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Boone v. T-Mobile USA Inc.

United States District Court, D. New Jersey

January 26, 2018

DEAN BOONE, individually and on behalf of all others similarly situated, Plaintiff,
v.
T-MOBILE USA INC., Defendant.

          OPINION

          KEVIN McNULTY UNITED STATES DISTRICT JUDGE

         Plaintiff Dean Boone ("Boone") alleges that defendant T-Mobile USA Inc. ("T-Mobile") obtained his credit report through a "hard" credit inquiry without his consent. He brings a class action on behalf of himself and all others similarly situated for purported violations of the Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq. ("FCRA") and the New Jersey Fair Credit Reporting Act, N.J. Stat. Ann. 56:11-28, et seq. ("NJ FCRA"). T-Mobile seeks to dismiss Boone's second amended complaint. (ECF no. 33). Boone opposes this motion and seeks leave to submit a third amended complaint. (ECF no. 36). T-Mobile opposes Boone's motion to amend, (ECF no. 39).

         I. BACKGROUND[1]

         A. Factual History

         Mr. Boone resides in Mahwah, New Jersey. (2AC ¶ 5). T-Mobile is a corporation that provides telephone and data services throughout the country. (2AC ¶ 6). Boone seeks to certify nationwide and New Jersey classes based on T-Mobile's purported violations of the FCRA and N.J. FCRA.

         On or about April 21, 2016, Boone went to a T-Mobile store in Paramus, New Jersey, and asked a T-Mobile employee about available cell phone plans and rates. (2AC ¶ 11). Boone made it clear that he did not want his credit report accessed if a "hard" credit inquiry would be required. (2AC ¶ 12). According to Boone, "hard" inquiries result in the disclosure of unauthorized personal information to T-Mobile and also lower the prospective customers' credit scores; "soft" inquiries, by contrast, involve less disclosure of information and do not affect credit scores. (2AC ¶ 21). The employee confirmed that T-Mobile would conduct a soft inquiry and not a hard inquiry. (2AC ¶ 15). Boone did not sign any agreement, did not agree to any services, and did not provide written consent for a hard inquiry. (2AC ¶¶ 16-17). Nonetheless, T-Mobile obtained his credit report through a hard credit inquiry. (2AC ¶ 17).

         T-Mobile has "routinely and systematically" obtained such hard inquiries on prospective customers without a permissible purpose or written consent. (2AC f 20). Those prospective customers form the putative classes.

         B. Putative Class Action

         Boone seeks to represent classes of prospective T-Mobile customers who, like him, were allegedly subject to improper hard credit inquiries. In his second amended complaint, Boone defines two putative classes of putative customers for whom T-Mobile conducted hard inquiries on "false pretenses":

FCRA False Pretense Class: All persons within the United States who had a hard credit inquiry performed on his or her credit by [T-Mobile] who had not previously authorized a hard inquiry within the five years prior to the filing of the Complaint until the date of final judgment in this action. (2AC ¶ 27).
NJ False Pretense Class: All persons within New Jersey who had a hard credit inquiry performed on his or her credit by [T-Mobile] who had not previously authorized a hard inquiry within the five years prior to the filing of the Complaint until the date of final judgment in this action. (2AC ¶ 28).

         In his proposed third amended complaint, Boone proposes two additional classes of prospective customers for whom T-Mobile sought hard inquiry credit reports for an "impermissible purpose":

FCRA Impermissible Purpose Class: All persons within the United States who had a hard credit inquiry performed on his or her credit by [T-Mobile, ] who had not authorized a hard inquiry, thereby obtaining a persons' credit report without any permissible purpose, within the five years prior to the filing of the Complaint until the date of final judgment in this action. (3AC ¶ 27).
NJ FCRA Impermissible Purpose Class: All persons within New Jersey who had a hard credit inquiry performed on his or her credit by [T-Mobile], who had not authorized a hard inquiry, thereby obtaining a persons' credit report without any permissible purpose, within the five years prior to the filing of the Complaint until the date of final judgment in this action. (3AC ¶ 29).[2]

         As the titles suggest, any FCRA class would seek relief under the federal FCRA, while any N.J. FCRA class would seek relief under the N.J. FCRA. (2AC ¶¶ 38-51; 3AC ¶¶ 40-53).

