Gilmore v. Ally Financial Inc. et al

Filing 25

ORDER granting 12 Motion to Dismiss. For the reasons contained herein, the Court finds that Plaintiff has failed to adequately plead that she has Article III standing to bring this suit. Defendants Motion to Dismiss is therefore GRANTED with leave to amend. Ordered by Magistrate Judge Ramon E. Reyes, Jr. on 4/24/2017. (Din, Myra)

Case 1:15-cv-06240-RER Document 25 Filed 04/24/17 Page 1 of 11 PageID #: 247

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
_____________________
No 15-CV-6240 (RER)

_____________________

CYDNEY GILMORE,
Plaintiff,
VERSUS

ALLY FINANCIAL INC. AND ALLY BANK,
Defendants.
___________________
April 24, 2017
___________________

African-American customers, which results
in their paying more to finance vehicles with
Defendants than similarly situated white
borrowers. (Id. ¶ 17). To remedy this alleged
disparate impact, Plaintiff seeks, inter alia,
an order certifying the class pursuant to Fed.
R. Civ. P. 23; actual, statutory, and punitive
damages; pre-judgment and post-judgment
interest; reasonable attorney’s fees and costs;
and injunctive relief. (Id. ¶¶ 3, 58).

RAMON E. REYES, JR., U.S.M.J.:
Plaintiff Cydney Gilmore (hereinafter
“Plaintiff” or “Gilmore”) filed a putative
class action against Defendants Ally
Financial Inc., and Ally Bank (collectively
“Ally” or “Defendants”) pursuant to: the
Equal Credit Opportunity Act (“ECOA”), 15
U.S.C. § 1691-1691(f); New York General
Business Law (“GBL”) Art 22-A, § 349; and
New York common law. (Dkt No. 9,
Complaint, (“Compl.”)). Plaintiff alleges that
Defendants, who are engaged in the business
of purchasing retail finance contracts from
car dealers, maintain a policy or practice of
allowing these dealers to mark up the
financing rate they offer consumers based on
subjective
criteria
unrelated
to
creditworthiness. (Compl. ¶¶ 1, 6, 24, 35-37).

Defendants have moved to dismiss
the Complaint, primarily arguing that: 1)
Plaintiff’s claim is moot in light of the
monetary relief that she was offered pursuant
to two 2013 Consent Orders; 2) Plaintiff has
no standing to bring this action because she
has not pleaded a cognizable injury that is
fairly traceable to Defendants’ conduct; and
3) Plaintiff has failed to adequately plead a
prima facie ECOA claim. (Dkt. No. 13,
Memorandum of law in Support of

According to Plaintiff, Defendants’
policy or practice has a disparate impact on

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Defendants’ Motion to Dismiss (“Def.
Mem.”), at 7-19).

Memorandum Opposing the Defendants’
Motion to Dismiss, (Dkt. No. 21, (“Pl.
Mem.”), and Defendants’ filed a second
Memorandum in Support of their Motion to
Dismiss. (Dkt. No. 22).

As discussed more fully below,
Defendants’ motion to dismiss is GRANTED
without prejudice as Plaintiff has not
established Article III standing.

II.

Ally, formerly GMAC, Inc., is a
Delaware financial services corporation, with
a principal place of business in Michigan
(Compl. ¶ 5). Ally finances auto loans to
consumers throughout the United States.
(Id.). As one of the largest banks and leading
automobile lenders in the nation, Ally has
funded millions of loans to automobile
dealers nationwide. (Id. ¶ 6).

BACKGROUND
In assessing the present motion to
dismiss, the Court accepts the following wellplead facts as true. Goldstein v. Pataki, 516
F.3d 50, 53 (2d Cir. 2008). The parties have
consented to my jurisdiction pursuant to 28
U.S.C. 636(c) (Dkt. Nos. 15–17).
I.

The Parties and Transaction

Procedural History
Ally regularly participates in the
decision to extend credit to consumers by
employing an underwriting process that helps
establish consumers’ loan interest rates. (Id.
¶ 22). First, Ally assigns one of six credit tiers
to each loan applicant. (Id.). Next, based on
the credit tier for which an applicant
qualifies, Ally sets a “buy rate” for each loan.
(Id. ¶ 23) The buy rate is a minimum interest
rate for a loan that Ally will fund and is based
on Ally’s current cost of funds, adjustments
that reflect the borrower’s creditworthiness,
and other objective criteria related to the
borrower risk. (Id.). Ally then communicates
the buy rates to automobile lenders who
incorporate them into their “retail installment
contracts.” (Id.). Ally also indicates to dealers
whether or not they will purchase these
contracts. (Id. ¶ 7).

