Schwartz v. HSBC Bank USA, N.A.

Filing 63

OPINION AND ORDER re: 51 MOTION to Dismiss Second Amended Complaint filed by HSBC Bank USA, N.A. For the foregoing reasons, Defendant's motion to dismiss is GRANTED. The Clerk of Court is directed to terminate all pending motions, adjourn all remaining dates, and close this case. (As further set forth in this Opinion and Order.) (Signed by Judge Katherine Polk Failla on 1/9/2017) (mro)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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:
BRUCE SCHWARTZ, individually and on
:
behalf of all others similarly situated,
:
:
Plaintiff,
:
:
v.
:
:
HSBC BANK USA, N.A.,
:
:
Defendant. :
:
------------------------------------------------------- X

USDC SDNY
DOCUMENT
ELECTRONICALLY FILED
DOC #: _________________
DATE FILED: January 9, 2017
______________

14 Civ. 9525 (KPF)
OPINION AND ORDER

KATHERINE POLK FAILLA, District Judge:
Plaintiff Bruce Schwartz sued Defendant HSBC Bank USA, N.A., for
alleged violations of the Truth in Lending Act (“TILA” or the “Act”), 15 U.S.C.
§§ 1601-1677f, and its implementing regulations. In a previous opinion, the
Court held that Plaintiff had sufficiently stated a claim for violation of TILA
disclosure requirements concerning penalty annual percentage rates (or
“APRs”). See Schwartz v. HSBC Bank USA, N.A., 160 F. Supp. 3d 666, 681-82
(S.D.N.Y. 2016) (“Schwartz I”). Following the Supreme Court’s decision in
Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016), Plaintiff filed a Second Amended
Complaint (the “SAC”), which Defendant now moves to dismiss for lack of
standing pursuant to Federal Rule of Civil Procedure 12(b)(1). Because the
SAC fails plausibly to plead a concrete and particularized injury, Defendant’s
motion is granted.

BACKGROUND 1
A.

Factual Background
The Court assumes familiarity with its prior Opinion, see Schwartz I, 160

F. Supp. 3d at 669-71, and only briefly recites the facts relevant to the instant
motion.
Plaintiff maintains an open-end consumer credit card account with
Defendant. (SAC ¶¶ 8, 10-11). Defendant’s billing statements to Plaintiff from
January 2014 through May 2014 failed properly to disclose (i) that failure to
make a timely monthly minimum payment could subject Plaintiff’s account
balance to a penalty APR; and (ii) what the amount of that penalty APR would
be. (Id. at ¶¶ 20-21, 44-45). Specifically, Plaintiff alleges that these billing
statements “neither disclosed that [Plaintiff] was already subject to a penalty
[of] 27.24% or any other penalty APR, nor made any disclosure under the ‘Late
Payment Warning’ advisory that a failure to make the minimum payment due
by the due date could subject [Plaintiff] to the imposition of a penalty APR of
27.24%.” (Id. at ¶ 44). Plaintiff alleges that these omissions violated
mandatory disclosure provisions under TILA’s statutory and regulatory
scheme. (Id. at ¶ 45). Schwartz I held, inter alia, that such allegations

1

This Opinion draws on facts from the Second Amended Complaint (“SAC”, Dkt. #48),
the well-pled facts of which are taken as true for purposes of this motion. See Morrison
v. Nat’l Austl. Bank Ltd., 547 F.3d 167, 170 (2d Cir. 2008); see also Ashcroft v. Iqbal,
556 U.S. 662, 679 (2009). For convenience, Defendant’s moving brief is referred to as
“Def. Br.” (Dkt. #52); Plaintiff’s brief in opposition as “Pl. Opp.” (Dkt. #53); Defendant’s
reply as “Def. Reply” (Dkt. #55); Defendant’s supplemental brief as “Def. Suppl. Br.”
(Dkt. #59); and Plaintiff’s supplemental brief as “Pl. Suppl. Br.” (Dkt. #60).

2

“sufficiently stated a claim for violation of TILA’s APR disclosure requirements.”
160 F. Supp. 3d at 681-82. 2
B.

