Wiener v. MIB Group, Inc. ( 2023 )

United States Court of Appeals
For the First Circuit
No. 22-1907
MALCOLM WIENER,
Plaintiff, Appellant,
v.
MIB GROUP, INC. and JONATHAN SAGER,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. William G. Young, U.S. District Judge]
Before
Rikelman, Lipez, and Thompson,
Circuit Judges.
David G. Webbert, with whom Johnson & Webbert, LLP, Megan C.
Deluhery, Todd & Weld LLP, and Carolyn T. Seely were on brief, for
appellant.
Todd P. Stelter, with whom Marissa I. Delinks and Hinshaw &
Culbertson LLP were on brief, for appellees.
November 9, 2023
RIKELMAN, Circuit Judge. Several years ago, Malcolm
Wiener sued his former life insurance company for negligence. He
claims that the defendants here tried to torpedo that lawsuit, to
which they were not parties, by illegally disclosing to his former
insurer confidential information protected by a federal statute.
This case presents one question: Does Wiener have Article III
standing to sue the defendants in this case based on the additional
attorney's fees and costs he incurred to respond to their actions
in that separate lawsuit? Because a past, out-of-pocket loss is
a quintessential basis for Article III standing, we conclude the
answer is yes. Therefore, we reverse the district court's order
dismissing this case at the pleading stage for lack of standing.
I. BACKGROUND
A. Relevant Facts1
MIB Group, Inc. is an information clearinghouse and is
owned by its member life and health insurance companies. For a
number of years, Jonathan Sager was its Executive Vice President
and General Counsel.2
1 We draw the relevant facts from Wiener's amended complaint.
See Webb v. Injured Workers Pharmacy, LLC, 72 F.4th 365, 369 (1st
Cir. 2023).
2 For the purposes of this opinion, and as we will discuss
later, we assume that MIB Group, Inc. is a "consumer reporting
agency" subject to the Fair Credit Reporting Act. We also assume
that Sager was one of MIB's agents such that it could be held
liable for his actions challenged in the amended complaint.
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MIB's services enable its members to evaluate "an
individual's risk and eligibility during the underwriting of life,
health, disability income, critical illness, and long-term care
insurances policies." For example, MIB collects information about
a life-insurance applicant's medical conditions from its members
and "makes this information available to member[s] . . . who
receive an authorized release" from the applicant. It also
collects information about "which member companies have reviewed
or queried an MIB file on a particular individual." For privacy
reasons, the medical information in an individual's MIB file "is
catalogued using proprietary 'codes'" selected by the reporting
member company. Other member companies with an executed
authorization may view the MIB codes assigned to a particular
individual, which member company supplied the codes, and whether
(and, if so, which) member companies have "formally queried the
file" or "made less formal reviews."
As of June 2020, MIB had 390 members that "represent[ed]
90-95% of all individual life insurance application activity in
the United States." One of its members was AXA Equitable Life
Insurance Company ("AXA").
In the late 1980s, Wiener purchased three universal life
insurance policies from AXA for a total value of $16 million. In
2013, following a "payment error or oversight," AXA terminated
these policies and sent Wiener an application for reinstatement.
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At AXA's request, Wiener submitted certain medical information to
provide "a preliminary indication" of his insurability. But AXA
denied Wiener's application after evaluating information from one
of his physicians, an evaluation he later learned had been
performed by AXA "falsely and negligently." AXA then reported to
MIB certain codes that identified four serious medical conditions,
which Wiener did not actually have, as the basis for its decision
not to reinstate his policies. The false report rendered Wiener
effectively uninsurable "at the appropriate rate for his true
health status."
