17‐2212‐cv (L)

Schwartz v. HSBC Bank USA, N.A.

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

SUMMARY ORDER

          

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT.  CITATION TO A SUMMARY

ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE

OF APPELLATE PROCEDURE 32.1 AND THIS COURTʹS LOCAL RULE 32.1.1.  WHEN CITING A

SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE

FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION ʺSUMMARY ORDERʺ).  A

PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED

BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second

Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in

the City of New York, on the 13th day of September, two thousand eighteen.

PRESENT: ROBERT D. SACK,  

REENA RAGGI,

DENNY CHIN,

     Circuit Judges.

    

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BRUCE SCHWARTZ, individually and on behalf of

all others similarly situated,

    Plaintiff‐Appellant‐Cross‐Appellee,

           

     v.         17‐2212‐cv, 17‐2309‐cv

          

HSBC BANK USA, N.A.,  

    Defendant‐Appellee‐Cross‐Appellant.

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FOR PLAINTIFF‐APPELLANT‐  BRIAN BROMBERG, Bromberg Law Office,

CROSS‐APPELLEE: P.C., New York, New York (Harley Schnall,

Law Office of Harley Schnall, New York, New

York, on the brief).  
   

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FOR DEFENDANT‐APPELLEE‐  LOUIS SMITH (Rebecca Garibotto Zisek, on

CROSS‐APPELLANT: the brief), Greenberg Traurig, LLP, Florham

Park, New Jersey.  

Appeal from the United States District Court for the Southern District of

New York (Failla, J.).  

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,

ADJUDGED, AND DECREED that the judgment of the district court is AFFIRMED.  

Plaintiff‐appellant‐cross‐appellee Bruce Schwartz brings suit on behalf of

himself and all others similarly situated against defendant‐appellee‐cross‐appellant

HSBC Bank USA, N.A. (ʺHSBCʺ) alleging that HSBC violated and continues to violate

certain provisions of the Truth in Lending Act (ʺTILAʺ), 15 U.S.C. §§ 1601‐1667f, and its

implementing regulation, Regulation Z, 12 C.F.R. Part 1026, stemming from Schwartzʹs

holding of a personal‐use open end consumer credit card account with HSBC.  We

assume the partiesʹ familiarity with the underlying facts, procedural history, and issues

on appeal.

This appeal centers on a claim in Schwartz’s Second Amended Complaint

(the ʺSACʺ) which alleges that HSBC failed to warn him, in violation of the TILA, 15

U.S.C. § 1637(b)(12)(B), that late payments on his credit card balance would result in the

imposition of a penalty annual percentage rate or APR (the ʺLate Payment Warning

Claimʺ).  Schwartz does not allege that he was ever charged such a penalty, but rather
   

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contends that the violation of the TILA is sufficient by itself to demonstrate standing

under Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016).   

HSBC moved to dismiss pursuant to Federal Rule of Civil Procedure

12(b)(1) based on the absence of Article III standing.  On January 9, 2017, the district

court dismissed the SAC for failure to allege a plausibly concrete and particularized

injury.  The district court did not grant leave to amend because it was not requested by

Schwartz and instructed that the case be closed.  

On January 23, 2017, Schwartz filed a Motion to Reopen the Case and

Vacate the Judgment or for Leave to File Third Amended Complaint Nunc Pro Tunc.  

The district court denied the motion.   

Schwartz appealed.1   HSBC cross‐appealed an earlier ruling of the district

court, which rejected HSBCʹs argument that the Late Payment Warning Claim was

untimely and precluded by collateral estoppel.     

    We review the granting of a motion to dismiss for lack of subject matter

jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1) de novo, ʺconstruing the

                                                 

1   Schwartz’s notice of appeal cites the January 9, 2017 opinion and the resulting judgment

and the June 19, 2017 opinion denying reconsideration.  Schwartz does not appeal an earlier

February 9, 2017 opinion concerning claims in an earlier Complaint.  Additionally, in his briefs

Schwartz does not address any claim aside from the Late Payment Warning Claim and does not

challenge the district courtʹs decision to not reconsider its earlier ruling or grant leave to amend.  

Accordingly, these arguments are waived and the only argument Schwartz has raised on appeal

is his standing to sue.  See, e.g., Norton v. Samʹs Club, 145 F.3d 114, 117 (2d Cir. 1998) (noting that

issues not briefed are waived).  
   

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complaint in plaintiffʹs favor and accepting as true all material factual allegations

contained therein.ʺ  Katz v. Donna Karan Co., 872 F.3d 114, 118 (2d Cir. 2017).   