On September 18, 2015, Gilmore
commenced this action by filing a Summons
with Notice in New York State Supreme
Court, Kings County. (Dkt No. 1, Exhibit A).
On October 30, 2015, Defendants removed
the case to this Court. (Dkt. No. 1). On
November 30, 2015, Plaintiff filed a
Complaint on behalf of herself and a putative
class of similarly situated consumers. (See
Compl.).
On January 15, 2016, Defendants
filed a Notice of a Motion to Dismiss the
Complaint
accompanied
with
a
Memorandum in Support of the Motion to
Dismiss. (Dkt. No. 12, Notice of Motion to
Dismiss, (“Notice Mem.”); Dkt. No. 13,
Defendants’ Memorandum in Support of
their Motion to Dismiss, (“Def. Mem.”)). On
January 21, 2016, I held a hearing on the
Defendants’ Motion to Dismiss and the
underlying lawsuit. (See Dkt. No. 16,
Transcript of Proceedings held on January
19, 2016). Following the hearing, Plaintiff
filed a letter in opposition to Defendants’
Motion to Dismiss. (Dkt. No. 18). On
September 27, 2016, Plaintiff filed a

Through its agreements with dealers,
Ally allows dealers to “mark up” a
consumer’s interest rate above Ally’s
established buy rate. (Id. ¶ 24). Plaintiff
alleges that because Ally compensates
dealers for part of the increased revenue that
the dealers derive from their mark-up, Ally’s
arrangement indirectly creates financial

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incentives for dealers to mark up borrowers’
interest rates above the buy rates that Ally
sets. (Id. ¶¶ 17, 24).

creditworthiness or other objective criteria
related to borrower risk.” (Id. ¶¶ 16-18). It
further concluded that Ally had engaged in a
pattern and practice of lending discrimination
in violation of the ECOA § 1691(a)(1). (Id. ¶
19). The CFPB then referred the case to the
Department of Justice (“DOJ”). (Id.).

Plaintiff resides in Brooklyn, New
York. (Id. ¶ 4). On or around July 22, 2013,
Plaintiff went to Kristal Auto Mall in
Brooklyn to “purchase and finance a vehicle
for her personal use.” (Id. ¶ 12). There, she
discussed the purchase of her car with a
salesman and finance manager. (Id.). Plaintiff
then agreed to purchase and finance a used
2012 Cadillac. (Id.). Upon deciding to
purchase the Cadillac, Plaintiff sat with the
finance representative and was presented
with a retail installment contract. (Id. ¶ 13).
When the contract was presented, Plaintiff
“voiced concern over the high rate of 9.54%
being offered” to her. (Id.). The finance
representative indicated that the rate
presented was the rate for which Plaintiff
“qualified” and added that she could
“refinance the loan later to attempt to lower
the rate.” (Id.). Plaintiff then signed the
contract and began to pay her loan. (Id.).
III.

The DOJ similarly investigated
Ally’s indirect lending practices and
reviewed loan-level data for more than 1.21
million automobile loans that Ally funded.
(Id. ¶ 19). The investigation revealed that
Ally’s relationship with its dealers allowed
dealers to mark up a consumer’s interest rate
above Ally’s established buy rate, and it
further concluded that Ally charged AfricanAmerican borrowers more than white
borrowers in interest rate mark-ups for
reasons not based on creditworthiness or
objective criteria related to borrower risk. (Id.
¶¶ 24–26). In December 2013, the DOJ sued
Ally in the U.S. District Court for the Eastern
District of Michigan for “discriminating
against thousands of inter alia AfricanAmerican consumer borrowers across the
United States who obtained loans from Ally
to finance automobiles.” (Id. ¶ 15). That case
settled, and Defendants entered into Consent
Agreements with the DOJ and CFPB for
injunctive, compensatory, and punitive
damages owed to the government and
consumers the government identified as
affected by the alleged practices. (See
Consent Order, United States v. Ally
Financial Inc. and Ally Bank, No. 13-cv15180, Dkt. No. 5 (E.D. Mich. 2013)
(hereinafter “DOJ Consent Order”); Consent
Order, Ally Financial Inc., No. 2013-CFPB0010, (hereinafter “CFPB Consent Order”)).1

The Underlying Investigation

In September 2012, the Consumer
Finance Protection Bureau (“CFPB”) began
examining Ally’s indirect automobile
lending program and its compliance with fair
lending laws and regulations from April 1,
2011 to March 31, 2012. (Id. ¶ 18). The
examination concluded that during the
examined period, Ally’s system caused
African-Americans borrowers “to pay higher
interest rates for their automobile loans than
non-white borrowers because of their race or
national origin and not based on their
1

The Court takes notice of these Consent Orders
because “[w]here subject matter jurisdiction is
contested, a district court may consider evidence
outside the pleadings, such as affidavits and exhibits.”
Fullwood v. Wolfgang’s Steakhouse, Inc., No. 13 Civ.
7174 (KPF), 2017 WL 377931, at *2 (S.D.N.Y. Jan.

