IN RE DAVIS, Bankruptcy No. 09-23625 SBB.

• Decision Date: 21 June 2010
• Docket Number: Adversary No. 09-01434 SBB.,Bankruptcy No. 09-23625 SBB.
• Citation: 430 B.R. 902
• Parties: In re Robert Gene DAVIS and Veronic A Jean Davis, Debtors. Robert Gene Davis, Plaintiff, v. Eagle Legacy Credit Union, Defendant.
• Court: U.S. Bankruptcy Court — District of Colorado

430 B.R. 902

In re Robert Gene DAVIS and Veronic A Jean Davis, Debtors Robert Gene Davis, Plaintiff, v. Eagle Legacy Credit Union, Defendant.

Bankruptcy No. 09-23625 SBB. Adversary No. 09-01434 SBB.

United States Bankruptcy Court, D. Colorado.

June 21, 2010.

COPYRIGHT MATERIAL OMITTED

Tara E. Gaschler, Denver, CO, for Plaintiff.

Billy-George Hertzke, Stewart J. Pluss, James E. Goldfarb, Denver, CO, for Defendant.

ORDER

SIDNEY B. BROOKS, Bankruptcy Judge.

THIS MATTER comes before the Court on Defendant's Combined Motion and Memorandum Brief in Support of Summary Judgment filed on January 29, 2010 ("Defendant's Motion for Summary Judgment"),¹ the Response thereto filed by Plaintiff on February 26, 2010,² and the Reply filed by Defendant on April 23, 2010.³ The Court, having reviewed the file and being advised in the premises, makes the following findings, conclusions, and Orders:

I. Background

Plaintiff/Debtor Robert Gene Davis and Co-Debtor Veronica Jean Davis filed their voluntary petition for bankruptcy under Chapter 13 on July 9, 2009. On July 23, 2010, Defendant Eagle Legacy Credit Union filed a proof of claim containing Plaintiffs Social Security number, driver's license number, and date of birth without redaction.⁴ On July 26, 2010, Plaintiff filed an ex parte emergency motion to restrict public access to the proof of claim or to require the clerk to delink, disable or remove the proof of claim and/or its attachments. The Court granted the motion and entered an order on July 29, 2009, that restricted public access to the proof of claim.

On July 28, 2009, Plaintiff filed the instant adversary proceeding. In his Complaint, he pleads five causes of action, which he entitles (1) "objection to claim;" (2) "violation of the standard of care set by the Gramm-Leach-Bliley Act, 15 U.S.C. Subchapter I, § 6801-6809;" (3) "contempt of court and violation of federal district court and bankruptcy court orders and policies against disclosure of personal identifiers and personal data;" (4) "contempt of court and violation of rule of Federal Rule of Bankruptcy Procedure 9037 failure to redact nonpublic information;" and (5) "invasion of privacy and intentional or negligent infliction of emotional distress." With the first, third, and fourth causes of action Plaintiff asks the Court to find Defendant in contempt of court and sanction him for disclosing Plaintiff's personal information in violation of Rule 9037 of the Federal Rules of Bankruptcy Procedure and General Procedure Order 2003-4. Plaintiff asserts that in his second cause of action he seeks to hold Defendant liable for violating the standard of care set forth in the Gramm-Leach-Bliley Act.

Defendant seeks entry of summary judgment on all causes of action, arguing that Plaintiff has identified no evidence that establishes that he suffered an injury in fact and thus lacks standing to pursue any action against Defendant. Defendant also disputes that a private right of action exists under the Gramm-Leach-Bliley Act, or that an independent cause of action for civil contempt is available to Plaintiff. In addition, Defendant contends that the Court cannot disallow a creditor's claim as a sanction for failing to redact personal information.

II. Standard for Evaluating the Defendant's Motion for Summary Judgment

Federal Rule of Civil Procedure 56(c), which is made applicable to bankruptcy proceedings by Bankruptcy Rule 7056, provides that summary judgment shall be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law."

When applying this standard, the court must examine the factual record and reasonable inferences therefrom in the light most favorable to the party opposing summary judgment—here, the Defendant.⁵

III. Discussion

A. Introduction

This Court has previously reviewed several complaints filed by Plaintiff's counsel in other bankruptcy cases, which are virtually identical to the complaint now before the Court. In reviewing these complaints, it appears that counsel may have not considered the concept of justiciability (the concept of standing in particular) or analyzed fully the distinction between motions practice and the filing of an adversary proceeding. Thus, the Court will address this as an initial matter.

