Browner v. Am. Eagle Bank

• Decision Date: 08 January 2019
• Docket Number: Case No. 18 CV 1494
• Parties: Terrace BROWNER, Plaintiff, v. AMERICAN EAGLE BANK, Defendant.
• Court: U.S. District Court — Northern District of Illinois

355 F.Supp.3d 731

Terrace BROWNER, Plaintiff,

v.AMERICAN EAGLE BANK, Defendant.

Case No. 18 CV 1494

United States District Court, N.D. Illinois, Eastern Division.

Signed January 8, 2019

Larry Paul Smith, SmithMarco, P.C., Chicago, IL, David M. Marco, SmithMarco, P.C., Bradenton, FL, for Plaintiff.

William J. Serritella, Jr., Kristine M. Kolky, Rachel L. Schaller, Taft Stettinius & Hollister LLP, Chicago, IL, for Defendant.

MEMORANDUM OPINION AND ORDER

Joan B. Gottschall, United States District JudgePlaintiff Terrace Browner ("Browner") has brought a one count complaint, ECF No. 1, alleging that defendant, American Eagle Bank ("defendant"), illegally accessed her individual and personal credit file from Trans Union, a "consumer reporting agency" as defined in 15 U.S.C. § 1681a(f), in violation of 15 U.S.C. § 1681b (hereinafter the Fair Credit Reporting Act or FCRA). Plaintiff alleges that at the time, she had no personal business relationship with defendant; defendant had no information in its possession to suggest that plaintiff owed defendant a debt or was responsible to pay a debt to defendant; and plaintiff did not consent to defendant's accessing her individual and personal credit report: in short, that defendant had no legitimate business reason for accessing the report and impermissibly obtained information relating to plaintiff's personal and individual credit accounts including plaintiff's payment history, individual credit accounts, and credit worthiness. See Compl. ¶¶ 9–26. By accessing plaintiff's credit report, defendant obtained personal information about plaintiff including her current and past addresses, birthdate, employment history, and telephone numbers. Compl. ¶ 25. Plaintiff alleges that unknown employees, representatives, and/or agents of defendant viewed this information, which she asserts constituted a publication of her personal information. Compl. ¶ 26. Moreover, plaintiff alleges that defendant's accessing of plaintiff's credit report will be displayed on plaintiff's credit report for two years. Compl. ¶ 26. Plaintiff alleges that she has suffered "financial and dignitary harm arising from the [d]efendant's review of her personal information and her credit information and an injury to her credit rating and reputation." Compl. ¶ 29.

Citing Spokeo, Inc. v. Robins , ––– U.S. ––––, 136 S.Ct. 1540, 1549, 194 L.Ed.2d 635 (2016), defendant moves to dismiss, arguing that plaintiff lacks Article III standing, specifically, injury in fact. Defendant argues that plaintiff alleges a bare procedural violation which Spokeo makes plain does not establish Article III standing. Defendant asserts that while plaintiff alleges an unspecified "injury to her credit rating and reputation," this allegation is totally conclusory and must be disregarded. Mem. Supp. Mot. to Dismiss 2, ECF No. 11 (quoting Compl. ¶ 29). For the reasons discussed below, the court concludes that the invasion of privacy of which plaintiff complains is a sufficient injury in fact to establish Article III standing and denies the motion to dismiss.

The " ‘irreducible constitutional minimum’ of standing" consists of three elements. Spokeo , 136 S.Ct. at 1547 (quoting Lujan v. Defenders of Wildlife , 504 U.S. 555, 560–61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) ). They are injury in fact, which is at issue here, causation, and redressability. Id. (citations omitted). The burden to establish each element is on the plaintiff. Id. (citing FW/PBS, Inc. v. Dallas , 493 U.S. 215, 231, 110 S.Ct. 596, 107 L.Ed.2d 603 (1990) ). "To meet this burden at the pleading stage, ‘the plaintiffs' complaint must contain sufficient factual allegations of an injury resulting from the defendants' conduct, accepted as true, to state a claim for relief that is plausible on its face.’ " Moore v. Wells Fargo Bank, N.A. , 908 F.3d 1050, 1057 (7th Cir. 2018) (quoting Diedrich v. Ocwen Loan Servicing, LLC , 839 F.3d 583, 588 (7th Cir. 2016) ). The Seventh Circuit described injury in fact in Groshek v. Time Warner Cable, Inc. , 865 F.3d 884, 886 (7th Cir. 2017) :

To establish injury in fact, Groshek must show that he "suffered ‘an invasion of a legally protected interest’ that is ‘concrete and particularized’ and ‘actual or imminent, not conjectural or hypothetical.’ " To be "concrete," an injury "must actually exist;" it must be "real," not "abstract," but not necessarily tangible. In determining whether an alleged intangible harm constitutes a concrete injury in fact, both history and Congress' judgment are important.