26, 2017) (citing Zappia Middle East Constr. Co. v.
Emirate of Abu Dhabi, 215 F.3d 247, 253 (2d Cir.
2000); accord Tandon v. Captain's Cove Marina of
Bridgeport, Inc., 752 F.3d 239, 243 (2d Cir. 2014)).

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In or about June 2015, Gilmore
received a joint letter of notice from the DOJ
and the CFPB informing her that she was
identified as a member of a class of African
American and/or Black consumers to receive
a payment pursuant to an $80 million
settlement between those governmental
entities and Defendants. (Id. ¶ 14).
IV.

R. Civ. P. 8). Dismissal is authorized under
Fed. R. Civ. P. 12(b)(1) when the federal
court lacks subject matter jurisdiction and
under 12(b)(6) when the plaintiff fails to state
a claim upon which relief can be granted. Fed
R. Civ. P. 12(b)(1), 12(b)(6). When parties
make motions under both rules, the court
should “‘consider the Rule 12(b)(1)
challenge first since if it must dismiss the
complaint for lack of subject matter
jurisdiction, the accompanying defenses and
objections become moot and do not need to
be determined.’” Rhulen Agency, Inc. v.
Alabama Ins. Guar. Ass'n, 896 F.2d 674, 678
(2d Cir.1990) (quoting Wright and A. Miller,
Federal Practice and Procedure § 1350, at
548 (1969)); All. For Envtl. Renewal, Inc. v.
Pyramid Crossgates Co., 436 F.3d 82 (2d
Cir. 2006).

Plaintiff’s Claims

Subsequent to receiving this letter,
Plaintiff filed the instant action, in which
Plaintiff alleges that Defendants have
engaged in discrimination against consumer
borrowers on the basis of race and national
origin in violation of the ECOA § 1691(a)(1).
(Id. ¶ 34). Plaintiff specifically alleges: that
Ally’s policies and practices constitute a
pattern or practice of resistance to the full
enjoyment of rights secured by the ECOA §
1691-1691(f); that Plaintiff and the Class are
aggrieved applicants as defined under ECOA
§ 1691(e); and that Ally’s policies were
implemented intentionally. (Id. ¶¶ 34-38).

Unlike the evaluation of a motion to
dismiss under 12(b)(6), in which “[t]he court
must take all facts alleged in the complaint as
true and draw all reasonable inferences in
favor of [the] plaintiff,” under Rule 12(b)(1),
“jurisdiction must be shown affirmatively,
and that showing [may] not [be] made by
drawing from the pleadings inferences
favorable to the party asserting it.” Morrison
v. Nat’l Bank Ltd., 547 F.3d 167, 170 (2d Cir.
2008) (citations and quotation marks
omitted). Hence, whereas under Rule
12(b)(6), the movant bears the burden of
proof, on a Rule 12(b)(1) motion, the party
who invokes the Court's jurisdiction bears the
burden to demonstrate that subject matter
jurisdiction exists. Tandon v. Captain's Cove
Marina of Bridgeport, Inc., 752 F.3d 239,
243 (2d Cir. 2014) (“In resolving motion to
dismiss under Rule 12(b)(1)… [w]here
jurisdictional facts are placed in dispute, the
party asserting subject matter jurisdiction
‘has burden of proving by preponderance of
evidence that it exists.’”) (citations omitted);
see Sobel v. Prudenti, 25 F. Supp. 3d 340,
352 (E.D.N.Y. 2014).

Plaintiff also asserts that Defendants’
conduct was unfair, illegal, false, deceptive,
and/or misleading, in violation of GBL § 349.
(Id. ¶¶ 41-45). In addition, Plaintiff alleges a
violation of the implied covenant of good
faith and fair dealing, (Id. ¶¶ 49-54), and
claims that Defendants were unjustly
enriched in violation of New York common
law. (Id. ¶¶ 55-58).
DISCUSSION
I.

Standards for a Motion to Dismiss

Under Fed. R. Civ. P. 8(a)(2), a
pleading must contain “‘a short and plain
statement of the claim showing that the
pleader is entitled to relief.’” Ashcroft v.
Iqbal, 556 U.S. 662, 677–78, 129 S. Ct. 1937,
1940, 173 L. Ed. 2d 868 (2009) (quoting Fed.

