HONORABLE RICHARD A. JONES 1
6 UNITED STATES DISTRICT COURT 7 WESTERN DISTRICT OF WASHINGTON AT SEATTLE 8 DOUGLAS H. ROUGH, 9
Plaintiff, 10 Case No. 2:18-cv-01555-RAJ v. 11 ORDER
CHASE BANK, et al., 12 Defendant. 13 14 I. INTRODUCTION 15 This matter comes before the Court on motions to dismiss by Defendants Chase 16 Bank, N.A. (“Chase”) and Barclayscard. Dkt. ## 48, 52. For the reasons stated below, the 17 Court GRANTS both motions. Additionally, the Court GRANTS Chase’s pending motion 18 to strike and DENIES as moot Chase’s motion to quash. Dkt. ## 55, 60. 19 II. BACKGROUND 20 After the Court granted Defendants’ motions to dismiss, Plaintiff filed his Second 21 Amended Complaint (“SAC”) on June 3, 2019. See Dkt. ## 40, 45, 46, 47. Plaintiff alleges 22 that he was offered employment by Defendant MC Medical AG in September 2017. Dkt. 23 # 47 at 1. He claims that the company told him a permanent job offer would follow on 24 November 1, 2017 if he passed a series of training tests. Id. The alleged agreement 25 between Plaintiff and MC Medical AG would pay him $2,500 for training and did not 26 prevent him from working elsewhere during the training period. Id. at 1-2. 27 On October 11, 2017, Plaintiff claims that MC Medical AG asked him to purchase 1 equipment and agreed to transfer money to his Chase credit card to cover the transactions. 2 Id. at 2. Plaintiff states that he was unfamiliar with this type of transfer and called Chase. 3 Id. He claims to have asked Chase whether the transfer to his account could be reversed. 4 Id. at 3-4. Plaintiff alleges that Chase told him the transfer could not be reversed after 24 5 hours without a court order. Id. at 4. During the call, Plaintiff alleges the Chase 6 representative made no mention of the possibility of suspicious activity with this type of 7 transfer or that Plaintiff had to be the “owner” of the transferring account. Id. Plaintiff 8 alleges that he received a Chase account number from MC Medical AG and executed the 9 money transfer to his Chase credit card. Id. After waiting 24 hours, Plaintiff alleges that 10 he made multiple purchases for MC Medical AG on his credit card. Id. 11 On October 16, 2017, Plaintiff claims that he was approached by another company, 12 Defendant ALN. Id. at 9. He alleges that ALN asked him to execute a transaction for 13 equipment like the one he completed with MC Medical AG. Id. at 10. Based on his 14 experience with the Chase transfer, Plaintiff alleges he essentially conducted the same 15 transaction with ALN—this time he received a Wells Fargo account number, transferred 16 money to his Barclaycard, and purchased equipment for ALN. Id. at 10-12. 17 Plaintiff claims that after three weeks, the money transfers to both his Chase credit 18 card and his Barclaycard were reversed. Id. at 11-16. Plaintiff states that he is a victim of 19 fraud. Id. at 22. He brings this action claiming, in part, that Defendants Chase and 20 Barclayscard are complicit in financial fraud schemes by not taking affirmative actions to 21 stop it. Id. at 11. Specifically, he claims the fraud here would not have been possible 22 without advice from Chase and could have been stopped with simple authentication 23 measures. Id. at 22. He seeks in damages the cost of the fraud, the cost to investigate, the 24 interest charged by the banks, and future lost wages. Id. 25 Chase and Barclayscard filed motions to dismiss the SAC, which is now before the 26 27 1 Court.1 Dkt. ## 48, 52. 2 III. LEGAL STANDARD 3 Rule 12(b)(6) permits a court to dismiss a complaint for failure to state a claim. The 4 rule requires the court to assume the truth of the complaint’s factual allegations and credit 5 all reasonable inferences arising from those allegations. Sanders v. Brown, 504 F.3d 903, 6 910 (9th Cir. 2007). A court “need not accept as true conclusory allegations that are 7 contradicted by documents referred to in the complaint.” Manzarek v. St. Paul Fire & 8 Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). The plaintiff must point to factual 9 allegations that “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. 10 Twombly, 550 U.S. 544, 568 (2007). If the plaintiff succeeds, the complaint avoids 11 dismissal if there is “any set of facts consistent with the allegations in the complaint” that 12 would entitle the plaintiff to relief. Id. at 563; Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). 13 A court typically cannot consider evidence beyond the four corners of the complaint, 14 although it may rely on a document to which the complaint refers if the document is central 15 to the party’s claims and its authenticity is not in question. Marder v. Lopez, 450 F.3d 445, 16 448 (9th Cir. 2006). A court may also consider evidence subject to judicial notice. United 17 States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003). 