In January 2018, Wiener sued AXA in North Carolina state
court, and AXA promptly removed the case to federal court on the
basis of diversity jurisdiction. See generally Wiener v. AXA
Equitable Life Ins. Co., No. 3:18-cv-00106 (W.D.N.C.) (the "North
Carolina Litigation").3 In the North Carolina Litigation, Wiener
alleged that AXA negligently "reported false conclusions about his
medical conditions to . . . MIB, causing him to become
uninsurable." Wiener v. AXA Equitable Life Ins. Co., 58 F.4th
3The parties agree that we may take judicial notice of the
public filings in the North Carolina Litigation as part of our
analysis of Wiener's amended complaint in this case. They are
correct. See Rodi v. S. New Eng. Sch. of L., 389 F.3d 5, 19 (1st
Cir. 2004) ("It is well-accepted that federal courts may take
judicial notice of proceedings in other courts if those proceedings
have relevance to the matters at hand." (quoting Kowalski v. Gagne,
914 F.2d 299, 305 (1st Cir. 1990))).
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774, 778 (4th Cir. 2023).4 His complaint included a request for
attorney's fees and costs.
During the North Carolina Litigation, Sager provided AXA
with information about "an 'extended activity file' that MIB had
maintained on . . . Wiener going back to 1995." Specifically, he
disclosed that "no member companies except AXA . . . and [its
reinsurer] ever made an inquiry of . . . Wiener's MIB file since
1995" (the "Disclosure"). According to Sager, this meant that "no
information contained in . . . Wiener's file [had] ever been shared
with any other member company except AXA . . . and [its
reinsurer]." He provided this information to AXA "voluntarily,"
"not pursuant to any [c]ourt or other compelled process," and
without Wiener's authorization. At the time Sager searched the
extended activity file, he knew that AXA had a policyholder
relationship with Wiener at some point but did not know (or make
any effort to determine) whether Wiener was still insured by AXA.
Sager then worked with AXA to draft a declaration from
him conveying this information, which AXA submitted in support of
Wiener's complaint in the North Carolina Litigation also
4
alleged negligent misrepresentation, libel, and a violation of
North Carolina's Unfair and Deceptive Trade Practices Act, but the
district court dismissed these claims on summary judgment. See
Wiener, 58 F.4th at 778.
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a motion in limine to exclude Wiener's causation expert at trial.5
That expert was prepared to testify that: (1) MIB's member
insurance companies review the information coded into an
individual's MIB file to determine that individual's insurability;
and (2) "AXA's inaccurate code reporting to MIB created an
insurmountable obstacle to [Wiener's] insurability with other
carriers" and rendered him "effectively uninsurable." Sager also
eventually testified at the North Carolina trial, reiterating the
information in his declaration and confirming that he had conducted
the search of the extended activity file "on [his] own
initiative . . . knowing that there was some controversy."
Wiener "incurred attorney's fees and costs associated
with having to respond to" the Disclosure, which came after the
close of discovery in the North Carolina Litigation. "This placed
[Wiener] at a substantial disadvantage in the litigation and caused
not only financial harm but distress as well."
In this case, Wiener alleges in his amended complaint that
5
AXA filed Sager's declaration "in support of a dispositive motion."
He concedes in his opening brief on appeal, however, that this
allegation was incorrect and that AXA filed the declaration "in
support of three motions in limine as referenced in the briefing
below and apparent from review of the docket in" the North Carolina
Litigation. Before the district court, though, Wiener cited (and
filed a copy of) only one motion in limine, namely, AXA's motion
to exclude Wiener's expert from testifying at trial. Because
Wiener did not rely on the other two motions in limine for his
standing argument below, we do not consider those motions here.
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Nevertheless, at the conclusion of the North Carolina
trial in September 2020, the jury returned a verdict in Wiener's
favor. AXA subsequently filed a motion to dismiss for lack of
subject matter jurisdiction and to set aside the verdict. In
addition to challenging the district court's subject matter
jurisdiction,6 AXA argued that there was insufficient evidence of
harm to support the jury's verdict for Wiener on his negligence
claim. The district court granted AXA's motion on jurisdictional
grounds, declining to address AXA's remaining arguments.
Wiener appealed to the U.S. Court of Appeals for the
Fourth Circuit. In 2023, the Fourth Circuit reversed the decision
granting AXA's motion to dismiss. See Wiener, 58 F.4th at 777,
785. In doing so, it also concluded that "[a]mple evidence
supported the jury's verdict for Wiener." Id. at 784. It remanded
the case for review of post-trial damages issues. See id. at 777,
785.