         C. Procedural History

         On January 19, 2017, Boone filed a complaint against T-Mobile in this Court. (ECF no. 1). T-Mobile moved to dismiss the complaint on February 27, 2017. (ECF no 10). On March 17, 2017, Boone filed an amended complaint. (ECF no. 13). T-Mobile moved to dismiss the amended complaint on April 14, 2017. (ECF no. 19).

         On June 15, 2017, Boone and T-Mobile attended a scheduling conference before the Honorable Michael A. Hammer. (PL Br. 4). At the scheduling conference, T-Mobile consented to Boone's filing a second amended complaint. (PL Br. 4).

         Boone filed that second amended complaint on June 28, 2017. (ECF no. 31). On July 26, 2017, T-Mobile filed this motion to dismiss the second amended complaint for failure to state a claim and for lack of standing. (ECF no. 33), On August 24, 2017, Boone sought leave to file a third amended complaint. (ECF no. 36). T-Mobile, which this time did not consent (PL Br. 4), opposes that motion. (ECF no. 39).

         II. LEGAL STANDARDS

         A. 12(b)(1) Motion to Dismiss for Lack of Jurisdiction

         Motions to dismiss for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1) may be raised at any time. Iwanowa v. Ford Motor Co., 67 F.Supp.2d 424, 437-38 (D.N.J. 1999). "[B]ecause subject matter jurisdiction is non-waivable, courts have an independent obligation to satisfy themselves of jurisdiction if it is in doubt. See ML Healthy City Sch. Dist. Bd. of Educ. v. Doyle, 429 U.S. 274, 278 (1977). A necessary corollary is that the court can raise sua sponte subject-matter jurisdiction concerns." Nesbit v. Gears Unlimited, Inc., 347 F.3d 72, 76-77 (3d Cir. 2003).

         Rule 12(b)(1) challenges may be either facial or factual attacks. See 2 Moore's Federal Practice § 12.30[4] (3d ed. 2007); Mortensen v. First Fed. Sav. & LoanAss'n, 549 F.2d 884, 891 (3d Cir. 1977). A facial challenge asserts that the complaint does not allege sufficient grounds to establish subject matter jurisdiction. Iwanowa, 67 F.Supp.2d at 438. A court considering such a facial challenge assumes that the allegations in the complaint are true. Cardio-Med. Assoc, Ltd. v. Crozer-Chester Med. Ctr., 721 F.2d 68, 75 (3d Cir. 1983); Iwanowa, 67 F.Supp.2d at 438. It "review[s] only whether the allegations on the face of the complaint, taken as true, allege facts sufficient to invoke the jurisdiction of the district court." Common Cause of Penn. v. Pennsylvania, 558 F.3d 249, 257 (3d Cir. 2009) (quoting Taliaferro v. Darby Twp. Zoning Bd., 458 F.3d 181, 188 (3d Cir. 2006)).

         A factual attack, on the other hand, permits the Court to consider evidence extrinsic to the pleadings. Gould Elecs. Inc. v. United States, 220 F, 3d 169, 178 (3d Cir. 2000), holding modified on other grounds by Simon v. United States, 341 F.3d 193 (3d Cir. 2003). Such a factual attack "does not provide plaintiffs the procedural safeguards of Rule 12(b)(6), such as assuming the truth of the plaintiffs allegations." CNA v. United States, 535 F.3d 132, 144 (3d Cir. 2008).

The burden of establishing federal jurisdiction rests with the party asserting its existence, [citing DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 342 n.3 (2006).] "Challenges to subject matter jurisdiction under Rule 12(b)(1) may be facial or factual." [citing Common Cause of Pa. v. Pennsylvania, 558 F.3d 249, 257 (3d Cir. 2009) (quoting Taliaferro v. Darby Twp. Zoning Bd., 458 F.3d 181, 188 (3d Cir. 2006)).] A facial attack "concerns 'an alleged pleading deficiency' whereas a factual attack concerns 'the actual failure of [a plaintiffs] claims to comport [factually] with the jurisdictional prerequisites.m [citing CNA v. United States, 535 F.3d 132, 139 (3d Cir, 2008) (alterations in original) (quoting United States ex ret Atkinson v. Pa. Shipbuilding Co., 473 F.3d 506, 514 (3d Cir.2007)).]
"In reviewing a facial attack, the court must only consider the allegations of the complaint and documents referenced therein and attached thereto, in the light most favorable to the plaintiff." [citing Gould Elecs. Inc. v. United States, 220 F.3d 169, 176 (3d Cir. 2000).] By contrast, in reviewing a factual attack, "the court must permit the plaintiff to respond with rebuttal evidence in support of jurisdiction, and the court then decides the jurisdictional issue by weighing the evidence. If there is a dispute of a material fact, the court must conduct a plenary hearing on the contested issues prior to determining jurisdiction." [citing McCann v. Newman Irrevocable Trust, 458 F.3d 281, 290 (3d Cir. 2006) (citations omitted).]

