Goggans v. Trans Union, Llc et al

MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM

E.D. Pa.March 21, 2017

DMEAST #28809624 v3 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA KAREEM A. GOGGANS, Plaintiff, v. TRANS UNION, LLC; EQUIFAX INFORMATION SERVICES, LLC; EXPERIAN INFORMATION SOLUTIONS, INC.; CAPITAL ONE BANK USA, N.A.; KOHL’S DEPARTMENT STORES, INC.; CREDIT ONE FINANCIAL d/b/a/ CREDIT ONE BANK; SYNCHRONY BANK, INC.; AMAZON.COM, INC.; WAL MART STORES, INC.; PAYPAL, INC.; and CAVALRY PORTFOLIO SERVICES, LLC, Defendants. : : : : : : : : : : : : : : : : : : CIVIL ACTION NO. 2:17-CV- 00404 MOTION OF DEFENDANTS CAPITAL ONE BANK USA, N.A., KOHL’S DEPARTMENT STORES, INC., AND PAYPAL, INC. TO DISMISS THE COMPLAINT Pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, Defendants, Capital One Bank USA, N.A., Kohl’s Department Stores, Inc., and PayPal, Inc. by their undersigned counsel, hereby move the Court to dismiss the Complaint with prejudice. The grounds for this Motion are set forth in the accompanying memorandum of law. Case 2:17-cv-00404-PD Document 52 Filed 03/21/17 Page 1 of 2 DMEAST #28809624 v3 2 Respectfully submitted, Dated: March 21, 2017 /s/ Daniel JT McKenna Daniel JT McKenna (PA. I.D. No. 93930) Jenny N. Perkins (PA I.D. No. 306498) Ballard Spahr LLP 1735 Market Street, 51st FL Philadelphia, PA 19103 Telephone: 215.665.8550 Facsimile: 215.864.8999 Attorneys for Defendants Capital One Bank USA, N.A., Kohl’s Department Stores, Inc., and PayPal, Inc. Case 2:17-cv-00404-PD Document 52 Filed 03/21/17 Page 2 of 2 DMEAST #28809624 v3 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA KAREEM A. GOGGANS, Plaintiff, v. TRANS UNION, LLC; EQUIFAX INFORMATION SERVICES, LLC; EXPERIAN INFORMATION SOLUTIONS, INC.; CAPITAL ONE BANK USA, N.A.; KOHL’S DEPARTMENT STORES, INC.; CREDIT ONE FINANCIAL d/b/a/ CREDIT ONE BANK; SYNCHRONY BANK, INC.; AMAZON.COM, INC.; WAL MART STORES, INC.; PAYPAL, INC.; and CAVALRY PORTFOLIO SERVICES, LLC, Defendants. : : : : : : : : : : : : : : : : : : CIVIL ACTION NO. 2:17-CV- 00404 ORDER AND NOW, this _______ day of __________________, 2017, upon consideration of the Motion of defendants Capital One Bank USA, N.A., Kohl’s Department Stores, Inc., and PayPal, Inc. to Dismiss, with supporting Memorandum of Law, and Plaintiff’s response thereto, if any, it is hereby ORDERED that said Motion is GRANTED, and that the Complaint is DISMISSED WITH PREJUDICE. BY THE COURT: Diamond, J. Case 2:17-cv-00404-PD Document 52-1 Filed 03/21/17 Page 1 of 1 DMEAST #28809624 v3 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA KAREEM A. GOGGANS, Plaintiff, v. TRANS UNION, LLC; EQUIFAX INFORMATION SERVICES, LLC; EXPERIAN INFORMATION SOLUTIONS, INC.; CAPITAL ONE BANK USA, N.A., KOHL’S DEPARTMENT STORES, INC.; CREDIT ONE FINANCIAL d/b/a/ CREDIT ONE BANK; SYNCHRONY BANK, INC.; AMAZON.COM, INC.; WAL MART STORES, INC.; PAYPAL, INC.; and CAVALRY PORTFOLIO SERVICES, LLC, Defendants. : : : : : : : : : : : : : : : : CIVIL ACTION NO. 2:17-CV- 00404 MEMORANDUM OF LAW IN SUPPORT OF MOTION OF DEFENDANTS CAPITAL ONE BANK USA, N.A., KOHL’S DEPARTMENT STORES, INC., ANY PAYPAL, INC. TO DISMISS THE COMPLAINT Defendants, Capital One Bank USA, N.A. (“Capital One”), Kohl’s Department Stores, Inc. (“Kohl’s”), and PayPal, Inc. (“PayPal”) (collectively, the “Defendants”), by their undersigned counsel, hereby submit this Memorandum of Law in Support of their Motion to Dismiss the Complaint. Case 2:17-cv-00404-PD Document 52-2 Filed 03/21/17 Page 1 of 21 DMEAST #28809624 v3 i TABLE OF CONTENTS Page I. PRELIMINARY STATEMENT .................................................................... 1 II. STATEMENT OF FACTS ............................................................................. 2 III. ARGUMENT .................................................................................................. 2 A. Standard of Review .............................................................................. 2 B. Plaintiff’s FCRA Claim Is Insufficiently Pled ..................................... 3 C. Plaintiff’s State Law Claims Are Preempted By The FCRA ............... 5 D. Plaintiff’s State Law Claims Fail As A Matter Of Law ..................... 10 1. Defamation ............................................................................... 