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Kreiger v. Bank of America, N.A.

United States District Court, M.D. Pennsylvania

January 17, 2017

BANK OF AMERICA, N.A., Defendant.


          Matthew W. Brann, United States District Judge

         Before the Court for disposition is Defendant Bank of America, N.A.'s Motion to Dismiss Plaintiff's Amended Complaint. For the following reasons, Defendant's Motion will be granted.


         This action was brought before the Court by Notice of Removal on May 9, 2016.[2] At its core, Plaintiff William Krieger's (“Plaintiff”) Amended Complaint concerns Defendant Bank of America, N.A.'s (“Defendant”) actions in light of what he contends was a fraudulent transaction billed to his account. In support of this contention, Plaintiff's Amended Complaint contains the following factual narrative.

         The instant dispute stems from functional problems which Plaintiff[3] was experiencing with his computer in June 2015. Specifically, on or about June 27, 2015, Plaintiff received a telephone call from an unknown third party identifying himself as a Microsoft employee.[4] This unknown party informed Plaintiff that his computer woes were the result of a virus, and requested that Plaintiff grant him remote access to remedy the situation.[5] As this unknown party was accessing the computer to “remove the virus, ” Plaintiff's daughter arrived home and informed him that this call was likely the result of a scam.[6] To remedy the situation, she then disconnected the computer from the internet.[7] Plaintiff asserts that, as his daughter pulled the plug, his credit card number displayed on the computer screen.[8]

         To mitigate the potential effects of this scam, Plaintiff and his daughter made two telephone calls. First, they called Microsoft and were informed that the individual accessing their computer was not a Microsoft employee.[9] Second, Plaintiff called Defendant to inquire about possible unauthorized charges made by this unknown third party.[10] During this latter conversation, Plaintiff was told that a Western Union money transfer had been purchased in the amount of $657.00.[11]Although Plaintiff then relayed that he had not authorized the charge and that his account was compromised, Defendant's customer service department instructed Plaintiff that action concerning the charge could be taken only after he received a billing statement.[12]

         On July 29, 2015, Plaintiff received a billing statement from Defendant which reflected the Western Union charge from June 27, 2015.[13] During a subsequent telephone call made to Defendant, Plaintiff again expressed that the charge was unauthorized.[14] Defendant initially expressed that it could not do anything concerning the charge because Western Union had already authorized the charge.[15] However, Defendant later advised Plaintiff during a second telephone call that it would credit the account while it investigated the charge.[16] Two letters later received by Plaintiff, and attached to his Amended Complaint, memorialized the substance of these telephone conversations.[17] Based on both these letters and a billing statement received after August 18, 2015, Plaintiff believed the disputed charge had been resolved to his satisfaction.[18]

         Defendant then mailed a letter on September 11, 2015 which indicated that it had completed its investigation of the disputed charge, and, because Western Union had documentation supporting the validity of the charge, it would be reinstating the disputed amount.[19] Defendant also enclosed a document entitled “Western Union Chargeback Response” which listed the recipient of the money order as Amit Rajak in Mumbai, India.[20] Plaintiff avers that he has never been to India, nor does he know any named Amit Rajak.[21] A billing statement for August 19, 2015 through September 18, 2015 subsequently confirmed the reinstatement of this charge.[22]

         On September 23, 2015, Plaintiff again contacted Defendant to discuss this now-rebilled Western Union charge.[23] During this telephone call, Defendant's representatives stated that the Western Union money transfer had not been paid out until August 1, 2015-following what Plaintiff avers were numerous warnings to Defendant that the charge was unauthorized.[24] A Notice of Billing Error was thereafter sent by Plaintiff on September 26, 2015 and received by Defendant on September 29, 2015.[25] An acknowledgement sent by Defendant on October 3, 2015 confirmed its receipt.[26] Defendant further responded in a letter dated October 9, 2015 that it was unable to credit Plaintiff's account based on the results of its investigation of the charge.[27]

         Based on these events, Plaintiff asserts that Defendant violated (1) the Fair Credit Billing Act (“FCBA”), [28] (2) the Truth in Lending Act (“TILA”), [29] and (3) the Fair Credit Extension Uniformity Act (“FCEUA”)[30] and Unfair Trade Practices and Consumer Protection Law (“UTPCPL”).[31] Defendant, in turn, has moved to dismiss the entirety of Plaintiff's Amended Complaint under Federal Rule of Civil Procedure 12(b)(6).[32] This matter has since been fully briefed and is ripe for disposition.[33]


