NEAL v. CAPITAL ONE BANK USA NA et al
Filing
6
MEMORANDUM OPINION, ORDER, AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE signed by MAG/JUDGE L. PATRICK AULD on 12/17/2015. Plaintiff's Amended Complaint fails to state a claim. IT IS THEREFORE ORDERED that Plaintiff' s Application to Proceed In Forma Pauperis (Docket Entry 1 ) is granted for the limited purpose of allowing the Court to consider a recommendation of dismissal. RECOMMENDED that this action be dismissed for failure to state a claim pursuant to 28 U.S.C. § 1915(e)(2)(B).(Taylor, Abby)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
CRYSTAL E. NEAL,
Plaintiff,
v.
CAPITAL ONE BANK USA NA,
CAPITAL ONE BANK SERVICES,
TRANSUNION, EQUIFAX, and
EXPERIAN
Defendants.
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)
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1:15-CV-837
MEMORANDUM OPINION, ORDER, AND RECOMMENDATION
OF UNITED STATES MAGISTRATE JUDGE
This
case
comes
before
the
undersigned
United
States
Magistrate Judge on Plaintiff’s Application for Leave to Proceed In
Forma Pauperis (the “IFP Application”) (Docket Entry 1).
For the
reasons that follow, pauper status will be granted solely for the
purpose
of
recommending
dismissal
pursuant
to
28
U.S.C.
§ 1915(e)(2)(B).
LEGAL BACKGROUND
“The federal in forma pauperis statute, first enacted in 1892
[and now codified at 28 U.S.C. § 1915], is intended to guarantee
that no citizen shall be denied access to the courts ‘solely
because his poverty makes it impossible for him to pay or secure
the costs.’”
Nasim v. Warden, Md. House of Corr., 64 F.3d 951, 953
(4th Cir. 1995) (en banc) (quoting Adkins v. E.I. DuPont de Nemours
& Co., 335 U.S. 331, 342 (1948)).
“Dispensing with filing fees,
however, [is] not without its problems.
the statute
d[o]
not face
ordinary litigants.
the
same
Parties proceeding under
financial
constraints
as
In particular, litigants suing in forma
pauperis d[o] not need to balance the prospects of successfully
obtaining relief against the administrative costs of bringing
suit.”
Nagy v. Federal Med. Ctr. Butner, 376 F.3d 252, 255 (4th
Cir. 2004). To address this concern, the in forma pauperis statute
obliges “the [C]ourt . . . [to] dismiss the case at any time if
[it] determines . . . the action . . . fails to state a claim on
which relief may be granted.”
28 U.S.C. § 1915(e)(2).
A plaintiff “fails to state a claim on which relief may be
granted,”
28
U.S.C.
§
1915(e)(2)(B)(ii),
by
not
alleging
“sufficient factual matter, accepted as true, to ‘state a claim to
relief that is plausible on its face,’” Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,
570 (2007)).
“Where a complaint pleads facts that are ‘merely
consistent with’ a defendant’s liability, it ‘stops short of the
line
between
possibility
and
plausibility
of
“entitlement
to
relief.”’” Id. (quoting Twombly, 550 U.S. at 557). The applicable
standard,
thus,
“demands
more
than
the-defendant-unlawfully-harmed-me accusation.”
an
Id.
unadorned,
Moreover,
“the tenet that a court must accept as true all of the allegations
contained in a complaint is inapplicable to legal conclusions.
2
Threadbare recitals of the elements of a cause of action, supported
by mere conclusory statements, do not suffice.”
Id.1
DISCUSSION
A. The Complaint
On October 7, 2015, Plaintiff filed a pro se Complaint (Docket
Entry 2), along with her IFP Application (Docket Entry 1).
The
Complaint seeks relief under the Fair Debt Collection Practices Act
(“FDCPA”), 15 U.S.C. § 1692 et seq., and the Fair Credit Reporting
Act (“FCRA”), 15 U.S.C. § 1681 et seq.
(Docket Entry 2 at 1; see
also id. at 3–7 (setting forth two causes of action under FCRA and
one under FDCPA).)