        To satisfy the ʺʹirreducible constitutional minimumʹ of standing,ʺ Schwartz

ʺmust have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged

conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial

decision.ʺ  Spokeo, 136 S. Ct. at 1547 (citing Lujan v. Defs. of Wildlife, 504 U.S. 555, 560

(1992)).   An ʺinjury in factʺ must be a ʺʹlegally protected interestʹ that is both ʹ(a)

concrete and particularized, and (b) actual or imminent, not conjectural or

hypothetical.ʹʺ  Crupar‐Weinmann v. Paris Baguette Am., Inc., 861 F.3d 76, 79 (2d Cir. 2017)

(quoting Lujan, 504 U.S. at 560‐61).  To be ʺparticularized,ʺ an injury ʺmust affect the

plaintiff in a personal and individualized way.ʺ  Spokeo, 136 S. Ct. at 1548 (internal

quotation marks omitted).  To be ʺconcrete,ʺ an injury ʺmust actually exist,ʺ i.e., it must

be ʺreal and not abstract.ʺ  Id. (internal quotation marks omitted).  Certain procedural

violations may alone be enough to demonstrate a concrete injury.  Strubel v. Comenity

Bank, 842 F.3d 181, 190 (2d Cir. 2016) (citing Spokeo, 136 S. Ct. at 1549).  In Strubel we

formulated a two‐part test to identify concrete harm with respect to such procedural

violations:  ʺan alleged procedural violation can by itself manifest concrete injury where

[1] Congress conferred the procedural right to protect a plaintiffʹs concrete interests and

[2] where the procedural violation presents a ʹrisk of real harmʹ to that concrete

interest.ʺ  Id. (quoting Spokeo, 136 S. Ct. at 1549).   
   

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    When evaluating standing at the pleading stage, ʺgeneral factual

allegations of injury resulting from the defendantʹs conductʺ may be sufficient.  John v.

Whole Foods Mkt. Grp., Inc., 858 F.3d 732, 736 (2d Cir. 2017) (internal quotation marks

omitted).  Moreover, when a defendant challenges a complaint facially, as HSBC does

here, we ʺdetermine whether the Pleading allege[s] facts that affirmatively and

plausibly suggest that [the plaintiff] has standing to sueʺ and ʺdraw all reasonable

inferences in favor of the plaintiff.ʺ  Id. (quoting Carter v. HealthPort Techs., LLC, 822 F.3d

47, 56‐57 (2d Cir. 2016)) (internal quotation marks omitted) (brackets in original)

(alteration omitted).    

Schwartz fails to allege either a particularized or concrete ʺrisk of real

harmʺ sufficient to satisfy the injury‐in‐fact requirement of Article III standing.  Strubel,

842 F.3d at 190.  Indeed, Schwartzʹs pleading regarding injury is limited to three short,

conclusory paragraphs.  Two of the paragraphs fail to mention Schwartz and plead only

with relation to the class, alleging in a conclusory manner that the lack of proper

notification ʺimpinge[d] on consumersʹ awareness of the cost of credit.ʺ  App. 177, 181.  

The third paragraph, the only one of the three to mention Schwartz, concludes without

explanation that the alleged notice deficiencies ʺconstituted a concrete harm and created

a material risk of concrete harm to Schwartz and to other credit consumers,ʺ without

providing any explanation or support.  App. 182.  The district court correctly concluded

that these conclusory allegations were insufficient.  See Ashcroft v. Iqbal, 556 U.S. 662, 678
   

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(2009).  While a bare statutory violation may be sufficient under Spokeo and Strubel to

present a particularized risk of real harm to a concrete interest in certain circumstances,

a plaintiff still must plead those circumstances affirmatively and plausibly.  See Spokeo,

136 S. Ct. at 1547 (noting that plaintiff ʺmust clearly allege facts demonstrating each

elementʺ of standing.).  Schwartz does not do so here.  The pleadings and exhibits

attached thereto show that Schwartz received an initial disclosure about the penalty

APR in his cardmember agreement with HSBC, and that partial disclosure about the

penalty APR appeared on the backside of at least one monthly billing statement sent

during the putative class period.  While the TILA requires that such disclosures appear

on the front of each periodic statement, see 15 U.S.C. § 1637(b)(12)(B); 12 C.F.R. §

1026.7(b)(11),  Schwartz nowhere pleads how HSBCʹs alleged noncompliance with such

a repetitive notice requirement impinged his own awareness of the cost of credit in light

of the earlier notice received.  In these circumstances, his pleadings fail to state a

plausible particular and concrete injury.  Accordingly, we identify no error in the

dismissal of Schwartzʹs Late Payment Warning Claim.     

We have considered all of Schwartzʹs remaining arguments and find them

to be without merit.  Accordingly, we AFFIRM the judgment of the district court.

FOR THE COURT:

     Catherine OʹHagan Wolfe, Clerk