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Thymes v. Gillman Companies

United States District Court, S.D. Texas, Houston Division

June 18, 2018




         Plaintiff Derrick W. Thymes ("Plaintiff" or "Thymes") brings five causes of action against Defendant Gillman Subaru, Inc. ("Defendant" or "Gillman") for: (1) violations of the Fair Credit Reporting Act ("FCRA"); (2) negligence; (3) disclosure of private consumer financial information and invasion of privacy; (4) deliberate theft of Plaintiff's identity by employees of Defendant; and (5) breach of fiduciary duty.[1] Pending before the court is Defendant's Motion to Dismiss Plaintiff's First Amended Complaint ("Motion to Dismiss") (Docket Entry No. 18).

         I. Factual Allegations and Procedural Background

         Plaintiff initially brought this action on September 20, 2017, asserting causes of action for (1) violations of the Federal Trade Commission ("FTC") Safeguard Rule and the Gramm-Leach-Bliley Act ("GLBA"); (2) negligence; (3) disclosure of private consumer financial information in violation of the GLBA; (4) identity theft and fraud; and (5) breach of implied Contract.[2] Defendant filed a motion to dismiss Plaintiff's original complaint (Docket Entry-No. 7) . On March 9, 2018, the court dismissed with prejudice Plaintiff's federal claims under the FTC Safeguard Rule and the GLBA, and ordered Plaintiff to amend his complaint setting forth facts to plausibly support a cause of action for identify theft and fraud, and breach of an implied contract. (Docket Entry No. 14).[3]

         In Plaintiff's First Amended Complaint he alleges that he purchased a car from Defendant in September of 2015.[4] Although Plaintiff's bank had pre-approved his auto loan, Defendant requested that Plaintiff complete its finance application from Ally Financial.[5] After the purchase Plaintiff drove nonstop from the dealership to his home in Louisiana.[6] By December of 2015 debt collectors began contacting Plaintiff and utility accounts in Texas were opened under Plaintiff's name.[7] Plaintiff alleges that "Defendant failed to maintain an adequate identity theft protection and document security program; and thus, improperly secured his personal information . . . . "[8] Plaintiff alleges that he "personally notified Defendant . . . that his identity had been stolen" but that Defendant "took no action to utilize the assistance of law enforcement agencies (State or Federal) or otherwise conduct an internal investigation to ascertain how Plaintiff's personal information had been compromised."[9] Plaintiff brings five causes of action in his Amended Complaint.[10] Defendant moves to dismiss all claims, except negligence, under Federal Rule of Civil Procedure 12(b) (6) and, if the court dismisses Plaintiff's federal claim, moves to dismiss any remaining state law claims under Rule 12(b)(1) for lack of supplemental jurisdiction.[11]

         II. Standard of Review

         Under the Federal Rules of Civil Procedure a pleading must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). A plaintiff's pleading must provide the grounds of his entitlement to relief, and "a formulaic recitation of the elements of a cause of action will not do. . . ." Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1965 (2007). " ' [N]aked assertion[s] ' devoid of 'further factual enhancement'" or "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." See Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). "[C]onclusory allegations or legal conclusions masquerading as factual conclusions will not suffice to prevent a motion to dismiss." Fernandez-Montes v. Allied Pilots Ass'n, 987 F.2d 278, 284 (5th Cir. 1993). Instead, "[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." Iqbal, 129 S.Ct. at 1949.

         A Rule 12(b)(6) motion tests the formal sufficiency of the pleadings and is "appropriate when a defendant attacks the complaint because it fails to state a legally cognizable claim." Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001), cert. denied sub nom. Cloud v. United States, 122 S.Ct. 2665 (2002). To defeat a motion to dismiss, a plaintiff must plead "enough facts to state a claim to relief that is plausible on its face." Twombly, 127 S.Ct. at 1974. The court does not "strain to find inferences favorable to the plaintiffs" or "accept conclusory allegations, unwarranted deductions, or legal conclusions." Southland Securities Corp. v. INSpire Insurance Solutions, Inc., 365 F.3d 353, 361 (5th Cir. 2004) (internal quotation marks and citations omitted). "[C]ourts are required to dismiss, pursuant to [Rule] 12(b)(6), claims based on invalid legal theories, even though they may be otherwise well-pleaded." Flynn v. State Farm Fire and Casualty Insurance Co. (Texas), 605 F.Supp.2d 811, 820 (W.D. Tex. 2009) (citing Neitzke v. Williams, 109 S.Ct. 1827, 1832 (1989)).