10 2. UTPCPL ................................................................................... 11 3. FCEUA ..................................................................................... 13 IV. CONCLUSION ............................................................................................. 14 Case 2:17-cv-00404-PD Document 52-2 Filed 03/21/17 Page 2 of 21 DMEAST #28809624 v3 ii TABLE OF AUTHORITIES Page(s) FEDERAL CASES ALA Inc. v. CCAIR, Inc. 29 F.3d 855 (3d Cir. 1994) ................................................................................... 3 Ashcroft v. Iqbal, 129 S. Ct. 1937 (U.S. 2009) .............................................................................. 2, 4 Bealer v. Mut. Fire, Marine & Inland Ins. Co., 2005 U.S. Dist. LEXIS 15755 (E.D. Pa. Aug. 1, 2005) ..................................... 10 Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) .......................................................................................... 2, 4 Bolduc v. Experian Info. Sols., Inc., No. 16-1367, 2017 WL 126114 (E.D. Pa. Jan. 12, 2017) .................................... 9 Cicala v. Trans Union, LLC, CV 15-6790, 2016 WL 2622377 (E.D. Pa. May 9, 2016) .................................... 9 Cushman v. Trans Union Corp., 115 F.3d 220 (3d Cir. 1997) ............................................................................... 10 Davis v. Maryland Bank, 2002 WL 32713429 (N.D. Cal. June 19, 2002) .................................................... 7 Diprinzio v. MBNA America Bank, N.A., 2005 WL 2039175 (E.D. Pa. Aug, 24, 2005) ................................................... 6, 9 Elsady v. Rapid Global Business Solutions, Inc., 2010 WL 742900 (E.D. Mich. Feb. 26, 2010) ...................................................... 7 Floyd v. Brown & Williamson Tobacco Corp., 159 F. Supp. 2d 823 (E.D. Pa. 2001) .................................................................. 12 Garczynski v. Countrywide Home Loans, Inc., 656 F.Supp.2d 505 (E.D. Pa. 2009) .................................................................... 14 Goins v. MetLife Home Loans, No. 12-cv-6639, 2014 WL 5431154 (E.D. Pa. Oct. 24, 2014) ............................. 8 Case 2:17-cv-00404-PD Document 52-2 Filed 03/21/17 Page 3 of 21 DMEAST #28809624 v3 iii Hartman v. Deutsche Bank Nat’l Trust Co., 2008 WL 2996515 (E.D. Pa. Aug. 1, 2008) ....................................................... 14 Hunt v. U.S. Tobacco Co., 538 F.3d 217 (3d Cir. 2008) ......................................................................... 11, 12 Hutchinson v. Delaware Sav. Bank FSB, 410 F.Supp.2d 374 (D.N.J. 2006) ..................................................................... 6, 8 Jaramillo v. Experian Info. Solutions, Inc., 155 F.Supp. 2d 356 (E.D. Pa. 2001) ................................................................. 4, 6 Jones v. Select Portfolio Servicing, Inc., 2008 WL 1820935 (E.D. Pa. Apr. 22, 2008) ........................................................ 4 Kemezis v. Matthew, 2008 WL 5191587 (E.D. Pa. Dec. 10, 2008) ...................................................... 12 Kodrick v. Ferguson, 54 F.Supp.2d 788 (N.D. Ill. 1999) ........................................................................ 7 Levy-Tatum v. Navient and Sallie Mae Bank, No. 15-3794, 2016 WL 75231 (E.D. Pa. Jan. 7, 2016) ............................ 8, 12, 13 Lum v. Bank of America, 361 F.3d 217 ......................................................................................................... 3 Manno v. Am. Gen. Fin. Co., 439 F. Supp.2d 418 (E.D. Pa. 2006) ..................................................................... 8 Morse v. Lower Merion Sch. Dist., 132 F.3d 902 (3d Cir. 1997) ........................................................................... 3, 11 Perkins v. State Farm Ins. Co., 589 F. Supp. 2d 559 (M.D. Pa. 2008) ................................................................. 12 Perl v. American Express, 2012 U.S. Dist. LEXIS 7719 (S.D.N.Y. Jan. 19, 2012) ....................................... 5 Ritchie v. Northern Leasing Systems, Inc., 14 F. Supp. 3d 229, 240 (S.D.N.Y. 2014) ............................................................ 