Mead v. City First Bank of Dc, N.A. ( 2009 )

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.
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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.”
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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
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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
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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
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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.
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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
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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.)