United States District Court, E.D. Wisconsin
RONDO TYUS and DAVID GEBHARDT, Individually and as representatives of the Classes, Plaintiffs,
UNITED STATES POSTAL SERVICE, Defendant.
ORDER ON PARTIES' MOTIONS FOR
WILLIAM E. DUFFIN U.S. Magistrate Judge
October 19, 2016, this court found that plaintiffs David
Gebhardt and Rondo Tyus lacked Article III standing to
proceed in federal court and that the case must be remanded
to state court. (ECF No. 33.) The plaintiffs now move the
court to reconsider whether they have Article III standing
or, alternatively, to allow them to amend their complaint.
(ECF No. 37.) USPS has also filed a motion for
reconsideration in which it asks this court to reconsider its
finding that a remand of the case - instead of a
dismissal-was warranted after the court found the plaintiffs
lacked Article III standing. (ECF No. 41.) Both motions are
fully briefed and ready for resolution.
prevail on a motion for reconsideration, a party must either
present newly discovered evidence or establish that the court
made a manifest error of law or fact. Oto v. Metro. Life
Ins. Co., 224 F.3d 601, 606 (7th Cir.
2000). While “[r]econsideration is a useful
mechanism when the court has clearly erred and immediate
correction will save time in the long run[, ]”
Eivaz v. Edwards, No. 12-CV-910, 2015 WL 59347, at
*1 (E.D. Wis. Jan. 5, 2015), a “'manifest
error' is not demonstrated by the disappointment of the
losing party.” Oto, 224 F.3d at 606. Whether
to grant or deny a motion for reconsideration is within the
district court's sound judgment. LB Credit Corp. v.
Resolution Trust Corp., 49 F.3d 1263, 1267 (7th Cir.
PLAINTIFFS' MOTION FOR RECONSIDERATION
motion raises three arguments: (1) the court
“overlooked” the plaintiffs' argument that
the rights here are “substantive” as opposed to
“procedural”; (2) the court misunderstood the
facts of Thomas v. FTS USA, LLC., No. 3:13-CV-825,
2016 WL 3653878 (E.D. Va. June 30, 2016); and (3) the court
incorrectly interpreted a passage of Spokeo v.
Robins, 136 S.Ct. 1540 (2016), and should have
considered the allegations of factual inaccuracies in
Tyus's credit report as set forth in his brief opposing
the motion to dismiss.
versus Procedural Rights
order, the court concluded that (1) while the FCRA created a
right to privacy, the plaintiffs had not alleged a concrete
injury to their privacy right, and (2) the failure to provide
a stand-alone disclosure form was the sort of violation which
does not establish a concrete injury for standing purposes.
(ECF No. 33 at 13; citing Groshek v. Time Warner Cable,
Inc., 15-C-157, 2016 WL 4203506 (E.D. Wis. Aug. 9,
2016).) The court did not overlook the distinction between
substantive rights and procedural rights. It simply disagreed
with the plaintiffs' argument.
Court of Appeals for the Seventh Circuit recently weighed in
on these issues. In Meyers v. Nicolet Restaurant of De
Pere, LLC, No. 16-2075, 2016 WL 7217581 (7th
Cir. Dec. 13, 2016), the plaintiff used a credit card to pay
for his dinner at the defendant restaurant. The Fair and
Accurate Credit Transaction Act (FACTA) (a 2003 amendment to
the FCRA) provides that “[n]o person that accepts
credit cards or debit cards for the transaction of business
shall print more than the last 5 digits of the card number or
the expiration date upon any receipt provided to the
cardholder at the point of the sale or transaction.” 15
U.S.C. § 1681c(g)(1). Plaintiff noticed that his credit
card receipt did not truncate the expiration date as
required. He sued the restaurant. His allegations showed that
“Meyers discovered the violation immediately and nobody
else ever saw the non-compliant receipt.” Id.