         A. Legal Standard

         Under Federal Rule of Civil Procedure 12(b)(6), a defendant may file a motion to dismiss for “failure to state a claim upon which relief can be granted.” Such a motion “tests the legal sufficiency of a pleading” and “streamlines litigation by dispensing with needless discovery and factfinding.”[34] “Rule 12(b)(6) authorizes a court to dismiss a claim on the basis of a dispositive issue of law.”[35]This is true of any claim, “without regard to whether it is based on an outlandish legal theory or on a close but ultimately unavailing one.”[36]

         Beginning in 2007, the Supreme Court of the United States initiated what some scholars have termed the Roberts Court's “civil procedure revival” by significantly tightening the standard that district courts must apply to 12(b)(6) motions.[37] In two landmark decisions, Bell Atlantic Corporation v. Twombly and Ashcroft v. Iqbal, the Roberts Court “changed . . . the pleading landscape” by “signal[ing] to lower-court judges that the stricter approach some had been taking was appropriate under the Federal Rules.”[38] More specifically, the Court in these two decisions “retired” the lenient “no-set-of-facts test” set forth in Conley v. Gibson and replaced it with a more exacting “plausibility” standard.[39]

         Accordingly, after Twombly and Iqbal, “[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'”[40] “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”[41] “Although the plausibility standard does not impose a probability requirement, it does require a pleading to show more than a sheer possibility that a defendant has acted unlawfully.”[42] Moreover, “[a]sking for plausible grounds . . . calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of [wrongdoing].”[43]

         The plausibility determination is “a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.”[44] No matter the context, however, “[w]here a complaint pleads facts that are ‘merely consistent with' a defendant's liability, it ‘stops short of the line between possibility and plausibility of entitlement to relief.'”[45]

         When disposing of a motion to dismiss, a court must “accept as true all factual allegations in the complaint and draw all inferences from the facts alleged in the light most favorable to [the plaintiff].”[46] However, “the tenet that a court must accept as true all of the allegations contained in the complaint is inapplicable to legal conclusions.”[47] “After Iqbal, it is clear that conclusory or ‘bare-bones' allegations will no longer survive a motion to dismiss.”[48] “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.”[49]

         As a matter of procedure, the United States Court of Appeals for the Third Circuit has instructed that:

Under the pleading regime established by Twombly and Iqbal, a court reviewing the sufficiency of a complaint must take three steps. First, it must tak[e] note of the elements [the] plaintiff must plead to state a claim. Second, it should identify allegations that, because they are no more than conclusions, are not entitled to the assumption of truth. Finally, [w]hen there are well-pleaded factual allegations, [the] court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.[50]

         B. Analysis

         Through the instant Motion to Dismiss, Defendant now asks this Court to dismiss Plaintiff's Amended Complaint in its entirety. Having considered the arguments of both parties, I will grant this Motion. My reasoning for this conclusion follows below and is separated in accordance with the claim analyzed.

         (1) Plaintiff Has Not Alleged a Plausible Claim For Relief Under the Fair Credit Billing Act.

         The Fair Credit Billing Act “provides a procedure through which a debtor can dispute statements containing a billing error issued by a creditor.”[51] Specifically, when a creditor receives written notice from the consumer of the alleged errors within 60 days of the issuance of the statement containing those charges, the FCBA requires creditors to investigate and correct any charges erroneously billed to a consumer's account.[52] To trigger such an investigation, the written notice of billing error must contain: “(1) information that allows the creditor to ascertain the consumer's name and account number, (2) an indication that the consumer believes the statement contains a billing error and the amount of that error, and (3) the reasons for the consumer's belief.”[53]

         In the matter at hand, Defendant alleges that its obligations under the FCBA were not triggered because Plaintiff failed to send a written notice of billing error within 60 days after receiving the first billing statement containing the Western Union charge.[54] I agree with this contention. According to the facts as plead by Plaintiff, the first statement containing the Western Union charge was received on July 29, 2015.[55] Plaintiff, however, first contested this charge by written notice received by Defendant on September 29, 2015.[56] The duration between July 28, 2015 (the absolute earliest date on which first statement containing the Western Union charge could have been issued) and September 29, 2015 (the date which Plaintiff alleges Defendant received his written notice) is 63 days.[57] Because this passage of time exceeds 60 days, Defendant's obligations under Section 166(a)(A) and (B) were never triggered. Liability under this statute can therefore not be imposed.

