Thompson v. Carmax
| Decision Date | 13 April 2023 |
| Docket Number | 23-cv-01364-JCS |
| Parties | KENAN THOMPSON, Plaintiff, v. CARMAX, Defendant. |
| Court | U.S. District Court — Northern District of California |
ORDER TO SHOW CAUSE RE DISMISSAL
Plaintiff pro se, applied to proceed in forma pauperis and the Court granted his application. See Docket No. 4. The Court now reviews the sufficiency of Plaintiff's complaint to determine whether it satisfies 28 U.S.C. § 1915(e)(2)(B). Because the complaint does not state any claim, Plaintiff is ORDERED TO SHOW CAUSE why the complaint should not be dismissed. Plaintiff may file either an amended complaint or a response to this order addressing why his complaint is sufficient, no later than May 11 2023.
Plaintiff brings this action against Defendant Carmax in connection with a “consumer credit transaction” he entered into with Carmax on July 26, 2022. Compl. at 6. In his “Statement of Facts[,]” Plaintiff alleges that Carmax: 1) “did not give the proper disclosures to the plaintiff in the credit transaction a total of four times”; 2) “did not notice the plaintiff of his rights in the credit transaction”; 3) “did not protect the privacy of the plaintiff twice”; 4) “knowingly used a false representation in the credit transaction”; 5) “used false information to trick the plaintiff in the credit transaction”; and 6) “failed to do what it promised in the contract with the plaintiff.” Id. at 3-5.
Plaintiff asserts eight claims in the complaint:
Claim One (12 C.F.R. § 226.23(a)): In this claim, Plaintiff alleges that “Law states that the defendant had to give me two copies of a disclosure of the right to rescind” but that “Defendant never gave me any disclosure of this right[.]” Id. at 6.
Claim Two (12 C.F.R § 226.23(d)): In this claim, Plaintiff alleges that “Law states the defendant had to give me a disclosure explaining what the effects of the rescission were” but that “Defendant never gave me this disclosure.” Id. at 7.
Claim Three (15 U.S.C. § 6802(b)): In this claim, Plaintiff alleges that “Law states the defendant has to give the consumer a disclosure that tells the consumer how they can have their information not shared with third parties” and that “Law states the defendant has to give the consumer this disclosure before they share the information” but that “Defendant never gave the plaintiff this disclosure.” Id. at 8.
Claim Four (15 U.S.C. § 6803(a)): In this claim, Plaintiff alleges that “Law states the defendant has to give the consumer a disclosure that tells how they share information that is consitent [sic] with 15 U.S.C. 6802” but that “Defendant never gave the plaintiff this disclosure[.]” Id. at 9.
Claim Five (Fraud in the Inducement): In this claim, Plaintiff alleges that “Law states that fraud in the inducement occurs when one person tricks the other into signing an agreement based on fraudulent statements[.]” Id. at 10. Plaintiff further alleges that:1) “Defendant used fraudulent statements in their return policy”; 2) “Defendant did not follow the agreement in their policy when asked to”; and 3) “Plaintiff was tricked into signing the contract because of the false statements listed in the contract by the defendant[.]” Id. Claim Six (Fraudulent Misrepresentation): In this claim, Plaintiff alleges that “Law states that fraudulent misrepresentation happens when a representation is made that is used to trick the other party” and that “Defendant made a representation about their return policy . . .[that] was not true” and that Defendant “should have known . . . was not true.” Id. at 11. According to Plaintiff, he “relied on the false representation” and “was not able to use the representation when they brought it to the defendant's attention.” Id. at 11-12.
Claim Seven (Breach of Contract): In this claim, Plaintiff alleges that “Law states that breach of contract happens when one party doesn't do their promised obligation[,]” “Defendant made a promise about their return policy to the plaintiff[,]” and that “Defendant did not keep this promise[.]” Id. at 13.
Claim Eight (Fraud): In this claim, Plaintiff alleges that “Law states that fraud happens when a misrepresentation of a fact happens” and that “Defendant made a statement about their return policy to the plaintiff” but “did [not] do what they promised in the statement.” Id. at 14.
Plaintiff alleges that as a result of Carmax's violations, they were damaged in the amount of $238,000. Id. at 15.