Court of Appeals summarized the lessons of Spokeo:
That Congress has passed a statute coupled with a private
right of action is a good indicator that whatever harm might
flow from a violation of that statute would be particular to
the plaintiff. Yet the plaintiff still must allege a concrete
injury that resulted from the violation in his case. As
Spokeo explained, “Congress' role in
identifying and elevating intangible harms does not mean that
a plaintiff automatically satisfies the injury-in-fact
requirement whenever a statute grants a person a statutory
right and purports to authorize that person to sue to
vindicate that right.” Id. at 1549. In other
words, Congress' judgment that there should be a legal
remedy for the violation of a statute does not mean each
statutory violation creates an Article III injury. See
Diedrich v. Ocwen Loan Servicing, LLC, 839 F.3d 583,
590-91 (7th Cir. 2016) (rejecting the argument that a
violation of the Real Estate Settlement Procedures Act,
without more, is a sufficient injury-in-fact after
Spokeo). Such an injury “must be ‘de
facto'; that is, it must actually exist.”
Spokeo, 136 S.Ct. at 1548.
Meyers, 2016 WL 7217581, at *3. The court concluded:
Spokeo compels the conclusion that Meyers'
allegations are insufficient to satisfy the injury-in-fact
requirement for Article III standing. The allegations
demonstrate that Meyers did not suffer any harm because of
Nicolet's printing of the expiration date on his receipt.
Nor has the violation created any appreciable risk of harm.
After all, Meyers discovered the violation immediately and
nobody else ever saw the non-compliant receipt. In these
circumstances, it is hard to imagine how the expiration
date's presence could have increased the risk that
Meyers' identity would be compromised. See Id.
at 1550 (“It is difficult to imagine how the
dissemination of an incorrect zip code, without more, could
work any concrete harm.”).
Id. In reaching that conclusion, the court noted:
[Meyers] staked his entire standing argument on the
statute's grant of a substantive right to receive a
compliant receipt. But whether the right is characterized as
“substantive” or “procedural, ” its
violation must be accompanied by an injury-in-fact. A
violation of a statute that causes no harm does not trigger a
federal case. That is one of the lessons of Spokeo.
Meyers, 2016 WL 7217581, at *3, n. 2.
is admittedly a split among courts as to whether a
“bare violation” of the FCRA's disclosure and
pre-adverse action notice provisions is in and of itself a
“concrete harm” sufficient to give a plaintiff
standing to pursue such a claim in federal court. Some
courts, including those relied upon by plaintiffs, have
concluded that a bare violation is sufficient. See e.g.
Rodriguez v. El Toro Med. Investors Ltd. P'ship, No.
16-00059, 2016 WL 6804394 (C.D. Cal. Nov. 16, 2016);
Thomas, 2016 WL 3653878, at *11. Others, including
this court, have concluded otherwise. In stating that a
“violation of a statute that causes no harm does not
trigger a federal case, ” the Court of Appeals for the
Seventh Circuit seems to be in the latter camp.
Meyers, 2016 WL 7217581, at *3, n.2. Thus, this
court's position is unchanged.
court's order noted that in Thomas the complaint
alleged that Thomas had not received a disclosure form and
had not authorized the release of a background report. (ECF
No. 33 at 12-13.) Plaintiffs note that, while Thomas
alleged he never received a disclosure form, he
conceded that he had received an “Employment Release
Statement” by the time the case was decided at summary
judgment. See Thomas, 2016 WL 3653878, at *8, n.3.
Plaintiffs allege that, therefore, their claims are
substantially identical to those in Thomas.
this court's alleged misunderstanding of the facts in
Thomas, the reference to the Thomas
pleadings was merely to contrast them with the
plaintiffs' pleadings in this case. In any event,
Thomas is not binding on this court and as stated
above this court disagrees with its conclusion.
final argument contends that the court misapplied a passage
from Spokeo pertaining to the impact of inaccurate
background reports. Specifically, plaintiffs take issue with
the court's statement that “Spokeo
contemplated this very situation” (ECF No. 33 at 15),