Procedural Background
Plaintiff filed the Complaint on December 1, 2014, and a First Amended

Complaint (the “FAC”) on March 27, 2015. (Dkt. #2, 12). In Schwartz I, issued
February 9, 2016, the Court partially converted Defendant’s motion to dismiss
into one for summary judgment, and awarded Defendant summary judgment
as to Plaintiff’s claims for breach of contract and for improperly imposing a late
fee and interest charge in violation of TILA. See 160 F. Supp. 3d at 676-79,
683-84. The Court denied, however, Defendant’s motion to dismiss Plaintiff’s
claim for failing properly to disclose penalty APRs in violation of TILA. 3 See id.
at 681-82. Following a February 23, 2016 conference, the Court stayed this
action pending the Supreme Court’s anticipated decision in Spokeo, which was
issued on May 16, 2016, and revised on May 24, 2016. Thereafter, the Court
held a conference on June 9, 2016, and set a schedule for the filing of the SAC
and of Defendant’s instant motion to dismiss for lack of subject matter
jurisdiction pursuant to Rule 12(b)(1). (Dkt. #45, 49).

2

Schwartz I concerned the First Amended Complaint (“FAC”), while the instant motion
concerns the Second Amended Complaint. Among other things, the second amendment
added allegations of penalty APR disclosure violations in monthly statements from
January 2014 through May 2014, rather than in May 2014 alone, and revised the
alleged penalty APR from 29.99% to 27.24%. Compare 160 F. Supp. 3d 666, 682
(S.D.N.Y. 2016) (upholding allegation that Defendant failed properly to disclose penalty
APR of 29.99% in May 2014 billing statement (citing FAC ¶¶ 19, 21, Ex. E)), with SAC
¶ 45 (alleging that Defendant failed properly to disclose penalty APR of 27.24% in
January 2014 through May 2014 billing statements). Neither change alters the present
analysis.

3

The Court also denied as moot Defendant’s motion in the alternative to strike the start
date for Plaintiff’s proposed classes. See Schwartz I, 160 F. Supp. 3d at 684.

3

Plaintiff filed the SAC on June 30, 2016 (Dkt. #48); Defendant its motion
to dismiss and supporting brief on July 18, 2016 (Dkt. #51-52); Plaintiff his
opposition brief and declaration on August 17, 2016 (Dkt. #53-54); and
Defendant its reply brief on August 31, 2016 (Dkt. #55). After briefing was
completed, the Second Circuit decided Strubel v. Comenity Bank, 842 F.3d 181
(2d Cir. 2016). This Court subsequently granted the parties leave to submit
supplemental letter briefs concerning the effect, if any, of Strubel on the
pending motion, which briefs the parties filed on December 16, 2016. (Dkt.
#59-60). 4
DISCUSSION
A.

Applicable Law
1.

Motions to Dismiss Under Federal Rule of Civil
Procedure 12(b)(1)

“[A] district court may properly dismiss a case for lack of subject matter
jurisdiction under Rule 12(b)(1) if it lacks the statutory or constitutional power
to adjudicate it.” Aurecchione v. Schoolman Transp. Sys., Inc., 426 F.3d 635,
638 (2d Cir. 2005) (internal quotation marks omitted); accord Sokolowski v.
Metro. Transp. Auth., 723 F.3d 187, 190 (2d Cir. 2013). A “plaintiff asserting
subject matter jurisdiction has the burden of proving by a preponderance of
the evidence that it exists.” Makarova v. United States, 201 F.3d 110, 113 (2d
Cir. 2000).

4

The parties have submitted additional notices of supplemental authority, as well. (See
Dkt. #56, 61-62).

4

In resolving a Rule 12(b)(1) motion to dismiss, “[t]he court must take all
facts alleged in the complaint as true and draw all reasonable inferences in
favor of [the] plaintiff, but 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 Austl. Bank Ltd., 547 F.3d
167, 170 (2d Cir. 2008) (internal citation and quotation marks omitted). Where
subject matter jurisdiction is contested, a district court may consider evidence
outside the pleadings, such as affidavits and exhibits. See 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). And where, as here, “the Rule 12(b)(1) motion is facial, i.e., based solely
on the allegations of the complaint or the complaint and exhibits attached to it
(collectively the “Pleading”) … [t]he task of the district court is to determine
whether the Pleading ‘allege[s] facts that affirmatively and plausibly suggest
that [the plaintiff] has standing to sue.’” Carter v. HealthPort Techs., LLC, 822
F.3d 47, 56 (2d Cir. 2016) (quoting Amidax Trading Grp. v. S.W.I.F.T. SCRL, 671
F.3d 140, 145 (2d Cir. 2011)).
2.

