Court Opinion

ID: 4412778
Source: CourtListenerOpinion
Date Created: 2019-07-01 07:00:29.877328+00
Date Added: 2024-06-11T14:52:22.966241
License: Public Domain

NONPRECEDENTIAL DISPOSITION
                To be cited only in accordance with Fed. R. App. P. 32.1

               United States Court of Appeals
                                 For the Seventh Circuit
                                 Chicago, Illinois 60604

                                Submitted June 28, 2019 *
                                 Decided June 28, 2019

                                         Before

                           JOEL M. FLAUM, Circuit Judge

                           DIANE S. SYKES, Circuit Judge

                           DAVID F. HAMILTON, Circuit Judge

No. 19-1338

DEBORAH WALTON,                                Appeal from the United States District
    Plaintiff-Appellant,                       Court for the Southern District of Indiana,
                                               Indianapolis Division.
      v.

FIRST MERCHANTS BANK, et al.,                  No. 1:18-cv-01784-JRS-DLP
      Defendants-Appellees.
                                               James R. Sweeney II,
                                               Judge.

                                       ORDER

       Deborah Walton sued First Merchants Bank, its general counsel, and its CEO for
allegedly discriminating against her in violation of the Equal Credit Opportunity Act,
15 U.S.C. §§ 1691–1691f. She also asserted that the defendants negligently shared her
personal information without her consent. The district court dismissed the complaint

      *
        We have agreed to decide this case without oral argument because the briefs
and record adequately present the facts and legal arguments, and oral argument would
not significantly aid the court. FED. R. APP. P. 34(a)(2)(C).
No. 19-1338                                                                         Page 2

for failure to state a claim, and Walton appeals. Because Walton did not plausibly state
a claim for race discrimination or negligence, we affirm.

       The amended complaint was dismissed under Federal Rule of Civil
Procedure 12(b)(6), so we recount the facts as alleged in the complaint and its exhibits,
making all reasonable inferences in Walton’s favor. Loja v. Main St. Acquisition Corp., 906
F.3d 680, 682–83 (7th Cir. 2018). We construe her pro se complaint liberally. Erickson v.
Pardus, 551 U.S. 89, 94 (2007).

        This suit arises from two disparate sets of events. In 2017, Walton sued the Bank
for allegedly violating the Telephone Consumer Protection Act, 47 U.S.C. § 227. During
the litigation, the Bank shared all her personal information, including her account
numbers and Social Security number, with the law firm representing it. In turn, the
Bank’s lawyers publicly disclosed that information by filing unredacted documents on
the electronic court docket, handing them to a court reporter during a deposition, and
mailing a CD containing the documents to Walton herself. Walton alleges that these
disclosures were negligent under Indiana law.

       Walton also had ongoing customer-service difficulties with the Bank, where she
held checking and savings accounts and a personal loan. She alleges that, at various
times, the Bank did not allow her to make deposits or withdraw available funds, failed
to apply her loan payments, did not mail her statements to her, and ultimately closed
her accounts without providing a reason. Walton, who is African American, claims that
these events constitute race discrimination in violation of the Equal Credit Opportunity
Act. She alleges that the defendants “have not treated White Customers in the same
manner they have treated Black customers when it comes to Equal Credit
Opportunities” and that they “have given other Customers that are not Black the benefit
of protecting their personal information.” Because the defendants violated the Act, she
added, they were also negligent per se under Indiana law.

        The district judge dismissed the amended complaint with prejudice. Walton had
failed to state a negligence claim for multiple reasons, the judge said, including that she
did not show that the defendants had breached any duty to her or that she had incurred
any compensable injury. The judge also concluded that Walton had failed to state a
claim under the Equal Credit Opportunity Act because she had not alleged that the
Bank “mistreated her because of her race,” and her allegations of discrimination were
conclusory. Without a claim that the defendants violated the Act, Walton could not
proceed on a claim that the defendants were negligent per se. Finally, the judge ordered
No. 19-1338                                                                            Page 3

Walton, who had filed at least 20 cases in the district since 2003, to show cause why she
should not be sanctioned for filing a frivolous lawsuit. See FED. R. CIV. P. 11(b)(1), (2). 1