B. Proceedings Below
Wiener brought this suit against MIB and Sager
(collectively, "MIB") in the District of Massachusetts in May 2022,
while his appeal in the North Carolina Litigation was pending. In
July, he filed the operative amended complaint in this case,
The basis of AXA's jurisdictional challenge was that an
6
exclusive-remedies provision in a North Carolina statute preempted
Wiener's negligence claim. Wiener, 58 F.4th at 779.
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bringing two counts under the Fair Credit Reporting Act (the
"FCRA")7 and seeking damages, declaratory and injunctive relief,
attorney's fees, and costs. Shortly thereafter, MIB filed a motion
to dismiss the amended complaint. MIB pursued two grounds for
dismissal: failure to plead Article III standing and failure to
state a claim under Federal Rule of Civil Procedure 12(b)(6) for
any violation of the FCRA.8 Wiener opposed on both grounds. On
Article III standing, he pointed to two harms alleged in his
amended complaint: the out-of-pocket loss he incurred, in the form
of additional attorney's fees and costs, to respond to the
Disclosure in the North Carolina Litigation; and the distress
caused by MIB's invasion of his privacy via the Disclosure.
7More specifically, Wiener alleged violations under sections
1681n and 1681r (Count I) and 1681o (Count II) of the FCRA. Section
1681r prohibits "[a]ny officer or employee of a consumer reporting
agency [from] knowingly and willfully provid[ing] information
concerning an individual from the agency's files to a person not
authorized to receive that information." 15 U.S.C. § 1681r.
Sections 1681n and 1681o "provide[] a private right of action and
impose[] civil liability on users of credit information and
consumer reporting agencies for noncompliance with the
requirements of the [FCRA]" if the noncompliance was willful
(§ 1681n(a)), knowing (§ 1681n(b)), or negligent (§ 1681o).
Sullivan v. Greenwood Credit Union, 520 F.3d 70, 74 (1st Cir.
2008).
8 AlthoughMIB characterized its standing challenge as arising
under Rule 12(b)(6), we consider its motion to dismiss for lack of
standing as made under Rule 12(b)(1), which permits motions to
dismiss for lack of subject matter jurisdiction. See Dantzler,
Inc. v. Empresas Berríos Inventory & Operations, Inc., 958 F.3d
38, 46 (1st Cir. 2020) (noting that "standing is a prerequisite to
a federal court's subject matter jurisdiction" (quoting
Hochendoner v. Genzyme Corp., 823 F.3d 724, 730 (1st Cir. 2016))).
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In October 2022, the parties presented oral argument on
the motion to dismiss. At the start of the hearing, the district
court noted that Wiener's "most difficult problem" was
constitutional standing and asked how Wiener had been harmed.
Wiener's counsel cited "two aspects of . . . harm for standing
purposes." The first harm, she explained, was an "invasion of a
privacy interest, . . . which has been protected in the common law
for over 100 years." But before she could make her second point,
the district court posed a question and then quickly pivoted to
MIB's counsel. After a brief exchange with MIB's counsel, the
district court ruled from the bench that Wiener lacked Article III
standing and granted the motion to dismiss. In total, the hearing
lasted about five minutes. The district court thereafter entered
a one-sentence written order of dismissal. It never reached MIB's
arguments that the amended complaint failed to state a claim under
Rule 12(b)(6). Wiener timely appealed.
II. STANDARD OF REVIEW
We review de novo the district court's decision to
dismiss the case on Article III standing grounds based on the face
of the amended complaint, prior to any discovery. See Webb v.
Injured Workers Pharmacy, LLC, 72 F.4th 365, 371 (1st Cir. 2023).
In doing so, we "take the [amended] complaint's well-pleaded facts
as true and indulge all reasonable inferences in [Wiener]'s favor."
