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Rubinstein v. Department Stores National Bank

United States District Court, S.D. New York

July 22, 2013

Valerie Rubinstein, Plaintiff,
v.
Department Stores National Bank, Defendant

For Valerie Rubinstein, individually and on behalf of all others similarly situated, Plaintiff: Brian Lewis, Michael Noah Litrownik, Bromberg, Bromberg Law Office, P.C., New York, NY; Harley Jay Schnall, Law Office of Harley J. Schnall, New York, NY.

For Department Stores National Bank, Defendant: Julia Beatrice Strickland, LEAD ATTORNEY, PRO HAC VICE, Stroock & Stroock & Lavan LLP, Los Angeles, LA; David Wesley Moon, PRO HAC VICE, Stroock & Stroock & Lavan, LLP (CA), Los Angeles, CA; Joseph Eric Strauss, Stroock & Stroock & Lavan LLP, New York, NY.

OPINION

ALISON J. NATHAN, United States District Judge.

Page 261

MEMORANDUM AND ORDER

Plaintiff, Valerie Rubinstein (" Rubinstein" ), brings this putative class action alleging that Defendant, Department Stores National Bank (" DSNB" ), violated the Truth in Lending Act (" TILA" ), 15 U.S.C. § 1601, et seq., by sending periodic statements containing incomplete billing rights notices. Defendant moved to dismiss or, in the alternative, to strike Plaintiff's request for $1,000,000 in statutory damages. For the reasons that follow, Defendant's motion to dismiss is DENIED and the motion to strike is GRANTED.

I. STANDARD OF REVIEW

In deciding a motion to dismiss pursuant to Rule 12(b)(6), the allegations in the complaint are accepted as true, and all reasonable inferences must be drawn in favor of the non-moving party. McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 191 (2d Cir. 2007). The Court should not dismiss the complaint if the plaintiff has stated " enough facts to state a claim to relief that is plausible on its face." Bell A. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). " 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." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). " In considering a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6), a district court may consider the facts alleged in the complaint, documents attached to the complaint as exhibits, and documents incorporated by reference in the complaint." DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104, 111 (2d Cir. 2010).

II. BACKGROUND

The following facts are alleged in the complaint and assumed to be true for purposes of this motion.

Page 262

Plaintiff is the holder of a Bloomingdales credit card issued by DSNB. (Compl. ¶ ¶ 11-12, 15). The periodic statement that Plaintiff received on approximately October 28 or October 29, 2011, did not contain an annual " long-form" billing rights notice, as required by 15 U.S.C. § 1637(a)(7). (Compl. ¶ ¶ 15-16, 35-38). Instead, she received a " short-form" notice with her monthly billing statement, which 12 C.F.R. § 1026.9(a)(2) allows creditors to distribute on a monthly basis as an alternative to the annual long-form notice mandated by the statute. (Compl. ¶ ¶ 35-38). The monthly short-form notice that Rubinstein received from the credit card company failed to comply with the requirements of 12 C.F.R. § 1026.9(a)(2) and the related Model Form G-4 in that it failed to provide the following notice:

If you have a problem with the quality of goods or services that you purchased with a credit card, and you have tried in good faith to correct the problem with the merchant, you may not have to pay the remaining amount due on the goods or services. You have this protection only when the purchase price was more than $50 and the purchase was made in your home state or within 100 miles of your mailing address. (If we own or operate the merchant, or if we mailed you the advertisement for the property or services, all purchases are covered regardless of amount or location of purchase.)

76 Fed. Reg. 79838 (Dec. 22, 2011); see also Credit Card Statement, Compl. Ex. A (Dkt. No. 1 at 14).

Plaintiff does not allege that she suffered actual damages as a result of this omission. Instead, she brings the present action on behalf of herself and others similarly situated, seeking to recover $1,000,000 in statutory damages. (Compl. ¶ 39).

III. DISCUSSION

DSNB argues that, even assuming that it violated 12 C.F.R. § 1026.9(a)(2), Plaintiff is not entitled to statutory damages for this violation. Defendant argues that because Plaintiff does not allege that she suffered actual damages, she has therefore failed to state a claim upon which relief may be granted. The Court disagrees because, for the reasons set forth below, statutory damages may properly be awarded for the alleged violation.

A. Plaintiff Is Entitled to Statutory Damages

1. Statutory Damages Under the TILA

The TILA only provides statutory damages for violations of certain specifically enumerated provisions. 15 U.S.C. § 1640(a). Courts in this district have consistently disallowed statutory damages for violations of provisions of the TILA that are not enumerated in Section 1640(a). Turk v. Chase Manhattan Bank USA, N.A., 2001 WL 736814, at *2 (S.D.N.Y. June 11, 2001) (no statutory damages for violation of section of the statute not enumerated in Section 1640); Kelen v. World Fin. Network Nat'l Bank, 763 F.Supp.2d 391, 394-95 (S.D.N.Y. 2011) (no statutory damages where complaint alleged violations of a regulation promulgated pursuant to a statutory provision not enumerated in Section 1640); see also Brown v. Payday Check Advance, Inc., 202 ...


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