Blumenfeld v. Regions Bank
Filing
64
MEMORANDUM OPINION AND ORDER - This matter comes before the court on Defendant Regions Banks motion to dismiss the amended complaint for lack of standing (doc. 55 ) and motion to exclude evidence (doc. 60 ). The court DENIES the motion to dismiss b ecause Ms. Blumenfeld has presented sufficient evidence to establish standing. The court DENIES the motion to exclude the evidence because Ms. Blumenfelds failure to disclose the information is harmless. Signed by Judge Annemarie Carney Axon on 3/18/2019. (KEK)
FILED
2019 Mar-18 AM 10:56
U.S. DISTRICT COURT
N.D. OF ALABAMA
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
MIDDLE DIVISION
TERRY BLUMENFELD,
Plaintiff,
v.
REGIONS BANK,
Defendant.
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4:16-cv-01652-ACA
MEMORANDUM OPINION AND ORDER
This matter comes before the court on Defendant Regions Bank’s motion to
dismiss the amended complaint for lack of standing (doc. 55) and motion to
exclude evidence (doc. 60). In this case, Plaintiff Terry Blumenfeld asserts that
Regions Bank violated the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681
et seq., and Alabama law by pulling her consumer report and sharing that report
with her mother, all without Ms. Blumenfeld’s consent.
Regions Bank contends that Ms. Blumenfeld lacks standing because she has
asserted nothing more than a bare procedural violation of the FCRA for which she
has not shown a concrete injury.
In response, Ms. Blumenfeld submitted an
affidavit in which she attests that she spent $40 to $50 on a lock box so that she
could secure the consumer report that Regions Bank disclosed to her mother. This
affidavit prompted Regions Bank to move to exclude that evidence for failing to
timely disclose it during discovery.
The court DENIES the motion to dismiss because Ms. Blumenfeld has
presented sufficient evidence to establish standing. The court DENIES the motion
to exclude the evidence because Ms. Blumenfeld’s failure to disclose the
information is harmless.
I.
BACKGROUND
The court described in detail the facts underlying this case in a previous
memorandum opinion (see doc. 44), and will not now repeat all of those facts. Of
relevance to the motions currently before the court, taken in the light most
favorable to Ms. Blumenfeld, she has presented evidence that Regions Bank pulled
her consumer report and shared that report with her mother, all while knowing it
did not have her consent. (See id. at 4–6).
Ms. Blumenfeld testified that she has not experienced any issues with
identity theft as a result of Regions Bank accessing or sharing her consumer report,
and she is not aware of a decrease in her credit score. (Doc. 30-1 at 145–46). She
also testified that she did not have any out of pocket damages as a result of the
violation. (Id. at 164). But she testified that she was very angry, embarrassed, and
stressed about the disclosure of her consumer report to her mother. (Id. at 115).
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Now, after the close of discovery, Ms. Blumenfeld has submitted an
affidavit in which she attests that she also spent $40 to $50 on a lock box in order
to secure the consumer report. (Doc. 56-3 at 4 ¶ 13). The affidavit does not
explain why she never before disclosed the purchase of the lock box.
(See
generally id.). After Regions Bank moved to exclude that part of the affidavit,
Ms. Blumenfeld submitted another affidavit in which she states that “until [she]
provided the affidavit to my lawyer . . . , [she] did not at the time understand the
$40 or $50 dollars I spent for the lock box to be the type of out of pocket damages
defendant was asking about.” (Doc. 63-1 at 2). Instead, she believed out of pocket
damages meant “medical bills for seeing a doctor or a psychiatrist or psychologist
or lost time from work.” (Id. at 3).
II.
DISCUSSION
Regions Bank has moved to dismiss the case and to exclude
Ms. Blumenfeld’s evidence that she spent money on a lock box. (Docs. 55, 60).
The court will address the motion to dismiss first, followed by the motion to
exclude. But before that, the court will briefly set out the statutory background.
The FCRA regulates permissible uses of and access to consumer reports, and
creates a private right of action for willful violations of the Act. See 15 U.S.C.
