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Gensmer v. Capital One N.A.

United States District Court, S.D. Alabama, Southern Division

December 17, 2018

MICHELLE GENSMER, Plaintiff,
v.
CAPITAL ONE N.A., Defendant.

          ORDER

          WILLIAM H. STEELE, UNITED STATES DISTRICT JUDGE.

         This matter comes before the Court on defendant Capital One, N.A.'s Motion to Dismiss (doc. 8). The Motion has been briefed and is now ripe.

         I. Background.

         Plaintiff, Michelle Gensmer, brought this putative class action against defendant, Capital One N.A., alleging a violation of the Truth-in-Lending Act, 15 U.S.C. §§ 1601 et seq. (“TILA”). According to the well-pleaded factual allegations of the Complaint (doc. 1), which are accepted as true on Rule 12(b)(6) review, Gensmer has two Capital One credit card accounts. (Doc. 1, ¶ 8.) At some point, Gensmer opted out of receiving paper account statements from Capital One, in favor of managing her accounts electronically via a mobile application known as the “Capital One Wallet App, ” which Capital One published, marketed and promoted to its customers. (Id., ¶¶ 7, 9.) By the terms of her agreements with Capital One, Gensmer's monthly credit card payments were due on or before the 25th of each month, failing which Capital One was entitled to assess a late fee. (Id. ¶ 10.)

         As alleged in the Complaint, Gensmer initiated payments on both Capital One accounts through her bank in August 2017. (Id., ¶ 11.)[1] On or about August 26, 2017, she utilized the Wallet App to confirm that her payments had been posted and to review her Capital One account status. (Id.) At that time, Gensmer observed that the Wallet App showed that Capital One had assessed late fees of $25.00 on both accounts on August 24, 2017, one day before her payment due deadline. (Id.) Upon further examination of her Capital One account information in the Wallet App, Gensmer discovered that it contained inaccurate information about transaction dates. In particular, the Wallet App showed purchases as having occurred one day earlier than the actual transactions. (Id., ¶ 12.) For example, a Starbucks charge of $3.83 was listed in the Wallet App as having been made on August 18, when in fact Gensmer made that purchase on August 19. (Id., ¶ 13.) Likewise, an Amazon charge of $14.99 was listed in the Wallet App as having been made on August 24, when in fact Gensmer made that purchase on August 25. (Id., ¶¶ 14-15.) The Complaint alleges that Capital One's “publication of false information regarding transactions and due dates through the Wallet App was a regular and uniform practice.” (Id., ¶ 16.)

         Based on these factual allegations, Gensmer brings a putative class claim against Capital One for violation of TILA. In her Complaint, Gensmer quotes portions of 15 U.S.C. § 1637(b), the TILA section requiring creditors with consumer accounts under an open end credit plan to transmit to the obligor periodic statements containing certain prescribed information. (Id., ¶ 31.) The Complaint frames Gensmer's TILA claim in the following terms: “Capital One has violated 15 U.S.C. § 1637(b), and Regulation Z § 1026.5(b) by failing to properly and accurately disclose to persons using its Wallet App the due dates of their payments and the dates of their transactions.” (Id., ¶ 32.) Gensmer further pleads that this practice injured her in a concrete way because “the incorrect display of the payment due date by the Wallet App creates a real risk of harm … by lulling consumers into the belief that they had another day to pay before they would incur a late fee. Also, the false information creates the impression that more time is allowed for avoiding a late fee than the contract actually provides.” (Id., ¶ 33.) On the strength of these allegations, Gensmer seeks the following forms of relief: statutory damages pursuant to 15 U.S.C. § 1640(a)(2)(A), actual damages, and costs and attorney's fees. (Id. at 10.)

         Capital One now seeks dismissal of the Complaint on multiple bases, two of which are of particular significance. First, Capital One moves for dismissal pursuant to Rule 12(b)(1), Fed.R.Civ.P., on the ground that Gensmer has failed to allege sufficient facts to show a concrete and particularized injury, as necessary to establish Article III standing. Second, Capital One moves for Rule 12(b)(6) dismissal, reasoning that Gensmer is ineligible for statutory damages and has alleged no facts showing that she suffered actual damages as a result of the alleged TILA violation. Each of these grounds for dismissal will be examined in turn.[2]

         II. Analysis.

         A. Article III Standing.

         As an initial matter, Capital One moves for dismissal for lack of jurisdiction on the ground that Gensmer cannot satisfy the requirements of Article III standing.[3] The three irreducible elements of Article III standing are that a plaintiff must have “(1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Spokeo, Inc. v. Robins, ___ U.S. ___, 136 S.Ct. 1540, 1547, 194 L.Ed.2d 635 (2016). “The plaintiff, as the party invoking federal jurisdiction, bears the burden of establishing these elements, ” which at the pleading stage necessitates that the plaintiff “clearly … allege facts demonstrating each element.” Id. (citations and internal quotation marks omitted).

