Pena v. Wells Fargo Bank, N.A.

• Court: District Court, N.D. California
• Decided: December 23, 2019
• Docket: 3:19-cv-04065
• Status: Unknown

Opinion

1 2 3 4 IN THE UNITED STATES DISTRICT COURT 5 FOR THE NORTHERN DISTRICT OF CALIFORNIA 6 7 EDUARDO PEÑA, Case No. 19-cv-04065-MMC

8 Plaintiff, ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S 9 v. MOTION TO DISMISS; GRANTING IN PART AND DENYING IN PART 10 WELLS FARGO BANK, N.A., DEFENDANT'S MOTION TO STAY OR BIFURCATE DISCOVERY Defendant. 11 Re: Dkt. Nos. 39, 40

13 Before the Court are two motions: (1) defendant's "Motion to Dismiss," filed 14 October 28, 2019; and (2) defendant's "Motion to Stay Discovery . . . , and in the 15 Alternative, to Bifurcate Discovery," filed October 28, 2019. Both motions have been fully 16 briefed.1 Having read and considered the papers filed in support of and in opposition to 17 the motions, the Court rules as follows.2 18 BACKGROUND 19 For purposes of the instant motion, the Court assumes the following allegations in 20 the operative complaint, the First Amended Complaint ("FAC"), are true. 21 Plaintiff Eduardo Peña "obtained status under DACA [Deferred Action for 22 Childhood Arrivals] along with a Social Security number and federal work authorization in 23 24 1Defendant's reply in support of its motion to stay or bifurcate discovery was 25 submitted in double-sided format. For future reference, defendant is advised that all future chambers copies must be submitted in single-sided format. See Standing Orders 26 for Civil Cases Assigned to The Honorable Maxine M. Chesney ¶ 2; Civil L.R. 3-4(c)(2) (providing “text must appear on one side only”). 27 1 or around 2012" and "[h]e has since renewed his DACA status three times." (See FAC 2 ¶ 9.) He presently is employed as a "tax manager." (See FAC ¶ 8.) 3 "In or around November 2018," plaintiff "submitted an online application for an 4 auto loan through the Wells Fargo website," and, "[w]hen the online application requested 5 that he enter his citizenship status," he selected "non-resident alien." (See FAC ¶ 49.) 6 "At some point after [plaintiff] submitted his application," defendant "conducted a hard 7 credit check and pull of his consumer report from one or more credit bureaus." (See FAC 8 ¶ 50.) At another point after he submitted his application, plaintiff "received a phone call 9 from a Wells Fargo representative to process the loan" and said representative "provided 10 him with additional paperwork to complete and asked him for a copy of his Social 11 Security card." (See FAC ¶ 51.) After plaintiff provided his Social Security card, the 12 representative then asked him for "a copy of his work permit," which plaintiff also 13 provided. (See id.) Thereafter, the representative told plaintiff he was "ineligible for the 14 loan because his DACA status expired within the loan period" (see id.); plaintiff's 15 "creditworthiness" was "not consider[ed]" (see FAC ¶ 52.) Although plaintiff subsequently 16 requested defendant send him a "written explanation" for the denial, he did not receive an 17 explanation that "accurately stated the reason." (See FAC ¶ 53.) 18 Based on said allegations, plaintiff alleges three claims for relief, specifically, 19 (1) "Alienage Discrimination (42 U.S.C. § 1981)"; (2) "Failure to Provide Written Notice of 20 Reason for Denial (ECOA, 15 U.S.C. § 1691 and 12 C.F.R. § 1002.9(a))"; and 21 (3) "Obtaining Consumer Reports Without a Permissible Purpose (FCRA, 15 U.S.C. 22 § 1681b(f))." 