5 Case 2:17-cv-00404-PD Document 52-2 Filed 03/21/17 Page 4 of 21 DMEAST #28809624 v3 iv Rosenthal v. Longchamp Coral Gables LLC, 603 F. Supp. 2d 1359 (S.D. Fla. 2009) ................................................................. 5 Roybal v. Equifax, 405 F.Supp.2d 1177 (E.D. Cal. 2005) .................................................................. 7 Trump Hotels & Casino Resorts, Inc. v. Mirage Resorts, Inc., 140 F.3d 478 (3d Cir. 1998) ................................................................................. 2 U.S. ex rel. Waris v. Staff Builders, Inc., 1999 WL 179745 (E.D. Pa. March 4, 1999) ....................................................... 12 Van Veen v. AT&T Corp, No. 10-1635, 2011 WL 4001004 (E.D. Pa. May 25, 2011) (Diamond, J.) .......... 8 Vullings v. Trans Union, LLC, 115 F. Supp. 3d 538, 542 (E.D. Pa. 2015) ............................................................ 8 OTHER CASES Booze v. Allstate Ins. Co., 750 A.2d 877 (Pa. Super. Ct. 2000) .................................................................... 11 Bortz v. Noon, 729 A.2d 555 (Pa. 1999) ..................................................................................... 12 Colaizzi v. Beck, 895 A.2d 36 (Pa. Super. Ct. 2006) ...................................................................... 11 FEDERAL STATUTES 15 U.S.C. § 1681h(e) ................................................................................... 5, 6, 9, 10 15 U.S.C. § 1681k(e) ............................................................................................... 10 15 U.S.C. § 1681s-2(b)(1)(A-D) ................................................................................ 4 15 U.S.C. § 1681t(b)(1)(F) ........................................................................ 5, 6, 7, 8, 9 OTHER STATUTES 73 P.S. § 2270.4 ....................................................................................................... 13 Case 2:17-cv-00404-PD Document 52-2 Filed 03/21/17 Page 5 of 21 DMEAST #28809624 v3 v RULES Fed R. Civ. P. 9(b) ................................................................................................... 12 Rule 12(b)(6) .......................................................................................................... 2, 3 Case 2:17-cv-00404-PD Document 52-2 Filed 03/21/17 Page 6 of 21 DMEAST #28809624 v3 I. PRELIMINARY STATEMENT Plaintiff alleges that Defendants Capital One Bank USA, N.A. (“Capital One”), Kohl’s Department Stores, Inc. (“Kohl’s”), and PayPal, Inc. (“PayPal”) (collectively, the “Defendants”), reported false information regarding certain credit accounts1 to defendants Trans Union, LLC (“Trans Union”), Equifax Information Services, LLC (“Equifax”) and Experian Information Solutions, Inc. (“Experian”) (collectively, the “Credit Reporting Agencies”) and failed to perform reasonable investigations of Plaintiff’s disputes of the reported information. Based on these allegations, Plaintiff brings four causes of action against Defendants: (1) violation of the Fair Credit Reporting Act (“FCRA”); (2) violation of Pennsylvania’s Fair Credit Extension Uniformity Act (“FCEUA”); (3) violation of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (“UTPCPL”); and (4) defamation. Plaintiff’s FCRA claim should be dismissed as inadequately pled. Plaintiff’s FCEUA, UTPCPL, and defamation claims should be dismissed because they are each premised on all defendants’ alleged reporting of credit information such that those claims are preempted by the FCRA. These claims also individually fail on their merits. Thus, Plaintiff’s state law claims in the Complaint should be dismissed in full. 1 The allegations against Capital One and Kohl’s are premised on the same credit account. Case 2:17-cv-00404-PD Document 52-2 Filed 03/21/17 Page 7 of 21 DMEAST #28809624 v3 2 II. STATEMENT OF FACTS Plaintiff generally alleges that he discovered in late 2016 that all defendants were furnishing inaccurate credit data to the Credit Reporting Agencies regarding accounts that Plaintiff purportedly did not own or open. (Compl. ¶¶ 16- 17, 19.) Plaintiff generally alleges he disputed the reporting with the Credit Reporting Agencies, which in turn notified the defendants of the same. (Compl. ¶¶ 20-23.) Plaintiff alleges that the Credit Reporting Agencies informed him that the accounts had been “verified” and would not be deleted. (Compl. ¶ 24.) Plaintiff fails to provide specific allegations regarding each defendant and, instead decided to “lump” all of the defendants together via general allegations. III. ARGUMENT A. 