Cottle v. Monitech, Inc.
7:17-cv-00137
E.D.N.C.Dec 20, 2017Background
- Defendant Monitech, Inc. installs and leases ignition interlock devices to motorists; plaintiff Jessica Cottle signed a 12‑month lease on July 23, 2016 requiring six $150 payments (first due at signing).
- Cottle sued as a putative class action under the Consumer Leasing Act (CLA) and Regulation M, alleging the lease failed to provide required segregated disclosures and was not substantially similar to the model form.
- Plaintiff alleged the sole injury was confusion about lease terms (total amount owed, possible additional charges, and purchase option) resulting from the alleged disclosure defects.
- Defendant moved to dismiss under Fed. R. Civ. P. 12(b)(1) (lack of Article III standing) and 12(b)(6) (failure to state a claim).
- The court analyzed Article III standing in light of Spokeo and Fourth Circuit precedent requiring a concrete informational injury, concluding plaintiff alleged only a bare procedural violation and confusion without a concrete adverse effect.
- Court granted defendant’s motion and dismissed the action for lack of Article III standing; file closed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Article III standing for CLA/Regulation M claim | Cottle contends the statutory disclosure violations caused confusion — an informational injury the CLA protects | Monitech argues plaintiff alleges only a bare procedural violation and suffered no concrete harm or adverse effect on her conduct | Dismissed for lack of Article III standing: confusion alone insufficient without concrete harm or denial of information that caused real adverse effect |
| Sufficiency of factual allegations to survive 12(b)(6) | The complaint alleges statutory violations and confusion about lease terms | Defendant contends allegations are conclusory and do not show cognizable injury | Because plaintiff lacks Article III standing, the complaint fails and dismissal is appropriate |
Key Cases Cited
- Koons Buick Pontiac GMC, Inc. v. Nigh, 543 U.S. 50 (2004) (describing CLA as Truth in Lending Act amendment to apply TILA protections to leases)
- Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) (bare procedural violations, divorced from concrete harm, do not satisfy injury‑in‑fact)
- Dreher v. Experian Info. Sols., Inc., 856 F.3d 337 (4th Cir. 2017) (informational injury requires denial of information to which plaintiff is entitled and a real adverse effect)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (standing requires concrete, particularized, and actual or imminent injury)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (complaint must state a plausibly actionable claim)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (legal conclusions and conclusory allegations insufficient to survive a motion to dismiss)
- Warth v. Seldin, 422 U.S. 490 (1975) (standing determines whether court may decide the merits)
- Phelps v. Robert Woodall Chevrolet, Inc., 306 F. Supp. 2d 593 (W.D. Va. 2003) (describing TILA/CLA as remedial consumer protection statutes to be construed liberally)