Truth in Lending Act and Regulation Z

Congress enacted TILA to “‘protect consumers against inaccurate and
unfair credit billing and credit card practices’ and promote ‘the informed use of
credit’ by ‘assuring a meaningful disclosure’ of credit terms.” Strubel, 842 F.3d
at 186 (quoting Vincent v. The Money Store, 736 F.3d 88, 105 (2d Cir. 2013));
see also 15 U.S.C. § 1601(a). The Act “promotes this goal largely by ‘imposing

5

mandatory disclosure requirements on those who extend credit to consumers
in the American market.’” Id. (quoting Mourning v. Family Publ’ns Serv., Inc.,
411 U.S. 356, 363 (1973)). TILA affords consumers a cause of action for, inter
alia, statutory damages against a creditor who fails to comply with certain
disclosure requirements. See 15 U.S.C. § 1640(a)(2) (providing for an
individual consumer in most such cases to be awarded statutory damages
between $500 and $5,000, and for a possible class award of up to $1,000,000);
see also id. § 1637(b)(12) (setting forth disclosure requirements related to late
payment deadlines and penalties).
As relevant here, the Act requires the creditor of an open-end consumer
credit card account “[to] transmit to the obligor [i.e., the credit card holder], for
each billing cycle at the end of which there is an outstanding balance in that
account or with respect to which a finance charge is imposed, a statement
setting forth” applicable disclosures. 15 U.S.C. § 1637(b). The TILA disclosure
provision concerning interest rate hikes for late payments provides:
If 1 or more late payments under an open end consumer
credit plan may result in an increase in the annual
percentage rate applicable to the account, the
statement required under subsection (b) with respect to
the account shall include conspicuous notice of such
fact, together with the applicable penalty annual
percentage rate, in close proximity to the disclosure
required under subparagraph (A) of the date on which
payment is due under the terms of the account.
Id. § 1637(b)(12)(B).
TILA’s implementing regulations, known as Regulation Z, clarify that a
creditor must disclose “on each periodic statement” “[t]he amount of any late

6

payment fee and any increased periodic rate(s) (expressed as an annual
percentage rate(s)) that may be imposed on the account as a result of a late
payment.” 12 C.F.R. § 1026.7(b)(11)(i)(B). 5 Regulation Z also requires that the
payment due date be “disclosed on the front of the first page of the periodic
statement,” and that “[t]he amount of the late payment fee and the annual
percentage rate(s) … be stated in close proximity to the due date.” Id.
§ 1026.7(b)(13).
In the SAC, Plaintiff alleges that Defendant’s billing statements from
January 2014 through May 2014 failed properly to disclose certain notices
required under 15 U.S.C. § 1637(b)(12)(B) and 12 C.F.R. § 1026.7(b)(11),
(b)(13). As noted, Schwartz I upheld substantially these allegations. See 160
F. Supp. 3d at 681-82.
3.

Standing

To satisfy the “irreducible constitutional minimum” of Article III standing,
a plaintiff bears the burden of establishing (i) “injury in fact,” (ii) a “causal
connection” between that injury and the complained-of conduct, and (iii) a
likelihood “that the injury will be redressed by a favorable decision.” Lujan v.
Defs. of Wildlife, 504 U.S. 555, 560-61 (1992) (internal quotation marks
omitted); accord Spokeo, 136 S. Ct. at 1547. Here, Defendant argues that
Plaintiff fails adequately to plead the first element — that he suffered an injury

5

“The Supreme Court has afforded Chevron deference to Regulation Z, insofar as it
reflects reasonable agency interpretations of ambiguities in … TILA.” Strubel v.
Comenity Bank, 842 F.3d 181, 187 (2d Cir. 2016) (citing Household Credit Servs., Inc. v.
Pfennig, 541 U.S. 232, 238-39 (2004)).

