Daniel v. Goodyear Tire/CBSD
OPINION & ORDER(1) Accepting the Magistrate Judge's Recommendation Dated July 27, 2017 (DKT. 29 ); (2) Overruling Plaintiff's Objections Thereto (DKT. 32 ); (3) Granting Defendant's Motion to Dismiss (DKT. 25 ); and (4) Dismissing Plaintiff's Claim with Prejudice. Signed by District Judge Mark A. Goldsmith. (Sandusky, K)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
Case No. 15-cv-11479
HON. MARK A. GOLDSMITH
GOODYEAR TIRE/CBSD, et al,
OPINION & ORDER
(1) ACCEPTING THE MAGISTRATE JUDGE’S RECOMMENDATION DATED JULY
27, 2017 (DKT. 29); (2) OVERRULING PLAINTIFF’S OBJECTIONS THERETO (DKT.
32); (3) GRANTING DEFENDANT’S MOTION TO DISMISS (DKT. 25); AND (4)
DISMISSING PLAINTIFF’S CLAIM WITH PREJUDICE
This matter is before the Court on the Report and Recommendation (“R&R”) of Magistrate
Judge Stephanie Dawkins Davis (Dkt. 29), which recommends granting Defendant Citibank’s
motion to dismiss. Following an extension, see 8/11/2017 Order (Dkt. 31), Plaintiff Rochelle
Daniel timely filed objections to the R&R (Dkt. 32), to which Citibank filed a response (Dkt. 33).
Daniel then filed a reply to the response (Dkt. 34). Because oral argument will not aid the
decisional process, the objections to the R&R will be decided based on the parties’ briefing. See
E.D. Mich. LR 7.1(f)(2); Fed. R. Civ. P. 78(b). For the reasons set forth below, the R&R is
accepted and Citibank’s motion to dismiss is granted.
On April 29, 2013, Daniel received a copy of her credit report, prepared by Experian.1 Sec.
Am. Compl. (“SAC”) ¶ 7 (Dkt. 24). Through this report, Daniel discovered that Citibank had
Because this case is before the Court under Rule 12(b)(6) of the Federal Rules of Civil Procedure,
the factual background is drawn from the allegations made in Plaintiff’s complaint.
requested a copy of her credit report, apparently without her consent. Id. Sixteen months later, in
August 2014, she faxed a letter to Citibank requesting an explanation for the request; Citibank did
not respond to the letter. Id. ¶ 11. On October 6, 2014, Daniel called Citibank and spoke to a
representative who informed her that Citibank would not have information regarding any credit
request because so much time had elapsed since the request. Id. ¶¶ 12-13.
Daniel filed suit, alleging that Citibank willfully violated the Fair Credit Reporting Act
(“FCRA”), 15 U.S.C. §1681 et seq., by obtaining her credit report without a permissible purpose,
SAC ¶¶ 24-28, and negligently violated the same Act. Id. ¶¶ 29-35. She further alleges that
Citibank committed the tort of intrusion upon seclusion, arguing that she had a reasonable
expectation of privacy in her credit report, and that Citibank violated this expectation by obtaining
her credit report without legal justification. Id. ¶¶ 36-43.
Citibank filed a motion to dismiss, arguing that it did indeed have a permissible purpose
for obtaining Daniel’s credit report, and, thus, could not have violated the FCRA. See Def. Mot.
to Dismiss (Dkt. 25). To support this claim, Citibank submitted Daniel’s application for a
Goodyear credit plan. See Pl. App., Ex. 2 to Def. Mot. to Dismiss (Dkt. 25-2). Citibank also
argues that Daniel did not adequately state a claim for any of the three claims presented in the
SAC. Daniel responded that the submitted application was “[c]learly” fabricated, and that she did
sufficiently state her claims against Citibank. Pl. Resp. Br. (Dkt. 27). Citibank replied by
reiterating that Daniel did not sufficiently state a claim, and that it had a permissible purpose for
obtaining the credit report. See Def. Reply (Dkt. 28).
