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Buckley v. Santander Consumer USA, Inc.

United States District Court, W.D. Washington, Tacoma

March 29, 2018

SUZANNE BUCKLEY, et al., Plaintiffs,



         This matter comes before the Court on Defendant Santander Consumer USA, Inc.'s (“Santander”) motion to dismiss. Dkt. 19. The Court has considered the pleadings filed in support of and in opposition to the motion and the remainder of the file and hereby grants the motion in part and denies it in part for the reasons stated herein.

         I. BACKGROUND

         The factual allegations in Plaintiff Suzanne Buckley's (“Buckley”) amended complaint are accepted as true for the purpose of ruling on the pending motion.

         On some unspecified date prior to February 15, 2017, Buckley incurred a debt related to the financing of a purchased vehicle. Dkt. 15 at 2. The debt was financed through Santander. Id. Buckley's sales agreement with the vehicle dealership stated: “You agree to pay the Creditor - Seller . . . the Amount Financed and Finance Charge in U.S. funds according to the payment schedule below . . . .” Dkt. 19-1 at 2. Sometime later, but still before February 15, 2017, Buckley defaulted on her debt. Dkt. 15 at 2.

         On some subsequent date, still before February 15, 2017, Buckley alleges two alternative theories whereby her personal information was transferred from Santander's possession so that it eventually fell into the hands of Apex National Services (“Apex”), a purported debt collection company. Id. Buckley first alleges that the information was stolen from Santander. Id. Under this theory, Buckley alleges that Santander “recklessly failed to maintain secure servers to impede any unauthorized access to sensitive consumer information” and “fail[ed] to notify [Buckley] that [her] personal identifying information had been disclosed to unauthorized third parties.” Id. at 8-9. Alternatively, Buckley alleges that Santander “assigned, placed, or otherwise transferred the alleged debt to an unauthorized third party.” Id. at 2. The information that Buckley alleges was improperly transferred to or obtained by a third party included Buckley's name, social security number, driver's license, address, file number, and vehicle identification number for the subject vehicle of Buckley's debt. Id.

         On an unspecified date, prior to February 15, 2017, Apex contacted Buckley in an attempt to collect the alleged debt. Id. at 3. Buckley began negotiations with Apex and their agent, Universal Payment Processing (“Universal”), and eventually entered into an agreement to settle the entire alleged debt for $5, 000. Id. On February 15, 2017, Buckley made the agreed-upon payment of $5, 000 to Universal. Id. The same date, Universal sent Buckley a letter informing her that the alleged debt was satisfied in full. Id.

         On May 16, 2017, Crown Asset Management LLC (“Crown”), a debt collection company, filed a lawsuit against Buckley to collect the same debt for which she had negotiated and issued a payment to Apex and Universal. Id. Through the course of the litigation, Buckley discovered that unfortunately, Apex “is an unauthorized or ‘ghost' debt collector who does not legally collect from consumers and is not licensed in the state of Washington as a debt collector. Id. at 4. Instead, Buckley, had been “tricked into paying a scam debt collector . . . .” Id.

         On October 11, 2017, Buckley filed her class action complaint. Dkt. 1. On January 4, 2018, Buckley filed an amended class action complaint (“complaint”). Dkt. 15. In the complaint, Buckley asserts five claims against Santander: (1) violations of the Washington Consumer Protection Act (“CPA”); (2) negligence, (3) intrusion upon seclusion through disclosure of private information; (4) breach of contract; and (5) a violation of the Washington Data Breach Act (“DBA”). Id. at 7-11.

         On January 18, 2018, Santander moved to dismiss Buckley's complaint. Dkt. 19. On February 5, 2018, Buckley responded. Dkt. 21. On February 9, 2018, Santander replied. Dkt. 22.


         A. Motion to Dismiss Standard

         Motions to dismiss brought under Rule 12(b)(6) of the Federal Rules of Civil Procedure may be based on either the lack of a cognizable legal theory or the absence of sufficient facts alleged under such a theory. Balistreri v. Pacifica Police Department, 901 F.2d 696, 699 (9th Cir. 1990). Material allegations are taken as admitted and the complaint is construed in the plaintiff's favor. Keniston v. Roberts, 717 F.2d 1295, 1301 (9th Cir. 1983). To survive a motion to dismiss, the complaint does not require detailed factual allegations but must provide the grounds for entitlement to relief and not merely a “formulaic recitation” of the elements of a cause of action. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Buckley must allege “enough facts to state a claim to relief that is plausible on its face.” Id. at 570.