(citations omitted). As explained in Spokeo :

Because the doctrine of standing derives from the case-or-controversy requirement, and because that requirement in turn is grounded in historical practice, it is instructive to consider whether an alleged intangible harm has a close relationship to a harm that has traditionally been regarded as providing a basis for a lawsuit in English or American courts.

136 S.Ct. at 1549.

In addition to considering the status of the intangible injury alleged historically, "because Congress is well positioned to identify intangible harms that meet minimum Article III requirements, its judgment is also instructive and important." Id. The Court in Spokeo noted explicitly that "Congress may ‘elevat[e] to the status of legally cognizable injuries concrete, de facto injuries that were previously inadequate in law.’ " Id. (quoting from Lujan , 504 U.S. at 578, 112 S.Ct. 2130 ). Moreover, Congress has the power to define injuries and articulate chains of causation giving rise to cases and controversies that did not previously exist. Id. But the fact that a statute grants a person a statutory right and the right to sue does not necessarily mean that Article III is satisfied. "Article III standing requires a concrete injury even in the context of a statutory violation." Id. "[A] bare procedural violation, divorced from any concrete harm," is not sufficient. Id. Rather, the plaintiff must show that the statutory violation at issue presents an appreciable risk of harm to the underlying concrete interest that Congress was trying to protect in enacting the statute. Id.

There is little consistency in the lower court cases addressing the question of standing to bring FCRA claims involving the unauthorized access of a plaintiff's credit information. Appellate guidance is scarce. The Seventh Circuit has not addressed the issue. It has, however, addressed related issues on a few occasions, perhaps most importantly in Gubala v. Time Warner Cable, Inc. , 846 F.3d 909 (7th Cir. 2017).

Gubala involved a subsection of the Cable Communications Policy Act which required a cable operator to destroy personally identifiable consumer information if no longer necessary for the purpose for which it was collected. See 47 U.S.C. § 551(e). Gubala was a Time Warner subscriber for two years but then cancelled his subscription. Gubala , 846 F.3d at 910. Eight years later, he learned from an inquiry to Time Warner that it had kept his information in its possession. Id. Although recognizing that there was a risk of harm in such a situation, the court held that in the absence of an allegation that Time Warner had given away, leaked, or lost his information, Gubala had suffered no concrete injury and lacked standing to sue. Id. at 911–13. Nor had Gubala alleged a legitimate privacy violation, since there was no allegation of any dissemination of the information. Id. at 912.

Gubala is referred to as a "retention" case. E.g. , Haddad v. Midland Funding, LLC , 255 F.Supp.3d 735, 738 (N.D. Ill. 2017) ; Pavone v. Law Offices of Anthony Mancini, Ltd. , 2017 WL 1197098, at *4 (N.D. Ill. Mar. 31, 2017). It is different from the case at bar, most significantly, in that the defendant in Gubala obtained plaintiff's confidential information for a permissible purpose but retained it longer than the statute allowed. See Pavone , 2017 WL 1197098, at *4 (distinguishing Gubala on a similar ground).

The Seventh Circuit again addressed the issue of standing in the FCRA context in Groshek v. Time Warner Cable, Inc. , 865 F.3d 884 (7th Cir. 2017). In Groshek , the plaintiff applied for a job with Time Warner, as well as with another company, and the job application, while informing him that a consumer report might be procured in making the application decision, failed to make that disclosure "in a document that consists solely of the disclosure," as required by a provision of the FCRA, 15 U.S.C. § 1681b(b)(2)(A)(i). Groshek , 865 F.3d at 885–86. Noting that Groshek did not allege that he did not receive a disclosure, nor that he was confused by it, nor that he failed to understand that a consumer report would be procured, the court held that the mere allegation that the disclosure form contained extraneous information, with no indication that plaintiff had failed to understand the disclosure as it was provided to him, was a mere statutory violation, removed from any concrete or appreciable risk of harm. Id. at 888–89. Plaintiff therefore lacked standing to sue.

In Robertson v. Allied Solutions, LLC , 902 F.3d 690 (7th Cir. 2018), the Seventh Circuit again addressed the intersection of standing requirements and the FCRA but this time, reached a different conclusion. Plaintiff, on behalf of a class, alleged that she had applied for a position with Allied Solutions ("Allied") which offered her a job but ran a background check before she reported for work. Id. at 693. Based on the information the background check revealed, Allied revoked the job offer. Plaintiff complained both that the disclosure forms Allied provided were not clear or conspicuous, as the FCRA required, and that the forms included extraneous information. Id. at 694. This claim was doomed by Groshek . Id. But 15 U.S.C. § 1681b(b)(3)(A) also provides that when an employer relies in any measure on a background check report, it must provide the applicant both with a copy of the report and with a written description of her...