Opinion
22-cv-5288 (JGLC) (VF)
05-13-2024
MARK TUNNE, Plaintiff, v. DISCOVER FINANCIAL SERVICES, INC., et al, Defendants.
TO: THE HONORABLE JESSICA G. L. CLARKE, United States District Judge.
REPORT AND RECOMMENDATION
VALERIE FIGUEREDO United States Magistrate Judge
Plaintiff Mark Tunne, proceeding pro se and in forma pauperis, filed an amended complaint on October 25, 2023, asserting ten claims against Discover Financial Services, Inc. (“Discover”), and two employees of Discover, Jane Does “Janelle” and “Evy M.” (collectively, “Defendants”). On December 6, 2023, Defendants moved to dismiss the amended complaint under Federal Rule of Civil Procedure 12(b)(6). For the reasons that follow, I respectfully recommend that Defendants' motion be GRANTED, in part, and DENIED, in part. I also recommend that Tunne be granted leave to amend the claims in Counts V, VI, and VII, and the claim in Count VIII as it relates to the claim for breach of contract.
The page numbers referenced herein for citations to the electronic docket (“ECF”) are to the original pagination in those documents.
The following facts are taken from Tunne's amended complaint and are accepted as true for purposes of this motion. See Purcell v. New York Inst. of Tech. - Coll. of Osteopathic Med., 931 F.3d 59, 61 (2d Cir. 2019) (citation omitted).
Mark Tunne is a resident of New York. ECF No. 56 (“Am. Compl.”) ¶¶ 5, 10. Discover is a business with its headquarters in Illinois. Id. ¶ 6. Jane Does “Janelle” and “Evy M.” are employees of Discover who work at Discover's “main Executive Offices” in Delaware. Id. ¶¶ 78.
In December 2018, Tunne applied for a Discover credit card. Id. ¶ 34. When he applied, Tunne submitted all of his “income records, disability status,” and a copy of his New York State photo identification card. Id. Tunne was approved for the credit card. Id.
On April 29, 2021, Tunne received a telephone call from Janelle who identified herself as “a senior service representative” for Discover. Id. ¶ 12. Janelle “refused” to give her last name. Id. Janelle told Tunne that his credit card had been “flagged for ‘verification'” and explained that she “needed to verify [Tunne's] income tax records filed with the [Internal Revenue Service (the “IRS”)].” Id. ¶ 13. Before this call, Tunne had never received any phone calls from Discover “due to his then 100% on-time payment record every month for nearly a year and a half.” Id. ¶ 14. Tunne immediately told Janelle that he was “a disabled, U.S. Veteran” who has received federal disability income since June 2018, and that he does not pay federal and state income taxes due to his “tax-free, tax-exempt status.” Id. ¶ 16. Janelle told Tunne that she was going to conduct a “verification” with the IRS, despite Tunne's “repeated protests.” Id.
After an “intense” argument, Tunne “emphatically” told Janelle that neither she nor anyone affiliated with Discover could investigate Tunne for “‘verification' [of] any information from the IRS.” Id. Janelle told Tunne that his credit card would be temporarily “disengaged” until the inquiry with the IRS was completed. Id. On or about May 10, 2022, Tunne was informed by Discover via e-mail that his credit card was “‘terminated' due to no ‘verification.'” Id. ¶¶ 17-18. Discover would not state in writing what “‘verification' they were seeking to confirm.” Id.
Over the course of three months, Tunne attempted “numerous times to rectify this matter to no avail.” Id. ¶ 19. Each customer service representative would say that “they have no notes of why [Tunne's] credit card was shut down despite . . . seeing [Tunne's] excellent, on-time, payment record.” Id. (alteration omitted). Tunne received no explanation as to what “‘verification'” Discover sought or why Tunne's credit-card account had been terminated. Id. Tunne spoke directly with Janelle on two separate occasions and she repeated that his “credit card was terminated due to not receiving IRS Verification from the IRS regarding [Tunne's] taxes.” Id. ¶ 20. Tunne “repeatedly warn[ed] Janelle [that] neither she nor Discover Card [had] permission to contact the IRS.” Id. ¶ 21.
On April 22, 2022, Tunne contacted Discover's “customer service department.” Id. ¶ 22. Tunne spoke with “a male, service rep[resentative] who identified himself as ‘Dallas'” in Discover's Credit Bureau Department. Id. ¶ 22. Dallas informed Tunne that: (i) he had been contacted on April 29, 2021, and was told that verification of his income taxes were needed; (ii) on April 29, 2021, an “electronic 4506 IRS Income Tax Verification Form” was sent to Tunne via e-mail; (iii) on April 30, 2021, Tunne returned the electronically signed 4506 Tax Verification Form with an “electronic [] signature”; and (iv) on May 10, 2021, Tunne's credit card was “terminated due to ‘no verification' from the IRS.” Id. ¶ 23.
On April 25, 2022, Tunne was advised to electronically file a Federal Trade Commission complaint with the Financial Protection Bureau, and he did so. Id. ¶ 24. Discover responded by letter dated June 13, 2022. Id. ¶ 25. The letter stated that: (1) Tunne had been contacted by Discover on April 29, 2021; (ii) Discover had sent a “consented Equifax-DocuSign 4506 IRS Tax Verification Form” to Tunne via e-mail; and (iii) Tunne returned the signed form by e-mail on April 30, 2021. Id. Following receipt of the letter, Tunne contacted Discover, asking for a copy of the e-mails from April 29 and 30, 2021. Id. ¶ 26. Discover never responded. Id. ¶ 27.
On June 16, 2022, Tunne spoke to a customer service representative who identified himself as “Kyle.” Id. ¶ 28. Kyle told Tunne that Discover did “not have the email receipt.” Id. He offered to send Tunne a copy of the “4506 electronic, IRS Tax Verification Form” bearing Tunne's electronic signature. Id. Tunne confirmed with his e-mail server that “there was no email communication between [Tunne] and Discover Card on April 29, 2021, and on April 30, 2021.” Id. ¶¶ 29-30 (capitalization omitted).
In May of 2021, Tunne had an “average” credit score of 813. Id. ¶ 88. The following month, Tunne's credit score “plummeted” to an average of 683. Id. Tunne has sought intervention from TransUnion, Equifax, and Experian to “seek answers for [Discover's] lawful reason(s) for closing [Tunne's] credit card” resulting in his credit score “plummet[ing].” Id. As a result of Defendants' actions, Tunne suffered, and continues to suffer, “emotional distress and mental anguish,” along with “depression and anxiety.” Id. ¶¶ 108-09.
B. Procedural History
On June 22, 2022, Tunne commenced this action against Defendants, TransUnion, Inc., Equifax, Inc., and Experian, Inc. See ECF No. 2. Tunne voluntarily dismissed TransUnion, Inc. Equifax, Inc., and Experian, Inc. as defendants on February 16, 2023, March 20, 2023, and May 30, 2023, respectively. See ECF Nos. 29, 33, 47. Discover and the two Discover employees are the only remaining defendants.
Defendants and Tunne appeared before the undersigned for an initial case management conference on September 20, 2023. At the conference, the Court granted Tunne leave to file an amended complaint. See ECF No. 55. On October 25, 2023, Tunne filed an amended complaint asserting ten causes of actions against Defendants. See Am. Compl.
