Freshta Nayab v. Capital One Bank (Usa), Na, 942 F.3d 480

Background

Plaintiff Freshta Nayab sued Capital One under the Fair Credit Reporting Act (FCRA), alleging Capital One obtained multiple inquiries to her Experian consumer credit report for purposes not authorized by 15 U.S.C. § 1681b(f).
The district court dismissed Nayab’s complaint with prejudice for lack of Article III standing and for failure to state a claim.
The Ninth Circuit reversed and remanded, holding (majority) that an unauthorized procurement of a consumer credit report injures a concrete, substantive privacy interest under the FCRA and thus confers standing.
The panel also held a plaintiff need only plead facts giving rise to a reasonable inference that the report was obtained for an unauthorized purpose; the defendant bears the burden of pleading an authorized purpose as an affirmative defense.
The court clarified that injury exists whether or not the unauthorized user published or otherwise used the report.
Judge Rawlinson concurred in part (standing) and dissented in part (would have affirmed dismissal on Rule 8/Twombly-Iqbal pleading grounds, finding Nayab’s allegations conclusory).

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a consumer suffers a concrete Article III injury when a third party obtains her credit report for a purpose not authorized by the FCRA	Nayab: unauthorized procurement itself invades the statutory privacy interest and is a concrete injury	Capital One: a bare procedural or technical violation absent additional harm may not confer Article III standing	Court: Yes. Unauthorized obtaining of a credit report violates a substantive FCRA right and is a concrete injury, even if the report was not published or otherwise used; Nayab has standing
Whether plaintiff must plead the defendant’s actual (unauthorized) purpose to survive Rule 12(b)(6)	Nayab: she need only allege facts giving rise to a reasonable inference the report was obtained for an unauthorized purpose; defendant should plead any authorized-purpose defense	Capital One: plaintiff must plead the purpose or otherwise plead facts negating each authorized exception	Court: Plaintiff need not plead the defendant’s actual purpose; plaintiff’s allegations that negate or render unlikely the statutory exceptions are sufficient to state a plausible claim; defendant bears burden of pleading an authorized-purpose defense
Sufficiency of Nayab’s complaint under Twombly/Iqbal	Nayab: alleged specific facts (no relationship, no transactions, discovered inquiries on credit report) that plausibly infer unauthorized access	Capital One: allegations are conclusory and fail to plausibly allege wrongdoing under Twombly/Iqbal	Court (majority): Allegations were sufficient to permit a reasonable inference of unauthorized access and survive dismissal; Judge Rawlinson dissented, arguing the pleading was conclusory and insufficient under Twombly/Iqbal

Key Cases Cited

Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (U.S. 2016) (standing framework; procedural vs. concrete harms)
Lujan v. Defenders of Wildlife, 504 U.S. 555 (U.S. 1992) (basic Article III standing elements)
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (pleading must be plausible, not merely speculative)
Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (Twombly standard applied to factual plausibility and conclusory allegations)
Eichenberger v. ESPN, Inc., 876 F.3d 979 (9th Cir. 2017) (privacy-based statutory right can supply concreteness for standing)
Robins v. Spokeo, Inc., 867 F.3d 1108 (9th Cir. 2017) (on remand interpreting Spokeo and recognizing procedural violations can sometimes confer concreteness)
Syed v. M-I, LLC, 853 F.3d 492 (9th Cir. 2017) (FCRA privacy interest and standing where employer improperly procured report)
Van Patten v. Vertical Fitness Group, LLC, 847 F.3d 1037 (9th Cir. 2017) (express-consent under TCPA treated as an affirmative defense)
Tourgeman v. Nelson & Kennard, 900 F.3d 1105 (9th Cir. 2018) (allocation of burdens between elements and affirmative defenses)