Kennedy v. Chase Manhattan Bank Usa, Na, 03-30811.
| Citation | 369 F.3d 833 |
| Decision Date | 06 May 2004 |
| Docket Number | No. 03-30811.,03-30811. |
| Parties | Richard D. KENNEDY; Sally S. Kennedy, Plaintiffs-Appellants, v. CHASE MANHATTAN BANK USA, NA; Experian Information Solutions, Inc.; Transunion, LLC; Bank of America, NA (USA), Defendants-Appellees. |
| Court | United States Courts of Appeals. United States Court of Appeals (5th Circuit) |
Richard Kennedy, Metairie, LA, pro se.
Sally Kennedy, Metairie, LA, pro se.
Glenn Lyle Maximilia Swetman, Jeanette Seraile-Riggins, Aultman, Tyner & Ruffin, New Orleans, LA, for Chase Manhattan Bank, NA.
Kelly Titus Scalise, Michael Anthony Golemi, Liskow & Lewis, New Orleans, LA, Jordana Rachel Sternberg, Jones Day, Atlanta, GA, for Experian Information Solutions Inc.
Glenn Paul Orgeron, Karen Waters Shipman, Lemle & Kelleher, New Orleans, LA, for Trans Union LLC.
Stephen Winthrop Rider, Lisa D. Munyon, McGlinchey Stafford, New Orleans, LA, for Bank of America, NA (USA).
Appeal from the United States District Court for the Eastern District of Louisiana.
Before DAVIS, BENAVIDES and PRADO, Circuit Judges.
This appeal arises from a lawsuit brought by Richard D. Kennedy and his wife, Sally S. Kennedy, under the Fair Credit Reporting Act (the Act) against Chase Manhattan Bank USA, NA (Chase Manhattan); Bank of America, NA (USA)(BOA); Experian Information Solutions, Inc. (Experian); and Transunion LLC (Transunion). In their complaint, the Kennedys asserted that the banks violated the Act by obtaining their credit information under false pretenses and by failing to adopt reasonable procedures for complying with the Act. The Kennedys further alleged that Experian and Transunion (collectively, the consumer reporting agencies) failed to adopt reasonable procedures for complying with the Act.
In response to the Kennedys' complaint, the banks and the consumer credit reporting agencies moved to dismiss the Kennedys' claims for failure to state a claim. After considering the motions, the district court determined the Kennedys' allegations were not actionable under the Act and dismissed the Kennedys' claims. The Kennedys' challenge that determination in this appeal.
The Kennedys' complaint sets out the background of their lawsuit. In their complaint, the Kennedys, pro se, asserted that they received pre-qualified offers for credit card accounts from Chase Manhattan and BOA, that based on the representations made by the banks the Kennedys believed they were pre-approved for credit, and that they accepted the offers by returning the applications. The banks, however, obtained consumer credit reports from Experian and Transunion and notified the Kennedys that, based upon the information in these reports, the banks would not open credit card accounts for the Kennedys.
The pre-approved offers are attached as exhibits to the complaint. Each offer provides, in part, that the offered credit may not be extended if, after the consumer responds to the offer, the bank determines the consumer does not meet the criteria used to select the consumer for the offer or any "applicable criteria bearing on creditworthiness."
Throughout their lawsuit, the Kennedys maintained the banks violated the Act by failing to honor firm offers of credit. The Kennedys contended the banks violated section 1681q of the Act by obtaining information under the Act under false pretenses, and/or violated section 1681e by not maintaining reasonable procedures and certifications necessary to comply with the Act. The Kennedys argued that the credit reporting agencies violated section 1681e by "not adopting reasonable procedures for meeting the needs of commerce for consumer credit in a manner which is fair and equitable to the consumer with regard to confidentiality and proper utilization of such information in accordance with the requirements of the Fair Credit Reporting Act." The Kennedys asserted that: the defendants' actions constituted unfair and deceptive trade practices; the credit offers contained low introductory rates and balance transfer rates that would have saved them money; their credit history was damaged by having a declined credit investigation on their credit records; and they suffered humiliation, mental pain, and anxiety due to the defendants' willful and wanton disregard for their rights. The Kennedys sought actual and punitive damages, as well as costs and attorney's fees.
Chase Manhattan moved to dismiss the complaint for improper joinder because it had not extended an offer of credit to Richard Kennedy (that offer was extended by BOA). Chase Manhattan also filed a motion to dismiss for failure to state a claim and/or for summary judgment. Chase Manhattan argued that sections 1681b(c) and 1681e did not apply to it because it was not a consumer reporting agency; it had not violated section 1681a by obtaining information under false pretenses because Sally Kennedy granted permission to review her credit history; and its actions did not constitute unfair and deceptive trade practices because it had a legal right to decline to extend credit to consumers not meeting its criteria.