Lincoln Ben. Life Co. v. AEI Life, LLC, 800 F.3d 99, 105 (3d Cir. 2015) (footnotes omitted; case citations in footnotes inserted in text).

         Since T-Mobile does not challenge the validity of any of Boone's factual claims as part of its motion, it brings a facial challenge. It argues that the allegations in the operative version of the complaint, even accepted as true, are insufficient to establish Boone's Article III standing, an FCRA claim, or a N.J. FCRA claim. In reviewing facial challenges to standing, Courts "apply the same standard as on review of a motion to dismiss under Rule 12(b)(6)." Id.; see In re Horizon Healthcare Servs. Inc. Data Breach Litig., 846 F.3d 625, 632-33 (3d Cir. 2017); Petruska v. Gannon Univ., 462 F.3d 294, 299 n.l (3d Cir. 2006).

         B. 12(b)(6) Motion to Dismiss for Failure to State a Claim

         Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a complaint, in whole or in part, if it fails to state a claim upon which relief can be granted. The moving party bears the burden of showing that no claim has been stated. Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 2005). In deciding a motion to dismiss under Rule 12(b)(6), a court must take all allegations in the complaint as true and view them in the light most favorable to the plaintiff. See Warth v. Seldin, 422 U.S. 490, 501 (1975); Trump Hotels & Casino Resorts, Inc. v. Mirage Resorts Inc., 140 F.3d 478, 483 (3d Cir. 1998); see also Phillips v. County of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008).

         Federal Rule of Civil Procedure 8(a) does not require that a complaint contain detailed factual allegations. Nevertheless, "a plaintiffs obligation to provide the 'grounds' of his 'entitlement to relief requires more than labels and conclusions, and formulaic recitation of the elements of a cause of action will not do." BellAtl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). The factual allegations must be sufficient to raise a plaintiffs right to relief above a speculative level, such that it is "plausible on its face." See Id. at 570; see also Umland v. PLANCO Fin. Serv., Inc., 542 F.3d 59, 64 (3d Cir. 2008). A claim has "facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556). While "[t]he plausibility standard is not akin to a 'probability requirement'... it asks for more than a sheer possibility." Iqbal, 556 U.S. at 678.

         The United States Court of Appeals for the Third Circuit has explicated the Twombly/Iqbal standard on several occasions. See, e.g., Argueta v. U.S. Immigration & Customs Enforcement, 643 F.3d 60, 70-73 (3d Cir. 2011); Santiago v. Warminster Twp., 629 F.3d 121, 129-30 (3d Cir. 2010). In doing so, it has provided a three-step process for evaluating a Rule 12(b)(6) motion:

To determine whether a complaint meets the pleading standard, our analysis unfolds in three steps. First, we outline the elements a plaintiff must plead to a state a claim for relief. See [Iqbal, 556 U.S.] at 675; Argueta, 643 F.3d at 73. Next, we peel away those allegations that are no more than conclusions and thus not entitled to the assumption of truth. See Iqbal, 556 U.S. at 679; Argueta, 643 F, 3d at 73. Finally, we look for well-pled factual allegations, assume their veracity, and then "determine whether they plausibly give rise to an entitlement to relief." Iqbal, 556 U.S. at 679; Argueta, 643 F.3d at 73. This last step is "a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 556 U.S. at 679.

Bistrian v. Levi, 696 F.3d 352, 365 (3d Cir. 2012).