         III. Analysis

         A. Plaintiff Fails to State a Claim Under the FCRA

         Plaintiff did not respond to Defendant's Motion to Dismiss by the submission day, May 3, 2018.[12] Accordingly, the court treats the arguments as unopposed by Plaintiff.[13] As such, this court may dismiss the claims as abandoned. See Black v. North Panola School Dist., 461 F.3d 584, 588 n.l (5th Cir. 2006) (holding that the plaintiff's failure to defend a claim in responses to motions to dismiss or to otherwise pursue it beyond her complaint constituted abandonment of the claim) (citing Vela v. City of Houston, 276 F.3d 659, 679 (5th Cir. 2001)).

         Alternatively, Plaintiff's only federal claim for violation of the FCRA, 15 U.S.C § 1681s-2, has no merit whether the court treats it as abandoned or not. Section 1681s-2(a) of the FCRA provides that " [a] person shall not furnish any information relating to a consumer to any consumer reporting agency if the person knows or has reasonable cause to believe that the information is inaccurate." 15 U.S.C § 1681S-2(a)(1)(A). Although the FCRA does not create a private right of action for violations of subsection (a) of Section 1681s-2, it does create one for violations of subsection (b) of Section 1681-2. See Conrad v. Barclays Bank Delaware, Civil Action No. 4:17-1045, 2017 WL 7796344 at *2 (S.D. Tex. July 27, 2017) (citing cases in this district that concluded that a private right of action under § 1681S-2(b) exists). Pursuant to Section 1681s-2(b), once a "furnisher of information" is notified of a dispute "with regard to the completeness or accuracy of any information provided by a person to a consumer reporting agency, " the person shall, inter alia, "conduct an investigation with respect to the disputed information . . . [and] report the results of any such investigation to the consumer reporting agency." 15 U.S.C. § 1681s-2 (b) (1); see also Young v. Equifax Credit Information Services, Inc., 294 F.3d 631, 639 (5th Cir. 2 0 02). The consumer reporting agency must give notice of a dispute to the furnisher of information, and "[s]uch notice is necessary to trigger the furnisher's duties under Section 1681s-2(b)." Young, 294 F.3d at 639 (citing 15 U.S.C. § 1681S-2(b)(1)); see also SimmsParris v. Countrywide Financial Corp., 652 F.3d 355, 358 (3d Cir. 2011) ("Notice under § 1681i(a)(2) must be given by a credit reporting agency, and cannot come directly from the consumer.").

         Plaintiff alleges that Defendant's employees "coaxed said Plaintiff to finance the transaction through another lender" and that "[o]nee the dealership contacted consumer reporting agencies regarding Plaintiff, the dealership is then a 'furnisher' under the FCRA whereby imposing a duty on Defendant to investigate and respond to claims from consumers (i.e., Plaintiff)."[14] Plaintiff alleges that Defendant "failed to respond, let alone investigate, once Mr. Thymes notified them that his identity had been stolen and was being used throughout southeast Texas to open numerous utility accounts. "[15]

         Although Plaintiff complains that his identity was stolen and that Defendant failed to investigate, he does not allege facts that implicate the FCRA. First, Plaintiff does not allege that Defendant furnished inaccurate information to a credit reporting agency. See 15 U.S.C. §§ 1681S-2 (a); 1681S-2 (b) (1) (A) . Second, Plaintiff does not allege that he disputed the completeness or accuracy of the information with the credit reporting agency. See id. § 1681s-2(b). Third, Plaintiff alleges that "Mr. Thymes notified [Defendant] that his identity had been stolen ..." but fails to allege that the credit reporting agency gave the requisite notice to Defendant.[16] Young, 294 F.3d at 639. Because Plaintiff's identify theft allegations do not fall within the FCRA, ...

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