The Kennedys opposed the motion to dismiss for improper joinder, arguing that they had community property and that when one member was denied credit or had his or her credit history damaged, it affected the other. They also opposed Chase Manhattan's motion to dismiss or for summary judgment, arguing that the Act applied not only to credit reporting agencies, but also to the users of this information. The Kennedys asserted that a creditor may obtain a credit report without the consumer's permission only when the creditor meets the conditions set forth in section 1681b(c), which allows pre-screening consumers for offers of credit. In particular, they contended a condition of obtaining a credit report is that if the consumer meets the criteria established by the creditor prior to the selection of the consumer for the offer, the creditor must make a firm offer of credit to the consumer. If the consumer accepts this offer, the creditor may obtain a second credit report to verify that the consumer continues to meet the selection criteria. They contend the creditor is not allowed to apply a new set of criteria to the second credit report in order to disqualify a consumer from the credit offer after the consumer has accepted the offer.
Sally Kennedy averred that her credit history did not change between the time that she was selected for the offer of credit and the time that she accepted it, although this assertion is not set forth in the complaint. She asserted that Chase Manhattan did not indicate that any further conditions were made on the offer. She contended that the offer of credit evidenced the fact that she satisfied Chase Manhattan's credit criteria and that Chase Manhattan violated the Act by not extending this credit to her after it obtained her credit report without her knowledge. She argued that this constituted obtaining the credit report under false pretenses and that informing the consumer of pre-approval, but not honoring this offer, constituted an unfair trade practice.
Chase Manhattan responded that the Act was amended in 1997 to allow creditors to extend conditional firm offers to consumers. Chase Manhattan asserted that pursuant to section 1681b(c), consumer reporting agencies are permitted to furnish only limited information to creditors during the pre-screening process and that after the consumer responds to the credit offer the creditor is permitted to access the creditor's credit report to determine whether the consumer satisfies its previously-determined criteria for credit worthiness. Chase Manhattan contended that after reviewing Sally Kennedy's complete credit history it determined that she did not satisfy its criteria for credit worthiness.
The district court granted Chase Manhattan's motion to dismiss and held the motion for improper joinder moot. The court determined that section 1681b(c) applied not only to credit reporting agencies but also to the entities requesting credit information. The court agreed with the bank's assertion that it had the legal right to decline credit to consumers who fail to satisfy its credit criteria, that the credit application informed Sally Kennedy of this possibility, and that Sally Kennedy's signature on the application evidenced her agreement to those terms. The court held that a "firm offer" under the Act means a firm offer "if you meet certain criteria" and that dissatisfaction with the pre-screening process did not state a cause of action under the Act. The court also held that the state law claims were preempted by the Act.
BOA, Transunion, and Experian also filed motions to dismiss. The district court granted all three motions, citing the reasons set forth in its order granting Chase Manhattan's motion to dismiss. The Kennedys then moved for rehearing on the banks' motions, but the district court denied the motion for rehearing. The district court then entered judgment in favor of all defendants. The Kennedys timely appealed. In their appeal, the Kennedys maintain their complaint states a cause of action and that the district court erred by dismissing their claims.
This Court reviews de novo the grant of a motion to dismiss for failure to state a claim.1 In considering a motion to dismiss, the district court must take the facts as alleged in the complaint as true, and may not dismiss the complaint "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."2 If the district court considers information outside of the pleadings, the court must treat the motion as a motion for summary judgment.3 Although the court may not go outside the complaint, the court may consider documents attached to the complaint.4
In this instant case, many of the parties' arguments relate to information not in or attached to the complaint....
To continue reading
Request your trial
-
Mississippi v. Rinehart
...complaint. See Walker v. Webco Indus., Inc., 562 F. App'x 215, 216-17 (5th Cir. 2014) (per curiam) (citing Kennedy v. Chase Manhattan Bank USA, NA, 369 F.3d 833, 839 (5th Cir. 2004)). "[A plaintiff's] complaint . . . 'must contain sufficient factual matter, accepted as true, to "state a cla......
-
Villagran v. Central Ford, Inc.
...the lists to solicit customers with firm offers for credit in the form of pre-approved offers of credit." Kennedy v. Chase Manhattan Bank USA, NA, 369 F.3d 833, 841 (5th Cir.2004). Such preapproved "firm offers of credit" may be conditioned on the consumer meeting the creditor's previously ......
-
Severance v. Patterson
...this claim under Rule 12(b)(6). The grant of a motion to dismiss under Rule 12(b)(6) is reviewed de novo. Kennedy v. Chase Manhattan Bank USA, NA, 369 F.3d 833, 839 (5th Cir.2004). We construe the complaint in the light most favorable to the plaintiff and draw all reasonable inferences in t......
-
Villagran v. Freeway Ford, Ltd.
...the lists to solicit customers with firm offers for credit in the form of pre-approved offers of credit." Kennedy v. Chase Manhattan Bank USA, NA, 369 F.3d 833, 841 (5th Cir.2004). Such preapproved "firm offers of credit" may be conditioned on the consumer meeting the creditor's previously ......