It also purports to assert a state-law claim
for Defendants’ alleged violation of the “North Carolina Consumer
Collection Practices Act.”
In
sum,
the
(See id. at 4–5.)
Complaint
alleges
that,
in
September
2014,
Plaintiff pulled her credit report, which indicated a derogatory
account with Defendant Capital One Bank USA NA (hereinafter,
“Capital One”).
(Id. at 2.)
The Complaint further alleges that
Plaintiff filed a dispute letter with three credit reporting
1
Although the Supreme Court has reiterated that “[a] document
filed pro se is to be liberally construed and a pro se complaint,
however inartfully pleaded, must be held to less stringent
standards than formal pleadings drafted by lawyers,” Erickson v.
Pardus, 551 U.S. 89, 94 (2007) (internal citations and quotation
marks omitted), the United States Court of Appeals for the Fourth
Circuit has “not read Erickson to undermine Twombly’s requirement
that a pleading contain more than labels and conclusions,”
Giarratano v. Johnson, 521 F.3d 298, 304 n.5 (4th Cir. 2008)
(internal quotation marks omitted) (dismissing pro se complaint).
3
agencies.
(Id.)
According to the Complaint, a year later,
Plaintiff again pulled her credit report and discovered that the
derogatory account still appeared.
(Id.)
Finally, the Complaint
alleges in conclusory fashion that Defendants “have been attempting
to collect on what they now claim to be a balance of approximately
$2,300.”
(Id.)
Upon review, the undersigned Magistrate Judge identified a
number
of
Complaint,
deficiencies
including
in
the
Plaintiff’s
lack
of
IFP
factual
Application
and
information
to
substantiate Plaintiff’s claims. In an attempt to determine, inter
alia, if Plaintiff could provide factual matter sufficient to
support
an
inference
that
Capital
One
qualified
as
a
“debt
collector” under the FDCPA or, alternatively, that Defendants
“willfully violated” the FCRA and/or that actual damages resulted
from Defendants’ negligent violations of the FCRA, the undersigned
Magistrate Judge set this case for a hearing.
(See Text Order
dated Oct. 9, 2015.)
At said hearing, Plaintiff indicated that she prepared the
Complaint by using a template and case that she found online, and
that she could provide additional factual information to support
her claims.2
The undersigned Magistrate Judge then reviewed the
2
The Clerk’s Office recorded the hearing.
dated Oct. 26, 2015.)
4
(See Minute Entry
Complaint with Plaintiff to afford her an opportunity to address
its deficiencies.
During this review:
1. Plaintiff conceded that she did not have any basis for
alleging that Defendants are “not authorized to do business in
North Carolina” (Docket Entry 2, ¶¶ 6-7).
2. Plaintiff conceded that she did not have any basis for
alleging that “Capital One [] is an unknown entity” (id., ¶ 6) and
that this statement contradicts her assertion that Capital One is
a Delaware Corporation (id., ¶ 7).
3. Plaintiff conceded that Capital One Bank USA NA and Capital
One Bank Services are the same entity.
4. Plaintiff conceded that the paragraphs numbered 30, 34, 38,
and 42 in the Complaint all state that “[p]aragraphs 1 through 29
are realleged as though fully set forth herein” (id., ¶¶ 30, 34,
38, 42), but, in fact, 13 paragraphs (at most) precede Paragraph 30
(see id. at 1-3) and the Complaint contains no paragraphs numbered
9 through 29 (see id. at 1-7).
5. Plaintiff informed the Court that she twice “pulled [her]
credit report” (id. at 2), but admitted that her credit report only
contained information from Equifax and Transunion, not Experian.
6. Plaintiff admitted that, although the Complaint directs the
Court to a letter she received from Capital One by stating,
“Attention Exhibit: A” (id.), she failed to attach the letter, or
5
any other document titled “Exhibit: A,” to her Complaint (see id.
at 1-7).
7. Plaintiff informed the Court that Capital One has not
attempted to collect the debt since June 19, 2011, but asserted
that Capital One did attempt to collect the debt at some point
prior to June 19, 2011, a circumstance which Plaintiff conceded the
Complaint did not describe.
