Cole v. U.S. Capital, 03-3331.
| Citation | 389 F.3d 719 |
| Decision Date | 19 November 2004 |
| Docket Number | No. 03-3331.,03-3331. |
| Parties | Oneta S. COLE, Plaintiff-Appellant, v. U.S. CAPITAL, Incorporated, AutoNation USA Corporation, and Jerry Gleason Chevrolet, Incorporated, Defendants-Appellees. |
| Court | United States Courts of Appeals. United States Court of Appeals (7th Circuit) |
Daniel A. Edelman, Edelman, Combs & Latturner, Chicago, IL, for Plaintiff-Appellant.
Daniel S. Kaplan, Kaplan & Greenswag, Northfield, IL, Kevin B. Duff (Argued), Rachlis, Durham, Duff & Adler, Chicago, IL, for Defendants-Appellees.
Before RIPPLE, KANNE and WILLIAMS, Circuit Judges.
Oneta S. Cole filed a complaint, and later an amended complaint, in which she alleged violations of the Fair Credit Reporting Act ("FCRA"). The defendants, U.S. Capital, Inc., AutoNation USA Corp. ("AutoNation"),1 and Jerry Gleason Chevrolet, Inc. ("Gleason Chevrolet"), moved to dismiss the second amended complaint. The district court granted the defendants' motion. For the reasons set forth in the following opinion, we reverse the judgment of the district court and remand the case for further proceedings consistent with this opinion.2
Ms. Cole received a promotional credit flyer from U.S. Capital, Inc. and Gleason Chevrolet. The flyer, which she attached to her complaint, states that Ms. Cole is "pre-approved to participate in an exclusive offer from U.S. Capital and Jerry Gleason Chevrolet." R.37, Ex.A. The flyer explains that she is eligible to "receive a Visa or MasterCard with limits up to $2000 as well as up to $19,500 in AUTOMOTIVE CREDIT!" Id. The flyer then discusses Ms. Cole's ability to purchase a car from Gleason Chevrolet without payments until 2002. Under large, bold letters it instructs Ms. Cole how to activate her card by responding prior to December 8, 2001.
In the bottom one inch (approximately) of the page, in much smaller type, the flyer informs Ms. Cole that:
We have determined that you meet our initial criteria for inclusion in this special credit offer. Because it is an exclusive opportunity we could not offer it to every one. You were selected based on information obtained in your consumer report from Trans Union L.L.C. and the final acceptance is subject to your ability to meet our full eligibility requirements.
Id. The text then specifies the criteria that she would have to meet to take advantage of the offer. Among the requirements, the recipient of the offer must not have a monthly car payment that exceeds 50% of her gross income, the recipient must be eighteen years of age with an annual income of at least $18,000, and all bankruptcies must be discharged. The flyer then states that:
Lender reserves the right to require consumer to pay off currently financed vehicle and may require consumer to increase down payment, which will affect equity and collateral. In any event, you are guaranteed to receive a credit line of at least three hundred dollars for the purchase of a vehicle, GRSI, Coral Springs, FL. If at the time of offer consumer no longer meets the initial criteria, offer may be revoked. We hope you are pleased with the opportunity it affords. If you prefer that your name be omitted from future offerings, please contact Trans Union, Marketing Opt Out, and PO BOX 97328, Jackson, MS 39288-7328 or call 1-888-546-8688.
Id. Finally, the flyer concludes with a "CREDIT CARD DISCLAIMER." Id. It states that the customer authorizes U.S. Capital Financial Services to act as an agent to obtain a credit card for the customer. It then explains that "[g]uaranteed approval is neither expressed nor implied, interest rates may vary from 2.9% to 24.9% based on individual credit worthiness and lenders credit parameters." Id.
After receiving the flyer, Ms. Cole brought the present action in district court seeking statutory damages and attorneys' fees for alleged violations of the FCRA.3 In her initial complaint, Ms. Cole alleged that she had not requested the materials that she had received from the defendants. Furthermore, she had not authorized anyone to access her credit report, and therefore, there was no legitimate reason for the defendants to access her credit information. Specifically, Ms. Cole alleged that the materials did not qualify as a firm offer of credit as used in the FCRA. She claimed that "[a]n offer of a $300 line of credit useable only to finance the purchase of an automobile is a sham." R.37 at 3 ¶ 12.a. The offer was made, she averred, to obtain credit information; it was not extended with the expectation that consumers would avail themselves of the offer.
