Northrop v. Hoffman of Simsbury, Inc.

• Citation: 39 Fed.R.Serv.3d 492,134 F.3d 41
• Decision Date: 21 November 1997
• Docket Number: D,No. 460,460
• Parties: Deborah NORTHROP, Plaintiff-Appellant, v. HOFFMAN OF SIMSBURY, INC., d/b/a Hoffman Honda of Avon, Jeffrey S. Hoffman, as President of Hoffman of Simsbury, Inc., John Doe # 1, an unknown employee of Hoffman of Simsbury, Inc., John Doe # 2, an unknown employee of Hoffman of Simsbury, Inc., and Larry F. Katzke, an employee of XYZ Corporation, Defendants-Appellees, Jane Doe # 1, an unknown employee of XYZ Corporation, Richard Roe, an unknown individual, and XYZ Corporation, an unknown corporation, Defendants. ocket 97-7257.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

Page 41

134 F.3d 41

39 Fed.R.Serv.3d 492

Deborah NORTHROP, Plaintiff-Appellant, v. HOFFMAN OF SIMSBURY, INC., d/b/a Hoffman Honda of Avon Jeffrey S. Hoffman, as President of Hoffman of Simsbury Inc., John Doe # 1, an unknown employee of Hoffman of Simsbury, Inc., John Doe # 2, an unknown employee of Hoffman of Simsbury, Inc., and Larry F. Katzke, an employee of XYZ Corporation, Defendants-Appellees Jane Doe # 1, an unknown employee of XYZ Corporation Richard Roe, an unknown individual, and XYZ Corporation, an unknown corporation, Defendants.

No. 460, Docket 97-7257.

United States Court of Appeals, Second Circuit.

Argued Oct. 7, 1997.

Decided Nov. 21, 1997.

W. Philip Jones, Jones & Wanchak, L.L.C., Avon, CT, for Plaintiff-Appellant.

Herbert Watstein, Watstein & Watstein, Bristol, CT (Mona E. Herman, Simsbury, CT, of counsel), for Defendants-Appellees Hoffman of Simsbury, Inc., d/b/a/ Hoffman Honda of Avon; Jeffrey S. Hoffman, as President of Hoffman of Simsbury, Inc.; John Doe # 1, an unknown employee of Hoffman of Simsbury, Inc.; and John Doe # 2, an unknown employee of Hoffman of Simsbury, Inc.

James V. Somers, Halloran & Sage, Hartford, CT (John B. Farley, Halloran & Sage, of counsel), for Defendant-Appellee Larry F. Katzke, an employee of XYZ Corporation.

Before: KEARSE, MINER, and CABRANES, Circuit Judges.

JOSE A. CABRANES, Circuit Judge:

Plaintiff-appellant Deborah Northrop appeals from a ruling of the United States District Court for the District of Connecticut (Alfred V. Covello, Judge ), dismissing her complaint for failure to state a claim for relief under the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq. (1994) ("FCRA" or the "Act"). For the reasons set forth below, we vacate the ruling of the district court and remand the case for further proceedings.

I.

In reviewing the dismissal of a complaint under Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim upon which relief can be granted, we must accept as true the facts alleged in the complaint and draw all reasonable inferences in the plaintiff's favor. See McEvoy v. Spencer, 124 F.3d 92, 95 (2d Cir.1997). The facts alleged in plaintiff-appellant Northrop's Second Amended Complaint are as follows.

On or about September 25, 1995, Northrop was in the process of obtaining a mortgage to refinance her home through a company called Mortgage Master. As part of that process, Mortgage Master requested and received plaintiff's consumer credit report from United Data Services. That report indicated that on July 3, 1995, defendant-appellee Hoffman of Simsbury, Inc., d/b/a Hoffman Honda of Avon ("Hoffman"), had made an inquiry and received Northrop's consumer credit report. At the time that Hoffman requested plaintiff's credit report, Northrop was conducting no business with Hoffman of any kind. ¹

As a result of Hoffman's request for Northrop's consumer credit report, Mortgage Master demanded that Northrop explain the basis for the inquiry by Hoffman. On or about October 3, 1995, Northrop contacted Hoffman to find out who had requested her consumer credit report and the reason for that request, but was given no answer. On or about October 5, 1995, Northrop was told by a Hoffman employee that Hoffman's computerized records had been destroyed. Northrop's subsequent telephone calls to Hoffman have not been returned.

Plaintiff claims that these actions interfered with her efforts to obtain a mortgage and inflicted emotional distress. She brings this action based on alleged violations of the FCRA and the Connecticut Unfair Trade Practices Act, Conn.Gen.Stat. § 42-110a et seq., seeking actual and punitive damages, costs, and attorney's fees as well as equitable relief in the form of an injunction, enjoining all defendants from using or disclosing the contents of her credit report. The district court granted defendants' motion to dismiss ² in a ruling dated February 3, 1997, holding that plaintiff had not stated a claim upon which relief could be granted under the FCRA, and declining to exercise jurisdiction over the remaining state law claim. Plaintiff now appeals.