Hochendoner v. Genzyme Corp., 823 F.3d 724, 730 (1st Cir. 2016);
- 9 -
see Webb, 72 F.4th at 371. We also "consider (a) implications
from documents attached to or fairly incorporated into the
[amended] complaint, (b) facts susceptible to judicial notice, and
(c) [any] concessions in [Wiener]'s response to the motion to
dismiss." Lyman v. Baker, 954 F.3d 351, 360 (1st Cir. 2020)
(cleaned up) (quoting Schatz v. Republican State Leadership Comm.,
669 F.3d 50, 55-56 (1st Cir. 2012)).
It is Wiener's burden, as the plaintiff, to allege
sufficient facts "to plausibly demonstrate" standing. DiCroce v.
McNeil Nutritionals, LLC, 82 F.4th 35, 39 (1st Cir. 2023) (quoting
Hochendoner, 823 F.3d at 731). "Neither conclusory assertions nor
unfounded speculation can supply the necessary heft."
Hochendoner, 823 F.3d at 731. Because "standing is not dispensed
in gross," Wiener must demonstrate standing for each claim he
brings and each form of relief he seeks. TransUnion LLC v.
Ramirez, 141 S. Ct. 2190, 2208 (2021).
We must "accept as valid" the merits of Wiener's legal
claims in evaluating Article III standing. Fed. Election Comm'n
v. Cruz, 596 U.S. 289, 298 (2022); see Hochendoner, 823 F.3d at
734 (evaluating standing without considering "the plaintiffs'
[substantive] claims as a matter of law or the adequacy of their
pleading to state a claim"); see also Mission Prod. Holdings, Inc.
v. Tempnology, LLC, 139 S. Ct. 1652, 1660 (2019) (noting that the
uncertainty or unlikelihood of a plaintiff's ultimate recovery "is
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of no moment" to the issue of standing). Accordingly, for the
purposes of this opinion, we assume that Wiener has adequately
pleaded claims under the FCRA against MIB. See Cruz, 596 U.S. at
298.
III. DISCUSSION
Wiener argues that the district court erred in
dismissing his amended complaint for lack of Article III standing.
He also urges us to hold that he has plausibly stated a claim for
violations of the FCRA, even though the court never reached MIB'S
Rule 12(b)(6) arguments. We agree that the district court erred
in dismissing the amended complaint on Article III grounds but
remand so that it can consider MIB's Rule 12(b)(6) arguments in
the first instance.
A. Article III Standing
Article III of the Constitution limits "the judicial
Power" to "Cases" and "Controversies." U.S. Const. art. III, § 2,
cl. 1; see Spokeo, Inc. v. Robins, 578 U.S. 330, 338 (2016)
("Standing to sue is a doctrine rooted in the traditional
understanding of a case or controversy."). In evaluating Article
III standing, we essentially "determine whether [a] particular
plaintiff is entitled to have a federal court" decide their
dispute. Pagán v. Calderón, 448 F.3d 16, 26 (1st Cir. 2006).
To demonstrate Article III standing, a plaintiff must
meet a familiar three-part test. "[A] plaintiff must show (i)
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that he suffered an injury in fact that is concrete,
particularized, and actual or imminent; (ii) that the injury was
likely caused by the defendant; and (iii) that the injury would
likely be redressed by judicial relief." TransUnion, 141 S. Ct.
at 2203. An injury is concrete if it "actually exist[s]" and
particularized if it "affect[s] the plaintiff in a personal and
individual way." Spokeo, 578 U.S. at 339-40 (quoting Lujan v.
Defs. of Wildlife, 504 U.S. 555, 560 n.1 (1992)); see DiCroce, 82
F.4th at 39. The causation prong requires that the plaintiff's
injury be fairly traceable to the defendant's conduct, rather than
the result of "independent action" by some other party not before
the court. Lyman, 954 F.3d at 361 (quoting Lujan, 504 U.S. at
560). Finally, the redressability prong requires that the
plaintiff request relief that is likely to remedy their injury.
See Uzuegbunam v. Preczewski, 141 S. Ct. 792, 797 (2021); Brito v.
Garland, 22 F.4th 240, 253 (1st Cir. 2021). If the plaintiff fails
at the pleading stage to allege facts demonstrating each element
of standing, "there is no case or controversy for the federal court
to resolve." TransUnion, 141 S. Ct. at 2203 (quoting Casillas v.