In the R&R, Magistrate Judge Davis concluded that Citibank’s permissible-purpose
argument was premature because the documents that form the defense were not part of the
pleadings, and thus could not be considered at the motion-to-dismiss stage. See R&R at 9-11.
However, the Magistrate Judge agreed with Citibank that Daniel did not adequately state a claim
regarding the willful violation of the FCRA, concluding that the SAC did not contain allegations
of fact sufficient to support an inference that Citibank ran an unjustifiably high risk of violating
the FCRA. See id. at 11-13. The Magistrate Judge also dismissed Daniel’s negligent-violation
claim, concluding that Daniel did not offer factual underpinnings for her claim of emotional
damages because the case did not involve extreme circumstances that could lead to damages for
emotional distress. See id. at 13-16. Finally, the Magistrate Judge dismissed Daniel’s intrusionupon-seclusion claim, concluding that the SAC did not contain allegations sufficient to support a
finding that Citibank’s actions were objectionable to the reasonable person. See id. at 16-17.
Daniel filed four objections to the R&R, arguing (i) the Magistrate Judge misstated the
factual background; (ii) Citibank’s “mistake” constituted a willful violation of the law; (iii) Daniel
sufficiently pleaded emotional distress; and (iv) a reasonable jury could conclude that Citibank’s
conduct was objectionable.
II. STANDARD OF REVIEW
The Court reviews de novo any portion of the R&R to which a specific objection has been
made. See 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b); Alspaugh v. McConnell, 643 F.3d 162,
166 (6th Cir. 2011) (“Only those specific objections to the magistrate’s report made to the district
court will be preserved for appellate review; making some objections but failing to raise others
will not preserve all the objections a party may have.”). Any arguments made for the first time in
objections to an R&R are deemed waived. Uduko v. Cozzens, 975 F. Supp. 2d 750, 757 (E.D.
On a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), “[t]he
defendant has the burden of showing that the plaintiff has failed to state a claim for relief.” Directv,
Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007) (citing Carver v. Bunch, 946 F.2d 451, 454-455
(6th Cir. 1991)), cert. denied, 552 U.S. 1311 (2008). To survive a Rule 12(b)(6) motion, the
plaintiff must allege sufficient facts to state a claim to relief above the speculative level, such that
it is “plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). The plausibility
standard requires courts to accept the alleged facts as true, even when their truth is doubtful, and
to make all reasonable inferences in favor of the plaintiff. Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009); Twombly, 550 U.S. at 555-556.
A. Factual Background
Daniel’s first objection is that the Magistrate Judge “erred in stating that the representative
advised me that it no longer had the application because two years had elapsed.” Pl. Obj. at 2-3
(Dkt. 32). Rather, Daniel argues that it was she who had made the observation that only two years
had passed, not Citibank’s representative.
The Court overrules Daniel’s objection.
The Magistrate Judge’s alleged factual
misstatement was made in connection with her conclusion that the facts alleged by Daniel were
sufficient to “support a plausible inference that Citibank accessed her credit report without a
permissible purpose,” finding in favor of Daniel on the argument on which this objection is
grounded. R&R at 10. Thus, any error the Magistrate Judge might have made in the recitation of
the factual background of the case is harmless. Accordingly, the Court overrules Daniel’s first
B. Willful Violation of Law
Daniel’s second objection is that the Magistrate Judge erred in determining that Citibank’s
“mistake” did not constitute a willful violation of law. Daniel cites Jerman v. Carlisle, McNellie,
Rini, Kramer & Ulrich GPA, 559 U.S. 573 (2010), in which the Supreme Court held that the “bona
fide error” defense in the Fair Debt Collection Practices Act (FDCPA) does not apply to a violation
resulting from a debt collector’s mistaken interpretation of the legal requirements of the Act.
Daniel argues that this holding in the context of the FDCPA means that mistaken interpretations
of an act cannot be used as a defense for violations of other federal consumer protection statutes,
such as the FCRA. Citibank responds that Daniel has provided no support for her conclusion that
Jerman applies to the FCRA, and that Daniel has not alleged sufficient facts to show the requisite
level of culpability.