II.

We review de novo the grant of a motion to dismiss under Rule 12(b)(6) for failure to state a claim upon which relief can be granted. See Allen v. WestPoint-Pepperell, Inc., 945 F.2d 40, 44 (2d Cir.1991). The complaint may be dismissed only where " 'it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.' " Id. (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957)).

Plaintiff-appellant's Second Amended Complaint claimed that defendants violated 15 U.S.C. §§ 1681b, c, and/or e, ³ all of which are sections of the FCRA that impose obligations solely upon "consumer reporting agencies." Based on the defendants' alleged violations of the FCRA, appellant sought relief under § 1681n, which provides for a cause of action against "[a]ny consumer reporting agency or user of information which willfully fails to comply with any requirement imposed under [the FCRA]." (emphasis supplied).

The district court, in dismissing plaintiff-appellant's complaint, found that the defendants were not "consumer reporting agencies." Although the only sections specifically alleged in plaintiff-appellant's Second Amended Complaint to have been violated were sections relating to "consumer reporting agencies," the district court recognized that the FCRA also imposes liability upon "users of information." It found, however, that the only obligations placed upon "users" by the FCRA, and therefore the only basis for liability against them under § 1681n, are the disclosure obligations imposed by § 1681m "[w]henever credit ... is denied or the charge for such credit ... is increased." 15 U.S.C. § 1681m. ⁴ Inasmuch as Northrop did not allege that defendants denied her credit or increased the charge for credit--the requirements necessary to trigger § 1681m--the court found that plaintiff failed to state a claim under the FCRA.

On appeal, appellant does not contest the conclusion that defendants are not "consumer reporting agencies," nor does she contest the fact that defendants did not deny her credit or increase the charge for credit. Rather, she argues that defendants can be held liable under § 1681n because they willfully violated the "requirement" imposed by § 1681q, a criminal provision of the FCRA that imposes penalties upon "[a]ny person who knowingly and willfully obtains information on a consumer from a consumer reporting agency under false pretenses." (emphasis supplied). While the district court indicated that users of information can be held liable under § 1681n solely for violating the disclosure obligations of § 1681m, which apply only when "credit ... is denied or the charge for such credit ... is increased," appellant argues that users of information may also be held civilly liable under § 1681n for violating § 1681q, which is incorporated into § 1681n. That is, appellant argues that § 1681q, prohibiting "any person" from procuring credit information under false pretenses, is among the FCRA "requirements" whose willful violation by users of information supports civil liability under § 1681n. ⁵ We agree.

III.

As a preliminary matter, we must decide whether appellant is foreclosed from seeking relief under § 1681n pursuant to a violation of § 1681q by her failure to cite § 1681q in her Second Amended Complaint. We recognize that appellant's failure to cite § 1681q as a potential basis for liability under § 1681n gave the district court little or no reason or opportunity to address this theory of liability. Nevertheless, appellant's failure to cite the correct section of the FCRA does not require us to affirm the dismissal of her complaint so long as she has alleged facts sufficient to support a meritorious legal claim. Under the liberal pleading principles established by Rule 8 of the Federal Rules of Civil Procedure, in ruling on a 12(b)(6) motion "[t]he failure in a complaint to cite a statute, or to cite the correct one, in no way affects the merits of a claim. Factual allegations alone are what matters." Albert v. Carovano, 851 F.2d 561, 571 n. 3 (2d Cir.1988) (in banc) (citing Newman v. Silver, 713 F.2d 14, 15 n. 1 (2d Cir.1983)); see also Flickinger v. Harold C. Brown & Co., 947 F.2d 595, 600 (2d Cir.1991) ("[Defendant] ... point[s] out that [plaintiff] failed to plead the third party beneficiary theory in his complaint. To this, we simply respond that federal pleading is by statement of claim, not by legal theory.").

Northrop's Second Amended Complaint did allege that defendants received her consumer credit report from a credit reporting agency while they were conducting no business with her of any kind, the natural implication of which is that they did so "under false pretenses." ⁶ Indeed, the memorandum of law offered in support of one of the defendants' motions to dismiss evidences clear awareness of the substance of plaintiff's claim--even if the statutory basis of her complaint remained opaque--stating that "[t]he essence of Plaintiff's Second Amended Complaint" is "that Hoffman and Mr. Katzke improperly requested [her] consumer credit report from a consumer credit reporting agency." See Kelly v. Schmidberger, 806 F.2d 44, 46 (2d Cir.1986) ("The test of a complaint's sufficiency is whether it is detailed and informative enough to enable defendant to respond....") (internal quotation marks omitted). Accordingly, plaintiff's Second Amended Complaint is sufficient to survive a motion to dismiss so long as (1) § 1681n can, as a matter of law, support liability against users of information who violate § 1681q by procuring credit reports under false pretenses, and (2) defendants are "users of information" under § 1681n.

IV.

Defendants rely on DiGianni v. Stern's, 26 F.3d 346, 348 (2d Cir.1994) (per curiam), to argue that users of information may not...