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 (U.S. 2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). A complaint should be dismissed under Rule 12(b)(6) where no relief could be granted under any set of facts consistent with the allegations of the complaint. Trump Hotels & Casino Resorts, Inc. v. Mirage Resorts, Inc., 140 F.3d 478, 483 (3d Cir. 1998). “In deciding motions to dismiss pursuant to Rule 12(b)(6), courts generally consider only the allegations in the complaint, exhibits attached to the complaint, matters of public Case 2:17-cv-00404-PD Document 52-2 Filed 03/21/17 Page 8 of 21 DMEAST #28809624 v3 3 record, and documents that form the basis of a claim.”2 Lum v. Bank of America, 361 F.3d 217, 222 n.3 (3d Cir. 2004)(citations omitted). When a complaint is challenged by a Rule 12(b)(6) motion, “a plaintiff's obligation to provide the ‘grounds’ of his ‘entitlement to relief’ requires more than labels and conclusions, and a formulaic recitation of a cause of action’s elements will not do. Factual allegations must be enough to raise a right to relief above the speculative level on the assumption that all of the complaint’s allegations are true.” Id. Thus, in order to defeat a motion to dismiss under Rule 12(b)(6), a plaintiff cannot rely upon unsupported legal conclusions, legal conclusions couched as factual allegations, or conclusory factual allegations devoid of any reference to actual events. Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997). B. Plaintiff’s FCRA Claim Is Insufficiently Pled Plaintiff purports to bring his claim under section 1681s-2(b). To state a cause of action under 1681s–2(b), a plaintiff must, at minimum, allege that the defendant furnished inaccurate information to a credit reporting agency, the consumer notified a credit reporting agency of the dispute, the credit reporting 2 A document will form “the basis of a claim if it is ‘integral to or explicitly relied upon in the complaint.’” Id. “Where there is a disparity between a written instrument annexed to a pleading and an allegation in the pleading based thereon, the written instrument will control.” ALA Inc. v. CCAIR, Inc. 29 F.3d 855, 859 n.8 (3d Cir. 1994) (citation omitted). Case 2:17-cv-00404-PD Document 52-2 Filed 03/21/17 Page 9 of 21 DMEAST #28809624 v3 4 agency then notified the furnisher of information and the furnisher of information failed to investigate or rectify the charge. See Jones v. Select Portfolio Servicing, Inc., 2008 WL 1820935, at *8 (E.D. Pa. Apr. 22, 2008) (citing 15 U.S.C. § 1681s- 2(b)(1)(A-D)); see also Jaramillo v. Experian Info. Solutions, Inc., 155 F.Supp. 2d 356, 363 (E.D. Pa. 2001) (“to state a cause of action under 1681 s-2(b) requires a pleading that a consumer reporting agency notified a furnisher of a dispute, pursuant to 1681i(a)(2), so as to trigger a duty under section 1681s-2(b).”). To satisfy Twombly and Iqbal, those allegations must be grounded in facts specific to each individual defendant to allow “the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” 556 U.S. at 663. “[T]he tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.” Id. at 678. Plaintiff, however, has merely pled conclusory statements purportedly applicable to all defendants without any specificity, or factual allegation specific to any defendant.3 While Defendants cannot admit such evidence now at the pleading stage, it should not be compelled to incur the costs associated with discovery and summary 3 Plaintiff’s inadequate pleading is particularly problematic as to PayPal because PayPal does not furnish information to the Credit Reporting Agencies. Case 2:17-cv-00404-PD Document 52-2 Filed 03/21/17 Page 10 of 21 DMEAST #28809624 v3 5 judgment to disprove a claim for which Plaintiff has no factual predicate and cannot meet his pleading standard.4 C. Plaintiff’s State Law Claims Are Preempted By The FCRA Plaintiff brings several state law causes of action against the Defendants, but all are preempted by the FCRA. The FCRA contains two separate preemption provisions. 