7

in fact. (Def. Br. 14-20). To demonstrate injury in fact, a plaintiff must show
he suffered (i) “an invasion of a legally protected interest,” (ii) “that is concrete
and particularized,” and (iii) “actual or imminent, not conjectural or
hypothetical.” Spokeo, 136 S. Ct. at 1547 (quoting Lujan, 504 U.S. at 560)
(internal quotation marks omitted).
Plaintiff has pled the invasion of a legally protected interest under TILA
that is actual and not conjectural or hypothetical, because the law requires
Defendant, as the creditor of an open-end consumer credit card account, to
provide Plaintiff, as the card holder, a periodic statement with a conforming
notice of certain penalty APR disclosures. See 15 U.S.C. § 1637(b)(12)(B); 12
C.F.R. § 1026.7(b)(11), (b)(13).
Plaintiff’s standing thus turns on whether he has pled adequately a
“concrete and particularized” injury to his TILA-conferred interest. To be
“particularized,” “the injury must affect the plaintiff in a personal and
individual way,” Lujan, 504 U.S. at 560 n.1, and to be “concrete,” the injury
“must be de facto; that is, it must actually exist,” Spokeo, 136 S. Ct. at 1548
(internal quotation marks and citation omitted); see also id. (“When we have
used the adjective ‘concrete,’ we have meant to convey the usual meaning of
the term — ‘real,’ and not ‘abstract.’”).
The Supreme Court recently elaborated upon the concreteness
requirement in Spokeo. There, the Court evaluated whether a consumer had
standing to bring a claim under the Fair Credit Reporting Act (“FCRA”), 15
U.S.C. §§ 1681-1681x, which “seeks to ensure ‘fair and accurate credit

8

reporting.’” Spokeo, 136 S. Ct. at 1545 (quoting § 1681(a)(1)). The plaintiff
alleged that the defendant consumer reporting agency violated the FCRA
because, inter alia, the agency had failed to follow reasonable procedures to
assure maximum possible accuracy of consumer reports and, consequently,
disseminated inaccurate information about the plaintiff. Id. at 1545-46 (citing
§ 1681e(b)). The Court ultimately vacated the Ninth Circuit’s finding of injury
in fact because that finding was based on an incomplete analysis that probed
the particularity of the plaintiff’s injury but not also its concreteness. Id. at
1550.
The Court reiterated that intangible injuries may be concrete, observing
that “Congress is well positioned to identify intangible harms that meet
minimum Article III requirements.” Spokeo, 136 S. Ct. at 1549; id. (“‘Congress
has the power to define injuries and articulate chains of causation that will give
rise to a case or controversy where none existed before.’” (quoting Lujan, 504
U.S. at 580 (Kennedy, J., concurring in part and concurring in judgment))). A
“risk of real harm” can thus also satisfy Article III’s concreteness requirement.
Id.
However, “a bare procedural violation, divorced from any concrete harm”
is insufficient; even in the context of a statutory violation, a concrete injury is
necessary. Spokeo, 136 S. Ct. at 1549. For example, the Court noted, an
FCRA procedural violation might not lead to the dissemination of inaccurate
information and, even if it did, the dissemination of inaccurate information
might not actually “cause harm or present any material risk of harm” to the

9

plaintiff. Id. at 1550. At the same time, “the violation of a procedural right
granted by statute can be sufficient in some circumstances to constitute injury
in fact. In other words, a plaintiff in such a case need not allege any additional
harm beyond the one Congress has identified.” Id. at 1549 (emphasis in
original).
B.

Analysis
Defendant argues that this Court lacks subject matter jurisdiction

because Plaintiff fails plausibly to plead the concrete and particularized injury
necessary to establish Article III standing. The Court agrees.
1.

Plaintiff Fails Plausibly to Plead a Concrete Injury

With respect to the concreteness requirement, Defendant principally
argues that the SAC identifies an injury that is not concrete. (See, e.g., Def.
Br. 17 (“The harm that Plaintiff alleges in his Complaint is not ‘concrete.’”)). It
is unclear whether Defendant also argues that the SAC is defective because its
allegations of injury are inadequately pled. The Court takes up the latter
inquiry in any event, consistent with its “independent obligation to consider the
presence or absence of subject matter jurisdiction sua sponte … [including]
whether a plaintiff has standing under Article III to pursue its claim.” Jennifer
Matthew Nursing & Rehab. Ctr. v. U.S. Dep’t of Health & Human Servs., 607
F.3d 951, 955 (2d Cir. 2010) (internal quotation marks and citations omitted);
see generally Chan Ah Wah v. HSBS Bank PLC, No. 13 Civ. 4789 (JPO), 2014
WL 2453304, at *1 (S.D.N.Y. June 2, 2014) (discussing jurisdictional pleading).
The Court finds that the SAC’s allegations of injury are conclusory and not

10

plausibly pled and, thus, does not reach the issue whether the type of harm
alleged is cognizable as a concrete injury under Spokeo and its nascent
progeny.
a.