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“A case is properly dismissed for lack
of subject matter jurisdiction under Rule
12(b)(1) when the district court lacks the
statutory or constitutional power to
adjudicate it.” Makarova v. United States,
201 F.3d 110, 113 (2d Cir. 2000). Under
Article III, § 2 of the Constitution,
jurisdiction of federal courts is limited to
“Cases” and “Controversies.” U.S. Const.
Art. III § 2. This “restricts the authority of the
federal courts to resolving “actual and
concrete disputes, the resolutions of which
have direct consequences on the parties
involved.” Genesis Healthcare Corp. v.
Symczyk, —U.S.—, 133 S. Ct. 1523, 1528,
185 L. Ed. 2d 636 (2013) (citations omitted).
Without a case or controversy, a district court
lacks the constitutional power to adjudicate,
and the case must be dismissed. Jennifer
Matthew Nursing & Rehab Ctr. v. U.S. Dep’t
of Health and Human Servs., 607 F.3d 951,
955 (2d Cir. 2010).
II.

not conjectural or hypothetical; (2) the injury
is fairly traceable to the challenged action of
the defendant; and (3) it is likely, as opposed
to merely speculative, that the injury will be
redressed by a favorable decision.” Friends
of the Earth, Inc., v. Laidlaw Envtl. Servs.,
Inc., 528 U.S. 167, 180–81, 120 S. Ct. 693,
145 L. Ed. 2d 610 (2000) (citing Lujan v.
Defenders of Wildlife, 504 U.S. 555, 560–61,
112 S. Ct. 2130, 119 L. Ed. 2d 351 (1992)).
The party seeking to invoke federal
jurisdiction has the burden to establish each
element. See Spokeo, Inc. v. Robins, —
U.S.—, 136 S. Ct. 1540, 1547, 194 L. Ed. 2d
635 (2016); Ali v. N.Y. City Envtl. Control
Bd., No. 14-CV-00312 (SLT)(CLP), 2015
WL 7281633 (E.D.N.Y. Nov. 16, 2015) (on a
motion to dismiss, “[t]he plaintiff bears the
burden of ‘alleg[ing] facts that affirmatively
and plausibly suggest that it has standing to
sue.’”).
Because standing is an essential
component of a plaintiff's case, it “must be
supported with evidence sufficient to meet
the standard required at the various stages of
litigation.” Elliott v. City of New York, No.
06–CV–296 (RPP), 2010 WL 4628508, at *9
(S.D.N.Y. Nov. 15, 2010) (citing Lujan, 504
U.S. at 561). Therefore, whereas a plaintiff
whose standing is challenged by way of a
summary judgment motion must respond
with competent evidence sufficient to pass
muster under Fed. R. Civ. P. 56, “[a]t the
pleading stage, general factual allegations of
injury resulting from the defendant's conduct
may suffice.” Am. Bird Conservancy v.
Harvey, No. 16-cv-1582 (ADS)(AKT), 2017
WL 477968, at *7 (E.D.N.Y. Feb. 6, 2017)
(quoting Carter v. HealthPort Techs., LLC,
822 F.3d 47, 56 (2d Cir. 2016)). Here,
because the Defendant's motion to dismiss is
facial, (i.e. based solely on the allegations in
the complaint), “the plaintiff has no
evidentiary burden” and “[t]he task of the
district court is to determine whether the

Article III Standing Requirements

The Supreme Court has called the
doctrine of standing “perhaps the most
important” of the case-or-controversy
doctrines placing limits on federal judicial
power as it derives directly from the
Constitution. Allen v. Wright, 468 U.S. 737,
750, 104 S. Ct. 3315, 3324, 82 L. Ed. 2d 556
(1984). The doctrine requires a plaintiff to
have a “personal stake,” in the outcome of the
action.
Summers
v.
Earth
Island
Institute, 555 U.S. 488, 493, 129 S. Ct. 1142,
173 L. Ed. 2d 1 (2009)). That is, a plaintiff
must allege a “personal injury fairly traceable
to the defendant’s allegedly unlawful conduct
and likely to be redressed by the requested
relief.” Allen, 468 U.S. at 751.
The
irreducible
constitutional
minimum for standing contains three
elements. “[A] plaintiff must show (1) it has
suffered an ‘injury in fact’ that is (a) concrete
and particularized and (b) actual or imminent,
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[p]leading ‘allege[s] facts that affirmatively
and plausibly suggest that [the plaintiff] has
standing to sue.’” Id. (citing Carter, 822 F.3d
at 56) (quoting Amidax Trading Grp. v.
S.W.I.F.T. SCRL, 671 F.3d 140, 145 (2d Cir.
2011)); Ali, 2015 WL 7281633, at * 4. In
carrying out this task, the Court presumes
that general allegations embrace more
specific facts that are necessary to support the
claim. Lujan, 504 U.S. at 561.

Plaintiff based on [their] allegations[,]” and
Plaintiff does not allege any further injury or
that the Compensation offered pursuant to the
Agencies calculation is insufficient[,]” she
has not adequately plead an injury-infact. Id.2 Although the Defendants do not
address concreteness and particularity
requirements separately, in light of the recent
guidance from Spokeo, this Court will do so.
1. Particularity

A. Injury-in-Fact

Gilmore has failed to plead a
sufficiently particularized claim. Though
Gilmore does allege certain facts that speak
to her personal transaction—visiting Kristal
Auto Mall in July 2013, (Compl. ¶ 12),
entering a retail installment contract”
reflecting her interest rate of 9.54%, (Id. ¶13),
and receiving a letter notice from the DOJ
and CFPB informing her about the $80
Million settlement, (Id. ¶14)—nowhere in her
Complaint
does
she
allege
that
she personally was
treated
in
a
discriminatory manner based on her race or
that she personally suffered from having to
pay an interest rate that was higher than that
charged to non-African American customers
who entered loan agreements funded by
Defendants at the same dealer.