         "In deciding a Rule 12(b)(6) motion, a court must consider only the complaint, exhibits attached to the complaint, matters of the public record, as well as undisputedly authentic documents if the complainant's claims are based upon these documents." Mayer v. Belichick, 605 F.3d 223, 230 (3d Cir. 2010); see also In re Asbestos Prods. Liability Litig. (No. VI), 822 F.3d 125, 134 & n.7 (3d Cir. 2016); Buck v. Hampton Twp. Sch. Dist, 452 F.3d 256, 260 (3d Cir. 2006) ("In evaluating a motion to dismiss, we may consider documents that are attached to or submitted with the complaint, and any matters incorporated by reference or integral to the claim, items subject to judicial notice, matters of public record, orders, and items appearing in the record of the case.").

         III. DISCUSSION

         T-Mobile argues that (A) Boone lacks Article III standing, (B) Boone fails to state a claim under the FCRA or the N.J. FCRA, and (C) Boone's request to submit a third amended complaint should be denied.

         A. Article III Standing

         "The Constitution confers limited authority on each branch of the Federal Government." Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1546 (2016). Under Article III, the federal courts are endowed with "[t]he judicial Power of the United States, " which is limited to "Cases" and "Controversies." U.S. Const, art. Ill. §§1, 2; see Lujan v. Defenders of Wildlife, 504 U.S. 555, 559 (1992). Courts ensure that Article III standing exists in order to maintain the proper separation of powers. Lujan, 504 U.S. at 559-60. In fact, "[n]o principle is more fundamental to the judiciary's proper role in our system of government than the constitutional limitation of federal-court jurisdiction to actual cases or controversies." Spokeo, 136 S.Ct. at 1547 (citing Raines v. Byrd, 521 U.S. 811, 818(1997)).

         Standing "serves to identify those disputes which are appropriately resolved through the judicial process." Whitmore v. Arkansas, 495 U.S. 149, 154-55 (1990). While some of the elements of standing embody prudential considerations, "the core component of standing is an essential and unchanging part of the case-or-controversy requirement of Article III." Lujan, 504 U.S. at 560 (citing Allen v. Wright, 468 U.S. 737, 751 (1984)).

         There are three elements of Article III standing: (1) First, a plaintiff must have an "injury in fact"-i.e., an "invasion of a legally protected interest" that is "concrete, " "particularized, " and "actual or imminent, not 'conjectural' or 'hypothetical."' Lujan, 504 U.S. at 560. (2) Second, a plaintiff must show a "causal connection between the injury and the conduct complained of such that the injury is "fairly trace[able] to the challenged action of the defendant, and not... th[e] result [of] the independent action of some third party not before the court." Id. (citations omitted). (3) Third, there must be a likelihood "that the injury will be 'redressed by a favorable decision.''' Id. at 561 (citation omitted). These requirements are known as injury in fact, causation, and redressability.

         "The requirements for standing do not change in the class action context." In re Horizon Healthcare Servs. Inc. Data Breach Litig., 846 F.3d 625, 634 (3d Cir. 2017). The named plaintiff must allege and show Article III standing in order to maintain a putative class action. Id. "[I]f none of the named plaintiffs purporting to represent a class establishes the requisite of a case or controversy with the defendants, none may seek relief on behalf of himself or any other member of the class." O'Shea v. Littleton, 414 U.S. 488, 494 (1974); see Horizon, 846 F.3d at 634. However, the named plaintiff does not have to show that unidentified members of the putative class members have suffered an injury in order to proceed. See Horizon, 846 F.3d at 634; see also Lewis v. Casey, 518 U.S. 343, 357 (1996); Warth v. Seldin, 422 U.S. 490, 502 (1975).

         1.Injury-in-fact Requirement

         To show an injury in fact, a plaintiff must allege an "invasion of a legally protected interest" that is (a) "concrete, " (b) "particularized, "[3] and (c) "actual or imminent, not 'conjectural' or 'hypothetical."' Lujan, 504 U.S. at 560. I will address these elements separately.

         (a) Concrete

         For the following reasons, I conclude that Boone's injury as alleged is concrete.

         For an injury to be "concrete, " it must be "'de facto'; that is, it must actually exist." Spokeo, 136 S.Ct. at 1548 (citing Black's Law Dictionary 479 (9th ed. 2009)). It must be "real, " but does not necessarily need to be "tangible." Id. at 1548-49; see, e.g., Pleasant Grove City v. Summum,555 U.S. 460 (2009) (free speech); Church of Lukumi ...


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