Mead v. City First Bank of Dc, N.A.

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

______________________________ ) DAVID MEAD, ) ) Plaintiff, ) ) v. ) Civil Action No. 08-1597 (RWR) ) CITY FIRST BANK OF DC, N.A., ) et al., ) ) Defendants. ) ______________________________)

MEMORANDUM OPINION

Plaintiff David Mead brings his seven-count amended

complaint against nondiverse defendants under 28 U.S.C. § 1331,

contending that Count II alleges a federal question under the

Right to Financial Privacy Act (“RFPA”), 12 U.S.C. §§ 3403 and

3417. Defendant City First Bank of DC has moved to dismiss Count

II under Federal Rules of Civil Procedure 12(b)(1) for lack of

subject matter jurisdiction and Rule 12(b)(6) for failure to

state a claim upon which relief can be granted. Because Mead has

raised a federal question, but has not stated a valid claim under

the RFPA, the defendant’s motion to dismiss Count II under Rule

12(b)(6) for failure to state a claim will be granted and the

court will decline to exercise supplemental jurisdiction over

Mead’s remaining state law claims. -2-

BACKGROUND

Mead brings his seven-count amended complaint against City

First Bank of DC and other nondiverse defendants in the district

court asserting that the court has federal question jurisdiction

over his amended complaint under 28 U.S.C. § 13311 because Count

II of the amended complaint alleges a violation of the RFPA.

Count II contends that City First and other defendants unlawfully

disclosed information contained in Mead’s financial records to

third parties, including the district court, in violation of 12

U.S.C. § 3403. The remaining six counts of the amended complaint

are brought under District of Columbia statutory and common law.

Count I of the amended complaint alleges violations of the

District of Columbia Consumer Protection Procedures Act, D.C.

Code § 28-3901 et seq. Counts III-VII allege claims of

unconscionability, fraud, tortious interference, breach of

contract, quiet title, and unjust enrichment arising out of loan

arrangements between the parties. City First has moved to

dismiss Count II under Rules 12(b)(1) and 12(b)(6), and requests

that the court decline to exercise supplemental jurisdiction over

Mead’s remaining state law claims.

1 Under 28 U.S.C. § 1331, “the district courts . . . have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.” -3-

DISCUSSION

I. COUNT TWO: RFPA VIOLATION

Count II alleges that the defendants violated the RFPA by

unlawfully disclosing information contained in Mead’s financial

records in violation of 12 U.S.C. § 3403. Under § 3403, “[n]o

financial institution, or officer, employees, or agent of a

financial institution, may provide to any Government authority

access to or copies of, or the information contained in, the

financial records of any customer except in accordance with” the

other provisions of the RFPA. 12 U.S.C. § 3403(a) (emphasis

added). The RFPA defines a “government authority” as “any agency

or department of the United States, or any officer, employee, or

agent thereof[.]” 12 U.S.C. § 3401(3). City First alleges that

Count II should be dismissed under either Rule 12(b)(1) for lack

of subject matter jurisdiction or Rule 12(b)(6) for failure to

state a claim because Mead has not alleged a disclosure to a

government authority.

A. Federal question jurisdiction

City First contends that by failing to allege disclosure to

a government authority, Mead has failed to allege sufficient

jurisdictional facts to support federal question jurisdiction

under 28 U.S.C. § 1331. The Supreme Court, in explaining the

“subject-matter jurisdiction/ingredient-of-the-claim-for-relief

dichotomy,” has cautioned against treating an element of a claim -4-

as jurisdictional when the required element “appears in a

separate provision [of the statute] that ‘does not speak in

jurisdictional terms or refer in any way to the jurisdiction of

the district courts.’” Arbaugh v. Y&H Corp., 546 U.S. 500, 511,

515 (2006) (quoting Zipes v. Trans World Airlines, Inc., 455 U.S.

385, 394 (1982)).

The RFPA’s jurisdictional provision provides only that “[a]n

action to enforce any provision of [the statute] may be brought

in any appropriate United States district court without regard to

the amount in controversy within three years from the date on

which the violation occurs or the date of discovery of such

violation, whichever is later.” 12 U.S.C. § 3416. In Doe v.

Board on Professional Responsibility of the District of Columbia

Court of Appeals, 717 F.2d 1424 (D.C. Cir. 1983), the D.C.

Circuit, noting the RFPA’s “general grant of jurisdiction,” held

that Doe’s claim alleging that the Board of Professional

Responsibility violated the RFPA was “sufficiently substantial to

support the district court’s assertion of federal question

jurisdiction.” Id. at 1427. The court instead determined that

whether the Board fell under the RFPA’s definition of government

authority was a question going to the merits of Doe’s complaint.