An injury-in-fact is “an invasion of a
legally protected interest which is (a)
concrete and particularized and (b) actual or
imminent,
not
conjectural
or
hypothetical.” Id. at 560 (citations and
internal quotation marks omitted). To
establish standing, a Plaintiff must satisfy the
dual requirements of “particularization” and
“concreteness.” Id.
at
1548; Bellino v.
JPMorgan Chase Bank, N.A., No. 14-CV3139 (NSR), 2016 WL 5173392, at *2
(S.D.N.Y. Sept. 20, 2016). For an injury to be
particularized, “it must affect the plaintiff in
a personal and individual way.” Spokeo,
136 S. Ct. at 1548 (emphasis added)
(collecting cases). Meanwhile, concreteness
refers to the “realness” of the injury—
meaning that the injury “must actually exist”
and cannot be “abstract.” Id.

Courts typically require such a
personal connection in ECOA cases. See e.g.,
Masudi v. Ford Motor Credit Co., No. 07CV-1082 (CBA)(LB), 2008 WL 2944643, at
*4 (E.D.N.Y. July 31, 2008) (district court
found the plaintiff’s ECOA complaint to be
inadequately plead because it “d[id] not
allege a single event, policy or action taken
by either of the defendants regarding
plaintiff’s car loan, nor d[id] plaintiffs allege

Defendants argue that Gilmore fails
to allege an injury-in-fact because she “fails
to plead any facts plausibly indicating that
she suffered an injury beyond that already
addressed by the 2013 Consent Orders.”
(Def. Mem. at 8). Defendants add that
because the CFPB and DOJ have already
“determined the compensation due to

orders, the Court should construe the Complaint as “a
request to review the individual payment amount for
Plaintiff pursuant to the Orders” in spite of that being
impermissible by the terms of the Orders. (Id.).

2

Defendants point to paragraphs in the two Consent
Orders that they claim preclude the court from
reviewing the final payment amounts calculated
pursuant to the Consent Orders. (See Def. Mem. 1, at
9). Defendants further argue that because Plaintiff fails
to allege an injury beyond what is addressed in these

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how the finance charges imposed on their
loan were discriminatory.” (emphasis in
original)); see also Osborne v. Amsouth
Bank, No. 3:02-CV-577, 2003 WL 22025067
(M.D. Tenn. July 15, 2003) (district court
dismissed plaintiff’s ECOA claims on
summary judgment as plaintiff failed to
prove that she had suffered an injury-in-fact
and evidence showed that she individually
paid less mark-up than average white
customers at the dealership).

also Warth v. Seldin, 422 U.S. 490, 518, 95
S. Ct. 2197, 45 L. Ed. 2d 343 (1975) (“It is
the responsibility of the complainant clearly
to allege facts demonstrating that he is a
proper party to invoke judicial resolution of
the dispute and the exercise of the court’s
remedial powers.”); Morrison, 547 F.3d at
170 (“Jurisdiction must be shown
affirmatively, and that showing is not made
by drawing from the pleadings inferences
favorable to the party asserting it.”).
Therefore, the Court finds that Gilmore’s
claim is too generalized to demonstrate a
particularized injury.

Here, the Complaint simply states
that Gilmore is part of a class that was
identified in a separate investigation as
having possibly suffered inflated interest
rates on car loans financed by Defendants
during a particular time period. (See Compl.
¶¶ 14, 28–31). But being a member of a group
that allegedly suffered from a discriminatory
practice based on unproven claims in a
separate lawsuit with different parties does
not indicate that Gilmore herself suffered an
injury that was the result of racial
discrimination at the time that she entered the
loan. See Masudi, 2008 WL 2944643, at *5
(“The Court agrees that the settlement in the
[prior related] case does not establish that
defendants discriminated against [the instant
plaintiffs].” (emphasis in original)). Although
Plaintiff was one of the consumers identified
in the underlying action, Plaintiff still cannot
rely on the unproven claims of that separate
action to plausibly allege that she has a
personal stake in this litigation. While a prior
related case can “inform” a lawsuit, it “cannot
serve as the sole basis for [a party’s] claim.”
Id. at *5.