§§ 1681b, 1681n, 1681o. By definition, a consumer report is
any written, oral, or other communication of any information by a
consumer reporting agency bearing on a consumer's credit worthiness,
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credit standing, credit capacity, character, general reputation, personal
characteristics, or mode of living which is used or expected to be used
or collected in whole or in part for the purpose of serving as a factor
in establishing the consumer's eligibility for—
(A) credit or insurance to be used primarily for personal, family, or
household purposes;
(B) employment purposes; or
(C) any other purpose authorized under section 1681b of this title.
Id. §1681a(d)(1).
Section 1681b(f) of the FCRA permits a user to obtain a
consumer report only for those purposes for which an agency is authorized to
furnish the report. Id. § 1681b(f)(1).
When enacting the FCRA, Congress found that “[t]here is a need to insure
that consumer reporting agencies exercise their grave responsibilities with fairness,
impartiality, and a respect for the consumer’s right to privacy.”
15 U.S.C.
§ 1681(a)(4). Congress stated that the purpose of the FCRA was “to require that
consumer reporting agencies adopt reasonable procedures for meeting the needs of
commerce . . . in a manner which is fair and equitable to the consumer, with regard
to the confidentiality, accuracy, relevancy, and proper utilization of such
information.” Id. § 1681(b); see also Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47,
52 (2007) (“Congress enacted FCRA in 1970 to ensure fair and accurate credit
reporting, promote efficiency in the banking system, and protect consumer
privacy.”). Congress later amended the FCRA to add requirements for users of
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consumer reports as well as the consumer reporting agencies themselves. See 15
U.S.C. § 1681b(f) (prohibiting a “person” from using or obtaining a consumer
report except for specified purposes).
1.
Motion to Dismiss
Regions Bank moves to dismiss the amended complaint for lack of standing,
under Federal Rule of Civil Procedure 12(b)(1), on the basis that Ms. Blumenfeld
has not presented any evidence that she suffered a concrete injury based on the
bank’s violation of the FCRA. (Doc. 55). Rule 12(b)(1) permits a party to move
to dismiss a claim for “lack of subject-matter jurisdiction.”
Under Article III of the United States Constitution, federal courts have
subject matter jurisdiction only over “cases” or “controversies.” U.S. Const. art.
III, § 2; Muransky v. Godiva Chocolatier, Inc., 905 F.3d 1200, 1207 (11th Cir.
2018). “Standing is one of the essential components of Article III’s case or
controversy requirement.” Muransky, 905 F.3d at 1207. The plaintiff bears the
burden of establishing standing by showing that she “(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.” Spokeo, Inc. v. Robins, 136
S. Ct. 1540, 1547 (2016).
The only question is this case is whether
Ms. Blumenfeld has established an injury in fact; the parties do not dispute
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traceability or redressability and the court finds that she has satisfied her burden on
those elements.
Injury in fact requires a showing that the plaintiff “suffered ‘an invasion of a
legally protected interest’ that is ‘concrete and particularized’ and ‘actual or
imminent, not conjectural or hypothetical.’” Spokeo, 136 S. Ct. at 1548 (quoting
Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992)). Again, the parties do
not dispute that Ms. Blumenfeld has adequately established an actual invasion of a
legally protected interest, nor do they dispute that Ms. Blumenfeld’s injury is
particularized. See id. (defining “particularized” as “affect[ing] the plaintiff in a
personal and individual way”) (quotation marks omitted). The court finds that she
has satisfied her burden on those points as well. The only dispute is whether
Ms. Blumenfeld has shown that her injury is “concrete.” (Doc. 55 at 3–4).
The United States Supreme Court has explained that to be concrete, any
injury “must be ‘de facto’; that is, it must actually exist.” Spokeo, 136 S. Ct. at
1548. The injury may not be “abstract.” Id. And “Congress cannot erase Article
III’s standing requirements by statutorily granting the right to sue to a plaintiff who
would not otherwise have standing.” Id. at 1547–48.
But concrete does not necessarily mean tangible. Spokeo, 136 S. Ct. at
1549. In some cases, “the violation of a procedural right granted by statute can be
sufficient . . . to constitute injury in fact.” Id.; see also Havens Realty Corp v.
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Coleman, 455 U.S. 363, 373 (1982) (“[T]he actual or threatened injury required by
Art. III may exist solely by virtue of statutes creating legal rights, the invasion of
which creates standing . . . .”) (quotation marks omitted).