15 U.S.C. § 1681h(e) provides: no consumer may bring any action or proceeding in the nature of defamation, invasion of privacy or negligence with respect to the reporting of information against any … person who furnishes information to a credit reporting agency … except as to false information furnished with malice or willful intent to injure such consumer. See 15 U.S.C. § 1681h(e). The second preemption provision, 15 U.S.C. § 1681t(b)(1)(F) provides, in pertinent part, No requirement or prohibition may be imposed under the laws of any State … with respect to any subject matter regulated under … Section 1681s-2 of this title, 4 If Plaintiff is permitted to replead his claim with sufficient particularity, he should be compelled to adequately allege facts to support willfulness for his claim under Section 1681n and actual damages for his claims under Sections 1681n and 1681o. See, e.g., Perl v. American Express, 2012 U.S. Dist. LEXIS 7719, at *10 (S.D.N.Y. Jan. 19, 2012) (recognizing that actual damage is an essential element of a § 1681o claim) (collecting cases); Ritchie v. Northern Leasing Systems, Inc., 14 F. Supp. 3d 229, 240 (S.D.N.Y. 2014) (dismissing claims for negligent violation of the FCRA because the “Complaint contains nothing more than conclusory allegations” of actual damages). Rosenthal v. Longchamp Coral Gables LLC, 603 F. Supp. 2d 1359, 1362 (S.D. Fla. 2009) (dismissing § 1681n claim because conclusory allegations were insufficient to establish that the defendant acted willful). Case 2:17-cv-00404-PD Document 52-2 Filed 03/21/17 Page 11 of 21 DMEAST #28809624 v3 6 relating to the responsibilities of persons who furnish information to consumer reporting agencies…. See 15 U.S.C. § 1681t(b)(1)(F). Courts in the Third Circuit follow two approaches to reconciling the above provisions: the plain language approach and the statutory approach. The plain language approach dictates that the FCRA bars all “state law claims arising out of actions taken in connection with consumer credit reporting.” Hutchinson v. Delaware Sav. Bank FSB, 410 F.Supp.2d 374, 384 (D.N.J. 2006) (internal citation omitted) (dismissing nearly identical claims because the alleged damages arose from “conduct [that] is regulated by FCRA….”); Jaramillo v. Experian Information Solutions, Inc., 155 F.Supp.2d 356, 362 (E.D. Pa. 2001) (“The plain language of section 1681t(b)(1)(F) clearly eliminated all state causes of action against furnishers of information, not just ones that stem from statutes that relate specifically to credit reporting. To allow causes of action under state statutes that do not specifically refer to credit reporting, but to bar those that do, would defy the Congressional rationale for the elimination of state causes of action.”). Conversely, the statutory approach dictates that Section 1681h(e) preempts defamation, invasion of privacy and negligence claims, while Section 1681t(b)(1)(F) preempts claims grounded in state statutes, thereby permitting limited common-law claims. Diprinzio v. MBNA America Bank, N.A., 2005 WL 2039175, at *6 (E.D. Pa. Aug, 24, 2005). Case 2:17-cv-00404-PD Document 52-2 Filed 03/21/17 Page 12 of 21 DMEAST #28809624 v3 7 However, as the U.S. District Court for the Eastern District of Michigan noted, the plain language approach “best reconciles the two” preemption provisions within the FCRA. Elsady v. Rapid Global Business Solutions, Inc., 2010 WL 742900, at *6 (E.D. Mich. Feb. 26, 2010). This is because it most accurately reflects the clear legislative intent behind the provisions: The legislative history demonstrates the Congress enacted section 1681t(b)(1)(F) in order to create a uniform scheme governing the disclosure of credit information. See Kodrick v. Ferguson, 54 F.Supp.2d 788, 794 (N.D. Ill. 1999) (discussing legislative history of FCRA’s preemption provisions). Allowing common law tort claims which implicate the same subject matter as section 1681s-2(1) would undermine Congress’ intention to create a uniform system of protection for consumers. Davis v. Maryland Bank, 2002 WL 32713429, at * 13 (N.D. Cal. June 19, 2002); see also Roybal v. Equifax, 405 F.Supp.2d 1177, 1181 (E.D. Cal. 2005) (“Through the FCRA, Congress has elected to establish a scheme of uniform requirements regulating the use, collection