This objection is overruled. The Magistrate Judge properly outlined the standard for
determining a willful violation of the FCRA: In addition to meeting the elements of the civil
violation,2 it must also be shown that Defendant violated the Act either intentionally or recklessly.
Safeco Ins. Co. of America v. Burr, 551 U.S. 47, 57 (2007). In this context, an act is reckless when
it entails “an unjustifiably high risk of harm that is either known or so obvious that it should be
known.” Id. at 68 (internal quotation marks omitted). “[A] company subject to FCRA does not
act in reckless disregard of it unless the action is not only a violation under a reasonable reading
of the statute’s terms, but shows that the company ran a risk of violating the law substantially
greater than the risk associated with a reading that was merely careless.” Id. at 69. Considering
that the Supreme Court has spoken on the requisite standard for showing a willful violation of the
FCRA, it is inconsequential that the Court, in the FDCPA context, ruled that mere mistake is not
an adequate defense. Lower courts should not assume that a more recent Supreme Court opinion
To show a violation of the FCRA, a plaintiff must prove three elements: “(i) that there was a
‘consumer report’ within the meaning of the statute; (ii) that the defendant used or obtained it; and
(iii) that the defendant did so without a permissible statutory purpose.” Bickley v. Dish Network,
LLC, 751 F.3d 724, 728 (6th Cir. 2014) (emphasis in original) (internal quotation marks omitted).
has overruled a prior decision without an explicit directive from the Supreme Court. See Agostini
v. Felton, 521 U.S. 203, 237 (1997). Therefore, this Court is not free to infer an implicit overruling
of Safeco and cannot view a subsequent decision regarding the FDCPA as having any bearing on
The question that remains is whether Daniel adequately pleaded intentionality or
recklessness under Safeco. Even construing the complaint liberally, as the Court must, Daniel has
not stated a claim for willful violation of the FCRA. Daniel simply does not make the factual
allegations necessary to show that Citibank operated in a way that risked violating the FCRA in a
manner “substantially greater than the risk associated with a reading that was merely careless.”
Safeco, 551 U.S. at 69. As the Magistrate Judge observed, Daniel’s complaint only supports the
conclusion that Citibank did not possess any application for a pull of Daniel’s credit report over
two years after the report was pulled. Such an allegation does not state a claim that Citibank
willfully violated the FCRA. Accordingly, Daniel’s second objection is overruled.
C. Negligent Violation of Law
Daniel next objects to the Magistrate Judge’s conclusion that she has not stated a claim for
negligent violation of the FCRA. A defendant who negligently fails to comply with the terms of
the FCRA is liable to the plaintiff for “any actual damages sustained by the consumer as a result
of the failure.” 15 U.S.C. § 1681o. Daniel cites Bach v. First Union National Bank, 149 F. App’x
354 (6th Cir. 2005), arguing that actual damages can be proven by showing humiliation and mental
distress, and that a plaintiff’s testimony can be sufficient to support such a claim. Citibank cites
the Magistrate Judge’s opinion, claiming that Daniel’s generalized claims of emotional injury are
insufficient to withstand the motion to dismiss.
This objection is overruled. Daniel is correct that actual damages in this context may be
proven by showing pain, suffering, and humiliation, and that a plaintiff’s testimony alone can show
this harm. See Bach, 149 F. App’x at 361. As the Magistrate Judge observed, however, there is
also precedent to the effect that claims for damages in the form of humiliation and mental distress
must arise in cases with particularly extreme circumstances. See, e.g., Burnstein v. Saks Fifth
Avenue & Co., 208 F. Supp.2d 765 (E.D. Mich. 2002). For example, in Smith v. LexisNexis
Screening Solutions, Inc., 837 F.3d 604, 611 (6th Cir. 2016), the plaintiff was awarded damages
for emotional distress after a negligently-performed background check characterized plaintiff as a
felon, when in fact he was not. The Sixth Circuit concluded that emotional damages could be
awarded “where the facts are so inherently degrading that a jury could infer ... emotional distress.”