In those cases, “a
plaintiff . . . need not allege any additional harm beyond the one Congress has
identified.” Spokeo, 136 S. Ct. at 1549. To determine whether an intangible harm
is concrete, courts should “consider whether an alleged intangible harm has a close
relationship to a harm that has traditionally been regarded as providing a basis for a
lawsuit in English or American courts.” Id.
In Spokeo itself, the Supreme Court declined to express a view about
whether a violation of the FCRA could, by itself, establish a concrete injury that
would confer standing on a plaintiff. See Spokeo, 136 S. Ct. at 1550 (remanding
the case for further consideration because the Ninth Circuit’s “standing analysis
was incomplete,” and “tak[ing] no position as to whether the Ninth Circuit’s
ultimate conclusion—that [the plaintiff] adequately alleged an injury in fact—was
correct”). But the Eleventh Circuit has addressed whether a statutory violation can
confer standing on a few occasions.
Of the Eleventh Circuit decisions on this question, the court finds Perry v.
Cable News Network, Inc., 854 F.3d 1336 (11th Cir. 2017) the most persuasive in
this context. In Perry, the Eleventh Circuit addressed whether a violation of the
Video Privacy Protection Act was sufficiently concrete to confer standing. Id. at
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1340–41.
The Court explained that Congress had enacted the law to protect
personal privacy, and “a cause of action for this type of an invasion of privacy ‘has
a close relationship to a harm that has traditionally been regarded as providing a
basis for a lawsuit in English or American courts.’” Id. (quoting Spokeo, 136
S. Ct. at 1549). Noting that “Supreme Court precedent has recognized in the
privacy context that an individual has an interest in preventing disclosure of
personal information,” the Eleventh Circuit held that the plaintiff had established a
concrete injury despite the lack of any injury beyond the statutory violation. Id. at
1341.
The statutes at issue in this case and the Perry case are different—the FCRA
in this case and the Video Privacy Protection Act in that case—but the analysis is
the same. Just like the Video Privacy Protection Act, Congress enacted the FCRA
to protect the privacy interests of consumers. See 15 U.S.C. § 1681(a)(4) (“There
is a need to insure that consumer reporting agencies exercise their grave
responsibilities with fairness, impartiality, and a respect for the consumer’s right to
privacy.”) (emphasis added); see also Safeco Ins. Co. of Am., 551 U.S. at 52. Just
like the defendant’s actions in Perry, the defendant in this case violated that
privacy interest by disclosing Ms. Blumenfeld’s private and confidential consumer
report to a third party. Because “a cause of action for this type of an invasion of
privacy ‘has a close relationship to a harm that has traditionally been regarded as
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providing a basis for a lawsuit in English or American courts,’” this court
concludes that Ms. Blumenfeld has established a concrete injury to support
standing. Perry, 854 F.3d at 1340 (quoting Spokeo, 136 S. Ct. at 1549).
Regions Bank contends that because this court has already rejected
Ms. Blumenfeld’s claim for invasion of privacy under Alabama law, she cannot
now establish a concrete injury by showing that the common law traditionally
protects against the same type of harm as the FCRA. (Doc. 55 at 17–18). But the
question posed by Spokeo is not whether a plaintiff could prevail on a common law
claim.
The question is whether “an alleged intangible harm has a close
relationship to a harm that has traditionally been regarded as providing a basis for a
lawsuit in English or American courts.” Spokeo, 136 S. Ct. at 1549. As the court
has explained above, the answer in this particular case is yes.
The court also emphasizes that Ms. Blumenfeld’s ability to prevail on an
Alabama law claim for invasion of privacy is beside the point. As the Eleventh
Circuit has said, “the point is not that [the plaintiff]’s harm would have been
actionable at common law. The inquiry under Spokeo is whether the alleged harm
bears a ‘close relationship’ to one actionable at common law.” Muransky, 905
F.3d at 1211 (quoting Spokeo, 136 S. Ct. at 1549); see also Spokeo, 136 S. Ct. at
1549 (“Congress may elevate to the status of legally cognizable injuries concrete,
de facto injuries that were previously inadequate in law.”) (quotation marks and
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alteration omitted). Regions Bank’s position that Ms. Blumenfeld cannot establish
a concrete injury unless she can demonstrate every element of Alabama’s invasion
of privacy cause of action would mean that a plaintiff’s standing depends on where
she attempts to bring suit, because each state’s specific causes of action may be
different. The court rejects that suggestion.
