Thompson v. Carmax
- Joseph Spero
- 3:23-cv-01364
- U.S. District Court · Northern District of California
- 8
In Thompson v. Carmax, Judge Spero ordered Thompson to explain why his complaint should not be dismissed because all eight claims were inadequately pleaded.
Kenan Thompson’s case was not dismissed at this stage, but he was required to respond or amend his complaint by May 11, 2023. Carmax was the defendant whose alleged conduct was described in the complaint.
What happened
Thompson v. Carmax concerned Kenan Thompson’s claims about a July 26, 2022 consumer-credit transaction with Carmax. Representing himself, Thompson alleged that Carmax failed to provide required disclosures, mishandled his financial privacy, made false statements, and breached a return-policy promise.
The court reviewed the complaint under the screening rules for people allowed to proceed without paying filing fees. It concluded that the two credit-disclosure claims, two financial-privacy claims, three fraud-related claims, and breach-of-contract claim did not include enough specific facts to state a claim.
Judge Spero did not dismiss the case in this order. He ordered Thompson to file either an amended complaint or a response explaining why the existing complaint was sufficient by May 11, 2023, and stated that failure to respond would lead to a recommendation that the case be dismissed.
The detailed version
- Thompson v. Carmax · No. 3:23-cv-01364
- Joseph Spero
- Apr. 13, 2023
Background
Kenan Thompson sued Carmax concerning a consumer-credit transaction that he alleged took place on July 26, 2022. Thompson was representing himself. The court had granted his application to proceed without paying the filing fee and therefore screened the complaint under 28 U.S.C. § 1915(e)(2)(B).
Thompson alleged that Carmax failed to provide disclosures, failed to notify him of rights connected to the credit transaction, failed to protect his privacy, used a false representation and false information, and failed to perform a contractual promise. He sought $238,000 in damages.
Claims and Analysis
Thompson asserted eight claims:
- Two claims under 12 C.F.R. § 226.23 concerning disclosures about the right to cancel or rescind a credit transaction and the effects of rescission.
- Two claims under 15 U.S.C. §§ 6802(b) and 6803 concerning disclosures and privacy protections under the Gramm–Leach–Bliley Act.
- Fraud in the inducement, fraudulent misrepresentation, and fraud.
- Breach of contract.
The court held that Claims One and Two did not state claims under the Truth in Lending Act because Thompson provided no facts about the credit transaction that would allow the court to determine which disclosures applied or whether Carmax violated them. The court also noted that Thompson relied on a rescission regulation but appeared to seek damages rather than rescission, which is governed by different provisions.
The court held that Claims Three and Four did not state claims under the Gramm–Leach–Bliley Act because Thompson alleged no facts describing the supposed privacy violations.
The court explained that the fraud-related claims were subject to the heightened pleading requirement in Federal Rule of Civil Procedure 9(b). That rule requires specific details about the alleged fraud, including what was false or misleading and generally who made the statement, what was said, when and where it was said, and how the misconduct occurred. The court held that Thompson’s fraud allegations did not provide those details and also did not adequately plead other required elements, such as reliance and damages.
For the breach-of-contract claim, the court stated that Thompson needed to identify the relevant contract terms and provide specific facts showing how Carmax breached them. Because he did neither, the court held that the claim failed to state a claim.
Order
The court issued an order to show cause regarding dismissal; it did not dismiss the complaint in this order. The court gave Thompson until May 11, 2023, to file either an amended complaint addressing the identified deficiencies or a response explaining why the current complaint was sufficient. The court stated that if Thompson did not respond by that date, the case would be reassigned to a United States district judge with a recommendation that it be dismissed under 28 U.S.C. § 1915(e)(2)(B).
The opinion’s instructions about an amended complaint refer to case number 19-cv-06894, which differs from the 23-cv-01364-JCS case number in the caption.
Read the full 8-page opinion on CourtListener, the free public archive maintained by the Free Law Project.