Rosario v. Santander Consumer USA

Background

Carlos Rosario Jr., who was representing himself, sued Santander Consumer USA under the Fair Debt Collection Practices Act and the Truth in Lending Act. He alleged that he entered into a consumer-credit contract for a vehicle at Performance Toyota on September 17, 2018, after being misled and not receiving full disclosure.

Rosario alleged that the vehicle was repossessed on June 22, 2021, but that he recovered it. He said that he later sent Santander a debt-validation letter, a letter directing it to stop unspecified actions, and an opportunity to cure. He also sent Santander and Performance Toyota a notice of rescission under the Truth in Lending Act. Rosario alleged that the vehicle was repossessed again on June 3, 2022, and that he was coerced into making a payment. He further alleged that Santander reported negative information to credit-reporting agencies, which prevented him from obtaining an apartment, and that he lost his job because he lacked transportation. He sought damages and repayment of all loan payments.

Court’s analysis

Because Rosario had been allowed to proceed without prepaying filing fees, the court screened the complaint under 28 U.S.C. § 1915(e)(2)(B). The court explained that it must dismiss such a complaint if it is frivolous, malicious, fails to state a claim, seeks relief from an immune defendant, or falls outside the court’s subject-matter jurisdiction. The court also explained that self-represented pleadings are read liberally but still must provide enough facts to make a claim plausible under Federal Rule of Civil Procedure 8.

Fair Debt Collection Practices Act claim

The court held that Rosario’s allegations were insufficient to state a claim under the Fair Debt Collection Practices Act. First, it was unclear whether Santander qualified as a “debt collector” under that statute because the allegations suggested that Santander originated the loan. The court noted that entities generally do not qualify as debt collectors when they collect loans they originated for themselves.

Second, Rosario did not identify conduct by Santander that the statute prohibits. He did not allege, for example, repeated harassing calls, threats of violence, publication of information about his failure to pay, or other conduct intended to harass, oppress, or abuse him. The court acknowledged the serious harms he alleged from the repossessions but concluded that he had not explained what Santander did that violated the Act.

Truth in Lending Act claim

The court also held that Rosario’s Truth in Lending Act allegations were insufficient. The Act generally requires creditors to clearly disclose material terms of closed-end consumer-credit transactions, including the finance charge and the total of scheduled payments. Rosario alleged only that he was misled and did not receive full disclosure. He did not identify what Santander did to mislead him or what information it failed to disclose.

Disposition

The court granted Rosario leave to file an amended complaint within 60 days. It directed him to provide the relevant facts supporting each claim, including what each defendant did or failed to do, when and where the events occurred, his injuries, and the relief he seeks. The amended complaint must completely replace the original complaint, so any facts or claims Rosario wants the court to consider must be repeated in the amended filing.

The court stated that if Rosario did not comply within the allowed time and could not show good cause for the failure, the complaint would be dismissed for failure to state a claim. No summons would issue at that time. The court also certified that an appeal would not be taken in good faith and denied Rosario permission to appeal without prepaying fees.