23 DISCUSSION 24 A. Motion to Dismiss 25 The Court considers plaintiff's three claims, in turn. 26 1. First Claim: Alienage Discrimination 27 In the First Claim for Relief, plaintiff alleges defendant's denial of his application for 1 that "[a]ll persons within the jurisdiction of the United States shall have the same right in 2 every State and Territory to make and enforce contracts . . . as is enjoyed by white 3 citizens." See 42 U.S.C. § 1981(a). Section 1981 "protect[s] primarily against racial 4 discrimination" but also "protects against discrimination on the basis of alienage." See 5 Sagana v. Tenorio, 384 F.3d 731, 738 (9th Cir. 2004). 6 At the outset, the Court notes that several issues bearing on plaintiff's § 1981 7 claim are not directly addressed by the parties in their respective submissions, and, 8 consequently, the Court, without making a finding herein as to how such issues should be 9 resolved, assumes the following: (1) aliens protected by § 1981 are aliens who are 10 lawfully present in the country, see Anderson v. Conboy, 156 F.3d 167, 180 (2nd Cir. 11 1998) (finding "[i]f an employer refuses to hire a person because that person is in the 12 country illegally, that employer is discriminating on the basis not of alienage but of 13 noncompliance with federal law"); (2) DACA recipients are considered to be lawfully in 14 the country, see Arizona Dream Act Coalition v. Brewer, 757 F.3d 1053, 1059 (9th Cir. 15 2014 (observing Department of Homeland Security "considers DACA recipients not to be 16 unlawfully present in the United States"); and (3) the length of the loan plaintiff sought 17 from defendant extended beyond the date his DACA status would expire if not renewed 18 (see FAC ¶ 51). 19 Next, it is undisputed that, if a person is "approved into the DACA program," the 20 person is "granted a renewable two-year term of deferred action." See Regents of the 21 University of California v. United States Department of Homeland Security, 908 F.3d 476, 22 490 (9th Cir. 2018). Stated otherwise, all DACA recipients must seek a renewal every 23 two years. In light of the factual allegations in the FAC, "accept[ed] as true," see Ashcroft 24 v. Iqbal, 556 U.S. 662, 678 (2009), as well as the assumptions identified above, the Court 25 finds defendant's denial of plaintiff's application, allegedly based on a requirement that 26 plaintiff's DACA status not expire during the above-referenced loan period, constitutes a 27 // 1 a violation of § 1981.3 2 Accordingly, defendant has not shown the First Claim for Relief is subject to 3 dismissal. 4 2. Second Claim: Failure to Provide Written Notice of Reason for Denial 5 In the Second Claim for Relief, plaintiff alleges defendant did not provide him with 6 a written notice that "accurately stated the reasons for its denial" (see FAC ¶ 90), in 7 violation of 15 U.S.C. § 1691, which requires a creditor to provide a "statement of 8 reasons" that "contains the specific reasons" for the denial, see 15 U.S.C. § 1691(d)(2)- 9 (3), and in violation of 12 C.F.R. § 1002.9, which similarly requires a creditor to provide a 10 "statement of specific reasons" that "indicate[s] the principal reason(s)" for the denial, see 11 12 C.F.R. § 1002.9(a)(2)(ii), § 1002.9(b)(2). 12 As defendant correctly observes, plaintiff fails to allege any facts to support his 13 conclusory assertion that the reasons stated in the notice he received were not 14 "accurate," and, consequently, he fails to state a cognizable claim. See Iqbal, 556 U.S. 15 at 679 (holding courts "not bound to accept as true a legal conclusion couched as a 16 factual allegation"); Harding v. Time Warner, Inc., 2009 WL 2575898, at *3-4 (S.D. Cal. 17 August 18, 2009) (finding complaint lacked "sufficient non-conclusory factual content" 18 where plaintiff alleged defendant employer did not "keep accurate records of all hours 19 worked by its employees" and did not "provide accurate Itemized Wage Statements") 20 (internal quotations and citations omitted). 21 Accordingly, the Second Claim for Relief is subject to dismissal. 22

