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Goldman v. Consumers Credit Union

United States District Court, W.D. Michigan, Southern Division

April 20, 2017

CONSUMERS CREDIT UNION et al., Defendants.


          Paul L. Maloney United States District Judge

         This is a civil action brought by a state prisoner asserting violation of various federal consumer protection statutes. The Court has granted Plaintiff leave to proceed in forma pauperis. Under the Prison Litigation Reform Act, Pub. L. No. 104-134, 110 Stat. 1321 (1996), the Court is required to dismiss any prisoner action brought under federal law if the complaint is frivolous, malicious, fails to state a claim upon which relief can be granted, or seeks monetary relief from a defendant immune from such relief. 28 U.S.C. §§ 1915(e)(2), 1915A. The Court must read Plaintiff's pro se complaint indulgently, see Haines v. Kerner, 404 U.S. 519, 520 (1972), and accept Plaintiff's allegations as true, unless they are clearly irrational or wholly incredible. Denton v. Hernandez, 504 U.S. 25, 33 (1992). Applying these standards, Plaintiff's action will be dismissed for failure to state a claim.

         Factual Allegations

         Plaintiff is incarcerated in the Cooper Street Correctional Facility. In his pro se complaint, Plaintiff sues Consumers Credit Union (CCU), Kalamazoo County, Kalamazoo County Sheriff Richard Fuller and Kalamazoo County Deputy Jeffrey Baker.

         Plaintiff opened a deposit account at CCU on November 15, 2014. Plaintiff consented to a credit check in order to open the account. Over a one-month period, Plaintiff deposited several checks made payable to him drawn upon the Suntrust bank account of Rosanna Dickenson. Plaintiff claims that under the terms of the contract he entered into with CCU, the credit union could place a hold on checks deposited by Plaintiff or grant him an unsecured line of credit until the check cleared. In this case, all of the checks deposited by Plaintiff were returned for insufficient funds. In the meantime, Plaintiff made ATM withdrawals and purchases on his debit card totaling $1, 015.03. CCU closed Plaintiff's account on December 13, 2014, and charged off the negative balance of $1, 015.03.

         Sometime between November 15 and 24, 2014, Defendant Baker called Plaintiff and advised him that he was the loss-prevention officer for CCU. According to Plaintiff, Baker also was employed as a Kalamazoo County Sheriff's Deputy. Baker informed Plaintiff that he had accessed Plaintiff's credit report numerous times in order to monitor credit checks being conducted by other financial institutions where Plaintiff was seeking to open accounts. Baker contacted five other financial institutions where Plaintiff had opened accounts and warned them of the activity on Plaintiff's CCU account. Even after Plaintiff's account was closed by CCU, Plaintiff alleges that Defendant Baker called him numerous times by telephone and email regarding the debt he owed to CCU. Baker allegedly advised Plaintiff to pay back the monies CCU had loaned him or he “would go to jail.” (Compl. ¶ 14, ECF No. 1, PageID.5.) Plaintiff told Baker to stop calling him, but Baker continued to leave him phone messages through February 2015.

         As a result of Baker's allegedly unlawful searches of Plaintiff's credit report, Plaintiff was charged in Kalamazoo County with uttering and publishing and obtaining money by false pretenses. Plaintiff was arrested on the charges in Florida and extradited to Michigan, where he pleaded guilty to two counts of false pretenses, more than $1, 000 but less than $20, 000, Mich. Comp. Laws § 750.2184A. He was sentenced on March 8, 2006, to concurrent prison terms of 10 to 90 months. See Michigan Department of Corrections Offender Tracking and Information System (OTIS),

         Plaintiff contends that Baker and CCU obtained his credit report numerous times under false pretenses and without permissible purpose in violation of the Consumer Credit Protection Act (CCPA), 15 U.S.C. § 1601 et seq., the Truth-in-Lending Act (TILA) 15 U.S.C. § 1601 et seq., and the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq. Plaintiff further claims that CCU violated the Right to Financial Privacy Act (RFPA), 12 U.S.C. § 3401 et seq., by disclosing his financial records to the Kalamazoo County Sheriff's Department without a subpeona or Plaintiff's written consent. Plaintiff also contends that Defendant Fuller and Kalamazoo County developed and maintained policies or customs that caused Plaintiff's rights to be violated. Specifically, Plaintiff claims Defendants Fuller and Kalamazoo County developed a “hands off” policy or custom with regard to the illegal activities undertaken by Defendant Baker, such that Baker believed that he could violate Plaintiff's rights with impunity.

         For relief, Plaintiff seeks monetary damages.


         A complaint may be dismissed for failure to state a claim if it fails “‘to give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.'” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). While a complaint need not contain detailed factual allegations, a plaintiff's allegations must include more than labels and conclusions. Twombly, 550 U.S. at 555; Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (“Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.”). The court must determine whether the complaint contains “enough facts to state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570. “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, 556 U.S. at 679. Although the plausibility standard is not equivalent to a “‘probability requirement, ' . . . it asks for more than a sheer possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 556). “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged - but it has not ‘show[n]' - that the pleader is entitled to relief.” Iqbal, 556 U.S. at 679 (quoting Fed.R.Civ.P. 8(a)(2)); see also Hill v. Lappin, 630 F.3d 468, 470-71 (6th Cir. 2010) (holding that the Twombly/Iqbal plausibility standard applies to dismissals of prisoner cases on initial review under 28 U.S.C. §§ 1915A(b)(1) and 1915(e)(2)(B)(i)).

         I. Consumer Credit Protection Act

         Plaintiff asserts violations of the CCPA arising from the alleged unlawful use of his credit report. The CCPA is codified at 15 U.S.C. §§1601-1693r. The subchapters of the CCPA can be summarized as follows:

Subchapter I of the Consumer Credit Protection Act is the Truth in Lending Act (“TILA”), 15 U.S.C. § 1601 et seq., which imposes disclosure requirements on creditors. Subchapter II places restrictions on garnishment of compensation, 15 U.S.C. § 1671 et seq. Subchapter II-A is the Credit Repair Organizations Act, 15 U.S.C. § 1679 et seq., which protects consumers from unfair trade practices by credit repair organizations. Subchapter III is the FCRA, 15 U.S.C. § 1681 et seq., which primarily regulates credit reporting agencies but also places requirements on users of credit information from these agencies. Subchapter IV is the Equal Credit Opportunity Act, 15 U.S.C.§ 1691 et seq., which prohibits discrimination in the extension of credit. Subchapter V is the Fair Debt ...

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