Concrete Injury After Spokeo and Strubel

After briefing on the instant motion was completed, the Second Circuit
issued Strubel v. Comenity Bank, 842 F.3d 181 (2d Cir. 2016), its first decision
interpreting Spokeo. 6 The Second Circuit understood Spokeo to instruct that
“an alleged procedural violation can by itself manifest concrete injury where
Congress conferred the procedural right to protect a plaintiff’s concrete
interests and where the procedural violation presents a ‘risk of real harm’ to
that concrete interest.” Id. at 189 (quoting Spokeo, 136 S. Ct. at 1549).
Strubel’s application of Spokeo is instructive. The alleged TILA violations
in Strubel were based on the defendant’s failure to disclose that:
(i)
(ii)

“the bank was statutorily obliged not only to
acknowledge billing error claims within 30 days of
receipt but also to advise of any corrections made
during that time”;

(iii)

“certain identified rights pertained only to disputed
credit card purchases for which full payment had not
yet been made, and did not apply to cash advances or
checks that accessed credit card accounts”; and

(iv)

6

“cardholders wishing to stop payment on an automatic
payment plan had to satisfy certain obligations”;

“consumers dissatisfied with a credit card purchase had
to contact [the defendant] in writing or electronically.”

Prior to Strubel, the Second Circuit cited to Spokeo in three summary orders, none of
which engaged with Spokeo’s substantive holding. See Cruper-Weinmann v. Paris
Baguette Am., Inc., 653 F. App’x 81 (2d Cir. 2016); Bank v. All. Health Networks, LLC,
No. 15-4037-cv, 2016 WL 6128043 (2d Cir. Oct. 20, 2016); Sikhs for Justice Inc. v.
Kerry, No. 15-4018-cv, 2016 WL 5791561 (2d Cir. Oct. 4, 2016).

11

See 842 F.3d at 185-86. The Second Circuit held that alleged disclosure
failures related to (iii) disputed credit card purchases and (iv) proper modes of
communication established concrete injury because “each serves to protect a
consumer’s concrete interest in ‘avoid[ing] the uninformed use of credit,’ a core
object of the TILA.” Id. at 190 (quoting 15 U.S.C. § 1601(a)). Strubel
continued:
These procedures afford such protection by requiring a
creditor to notify a consumer, at the time he opens a
credit account, of how the consumer’s own actions can
affect his rights with respect to credit transactions. A
consumer who is not given notice of his obligations is
likely not to satisfy them and, thereby, unwittingly to
lose the very credit rights that the law affords him. For
that reason, a creditor’s alleged violation of each notice
requirement, by itself, gives rise to a “risk of real harm”
to the consumer’s concrete interest in the informed use
of credit.
Id. at 190-91; see also id. at 194 (“[A] consumer [need not] have occasion to use
challenged procedures to demonstrate concrete injury from defective notice.”).
By contrast, Strubel held that the plaintiff had failed to plead concrete
injury arising from the disclosure failures related to (i) automatic payment
plans and (ii) billing errors, because there was no showing that those failures
“created a ‘material risk of harm’ — or, indeed, any risk of harm at all — to [the
plaintiff’s] interest in avoiding the uninformed use of credit.” 842 F.3d at 19192; see also id. at 193.
As earlier noted, this Court does not determine whether the TILA
violation alleged here caused an injury that was concrete under Spokeo and

12

Strubel because the Court finds that the SAC’s bare assertions of injury are
conclusory and inadequately pled.
b.

The SAC’s Allegations of Concrete Injury

The SAC adequately specifies how Defendant’s periodic statements
violated TILA and Regulation Z. (See, e.g., SAC ¶ 44 (alleging that statements
“neither disclosed that [Plaintiff] was already subject to a penalty 27.24% or
any other penalty APR, nor made any [conforming] disclosure … that a failure
to make the minimum payment due by the due date could subject him to the
imposition of a penalty APR of 27.24%.”); id. at ¶ 45 (“Because [Plaintiff’s]
account was not already subject to a 27.24% penalty rate in the billing months
of January through May of 2014, the Bank’s failure to properly disclose within
the statements furnished for those months, of the potential imposition of a
penalty APR of 27.24% for a late payment was in violation of TILA and
Regulation Z.”)).
The problem for Plaintiff is that his specificity with respect to violation is
outpaced by his imprecision with respect to consequent injury. The sum total
of the SAC’s allegations of injury caused by Defendant’s violations is:


“Upon information and belief, the consumers of the
Class suffered a concrete harm and a material risk of
concrete harm because the Bank’s omissions or
misstatements impinged on their awareness of the cost
of credit.” (SAC ¶ 24).