23 3In support of its motion to stay or bifurcate discovery, defendant has submitted evidence that, according to defendant, shows it denied plaintiff's application because he 24 did not submit certain requested material and that, if such material had been submitted, defendant could have found plaintiff eligible for the loan. Defendant does not, however, 25 rely on such evidence in support of its motion to dismiss (see Def.'s Reply Mem. in Support of Mot. to Stay Discovery at 4:9-12), which material, in any event, cannot be 26 considered in connection with such motion. See Intri–Plex Tech. Inc. v. Crest Group, Inc., 499 F.3d 1048, 1052 (9th Cir. 2007) (holding courts, when ruling on motion to 27 dismiss, "may not consider material beyond the complaint," other than material as to 1 3. Third Claim: Obtaining Consumer Reports Without Permissible Purpose 2 In the Third Claim for Relief, plaintiff alleges defendant obtained his "consumer 3 report" without having a "permissible purpose," as it "knows it will deny credit to non- 4 citizens with DACA status." (See FAC ¶¶ 50, 57, 60.) Plaintiff asserts such act was in 5 violation of 15 U.S.C. § 1681b, which prohibits a person from obtaining a "consumer 6 report" unless it is obtained for an "authorized" purpose. See 15 U.S.C. § 1681b(f). 7 Defendant argues the claim is subject to dismissal, as plaintiff has not pleaded facts to 8 support a finding that it lacked a permissible purpose to obtain plaintiff's consumer report. 9 A creditor may obtain a consumer report for use "in connection with a credit 10 transaction involving the consumer on whom the information is to be furnished [by a 11 consumer reporting agency] and involving the extension of credit to . . . the consumer." 12 See 15 U.S.C. § 1681b(a)(3)(A). As plaintiff alleges defendant obtained his consumer 13 report after he submitted a loan application to defendant (see FAC ¶¶ 49-50), plaintiff's 14 theory, to be viable, is dependent on defendant's knowledge of plaintiff's DACA status at 15 the time defendant obtained plaintiff's consumer report. 16 As noted, the FAC alleges that, when plaintiff submitted his loan application, he 17 advised defendant he was a "non-resident alien." (See FAC ¶ 49.) As not all non- 18 residents are DACA recipients, however, see, e.g., Ahmed v. University of Toledo, 822 19 F.2d 26, 26 (6th Cir. 1987) (observing "foreign students" who were "admitted to this 20 country under student visas" were "non-resident aliens"), said allegation, standing alone, 21 is insufficient to support a finding that defendant knew plaintiff was a DACA recipient at 22 the time it obtained his consumer report. 23 As also noted, the FAC alleges that, at some point after plaintiff submitted his 24 application, a "representative" of defendant requested plaintiff submit a copy of his "work 25 permit," and that, after plaintiff did so, the representative stated plaintiff was "ineligible for 26 the loan because his DACA status expired within the loan period" (See FAC ¶ 51.) 27 Assuming such factual allegations to be true, it would appear defendant's representative 1 however, the representative obtained such knowledge prior to defendant's obtaining 2 plaintiff's consumer report. 3 Under the circumstances, the Court finds plaintiff has failed to allege facts from 4 which it can reasonably inferred defendant lacked a permissible purpose when it obtained 5 plaintiff's consumer report. 6 Accordingly, the Third Claim for Relief is subject to dismissal. 7 B. Motion to Stay or Bifurcate Discovery 8 Defendant seeks an order staying all discovery or, alternatively, bifurcating 9 discovery such that discovery on plaintiff's individual claim(s) be conducted prior to class- 10 wide discovery. 11 To the extent defendant seeks an order staying all discovery, the motion will be 12 denied, as the First Claim for Relief will not be dismissed. 13 To the extent defendant alternatively seeks an order bifurcating discovery, the 14 motion will be granted. Defendant has offered evidence that its denial of plaintiff's loan 15 application was for a reason unrelated to plaintiff's status as a DACA recipient, 16 specifically, plaintiff's asserted "failure to provide appropriate documentation," described 17 as "a properly signed SSA-89" and a copy of a "valid work permit, visa, or DACA 18 authorization." (See Gerloff Decl. ¶¶ 14-17.) Contrary to plaintiff's argument, discovery 19 as to the merits of such limited issue, i.e., whether plaintiff did submit a completed 20 application, does not overlap with the class claim that defendant has a policy of denying 21 automobile loans to DACA recipients. 22 CONCLUSION 23 For the reasons stated above: 24 1. Defendant's motion to dismiss is hereby GRANTED in part and DENIED in part, 25 as follows: 26 a. To the extent defendant seeks dismissal of the First Claim for Relief, the 27 motion is DENIED. 1 for Relief, the motion is GRANTED, and said claims are DISMISSED. 2 c. If plaintiff wishes to file a Second Amended Complaint for purposes of 3 || amending the Second and/or Third Claims for Relief, he shall file it no later than January 4 || 17, 2020. 5 2. Defendant's motion to stay or bifurcate discovery is hereby GRANTED in part 6 || and DENIED in part, as follows: 7 a. To the extent defendant seeks an order staying all discovery, the motion 8 || is DENIED. 9 b. To the extent defendant seeks an order bifurcating discovery, the motion 10 || is GRANTED. 11 IT IS SO ORDERED. 12 . 13 || Dated: December 23, 2019 . XINE M. CHESNEY 14 United States District Judge

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