         In light of this clear deficiency, Plaintiff valiantly attempts to rescue his claim by making creative, but ultimately unpersuasive arguments concerning the written notice requirement. First, Plaintiff argues that, although 12 C.F.R. § 1026.13(b) of Regulation Z governs this dispute under the FCBA, the Consumer Financial Protection Bureau's official interpretations of this section require a cross reference with 12 C.F.R. § 1026.12. Therefore, because Section 1026.12 provides that notification may be made “by telephone, or in writing, ”[58] Plaintiff provided the required notice by informing Defendant of the Western Union charge by telephone on July 29, 2015. This argument is incorrect. As noted by Defendant, Section 1026.12(b)(3) concerns the liability of a cardholder for unauthorized charges. Here, the instant action as plead by Plaintiff concerns card issuer Defendant's liability under Section 1666(a) of the FCBA for failure to conduct a reasonable investigation. As I previously recognized in Knowles v. Capital One Bank (USA), N.A., this card issuer obligation is only triggered upon written notice of billing error.[59]

         Plaintiff argues, in the alternative, that he complied with the writing and timeliness requirements of the FCBA because his written notice of billing error was made in response to the re-billed charge on the September 18, 2015 statement. To support this argument, Plaintiff relies upon inspired arguments concerning what he believes the law should be. I am compelled, however, by the plain language of the applicable governing regulation-12 C.F.R. § 226.13(b)-to reject this argument. This regulation specifically states

A billing error notice is a written notice from a consumer that:(1) Is received by a creditor at the address disclosed under § 226.7(a)(9) or (b)(9), as applicable, no later than 60 days after the creditor transmitted the first periodic statement that reflects the alleged billing error.[60]

         This language clearly contradicts Plaintiff's argument. Thus, because written notice was received by Defendant more than 60 days after the first billing statement containing the error, Plaintiff's FCBA claim must be dismissed.[61]

         (2) Plaintiff Has Not Alleged a Plausible Claim Under the Truth in Lending Act.

         Defendant next seeks dismissal of the second count contained within Plaintiff's Amended Complaint. Defendant argues that dismissal is proper because the statutory section of the Truth in Lending Act cited by Plaintiff-15 U.S.C. § 1643-does not provide cardholders with a cause of action. Based on a review of the case law concerning this provision, I agree with this argument and will also dismiss this claim.

         Section 1643 of the Truth in Lending Act places limits on the liability of a cardholder for unauthorized use of a credit card. Most pertinently, this Section provides that "[a] cardholder shall be liable for the unauthorized use of a credit card only if . . . the liability is not in excess of $50."[62] This provision, however, does not provide a cardholder with a right to reimbursement nor a private cause of action. Specifically, as noted by the Third Circuit in Azur v. Chase Bank, USA, N.A., Section 1643

"places a ceiling on a cardholder's obligations under the law and thus limits a card issuer's ability to sue a cardholder to recover fraudulent purchases. The language of § 1643 does not, however, enlarge a card issuer's liability or give the cardholder a right to reimbursement."[63]

         Simply put, this section, while limiting a card issuer's potential recovery for fraudulent purchases, "imposes liability only upon the cardholder."[64]

         In the matter at hand, Plaintiff, a cardholder, alleges a claim under Section 1643 of the TILA against Defendant, a card issuer. In so doing, Plaintiff attempts to use Section 1643 as a sword bent on forcing liability through a novel cause of action. As described above, however, this use has been invalidated by the Third Circuit. Therefore, despite the best efforts of Plaintiff to obscure this finding, I am compelled to dismiss the instant TILA claim.

         (3) The Court Cannot Exercise Supplemental Jurisdiction over Plaintiff's Claim Under the Fair Credit Extension Uniformity Act/Unfair Trade Practices and Consumer Protection Law.

         The final count included in Plaintiff's amended complaint alleges a violation of the Pennsylvania Fair Credit Extension Uniformity Act[65] as enforced by the remedial provision of the Unfair Trade Practices and Consumer Protection Law.[66]Defendant moves for dismissal of this count for failure to state a claim upon which relief can be granted. However, because my prior dismissal of Plaintiff's claims under the FCBA and TILA removed this Court's original jurisdiction, I ...

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