8.
Plaintiff
conceded
that
a
deficiency
exists
in
the
Complaint where she states, “Neither Defendant has ever provided to
Plaintiff an accounting of the alleged debt nor any contract or
other legal justification for attempting to collect it” (id. at 2),
because
the
Complaint
does
not
specify
which
of
the
four
Defendant(s) to whom she refers (see id.).
9. Plaintiff conceded that paragraphs numbered 33(d) and 33(e)
(id. at 3) have no application to this case.
10. Plaintiff conceded that she used an online template and
legal case to draft her claim under the purported “North Carolina
Consumer Collection Practices Act” (id. at 4-5), and that the
template actually listed a Florida statute, see Consumer Collection
Practices, Fla. Stat. § 559.55, et al.
Plaintiff further admitted
that she simply substituted “North Carolina” for “Florida” in
asserting this claim.
The undersigned Magistrate Judge thereafter informed Plaintiff
that she could amend her complaint to address the deficiencies
6
discussed, and that, if she did, she should allege factual matter
regarding Defendants’ purported “willful” violations of the FCRA,
and, further, that she should allege factual matter regarding the
actual damages she incurred as a result of Defendants’ purported
“negligent” violations of the FCRA, including details about any
credit denials and how those denials resulted in financial losses.
B. The Amended Complaint
On November 5, 2015, Plaintiff filed her Amended Complaint,
which
fails
to
correct
several
of
the
original
Complaint’s
deficiencies and fails to provide enough factual information to
support her FCRA and FDCPA claims.
(See Docket Entry 5.)
Although
the Amended Complaint (1) no longer alleges that Defendants are
“not authorized to do business in North Carolina,” (2) only names
one Capital One entity as a Defendant, (3) attempts to correct the
erroneous paragraph numbering scheme by omitting paragraph numbers
after paragraph 8, and (4) omits Plaintiff’s purported North
Carolina state law claim (see id. at 1-6), the Amended Complaint,
nevertheless, still fails as a matter of law for several reasons:
First, the Amended Complaint names Experian as a defendant
(id. at 1), even though Plaintiff admitted that the credit reports
she
reviewed
only
contained
information
Transunion.
7
from
Equifax
and
Second, the Amended Complaint again directs the Court to
“Attention Exhibit: A” (id. at 2), but does not contain any
attached exhibit (see id. at 1-7).
Third, the Amended Complaint fails to correct the deficiency
that
“[n]either
Defendant
has
ever
provided
to
Plaintiff
an
accounting of the alleged debt nor any contract or other legal
justification for attempting to collect it,” because the Amended
Complaint (like the original Complaint) does not identify any of
the four Defendants.
(Compare id. at 2, with Docket Entry 2 at 2).
Fourth, although Plaintiff conceded that paragraphs numbered
33(d) and 33(e) in the original Complaint have no application to
this case, the Amended Complaint includes these same allegations
(Docket Entry 5 at 3).
With
regard to
the
lack
of
factual
matter,
the
Amended
Complaint purports to assert two causes of action under the FCRA
and one under the FDCPA (see id. at 3-6), but does not provide
enough facts to sufficiently allege any of those claims.
For
instance, at the hearing, Plaintiff stated that two businesses
denied her employment after those businesses ran her credit report,
causing monetary damages from her inability to get a job.
Amended
Complaint
does
not,
however,
provide
any
The
factual
allegations regarding employment denials (see id. at 1-6) and
specifically
omits
Plaintiff’s
original
assertions
that
she
suffered “financial loss” or “loss of use of funds” as a result of
8
Defendants’ actions (compare Docket Entry 2 at 3, with Docket Entry
5 at 1-6).
Additionally, at the hearing, Plaintiff stated that
Capital One attempted to collect on the debt prior to sending her
a letter on or about June 19, 2011, but the Amended Complaint again
fails to describe any collection activity (see Docket Entry 5 at 16).
Under these circumstances, the undersigned Magistrate Judge
recommends dismissal of this case under section 1915(e)(2)(B) for
failure to state a claim.