On December 16, 2023, Defendants filed a motion to dismiss all of Tunne's claims pursuant to Federal Rule of Civil Procedure 12(b)(6). ECF No. 59; ECF No. 59-2 (“Defs.' Mem.”). Tunne filed his opposition to Defendants' motion on January 29, 2024. ECF No. 64 (“Pl.'s Mem.”). Defendants filed a reply in further support of their motion on March 1, 2024. ECF No. 17 (“Defs.' Reply”).
DISCUSSION
A. Legal Standard
1. Motion to Dismiss
Rule 8 of the Federal Rules of Civil Procedure provides that a complaint seeking relief “must contain . . . a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). “This Rule does not countenance pleadings that are conclusory; it requires factual allegations that are sufficient to ‘give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.'” Anderson News, L.L.C. v. Am. Media, Inc., 680 F.3d 162, 182 (2d Cir. 2012) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). Where the well-pleaded facts in a complaint “do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not ‘show[n]'-that ‘the pleader is entitled to relief.'” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009) (quoting Fed.R.Civ.P. 8(a)(2)) (alteration in original).
To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a complaint must plead “enough facts to state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570. A claim has “facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. In considering a motion to dismiss, a district court must “accept[ ] all factual claims in the complaint as true, and draw[ ] all reasonable inferences in the plaintiff's favor.” Lotes Co. v. Hon Hai Precision Indus. Co., 753 F.3d 395, 403 (2d Cir. 2014) (quoting Famous Horse Inc. v. 5th Ave. Photo Inc., 624 F.3d 106, 108 (2d Cir. 2010)) (internal quotation marks omitted). However, “the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.” Iqbal, 556 U.S. at 678. “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. “[R]ather, the complaint's factual allegations must be enough to raise a right to relief above the speculative level, i.e., enough to make the claim plausible.” Arista Records, LLC v. Doe 3, 604 F.3d 110, 120 (2d Cir. 2010) (quoting Twombly, 550 U.S. at 555, 570) (internal quotation marks, alteration, and citation omitted).
2. Pro Se Filings
Courts liberally construe pleadings prepared by pro se litigants and hold them “to less stringent standards than formal pleadings drafted by lawyers.” Erickson v. Pardus, 551 U.S. 89, 94 (2007) (quoting Estelle v. Gamble, 429 U.S. 97, 106 (1976)). It is thus appropriate to interpret pro se submissions to raise the strongest arguments that they suggest. Gomez v. Brown, 655 F.Supp.2d 332, 342 (S.D.N.Y. 2009) (explaining that the court is obligated to make reasonable allowances to protect pro se litigants from “inadvertent forfeiture of important rights because of their lack of legal training”) (quoting Traguth v. Zuck, 710 F.2d 90, 95 (2d Cir. 1983)).
B. Analysis
In his amended complaint, Tunne asserts ten causes of action against Defendants. In Counts I and II, Tunne brings claims against all Defendants under the following criminal statutes: 18 U.S.C. § 1343; 18 U.S.C. § 371(1); 18 U.S.C. § 1341; 18 U.S.C. § 474(a)(b); 18 U.S.C. § 471; and 8 U.S.C. § 1324(c). See Am. Compl. ¶¶ 50-64. In Count III, Tunne brings a claim against all Defendants under the Privacy Act of 1974, 5 U.S.C. § 552(a). See id. ¶¶ 65-68. In Count IV, Tunne asserts a claim against all Defendants under the Equal Credit Opportunity Act, 15 U.S.C. § 1691. See id. ¶¶ 69-79. In Count V, Tunne asserts a claim against all Defendants under Title III of the Americans with Disabilities Act, 42 U.S.C. § 12182(a). See Id. ¶¶ 80-84. In Count VI, Tunne brings a claim against all Defendants for violation of the Consumer Credit Protection Act, 15 U.S.C. § 1601. See id. ¶¶ 85-88. In Count VII, Tunne brings a claim against all Defendants for violation of the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq. (the “FCRA”). See id. ¶¶ 89-93. In Count VIII, Tune asserts a claim against Discover for breach of contract, and a claim against the individual defendants for intentional interference with contractual relations. See id. ¶¶ 94-99. In Count IX, Tunne brings a claim against Discover for negligent hiring, retention, and supervision. See id. ¶¶ 100-03. Lastly, in Count X, Tunne asserts a claim against all Defendants for intentional infliction of emotional distress and mental anguish. See id. ¶¶ 104-09.
For the reasons explained below, I recommend that Defendants' motion be denied as it relates to Count IV of the amended complaint. As it relates to Counts I, II, III, V, VI, VII, VIII, IX, and X, I recommend that Defendants' motion be granted. I recommend that the claims in Counts I, II, III, IX, and X, and the claim in Count VIII, as it relates to intentional interference with contractual relations, be dismissed with prejudice. I further recommend that the claims in Counts V, VI, and VII, and the claim in Count VIII, as it pertains to breach of contract, be dismissed without prejudice. As to those claims, I recommend that Tunne be granted leave to file a second amended complaint that satisfies the pleading standards as explained in this Report and Recommendation.
1. Counts I and II
In Counts I and II, Tunne brings claims under the following criminal statutes: 18 U.S.C. § 1343; 18 U.S.C. § 371(1); 18 U.S.C. § 1341; 18 U.S.C. § 474(a)(b); 18 U.S.C. § 471; and 8 U.S.C. § 1324(c). See Am. Compl. ¶¶ 50-64. 18 U.S.C. §§ 1343 and 1341 criminalize committing wire and mail fraud; 18 U.S.C. § 371 makes it a felony to conspire to commit an offense against the United States; 18 U.S.C. §§ 474 and 471 criminalize counterfeiting and forgery; and 8 U.S.C § 1324 outlines the penalties for document fraud. All of these are criminal statutes.
Courts “have long recognized that crimes are prosecuted by the government, not by private parties.” Hill v. Didio, 191 Fed.Appx. 13, 14-15 (2d Cir. 2006) (summary order) (citation omitted). Courts have already held that all of the criminal statutes relied on by Tunne do not provide a private right of action. See Carvel v. Franchise Stores Realty Corp., No. 08-CV-8938 (JGK), 2009 WL 4333652, at *11 (S.D.N.Y. Dec. 1, 2009) (stating that 18 U.S.C. § 1343 is a criminal statute that “do[es] not create a private right of action.”); Official Publ'ns, Inc. v. Kable News Co., 884 F.2d 664, 667 (2d Cir. 1989) (noting that 18 U.S.C. §§ 1341 and 1343 “do not provide a private right of action.”); McRae v. Norton, No. 12-CV-1537 (KAM), 2012 WL 1268295, at *4 (E.D.N.Y. Apr. 13, 2012) (explaining that 18 U.S.C. § 371 does not create a private right of action); Polinski v. Oneida Cnty. Sheriff, No. 23-CV-316 (DNH) (ML), 2023 WL 2988753, at *3 (N.D.N.Y. Apr. 18, 2023) (dismissing plaintiff's claim under 18 U.S.C. § 471 because it is a criminal statute that does not create any private right of action), report and recommendation adopted, 2023 WL 3344060 (N.D.N.Y. May 10, 2023); Lopez v. Arrowhead Ranches, 523 F.2d 924, 926 (9th Cir. 1975) (stating that 8 U.S.C. § 1324 “is solely a penal provision and creates no private right of action”); Willis v. Green Tree Servicing, LLC, No. 15-CV-11258 (MFL), 2015 WL 5139307, at *6 n.7 (E.D. Mich. Sept. 1, 2015) (stating that 18 U.S.C. § 474 “explicitly prohibits criminal conduct and does not provide [plaintiff] with a private right of action”) (citation omitted).
