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Smith v. One Nevada Credit Union

United States District Court, D. Nevada

June 27, 2017

JOSEPH J. SMITH, Plaintiff,
v.
ONE NEVADA CREDIT UNION, Defendant.

          ORDER

          Gloria M. Navarro, Chief Judge

         Pending before the Court is the Motion to Dismiss, (ECF Nos. 6, 12), filed by Defendant One Nevada Credit Union (“Defendant”). Plaintiff Joseph J. Smith (“Plaintiff”) filed a Response, (ECF No. 14), and Plaintiff filed a Reply, (ECF No. 17). For the reasons discussed below, the Court GRANTS in part and DENIES in part Defendant's Motion.[1]

         I. BACKGROUND

         Plaintiff's Complaint, (ECF No. 1), brings a class action lawsuit on behalf of himself and those similarly situated, asserting claims under the Fair Credit Reporting Act (“FCRA”) and challenging Defendant's alleged practice of obtaining consumer credit information without authorization.

         Plaintiff alleges that he obtained an auto loan from Defendant in October 2004. (Compl. ¶ 15). By November 2008, Plaintiff alleges that his loan was paid off and his account with Defendant was closed. (Id. ¶ 16). Moreover, Plaintiff received a bankruptcy discharge in October 27, 2015. (Id. ¶ 19). Accordingly, Plaintiff asserts that even if the account had not been closed, any relationship between Plaintiff and Defendant was extinguished by the bankruptcy discharge. (Id. ¶¶ 20-22). After his relationship with Defendant ended, Plaintiff alleges that he did not seek credit of any type from Defendant, that Defendant knew the account had been closed, and yet Defendant obtained information from a credit reporting agency on January 15, 2016, without his authorization or a permissible purpose. (Id. ¶¶ 24-31).

         Based on these allegations, Plaintiff alleges that Defendant willfully and negligently violated the FCRA. Defendant argues in the instant Motion to Dismiss that: (1) Plaintiff lacks standing to assert such claims; and (2) Plaintiff fails to adequately allege the FCRA violations. (See Mot. to Dismiss “MTD”, ECF No. 6).

         II. LEGAL STANDARD

         A. Rule 12(b)(1)

         Rule 12(b)(1) of the Federal Rules of Civil Procedure permits motions to dismiss for lack of subject-matter jurisdiction.[2] Fed.R.Civ.P. 12(b)(1). When subject matter jurisdiction is challenged, the burden of proof is placed on the party asserting that jurisdiction exists. Scott v. Breeland, 792 F.2d 925, 927 (9th Cir. 1986) (holding that “[t]he party seeking to invoke the court's jurisdiction bears the burden of establishing that jurisdiction exists”). Accordingly, courts presume lack of subject matter jurisdiction until the plaintiff proves otherwise in response to the motion to dismiss. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994).

         “Ordinarily, a case dismissed for lack of subject matter jurisdiction should be dismissed without prejudice so that a plaintiff may reassert his claims in a competent court.” Frigard v. United States, 862 F.2d 201, 204 (9th Cir. 1988) (per curiam). However, where there is no way to cure the jurisdictional defect, dismissal with prejudice is proper. See id.

         Lack of standing is a defect in subject matter jurisdiction and may be challenged under Rule 12(b)(1). See Bender v. Williamsport Area Sch. Dist., 475 U.S. 534, 541 (1986). The standing doctrine has a constitutional and a prudential component. Elk Grove Unified Sch. Dist. v. Newdow, 542 U.S. 1, 11 (2004) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 559-62, (1992) (constitutional standing), and Allen v. Wright, 468 U.S. 737, 751 (1984) (prudential standing)). To satisfy the constitutional component, a plaintiff must meet three requirements: (1) the plaintiff must have suffered an injury in fact; (2) that is fairly traceable to the challenged conduct of the defendant; and (3) it must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision. Lujan, 504 U.S. at 560-61. The plaintiff bears the burden of establishing these elements, FW/PBS, Inc. v. Dallas, 493 U.S. 215, 231 (1990), and must allege sufficient facts to demonstrate that each element has been met, Warth v. Seldin, 422 U.S. 490, 518 (1975).

         B. Rule 12(b)(6)

         Rule 12(b)(6) of the Federal Rules of Civil Procedure mandates that a court dismiss a cause of action that fails to state a claim upon which relief can be granted. See North Star Int'l v. Ariz. Corp. Comm'n, 720 F.2d 578, 581 (9th Cir. 1983). When considering a motion to dismiss under Rule 12(b)(6) for failure to state a claim, dismissal is appropriate only when the complaint does not give the defendant fair notice of a legally cognizable claim and the grounds on which it rests. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). In considering whether the complaint is sufficient to state a claim, the Court will take all material allegations as true and construe them in the light most favorable to the plaintiff. See NL Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986).

         The Court, however, is not required to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences. See Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). A formulaic recitation of a cause of action with conclusory allegations is not sufficient; a plaintiff must plead facts showing that a violation is plausible, not just possible. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 555) (emphasis added). “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.” Id. Rule 8(a)(2) requires that a plaintiff's complaint contain “a short and plain statement of the claim showing that the pleader is entitled to ...


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