Galper v. JP Morgan Chase Bank, N.A.
2015 U.S. App. LEXIS 17224
| 2d Cir. | 2015Background
- Plaintiff Yelena Galper alleges Chase employees stole and fraudulently used her identity to open and operate accounts used for a Medicare fraud/money‑laundering scheme; she was later arrested and acquitted.
- Galper alleges Chase employees acted within the scope of employment and for Chase’s benefit, so Chase is vicariously liable under New York’s identity‑theft statutes (N.Y. Gen. Bus. Law §§ 380‑s, 380‑1).
- The New York statute authorizes a civil action only if the identity theft “resulted in the transmission or provision to a consumer reporting agency of information that would otherwise not have been transmitted or provided.”
- Galper’s complaint alleges adverse reports reached consumer reporting agencies and caused further harms but does not identify who furnished those reports.
- Chase removed to federal court and moved to dismiss, arguing Galper’s state claims are preempted by the FCRA’s express preemption for claims “with respect to” subject matter regulated by 15 U.S.C. § 1681s‑2 (duties of furnishers).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FCRA § 1681t(b)(1)(F) preempts Galper’s New York identity‑theft claims | Galper: her claims allege employee identity theft and vicarious liability under NY law; they do not implicate furnishers’ duties under § 1681s‑2 | Chase: the state claims depend on transmission to credit agencies and thus are "with respect to" furnishing duties and preempted | Court: § 1681t(b)(1)(F) preempts only claims that concern a defendant’s legal responsibilities as a furnisher under § 1681s‑2; vicarious liability for employees’ identity theft not addressing furnisher duties is not preempted |
| Whether claims based on wrongful furnishing of information are preempted | Galper: complaint primarily alleges employee theft rather than wrongful furnishing | Chase: to the extent claims rest on erroneous furnishing, they are preempted | Held: claims premised on erroneous or improper furnishing are preempted; claims premised on employee identity theft/vicarious liability are not |
| Whether punitive damages based on furnishing conduct are available | Galper seeks punitive damages generally | Chase argues punitive recovery based on furnishing is preempted | Held: punitive damages tied to alleged wrongful furnishing to CRAs are preempted by FCRA preemption provision |
| Proper scope of preemption clause "with respect to" subject matter regulated under § 1681s‑2 | Galper: narrow reading so states may provide tort remedies for identity theft | Chase: broad reading to preempt any state law tied to furnishing/reporting | Held: phrase read narrowly—preempts only claims that concern furnishers’ responsibilities under § 1681s‑2, not all claims that merely involve information reaching CRAs |
Key Cases Cited
- Wyeth v. Levine, 555 U.S. 555 (2009) (Congressional intent is the touchstone in preemption analysis)
- Dan’s City Used Cars, Inc. v. Pelkey, 133 S.Ct. 1769 (2013) ("with respect to" preemption interpreted as claims that concern the preempted subject matter)
- CTS Corp. v. Waldburger, 134 S.Ct. 2175 (2014) (presumption against preemption of state police powers)
- Lorillard Tobacco Co. v. Reilly, 533 U.S. 525 (2001) (each phrase in preemption clause limits preemptive scope)
- Macpherson v. JPMorgan Chase Bank, N.A., 665 F.3d 45 (2d Cir. 2011) (FCRA preempted state claims based on furnishers’ willful provisioning of false information)
- Longman v. Wachovia Bank, N.A., 702 F.3d 148 (2d Cir. 2012) (interpretation of § 1681s‑2 duties for furnishers)