“The failure to so furnish the amount of a potential
Penalty APR, as mandated by Congress and the Bureau,
serves to impinge on consumers’ awareness of the cost
of credit, constituting a concrete harm and creating a
material risk of concrete harm.” (Id. at ¶ 43).

13



“The Bank’s omission in the periodic statements of the
mandated Late Payment Warning Penalty APR
disclosure constituted a concrete harm and created a
material risk of concrete harm to [Plaintiff] and to other
credit consumers.” (Id. at ¶ 46).

“Where, as here, a case is at the pleading stage, the plaintiff must clearly
allege facts demonstrating each element” of standing. Spokeo, 136 S. Ct. at
1547 (internal quotation marks and citations omitted); see also Warth v. Seldin,
422 U.S. 490, 518 (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.”). Mere
incantations of “concrete harm” and “material risk of concrete harm,” or of the
purpose statement of TILA, are plainly insufficient to plead plausibly that
Plaintiff suffered a concrete injury. See Morrison, 547 F.3d at 170
(“[J]urisdiction must be shown affirmatively, and that showing is not made by
drawing from the pleadings inferences favorable to the party asserting it.”); see
also 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 quotation marks and
alterations omitted)). Accordingly, Plaintiff’s conclusory allegations fail to
demonstrate an injury in fact. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(“[B]are assertions ... are conclusory and not entitled to be assumed true.”).
Somewhat curiously, the detail concerning injury that is noticeably
missing from the SAC is present in Plaintiff’s opposition brief:
First, a Late Payment Warning that omits the disclosure
that a missed payment could even trigger any penalty
14

APR harms the consumer in a concrete way because it
subjects him to the risk of the harm — and in some
cases, the harm — of losing the standard APRs on his
future balances. Second, a Late Payment Warning that
omits the amount of the penalty APR prevents him from
evaluating the consequences of losing the currently
applicable APR. The consumer is harmed in a concrete
way because he is not fully informed about the account
terms, cannot successfully comparison shop, and could
easily end up paying more for the credit extended to him
than he had to. Consequently, the central purposes of
the Act are defeated.
(Pl. Opp. 14). It is also present in his supplemental brief:
[T]he disclosures of a possible penalty APR is quite
literally a “price tag” that was supposed to inform
[Plaintiff] of the costs of using his [Defendant-issued]
credit card in certain ways … [T]he incorrect “price tags”
attached to the various credit cards in his wallet could
very well have led him to unwisely choose between two
extensions of credit — that is, pay off one credit card
rather than another — based on incorrect information.
(Pl. Suppl. Br. 3).
To be sure, the injuries that Plaintiff allegedly suffered as a result of
Defendant’s penalty APR disclosure violations — as those injuries are described
in Plaintiff’s briefing — are not unlike the injuries that the Second Circuit
recognized as concrete in Strubel. See Strubel, 842 F.3d at 190-91. But,
critically, well-pled allegations describing Plaintiff’s injuries are found nowhere
in the SAC. Cf. Treiber v. Aspen Dental Mgmt., Inc., 635 F. App’x 1, 3 (2d Cir.
2016) (summary order) (“While plaintiffs’ assertion of price gouging might,
properly pled, demonstrate injury, because the allegation is wholly conclusory
and unsupported by any facts, it is insufficient to support standing.”). And
Plaintiff’s briefing cannot fill so gaping a hole in his pleading. See Jordan v.

15

Chase Manhattan Bank, 91 F. Supp. 3d 491, 500 (S.D.N.Y. 2015) (“It is
axiomatic that the Complaint cannot be amended by the briefs in opposition to
a motion to dismiss.” (internal quotation marks and alterations omitted)). The
Court therefore finds that Plaintiff fails to carry his burden to clearly allege
facts demonstrating a concrete injury to support standing. See Spokeo, 136 S.
Ct. at 1547.
2.