Id. (internal quotation marks omitted) (ellipses in original). On the other hand, damages were not
appropriate in Burnstein because the plaintiff did not identify any “egregious behavior” that “could
be expected to give rise in emotional distress,” in a case in which the plaintiff claimed that her
reputation would suffer on account of a delinquency noted on her credit report. Id. at 779. The
court observed that the defendant’s “conduct could more accurately be characterized as inattentive
than outrageous.” Id. At the motion-to-dismiss stage, the allegations in the complaint must be
more than “sparse and conclusory” to support a claim of negligent violation of the FCRA. Sion v.
SunRun, Inc., 2017 WL 952953, at *2 (N.D. Cal. 2017). In Sion, the court dismissed the case
because the Plaintiff merely alleged that she was “affected personally” and felt that her “privacy
had been invaded” by the disclosure. Id.
Here, Daniel argues that she suffered mental anguish due to the violation of her privacy;
she became more frustrated when her fax to Citibank was ignored, and even more so when
Citibank’s representative was unapologetic and nonchalant on the telephone. SAC at ¶¶ 32-33.
Daniel also argues that she suffered humiliation because the credit report contained derogatory
information about which she was embarrassed. Id. at ¶ 34. While it is understandable that Daniel
grew frustrated due to what she perceived as poor customer service, that is far from the extreme or
inherently degrading circumstances necessary to support a claim of emotional damages. Rather,
as in Burnstein, Citibank’s conduct is more accurately described, at worst, as inattentive rather
than outrageous. Because Daniel’s claims of emotional distress are no more than sparse and
conclusory, the third objection is overruled.
D. Intrusion Upon Seclusion
Finally, Daniel objects to the Magistrate Judge’s conclusion that she did not adequately
plead an intrusion-upon-seclusion claim.
To successfully plead the claim, a plaintiff must
adequately allege “(1) the existence of a secret and private subject matter, (2) a right possessed by
the plaintiff to keep that subject matter private; and (3) the obtaining of information about that
subject matter by the defendant through some method objectionable to the reasonable man.”
Lansing Ass’n of School Adm’rs v. Lansing School Dist. Bd. of Educ., 549 N.W.2d 15, 20 (Mich.
Ct. App. 1996) (emphasis removed). Citing case law that intrusion-upon-seclusion claims should
be dismissed when the plaintiff merely finds the disclosure itself to be intrusive, the Magistrate
Judge determined that Daniel did not plead the third prong of the claim because the act of accessing
a credit report alone is not a method objectionable to a reasonable person. See R&R at 16 (citing
Daniel v. West Asset Management, 2015 WL 2405708 at *3 (E.D. Mich. 2015)). Daniel objects,
arguing that Citibank has no evidence of a legitimate business need, and that Defendant never sent
an adverse-action notice to Daniel.
This objection is overruled. As the Magistrate Judge observed, Daniel must plead that the
method used to obtain the information was objectionable. See Lansing Ass’n of School Adm’rs,
549 N.W.2d at 20. Daniel has made no such allegation here. Instead, she only alleges that the
obtaining of the information itself was highly objectionable. See SAC ¶ 24. As recited by the
Magistrate Judge, this allegation is inconsistent with a litany of cases holding that obtaining a
credit report is rarely an actionable intrusion. See R&R at 16-17 (listing cases). Without facts
directed to the method itself and how that method was objectionable, the claim of intrusion of
seclusion was not properly pled. Thus, Daniel’s objection is overruled.
For the reasons set forth above, the Court accepts the Magistrate Judge’s recommendation
dated July 27, 2017 (Dkt. 29); overrules Daniel’s objections thereto (Dkt. 32); grants Citibank’s
motion to dismiss (Dkt. 25); and dismisses Daniel’s claim with prejudice.
Dated: September 27, 2017
s/Mark A. Goldsmith
MARK A. GOLDSMITH
United States District Judge
CERTIFICATE OF SERVICE
The undersigned certifies that the foregoing document was served upon counsel of record and any
unrepresented parties via the Court's ECF System to their respective email or First Class U.S. mail
addresses disclosed on the Notice of Electronic Filing on September 27, 2017.
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