Accordingly, because there is no private right of action under any of the criminal statutes relied on by Tunne, I recommend that Counts I and II of the amended complaint be dismissed with prejudice. “Courts generally grant leave to amend unless doing so would be futile or would result in prejudice to the non-pleading party.” IMH Broadway Tower Senior Lender, LLC v. Hertz, 415 F.Supp.3d 455, 463 (S.D.N.Y. 2019) (citing Ellis v. Chao, 336 F.3d 114, 127 (2d Cir. 2003) and Block v. First Blood Assocs., 988 F.2d 344, 350 (2d Cir. 1993)). There is no amendment Tunne could make to his allegations in Counts I and II that would state a claim for relief, because the criminal statutes provide no private right of action. Cain v. Christine Valmy Int'l Sch. of Esthetics, Skin Care, & Makeup, 216 F.Supp.3d 328, 336 (S.D.N.Y. 2016) (dismissing claim without leave to amend where statute on which plaintiff relied lacked a private right of action); Howard v. Mun. Credit Union, No. 05-CV-7488 (LAK), 2008 WL 782760, at *8 (S.D.N.Y. Mar. 25, 2008) (dismissing without leave to amend when statutory provision “simply affords no private right of action, and any amendment would therefore be futile”). As such, dismissal of Counts I and II should be with prejudice.
2. Count III
In Count III, Tunne brings a claim under the Privacy Act of 1974, 5 U.S.C. § 552a. See Am. Compl. ¶¶ 65-68. That statute permits a private litigant to bring a civil suit only against federal agencies. See 5 U.S.C. § 552a(g)(1) (providing that a private individual “may bring a civil action against the agency”). Accordingly, the Second Circuit has held “that the private right of civil action created by the Privacy Act is specifically limited to actions against agencies of the United States government.” Burch v. Pioneer Credit Recovery, Inc., 551 F.3d 122, 124 (2d Cir. 2008) (citations omitted). In other words, “[t]he civil remedy provisions of the [Privacy Act] do not apply against private individuals” or “private entities,” like Defendants here. Thompson v. CRF-Cluster Model Program, LLC, No. 19-CV-1360 (KPF), 2020 WL 4735300, at *5 n.5 (S.D.N.Y. Aug. 14, 2020) (quoting Pennyfeather v. Tessler, 431 F.3d 54, 56 (2d Cir. 2005)).
As Tunne states, he is not accusing the federal government or the IRS, a federal agency, of a violation of the Privacy Act. See Pl.'s Mem. at 14. Nor has Tunne alleged any facts to suggest that Discover “performs a government function,” such that it would be considered government-controlled and thus, a federal agency. See Burch, 551 F.2d at 125 (stating that in order for a private entity to be considered an agency, there must be allegations that show “a sufficient level of oversight, supervision and government connection”). Moreover, two of the defendants are individuals and Tunne has alleged no facts to suggest that those individuals were performing a government function. In short, the plain language of the Privacy Act precludes its application to Defendants. I thus recommend that Count III of the amended complaint be dismissed with prejudice. An amendment would be futile because the statute does not authorize suits against private entities and private individuals like Defendants here. I therefore recommend that dismissal be with prejudice.
3. Count IV
In Count IV, Tunne alleges that Defendants violated the Equal Credit Opportunity Act, 15 U.S.C. § 1691 (the “ECOA”). See Am. Compl. ¶¶ 69-79. To state a claim under the ECOA, a plaintiff must establish that: “(1) he was a member of a protected class, (2) he applied for credit from the defendant, (3) he was qualified for credit but the defendant denied his credit application, and (4) the defendant continued to engage in the type of transaction in question with other parties with similar qualifications.” Germain v. M & T Bank Corp., 111 F.Supp.3d 506, 528 (S.D.N.Y. 2015).
Defendants raise two arguments for dismissal of this claim. First, Defendants argue that Tunne was an existing accountholder and thus he has not alleged that he was an “applicant” within the meaning of the statute. Defs.' Mem. at 11-12. Second, Defendants argue that Tunne's claim should be dismissed because he has failed to allege that he is a member of a “protected class” for a claim under the ECOA. Id. For the reasons explained below, I recommend that Defendants' motion be denied because Tunne has sufficiently alleged both that he is an applicant and a member of a protected class within the meaning of the ECOA.
a. Tunne has sufficiently alleged that he is an applicant within the meaning of the ECOA.
In enacting the ECOA, Congress meant to protect applicants for credit from discrimination. 15 U.S.C. § 1691(a)(1)-(2) (stating that creditors are prohibited from discriminating against any credit applicant “on the basis of race, color, religion, national origin, sex or marital status, or age [or] because all or part of the applicant's income derives from any public assistance program”). “Accordingly, ‘only ‘applicants' have the ability to sue for ECOA violations.”' Germain, 111 F.Supp.3d at 528 (quoting RL BB Acquisition, LLC v. Bridgemill Commons Dev. Grp, LLC, 754 F.3d 380, 384 (6th Cir. 2015)) (other citations omitted). The ECOA defines an applicant as “any person who applies to a creditor directly for an extension, renewal, or continuation of credit, or applies to a creditor indirectly by use of an existing credit plan for an amount exceeding a previously established credit limit.” 15 U.S.C. § 1691a(b).
Courts have held that existing accountholders who did not apply for an extension, renewal, or continuation of their existing credit when the alleged violation occurred are not “applicants” within the plain meaning of the statute. See Fralish v. Bank of Am., N.A., No. 20-CV-418 (RLM) (MGG), 2021 WL 4453735, at *3 (N.D. Ind. Sept. 29, 2021) (finding that a person who has received the credit for which he applied no longer qualifies as an “applicant” for that credit within the meaning of the ECOA); Nia v. Bank of Am., N.A., 603 F.Supp.3d 894, 901 (S.D. Cal. 2022) (same); Tewinkle v. Cap. One, N.A., No. 19-CV-1002 (HBS), 2019 WL 8918731, at *5 (W.D.N.Y. Dec. 11, 2019), report and recommendation adopted, 2020 WL 2812519 (W.D.N.Y. May 29, 2020) (“[E]xisting account holders who haven't alleged that they applied for an extension, renewal, or continuation of credit during the time frame the alleged violation occurred aren't ‘applicants' as the statute defines the term.”). In other words, the statute requires that a plaintiff have sought credit either through “a new request, an extension of existing or additional credit or resisting termination of credit.” Tewinkle, 2019 WL 8918731, at *5.
Tunne held a credit account with Defendants for “nearly a year and a half” and had the account with no alleged issues until April 29, 2021. See Am. Compl. ¶¶ 11-15. Pursuant to Defendants' procedures, they had to “verify” Tunne's income tax records filed with the IRS to continue his credit. See id. ¶ 13. And because Defendants could not verify such records, Tunne's credit card was terminated. Id. ¶ 18. Accepting the facts in the amended complaint as true and viewing them in the light most favorable to Tunne, Tunne has alleged that he attempted to either obtain the continuation of his credit account or resist its termination without providing the verification sought by Defendants, ultimately resulting in the termination of his credit card. Given Tunne's pro se status, such facts sufficiently allege that Tunne was an “applicant” within the meaning of the ECOA. See Nia, 603 F.Supp.3d at 901 (finding that plaintiff who attempted to apply for continuation of credit, which resulted in bank's restriction and cancellation of account, sufficiently pled that he was an applicant within the meaning of the ECOA); see also Carr v. Cap. One Bank (USA) N.A., No. 21-CV-2300 (AT) (JKL), 2021 WL 8998918, at *7 (N.D.Ga. Dec. 8, 2021) (stating that an existing account holder qualifies as an “applicant” where the person directly applies for a continuation of credit).
b. Tunne has sufficiently alleged that he is part of a class protected by the ECOA.
