Lopez v. Genesis FS Card Services, Inc.

Background

Luther Lopez, representing himself, sued Genesis FS Card Services, Inc. and The Bank of Missouri under the Equal Credit Opportunity Act (ECOA), the Truth in Lending Act (TILA), and state law. The court had previously allowed him to proceed without paying filing fees in advance.

Lopez alleged that he opened a line of credit with the defendants on or about October 28, 2019. He said that on or about September 12, 2020, the defendants placed a hold on his account even though approximately $203 remained available, and told him that he would regain access 48 to 72 hours after making a $91 payment. Lopez alleged that he made the payment but that the defendants withheld access until September 28, 2020.

He also alleged that the defendants secretly charged a $99 annual fee, targeted high-risk individuals, including African Americans and other non-White applicants, and misrepresented credit-card rates, fees, or charges. He asserted breach-of-contract and conversion claims and sought money damages in an unspecified amount and an order barring hidden fees or withholding account access after payment. Lopez alleged that he was a New Jersey citizen, although the complaint showed a New York address. He described The Bank of Missouri as a foreign corporation doing business in New Jersey and alleged that Genesis FS Card Services, Inc. sold products and services in interstate commerce.

Court’s analysis

The court reviewed the complaint under the screening rules for a case brought without advance payment of filing fees. Those rules require dismissal of claims that are frivolous, malicious, fail to state a legally valid claim, seek money from an immune defendant, or fall outside the court’s subject-matter jurisdiction. The court also explained that pleadings filed by people without lawyers are read liberally, but still must provide a short and plain statement showing entitlement to relief.

For the ECOA claim, the court explained that the statute prohibits creditors from discriminating against applicants in credit transactions on specified grounds, including race, color, religion, national origin, sex, marital status, or age. The court found that Lopez cited the statute and alleged discrimination but did not provide facts suggesting that the defendants discriminated against him because of his race or another protected characteristic. The court stated that it was therefore unnecessary to resolve whether the alleged account restriction qualified as an adverse action under the ECOA.

For the TILA claim, the court explained that the law requires meaningful disclosure of credit terms, including finance charges and annual percentage rates. The court found insufficient facts because Lopez alleged that he was unaware of the $99 annual fee but did not allege that the defendants failed to disclose it or disclosed the credit terms unclearly or inconspicuously. The court also stated that TILA does not govern the alleged racial discrimination that formed the central part of Lopez’s claims.

For the state-law claims, the court considered diversity jurisdiction, which generally requires all plaintiffs and defendants to be citizens of different states and requires a claim exceeding $75,000. The court found that Lopez had not shown complete diversity or alleged facts establishing the required amount. In a footnote, the court stated that it would decide later whether to exercise supplemental jurisdiction over the state-law claims if no federal claim remained within its jurisdiction.

Disposition

The court granted Lopez leave to replead his claims because he was representing himself, even though it was unclear whether an amended complaint could cure the defects. The court directed him to submit an amended complaint to the Pro Se Intake Unit within 60 days of the order, label it “Amended Complaint,” and include docket number 21-CV-1370 (LTS). No summons would issue at that time. The order states that if Lopez failed to comply and could not show good cause for the failure, the matter would be dismissed for failure to state a claim. The order was signed by Chief United States District Judge Laura Taylor Swain.