18 IV. DISCUSSION 19 To overcome a motion to dismiss pursuant to Rule 12(b)(6), a plaintiff need only 20 allege facts that “state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 21 568. Although not completely clear from the Complaint, Plaintiff appears to be suing the 22 defendant banks for violations of RICO, the Truth in Lending Act (TILA), Regulation Z, 23 1 Chase also moves to strike certain allegations in Plaintiff’s response that assert the parties 24 are “close to settlement” and ask the Court to defer ruling until October. Dkt. # 59 at 1-2. 25 Courts have inherent power to strike references to settlement negotiations from pleadings. Jones v. Metro. Life Ins. Co., 2010 WL 4055928, at *6 (N.D. Cal. Oct. 15, 2010); see also 26 Roadway Express, Inc. v. Piper, 447 U.S, 752, 764 (1980) (“The inherent powers of federal courts are those which are necessary to the exercise of all others.”). The Court GRANTS 27 Chase’s motion. Dkt. # 60. 1 and the Bank Secrecy Act. See Dkt. # 47. Even considering these clarifications, the Court 2 finds that Plaintiff’s Complaint fails to comply with Rule 9(b) and does not state an 3 actionable claim against Defendants Chase and Barclayscard. 4 The Court notes that the SAC essentially repeats the same allegations as Plaintiff’s 5 previous complaints. See Dkt. ## 1, 36, 47. And as the Court previously stated, the crux 6 of Plaintiff’s Complaint is grounded in allegations of fraud. See Hart v. McLucas, 535 7 F.2d 516, 519 (9th Cir. 1976) (The elements of fraud consist of false representation in 8 reference to a material fact made with knowledge of its falsity and with the intent to deceive 9 with action taken in reliance upon the representation). The Ninth Circuit has consistently 10 held that cases “grounded in fraud” or that “sound in fraud” must satisfy the particularity 11 requirement of Rule 9(b). See Vess v. Ciba–Geigy Corp., 317 F.3d 1097, 1103–04 (9th 12 Cir. 2003). Rule 9(b) demands that the circumstances constituting the alleged fraud be 13 detailed with enough specificity to give defendants notice of the particular misconduct so 14 that they can defend against the charge and not just deny it. Id. Averments of fraud must 15 be accompanied by “the who, what, when, where, and how” of the misconduct charged. 16 Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir. 1997) (internal quotation marks omitted).
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HONORABLE RICHARD A. JONES 1
6 UNITED STATES DISTRICT COURT 7 WESTERN DISTRICT OF WASHINGTON AT SEATTLE 8 DOUGLAS H. ROUGH, 9
Plaintiff, 10 Case No. 2:18-cv-01555-RAJ v. 11 ORDER
CHASE BANK, et al., 12 Defendant. 13 14 I. INTRODUCTION 15 This matter comes before the Court on motions to dismiss by Defendants Chase 16 Bank, N.A. (“Chase”) and Barclayscard. Dkt. ## 48, 52. For the reasons stated below, the 17 Court GRANTS both motions. Additionally, the Court GRANTS Chase’s pending motion 18 to strike and DENIES as moot Chase’s motion to quash. Dkt. ## 55, 60. 19 II. BACKGROUND 20 After the Court granted Defendants’ motions to dismiss, Plaintiff filed his Second 21 Amended Complaint (“SAC”) on June 3, 2019. See Dkt. ## 40, 45, 46, 47. Plaintiff alleges 22 that he was offered employment by Defendant MC Medical AG in September 2017. Dkt. 23 # 47 at 1. He claims that the company told him a permanent job offer would follow on 24 November 1, 2017 if he passed a series of training tests. Id. The alleged agreement 25 between Plaintiff and MC Medical AG would pay him $2,500 for training and did not 26 prevent him from working elsewhere during the training period. Id. at 1-2. 27 On October 11, 2017, Plaintiff claims that MC Medical AG asked him to purchase 1 equipment and agreed to transfer money to his Chase credit card to cover the transactions. 2 Id. at 2. Plaintiff states that he was unfamiliar with this type of transfer and called Chase. 3 Id. He claims to have asked Chase whether the transfer to his account could be reversed. 