Langan v. United Servs. Auto. Ass'n, Case No. 13–cv–04994–JST

• Court: United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
• Writing for the Court: JON S. TIGAR, United States District Judge
• Citation: 69 F.Supp.3d 965
• Parties: Christopher Philip Langan, Plaintiff, v. United Services Automobile Association, et al., Defendants.
• Docket Number: Case No. 13–cv–04994–JST
• Decision Date: 23 September 2014

69 F.Supp.3d 965

Christopher Philip Langan, Plaintiff
v.
United Services Automobile Association, et al., Defendants.

Case No. 13–cv–04994–JST

United States District Court, N.D. California.

Signed September 23, 2014

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Christopher Philip Langan, Pleasant Hill, CA, pro se.

Lauren M. Case, Robert Stewart McLay, Hayes Scott Bonino Ellingson & McLay, LLP, Redwood Shores, CA, Stephen Julian Newman, Arjun P. Rao, Julia B. Strickland, Julieta Stepanyan, Stroock & Stroock & Lavan LLP, Daniel John McLoon, Michael Gregory Morgan, Jones Day, Alexander Howard Cote, Scheper Kim & Harris LLP, Los Angeles, CA, Deborah Anne Hedley, Jones Day, Palo Alto, CA, for Defendants.

ORDER RE: MOTIONS TO DISMISS, MOTION TO COMPEL ARBITRATION, AND MOTION TO STRIKE

Re: ECF Nos. 75, 76, 77, 79

JON S. TIGAR, United States District Judge

Four motions are pending in this proposed class action for claims arising out Plaintiff Langan's credit transactions. First, Defendants United States Automobile Association (“USAA”) and United Services Automobile Association Federal Savings Bank (“USAA FSB”) (collectively “the USAA Defendants”) move under Rule 12(b)(6) to dismiss the claims that Plaintiff Langan has asserted against them. Second, Defendants J.P. Morgan Chase National Corporate Services and JPMorgan Chase Bank (collectively “the Chase Defendants”) move under Rule 12(b)(6) to dismiss the claims that Langan has asserted against them. Third, Defendant Verizon moves to compel arbitration as to the claims that Langan has asserted against it. Finally, the Chase Defendants move to strike the class allegations in the complaint. Langan has not opposed any of these motions. For the reasons set forth below, the USAA Defendants' motion is GRANTED IN PART and DENIED IN PART; the Chase Defendants' motions are GRANTED; and Verizon's motion is DENIED AS MOOT.

I. BACKGROUND

A. The Parties and Claims

Plaintiff Langan, a disabled veteran who is representing himself, brings this action on his own behalf and on behalf of a class of “disabled U.S. veteran credit consumers” for claims arising out of several credit transactions. Am. Compl., ECF No. 63. The Defendants named in the complaint are the USAA Defendants; the Chase Defendants; Experian Data Corp., Experian Information Solutions, and Experian Services Corp. (collectively “the Experian Defendants”); Gulf Credit Services; and Verizon Cellco Partnership d/b/a Verizon Wireless (“Verizon”).

The gravamen of the complaint appears to be that (1) the Chase Defendants wrongfully filed a 1099–C form with the IRS after they removed some debts from Langan's credit report; (2) the USAA Defendants wrongfully charged him excessive fees and provided inaccurate information to credit reporting agencies, which then reported that inaccurate information on

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Langan's credit report without first conducting a reasonable investigation; (3) Defendant Gulf Credit Services unlawfully attempted to collect a disputed debt; and (4) Verizon breached a contract with Langan by charging him for phone services that should have been free under his contract.

Langan asserts the following claims in the operative complaint: (1) negligence against the Chase Defendants; (2) breach of contract against Verizon; (3) “breach” of the Credit Card Act, 15 U.S.C. §§ 1665d and 1637, against the USAA Defendants; (4) “breach” of California's Song–Beverly Credit Card Act against the USAA Defendants; (5) breach of contract against the USAA Defendants, the Experian Defendants, and Gulf Credit Services; (6) “breach” of California Civil Code § 1671 against the USAA Defendants, the Experian Defendants, Gulf Credit Services, and Verizon; (7) “breach” of California's Rosenthal Fair Debt Collection Practices Act against all Defendants; (8) “breach” of the Fair Credit Reporting Act against all Defendants; (9) “breach” of the California Consumer Credit Reporting Agencies Act against all Defendants; (10) breach of the covenant of good faith and fair dealing against all Defendants; (11) “breach” of California's Unfair Competition Law against all Defendants; (12) “breach” of California's Fair Advertising Law against all Defendants; (13) intentional misrepresentation against all Defendants; (14) negligent misrepresentation against all Defendants; (15) defamation against all Defendants; and (16) intentional infliction of emotional distress against all Defendants.