         Capital One's standing argument focuses on the “injury in fact” element. “To establish injury in fact, a plaintiff must show that he or she suffered an invasion of a legally protected interest that is concrete and particularized and actual or imminent, not conjectural or hypothetical.” Spokeo, 136 S.Ct. at 1548 (citation and internal quotation marks omitted); see also Muransky v. Godiva Chocolatier, Inc., 905 F.3d 1200, 1207 (11th Cir. 2018) (“An injury in fact must be concrete, particularized, and actual or imminent.”). “A concrete injury must be de facto; that is, it must actually exist.” Spokeo, 136 S.Ct. at 1548 (internal quotation marks omitted). That said, the law is clear that “intangible injuries can nevertheless be concrete, ” and courts look to both history and the judgment of Congress to make a “concreteness” assessment in a particular case. Id. at 1549; see also Nicklaw v. Citimortgage, Inc., 839 F.3d 998, 1002 (11thCir. 2016) (“intangible injuries may satisfy the Article III requirement of concreteness”) (citation omitted); Muransky, 905 F.3d at 1211 (“The inquiry under Spokeo is whether the alleged harm bears a ‘close relationship' to one actionable at common law.”). However, “Congress' role in identifying and elevating intangible harms does not mean that a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right.” Spokeo, 136 S.Ct. at 1549; see also Hancock v. Urban Outfitters, Inc., 830 F.3d 511, 514 (D.C. Cir. 2016) (finding no concrete injury for Article III standing where plaintiffs complained that defendant violated D.C. statute by requesting their zip codes, inasmuch as plaintiffs did not plausibly allege “any concrete consequence” from the statutory violation, such as “invasion of privacy, increased risk of fraud or identity theft, or pecuniary or emotional injury”).[4]

         The key point is that, as a matter of settled law, a mere allegation that a defendant violated a legal obligation imposed by federal statute does not automatically give rise to Article III standing, in the absence of a showing of some harm or risk of harm to the plaintiff caused by that violation. See Spokeo, 136 S.Ct. at 1549 (“Article III standing requires a concrete injury even in the context of a statutory violation. For that reason, Robins could not, for example, allege a bare procedural violation, divorced from any concrete harm, and satisfy the injury-in-fact requirement of Article III.”); Nicklaw, 839 F.3d at 1003 (“[T]he requirement of concreteness under Article III is not satisfied every time a statute creates a legal obligation and grants a private right of action for its violation. … A plaintiff must suffer some harm or risk of harm from the statutory violation to invoke the jurisdiction of a federal court.”) (citation omitted); Strubel v. Comenity Bank, 842 F.3d 181, 190 (2nd Cir. 2016) (“even where Congress has accorded procedural rights to protect a concrete interest, a plaintiff may fail to demonstrate concrete injury where violation of the procedure at issue presents no material risk of harm to that underlying interest”).[5]

         Again, Gensmer's Complaint alleges that Capital One violated TILA by “publish[ing] through its Wallet App materially false information regarding the dates of credit transactions and the dates on which late fees were incurred.” (Doc. 1, at 1.) According to the Complaint, this violation was manifested through listed transaction dates that were one day earlier than the actual transactions (i.e., a Starbucks purchase on August 19 was inaccurately reflected in the Wallet App as having occurred on August 18) and late fee charges listed as having been assessed one day earlier than they actually were (i.e., a $25 late fee assessed on August 25 appeared incorrectly in the Wallet App as having been charged on August 24).

         The critical concreteness inquiry is whether Gensmer has shown some real harm or risk of real harm to her by virtue of those inaccuracies. The Court answers this question in the negative. In her Complaint, Gensmer alleges that she has been injured by the complained-of practices “in a concrete way because the incorrect display of the payment due date by the Wallet App creates a real risk of harm in by [sic] lulling consumers into the belief that they had another day to pay before they would incur a late fee. Also, the false information creates the impression that more time is allowed for avoiding a late fee than the contract actually provides.” (Doc. 1, ¶ 33.) These allegations do not satisfy the Article III concreteness requirement for two distinct reasons. First, the Complaint nowhere alleges an “incorrect display of the payment due date” in the Wallet App or anywhere else. Gensmer does not identify anything in the Wallet App display indicating that any future month's ...


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