United States District Court, S.D. New York
STANLEY H. EPSTEIN, individually and on behalf of all others similarly situated, Plaintiff,
JPMORGAN CHASE & CO. and CHASE BANK, USA, N.A., Defendants.
OPINION AND ORDER
KATHERINE POLK FAILLA, District Judge.
On July 9, 2013, Stanley H. Epstein filed this action against JPMorgan Chase & Co. ("JPMC") and Chase Bank, USA, N.A. ("CBUSA") (collectively, "Defendants" or "Chase") as a nationwide class action pursuant to Federal Rule of Civil Procedure 23, on behalf of himself and all other Chase credit card account holders who were charged monies associated with a positive credit balance on their accounts. Defendants have moved to dismiss Plaintiff's complaint under Federal Rule of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction and, in the alternative, under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. Because this Court finds that Plaintiff Epstein lacks standing to bring the claims he alleges, either individually or as a putative class representative, Defendants' Rule 12(b)(1) motion to dismiss is granted, Defendants' Rule (12)(b)(6) motion to dismiss is denied as moot, and this case is dismissed.
A. The Defendants and the Cardmember Agreement
JPMC is a bank holding company. (Compl. ¶ 8). CBUSA, a subsidiary of JPMC, is a federally chartered bank that specializes in credit card services. ( Id. at ¶ 9). One of the services that CBUSA offers to customers is a credit card account that is governed by a standardized cardmember agreement. (Cardmember Agreement at 1). As relevant to the instant litigation, the Cardmember Agreement provides:
Minimum Payment: You must make your Minimum Payment in a way that we receive it by the time and date it is due. You may make payments greater than your required Minimum Payment. This will reduce the interest charges that are added to your Account.
Credit Balances: You may request a refund of any credit balance at any time. Otherwise, we will apply it to any new charges on your Account or provide the refund to you as required by law.
( Id. at 2). As to choice of law, the Agreement provides that:
The terms and enforcement of [the] agreement and [the customer's] account shall be governed and interpreted in accordance with federal law and, to the extent state law applies, the law of Delaware, without regard to conflict-of-law principles. The law of Delaware, where [CBUSA] and [the customer's] account are located, will apply no matter where [the customer] live[s] or use[s] the account."
( Id. at 4). And with respect to procedure, the Agreement instructs:
You must notify [CBUSA] of any potential errors [on the customer's account statement] in writing. [The customer] may call [CBUSA], but if [the customer] do[es, ] [CBUSA is] not required to investigate any potential errors and [the customer] may have to pay the amount in question.
Within 30 days of receiving [the customer's] letter, [CBUSA] must tell the customer that [it] received [the customer's] letter. [CBUSA] will also tell [the customer] if [CBUSA has] already corrected the error. Within 90 days of receiving [the customer's] letter, [CBUSA] must either correct the error or explain to [the customer] why [CBUSA] believe[s] the bill is correct.
( Id. (emphasis in original)). As Plaintiff alleges, the Cardmember Agreement does not disclose the existence of any fees or charges, including credit balance "interest" charges, to the account holder relating to a positive credit card account balance. (Compl. ¶¶ 16-18).
B. Plaintiff's Credit Card Account and Account Transaction History with Defendants
In May 2009, Plaintiff opened a Chase Marriott Rewards credit card account (the "Credit Card Account") with CBUSA that is governed by the Cardmember Agreement. ( See Compl. ¶¶ 2, 19). Plaintiff's Credit Card Account allows Plaintiff to, among other things, earn "rewards" points for every purchase he makes, and to use those rewards points to stay at Marriott-affiliated hotels. ( Id. at ¶ 19).
In late May 2012, Plaintiff received an account statement for his Credit Card Account for the period ending May 22, 2012. (Epstein Decl. ¶ 2 and Ex. A). This statement included a charge of $45.00 for Plaintiff's annual membership fee. ( Id. ). Due to what Plaintiff describes as his "simple mismanagement, " Plaintiff failed to pay any of the $45.00 balance at the time it came due on June 19, 2012. ( Id. ). As a result, on Plaintiff's next account statement, for the period ending June 22, 2012, there was a balance of $45.51, which consisted of the $45.00 annual membership fee and a $0.51 interest charge. ( Id. at ¶ 3). Plaintiff paid $47.00 to satisfy the June Account statement. ( Id. at ¶ 4). Plaintiff alleges that he intentionally overpaid the June 2012 Credit Card Account statement "[i]n an effort to stop Chase's interest charges." ( Id. ).
On July 30, 2012, Plaintiff paid $48.00 to settle his Credit Card Account statement for the period ending July 22, 2012. (Compl. ¶ 20). This payment resulted in a positive credit balance of $0.67 on Plaintiff's Credit Card Account because Plaintiff once again overpaid "in an effort to stop or reduce any possible interest charges in the future, " as he attests. ( Id. ; Epstein Decl. ¶ 5). According to Plaintiff, his next Credit Card Account statement reflected the positive credit balance of $0.67 and included an "Account Message" that read: "You have a credit balance so no payment is required. You may make charges against the credit or request a refund by contacting Cardmember Services at the address above. If after 6 months the credit balance is $1.00 or more, we will refund the credit within 30 days." (Compl. ¶ 21). Plaintiff did not use his Credit Card Account for the subsequent five months, and the $0.67 positive credit balance remained in his account during that time. ( Id. at ¶ 22).
Thereafter, Plaintiff received a statement for his Credit Card Account showing that on January 7, 2013, a charge of $0.67, identified as an "interest" charge, had been assessed against Plaintiff's Credit Card Account. (Compl. ¶ 23). According to Plaintiff, the Credit Card Account statement listed the charge as "Purchase Interest Chrg Debit ADJ." ( Id. ). As a result of this charge, Plaintiff's Credit Card Account balance went from a positive balance of $0.67 to $0.00. Plaintiff claims that CBUSA "had no right to take [his] money[, ]" and by doing so breached the Cardmember Agreement. ( Id. at ¶ 4).
On May 1, 2013, Plaintiff's Credit Card Account was charged the annual membership fee of $45.00. (Compl. ¶ 27). Because the $0.67 had been removed from Plaintiff's Credit Card Account, as discussed in the next section, it ...