Under the correct standard, the alleged harm in this case—disclosure of
Ms. Blumenfeld’s private financial information to a third party—bears a close
relationship to the common law’s protection against disclosure of private
information. See Perry, 854 F.3d at 1341; see also Spokeo, 136 S. Ct. at 1553
(Thomas, J., concurring) (“If Congress has created a private duty owed personally
to [the plaintiff] to protect his information, then the violation of the legal duty
suffices for Article III injury in fact.”); U.S. Dep’t of Justice v. Reporters Comm.
For Freedom of Press, 489 U.S. 749, 763 (1989) (“[B]oth the common law and the
literal understandings of privacy encompass the individual’s control of information
concerning his or her person.”). Accordingly, Ms. Blumenfeld has established that
she suffered a concrete injury based on Regions Bank’s violation of the FCRA.
The court DENIES Regions Bank’s motion to dismiss her amended complaint for
lack of standing.
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2.
Motion to Exclude Evidence
Regions Bank moves to exclude the evidence that Ms. Blumenfeld
purchased a lock box, contending that under Federal Rule of Civil Procedure 37,
she failed to timely disclose that evidence and cannot now rely on it. (Doc. 60).
Regions Bank does not specify whether it seeks to exclude this evidence solely
with respect to the motion to dismiss, but all of its arguments relate to
Ms. Blumenfeld’s use of the evidence to establish standing.
(See id.).
Accordingly, the court’s ruling on the motion to exclude the evidence is limited to
whether Ms. Blumenfeld can submit this new evidence in opposition to the motion
to dismiss; the court will not address whether Ms. Blumenfeld can submit this
evidence to a jury on the question of damages.
Rule 37 provides:
If a party fails to provide information or identify a witness as required
by [Federal] Rule [of Civil Procedure] 26(a) or (e), the party is not
allowed to use that information or witness to supply evidence on a
motion, at a hearing, or at a trial, unless the failure was substantially
justified or is harmless. In addition to or instead of this sanction, the
court, on motion and after giving an opportunity to be heard:
(A) may order payment of the reasonable expenses, including
attorney’s fees, caused by the failure;
(B) may inform the jury of the party’s failure; and
(C) may impose other appropriate sanctions . . . .
Fed. R. Civ. P. 37(c)(1).
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Ms. Blumenfeld concedes that she did not timely disclose the purchase of
the lock box, but contends that the court should excuse her late disclosure because
Regions Bank waited until after the court had denied its motion for summary
judgment to raise the issue of standing (doc. 63 at 3), and because she did not
understand the meaning of “out of pocket damages” when she first testified that
she had none (id. at 5).
The court finds that Ms. Blumenfeld has not shown substantial justification
based on Regions Bank’s timing in filing its motion to dismiss for lack of standing.
A party’s obligation to disclose evidence in discovery does not depend on what the
opposing party may assert in a dispositive motion.
Federal Rule of Civil
Procedure 26 requires parties to provide information about damages “without
awaiting a discovery request.”
Fed. R. Civ. P. 26(a)(1)(iii).
Not only did
Ms. Blumenfeld not disclose this evidence in her initial disclosures, she also
represented to Regions Bank that she had not incurred any out of pocket damages,
and only came forth with contrary evidence when Regions Bank moved to dismiss
the amended complaint on that ground.
Nor does the court find convincing
Ms. Blumenfeld’s explanation that she did not understand what “out of pocket
expenses” meant.
But the court does find that, with respect to this motion to dismiss,
Ms. Blumenfeld’s failure to disclose the purchase of the lock box is harmless. As
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the court has explained, Ms. Blumenfeld has standing to bring her FCRA claim.
She does not need to show that she incurred monetary damages in order to
establish standing.
The court DENIES Regions Bank’s motion to exclude the evidence. This
ruling relates only to the question whether to exclude the evidence from
consideration in determining standing.
III.
CONCLUSION
The court DENIES Regions Bank’s motion to dismiss the amended
complaint for lack of standing. (Doc. 55). The court DENIES Regions Bank’s
motion to exclude the evidence. (Doc. 60).
DONE and ORDERED this March 18, 2019.
_________________________________
ANNEMARIE CARNEY AXON
UNITED STATES DISTRICT JUDGE
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