4 Id. at 3-4. Plaintiff alleges that Chase told him the transfer could not be reversed after 24 5 hours without a court order. Id. at 4. During the call, Plaintiff alleges the Chase 6 representative made no mention of the possibility of suspicious activity with this type of 7 transfer or that Plaintiff had to be the “owner” of the transferring account. Id. Plaintiff 8 alleges that he received a Chase account number from MC Medical AG and executed the 9 money transfer to his Chase credit card. Id. After waiting 24 hours, Plaintiff alleges that 10 he made multiple purchases for MC Medical AG on his credit card. Id. 11 On October 16, 2017, Plaintiff claims that he was approached by another company, 12 Defendant ALN. Id. at 9. He alleges that ALN asked him to execute a transaction for 13 equipment like the one he completed with MC Medical AG. Id. at 10. Based on his 14 experience with the Chase transfer, Plaintiff alleges he essentially conducted the same 15 transaction with ALN—this time he received a Wells Fargo account number, transferred 16 money to his Barclaycard, and purchased equipment for ALN. Id. at 10-12. 17 Plaintiff claims that after three weeks, the money transfers to both his Chase credit 18 card and his Barclaycard were reversed. Id. at 11-16. Plaintiff states that he is a victim of 19 fraud. Id. at 22. He brings this action claiming, in part, that Defendants Chase and 20 Barclayscard are complicit in financial fraud schemes by not taking affirmative actions to 21 stop it. Id. at 11. Specifically, he claims the fraud here would not have been possible 22 without advice from Chase and could have been stopped with simple authentication 23 measures. Id. at 22. He seeks in damages the cost of the fraud, the cost to investigate, the 24 interest charged by the banks, and future lost wages. Id. 25 Chase and Barclayscard filed motions to dismiss the SAC, which is now before the 26 27 1 Court.1 Dkt. ## 48, 52. 2 III. LEGAL STANDARD 3 Rule 12(b)(6) permits a court to dismiss a complaint for failure to state a claim. The 4 rule requires the court to assume the truth of the complaint’s factual allegations and credit 5 all reasonable inferences arising from those allegations. Sanders v. Brown, 504 F.3d 903, 6 910 (9th Cir. 2007). A court “need not accept as true conclusory allegations that are 7 contradicted by documents referred to in the complaint.” Manzarek v. St. Paul Fire & 8 Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). The plaintiff must point to factual 9 allegations that “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. 10 Twombly, 550 U.S. 544, 568 (2007). If the plaintiff succeeds, the complaint avoids 11 dismissal if there is “any set of facts consistent with the allegations in the complaint” that 12 would entitle the plaintiff to relief. Id. at 563; Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). 13 A court typically cannot consider evidence beyond the four corners of the complaint, 14 although it may rely on a document to which the complaint refers if the document is central 15 to the party’s claims and its authenticity is not in question. Marder v. Lopez, 450 F.3d 445, 16 448 (9th Cir. 2006). A court may also consider evidence subject to judicial notice. United 17 States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003). 18 IV. DISCUSSION 19 To overcome a motion to dismiss pursuant to Rule 12(b)(6), a plaintiff need only 20 allege facts that “state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 21 568. Although not completely clear from the Complaint, Plaintiff appears to be suing the 22 defendant banks for violations of RICO, the Truth in Lending Act (TILA), Regulation Z, 23 1 Chase also moves to strike certain allegations in Plaintiff’s response that assert the parties 24 are “close to settlement” and ask the Court to defer ruling until October. Dkt. # 59 at 1-2. 25 Courts have inherent power to strike references to settlement negotiations from pleadings. Jones v. Metro. Life Ins. Co., 2010 WL 4055928, at *6 (N.D. Cal. Oct. 15, 2010); see also 26 Roadway Express, Inc. v. Piper, 447 U.S, 752, 764 (1980) (“The inherent powers of federal courts are those which are necessary to the exercise of all others.”). The Court GRANTS 27 Chase’s motion. Dkt. # 60. 1 and the Bank Secrecy Act. See Dkt. # 47. Even considering these clarifications, the Court 2 finds that Plaintiff’s Complaint fails to comply with Rule 9(b) and does not state an 3 actionable claim against Defendants Chase and Barclayscard. 4 The Court notes that the SAC essentially repeats the same allegations as Plaintiff’s 5 previous complaints. See Dkt. ## 1, 36, 47. And as the Court previously stated, the crux 6 of Plaintiff’s Complaint is grounded in allegations of fraud. See Hart v. McLucas, 535 7 F.2d 516, 519 (9th Cir. 1976) (The elements of fraud consist of false representation in 8 reference to a material fact made with knowledge of its falsity and with the intent to deceive 9 with action taken in reliance upon the representation). The Ninth Circuit has consistently 10 held that cases “grounded in fraud” or that “sound in fraud” must satisfy the particularity 11 requirement of Rule 9(b). See Vess v. Ciba–Geigy Corp., 317 F.3d 1097, 1103–04 (9th 12 Cir. 2003). Rule 9(b) demands that the circumstances constituting the alleged fraud be 13 detailed with enough specificity to give defendants notice of the particular misconduct so 14 that they can defend against the charge and not just deny it. Id. Averments of fraud must 15 be accompanied by “the who, what, when, where, and how” of the misconduct charged. 