-cv-00034-GAM Document 5 Filed 01/11/17 Page 11 of 13 10 of any specificity as to the nature of the entries he allegedly disputed and it is therefore impossible for this Court and TMCC to determine whether these entries were inaccurate in any respect. Because Plaintiff failed to demonstrate that any information provided by TMCC to the credit reporting agencies was inaccurate in any respect, Plaintiff’s FCRA claim fails as a matter of law. /s/ Daniel P. Wotherspoon Michael C. Falk Daniel P. Wotherspoon REED SMITH LLP Three Logan Square 1717 Arch Street, Suite 3100 Philadelphia, PA 19103 (215) 851-8100 (215) 851-1420 (fax) dwotherspoon@reedsmith.com Counsel for Defendant Toyota Motor Credit Corporation Dated: January 11, 2017 Case 2:17-cv-00034-GAM Document 5 Filed 01/11/17 Page 12 of 13 CERTIFICATE OF SERVICE I hereby certify that on this 11th day of January, 2017, I caused a true and correct copy of the foregoing Motion Of Defendant Toyota Motor Credit Corporation to Dismiss the Complaint of Steve Campbell and Memorandum in Support to be served via electronic mail and priority express mail on the following: Steve Campbell P.O. Box 134 Yardley, PA 19067 /s/ Daniel P. Wotherspoon Daniel P. Wotherspoon Case 2:17-cv-00034-GAM Document 5 Filed 01/11/17 Page 13 of 13 Case 2:17-cv-00034-GAM Document 5-1 Filed 01/11/17 Page 1 of 2 Case 2:17-cv-00034-GAM Document 5-1 Filed 01/11/17 Page 2 of 2