Where a plaintiff is found to be indigent under 28 U.S.C. § 1915(a)(1) and is granted leave to proceed in forma pauperis, courts must engage in screening and dismiss any claims which: (1) are frivolous or malicious; (2) fail to state a claim on which relief may be granted; or (3) seek monetary relief from a defendant who is immune from such relief. 28 U.S.C. § 1915(e)(2)(B); see Marks v. Solcum, 98 F.3d 494, 495 (9th Cir. 1996).
To state a claim for relief, a plaintiff generally must make “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). In alleging fraud or mistake, however, “a party must state with particularity the circumstances constituting fraud or mistake.” Fed.R.Civ.P. 9(b). Further, a claim may be dismissed for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6); see also Diaz v. Int'l Longshore and Warehouse Union, Local 13, 474 F.3d 1202, 1205 (9th Cir. 2007). In determining whether a plaintiff fails to state a claim, the court takes “all allegations of material fact in the complaint as true and construe[s] them in the light most favorable to the non-moving party.” Cedars-Sinai Med. Ctr. v. Nat'l League of Postmasters of U.S., 497 F.3d 972, 975 (9th Cir. 2007).
“[T]he tenet that a court must accept a complaint's allegations as true is inapplicable to legal conclusions [and] mere conclusory statements,” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)), and courts “do not necessarily assume the truth of legal conclusions merely because they are cast in the form of factual allegations.” Coto Settlement v. Eisenberg, 593 F.3d 1031, 1034 (9th Cir. 2010) (internal quotation marks omitted). The complaint need not contain “detailed factual allegations,” but must allege facts sufficient to “state a claim to relief that is plausible on its face.” Id. at 678 (citing Twombly, 550 U.S. at 570).
Where the complaint has been filed by a pro se plaintiff, courts must “construe the pleadings liberally . . . to afford the petitioner the benefit of any doubt.” Hebbe v. Pliler, 627 F.3d 338, 342 (9th Cir. 2010). “A pro se litigant must be given leave to amend his or her complaint unless it is absolutely clear that the deficiencies in the complaint could not be cured by amendment.” Noll v. Carlson, 809 F.2d 1446, 1448 (9th Cir. 1987), superseded on other grounds by statute, as recognized in Lopez v. Smith, 203 F.3d 1122 (9th Cir. 2000) (en banc). Further, when it dismisses the complaint of a pro se litigant with leave to amend, “the district court must provide the litigant with notice of the deficiencies in his complaint in order to ensure that the litigant uses the opportunity to amend effectively.” Id. (quoting Ferdik v. Bonzelet, 963 F.2d 1258, 1261 (9th Cir. 1992)). “Without the benefit of a statement of deficiencies, the pro se litigant will likely repeat previous errors.” Karim-Panahi v. L.A. Police Dep't, 839 F.2d 621, 624 (9th Cir. 1988) (quoting Noll v. Carlson, 809 F.2d 1446, 1448 (9th Cir. 1987)).
Claims One and Two of Plaintiff's complaint reference a regulation, 12 C.F.R. § 226.23, an implementing regulation of the Truth in Lending Act (TILA) governing the circumstances under which a consumer may rescind “a credit transactions in which a security interest is or will be retained or acquired in a consumer's principal dwelling.” 12 C.F.R. § 226.23. Plaintiff's allegations in these claims are too vague and conclusory to state any viable claim under TILA.
TILA was enacted “to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit, and to protect the consumer against inaccurate and unfair credit billing and credit card practices.” 15 U.S.C. § 1601(a). “Congress . . . delegated expansive authority to the Federal Reserve Board to elaborate and expand the legal framework governing commerce in credit.” Ford Motor Credit Co. v. Milhollin, 444 U.S. 555, 559-60 (1980) (citing 15 U.S.C. § 1604). Pursuant to that authority, the Federal Reserve Board adopted “Regulation Z” - an extensive set of regulations governing the disclosures that are required as to various types of consumer credit transactions. See generally, 12 C.F.R. Part 26. A disclosure violation under TILA triggers two potential remedies for a borrower: damages and rescission, 15 U.S.C. §§ 1635, 1640.
Plaintiff has not alleged any facts about the credit transaction that he claims violated TILA, making it impossible to determine what disclosures - if any-apply to the credit transaction he alleges he entered into with Carmax or if they were violated. The Court further notes that although Plaintiff relies on the regulation that governs the right to rescission, 12 C.F.R. § 226.23, he does not appear to seek rescission of any credit transaction. Instead, he seeks to recover damages, which are governed by a different regulation. For these reasons, Claims One and Two fail to state a claim.
Claims Three and...
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