Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_06-cv-03762/USCOURTS-cand-3_06-cv-03762-1/pdf.json

Parties Involved:
Crystal Garcia
Plaintiff
Roy Garcia
Plaintiff
Unionbancal Corporation
Defendant

Document Text:

U

nite

d

States District C

o

u

rt

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

U

nite

d

States District C

o

u

rt

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

CRYSTAL GARCIA,

Plaintiff,

 v.

UNIONBANCAL CORPORATION,

Defendant.

 /

No. C 06-03762 CRB

ORDER

Now pending before the Court is Defendant’s motion to dismiss Plaintiffs’ claims. 

For the reasons set forth below, Defendant’s motion is GRANTED with prejudice as to

Plaintiffs’ fifth cause of action. Defendant’s motion is GRANTED without prejudice as to

Plaintiffs’ other causes of action.

BACKGROUND

 On April 1, 2006, an unknown person allegedly stole a briefcase belonging to an

employee of Union Bank of California (“UBOC”). This briefcase allegedly contained

personal and financial information belonging to persons with checking, savings, and/or other

depository accounts with UBOC. According to Plaintiffs, this information included “names,

addresses, telephone numbers, account numbers, types of accounts, account opening dates,

Case 3:06-cv-03762-CRB Document 15 Filed 09/12/06 Page 1 of 6
U

nite

d

States District C

o

u

rt

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

1 California Civil Code section 1798.82 requires businesses that keep secured records

containing confidential information to “disclose any breach of the security of the system . . . to

any resident of California whose unencrypted personal information was, or is reasonably

believed to have been, acquired by an unauthorized person.” CAL. CIV. CODE § 1798.82.

2 Plaintiffs have identified UnionBanCal as the defendant in this suit. Their factual

allegations, however, pertain almost exclusively to UBOC. While the Complaint treats these two

corporate entities as one and the same, the parties now agree that UnionBanCal and UBOC are

separate corporate entities — UnionBanCal is not a bank but a holding company, and UBOC is

one of its subsidiaries. UnionBanCal thus argues, correctly, that it is not the proper defendant

in this suit, and Plaintiffs have indicated their intention to amend the complaint accordingly.

This order proceeds to the merits of Plaintiffs’ claims as if they had properly named UBOC as

the defendant. Defense counsel has asserted that he has authority to represent both UnionBanCal

and UBOC in this matter, and both corporations were represented at the hearing on the motion

to dismiss.

2

account balances, social security numbers and, occasionally, interest rates.” Complaint ¶ 11. 

On April 25, 2006, pursuant to California law, UBOC notified its customers about the theft.1

Plaintiffs Crystal and Roy Garcia purport to represent themselves and other similarly

situated UBOC customers (“Plaintiffs”) who maintain accounts with UBOC and who have

had their confidential financial information compromised as a result of the theft of the

briefcase. Complaint ¶ 14. Plaintiffs brought this suit alleging that UBOC recklessly and

negligently maintained custody of Plaintiffs’ data and thereby allowed it to be stolen. They

further allege that they relied on UBOC’s misleading representation that their information

“would remain secure.” Id. ¶ 27. Specifically, Plaintiffs set forth eight claims: (1)

negligence; (2) fraud; (3) negligent misrepresentation; (4) invasion of privacy; (5) negligent

noncompliance with the Fair Credit Reporting Act (FCRA); (6) violation of the California

Credit Reporting Agencies Act (CCRA); (7) violation of the California Investigative

Consumer Reporting Agencies Act (CICRAA); and (8) violation of California’s Unfair

Competition Law under Business and Professions Code section 17200. 

Defendant2 now moves to dismiss under Rule 12(b)(6), alleging that Plaintiffs have

failed to state a claim upon which relief may be granted. 