and sharing of consumer credit information. In order to maintain this uniformity, Congress included express preemption clauses in the FCRA relating the various aspects of consumer credit reporting. One area Congress has chosen to preempt is the regulation of furnishers of credit information.”). For this reason, Defendants submit that this approach should be followed, and under such approach, Plaintiff’s state law claims are all preempted. Case 2:17-cv-00404-PD Document 52-2 Filed 03/21/17 Page 13 of 21 DMEAST #28809624 v3 8 Each of Plaintiff’s state law claims are grounded entirely on the Defendants’ alleged erroneous reporting to the Consumer Reporting Agencies, which falls well within the purview of the FCRA. (Compl.). As such, Plaintiff cannot maintain separate causes of actions arising from the same conduct under the FCEUA, UTPCPL, and under common law defamation. See, e.g., Hutchinson, 410 F.Supp.2d at 384 (finding similar claims preempted by FCRA); Levy-Tatum v. Navient and Sallie Mae Bank, No. 15-3794, 2016 WL 75231 at *10 (E.D. Pa. Jan. 7, 2016) (“FCRA preempts any claim under Pennsylvania’s FCEUA, as brought through the UTPCPL, based upon conduct related to furnishing information to a credit reporting agency.”); Vullings v. Trans Union, LLC, 115 F. Supp. 3d 538, 542 (E.D. Pa. 2015) (finding that FCRA preemption compelled the dismissal of plaintiff’s FCEUA, UTPCPL, and common law defamation claims); Goins v. MetLife Home Loans, No. 12-cv-6639, 2014 WL 5431154, at *7 (E.D. Pa. Oct. 24, 2014) (“[D]istrict courts within the Third Circuit have largely accepted that the FCRA preempts state statutory claims.”); Van Veen v. AT&T Corp, No. 10-1635, 2011 WL 4001004 (E.D. Pa. May 25, 2011) (dismissing plaintiff’s FCEUA and UTPCPL claims because they were preempted by the FCRA) (Diamond, J.). Nevertheless, even if the statutory approach is applied, Plaintiff’s FCEUA and UTPCPL claims are still preempted under Section 1681t(b)(1)(F) since they arise out of state statutes. See, e.g., Manno v. Am. Gen. Fin. Co., 439 F. Case 2:17-cv-00404-PD Document 52-2 Filed 03/21/17 Page 14 of 21 DMEAST #28809624 v3 9 Supp.2d 418, 429 (E.D. Pa. 2006) (“Plaintiff’s PA [UTP]CPL claim is a statutory cause of action, it is preempted by [1681]t(b)(1)(F).”). Additionally, Plaintiff’s defamation claim is preempted under Section 1681h(e) because Plaintiff has not adequately alleged, and cannot allege, malice or willful intent to injure. See, e.g., Diprinzio, 2005 WL 2039175 at *6 (stating that under the statutory approach, Section 1681h(e) preempts defamation, invasion of privacy and negligence claims provided the conduct was not malicious or willful and Section 1681t(b)(1)(F) preempts all state statutory causes of action.); see also Bolduc v. Experian Info. Sols., Inc., No. 16-1367, 2017 WL 126114, at *3 (E.D. Pa. Jan. 12, 2017) (concluding that section 1681t(b)(1)(F) preempts both statutory and common law causes of action and therefore dismissing plaintiff’s defamation claims with prejudice); Cicala v. Trans Union, LLC, CV 15-6790, 2016 WL 2622377, at *4–5 (E.D. Pa. May 9, 2016) (“A number of Courts have since agreed that Section 1681t(b)(1)(F) preempts common law causes of action . . . [therefore] Section 1681t(b)(1)(F) preempts the [plaintiff’s] defamation claims.”). Instead, Plaintiff alleges that Defendants “knew” or “should have known” that certain trade lines were purportedly incorrect and believes that “failing to communicate the information . . . to all creditors” constitutes malice. (Compl. ¶¶ 67, 69, 71). Not only do these allegations fail to rise to the level of willful intent to injure sufficient to overcome preemption at the pleading stage, such purported “malice” does not even relate to the Defendants’ conduct in this Case 2:17-cv-00404-PD Document 52-2 Filed 03/21/17 Page 15 of 21 DMEAST #28809624 v3 10 matter. See 15 U.S.C. § 1681k(e); Cushman v. Trans Union Corp., 115 F.3d 220, 229 (3d Cir. 1997) (“assume[ing] without deciding” that the showing of willfulness is sufficient to avoid preemption under Section 1681h(e)). In sum, regardless of which approach is applied, Plaintiff’s defamation, FCEUA and UTPCPL claims are preempted and fail as a matter of law. D. Plaintiff’s State Law Claims Fail As A Matter Of Law In addition to being preempted by the FCRA, each of Plaintiff’s state law claims independently fails on their merits. 