Tunne alleges that Defendants terminated his credit-card account because he is disabled, a veteran, and receives his income from a public-assistance program. See Am. Compl. ¶¶ 16, 7173. To the extent Tunne bases his claim on his disability or his status as a veteran, the claim fails as a matter of law because neither of those constitute a “protected class” under the ECOA. See Gray v. Seterus, Inc., 233 F.Supp.3d 865, 870 (D. Or. 2017) (“[Disability is not a protected class under the ECOA.”); Kwon v. Santander Consumer USA, No. 15-CV-3352 (SJF) (AKT), 2017 WL 5495811, at *6 (E.D.N.Y. Apr. 18, 2017) (stating that “military service members” are not a protected class under the ECOA), affd, 742 Fed.Appx. 537 (2d Cir. 2018).
However, the ECOA bars discrimination in the extension of credit on the basis of an applicant's participation in a public-assistance program. Stoyanovich v. Fine Art Cap. LLC, No. 06-CV-13158 (SHS), 2007 WL 2363656, at *2 (S.D.N.Y. Aug. 17, 2007) (including discrimination against applicants who receive income from a public-assistance program within the scope of protected classes under the ECOA). Tunne alleges that he receives his income from a public-assistance program. See Am. Compl. ¶¶ 16, 71-73. As such, Tunne has sufficiently alleged that he is a member of a protected class.
I thus recommend that Defendants' motion to dismiss Count IV be denied because Tunne has plausibly alleged a claim under the ECOA.
4. Count V
In Count V, Tunne asserts a claim under Title III of the Americans with Disabilities Act (the “ADA”), alleging that Defendants discriminated against him because he is a “disabled U.S. veteran.” See Am. Compl. ¶¶ 80-84. The ADA prohibits discrimination “on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation by any person who owns, leases (or leases to), or operates a place of public accommodation.” 42 U.S.C. § 12182(a). To state a claim for violation of Title III of the ADA, a plaintiff must “establish that (1) he or she is disabled within the meaning of the ADA; (2) that the defendants own, lease, or operate a place of public accommodation; and (3) that the defendants discriminated against the plaintiff within the meaning of the ADA.” Roberts v. Royal Atlantic Corp., 542 F.3d 363, 368 (2d Cir. 2008).
Defendants assert that Tunne has failed to plead with any specificity which subchapter of the ADA forms the basis of his cause of action. See Defs.' Mem. at 13. In his amended complaint, Tunne explicitly cites to Title III multiple times. See, e.g., Am. Compl. ¶¶ 81, 84. I construe Tunne to be asserting a claim under Title III of the ADA.
Defendants contend that Tunne has failed to sufficiently allege any of the three required factors. See Defs.' Br. at 13-15. As discussed below, Tunne has failed to adequately plead that he is disabled within the meaning of the ADA.
To be disabled within the meaning of the ADA, a person must have: (1)(a) “a physical or mental impairment that substantially limits one or more major life activities of such individual,” or (1)(b) “a record of such an impairment” or must be “regarded as having such an impairment.” 42 U.S.C. § 12102(1). The Supreme Court has prescribed a three-step process for determining whether an individual is disabled under the first prong of 42 U.S.C. § 12102(1). “First, a court must determine whether the plaintiff suffers from a physical or mental impairment. Second, the court must identify the life activity upon which the plaintiff relies and determine whether it constitutes a major life activity under the ADA. Third, the court determines whether the identified impairment substantially limited that life activity.” Reilly v. Revlon, Inc., 620 F.Supp.2d 524, 539 (S.D.N.Y. 2009) (internal citations omitted) (citing Bragdon v. Abbott, 524 U.S. 624, 631 (1998)).
At the first step, the amended complaint states only that Tunne is a “disabled veteran.” See Am. Compl. ¶¶ 16, 21, 82. Tunne does not identify a specific physical or mental impairment that he suffers from. Nor does he identify a life activity that is affected by a physical or mental impairment. Moreover, there are no factual allegations concerning the severity of any impairment, its duration, or the frequency with which the impairment affects Tunne and his daily activities. Without additional factual allegations, Tunne has failed to allege sufficient facts from which the Court can plausibly infer that he is disabled within the meaning of the ADA. See Marecheau v. Equal Emp. Pracs. Comm'n, No. 13-CV-2440 (VEC), 2014 WL 5026142, at *5 (S.D.N.Y. Sept. 30, 2014) (concluding that plaintiff's self-diagnosis of a disability, without more, is insufficient to suggest that plaintiff is disabled within the meaning of the ADA); see also Zuckerman v. GW Acquisition LLC, No. 20-CV-8742 (VEC), 2021 WL 4267815, at *11 (S.D.N.Y. Sept. 20, 2021) (finding that plaintiff failed to plead a qualifying disability within the meaning of the ADA where plaintiff alleged no facts from which to infer the frequency, duration, or severity with which plaintiff's disability impacted her ability to sleep and concentrate).
To plausibly allege that he is disabled within the meaning of the ADA, Tunne must provide sufficient factual matter for the Court to determine the physical or mental impairment he suffers from and how that impairment limits a major life activity. See, e.g., Patterson v. EmblemHealth Inc., No. 22-CV-2177 (LTS), 2023 WL 5671531, at *5 (S.D.N.Y. Sept. 1, 2023) (finding allegations that plaintiff suffered from severe on-going respiratory difficulties that curtailed his ability to breathe, limited his ability to walk even short distances, led to the loss of his voice, and significantly affected his sleep were sufficient to allege that plaintiff was disabled within the meaning of the ADA).
In a cursory paragraph with no citation to case law, Defendants also argue that Tunne's claim should be dismissed because Tunne has failed to plead any facts that would support a finding that Discover operates a place of public accommodation to which Tunne was denied access or services. See Defs.' Mem. at 14. The Second Circuit, however, “has not reached this issue and there is both a circuit split and district court split” on the question of whether Title III requires a nexus between the discriminatory conduct and the goods and services of a physical location. Chalas v. Barlean's Organic Oils, LLC, No. 22-CV-04178 (CM), 2022 WL 17156838, at *4 (S.D.N.Y. Nov. 22, 2022).