2. Concreteness
The Complaint alleges that “Plaintiff,
and each Class Member, has been damaged
to the extent of a specific amount based upon
a discriminatorily inflated interest rate over
the fixed terms of the loans.” (Compl. ¶ 2).
Typically, this would suffice as a concrete
injury because “[a]ny monetary loss suffered
by the plaintiff satisfies the element;
including ‘even a small financial loss.’”
Carter, 822 F.3d at 55–56 (2d Cir. 2016)
(quoting Natural Resources Defense Council,
Inc. v. United States Food & Drug
Administration, 710 F.3d 71, 85 (2d Cir
2013)). However, Gilmore was already
identified by the DOJ as one of the
individuals who was subject to inflated
interest rates; and consequently, she was
already offered monetary relief to redress any
past damages she suffered. (See Compl. ¶ 14;
DOJ Consent Order; CFPB Consent Order).
Nowhere does Plaintiff state that the
relief she was offered failed to compensate
her for the past harm she suffered. Although
Plaintiff may have chosen not to accept the
payment offered, because the damages
caused by the alleged “discriminatorily
inflated interest rate” are the only damages
pleaded, absent any allegations that the
presented redress was insufficient or that

More importantly, where a plaintiff’s
standing is at issue, the Court is simply not at
liberty to make favorable inferences.
Spokeo, 136 S. Ct. at 1547 (“Where, as here,
a case is at the pleading stage, the plaintiff
must clearly allege facts demonstrating each
element of standing.” (internal quotation
marks
and
citations
omitted)); see
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Plaintiff suffered additional harms, there is
no concrete past harm for this Court to
redress.

discriminates on the basis of race or national
origin with respect to the pricing of
automobile loans in violation of the ECOA;
(2) mandates that Defendants create a
compliance
committee
to
monitor
Defendants’ adherence to provisions in the
Consent Order and regularly submit written
reports to the CFPB and DOJ; (3) requires
Defendants to implement a compliance plan
that will limit dealers’ maximum rate spread,
provide regular notices to all dealers
explaining the ECOA provisions, provide
quarterly analysis of dealer-specific retail
installment contract pricing data for
disparities on any prohibited bases, and
provide appropriate corrective action with
respect to dealers who are identified in for
disparities on a prohibited basis; (4) provide
annual remuneration to each of the AfricanAmerican, Hispanic, and Asian/Pacific
Islanders that were affected consumers by the
CFPB and DOJ during the relevant preceding
period; and (5) submit any non-discretionary
Dealer Compensation plans to the CFPB and
DOJ for prior approval (Id. at 6–8).

For the same reason, Plaintiff’s
request for injunctive relief is unfounded.
Injunctive relief is only appropriate if there is
an ongoing harm. “If respondent had alleged
a continuing violation or the imminence of a
future violation, the injunctive relief
requested would remedy that alleged harm.”
Steel Co. v. Citizens for a Better Env’t, 523
U.S. 83, 108, 118 S. Ct. 1003, 140 L. Ed. 2d
210 (1998); Vaughn v. Consumer Home
Mortg. Co., 297 F. App'x 23, 25 (2d Cir.
2008) (“Although past injuries may confer
standing to seek money damages, they do not
confer standing to seek equitable relief unless
the plaintiff can demonstrate that he or she is
likely to be harmed again in the future and in
a similar way.”); Trowbridge v. Cuomo, No.
16 Civ. 3455 (GBD), 2016 WL 7489098, at
*7 (S.D.N.Y. Dec. 21, 2016) (same); Floyd v.
City of N.Y., 283 F.R.D. 153, 169 (S.D.N.Y.
2012) (same); see e.g., Smith v. Chrysler Fin.
Co., No. Civ.A.00-CV-6003 DMC, 2004 WL
3201002, at *4 (D.N.J. Dec. 30, 2004)
(similar ECOA case where court found that
plaintiff did not have standing for injunctive
relief because allegation that Plaintiff may be
discriminated against again in the future was
“simply too speculative… in light of the fact
that Defendant may not ever be involved in
the financing of Plaintiff’s hypothetical
future Chrysler purchases.”).

Plaintiff never alleges that she is still
making payments at an inflated interest rate
without having been offered adequate
compensation or a rate adjustment. Plaintiff
also never alleges that Defendants failed to
provide any of the compensatory, punitive, or
injunctive relief required by the DOJ Consent
Order. Thus, Plaintiff has failed to plead a
concrete injury that is ongoing or imminent
for which injunctive is necessary. See
Deshawn E. by Charlotte E. v. Safir, 156 F.3d
340, 344 (2d Cir. 1998) (“Where, as here, a
plaintiff seeks prospective injunctive relief,
he must also demonstrate ‘that he is
realistically threatened by a repetition of [the
violation]”) (citing City of Los Angeles v.
Lyons, 461 U.S. 95, 109, 103 S. Ct. 1660, 75
L. Ed. 2d 675 (1983)); Nicosia v.
Amazon.com, Inc., 834 F.3d 220, 239 (2d Cir.
2016) (“enhanced risk of future injury may
[sometimes] constitute injury-in-fact, [but] . .