Madison Ave. Assocs., Inc., 926 F.3d 329, 333 (7th Cir. 2019));
see Spokeo, 578 U.S. at 338.
Importantly, Wiener does not "automatically satisf[y]"
Article III's requirements simply because the FCRA grants him "a
statutory right and purports to authorize [him] to sue to vindicate
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that right." Spokeo, 578 U.S. at 341. "[E]ven in the context of
a statutory violation," Wiener must allege an injury in fact to
satisfy Article III standing. TransUnion, 141 S. Ct. at 2204
(quoting Spokeo, 578 U.S. at 341); see Plazzi v. FedEx Ground
Package Sys., Inc., 52 F.4th 1, 4 (1st Cir. 2022).
To that end, Wiener asserts that he has plausibly pleaded
two types of harm: (1) out-of-pocket loss in the form of attorney's
fees and costs that he already incurred in the North Carolina
Litigation as a result of the Disclosure; and (2) emotional
distress arising from MIB's invasion of his privacy interests (vis-
à-vis the Disclosure).9 Because we conclude that Wiener's out-of-
pocket loss is sufficient to give him Article III standing to bring
his damages claims under the FCRA, we do not reach his second
standing argument. See Webb, 72 F.4th at 377-78 (declining to
address standing based on alleged emotional distress after
concluding plaintiffs plausibly alleged standing via another
9 We pause to note that Wiener's opening brief focuses almost
exclusively on the injury inquiry, but his reply delves into the
remaining standing elements. MIB does not take issue with this
approach, perhaps because of the district court's focus on the
injury prong. But we do not need to dwell on the upshot of any of
this because, deploying de novo review, we find on this record
that we are amply equipped to tackle a comprehensive standing
analysis. See Hoolahan v. IBC Advanced Alloys Corp., 947 F.3d
101, 115 n.20 (1st Cir. 2020) ("[W]e exercise our discretion to
bypass the issue of . . . waiver and leave the ramifications for
another day, particularly because we will analyze [the
appellant]'s arguments under a de novo standard . . . ." (citation
omitted)).
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basis); Attias v. Carefirst, Inc., 865 F.3d 620, 626 n.2 (D.C.
Cir. 2017) ("Because we conclude that all plaintiffs . . . have
standing to sue . . . based on their heightened risk of future
identity theft, . . . we will not address the other theories of
standing advanced by plaintiffs . . . .").
1. Injury in Fact
Wiener's alleged injury in fact is straightforward: He
claims that after discovery closed in the North Carolina
Litigation, Sager illegally disclosed to AXA information that was
potentially fatal to Wiener's claims in that case. Wiener was
caught off-guard, had to respond "without the typical discovery
methods," and incurred additional attorney's fees and costs in
doing so. In evaluating the allegations in the amended complaint,
we "draw on our judicial experience and common sense . . . and
read the complaint as a whole." Webb, 72 F.4th at 374 (brackets
omitted) (quoting In re Evenflo Co., Inc., Mktg., Sales Pracs. &
Prods. Liab. Litig., 54 F.4th 28, 39 (1st Cir. 2022), cert. denied,
No. 22-1181, 2023 WL 6377930 (U.S. Oct. 2, 2023)).
The docket in the North Carolina Litigation supports
Wiener's allegations. Wiener's negligence claim against AXA was
based on the premise that AXA's erroneous code reporting to MIB
caused him to become virtually uninsurable, as any insurer would
have declined coverage after discovering the four serious medical
conditions listed in his MIB profile. To that end, Wiener's expert
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was prepared to testify that "AXA's inaccurate code reporting to
MIB created an insurmountable obstacle to [Wiener's] insurability
with other carriers." AXA used Sager's declaration to support its
(ultimately unsuccessful) motion in limine to exclude Wiener's
expert. It relied on Sager's declaration to argue that, contrary
to the opinion of Wiener's expert, "MIB [had] confirmed that none
[of its member companies] requested . . . Wiener's MIB codes" or
relied on those codes. And at trial, Sager testified that a search
of Wiener's MIB file revealed no insurer had ever accessed the
codes in his file. The thrust of Sager's declaration and testimony
was that, if no insurer had ever seen the codes AXA inaccurately
reported to MIB, AXA's reporting could not have caused Wiener's
uninsurability.