See, e.g., Iqbal, 556 U.S. at 678
(mandating that plaintiffs provide “factual matter” to support
claims and ruling “legal conclusions” and “conclusory statements”
insufficient).
1. FCRA Claims
Plaintiff’s first FCRA claim alleges Defendants “willfully
violated the FCRA” by committing one or more of four proscribed
actions.
Amended
(Docket Entry 5 at 4-5.)
Complaint
Defendants
do
allegedly
not
The factual allegations in the
support
failed
to
this
inform
claim.
the
For
consumer
example,
reporting
agencies that Plaintiff disputed the reported information. (Id. at
4.)
This provision could only apply to Capital One, because the
other three Defendants are “consumer reporting agencies,” and
further, because Capital One is the only Defendant that Plaintiff
alleges
provided
any
information
to
the
consumer
reporting
agencies. (See id. at 2.) However, Plaintiff alleges that Capital
One
“purged
[her
disputed
debt]
9
from
[its]
system
and
also
instructed all major consumer reporting agencies to delete any
reference of [her] account,” thereby complying with this FCRA
provision.
(Id.)
Next, Defendants allegedly committed willful violations of the
FCRA by “negligently failing to conduct an investigation with
respect to the disputed information” regarding her debt.
(Id. at
4.) Only Capital One could bear liability under this provision, as
Plaintiff alleges only that Capital One received notice of her
disputed debt from a consumer reporting agency (id. at 2), such
that it had a duty to conduct an investigation of the disputed
information under this provision, see 15 U.S.C. § 1681s-2(b)(1)(A)
(“After receiving notice pursuant to section 1681i(a)(2) of this
title of a dispute with regard to the completeness or accuracy of
any information provided by a person to a consumer reporting
agency, the person shall conduct an investigation with respect to
the disputed information.”); 15 U.S.C. § 1681(i)(a)(2)(A) (“Before
the expiration of the 5-business-day period beginning on the date
on which a consumer reporting agency receives notice of a dispute
from any consumer or a reseller . . ., the agency shall provide
notification of the dispute to any person who provided any item of
information in dispute.”). Moreover, the Amended Complaint alleges
a willful violation of this FCRA provision, without the required
factual allegations detailing how Capital One committed willful
violations.
See Boston v. Client Servs. of MO, Inc., No. 3:13-CV-
10
184, 2013 WL 5925902, at *3 (W.D.N.C. Nov. 1, 2013) (granting the
defendant’s motion to dismiss where the plaintiff did not allege
any facts to support her assertion that the defendant willfully
violated the FCRA); see also Dalton v. Capital Associated Indus.,
Inc., 257 F.3d 409, 418 (4th Cir. 2001) (observing that allegations
of willful violations of the FCRA require the plaintiff to “show
that the defendant knowingly and intentionally committed an act in
conscious disregard for the rights of the consumer”).
Further, Defendants allegedly committed willful violations of
the FCRA by, “after receiving notice . . . of a dispute with regard
to the completeness or accuracy of any information provided by a
person to a consumer reporting agency, failing to review all
relevant information provided by the consumer reporting agencies.”
(Docket Entry 5 at 4.)
Among Defendants, only Capital One could
face liability under this provision, as the other Defendants are
all consumer reporting agencies that allegedly provided Capital One
with information regarding Plaintiff’s disputed debt.
2.)
(See id. at
Moreover, Plaintiff alleges that Capital One complied with
this provision by notifying her that it had reviewed information
regarding the disputed debt and purged it from its system.
(See
id.)
Lastly, Defendants allegedly committed willful violations of
the FCRA by, “after receiving notice . . . of a dispute with regard
to the completeness or accuracy of any information provided by a
11
person to a consumer reporting agency, failing to direct such
consumer reporting agencies to delete inaccurate information about
[P]laintiff
pertaining
to
the
account.”
(Id.
at
5.)
This
provision could only apply to Capital One, the only Defendant that
is not a consumer reporting agency.