         B. Alternative Pleading Under Rule 8

         Santander has argued that Buckley's claims are inadequately pled because she can only speculate as to alternative theories. See Dkt. 19 at 9-10. The Court summarily rejects this argument. Pleading in the alternative is plainly not the type of formulaic “speculative” pleading prohibited by Twombly, 550 U.S. at 555. Rule 8 authorizes the pleading of inconsistent alternative theories. Fed.R.Civ.P. 8(d)(2). To the extent that Santander argues that Buckley has pled inconsistent facts, it is clear that the factual theories asserted by Buckley, while mutually exclusive, are not inconsistent with the overarching theory that Santander provided Apex access to Buckley's sensitive personal information. Moreover, these mutually exclusive factual theories are not asserted for a single unitary claim, but rather separate alternative claims, and “plaintiffs may state as many separate claims as they have regardless of consistency.” In re Livent, Inc. Noteholders Sec. Litig., 151 F.Supp.2d 371, 406 (S.D.N.Y. 2001) (citing Fed.R.Civ.P. 8(e)).

         C. CPA Claims

         Santander moves to dismiss Buckley's claims for violations of the CPA. Under the CPA, a person may bring a civil action against a business to recover damages stemming from any “[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.” RCW 19.86.020. “To establish a claim under the CPA, five elements must be established: ‘(1) unfair or deceptive act or practice; (2) occurring in trade or commerce; (3) public interest impact; (4) injury to plaintiff in his or her business or property; (5) causation.'” Svendsen v. Stock, 143 Wn.2d 546, 553 (2001) (quoting Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 105 Wn.2d 778, 780 (1986)).

         Buckley has pled two alternative claims under the CPA. Under the first theory, Buckley claims that Santander violated the CPA by assigning her debt or otherwise disclosing her personal information to an “unauthorized third party.” Alternatively, Buckley argues that Santander violated the CPA by maintaining Buckley's information on an inadequately secured server and failing to notify her when the data was stolen. The Court will address the motion to dismiss as it pertains to each theory.

         1. Wrongful Disclosure Theory

         Santander moves to dismiss Buckley's CPA claim under wrongful disclosure theory on the basis that the complaint's cursory allegations of a wrongful disclosure to an “unauthorized third party” is too vague to adequately plead an unfair or deceptive act or practice. There are three ways that a plaintiff may plead a deceptive or unfair act or practice. State v. Mandatory Poster Agency, Inc., 199 Wn.App. 506, 518 (2017), review denied, 189 Wn.2d 1021 (2017). One is to plead a per se violation that has been expressly prohibited by a relevant statute, id., but Buckley has not alleged that the allegedly wrongful disclosure of her personal information constitutes a per se CPA violation. The other two methods are to describe either an act or practice that has the capacity to deceive a substantial portion of the public, or a practice that is in violation of the public interest. Id.

         The Court rejects Santander's argument that all of Buckley's CPA claims must be dismissed for the complaint's lack of “factual allegations relating to what [Santander]'s ‘deceptive act' was, when it may have occurred, or who it involved.” Dkt. 19 at 9. Santander is correct that Buckley does not allege that Santander has engaged in any misleading practices or made any misrepresentations. “Implicit in the definition of ‘deceptive' under the CPA is the understanding that the practice misleads or misrepresents something of material importance.” Holiday Resort Cmty. Ass'n v. Echo Lake Associates, LLC, 134 Wn.App. 210, 226 (2006), as amended on denial of reconsideration (Aug. 15, 2006). Accordingly, Buckley's claim cannot be premised on a “deceptive” act or practice, because no such misrepresentation has been alleged. Even so, “an act or practice can be unfair without being deceptive . . . . The ‘or' between ‘unfair' and ‘deceptive' is disjunctive.” Klem v. Washington Mut. Bank, 176 Wn.2d 771, 787 (2013).

[The Washington] Supreme Court has suggested a defendant's act or practice might be “unfair” if it “‘causes or is likely to cause substantial injury to consumers which is not reasonably avoidable by consumers themselves and is not outweighed by countervailing benefits.'” Klem, 176 Wn.2d at 787 (quoting 15 U.S.C. § 45(n)). Similarly, a defendant's act or practice might be “unfair” if it “offends public policy as established ‘by ...

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