We find the amended complaint's "allegations sufficient
to meet the minimal plausibility standard for" pleading an Article
III injury. DiCroce, 82 F.4th at 39. The plausibility standard
"does not demand 'a high degree of factual specificity'" in the
context of a motion to dismiss. García-Catalán v. United States,
734 F.3d 100, 103 (1st Cir. 2013) (quoting Grajales v. P.R. Ports
Auth., 682 F.3d 40, 47 (1st Cir. 2012)).10 Viewed as a whole, the
amended complaint demonstrates "that [Wiener] has personally
10 Accordingly, contrary to MIB's suggestion, Wiener was not
required to allege explicitly in the amended complaint "how, when,
where, why and to whom [he] owes or will eventually owe attorney's
fees."
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suffered economic harm in the past as a result of [MIB's] alleged
misconduct," and that is enough at this stage. DiCroce, 82 F.4th
at 39.
Although his substantive claims are based on a statute,
Wiener does not "allege a bare procedural violation [of the FCRA],
divorced from any concrete harm," Spokeo, 578 U.S. at 341, or
"merely seek[] to ensure [MIB]'s 'compliance with [statutory]
law,'" TransUnion, 141 S. Ct. at 2206 (citation omitted). Rather,
he alleges an out-of-pocket loss, a quintessential injury in fact.
See Gustavsen v. Alcon Lab'ys, Inc., 903 F.3d 1, 7-8 (1st Cir.
2018); TransUnion, 141 S. Ct. at 2204; Webb, 72 F.4th at 372.
MIB disagrees, devoting most of its argument on appeal
to undermining Wiener's alleged injury. It cites the general
premise that a plaintiff cannot establish Article III standing "by
bringing suit for the cost of bringing suit" and relies on a number
of cases to support this argument. See, e.g., Steel Co. v.
Citizens for a Better Env't, 523 U.S. 83, 107 (1998) ("[A]
plaintiff cannot achieve standing to litigate a substantive issue
by bringing suit for the cost of bringing suit. The litigation
must give the plaintiff some other benefit besides reimbursement
of costs that are a byproduct of the litigation itself."); Lewis
v. Cont'l Bank Corp., 494 U.S. 472, 480 (1990) ("[An] interest in
attorney's fees is, of course, insufficient to create an Article
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III case or controversy where none exists on the merits of the
underlying claim.").
None of the cases MIB cites is on point. Wiener is not
"bringing suit for the cost of bringing suit," as he does not seek
"reimbursement of [fees or] costs that are a byproduct of [this]
litigation" against MIB. Steel Co., 523 U.S. at 107. Rather, he
seeks damages to recover legal expenses that he already incurred
in a separate lawsuit against a different party. As the Sixth
Circuit has recognized, "[f]ees from a separate
proceeding . . . do not raise typical standing concerns because
the harm has already materialized, and the plaintiff cannot
manufacture standing simply by filing a new lawsuit." Hurst v.
Caliber Home Loans, Inc., 44 F.4th 418, 423 (6th Cir. 2022)
(emphasis added) (concluding that attorney's fees allegedly
incurred by mortgagor in separate, foreclosure action due to
mortgagee's violation of real estate statute satisfied injury-in-
fact requirement to confer standing); see, e.g., Bouye v. Bruce,
61 F.4th 485, 490 (6th Cir. 2023) (concluding that plaintiff had
standing because she had not "plead[ed] a mere statutory violation"
but also an injury, as "she had to defend against a state lawsuit
that [the defendant] had no right to bring in the first place").11
11In its Rule 28(j) letter, MIB also directs our attention
to the Seventh Circuit's recent decision in Choice v. Kohn L. Firm,
S.C., 77 F.4th 636 (7th Cir. 2023). In Choice, the plaintiff
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MIB nevertheless contends that "it makes little sense
that the . . . Disclosure, a seemingly benign (and truthful and
accurate) communication, somehow materially caused Wiener
financial harm above and beyond that already incurred in the normal
course of the North Carolina [L]itigation." But drawing all
reasonable inferences from the amended complaint's factual
allegations in Wiener's favor, we conclude otherwise.
