Summary
finding inaccurate credit information creates no injury if not disseminated and that any “chilling effect” injury is too speculative
Summary of this case from Norman v. Trans Union, LLCOpinion
21-CV-7089 (GRB)(JMW)
2022-02-03
Yechiel ZLOTNICK, Plaintiff, v. EQUIFAX INFORMATION SERVICES, LLC, Capital One Bank (USA), N.A., American Express National Bank, JPMorgan Chase Bank, N.A., Rocket Loans, LLC, Defendants.
Mark Rozenberg, Stein Saks, PLLC, Hackensack, NJ, for Plaintiff. Boris Brownstein, Clark Hill PLC, Princeton, NJ, for Defendant Equifax Information Services, LLC. Andrew P. Karamouzis, Moran Karamouzis LLP, Rockville Centre, NY, for Defendant Capital One Bank (USA), N.A. Christopher B. Turcotte, Turcotte Law, P.C., New York, NY, for Defendant JPMorgan Chase Bank, N.A. Lauren Valle, Stradley Ronon Stevens & Young, LLP, New York, NY, for Defendant Rocket Loans, LLC.
Mark Rozenberg, Stein Saks, PLLC, Hackensack, NJ, for Plaintiff.
Boris Brownstein, Clark Hill PLC, Princeton, NJ, for Defendant Equifax Information Services, LLC.
Andrew P. Karamouzis, Moran Karamouzis LLP, Rockville Centre, NY, for Defendant Capital One Bank (USA), N.A.
Christopher B. Turcotte, Turcotte Law, P.C., New York, NY, for Defendant JPMorgan Chase Bank, N.A.
Lauren Valle, Stradley Ronon Stevens & Young, LLP, New York, NY, for Defendant Rocket Loans, LLC.
ORDER
GARY R. BROWN, United States District Judge: Plaintiff Yechiel Zlotnick commenced this action against defendants Equifax Information Services, LLC ("Equifax"), Capital One Bank (USA), N.A., ("Capital One"), American Express National Bank ("Amex"), JPMorgan Chase Bank, N.A., ("Chase") and Rocket Loans, LLC ("Rocket") under the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681, et seq. On December 30, 2021, the Court issued a show cause order directing the plaintiff to demonstrate a concrete, particularized injury or provide factual material or authority in its absence. Having reviewed the submissions of the parties, the Court finds that plaintiff does not plausibly allege that he suffered a concrete or imminent injury in fact, and as such does not have Article III standing to pursue his claims in this Court.
Background
In his complaint, plaintiff alleges that defendants violated the FCRA when Capital One, Amex, Chase and Rocket (the "furnishers") provided inaccurate information related to several of his accounts to Equifax, a consumer reporting agency, which inaccurately reported those accounts as "charged off" rather than closed. See generally DE 1. Based on those alleged inaccuracies, plaintiff contends (1) that the furnishers willfully and negligently failed to properly investigate the accuracy of the information they reported to Equifax, in violation of 15 U.S.C. § 1681s-2 ; and (2) that Equifax failed to "follow reasonable procedures to assure the maximum possible accuracy of the information reported" and failed to "delete inaccurate information from [his] credit file" after receiving notice of such inaccuracies, in violation of 15 U.S.C. §§ 1681e and 1681i. DE 1 at ¶¶ 82(a), 88.
The Court issued a show cause order on December 30, 2021, directing plaintiff to demonstrate standing and permitting defendants to respond thereafter. Plaintiff filed a response on January 7, 2022, DE 10, and defendant Rocket replied on January 14, 2022. DE 16.
Discussion
"Congress enacted [the] FCRA in 1970 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, 127 S.Ct. 2201, 167 L.Ed.2d 1045 (2007). "In order to protect consumers from the harm that can result when inaccurate information is disseminated into their credit reports, the FCRA prescribes specific duties on three types of entities: (1) consumer reporting agencies; (2) users of consumer reports; and (3) furnishers of information to consumer reporting agencies." Kane v. Guaranty Residential Lending, Inc. , No. 04-CV-4847 (ERK), 2005 WL 1153623, at *2 (E.D.N.Y. May 16, 2005). To maintain a claim against a furnisher , a plaintiff must "show that: (1) the furnisher received notice of a credit dispute from a CRA; and (2) the furnisher then acted in ‘willful or negligent noncompliance with the statute.’ " Artemov v. TransUnion, LLC , No. 20-CV-1892 (BMC), 2020 WL 5211068, at *3 (E.D.N.Y. Sept. 1, 2020) (citing Markovskaya v. Am. Home Mortg. Servicing, Inc. , 867 F. Supp. 2d 340, 343 (E.D.N.Y. 2012) ). To maintain a claim against a CRA under 15 U.S.C. §§ 1681e and 1681i, a plaintiff needs to show the CRA acted in "willful or negligent noncompliance with the statute" after notice from the plaintiff.
While plaintiff fails to specify under which provision of 15 U.S.C. § 1681s-2 he brings his claims, this Court assumes the allegations arise under 15 U.S.C. §§ 1681s-2(b), as (a) has no private right of action. See Longman v. Wachovia Bank, N.A. , 702 F.3d 148, 151 (2d Cir. 2012) (§ 1681s-2(a) "plainly restricts enforcement ... to federal and state authorities" and therefore has "no private cause of action.").