In the Ninth Circuit, for example, the term “place of public accommodation” in the statute has been interpreted to require “some connection between the good or service complained of and an actual physical place.” Earll v. eBay, Inc., 599 Fed. App'x 695, 696 (9th Cir. 2015) (internal quotation marks omitted). Likewise, the Third, Sixth, and Eleventh Circuits also require a nexus between the discriminatory conduct-that is, the denial of a good or service-and a physical location. See Peoples v. Discover Financial Services, Inc., 387 Fed. App'x 179, 183 (3d Cir. 2010) (“Our court is among those that have taken the position that the term [public accommodation] is limited to physical accommodations.”); Kolling v. Blue Cross & Blue Shield of Michigan, 318 F.3d 715, 716 (6th Cir. 2003) (“A public accommodation is limited to a physical place[.]”); Gil v. Winn-Dixie Stores, Inc., 993 F.3d 1266, 1277 (11th Cir. 2021) (“[P]ursuant to the plain language of Title III of the ADA, public accommodations are limited to actual, physical places.”). A business that operates solely through a website, with no customerfacing physical location, therefore, is not considered a “place of public accommodation” within the meaning of Title III of the ADA in those circuits. See Gil, 993 F.3d at 1277 (“We hold that websites are not a place of public accommodation under Title III of the ADA.”); Erasmus v. Chien, 650 F.Supp.3d 1050, 1058 (E.D. Cal. 2023) (“[W]ebsites-which are clearly not physical places-are not on their own, places of public accommodation.”) (citations, internal quotation marks, and alterations omitted); Castillo v. Jo-Ann Stores, LLC, 286 F.Supp.3d 870, 877 (N.D. Ohio 2018) (concluding that in order to plead a claim under the ADA, a plaintiff must allege a nexus between the defendant's website and its physical stores); Mahoney v. Herr Foods Inc., No. 19-CV-5759 (MMB), 2020 WL 1979153, at *3 (E.D. Pa. Apr. 24, 2020) (“[A] website, on its own, is not a public accommodation within the meaning of the ADA.”) (citations omitted).
By contrast, in the First and Seventh Circuits, a place of public accommodation within the meaning of Title III of the ADA includes businesses that operate only on the Internet, with no physical location. SeeNat'l Ass'n of the Deaf v. Netflix, Inc., 869 F.Supp.2d 196, 201-02 (D. Mass. 2012) (concluding that “public accommodations” falling within the enumerated categories have an obligation to make their websites accessible even if they do not have any physical locations); Morgan v. Joint Admin. Bd. Ret. Plan of Pillsbury Co. & Am. Fed'n of Grain Millers, AFL-CIO-CLC, 268 F.3d 456, 459 (7th Cir. 2001) (holding that a website can be a place of public accommodation even independent of a connection to a physical space).
In Pallozzi v. Allstate Life Insurance Co., the Second Circuit addressed whether Title III of the ADA applies to insurance underwriting practices. See 198 F.3d 28, 31-33 (2d Cir. 1999), opinion amended on denial of reh'g, 204 F.3d 392 (2d Cir. 2000). In concluding that it did, the Court reasoned that “Title III's mandate that the disabled be accorded ‘full and equal enjoyment of the goods, [and] services . . . of any place of public accommodation,' suggests to us that the statute was meant to guarantee them more than mere physical access.” Id. at 32 (quoting 42 U.S.C. § 12182(a)) (alterations in original). In rejecting the insurance company's argument that Congress intended for Title III to “ensure that the disabled have physical access to” a location, the Court concluded that “an entity covered by Title III is not only obligated by the statute to provide disabled persons with physical access, but is also prohibited from refusing to sell them its merchandise by reason of discrimination against their disability.” Id. at 33. Although the Second Circuit did not reach the question of whether there must be a nexus between the discriminatory conduct and a physical location, “a majority of courts in this district, relying on Pallozzi, have held that such a nexus need not exist in order to find that Title III applies to goods and services.” Chalas, 2022 WL 17156838, at *5; see also Romero v. 88 Acres Foods, Inc., 580 F.Supp.3d 9, 20 (S.D.N.Y. 2022) (interpreting the term “public accommodation” to apply to websites “with or without a nexus to a physical space”); Taverez v. Moo Organic Chocolates, LLC, No. 21-CV-9816 (VEC), 2022 WL 3701508, at *3 (S.D.N.Y. Aug. 26, 2022) (concluding that “websites are within the broad reach Congress intended Title III to have . . . regardless of [a website's] connection [] to a physical space”); Winegard v. Crain Commc'ns, Inc., No. 20-CV-01509 (AJN), 2021 WL 1198960, at *2 (S.D.N.Y. Mar. 30, 2021) (determining that Title III applied to a business that operated through a website without a physical location).
Given the Second Circuit's decision in Pallozi, as well as the decisions of a majority of courts in this District, even if Discover does not operate a brick-and-mortar location, its credit services would still constitute “goods and services” of a “place of public accommodation” within the meaning of Title III of the ADA because, at a minimum, Discover has an online presence through its website. However, as discussed, because Tunne has failed to adequately plead the existence of a disability, I recommend dismissal of Count V. I recommend that Count V be dismissed without prejudice because Tunne may be able to allege sufficient factual matter to adequately plead that he is disabled within the meaning of the statute.
5. Count VI
In Count VI, Tunne brings a claim against Defendants for violation of the Consumer Credit Protection Act (the “CCPA”). See Am. Compl. ¶¶ 85-88. The CCPA is codified at 15 U.S.C. §§ 1601-1693r. The amended complaint alleges that Discover “refused to disclose in writing what ‘verification' they were seeking,” and that Discovery “has never notified [Tunne] in writing . . . what statement(s) the IRS said about [Tunne's] verification record prior to June 2022.” Id. ¶ 87.
The CCPA, under which Tunne brings his claim, “is the title given to the entire act, 15 U.S.C. § 1601, et seq., encompassing, inter alia, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, and the Truth in Lending Act.” Hamilton v. Cap. One, N.A., No. 11-CV-208 (BB) (WPL), 2011 WL 13277505, at *2 (D.N.M. Dec. 12, 2011). Although Tunne does not specify which subchapter of the CCPA he is invoking, his allegations suggest that his claim is pursuant to Subchapter I of the Truth in Lending Act (“TILA”), 15 U.S.C. § 1601 et seq., “which imposes disclosure requirements on creditors,” like Discover. Sullivan v. Greenwood Credit Union, 520 F.3d 70, 73 (1st Cir. 2008). The TILA was enacted in 1968 to “‘protect consumers against inaccurate and unfair credit billing and credit card practices' and promote ‘the informed use of credit' by ‘assuring a meaningful disclosure' of credit terms.” Vincent v. The Money Store, 736 F.3d 88, 105 (2d Cir. 2013) (alterations omitted) (quoting 15 U.S.C. § 1601(a)). The TILA promotes this goal largely by “imposing mandatory disclosure requirements on those who extend credit to consumers in the American market.” Mourning v. Family Publ'ns Serv., Inc., 411 U.S. 356, 363 (1973).
“Generally, there are two types of consumer credit transactions regulated by TILA: open end credit plans and closed end credit plans.” Follman v. World Fin. Network Nat. Bank, 971 F.Supp.2d 298, 301 (E.D.N.Y. 2013). The term “open end credit plan” denotes a plan “under which the creditor reasonably contemplates repeated transactions, which prescribes the terms of such transactions, and which provides for a finance charge which may be computed from time to time on the outstanding unpaid balance.” 15 U.S.C. § 1602(i). A credit-card account, such as Tunne's account here, is an example of an open-end credit plan. Follman, 971 F.Supp.2d at 301 (citation omitted). As is pertinent here, 15 U.S.C. § 1637(a)-(d) sets forth the initial disclosure requirements for open-end consumer credit plans, including the statement required with each billing cycle, the disclosure required in applications and solicitations, and the disclosure required prior to renewal of an account.
