Doak v. Capital One, N.A.

Background

Daniel Doak sued Capital One Bank (USA) N.A., which he had captioned as Capital One, N.A., on behalf of himself and a proposed class. He alleged violations of the Fair Credit Reporting Act, a federal law governing consumer credit reporting. Doak alleged that Capital One accessed his credit reports twice in November and December 2016 while his Chapter 7 bankruptcy case was pending, using false pretenses and without a permissible purpose.

Doak initially alleged that the credit checks occurred after his bankruptcy discharge, but corrected that allegation in his opposition. The court therefore considered the credit checks to have occurred before the discharge. Doak alleged emotional distress and sought actual and statutory damages, injunctive relief, litigation costs, and attorney’s fees.

Motions and judicial notice

Capital One moved to dismiss under Federal Rule of Civil Procedure 12(b)(1) for lack of subject-matter jurisdiction and under Rule 12(b)(6) for failure to state a claim. The court granted Capital One’s request for judicial notice of Doak’s bankruptcy petition and discharge because they were public records. It denied Capital One’s supplemental request for judicial notice because Doak had not referred to that document and it did not form the basis of his complaint.

Standing and concrete injury

The court focused on Article III standing, which requires a plaintiff to show a concrete and particularized injury, a connection between that injury and the defendant’s conduct, and a likelihood that a court decision would remedy it. In a Fair Credit Reporting Act case, a bare procedural violation without concrete harm is not enough to establish standing.

The court found that Doak had not adequately alleged a concrete injury. Both sides acknowledged that Capital One’s inquiries were “soft pulls.” The court explained that a soft pull does not affect a consumer’s credit score and is not visible to third parties, unlike a “hard pull.” Doak did not allege that the inquiries affected his credit score or that Capital One disclosed his private personal and financial information to anyone else. The court concluded that his allegations of mental anguish, emotional distress, and an invasion of privacy did not establish concrete harm under the facts alleged.

The court distinguished decisions involving hard credit inquiries, alleged risks of identity theft, or credit-report access after a bankruptcy discharge. It found more persuasive decisions holding that an improper soft inquiry, without allegations of harmful use, disclosure, or a substantial risk of access by others, does not create a concrete injury.

Ruling

Judge Edward J. Davila granted Capital One’s Rule 12(b)(1) motion to dismiss for lack of subject-matter jurisdiction. The court stated that, because it dismissed the claims on jurisdictional grounds, it did not need to reach Capital One’s Rule 12(b)(6) arguments. All claims in the complaint were dismissed with leave to amend, and Doak was given two weeks from the filing date of the order to amend his complaint.