As Wiener claims, the North Carolina Litigation's public
filings suggest that the Disclosure was engineered to end that
case by undermining any causal connection between AXA's actions
and Wiener's later inability to secure life insurance. Using our
common sense and judicial experience, we find it entirely plausible
that Wiener would have expended additional fees and costs to
address this potentially litigation-ending evidence. The truth or
alleged that the defendants' contradictory statements in a
separate, debt collection lawsuit caused him to take the
"detrimental step" of litigating the dispute rather than settling
the debt. See 77 F.4th at 637-39. The Seventh Circuit concluded
that Article III standing was lacking because the plaintiff's
complaint contradicted his claim that the defendants had induced
him to litigate; rather, the complaint indicated the defendants'
actions simply left him "confused about the proper course of
action" to take and so he consulted an attorney. Id. at 639
(citing Seventh Circuit precedent that "confusion leading one to
hire a lawyer [and pay an appearance fee] is insufficient to
establish standing"). Here, by contrast, Wiener's theory of
standing does not rest on mere confusion about next steps.
Instead, he alleges that MIB forced his hand and required him to
respond defensively to its actions, expending extra attorney's
fees and costs in the process. We therefore find Choice
inapposite.
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accuracy of the Disclosure, although potentially relevant to
Wiener's substantive claims under the FCRA, is not relevant to his
standing argument based on an out-of-pocket loss. See Hochendoner,
823 F.3d at 734 (conducting standing inquiry without regard to
"the validity of any of the plaintiffs' [substantive] claims as a
matter of law or the adequacy of their pleading to state a claim
under Rule 12(b)(6)").
MIB also argues that Wiener's alleged injury is
conjectural and hypothetical and therefore "squarely precluded" by
Clapper v. Amnesty Int'l USA, 568 U.S. 398 (2013). MIB
misunderstands Clapper and Article III jurisprudence generally.
In Clapper, the plaintiffs voluntarily engaged in costly and
burdensome measures that they claimed were necessary to protect
their communications from a government surveillance program. See
568 U.S. at 402, 415. The Supreme Court rejected this basis for
standing because the plaintiffs could not show that they had been,
or were likely to be, subjected to surveillance. See id. at 416.
The Court held that the plaintiffs could not "manufacture standing
merely by inflicting harm on themselves based on their fears of
hypothetical future harm that is not certainly impending." Id.;
see id. at 409 (explaining that "threatened injury must be
certainly impending to constitute an injury in fact" (quoting
Whitmore v. Arkansas, 495 U.S. 149, 158 (1990))).
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Given that the Disclosure already occurred and Wiener
already spent money to respond to it, his harm is not hypothetical
or conjectural and MIB's arguments based on Clapper make little
sense. Importantly, our "inquiry into standing must be based on
the facts as they existed when the action was commenced." Roe v.
Healey, 78 F.4th 11, 20 (1st Cir. 2023) (quoting Ramírez v. Sánchez
Ramos, 438 F.3d 92, 97 (1st Cir. 2006)). At the time he filed the
amended complaint, Wiener had incurred attorney's fees and costs
because of the Disclosure and had not been reimbursed for those
fees or costs.
We address two final points by MIB to wrap up our injury-
in-fact inquiry. First, MIB suggests that, at the hearing on the
motion to dismiss, Wiener intentionally limited his standing
argument to the invasion of privacy harm. The hearing transcript
undermines this assertion. The hearing lasted no more than five
minutes before the district court delivered its oral decision,
without any opportunity for Wiener's counsel to address the second
point she had teed up at the start of her argument. There was no
intentional waiver here. Second, MIB perfunctorily asserts that
Wiener's alleged injury is not particularized. Even if MIB has
not waived this argument, it is meritless. Wiener's loss of his
own money affected him "in a personal and individual way." Spokeo,
578 U.S. at 339 (citation omitted); see Gustavsen, 903 F.3d at 7(finding an "out-of-pocket loss of money" to be a particularized
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injury). In sum, Wiener has sufficiently alleged an injury in
fact.