Tunne alleges that Discover failed to disclose the precise information they were seeking to verify-whether it related to his income or his taxes. Am. Compl. ¶ 87. The TILA however, does not require disclosure of that type of information. Stated otherwise, the statute did not obligate Discover to disclose what type of information it sought to verify in order to continue Tunne's credit account. 15 U.S.C. § 1637 deals specifically with disclosure of “finance charges, interest rates, consumer rights and creditor responsibilities regarding billing matters, grace periods, cash advance fees, late fees and over-credit-limit fees.” Miller v. Eur. Am. Bank, 921 F.Supp. 1162, 1166 (S.D.N.Y. 1996). Nowhere does the statute state that it requires open-end credit plans to disclose the precise information Tunne alleges Discover failed to disclose here. Tunne has thus failed to allege that Discover violated its disclosure obligations under the TILA. I therefore recommend that Count VI be dismissed without prejudice. Because it is not clear that Tunne could not allege facts to support a viable claim, I recommend that he be afforded an opportunity to amend his claim.
6. Count VII
In Count VII, Tunne asserts a claim against Defendants for violation of the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq., (the “FCRA”). See Am. Compl. ¶¶ 89-93. Tunne alleges that in May and June of 2021, Defendants “did not[] submit accurate and honest credit card termination data regarding [Tunne's] credit card.” Id. ¶ 92. Defendants argue that this claim should be dismissed because Tunne has not pled all of the elements of a claim under the FCRA, and his allegations only contain “unsubstantiated legal conclusions with no factual detail.” See Defs.' Br. at 17-18.
The FCRA was enacted in “1970 to ensure fair and accurate reporting, promote efficiency in the banking system, and protect consumer privacy.” Safeco Ins. Co. of Am. V. Burr, 551 U.S. 47, 52 (2007). To fulfill this objective, the FCRA imposes obligations on three types of entities: “consumer reporting agencies, users of consumer reports, and furnishers of information to consumer reporting agencies.” Lichtman v. Chase Bank USA, N.A., No. 18-CV-10960, 2020 WL 1989486, at *3 (S.D.N.Y. Apr. 27, 2020) (quoting O'Diah v. New York City, No. 02-CV-00274, 2002 WL 1941179, at *12 (S.D.N.Y. Aug. 21, 2002)). The FCRA imposes two duties on entities like Discover that furnish such information: a duty under subsection (2)(a) “to report accurate information to a consumer reporting agency” and to “correct inaccurate information”; and a duty under subsection (2)(b) “once notice is received from a consumer reporting agency that there is a dispute as to the completeness or accuracy of the information provided to that reporting agency.” Varlack v. TD Bank N., No. 23-CV-7216 (LTS), 2023 WL 6811108, at *2 (S.D.N.Y. Oct. 16, 2023); see also 15 U.S.C. §§ 1681s-2(a), (b). Courts in this Circuit have held than an individual consumer, like Tunne, can bring suit only for violations of subsection (2)(b) in Section 1681s, because there is no private right of action under subsection (2)(a). See Barberan v. Nationpoint, 706 F.Supp.2d 408, 427 (S.D.N.Y. 2010) (“No private right of action exists for violations of § 1681s-2(a) because this provision ‘shall be enforced exclusively' by government officials.”); Moore v. U.S. Dep't of Educ., 457 Fed.Appx. 10, 12 n.1 (2d Cir. 2011) (summary order) (“While this court has not addressed the issue, a number of our sister circuits as well as district courts in this circuit have similarly concluded that 15 U.S.C. § 1681s-2(a) affords no private right of action.”).
Section 1681s-2(b) requires furnishers of credit information to investigate and report alleged inaccuracies in credit information after receiving notice from a consumer reporting agency of a consumer dispute. Varlack, 2023 WL 6811108, at *3 (citing Barberan, 706 F.Supp.2d at 247 n.12). However, “‘unless and until a furnisher of information receives notice from a[n] . . . agency, no private right of action exists under [Section] 1681s-2(b).'” Barberan, 706 F.Supp.2d at 247 n.12 (quoting Kane v. Guar. Residential Lending, Inc., No. 04-CV-4847 (ERK), 2005 WL 1153623, at *4 (E.D.N.Y. May 16, 2005) (emphasis in original)). “Notice from an individual consumer, in the absence of notice from a[n] . . . agency, is insufficient to trigger the duties contained in Subsection (b).” Kane, 2005 WL 1153623, at *4; see also Nguyen v. Ridgewood Sav. Bank, 66 F.Supp.3d 299, 306 (E.D.N.Y. 2014) (holding that the plaintiff did not state a claim under Section 1681s-2(b) where he “failed to plausibly allege that [the defendant] received notice of [the] [p]laintiff's dispute from a consumer reporting agency”).
Liberally reading the amended complaint, Tunne alleges that Defendants furnished inaccurate information to certain consumer reporting agencies, TransUnion, Equifax, and Experian, and that Tunne reported the inaccuracies to those agencies. See Am. Compl. ¶¶ 87-88. Tunne, however, does not allege that Defendants were notified by a consumer reporting agency of his dispute concerning inaccurate information or that Defendants failed to investigate the alleged inaccuracy after being notified by an agency. Tunne has thus failed to state a claim under Section 1681s-2(b). See Neblett v. Chase Bank, No. 09-CV-10574, 2010 WL 3766762, at *5 (S.D.N.Y. Sept. 27, 2010) (finding that the plaintiff had not stated a claim under section 1681s-2(b) because the plaintiff had “not alleged that a credit reporting agency notified [the defendant] of a dispute over the reporting of [the plaintiff's] credit”); Algende v. Bay Ridge Fed. Credit Union, No. 14-CV-2518, 2015 WL 1014217, at *3 (E.D.N.Y. Mar. 9, 2015) (dismissing an FCRA claim because, while the plaintiff alleged that “he alerted Experian credit reporting agency,” he failed to allege that “Experian informed [the] [d]efendant of the dispute as is required to trigger [the] [d]efendant's duties under the FCRA”).
I therefore recommend that Count VII of the amended complaint be dismissed. Here, too, it is not apparent that Tunne could not add factual allegations to plausibly state a claim. As such, I recommend that dismissal be without prejudice.
7. Count VIII
In Count VIII, Tune asserts two claims: a claim against Discover for breach of contract, and a claim against the individual defendants for intentional interference with contractual relations. See Am. Compl. ¶¶ 94-99. To adequately plead a breach-of-contract claim under New York law, a plaintiff must allege “(1) the existence of an agreement, (2) adequate performance of the contract by the plaintiff, (3) breach of contract by the defendant, and (4) damages.” Eternity Glob. Master Fund Ltd. v. Morgan Guar. Trust Co. of N.Y., 375 F.3d 168, 177 (2d Cir. 2004) (quoting Harsco Corp. v. Segui, 91 F.3d 337, 348 (2d Cir. 1996)). Further, to state a claim for breach of contract, a complaint must allege the specific provisions of the contract that were purportedly breached. See, e.g., Negrete v. Citibank, N.A., 187 F.Supp.3d 454, 468 (S.D.N.Y. 2016) (dismissing breach-of-contract claim for “fail[ure] to plead the essential terms of the alleged agreement between the parties and which provisions, if any, were breached”); Mariah Re Ltd. v. Am. Family Mut. Ins. Co., 52 F.Supp.3d 601, 611 (S.D.N.Y. 2014) (“An ‘essential requirement' to stating [a breach of contract] claim is alleging a ‘specific provision' that was breached.”) (citation omitted); Wolff v. Rare Medium, Inc., 171 F.Supp.2d 354, 358 (S.D.N.Y. 2001) (dismissing breach-of-contract claim because plaintiffs failed to identify the contractual provisions that defendant had breached).
Tunne does not identify in his amended complaint the contract that forms the basis of his contract claims. Nor does the amended complaint identify which law governs the contract that underlies the claim. However, both Tunne and Defendants apply New York law to their analysis of this claim. See Defs.' Mem. at 18-20; Pl.'s Mem. at 31-35.