Plaintiff Fails Plausibly to Plead a Particularized Injury

Having found that the SAC fails plausibly to plead a concrete injury, the
Court need not reach the issue of particularization. See Spokeo, 136 S. Ct. at
1548 (stating that concreteness and particularization requirements are distinct
and must each be satisfied). The Court nonetheless briefly notes that the
pleading failure described above also infects Plaintiff’s allegations of a
particularized injury.
To be particularized, “the injury must affect the plaintiff in a personal
and individual way.” Lujan, 504 U.S. at 560 n.1 (emphasis added); see also
Valley Forge Christian Coll. v. Ams. United for Separation of Church & State, Inc.,
454 U.S. 464, 472 (1982) (“[T]he party who invokes the court’s authority [must]
show that he personally has suffered some actual or threatened injury as a
result of the putatively illegal conduct of the defendant.” (internal quotation
marks omitted)); Strubel, 842 F.3d at 191 n.10 (“[P]articularity requires that
one sustain a grievance distinct from the body politic, not a grievance unique
from that of any identifiable group of persons.” (internal citation omitted)).

16

While the SAC identifies alleged violations of Plaintiff’s procedural rights
under TILA (see, e.g., SAC ¶¶ 44-45), its allegations that Plaintiff personally
and individually suffered an injury as a result of those violations are
conclusory and inadequately pled (see id. at ¶ 46 (alleging that penalty APR
disclosure violation “constituted a concrete harm and created a material risk of
concrete harm to [Plaintiff] and to other credit consumers.”); Def. Reply 3
(“None of [the SAC’s] allegations describes any injury sustained by Plaintiff as a
result of the alleged omission of the Penalty APR in the Late Payment Warning
on the billing statement, and Plaintiff, therefore, fails to adequately plead
standing.”)). See Spokeo, 136 S. Ct. at 1547; Iqbal, 556 U.S. at 678.
Once again, Plaintiff’s opposition brief supplies non-conclusory
assertions, this time of particularized injury, that are nowhere found in
Plaintiff’s pleading. (See, e.g., Pl. Opp. 6 (“[Plaintiff] himself was at risk of a
tangible harm — losing the availability of the standard APRs and having to pay
more for credit in the way of penalty APRs — had he missed paying the
minimum due by the due date.”)). And, once again, the Court will not permit
Plaintiff to supply through his briefing what properly belonged in his pleading.
See Jordan, 91 F. Supp. 3d at 500. Consequently, the Court finds that Plaintiff
has failed to carry his burden to clearly allege facts demonstrating a
particularized injury to support standing. See Spokeo, 136 S. Ct. at 1547.
3.

Plaintiff Is Not Granted Leave to Amend But Dismissal of the
SAC Is Without Prejudice

Plaintiff has not sought leave to amend his complaint a third time and,
accordingly, the Court affords him no such opportunity. See Shields v.
17

Citytrust Bancorp, Inc., 25 F.3d 1124, 1132 (2d Cir. 1994) (“Although federal
courts are inclined to grant leave to amend following a dismissal order, we do
not deem it an abuse of the district court’s discretion to order a case closed
when leave to amend has not been sought.”); Chen v. Antel Commc’ns, LLC, 653
F. App’x 43, 44 (2d Cir. 2016) (summary order) (same); cf. Loreley Fin. (Jersey)
No. 3 Ltd. v. Wells Fargo Sec., LLC, 797 F.3d 160, 190 (2d Cir. 2015)
(“Generally, we will not deem a request for leave to amend insufficient on the
basis of form alone.”); cf. Ronzani v. Sanofi S.A., 899 F.2d 195, 198-99 (2d Cir.
1990) (holding that district court abused its discretion in failing to allow
repleading where the plaintiff had made no motion to replead but had noted in
his supplemental opposition brief his desire to replead if the motion were
granted).
Nonetheless, the Court’s dismissal of the SAC for lack of Article III
standing is without prejudice because the dismissal is one for lack of subject
matter jurisdiction, which deprives the Court of its ability to issue a prejudicial
dismissal. See Carter, 822 F.3d at 54; Hernandez v. Conriv Realty Assocs., 182
F.3d 121, 123 (2d Cir. 1999).
CONCLUSION
For the foregoing reasons, Defendant’s motion to dismiss is GRANTED.
The Clerk of Court is directed to terminate all pending motions, adjourn all
remaining dates, and close this case.

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SO ORDERED.
Dated:

January 9, 2017
New York, New York

__________________________________
KATHERINE POLK FAILLA
United States District Judge

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