       On appeal, Walton restates the allegations in her amended complaint and argues
that she would have prevailed if she had been allowed to proceed to discovery. We
review de novo the dismissal of a complaint under Rule 12(b)(6) for failure to state a
claim upon which relief could be granted. Estate of Davis v. Wells Fargo Bank, 633 F.3d
529, 532–33 (7th Cir. 2011). A complaint must contain a short and plain statement of a
claim, with factual allegations “sufficient to show that [the] claim has substantive
plausibility.” Johnson v. City of Shelby, 135 S. Ct. 346, 347 (2014); see also FED. R. CIV. P.
8(a); Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

        The Equal Credit Opportunity Acts bans discrimination against any applicant,
with respect to any aspect of a credit transaction, on the basis of race. 15 U.S.C.
§ 1691(a)(1). Therefore, Walton needed to allege that she was an “applicant” and that
the defendants treated her less favorably because of her race. See Estate of Davis, 633 F.3d
at 538. But it is unclear whether Walton was an “applicant” of the Bank as defined in
15 U.S.C. § 1691a(b); she was, as best we can tell, a customer; she was not someone
seeking “an extension, renewal, or continuation of credit.”

       Even if Walton can be considered an “applicant” under the Act, nothing in her
complaint renders it plausible that the problems she encountered resulted from race
discrimination. We have made it clear that plaintiffs alleging race discrimination need
not provide great detail to state a claim. See Swanson v. Citibank, N.A., 614 F.3d 400, 405
(7th Cir. 2010) (concluding that identifying the type of discrimination, when it occurred,
and the perpetrator was sufficient); see also Carlson v. CSX Transp., Inc., 758 F.3d 819, 827
(7th Cir. 2014). But even though the burden was not high, Walton’s complaint fell short.

       Plausibility requires “more than a sheer possibility that a defendant has acted
unlawfully”; plaintiffs must allege “factual content that allows the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged.” West Bend
Mut. Ins. Co. v. Schumacher, 844 F.3d 670, 675 (7th Cir. 2016) (citing Iqbal, 556 U.S. at 678).
Here, Walton has alleged no facts suggesting discrimination. She only describes various

       1
          Before Walton responded to the order to show cause, she appealed on the day
after her complaint was dismissed with prejudice. That raised the possibility that the
district court’s decision was not “final.” See 28 U.S.C. § 1291. But we determined, after
the parties’ briefing, that the district court retained jurisdiction over its order to show
cause and that we would proceed to the merits.
No. 19-1338                                                                        Page 4

problems with the Bank’s administration of her accounts. She identifies no Bank
employees—not even the individual defendants—who acted in a discriminatory
manner. The only allusions to race are her two statements that white customers were
not mistreated. But no factual content supports this allegation or explains her awareness
of how the Bank allegedly treats its white customers. Her bare statements that the
alleged customer-service failures were “clear” discrimination are insufficient.
McReynolds v. Merrill Lynch & Co., Inc., 694 F.3d 873, 886 (7th Cir. 2012) (“The assertion
is merely a conclusion, unsupported by the necessary factual allegations to support a
reasonable inference of discriminatory intent.”) (citing Iqbal, 556 U.S. at 679).

        Walton’s claims under Indiana law also fail. A claim of negligence per se
requires plaintiffs to show that the defendant violated a statute without an excuse.
Stachowski v. Estate of Radman, 95 N.E.3d 542, 544 (Ind. Ct. App. 2018). Here, there is no
credible violation of the Act. And Walton’s argument that she stated a common-law
negligence claim premised on the sharing of her personal information is frivolous. The
defendants permissibly shared her personal information with the attorneys
representing them in a lawsuit that Walton filed against them. It is those attorneys, not
the defendants, whom Walton accuses of then disclosing the information without her
consent. In any case, the Bank did not act unreasonably because the attorneys
representing it were statutorily authorized to acquire her information. 15 U.S.C.
§ 6802(e)(4). The one possible misstep—filing an unredacted document—was, again, not
the action of the defendants and was, in any case, quickly remedied.

                                                                            AFFIRMED