DISCUSSION

Plaintiffs allege, inter alia, that UBOC has violated the FCRA, 15 U.S.C. § 1681 et.

seq. Specifically, Plaintiffs aver that the data contained in the stolen briefcase constitute

“consumer reports” as defined by that statute, and that UBOC violated the FCRA by

Case 3:06-cv-03762-CRB Document 15 Filed 09/12/06 Page 2 of 6
U

nite

d

States District C

o

u

rt

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

3

 Plaintiffs allege in their Complaint that UBOC is generally in the business of generating

consumer reports. Complaint ¶ 19. Plaintiff further alleges that UBOC “maintains computer

databases of consumer identity and credit information for use in generating credit/background

reports and in verifying information supplied by individuals as part of businesstransactions, such

as credit, insurance, employment, or housing applications.” Id. ¶ 20. Plaintiff also alleges that

UBOC “communicates information relating to consumers’ creditworthiness, credit standing,

credit capacity, character, general reputation, personal characteristics, and/or mode of living,”

and that this information “is used or expected to be used . . . to serve as a factor in establishing

consumers’ eligibility for personal, family or household credit, insurance, housing or

employment.” Id. at 21. These allegations, taken as true, may establish that UBOC sometimes

functions as a “consumer reporting agency.” But this alone does not establish UBOC’s liability

under the FCRA in this case; in order to fall under the ambit of the FCRA, it must have been

acting as a consumer reporting agency at the time it generated the information in the stolen

briefcase. See Smith v. First National Bank of Atlanta, 837 F.2d 1575, 1578 (11th Cir. 1988)

(holding that a bank is not acting as a “consumer reporting agency” if it has not furnished a

“consumer report.”). 

3

disclosing these consumer reports to unauthorized third persons. Complaint ¶¶ 70, 71; see

also 15 U.S.C. §§ 1681b, 1681o. 

Even taking the Plaintiffs’ factual allegations as true, however, their Complaint cannot

support a claim under the FCRA. On the facts presented in the Complaint, UBOC was not

acting as a “consumer reporting agency” with respect to the information contained in the

stolen briefcase. Furthermore, the contents of the briefcase, as described in the Complaint,

do not constitute “consumer reports.” Therefore, UBOC cannot incur liability under that

statute. See Rush v. Macy’s N.Y., Inc., 775 F.2d 1554, 1557 (7th Cir. 1985) (holding that

only a consumer reporting agency can be liable for claims under the FCRA).

Under the FCRA, a “consumer reporting agency” is defined as an entity that provides

“consumer credit information or other information on consumers for the purpose of

furnishing consumer reports to third parties.” 15 U.S.C. § 1681a(f) (emphasis added). Here,

the Complaint does not allege that UBOC produced the information contained in the stolen

briefcase for the purpose of providing it to any third party. Nor could the Complaint

plausibly make such an allegation, in light of the fact that the briefcase was allegedly stolen. 

Thus, at least insofar as the stolen briefcase is concerned, the Complaint fails to establish that

UBOC was acting as a “consumer reporting agency.”3 Accord Moore v. Beneficial Nat’l

Bank USA, 876 F. Supp. 1247, 1259-61 (M.D. Ala. 1995) (holding that a bank did not act as

Case 3:06-cv-03762-CRB Document 15 Filed 09/12/06 Page 3 of 6
U

nite

d

States District C

o

u

rt

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

4

“consumer reporting agencies” when handling information relating to its customers’

accounts).

The FCRA sets forth a broad definition of “consumer reports,” but it expressly

excludes from that definition any reports “containing information solely as to transactions or

experiences between the consumer and the person making the report.” 15 U.S.C. §

1681a(d)(2)(A)(i). Because the data contained in the stolen briefcase as described by

Plaintiffs fit squarely within this exception described by section 1681a(d)(2)(A)(i), the

Complaint fails to establish UBOC’s liability under the FCRA. See Smith v. First National

Bank of Atlanta, 837 F.2d 1575, 1578 (11th Cir. 1988) (“[W]here [a bank] has reported

information based solely on its own experience with one of its customers, the bank is not

acting as a ‘consumer reporting agency,’ within the meaning of the [FCRA] because . . . it

has not furnished a ‘consumer report.’”).

Plaintiffs’ conclusory assertions that the briefcase contained “consumer reports” are

insufficient. Clegg v. Cult Awareness Network, 18 F.3d 752, 754-55 (9th Cir. 1994) (noting

that a district court “is not required to accept legal conclusions cast in the form of factual

allegations if those conclusions cannot reasonably be drawn from the facts alleged”);

Western Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981) (“We do not, however,

necessarily assume the truth of legal conclusions merely because they are cast in the form of

factual allegations.”). Here, the Plaintiffs have alleged only that the stolen briefcase

contained “names, addresses, telephone numbers, account numbers, types of accounts,

account opening dates, account balances, social security numbers and, occasionally, interest

rates.” Complaint ¶ 11. This is information relating “solely as to transactions or experiences

between [Plaintiffs] and [UBOC].” 15 U.S.C. § 1681a(d)(2)(A)(i). 