B. Allegations Pertaining to the Moving Defendants

1. The USAA Defendants

Langan alleges that the USAA Defendants are credit card issuers and debt collectors, that they issued him three separate credit accounts, and that they charged excessive fees in July 2011 in connection with those accounts. Am. Compl. ¶¶ 8, 56.¹ He further avers that he contacted these Defendants multiple times to try to resolve these charges and to validate the debts he owed on the accounts but that Defendants ignored him. Id. ¶ 56. Langan allegedly made some payments on the accounts in November 2011, but “Defendants refused to remove the negative credit information on [his] credit report.” Id.

2. The Chase Defendants

Langan alleges that the Chase Defendants “claimed” that he “had a debt” with them in 2003, that he disputed this debt, and that Chase removed the debt from Langan's credit report in 2005. Id. ¶¶ 1, 9. Langan further avers that Chase filed a 1099–C for $2,756.36 with the IRS in 2011, which caused harm to his “reputation with the IRS.” Id.

3. Verizon

Langan allege that he and Verizon entered into a contract whereby Verizon would provide him with “unlimited data” on his cell phone, and that Verizon breached that contract when it charged him for phone services that should have been included in the “unlimited data” plan. Id. ¶¶ 46–48.

C. Procedural History

This action was removed from Contra Costa County Superior Court on the basis of federal question jurisdiction. ECF No. 1. The court granted Langan's request to proceed in forma pauperis and to have access to electronic case filing. ECF Nos. 39, 40. Langan filed an amended complaint

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on January 31, 2014, with the court's leave. ECF No. 63.

D. Jurisdiction

The court has jurisdiction over this action under 28 U.S.C. §§ 1331 and 1367.

II. CLAIMS AGAINST VERIZON

As a threshold matter, the court notes that the moving Defendants argue that Langan's claims do not appear to arise out of the same transaction or occurrence and that his joinder of these claims in the operative complaint is therefore improper.

These arguments are meritorious only with respect to the claims Langan asserts against Verizon. All of these claims arise out of state law. As such, the court can exercise jurisdiction over them only if the claims satisfy the requirements of 28 U.S.C. § 1367(a).² That section provides that in any civil action of which the district court has original jurisdiction, the court may exercise supplemental jurisdiction “over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution.” 28 U.S.C. § 1367(a). Claims are “so related” when the following two factors are satisfied: “(1) the jurisdiction-invoking claim and the supplemental claim [have] a ‘common nucleus of operative fact’ and (2) there [is] an expectation that the two claims would be tried in the same proceeding.” 13D Charles Alan Wright, Arthur R. Miller & Mary K. Kay, Fed. Prac. & Proc. Juris. § 3567.1 (3d ed.2005).

The claims that Langan has asserted against Verizon do not arise out of the common nucleus of operative fact as the federal claims that give this court original jurisdiction. Langan's federal claims are based on allegations that the non-Verizon Defendants overcharged Langan in connection with certain credit accounts, unlawfully attempted to collect debts incurred in connection with these accounts, unlawfully reported inaccurate information to credit reporting agencies, and failed to correct the resulting errors in Langan's credit reports.

On the other hand, the allegations pertaining to Verizon are based on the theory that Verizon entered into a contract to provide Langan with “unlimited data” on his cell phone but breached that contract when it charged him for phone services that should have been included in the “unlimited data” plan. See Am. Compl. ¶¶ 46–48. The phone contract between Verizon and Langan, which is not a credit-based contract, has no apparent connection to the credit accounts that form the basis of the federal claims. Because the claims asserted against Verizon are not “so related” to the other claims in the complaint, they do not satisfy the requirements of § 1367(a) and therefore must be DISMISSED WITHOUT PREJUDICE for lack of subject matter jurisdiction.³ In light of this dismissal, Verizon's motion to compel arbitration is DENIED AS MOOT.

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