Again, however, Plaintiff
alleges
with
that
Capital
One
complied
this
provision
by
“instruct[ing] all major consumer reporting agencies to delete any
references of [her] account.”
(Id. at 2.)
Plaintiff’s second FCRA claim alleges that Defendants violated
the same four provisions described above by acting “negligently,”
instead of “willfully.” (Compare Docket Entry 5 at 4-5 (first FCRA
claim alleging willful violations), with id. at 5-6 (second FCRA
claim alleging negligent violations).)
Again, for the reasons
noted above, Plaintiff fails to provide sufficient factual matter
that any violation of the FCRA (willful or negligent) occurred.
(See Docket Entry 5 at 1-6.)
Amended
statutory
Complaint
contains
violation,
it
Even assuming, arguendo, that the
sufficient
does
not
facts
provide
establishing
sufficient
a
factual
allegations regarding the willfulness of any violation or the
“actual damages” Plaintiff allegedly suffered as a result of
Defendants’ negligent actions, as required. (See id.)3
3
The Amended Complaint alleges, in conclusory fashion, that
Plaintiff incurred “credit denials, credit delays, inability to
apply for credit, inability to qualify for specific employment,
mental anguish, humiliation, a loss of reputation, and expenditures
for fees and costs.” (Docket Entry 5 at 3.) Notably, Plaintiff
12
Under
these
circumstances,
the
Court
should
dismiss
Plaintiff’s FCRA claims under 28 U.S.C. § 1915(e)(2)(B)(ii).
See
Golden v. NCO Fin. Sys., No. 1:12CV1097, 2013 WL 4519774, at *2
(M.D.N.C. Aug. 26, 2013) (unpublished) (recommending dismissal of
FCRA claims where complaint “contain[ed] only a bald assertion that
[the d]efendant acted willfully and that [the p]laintiff suffered
actual damages”), recommendation adopted, slip op. (M.D.N.C. Sept.
13, 2013) (Schroeder, J.); James v. Paragon Revenue Grp., No.
1:12CV1371,
2013
WL
3243553,
at
*3
(M.D.N.C.
June
26,
2013)
(unpublished) (same), recommendation adopted, slip op. (M.D.N.C.
July 23, 2013) (Schroeder, J.); King v. Equable Ascent Fin., LLC,
No. 1:12CV443, 2013 WL 2474377, at *4 (M.D.N.C. June 10, 2013)
(unpublished) (Eagles, J.) (same).
2. FDCPA Claim
Turning to Plaintiff’s FDCPA cause of action against Capital
One (see Docket Entry 5 at 3-4), this claim fails for two main
reasons.
First, Plaintiff alleges that “Defendant Capital One []
is a debt collector within the meaning of the FDCPA, 15 U.S.C. §
1692a(6)” (Docket Entry 5 at 3), but fails to explain how Capital
does not allege that Defendants’ actions “affected [her] ability to
get a specific loan or line of credit or interfered with [her]
ability to . . . get a specific job,” King v. Equitable Ascent
Fin., LLC, No. 1:12CV443, 2013 WL 2474377, at *4 (M.D.N.C. June 10,
2013) (unpublished) (Eagles, J.) (dismissing FCRA cause of action
based on the defendant’s negligent conduct because the plaintiff
failed to “allege[] any facts to support his claim for actual
damages”). (See Docket Entry 5 at 3.)
13
One falls under the statutory definition of “debt collector” (see
id.).
The FDCPA defines a debt collector as one who “regularly
collects or attempts to collect . . . debts owed or due or asserted
to be owed or due another.”
15 U.S.C. § 1692a(6).
“Where the holder of a debt attempts to collect its own
accounts, as [Plaintiff alleges that Capital One] has done here, it
is not a debt collector under the FDCPA.”
1:14CV495,
2015
WL
2374614,
at
*6
Bagwell v. Dimon, No.
(M.D.N.C.