Defendants contend that the amended complaint identifies neither the contract at issue, nor the provisions of the contract that Defendants allegedly breached. See Defs.' Mem. at 19. Defendants are correct. The amended complaint does not identify the contract or agreement underlying this claim. And even if it could be inferred that Tunne is referring to the standard credit agreement that governed his Discover credit card, Tunne has not identified any provision in that agreement that Defendants allegedly breached. See, e.g., Manes v. JPMorgan Chase Bank, N.A., No. 20-CV-11059 (VEC), 2022 WL 671631, at *7 (S.D.N.Y. Mar. 7, 2022) (dismissing breach-of-contract claim where plaintiff failed entirely to identify the specific contract term or terms that were allegedly breached).
Turning to Tunne's claim against the individual defendants for intentional interference with contract under New York law, a plaintiff must allege the following elements: “(1) the existence of a valid contract between the plaintiff and a third party; (2) the defendant's knowledge of the contract; (3) the defendant's intentional procurement of the third-party's breach of the contract without justification; (4) actual breach of the contract; and (5) damages resulting therefrom.” Kirch v. Liberty Media Corp., 449 F.3d 388, 401 (2d Cir. 2006) (internal quotation marks omitted). As discussed, Tunne has not identified the agreement at issue. That failure is fatal to this claim as well. See Sullivan v. Aircraft Servs. Grp., Inc., No. 19-CV-6500 (MKB), 2021 WL 11703008, at *4 (E.D.N.Y. Mar. 8, 2021) (“A claim for intentional interference with contract is deficient if it ‘fails to sufficiently plead the existence of a contract,' including details regarding ‘the formation of the contract, the date it took place, and the contract's major terms.'”) (quoting Valley Lane Indus. Co. v. Victoria's Secret Direct Brand Mgmt., L.L.C., 455 Fed. App'x 102, 104 (2d Cir. 2012)).
Further, “only a stranger to a contract, such as a third party, can be held liable for tortious interference with the contract.” Thompson v. Bosswick, 855 F.Supp.2d 67, 88 (S.D.N.Y. 2012) (citation and internal quotation marks omitted). As employees of Discover, Janelle and Evy M. are not strangers to the contract between Tunne and Discover unless they “exceeded the bounds of [their] authority.” Finley v. Giacobbe, 79 F.3d 1285, 1295 (2d Cir. 1996). But the amended complaint has not alleged any facts suggesting that either of the individual defendants acted outside the scope of their authority. Instead, the amended complaint alleges that the two individual defendants, identified by Tunne as customer service representatives at Discover, contacted him about his credit-card account and fielded his inquiries into the status of his account. See Am. Compl. ¶¶ 7-8, 12, 20, 33. Because the amended complaint does not contain facts to plausibly allege that Janelle and Evy M. were third parties to any contract between Tunne and Discover, Tunne has failed to state a claim for intentional interference with contract.
I therefore recommend that Count VIII be dismissed without prejudice as to the breach-of-contract claim. Given the nature of the alleged conduct here, leave to amend would be futile as it relates to the intentional interference with contractual relations claim asserted against the individual defendants. I therefore recommend that the claim be dismissed with prejudice.
8. Count IX
In Count IX, Tunne asserts a claim against Discover for negligent hiring, retention and supervision. See Am. Compl. ¶¶ 100-03. Under New York law, to state a claim for negligent hiring, training, supervision or retention, “in addition to the standard elements of negligence, a plaintiff must show: (1) that the tort-feasor and the defendant were in an employee-employer relationship; (2) that the employer knew or should have known of the employee's propensity for the conduct which caused the injury prior to the injury's occurrence; and (3) that the tort was committed on the employer's premises or with the employer's chattels.” Ehrens v. Lutheran Church, 385 F.3d 232, 235 (2d Cir. 2004) (citations and internal quotation marks omitted); accord, e.g., Papelino v. Albany Coll. of Pharmacy of Union Univ., 633 F.3d 81, 94 (2d Cir. 2011); Romano v. SLS Residential, Inc., 812 F.Supp.2d 282, 294-95 (S.D.N.Y. 2011). To plead ordinary negligence, a plaintiff must allege (1) the existence of a duty owed by the defendant to the plaintiff; (2) a breach of that duty; and (3) an ensuing injury as a result of the breach. See Aegis Ins. Services, Inc. v. 7 World Trade Co., L.P., 737 F.3d 166, 177 (2d Cir. 2013) (quoting Alfaro v. Wal-Mart Stores, Inc., 210 F.3d 111114 (2d Cir. 2000)). “A claim for negligent hiring or retention cannot proceed against an employer for conduct of an employee acting within the scope of employment.” Id. (citing Newton v. City of N.Y., 681 F.Supp.2d 473, 487-88 (S.D.N.Y. 2010) and Peterec v. Hilliard, No. 12-CV-3944 (CS), 2013 WL 5178328, at *13 (S.D.N.Y. Sep. 16, 2013)).
Tunne does not identify in his amended complaint which state's law forms the basis of his negligent hiring, retention, and supervision claim. However, both Tunne and Defendants apply New York law to their analyses of this claim. See Defs.' Mem. at 20-21; Pl.'s Mem. at 3537.
First, Tunne's claim should be dismissed because the amended complaint is devoid of any allegations supporting a plausible inference that Janelle or Evy M. were negligent. Tunne alleges that the two individual defendants misrepresented the reasons for seeking Tunne's income tax verification and “deliberately” withheld information him. Am. Compl. ¶¶ 102-03. Tunne contends that Janelle and Evy M. owed a duty to notify him when they were going to conduct a tax verification with the IRS or credit bureaus. See Pl.'s Mem. at 37. But the amended complaint makes clear that Discover did notify Tunne of the need to conduct a verification with the IRS. See, e.g., Am. Compl. ¶ 13. And to the extent Tunne alleges that the individual defendants misrepresented information, that allegation is conclusory and includes no factual support from which to plausibly infer that any Discover employee misrepresented Discover's need for verification from the IRS. In short, Tunne has failed to allege that either Janelle or Evy M. owed him a duty, or that Janelle or Evy M. breached that duty. See Durante Bros. and Sons, Inc. v. Flushing Nat'l Bank, 755 F.2d 239, 252 (2d Cir.), cert. denied, 473 U.S. 906, 105 (1985) (explaining that ordinary creditor-debtor relationship does not create a duty of care).
Second, the amended complaint fails to allege that Janelle and Evy M. were acting outside the scope of their employment. See supra at 25. Here, Janelle and Evy M.-customer service representatives who contacted Tunne about his account and responded to his various inquiries about the status of his account-were acting within the scope of their employment as customer service representatives at Discover. See Am. Compl. ¶¶ 7-8, 12, 20, 33. The amended complaint does not allege that Janelle or Evy M. communicated with Tunne in their personal capacities, or were otherwise not authorized to call on behalf of Discover. A claim for negligent hiring and retention cannot proceed against Discover if the individual defendants were acting within the scope of their employment. See Melvin v. Cnty. of Westchester, No. 14-CV-2995 (KMK), 2016 WL 1254394, at *21 (S.D.N.Y. Mar. 29, 2016) (dismissing negligent hiring, retention, and training claim because there were no allegations in the complaint that the defendants “were acting outside scope of employment during the course of events giving rise to Plaintiff's claim”).
