Strubel v. Comenity Bank
842 F.3d 181
| 2d Cir. | 2016Background
- Plaintiff Abigail Strubel opened a Comenity-issued Victoria’s Secret credit card in June 2012 and filed a putative class action under the Truth in Lending Act (TILA) one year later, challenging four disclosure statements in the account materials.
- Strubel alleged Comenity’s disclosures deviated impermissibly from Model Form G–3(A) and therefore violated 15 U.S.C. § 1637(a)(7), entitling her to statutory damages under 15 U.S.C. § 1640(a).
- The district court granted summary judgment to Comenity and denied class certification as moot; Strubel appealed.
- On appeal Comenity first raised a standing challenge; the Second Circuit analyzed Article III standing under Spokeo and related precedent to decide which claims presented a concrete, particularized injury.
- The court held Strubel lacked standing for two disclosure challenges (automatic-payment-plan notice and a 30‑day acknowledgment/correction notice) and dismissed those claims for lack of jurisdiction; it found standing for the two remaining claims but affirmed summary judgment on the merits for those claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing for failure-to-disclose automatic-payment-plan stop-payment notice | Strubel: omission of notice about obligations to stop automatic payments violated § 1637(a)(7) and caused concrete risk of harm | Comenity: no concrete injury because it did not offer an automatic payment plan to Strubel; thus no risk of harm | Court: No standing — dismissed for lack of jurisdiction because Strubel produced no evidence she faced the risk (Comenity did not offer auto-pay) |
| Standing for failure to disclose 30‑day acknowledgment/correction duty after reported billing error | Strubel: statement failed to clearly advise creditor must either acknowledge within 30 days or notify of a correction, violating § 1637(a)(7) | Comenity: the alleged defect is a bare procedural error that did not present a material risk of harm to Strubel | Court: No standing — dismissed for lack of jurisdiction because the claimed procedural shortfall presented no material risk of harm to Strubel (she never reported errors) |
| Merits of purchase/outstanding-balance language (whether disclosure omitted limitations on cash advances/checks and on only unpaid amounts) | Strubel: Comenity’s language omitted the Model Form’s explicit paragraphs limiting rights to credit-card purchases and to amounts still unpaid, so it departed from § 1637(a)(7) + Regulation Z | Comenity: its disclosure was substantially similar and would not mislead the average consumer; therefore compliant | Court: Held for Comenity — wording was substantially similar as a matter of law; no TILA violation |
| Merits of alleged requirement that disputes be submitted in writing | Strubel: Model Form’s optional language signals a written/electronic requirement, and omission violated § 1637(a)(7) | Comenity: Model Form language is explicitly optional; § 1666i does not require written notice | Court: Held for Comenity — no statutory or regulatory requirement that disputes be written; summary judgment affirmed |
Key Cases Cited
- Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) (Article III standing requires a concrete and particularized injury; procedural violations alone may be insufficient)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (irreducible standing requirements: injury in fact, causation, redressability)
- Summers v. Earth Island Inst., 555 U.S. 488 (2009) (procedural-right deprivation insufficient absent concrete interest protected by the procedure)
- Federal Election Comm’n v. Akins, 524 U.S. 11 (1998) (statutory right to information can confer Article III injury when denied)
- Public Citizen v. Department of Justice, 491 U.S. 440 (1989) (denial of statutorily required information can be a distinct injury supporting standing)
- Household Credit Servs., Inc. v. Pfennig, 541 U.S. 232 (2004) (Chevron deference to agency interpretations of TILA/Regulation Z)
- Global Crossing Telecomms., Inc. v. Metrophones Telecomms., Inc., 550 U.S. 45 (2007) (violating a valid implementing regulation effectuates a violation of the statute)
- Turner v. General Motors Acceptance Corp., 180 F.3d 451 (2d Cir. 1999) (TILA requires meaningful disclosure, not merely more disclosure)