May
18,
2015)
(unpublished) (first citing Wilson v. Draper & Goldberg, P.L.L.C.,
443 F.3d 373, 379 n.2 (4th Cir. 2006) (“[A] company’s own efforts
to collect overdue payments from its own delinquent clients would
not ordinarily make it a ‘debt collector’ under the [FDCPA], which
specifically refers to those who collect debts ‘owed or due or
asserted
to
be
owed
or
due
another.’”
(quoting
15
U.S.C.
§
1692a(6)); and then citing Scott v. Wells Fargo Home Mortg. Inc.,
326
F.
Supp.
well-settled
.
2d
.
709,
.
718
that
(E.D.
Va.
creditors,
2003)
(“[T]he
mortgagors,
and
law
is
mortgage
servicing companies are not debt collectors and are statutorily
exempt from liability under the FDCPA.”)); see also Kirby v. SCA
Collections, No. 1:13CV1048, 2014 WL 1225317, at *4 (M.D.N.C. Mar.
25, 2014) (unpublished) (first citing Horton v. HSBC Bank, No.
1:11CV3210TWT, 2013 WL 2452273, at *8 (N.D. Ga. June 5, 2013)
(unpublished) (“Reciting the statutory definition without offering
any facts in support is insufficient to plausibly allege that
14
Defendants qualify as debt collectors under the FDCPA.
On this
basis alone, Plaintiff’s FDCPA claim should be dismissed.”); and
then citing Garcia v. Jenkins/Babb LLP, No. 3:11–CV–3171–N–BH, 2012
WL
3847362,
at
*7
(N.D.
Tex.
July
31,
2012)
(unpublished)
(“Plaintiffs’ description of the Jenkins/Babb Defendants as ‘debt
collectors’ is a legal conclusion which courts are not bound to
accept as true. . . . The factual allegations in the amended
complaint
are
insufficient
to
establish
that
any
of
the
Jenkins/Babb Defendants were either engaged ‘in any business the
principal purpose of which is the collection of any debts’ or that
they ‘regularly collect or attempt to collect debts.’ This failure
is fatal to the claim against them under Iqbal.”
(internal
ellipses omitted))), recommendation adopted, slip op. (M.D.N.C.
Apr. 14, 2014) (Schroeder, J.).
Second,
the
Amended
Complaint
alleges
that
Capital
One
informed Plaintiff that it had purged her account from its system,
instructed all major consumer reporting agencies to delete any
references to her account, and now, can find no record of her
account.
(See Docket Entry 5 at 2.)
These allegations do not
sufficiently support a finding that Capital One violated any of the
cited
FDCPA
provisions,
such
as
“falsely
representing
the
character, amount, or legal status of any debt,” “communicating or
threatening to communicate to any person credit information which
is known or which should be known to be false,” “use of any false
15
representation or deceptive means to collect or attempt to collect
any debt or to obtain information concerning a consumer,” “failure
to disclose in the initial written communication . . . that the
debt collector is attempting to collect a debt,” “collection of any
amount . . . unless such amount is expressly authorized by the
agreement creating the debt or permitted by law,” and failing to
send timely written notice of rights to dispute the debt (id. at 34).
In sum, the FDCPA claim in the Amended Complaint fails as a
matter of law.
See Nowlin v. Capital One, No. 1:13CV1108, 2014 WL
795771, at *3 (M.D.N.C. Feb. 27, 2014) (unpublished) (recommending
dismissal of FDCPA claim because the only non-conclusory factual
allegation in the complaint did not support finding that the
defendant
violated
any
of
the
cited
FDCPA
provisions),
recommendation adopted, slip op. (M.D.N.C. Mar. 26, 2014) (Eagles,
J.).
CONCLUSION
Plaintiff’s Amended Complaint fails to state a claim.
IT
IS
THEREFORE
ORDERED
that
Plaintiff’s
Application
to
Proceed In Forma Pauperis (Docket Entry 1) is granted for the
limited purpose of allowing the Court to consider a recommendation
of dismissal.
16
IT IS RECOMMENDED that this action be dismissed for failure to
state a claim pursuant to 28 U.S.C. § 1915(e)(2)(B).
/s/ L. Patrick Auld
L. Patrick Auld
United States Magistrate Judge
December 17, 2015
17
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