Ms. Cole also alleged that the terms of the offer were too vague to constitute an offer capable of acceptance. In support of this allegation, Ms. Cole pointed to the fact that the flyer reserves the right to set material terms. Additionally, the offer is ambiguous; the $300 line of credit is characterized first as "guaranteed," but the flyer later states that "[g]uaranteed approval is neither expressed nor implied." Id. ¶ 12.c (quoting R.37, Ex.A). Finally, she claimed that the reservation of the right to require the consumer to pay off existing automobile loans "effectively constitutes an option to withdraw the $300 line of credit." Id. ¶ 12.d.
The district court dismissed Ms. Cole's first amended complaint. It held that the defendants had obtained the plaintiff's credit report for a permissible purpose under the FCRA. Specifically, the court held that the defendants obtained the report for the extension of a firm offer of credit. The court rejected Ms. Cole's contention that the $300 credit line was "too paltry a sum to be a `firm offer.'" R.27 at 6. It reasoned that "the complaint does not allege the $300 credit line to be a sham nor is any inference in the mailing." Id. The court found the offer of "at least" $300 was consistent with the FCRA because the FCRA "permits conditioning a firm offer of credit on `the consumer being determined, based on information in the consumer's application for the credit[,]... to meet specific criteria bearing on credit worthiness"' that were established before the selection of the consumer for the offer. Id. (quoting 15 U.S.C. § 1681a(l)(1)(A), (B)). Accordingly, the court concluded that the complaint failed to state a claim upon which relief could be granted.4
Ms. Cole then filed a second amended complaint in which she alleged that the flyer was not a firm offer of credit because (1) it was a sham to justify obtaining credit information; (2) it contained an offer that is too vague to be accepted; (3) the language of the flyer was ambiguous or mutually inconsistent; (4) the reservation of a right to require the consumer to pay off existing car loans constituted an option to withdraw the $300 offer; and (5) the disclosure did not comply with the requirements of § 1681m(d) because it is not clear and conspicuous.
Again, the defendants moved to dismiss the complaint, and the district court granted the motion. The court found that there was a guarantee of a $300 credit line and that the flyer indicated that the offer would be honored as required by the FCRA. The court explained that there was no suggestion, other than Ms. Cole's conclusory allegations, that the $300 credit amount would not have been honored. Additionally, the court reasoned, some consumers would be eligible for more than the minimum amount of credit.
The district court also rejected Ms. Cole's argument that the offer was too vague to constitute an offer under Illinois law. The court held that Illinois law did not apply to the offer because there was a presumption, unrebutted in this case, that Congress did not make the application of the federal law dependent on state law. The court believed that Congress intended the FCRA to have uniform application, and, therefore, the definition of what constitutes an offer under Illinois law was not relevant to the determination of whether the flyer constituted a firm offer of credit under § 1681. The court therefore dismissed the complaint as amended.
Ms. Cole timely appealed.
We review the district court's decision to grant a motion to dismiss de novo. See American United Logistics, Inc. v. Catellus Dev. Corp., 319 F.3d 921, 925-26 (7th Cir.2003). We consider the allegations in the light most favorable to the nonmoving party, Ms. Cole, and take all well-pleaded facts and allegations as true. See Delgado v. Jones, 282 F.3d 511, 515 (7th Cir.2002). "A complaint should not be dismissed `unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.'" Johnson v. Martin, 943 F.2d 15, 16 (7th Cir.1991) (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). "The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims." Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974).
As set forth above, the district court dismissed Ms. Cole's second amended complaint on the ground that the offer contained in the flyer was a "firm offer of credit" for purposes of the FCRA. In its view, because the extension of a "firm offer of credit" was a permissible reason for accessing an individual's information under the FCRA, the defendants' actions did not violate the FCRA. Our consideration of the district court's dismissal begins with the statute itself.
In interpreting the FCRA provisions applicable to Ms. Cole's claims, we must keep in mind the "language and design of the statute as a whole." Milwaukee Gun Club v. Schulz, 979 F.2d 1252, 1255 (7th Cir.1992). We must "construe statutes in the context of the entire statutory scheme and avoid rendering statutory...
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