Plaintiffs argue that the contents of the briefcase nonetheless constitute “consumer

reports” because some of the information — such as telephone numbers, social security

numbers, and addresses — does not “solely” describe transactions between the Plaintiffs and

UBOC. In other words, because such personal information might also relate to other

transactions affecting the Plaintiffs’ credit, such information should qualify the contents of

Case 3:06-cv-03762-CRB Document 15 Filed 09/12/06 Page 4 of 6
U

nite

d

States District C

o

u

rt

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

4

 Plaintiffs also assert claims under roughly analogous California statutes, including the

CCRAA and the ICRAA. While the Court notes that the legal analysis under these statutes is

substantially similar to the analysis required by the FCRA, see Gomon v. TRW, Inc., 28 Cal.

App. 4th 1161, 1168 (4th Dist. 1994), the Court makes no determination here regarding the

sufficiency of these state-law claims.

5

the stolen briefcase as “consumer reports.” The problem with Plaintiffs’ argument is that

such personal information still constitutes information relating to “transactions or

experiences between the consumer and the person making the report.” Id. §

1681a(d)(2)(A)(i). Simply put, information relating to “transactions or experiences between

the consumer and the person making the report” necessarily includes information about the

consumer. To hold otherwise — i.e., to accept Plaintiffs’ argument that the presence of

personal information about UBOC’s customers renders the contents of the briefcase beyond

the scope of Section 1681a(d)(2)(A)(i) — would render that provision of the FCRA nearly

meaningless. 

Even construing the allegations in the Complaint in the light most favorable to

Plaintiffs, see Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337 (9th Cir. 1996), and assuming

that all general allegations embrace whatever specific facts might be necessary to support

them, see Peloza v. Capistrano Unified Sch. Dist., 37 F.3d 517, 521 (9th Cir. 1994), Plaintiffs

fail to sufficiently allege that the data contained in the stolen briefcase could constitute

“consumer reports” within the meaning of the FCRA. Therefore, Plaintiffs claim under the

FCRA is DISMISSED with prejudice.4

With the dismissal of Plaintiffs’ claim under the FCRA, a jurisdictional problem

arises. Plaintiffs allege subject matter jurisdiction only under 28 U.S.C. § 1331 on the basis

of their FCRA claim, and diversity jurisdiction under 28 U.S.C. § 1332. Complaint ¶ 4. 

Without the FCRA claim, there can be no subject matter jurisdiction under section 1331. 

Moreover, Plaintiffs have not pled facts to support diversity jurisdiction under section 1332

because they do not identify the parties as diverse. See Complaint ¶¶ 10-11 (identifying

UnionBanCal as a “commercial financial institution” with “its headquarters in San Francisco,

California”). Because there is no basis for federal jurisdiction, the remainder of Plaintiffs’

claims are DISMISSED without prejudice. As to their other claims, Plaintiffs are free to

Case 3:06-cv-03762-CRB Document 15 Filed 09/12/06 Page 5 of 6
U

nite

d

States District C

o

u

rt

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

G:\CRBALL\2006\3762\Order re Motion to Dismiss.wpd 6

amend their Complaint if they so choose, but the basis for federal jurisdiction must appear on

the face of the Complaint. See Fed R. Civ. P. 8(a) (“A pleading which sets forth a claim for

relief . . . shall contain . . . a short and plain statement of the grounds upon which the court’s

jurisdiction depends.”). Cf. Warth v. Seldin, 422 U.S. 490, 518 (1975) (“It is the

responsibility of the complainant clearly to allege facts demonstrating that he is a proper

party to invoke judicial resolution of the dispute and the exercise of the court's remedial

powers.”).

IT IS SO ORDERED.

Dated: September 12, 2006

 

CHARLES R. BREYER

UNITED STATES DISTRICT JUDGE

Case 3:06-cv-03762-CRB Document 15 Filed 09/12/06 Page 6 of 6