Plaintiff has not pleaded that
Defendants are presently violating any laws
or that she continues to suffer from their
conduct. The DOJ Consent Order requires
strict compliance with the ECOA and
contains a detailed section outlining the
injunctive relief that the Defendants must
provide. (See DOJ Consent Order, at 5–11).
Among the enumerated requirements, this
section: (1) enjoins Defendants from
engaging in any act or practice that
8

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. such injuries are only cognizable where the
plaintiff alleges actual future exposure to that
increased risk”) (internal quotation marks
omitted).

have raised issues of traceability and
redressability in their motion to dismiss, the
Court will briefly address each.
B. Fairly Traceable

In addition, Plaintiff cannot assert
standing by claiming to be part of a putative
class that would, if certified, have an injury
because the standing of an individual named
plaintiff must be ascertained first. Denney v.
Deutsche Bank AG, 443 F.3d 253 (2d Cir.
2006) (“[N]o class may be certified that
contains members lacking Article III
standing.”); Presbyterian Church of Sudan v.
Talisman Energy, Inc., 244 F.Supp.2d 289,
334 (S.D.N.Y. 2003) (noting that “each
member of the class must have standing with
respect to injuries suffered as a result of
defendants' actions”); 7 AA Charles Alan
Wright, Arthur R. Miller, Mary Kay
Kane, FED. PRAC. & PROC. CIV.3d §
1785.1 (2005) (“[T]o avoid a dismissal based
on a lack of standing, the court must be able
to find that both the class and the
representatives have suffered some injury
requiring court intervention.”); Herbert B.
Newberg & Alba Conte, 1 NEWBERG ON
CLASS ACTIONS § 2.7 (4th ed. 2002)
(“…the standing issue focuses on whether the
plaintiff is properly before the court, not
whether represented parties or absent class
members are properly before the court.”).

The second element of standing
requires “a causal connection between the
injury and the conduct complained of. Lujan,
504 U.S. at 560. This means that the harm
alleged must be “fairly… trace[able] to the
challenged action of the defendant, and not
injury that results from the independent
action of some third party not before the
court.” Simon v. E. Ky. Welfare Rights Org,
426 U.S. 26, 41–42, 96 S. Ct. 1917, 48 L. Ed.
2d 450 (1976).
The traceability requirement requires
a plaintiff to “demonstrate a causal nexus
between the defendant’s conduct and the
injury.” Rothstein v. UBS AG, 708 F.3d 82,
91 (2d Cir. 2013) (citing Heldman v. Sobol,
962 F.2d 148, 156 (2d Cir. 1992). While
“such a nexus is most easily shown if there is
a direct relationship between the plaintiff and
the defendant … to establish that, in fact, the
asserted injury was the consequence of the
defendants actions, indirectness is not
necessarily fatal to standing … because the
fairly traceable standard is lower than that of
proximate cause.” Id. (internal citations and
quotation marks omitted). See Carter, 822
F.3d at 55–56 (“A defendant’s conduct that
injures a plaintiff but does so only indirectly,
after intervening conduct by another person,
may suffice for Article III standing.”); Fero
v. Excellus Health Plain, Inc., No. 6:15-CV06569 (EAW), 2017 WL 713660, at *14
(W.D.N.Y. Feb. 22, 2017) (finding that
because the standard for causation is “not an
onerous hurdle,” plaintiffs’ claim was
sufficient where it implicated the defendants
through “chains of events” even though it did
not rule out alternative sources of their
injuries.).

Plaintiff’s conclusory allegations fall
short of the standard to demonstrate standing.
Carter, 822 F.3d at 56 (“The task of the
district court is to determine whether the
[p]leading alleges facts that affirmatively and
plausibly suggest that the plaintiff has
standing to sue.” (internal marks and
alterations omitted)). Accordingly, the Court
finds that Plaintiff has inadequately pleaded
a past, present, or future injury-in-fact.
Although, this finding is enough for
the Court to conclude that Plaintiff lacks
Article III standing, because the Defendants
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Defendants argue that Plaintiff has
not demonstrated that it is “likely [that her]
injury was caused by the challenged conduct
of the defendant, and not by the independent
actions of third parties not before the court.”
(Def. Mem. at 9) (citing Lujan, 504 U.S. at
560). Defendant adds that Plaintiff’s
allegations “cannot establish a direct
relationship between Ally’s alleged conduct
and her alleged injury.” (Id.).

brokers, employees, and other mortgage
companies often lead to discriminatory
results sufficiently gave “rise to a fair
inference of causation”); cf. Masudi, 2008
WL 2944643, at *4 (finding that where
plaintiffs Complaint contained no facts or
statistics to show how defendants
discriminated
against
them,
“vague
generalities” were insufficient to show
causation between defendants conduct and
discriminatory practices).

