Nayab v. Capital One Bank, N.A.
3:16-cv-03111
S.D. Cal.Jun 23, 2017Background
- Plaintiff Freshta Nayab sued Capital One under the Fair Credit Reporting Act (FCRA), alleging Capital One made unauthorized inquiries on her Experian credit report in June 2016.
- The original complaint asserted a single FCRA claim and putative nationwide classes; Nayab filed a First Amended Complaint (FAC) after Capital One moved to dismiss.
- The FAC alleges Capital One lacked any permissible purpose under 15 U.S.C. § 1681b when it accessed her consumer report, but does not identify Capital One’s actual purpose or any transactional relationship.
- Nayab alleged on information and belief that the inquiries lowered her credit score, harmed credit availability, increased risk of harm from a data breach, and caused a privacy invasion, but pleaded no concrete, particularized damages.
- Capital One moved to dismiss for lack of subject-matter jurisdiction (no Article III standing) and for failure to state a claim under Rule 12(b)(6); the court granted dismissal with prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Article III standing — concrete injury | Nayab: statutory violation and alleged score drop, privacy invasion, and increased breach risk suffice | Capital One: FAC alleges only procedural violation; no concrete, particularized injury | No standing — procedural FCRA violation alone insufficient; alleged harms speculative or not pleaded as actual injuries |
| Causation / traceability of injury | Nayab: inquiries caused score drop and credit impact (on information and belief) | Capital One: conjectural; no facts linking inquiries to denial of credit or actual harm | Not satisfied — FAC fails to allege concrete, traceable harm |
| Sufficiency of FCRA claim (permissible purpose) | Nayab: alleging report was pulled and none of statutory purposes applied is enough; burden on defendant to prove permissible purpose | Capital One: plaintiff must plead facts showing defendant lacked a permissible purpose; mere denial or recitation is conclusory | Failure to state a claim — FAC lacks factual allegations about Capital One’s actual purpose; legal conclusions insufficient |
| Leave to amend | Nayab: could amend to plead facts if given chance | Capital One: plaintiff admits she has no information about purpose; amendment would be futile | Dismissal with prejudice — amendment futile because plaintiff admits lack of facts about defendant’s purpose, and any amendment would still fail to state a claim |
Key Cases Cited
- Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574 (jurisdictional threshold and requirement to establish subject-matter jurisdiction)
- Steel Co. v. Citizens for Better Environment, 523 U.S. 83 (federal courts must resolve jurisdictional questions before merits)
- Arbaugh v. Y & H Corp., 546 U.S. 500 (court’s independent obligation to determine subject-matter jurisdiction)
- Cetacean Community v. Bush, 386 F.3d 1169 (9th Cir. 2004) (standing requirement for Article III jurisdiction)
- Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (concrete and particularized injury required; bare procedural violations insufficient)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (standing elements: injury-in-fact, causation, redressability)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (plausibility standard for federal complaints)
- Ashcroft v. Iqbal, 556 U.S. 662 (conclusory allegations insufficient to survive dismissal)
- Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025 (pleading assumptions and construing allegations in plaintiff’s favor)
- Johnson v. Riverside Healthcare Sys., 534 F.3d 1116 (dismissal for lack of cognizable legal theory or insufficient facts)