16 Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir. 1997) (internal quotation marks omitted). 17 Plaintiff’s Complaint still fails to state facts supporting Plaintiff’s charge that the 18 banks knowingly gave false information in furtherance of any alleged scheme against him. 19 See Decker v. GlenFed, Inc. (In re GlenFed, Inc. Sec. Litig.), 42 F.3d 1541, 1548 (9th Cir. 20 1994) (“The plaintiff must set forth what is false or misleading about a statement, and why 21 it is false.”). Instead, Plaintiff only claims that Chase informed him that money could not 22 be transferred out of his account after 24 hours without a court order. Dkt. # 47. Even 23 assuming the truth of this allegation, the Complaint is devoid of facts showing Chase’s 24 involvement in any fraud scheme targeting Plaintiff or that any false statement was made 25 with the intent to deceive him. See Kearns v. Ford Motor Co., 567 F.3d 1120, 1125 (9th 26 Cir. 2009) (explaining fraud claims may not be based on mere speculation); Hart, 535 F.2d 27 at 519 (defining fraud as requiring the intent to deceive with action taken in reliance upon 1 that false representation). Although Plaintiff claims that Chase should have known that 2 “thousands of people were sending packages to the same address I sent [packages] to,” he 3 fails to show that Chase had any knowledge of this particular address or any connection to 4 the scheme by MC Medical AG or ALN to deceive Plaintiff. As for Barclays, Plaintiff 5 fails to allege that Barclays communicated with him at all concerning these transactions, 6 let alone misled him to use his Barclays card for that purpose. “Because a dismissal of a 7 complaint or claim grounded in fraud for failure to comply with Rule 9(b) has the same 8 consequence as a dismissal under Rule 12(b)(6), dismissals under the two rules are treated 9 in the same manner.” Vess, 317 F.3d at 1107. 10 The Complaint also fails to show how these allegations amount to violations of the 11 other statutes under which the action is brought. For example, Plaintiff does not allege 12 what required disclosures Barclays or Chase supposedly failed to provide him that would 13 serve as a predicate for a TILA claim or violation of Regulation Z. Alexander v. Wells 14 Fargo Bank, N.A., 2015 WL 512922 (W.D. Wash. Sep. 1, 2015) (explaining that 15 Regulation Z pertains solely to “disclosures of mortgage transfers”); Olivera v. Am. Home 16 Mortgage Serv., Inc., 689 F.Supp.2d 1218, 1223 (N.D. Cal. 2010) (dismissing TILA claim 17 where plaintiff failed to identify particular loan documentation that purportedly lacked 18 required disclosures). Plaintiff also fails to state a claim under RICO given his inability to 19 meet the Rule 9(b) standard. See, e.g., Alexander, 2015 WL 512922 at *6 (dismissing 20 RICO claim for failing to satisfy Rule 9(b) standard); Cascade Yarns, Inc. v. Knitting 21 Fever, Inc., 2011 WL 31862 (W.D. Wash. Jan. 3, 2011). Finally, the Bank Secrecy Act 22 does not create a private right of action. New World Mortgage v. TD Bank, 2011 WL 23 13225032, at *1 (C.D. Cal. Aug. 3, 2011); see also Armstrong v. American Pallet Leasing 24 Inc., 678 F. Supp. 2d 827, 874-75 (N.D. Iowa 2009) (listing district court cases that have 25 held the same). 26 In the last order dismissing Plaintiff’s complaint, the Court stated that if Plaintiff 27 filed an amended complaint that did not state a cognizable claim for relief, it would be 1 dismissed with prejudice. Dkt. # 46; see Leadsinger, Inc. v. BMG Music Pub., 512 F.3d 2 522, 532 (9th Cir. 2008) (“futility of amendment” justifies denial of leave to amend). Given 3 the deficiencies with the SAC as outlined in this Order, the Court dismisses the Complaint 4 against Chase and Barclayscard with prejudice. 5 V. CONCLUSION 6 For the reasons stated above, the Court GRANTS Defendants Chase and 7 Barclaycard’s motions to dismiss with prejudice. Dkt. # 48, 52. The Court also GRANTS 8 Chase’s motion to strike and DENIES as moot Chase’s motion to quash. Dkt. ## 55, 60. 9 10 DATED this 27th day of September, 2019. 11 A 12
13 The Honorable Richard A. Jones 14 United States District Judge 15
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