I thus recommend that Count IX be dismissed. Given the nature of the alleged conduct, leave to amend would be futile because Tunne will be unable to allege facts from which to plausibly plead the existence of a duty. I thus recommend that dismissal be with prejudice.
9. Count X
Lastly, in Count X, Tunne asserts a claim against Defendants for intentional infliction of emotional distress and mental anguish. See Am. Compl. ¶¶ 104-09. Under New York law, a claim for intentional infliction of emotional distress (“IIED”) requires a plaintiff to plead the following: (1) extreme and outrageous conduct on the part of the defendant; (2) the defendant's intent to cause, or disregard of a substantial probability of causing severe emotional distress; (3) a causal connection between the conduct and injury; and (4) severe emotional distress. See Howell v. New York Post Co., Inc., 81 N.Y.2d 115, 121 (1993); see also Conboy v. AT & T Corp., 241 F.3d 242, 258 (2d Cir.2001). A plaintiff must plead conduct “so extreme in degree and outrageous in character as to go beyond all possible bounds of decency, so as to be regarded as atrocious and utterly intolerable in a civilized community.” Liang v. Cafe Spice SB, Inc., 911 F.Supp.2d 184, 214-15 (E.D.N.Y. 2012). “The standard of outrageous conduct is strict, rigorous and difficult to satisfy.” Scollar v. City of New York, 74 N.Y.S.3d 173, 178 (1st Dep't 2018) (internal quotations omitted).
Tunne does not identify in his amended complaint which state's law forms the basis of his claim. However, both Tunne and Defendants apply New York law to their analyses of this claim. See Defs.' Mem. at 21-22; Pl.'s Mem. at 37-39.
The conduct alleged in Tunne's amended complaint falls far short of amounting to the type of “extreme and outrageous” conduct necessary to plausibly plead a claim for intentional infliction of emotional distress. The alleged conduct underlying Tunne's claim is Defendants' attempt to verify certain information relating to Tunne's taxes despite his “repeated protests and warnings” that Discover could not contact the IRS to conduct that verification. See Am. Compl. ¶ 16. Tunne alleges that Janelle ignored and dismissed Tunne's demands that Discovery not conduct such a verification. Id. This conduct, even viewed in the light most favorably to Tunne, is still well outside the realm of conduct that courts in New York have found satisfies the “extreme” or “outrageous” standard. See, e.g., Miller v. Int'l Paper Co., No. 12-CV-7071 (LAK), 2013 WL 3833038, at *13 (S.D.N.Y. July 24, 2013) (dismissing claim where the complained of conduct was solely the denial of retirement benefits); Biberaj v. Pritchard Indus., 859 F.Supp.2d 549, 557, 565 (S.D.N.Y. 2012) (determining that supervisors' repeated direction of profanities at employee, including calling her a “[b]itch, slut, [and] whore,” were insufficiently extreme and outrageous to support an IIED claim); Elmowitz v. Exec. Towers at Lido, LLC, 571 F.Supp.2d 370, 379 (E.D.N.Y. 2008) (determining that publicly shouting derogatory remarks and hitting plaintiff multiple times with a telephone was insufficiently extreme and outrageous for an IIED claim); Kaye v. Trump, 58 A.D.3d 579, 579 (1st Dep't 2009) (determining that rude remarks, commencing baseless lawsuits, filing criminal complaints towards plaintiff and frightening plaintiff's daughter did not constitute extreme and outrageous conduct sufficient to sustain a claim).
Further, even if Tunne has plausibly alleged extreme and outrageous conduct by Defendants, the amended complaint fails to include any non-conclusory allegations that Tunne suffered severe emotional distress as a result of that conduct. See Tantaros v. Fox News Network, LLC, No. 17-CV-2958 (GBD), 2018 WL 2731268, at *10 (S.D.N.Y. May 18, 2018). Tunne alleges that he suffered “mental anguish,” “depression,” and “anxiety.” See Am. Compl. ¶¶ 108-09. But the amended complaint includes no factual allegations explaining the nature of the depression or anxiety, how long Tunne has suffered from that depression or anxiety, or how either illness has impacted his daily activities. Similarly, although Tunne alleges that he suffered mental anguish, Tunne provides no factual details explaining the nature of the mental anguish or its duration or intensity. Without more, Tunne's allegations are insufficient to plausibly allege that he suffered severe emotional distress. See Medcalf v. Walsh, 938 F.Supp.2d 478, 490 (S.D.N.Y. 2013) (dismissing IIED claim where the complaint did not make “any non-conclusory allegation that [the plaintiff] suffered severe emotional distress”); Lyman v. City of N.Y., No. 96-CV-2382 (PKL), 1997 WL 473976, at *3 (S.D.N.Y. Aug. 20, 1997) (dismissing IIED claim where plaintiff alleged “in a conclusory manner that as a result of [defendant's] conduct she has suffered ‘severe emotional distress . . . and substantial emotional anguish'”).
Accordingly, I recommend that Count X be dismissed. Given the high bar necessary to plead extreme and outrageous conduct for a claim of intentional infliction of emotional distress and given the nature and circumstances of the conduct here, Tunne will be unable to plausibly allege a claim even with an amendment. See, e.g., Cowan v. City of Mount Vernon, 95 F.Supp.3d 624, 657 (S.D.N.Y. 2015) (concluding that instances of sexual battery repeated over a nearly year-long period constituted extreme and outrageous conduct for an IIED claim); Kohlhausenv. SUNY Rockland Cmty. Coll., No. 10-CV-3168, 2011 WL 1404934, at *16 (S.D.N.Y. Feb. 9, 2011) (concluding that allegations of “a longstanding campaign of intimidation and harassment” that included discriminatory conduct, “extremely offensive language,” and “several physical threats” were sufficiently extreme and outrageous to adequately state IIED claim), abrogated on other grounds by Leitner v. Westchester Cmty. Coll., 779 F.3d 130 (2d Cir. 2015). I thus recommend that dismissal be with prejudice.
CONCLUSION
For the foregoing reasons, I respectfully recommend that Defendants' motion be
DENIED as it relates to Count IV of the amended complaint. As it relates to Counts I, II, III, V, VI, VII, VIII, IX, and X, I recommend that Defendants' motion be GRANTED.
I recommend that Counts I, II, and III, IX, and X, and Count VIII, as it relates to intentional interference with contractual relations, be dismissed with prejudice. I recommend that Counts V, VI, and VII, and Count VIII, as it relates to breach of contract, be dismissed without prejudice. As to those claims, I recommend that Tunne be granted leave to file a second amended complaint that satisfies the pleading standards as explained in this Report and Recommendation. DATED: New York, New York
Respectfully submitted, PROCEDURE FOR FILING OBJECTIONS TO THIS REPORT AND RECOMMENDATION
Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure, the parties have fourteen (14) days (including weekends and holidays) from service of this Report and Recommendation to file any objections. See also Fed.R.Civ.P. 6(a), 6(b), 6(d). A party may respond to any objections within 14 days after being served. Any objections and responses shall be filed with the Clerk of the Court. Any request for an extension of time to file objections or responses must be directed to the Honorable Jessica G. L. Clarke. If a party fails to file timely objections, that party will not be permitted to raise any objections to this Report and Recommendation on appeal. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72; Fed.R.Civ.P. 6(a), 6(b), 6(d); Thomas v. Arn, 474 U.S. 140 (1985); Wagner & Wagner, LLP v. Atkinson, Haskins, Nellis, Brittingham, Gladd & Carwile, P.C., 596 F.3d 84, 92 (2d Cir. 2010).