See id. As in Doe, Mead’s claim alleging that City First

disclosed his financial information without complying the RFPA

raises a federal question sufficient to support jurisdiction -5-

under 28 U.S.C. § 1331. The defendant’s argument -- that Mead

has failed to state a claim because he has not alleged disclosure

to a government authority -- goes to the merits of Mead’s claim,

rather than the court’s jurisdiction.

B. Failure to state a claim

Under Rule 12(b)(6), a party may move to dismiss a complaint

for failure to state a claim upon which relief can be granted.

See Fed. R. Civ. P. 12(b)(6). “On review of a 12(b)(6) motion a

court ‘must treat the complaint’s factual allegations as true

. . . and must grant plaintiff the benefit of all inferences that

can be derived from the facts alleged.’” Holy Land Found. for

Relief & Dev. v. Ashcroft, 333 F.3d 156, 165 (D.C. Cir. 2003)

(quoting Sparrow v. United Air Lines, Inc., 216 F.3d 1111, 1113

(D.C. Cir. 2000)). “Factual allegations must be enough to raise

a right to relief above the speculative level . . . on the

assumption that all of the allegations in the complaint are true

. . . .” Bell Atl. Corp. v. Twombly, 550 U.S. 545, 555 (2007).

In Count II of the amended complaint, Mead alleges the

defendants made numerous unlawful disclosures of information

contained in his financial records. (See Am. Compl. at 21-25.)

However, the only alleged disclosures of information contained in

Mead’s bank records to a government entity are statements made by

City First’s lawyer to the district court during a hearing on

Mead’s motion for a temporary restraining order filed in this -6-

action.2 Under Doe, the judiciary is not an entity included

within the RFPA’s definition of a government authority. See 717

F.2d at 1427 (holding that the RFPA did not apply to the D.C.

Court of Appeals); see also McDonough v. Widnall, 891 F. Supp.

1439, 1447 (D. Colo. 1995) (noting that the RFPA was passed “as a

compromise between a ‘bank customer’s right of financial privacy

and the need of law enforcement agencies to obtain financial

records pursuant to legitimate investigations[,]’” and that

“[t]he RFPA requires federal agencies ‘to follow the procedures

established by [the RFPA] when they seek an individual’s

records’” (quoting United States v. Frazin, 780 F.2d 1461, 1465

(9th Cir. 1986) and H.R. Rep. No. 1383, 95th Cong., 2d Sess. 33

(1978))); Young v. United States, No. 87 CIV. 8307 (JFK), 1988 WL

131302, at *5 (S.D.N.Y. Nov. 28, 1988) (concluding that “the

judicial branch is not included in the definition of ‘Government

authority’”). Because the RFPA does not apply to disclosures

made to the judiciary, Mead’s allegation that the defendants

disclosed information from his bank records to the district court

does not state a claim entitling him to relief under the RFPA.

2 Mead also alleges that the defendants made several other disclosures of information contained in Mead’s bank records to private parties. Because RFPA applies only to disclosures made to a government authority, see 12 U.S.C. § 3403, Mead’s allegations that the defendants made disclosures of his financial records to private parties do not state claims under the RFPA. -7-

Accordingly, Count II will be dismissed under Rule 12(b)(6) for

failure to state a claim.

II. SUPPLEMENTAL JURISDICTION

The remaining six counts of the amended complaint allege

only state law claims against nondiverse defendants. Under 28

U.S.C. § 1367, a court “may decline to exercise supplemental

jurisdiction over a claim . . . if . . . the district court has

dismissed all claims over which it has original jurisdiction[.]”

28 U.S.C. § 1367(c)(3); see 13D C. Wright, A. Miller, E. Cooper &

R. Freer, Federal Practice & Procedure § 3567.3 (3d ed. 2008)

(noting that courts apply a presumption that supplemental

jurisdiction should be declined if all federal claims are

dismissed before trial because “ordinarily the court and

litigants will have invested little effort on litigating the

supplemental claims”). To date, the parties have yet to engage

in any discovery. Having dismissed the sole federal claim

alleged before discovery has begun, the court declines to

exercise supplemental jurisdiction over the remaining counts of

the amended complaint. Accordingly, Counts I and III-VII of the

amended complaint will be dismissed without prejudice.

CONCLUSION

Because Mead has failed to state a claim under the RFPA,

Count II of his amended complaint will be dismissed. Because the

remaining six counts in the amended complaint allege only state -8-

law claims against nondiverse defendants, the court will decline

to exercise supplemental jurisdiction and will dismiss the

remaining counts in Mead’s amended complaint without prejudice.3

A final, appealable order accompanies this Memorandum Opinion.

SIGNED this 20th day of May, 2009.

/s/ RICHARD W. ROBERTS United States District Judge

3 Under these circumstances, City First Bank of DC has consented to having its counterclaim dismissed without prejudice. (See Def.’s Response to Ct. Order at 1 n.1.)