The Court declines to adopt
Defendants’ high bar for traceability. As
discussed above, although causation is most
easily shown if there is a direct relationship,
“indirectness is not fatal to standing.”
Rothstein, 708 F.3d at 91. Plaintiff alleges
that “[i]t is Ally’s specific policy and practice
to permit dealers to mark up the buy rate for
reasons not related to the borrower’s
creditworthiness or other objective criteria
related to borrower risk[,]” and that as a result
“Ally’s policy and practice creates financial
incentives for dealers to mark up borrowers’
interest rates above those established based
on consumer’s creditworthiness or other
objective criteria related to borrower risk[,]”
which results in African-American borrowers
paying higher interest rates for their loans
than white borrowers. (Compl. ¶¶ 16–17).

C. Redressable
Redressability “requires a court to
determine whether it possesses the ability to
remedy the harm that a petitioner asserts.”
Nat'l Wildlife Fed'n v. Fed. Emergency
Mgmt. Agency, 345 F. Supp. 2d 1151, 1165
(W.D. Wash. 2004) (citing Citizens for Better
Forestry v. U.S. Dep't of Agric., 341 F.3d
961, 975–76 (9th Cir. 2003)). In this regard,
… “it must be ‘likely,’ as opposed to merely
‘speculative,’ that the injury will be redressed
by a favorable decision.’” Lujan, 504 U.S. at
561 (quoting Simon v. E. Ky. Welfare Rights
Org., 426 U.S. 26, 38, 43, 96 S. Ct. 1917, 48
L. Ed. 2d 450 (1976)).
In the instant case, the absence of any
concrete harm prevents there from being any
remedies that the Court can grant. As already
explained, Plaintiff has not alleged that she
has suffered monetary damages that were
insufficiently redressed in the 2013 DOJ
Consent Order.3 (Section A.2., supra). Nor
has Plaintiff alleged that there is any
imminent, ongoing injury for the Court to
equitably relieve. (Id.). In similar vein,
Plaintiff’s request for attorney’s fees and the
costs of litigation, (Compl. ¶ 48),

Such allegations are sufficiently
plausible to pass the less-than-onerous
standard for causation required at this stage
of the action. Moreover, other district courts
have found such schemes sufficient to satisfy
the standard. See e.g., Miller v. Countrywide
Bank, N.A., 571 F. Supp. 2d 251, 259 (D.
Mass. 2008) (finding that complaint where
plaintiff cited reports reflecting that
defendants’ granting “markup discretion” to
3

In her memorandum, Plaintiff argues that the money
she was offered in the settlement order cannot be
considered a “set off in a Related Consumer Action.”
(Pl. Mem. at 6). However, she repeatedly cites
language from the CFPB Consent Order that pertains

to the separate civil money penalty that the Defendants
paid to the government in the sum of $18 million and
not the provisions pertaining to the $80 million
settlement fund that was set as redress for the affected
consumers.

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detrimentally lack connection to a concrete
injury. “[A] plaintiff cannot achieve standing
to litigate a substantive issue by bringing suit
for the cost of bringing suit. The litigation
must give the plaintiff some other benefit
besides reimbursement of costs that are a
byproduct of the litigation itself.” Steel Co.,
523 U.S. at 107 (citations omitted). “An
‘interest in attorney's fees is ... insufficient to
create an Article III case or controversy
where none exists on the merits of the
underlying claim.’” Id.

CONCLUSION
For all the foregoing reasons, the
Court finds that Plaintiff has failed to
adequately plead that she has Article III
standing to bring this suit. Defendants’
Motion to Dismiss is therefore GRANTED
with leave to amend.
SO ORDERED.

Ramon E. Reyes, Jr.
RAMON E. REYES, JR.
United States Magistrate Judge

As Plaintiff’s Complaint seeks all
“relief as may be appropriate” under the
ECOA § 1691e(h) (Compl. ¶ 38), Plaintiff
implicitly seeks the declaratory and punitive
damages available under the statute. But like
equitable
and
compensatory
relief,
declaratory relief and punitive damages
necessitate a showing of concrete injury.
Steel Co., 523 U.S. at 107 (“although a suitor
may derive great comfort and joy from the
fact that the United States Treasury is not
cheated, that a wrongdoer gets his just
deserts, or that the Nation's laws are faithfully
enforced, that psychic satisfaction is not an
acceptable Article III remedy because it does
not redress a cognizable Article III injury”
(citing Allen, 468 U.S. at 754–755; Valley
Forge Christian Coll. v. Americans United
for Separation of Church & State, Inc., 454
U.S. 464, 482–483, 102 S. Ct. 752, 764, 70 L.
Ed. 2d 700 (1982)). “Relief that does not
remedy the injury suffered cannot bootstrap a
plaintiff into federal court; that is the very
essence of the redressability requirement.”
Id.

Dated: April 24, 2017
Brooklyn, NY

Accordingly, the Court finds that
Plaintiff fails to allege any redressable
injuries.

11