Perry v. First Nat. Bank
| Decision Date | 25 August 2006 |
| Docket Number | No. 05-3867.,05-3867. |
| Citation | 459 F.3d 816 |
| Parties | Thelma PERRY, Plaintiff-Appellant, v. FIRST NATIONAL BANK, doing business as First National Credit Card, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Daniel A. Edelman (argued), Edelman, Combs & Latturner, Chicago, IL, for Plaintiff-Appellant.
Kevin B. Duff (argued), Rachlis, Durham, Duff & Adler, Chicago, IL, for Defendant-Appellee.
Michael P. Conway, Grippo & Elden, Chicago, IL, for Amicus Curiae.
Before FLAUM, Chief Judge, BAUER and EVANS, Circuit Judges.
Plaintiff-Appellant Thelma Perry filed a class action suit against Defendant-Appellee First National Bank, d/b/a First National Credit Card ("First National") under the Fair Credit Reporting Act ("FCRA" or "Act"), 15 U.S.C. § 1681 et seq. Perry alleged that the company violated 15 U.S.C. § 1681m(d) by failing to include a clear and conspicuous statement of certain disclosures required under the FCRA.
First National filed a motion for summary judgment. The district court granted First National's motion, finding that amendments to FCRA had eliminated private rights of action to enforce § 1681m. The district court also granted First National's motion to strike an expert report that Perry attempted to submit in support of her claim.
Perry sought to amend her complaint to allege that First National's offer of credit was a sham, not a firm offer of credit, and that, pursuant to 15 U.S.C. § 1681b(c)(1)(B)(i), First National was prohibited from accessing her consumer credit report. The district court denied Perry's motion to amend, finding that the credit offer was a firm offer and that amending the complaint would be futile.
Perry appeals the grant of summary judgment for First National and the denial of her motion to amend. For the following reasons, we affirm.
Perry received a credit solicitation mailing from First National, dated February 14, 2005, offering her a pre-approved Visa credit card with a $250 limit. The mailing contained a letter as well as a brochure setting forth the terms and conditions of the offer. One paragraph of the brochure, titled "Fair Credit Report Act Notice" ("Notice") advised recipients in bold letters that "the credit bureau gave us your name and address and indicated that you met our minimum credit criteria," and that "you can tell credit bureaus to stop using your credit information for this purpose." The solicitation letter itself does not specifically refer to the Notice.
Perry did not authorize First National to access her consumer credit report. She alleges that First National accessed her consumer report and used a consumer reporting agency to target certain people, e.g., individuals with poor credit or individuals who recently obtained bankruptcy discharges, for sub-prime credit offers.
Perry alleged in her complaint that First National violated 15 U.S.C. § 1681m(d) by failing to include a "clear and conspicuous" statement of certain disclosures required by the FCRA. Perry tried to introduce the report of Timothy Shanahan ("Shanahan report"), a professor of education at the University of Illinois at Chicago, to support her argument that the Notice was not "clear and conspicuous." The Shanahan report included a "legibility analysis."
The district court found that Perry did not have a statutory right to bring a private cause of action under § 1681m(d), due to a 2003 amendment to the FCRA that eliminated the right to bring such actions. The district court therefore granted summary judgment for First National. The district court also granted First National's motion to strike Shanahan's report, explaining that "[b]ecause no private right of action exists under § 1681m, an evaluation of the Notice is not relevant to the instant case."
Perry also argued that even if her claim under § 1681m(d) could not succeed, she should be allowed to amend her complaint to plead a violation of 15 U.S.C. § 1681b(c)(1)(B)(i). Section 1681b(c)(1)(B)(i) permits a consumer credit agency to furnish a consumer report even though the consumer has not initiated or authorized the release only if the credit or insurance provider is extending the consumer a "firm offer of credit." Perry contends that the credit solicitation was not a firm offer of credit because it was for such a small amount of credit that it was virtually worthless. The district court disagreed and found that Perry could not state a claim under § 1681b(c)(1)(B)(i), because First National's credit offer was a "firm offer of credit." The district court denied Perry's motion to amend, finding that although the minimum amount of credit that First National offered was small, the interest rate was clear, approval was guaranteed, and the credit card did not contain usage limitations.