As a threshold matter a court has an obligation to examine a litigant's standing under Article III. See Joseph v. Leavitt , 465 F.3d 87, 89 (2d Cir. 2006) ; see also Taylor v. Johnson & Johnson , No. 09-CV-4575 (BMC), 2009 WL 3731988, at *1 (E.D.N.Y. Nov. 4, 2009). Where a party lacks standing to bring a claim, the court lacks subject matter jurisdiction over such claim. See SM Kids, LLC v. Google LLC , 963 F.3d 206, 210 (2d Cir. 2020). To have standing, plaintiff must prove: (1) he or she has suffered a "concrete and particularized injury"; (2) the injury "is fairly traceable to the challenged conduct"; and (3) the injury "is likely to be redressed by a favorable judicial decision." Hollingsworth v. Perry , 570 U.S. 693, 704, 133 S.Ct. 2652, 186 L.Ed.2d 768 (2013) (citing Lujan v. Defs. of Wildlife , 504 U.S. 555, 560–61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) ).
In the FCRA context, the Supreme Court made clear that "a bare procedural violation, divorced from any concrete harm" fails to satisfy the injury-in-fact requirement of Article III. Spokeo, Inc. v. Robins , 578 U.S. 330, 341, 136 S.Ct. 1540, 194 L.Ed.2d 635 (2016), as revised (May 24, 2016). In 2021, the Supreme Court, in another case involving the FCRA, again emphasized that the absence of any allegation of a concrete harm forecloses federal standing. TransUnion LLC v. Ramirez , ––– U.S. ––––, 141 S. Ct. 2190, 2200, 210 L.Ed.2d 568 (2021) ; see also In re FDCPA Mailing Vendor Cases , 551 F.Supp.3d 57, 62–63 (E.D.N.Y. July 23, 2021) (detailing the Ramirez decision, which discussion is incorporated herein by reference).
Plaintiff fails to allege a concrete injury. Despite plaintiff's conclusory allegations that "Equifax has been reporting this inaccurate information through the issuance of false and inaccurate credit information and consumer reports that it has disseminated to various persons and credit grantors, both known and unknown," DE 1, at ¶¶ 21, 37, 53, 70, no actual dissemination is alleged. Plaintiff alleges that as a result of all the defendants’ actions he "suffered damage by loss of credit, loss of ability to purchase and benefit from credit, a chilling effect on future applications for credit, and the mental and emotional pain, anguish, humiliation and embarrassment of credit denial." See generally DE 1. Thus, while plaintiff claims that his credit score was lowered as a result of the alleged improper reporting, DE 10 at 2, he fails to allege any particularized injury or actual dissemination to third-party creditors. Id. Plaintiff's allegations that he suffered a "chilling effect on future applications for credit," without more is unavailing because, "allegations of possible future injury are not sufficient." Clapper v. Amnesty Int'l USA , 568 U.S. 398, 409, 133 S.Ct. 1138, 185 L.Ed.2d 264 (2013). Instead, plaintiff must allege that "the exposure to the risk of future harm itself causes a separate concrete harm." Ramirez , 141 S. Ct. at 2211.
Plaintiff does allege that he suffered "mental and emotional pain," however such conclusory assertions do not confer standing. See Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) ("[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory [allegations], do not suffice."). Although there may be instances where emotional harm satisfies the Article III injury-in-fact requirement, such claims must be supported by sufficient allegations. See Maddox v. Bank of New York Mellon Trust Comp., N.A. , 19 F.4th 58, 65 (2d Cir. 2021) (rejecting claims of emotional harm where, as here, plaintiff failed to "plead enough facts to make it plausible that they did indeed suffer the sort of injury that would entitle them to relief." (quoting Harry v. Total Gas & Power N. Am., Inc. , 889 F.3d 104, 110 (2d Cir. 2018) )).
Absent from plaintiff's submissions are any allegations or other support that plaintiff was in fact denied credit or that plaintiff suffered any concrete consequences as a result of an allegedly lowered credit score. A lowered credit score in and of itself is not a concrete harm. See, e.g., Maddox , 19 F.4th at 65 (holding that adverse affects to a credit score cannot confer standing where "it is not alleged that this purported risk [to financing] materialized."). Where a plaintiff claims that an improper notation on his credit report resulted in a credit score reduction that could cause him reputational and financial harm, the absence of allegations of dissemination to third parties requires dismissal. See, e.g., Grauman v. Equifax Informational Services, LLC , 20-CV-3152 (ENV) (AKT), 549 F.Supp.3d 285, 291–92 (E.D.N.Y. July 16, 2021) ; cf. Cohen v. Experian Information Solutions, Inc. , No. 20-CV-3678 (BMC), 2021 WL 413494, at *2 (E.D.N.Y. Feb. 4, 2021) (dismissing FCRA claims against furnishers where no concrete harm alleged). Neither an incorrect notation on plaintiff's credit report nor the diminution in his credit score are sufficient to confer standing. Id. Inasmuch as plaintiff failed to satisfy the injury-in-fact requirement of Article III, the Court lacks subject matter jurisdiction over plaintiff's FCRA claims.
CONCLUSION
Based on the foregoing, the Court finds that plaintiff has not sufficiently pleaded a concrete, particularized injury for any of his claims in his complaint, and therefore plaintiff does not have standing to sue in federal court. Accordingly, the case is dismissed for lack of subject matter jurisdiction without prejudice to refiling in state court if appropriate. See Ramirez , 141 S. Ct. at 2224 (Thomas, J., dissenting) (suggesting that state courts may have jurisdiction over certain claims even in the absence of Article III standing). The Clerk of Court is directed to close the case.