B. Standing

Article III of the Constitution limits the authority of the federal courts to deciding "Cases" and "Controversies."⁶ "The case-or-controversy requirement is satisfied only where a plaintiff has standing."⁷ There are several requirements for standing, all of which must be met in order for a federal court to adjudicate a case. Chief among these is the requirement that the plaintiff have suffered an "injury in fact,"—that is, "an invasion of a legally protected interest which is (a) concrete and particularized, ... and (b) actual or imminent, not `conjectural' or `hypothetical.'"⁸ Thus, where a plaintiff cannot plead and demonstrate that there has been injury in fact, a court lacks jurisdiction to determine a matter.

In this case, Plaintiff has filed an adversary proceeding to address a legitimate concern—Defendant's failure to comply with Federal Rule of Bankruptcy Procedure 9037 and this Court's General Procedure Order 2003-4, which require the redaction of sensitive personal information from documents filed with the Court. However, Plaintiff has chosen to bring this matter to the Court's attention in a complaint, and thus must be able to demonstrate that he has standing to bring the claims. To establish standing, he must plead and articulate an injury in fact.

To this end, Plaintiff readily admits that he cannot prove that his personal information has been accessed by a third party, and that he cannot prove that his identity has been stolen. According to Plaintiff,

The harm in this case is Defendant's blatant disrespect for the Court's own orders and the Bankruptcy Rules. Plaintiff's damages stem from the actions he has been forced to take to protect his personal information. These damages include attorneys' fees, as well as the cost of credit monitoring to ensure that if his information has fallen into the hands of a third party, he can act quickly to avoid injury to his credit.⁹

The Court has a different view from Plaintiff's the concept of injury in fact. First, to the extent that Defendant's "blatant disrespect" for Court orders and rules has produced any harm, that harm has been suffered by the Court—not plaintiff—and is the Court's to vindicate. Second, a substantial portion of Plaintiff's attorneys' fees arise not from Defendant's actions, but from the filing of this adversary complaint in an attempt to address a matter that might more properly be addressed by filing a motion for compliance or even a motion seeking issuance of an order to show cause why documents containing personal information were filed in contravention of Court Rules and Orders. Third, and most importantly, the harm Plaintiff asserts is not "actual" or "imminent," for there is no evidence that Plaintiff's personal information has been accessed or misused by an unauthorized third party during the six days when it was viewable by the public on PACER, nor that it will be. In the absence of such evidence, Plaintiff's need for credit monitoring is conjectural or hypothetical.¹⁰ Thus, there is no injury in fact and Plaintiff lacks standing to bring any cause of action against Defendant. Summary judgment is proper on this ground alone.

C. Causes of Action

Not only does Plaintiff fail to establish standing within the meaning of Article III, Plaintiff also fails to state cognizable claims that are appropriately addressed in an adversary proceeding.

1. "Objection to Claim"

Plaintiff's purported First Cause of Action is entitled "Objection to Claim." However, the relief requested by Plaintiff is not so much a "cause of action" pursuant to 11 U.S.C. § 502 as it is a request that the Court exercise its powers under 11 U.S.C. § 105(a) to strike the claim as a sanction for Defendant's disclosure of her personal identifying information. Section 105(a) provides:

The court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title. No provision of this title providing for the raising of an issue by a party in interest shall be construed to preclude the court from, sua sponte, taking any action or making any determination necessary or appropriate to enforce or implement court orders or rules, or to prevent an abuse of process.¹¹

In asserting this "claim," Plaintiff properly raises concerns about the potential disregard of this Court's orders, a matter over which the Court may properly exercise its powers under section 105.¹² However, while 11 U.S.C. § 105(a) provides a means by which the Court may redress grievances such as Plaintiff's, it does not afford private cause of action¹³ nor does it assert a proper basis for striking a claim pursuant to 11 U.S.C. § 502. As such, Plaintiff's claims fails as a matter of law. Summary judgment under FED. R.CIV.P. 56 is granted.¹⁴

2. Violation of the Standard of Care Set out by the Gramm-Leach-Bliley Act

Plaintiff's Second Cause of Action, entitled "Violation of the Standard of Care Set Out by the Gramm-Leach-Bliley Act, 15 U.S.C. Subchapter I, § 6801-6809," is pled such that any reasonable person reading it would understand it to mean that Plaintiff is seeking relief pursuant to that law. The Gramm-Leach-Bliley Act¹⁵ emphasizes the need for protecting a consumer's privacy and confidentiality of nonpublic personal information. Consistent with that purpose, it also provides that the law and the regulations prescribed thereunder are to be enforced by federal and state authorities.¹⁶ By its terms, however, the law does not create a private cause of...