1. Defamation To state a claim for defamation, Plaintiff must allege: “(1) the defamatory character of the communication; (2) its publication by the defendant; (3) its application to the plaintiff; (4) an understanding by the reader or listener of its defamatory meaning; and (5) an understanding by the reader or listener of an intent by the defendant that the statement refer to the plaintiff.” See Bealer v. Mut. Fire, Marine & Inland Ins. Co., 2005 U.S. Dist. LEXIS 15755, at *15-16 (E.D. Pa. Aug. 1, 2005) (citations omitted). Here, Plaintiff does not identify what harm, if any, he allegedly suffered as a result of the Defendants’ purported inaccurate credit reporting. Indeed, Plaintiff merely contends that the Defendants’ conduct caused “serious injuries, damages and harm” to Plaintiff in the form of “credit denials, loss of use Case 2:17-cv-00404-PD Document 52-2 Filed 03/21/17 Page 16 of 21 DMEAST #28809624 v3 11 of funds, loss of credit and loan opportunities, excessive and/or elevated interest rate and finance charges,” and other out-of-pocket expenses without offering any specific examples as to when or how these actually occurred. (Compl. ¶¶ 32, 72). Such allegations are wholly conclusory and thus insufficient. See, e.g., Morse, 132 F.3d 906 (broad allegations without direct reference to specific events are insufficient). In sum, because Plaintiff fails to specifically identify an instance where he was viewed by a third party in a harmful manner as a result of Defendants’ purported credit reporting, he has not sufficiently pled a cause of action for defamation. 2. UTPCPL To state a claim under the UTPCPL’s catch-all provision, a plaintiff must show all of the elements of common law fraud. See Booze v. Allstate Ins. Co., 750 A.2d 877, 880 (Pa. Super. Ct. 2000); Colaizzi v. Beck, 895 A.2d 36, 39 (Pa. Super. Ct. 2006) (“In order to establish a violation of this catchall provision, a plaintiff must prove all of the elements of common law fraud.”) (internal quotation marks omitted);5 see also Hunt v. United States Tobacco Co., 538 F.3d 217, 224 5 There is a split among the federal district courts over this issue, but Defendants submit that the trend in these decisions is clearly in favor of maintaining the requirement that all of the elements of common law fraud need be proven. The Third Circuit engaged in an extensive analysis of Pennsylvania law involving the UTPCPL catchall provision, and concluded that the 1996 amendment did not change the requirement that a plaintiff asserting a catchall provision claim must prove the common law fraud element of justifiable reliance. Hunt v. U.S. Tobacco Co., 538 F.3d 217, Case 2:17-cv-00404-PD Document 52-2 Filed 03/21/17 Page 17 of 21 DMEAST #28809624 v3 12 (3d Cir. 2008) (“private plaintiffs alleging deceptive conduct under the [UTPCPL’s] post-1996 catch-all provision must allege [and prove] justifiable reliance.”). These elements are: (1) a representation; (2) that is material to the transaction at issue; (3) made falsely, with knowledge of its falsity or recklessness as to whether it is true or false; (4) with the intent of misleading another into relying on it; (5) justifiable reliance on the misrepresentation; and (6) resulting injury, which was proximately caused by the reliance.6 Bortz v. Noon, 729 A.2d 555, 560 (Pa. 1999). Additionally, to “maintain a private right of action under the UTPCPL, a plaintiff must demonstrate that she suffered an ascertainable loss of money or property as a result of the defendant’s prohibited conduct.” Levy-Tatum, 224-27 (3d Cir. 2008). Although the Hunt court did not reach the question as to whether all other elements of common law fraud (in addition to justifiable reliance) must be met under the catchall provision, courts in cases subsequent to Hunt have concluded that Hunt “casts doubt on the cases holding that because of the 1996 amendments, plaintiffs need not prove all of the elements of common law fraud. . . .” Perkins v. State Farm Ins. Co., 589 F. Supp. 2d 559, 567 n.4 (M.D. Pa. 2008). 