Our review of the district court's decision on a motion for summary judgment is de novo. See, e.g., In re Copper Antitrust Litigation, 436 F.3d 782, 788 (7th Cir. 2006). Summary judgment is appropriate when, taking all of the pleadings and evidence in the light most favorable to the non-moving party, "there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). "We review a denial of a motion to amend only for an abuse of discretion." Butts v. Aurora Health Care, Inc., 387 F.3d 921, 925 (7th Cir.2004).
Perry brought suit to enforce 15 U.S.C. § 1681m(d), the private right of action provisions contained in 15 U.S.C. §§ 1681n and 1681o. The district court dismissed Perry's claim, finding that an amendment to the FCRA had eliminated private rights of action under § 1681m.
Congress amended parts of 15 U.S.C. § 1681m on December 4, 2003, as part of the Fair and Accurate Credit Transactions Act ("FACTA"), Pub.L. 108-159. The question here is whether the newly added § 1681m(h)(8) was designed to preclude private enforcement of the entirety of § 1681m, or just § 1681m(h).1 15 U.S.C. § 1681m(h)(8) provides:
(h) Duties of users in certain credit transactions
....
(8) Enforcement
Sections 1681n and 1681o of this title shall not apply to any failure by any person to comply with this section.
This section shall be enforced exclusively under section 1681s of this title by the Federal agencies and officials identified in that section.
15 U.S.C. § 1681m(h)(8) (emphasis added).
Perry argues that FACTA only eliminated private rights of action to enforce § 1681m(h), not § 1681m in its entirety. According to Perry, § 1681m(h)(8) is ambiguous on its face. Specifically, Perry argues that the term "section" as used in § 1681m(h)(8) is ambiguous. Perry maintains that we should interpret the phrase "this section" to apply only to subsection 1681m(h).
We cannot accept Perry's interpretation. Instead, we find that the phrase "this section" unambiguously refers to section 1681m as a whole. "Congress ordinarily adheres to a hierarchical scheme in subdividing statutory sections." Koons Buick Pontiac GMC, Inc. v. Nigh, 543 U.S. 50, 60, 125 S.Ct. 460, 160 L.Ed.2d 389 (2004). As the Supreme Court explained in Koons:
This hierarchy is set forth in drafting manuals prepared by the legislative counsel's offices in the House and the Senate. The House manual provides:
"(D) clauses (starting with (i)) ...." House Legislative Counsel's Manual on Drafting Style, HLC No. 104-1, p. 24 (1995).
The Senate manual similarly provides:
"(i) Clause." Senate Office of the Legislative Counsel, Legislative Drafting Manual 10 (1997).
Koons, 543 U.S. at 60-61, 125 S.Ct. 460 (citation omitted). Cf. In re Farley Inc., 236 F.3d 359, 361-62 (7th Cir.2000) ().
Congress used these standard designations in § 1681m. "Section" clearly is used to refer to § 1681m as a whole. For example, in § 1681m(h)(8)(A) — which provides that the private right of action provisions of the FCRA do not apply to violations of "this section" — sections "1681n" and "1681o" are referred to as "Sections." In § 1681m(h)(8)(B) — which provides that enforcement of "this section" shall be exclusive to certain federal agencies and officials — "1681s" is designated a section. It is only logical to assume, then, that Congress was referring to section 1681m when it used "this section" in § 1681m(h)(8). Subsection 1681m(h) also uses the phrase "this subsection" consistently when referring just to § 1681m(h) and its notice requirements, rather than § 1681m. See 15 U.S.C. § 1681m(h)(1), (3), (4), (5), and (6). In this case, the assumption "that Congress intended the same terms used in different parts of the same statute to have the same meaning" weighs heavily in favor of our interpretation of "this section" in § 1681m(h)(8). Belom v. Nat'l Futures Ass'n, 284 F.3d 795, 798 (7th Cir.2002); see also Firstar Bank, N.A. v. Faul, 253 F.3d 982, 990 (7th Cir.2001); Taracorp, Inc. v. NL Indus., Inc., 73 F.3d 738, 744 (7th Cir.1996).
In a few places, § 1681m uses "section" to refer to a smaller subdivision of the statute than the entire section. However, these uses are entirely clear: the statute specifically says, for example, "section 1681a(k)(1)(A) of...
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