701 F. App'x 45
2d Cir.2017Background
- Patricia J. Ritchie, principal of a small California business, applied for a lease of a credit-card reader through an independent vendor (Merchants Made Easy).
- Ritchie returned a lease application and a voided check but never signed the formal lease; Merchants Made Easy sent Lease Finance Group, LLC (LFG) a lease bearing a forged signature and warranted it as valid.
- LFG delivered the machine, debited monthly payments from Ritchie’s account for 13 months, and sent her a copy of the (forged) lease; Ritchie used the machine and later closed her business and bank account.
- LFG and an affiliate, Northern Leasing Systems, sought collection after Ritchie stopped payments; collection activity affected her credit report and prompted a dispute to Experian.
- Ritchie sued LFG, Northern, and individuals/attorneys asserting RICO, FCRA, state-law analogues, common-law fraud, and N.Y. Gen. Bus. Law § 349 deceptive-practices claims; the district court granted summary judgment for defendants.
- The Second Circuit affirmed, concluding plaintiffs failed to show defendants’ knowledge of forgery or other liability under the asserted statutes and state claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether defendants committed RICO predicate acts (fraud, extortion) requiring specific intent | Ritchie contends defendants participated in or knowingly used a forged lease to collect payments | Defendants argue there is no evidence they forged or knew of the forgery; Merchants Made Easy warranted the signature | Court: No genuine dispute of specific intent; RICO and conspiracy claims dismissed |
| Whether defendants violated FCRA by obtaining/using Ritchie’s consumer report without permissible purpose | Ritchie claims defendants lacked permissible purpose and failed to properly investigate dispute | Defendants contend they accessed reports for permissible purposes (lease pricing, collection) and investigated the Experian dispute as required | Court: Accesses permissible; investigation obligations satisfied; FCRA claims dismissed |
| Whether state-law analogues to FCRA apply to non-New York resident (choice-of-law/standing) | Ritchie did not rebut defendants’ argument that state protections are limited to New York residents | Defendants argued the state law claims protect only NY residents (as applied) | Court: Plaintiff forfeited response on appeal; affirmed dismissal on that basis |
| Whether common-law fraud and NY GBL § 349 claims survive | Ritchie asserts fraud and deceptive practices arising from defendants’ statements about the lease/signature | Defendants note lack of evidence that Ritchie relied on any deceptive statements and no deceptive acts meeting § 349 standard | Court: Fraud dismissed for lack of actual reliance; § 349 dismissed for failure to show deceptive acts |
Key Cases Cited
- United States v. Regan, 937 F.2d 823 (2d Cir.) (mail and wire fraud require specific intent)
- United States v. Scacchetti, 668 F.2d 643 (2d Cir. 1982) (Hobbs Act extortion requires intent)
- Flickinger v. Harold C. Brown & Co., 947 F.2d 595 (2d Cir. 1991) (New York common-law fraud requires actual reliance)
- First Capital Asset Mgmt., Inc. v. Satinwood, Inc., 385 F.3d 159 (2d Cir.) (RICO conspiracy requires underlying predicate intent)
- United States v. Int'l Bhd. of Teamsters, 247 F.3d 370 (2d Cir. 2001) (standards for Rule 60(b) relief; extraordinary circumstances and admissibility)
- Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, N.A., 85 N.Y.2d 20 (N.Y. 1995) (elements of deceptive acts under N.Y. Gen. Bus. Law § 349)
- EDP Med. Computer Sys., Inc. v. United States, 480 F.3d 621 (2d Cir. 2007) (forfeiture of appellate arguments not raised below)