6 These elements must be pled with particularity. Fed R. Civ. P. 9(b); see also Floyd v. Brown & Williamson Tobacco Corp., 159 F. Supp. 2d 823, 832 (E.D. Pa. 2001) (holding that Rule 9(b) applies to UTPCPL claim). “‘Rule 9(b) ordinarily requires that plaintiffs plead the ‘who, what, when and where’ details of the alleged fraud . . . what is crucial is that plaintiffs employ some means to ‘inject[ ] precision and some measure of substantiation into their allegations of fraud.’” Kemezis v. Matthew, 2008 WL 5191587, at *2 (E.D. Pa. Dec. 10, 2008) (quoting U.S. ex rel. Waris v. Staff Builders, Inc., 1999 WL 179745, at *4 (E.D. Pa. March 4, 1999)). Case 2:17-cv-00404-PD Document 52-2 Filed 03/21/17 Page 18 of 21 DMEAST #28809624 v3 13 2016 WL 75231 at *9. Ascertainable loss requires an “actual, non-speculative loss of money or property.” Id. Plaintiff does not allege any misrepresentations of material fact made to him or any justifiable reliance on his part. Rather, Plaintiff merely points to the Defendants’ credit reporting, which Defendants did not directly furnish to Plaintiff so as to prompt any reliance. Moreover, Plaintiff has failed to indicate an ascertainable loss. As stated above, Plaintiff baldly contends that he suffered credit denials and other purported losses of credit opportunities without providing this court any indication that they actually occurred. Such allegations are merely “speculative” and do not meet the legal standard set forth in case law. For these reasons, Plaintiff has not stated, and cannot state, a claim under the UTPCPL. 3. FCEUA FCEUA is Pennsylvania’s counterpart to the FDCPA, and imposes standards on creditors and debt collectors in connection with “the collection of a debt.” 73 P.S. § 2270.4. FCEUA does not provide a party with a private right of action, but instead requires plaintiffs to “avail themselves of the UTPCPL’s remedial provision to obtain relief.” Levy-Tatum, 2016 WL 75231 at *9. For this reason, a party must demonstrate an “ascertainable loss of money or property as a result of the defendant’s prohibited conduct” as required under the UTPCPL. Id. As set forth above, Plaintiff has not alleged ascertainable loss, reliance, or actual wrongdoing on the part of Defendants. Thus, for the same Case 2:17-cv-00404-PD Document 52-2 Filed 03/21/17 Page 19 of 21 DMEAST #28809624 v3 14 reasons Plaintiff’s UTPCPL claim fails, so does Plaintiff’s FCEUA claim. Further, though FCEUA governs debt collection, Plaintiff fails to identify any communication between Defendants and Plaintiff that amounts to an attempt to collect a debt. See Hartman v. Deutsche Bank Nat’l Trust Co., 2008 WL 2996515, at *3-4 (E.D. Pa. Aug. 1, 2008) (dismissing FCEUA claim because it did not “identify a single communication between [the defendant lender] and [the p]laintiffs, much less one that constituted an ‘attempt to collect a debt.’”); Garczynski v. Countrywide Home Loans, Inc., 656 F.Supp.2d 505, 515 (E.D. Pa. 2009) (“[w]ithout pointing to any suspect debt collection practice that may be prohibited by the FCEUA, the Amended Complaint fails to make out an FCEUA claim.”). In fact, Plaintiff does not allege that Defendants communicated with Plaintiff at all let alone regarding any accrued debt on Plaintiff’s accounts. Therefore, this claim should also be dismissed. IV. CONCLUSION For the foregoing reasons, Defendants Capital One Bank USA, N.A., Kohl’s Department Stores, Inc., and PayPal, Inc. respectfully request this Court dismiss the Complaint with prejudice. Case 2:17-cv-00404-PD Document 52-2 Filed 03/21/17 Page 20 of 21 DMEAST #28809624 v3 15 Respectfully submitted, Dated: March 21, 2017 /s/ Daniel JT McKenna Daniel JT McKenna (PA. I.D. No. 93930) Jenny N. Perkins (PA I.D. No. 306498) Ballard Spahr LLP 1735 Market Street, 51st FL Philadelphia, PA 19103 Telephone: 215.665.8550 Facsimile: 215.864.8999 Attorneys for Defendants Capital One Bank USA, N.A., Kohl’s Department Stores, Inc., and PayPal, Inc. Case 2:17-cv-00404-PD Document 52-2 Filed 03/21/17 Page 21 of 21 DMEAST #28809624 v3 CERTIFICATE OF SERVICE I hereby certify that on this date I caused a true and correct copy of the foregoing Motion to Dismiss and Brief in Support of the Motion to Dismiss to be served via the Court’s electronic filing system upon all parties of record. /s/ Daniel JT McKenna Daniel JT McKenna Dated: March 21, 2017 Case 2:17-cv-00404-PD Document 52-3 Filed 03/21/17 Page 1 of 1