2. Causation
Wiener's alleged financial harm is also fairly traceable
to MIB's conduct. Taking the amended complaint's well-pleaded
facts as true and indulging all reasonable inferences in Wiener's
favor, it is plausible that Wiener could have avoided additional
attorney's fees and costs had the Disclosure not occurred.
Although AXA ultimately leveraged the Disclosure in the North
Carolina Litigation, it was Sager who voluntarily shared Wiener's
FCRA-protected information with AXA, "knowing that there was some
controversy" between AXA and Wiener. Accordingly, the Disclosure
was not "the result of the independent action of" AXA. Lyman, 954
F.3d at 361 (brackets omitted) (quoting Lujan, 504 U.S. at 560);
see Dep't of Com. v. New York, 139 S. Ct. 2551, 2566 (2019) (finding
causation where respondents' theory of standing relied "on the
predictable effect of [the petitioner]'s action on the decisions
of third parties").
MIB nonetheless argues that any harm that Wiener
experienced was "self-inflicted," again citing Clapper. MIB
continues to misread that case. In Clapper, the Supreme Court
concluded that, because the plaintiffs did "not face a threat of
certainly impending interception under [the Foreign Intelligence
Surveillance Act], the costs that they [had] incurred to avoid
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surveillance [were] simply the product of their fear of
surveillance." 568 U.S. at 417. The costs were therefore "self-
inflicted" rather than traceable to the government's activities.
See id. at 418.
The type of self-inflicted harm at issue in Clapper is
not implicated here. Unlike the plaintiffs in Clapper, Wiener did
not incur costs to prevent a speculative future harm. Instead, he
responded, after the fact, to critical evidence introduced by his
adversary in a lawsuit. In doing so, he incurred additional
litigation-related expenses. Responding to important evidence is
part and parcel of all litigation. Accordingly, we find entirely
unpersuasive MIB's argument that Wiener's decision to respond to
evidence that could have been fatal to his claims constituted
"self-inflicted" harm.
3. Redressability
Finally, a damages award against MIB would redress
Wiener's alleged financial harm. See Gustavsen, 903 F.3d at 9("Nor can there be any doubt that plaintiffs' financial injury can
be redressed by damages."); see also Dantzler, Inc. v. Empresas
Berríos Inventory & Operations, Inc., 958 F.3d 38, 49 (1st Cir.
2020) (explaining that a plaintiff "must show that the court can
fashion a remedy that will at least lessen [their] injury" but
"need not demonstrate that [their] entire injury will be redressed
by a favorable judgment").
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Recycling its earlier arguments, MIB claims that the
possibility that Wiener may recover attorney's fees and costs in
the North Carolina Litigation means that he has failed to meet the
redressability prong. In MIB's view, Wiener's "claims of harm
here would be rendered moot" if he were awarded fees and costs in
the North Carolina Litigation. "The burden of establishing
mootness rests squarely on the party raising it, and '[t]he burden
is a heavy one.'" Mangual v. Rotger-Sabat, 317 F.3d 45, 60 (1st
Cir. 2003) (alteration in original) (quoting United States v. W.T.
Grant Co., 345 U.S. 629, 633 (1953)). At this stage, MIB has
failed to meet that burden.
Indeed, MIB's hypothesis that Wiener may recover
attorney's fees and costs in the North Carolina Litigation, and
that any such award may include full reimbursement for his costs
and expenses in responding to the Disclosure, is pure speculation.
It in no way alters the basic facts alleged here: Wiener has
incurred an out-of-pocket loss, that loss remains unreimbursed,
and the district court could remedy that loss with a damages
award.12
Moreover, as Wiener notes, the district court in the North
12
Carolina Litigation dismissed his claim seeking attorney's fees
prior to trial. See Wiener, No. 3:18-cv-00106, ECF No. 1-2, at
11-12 (W.D.N.C. Mar. 8, 2018) (complaint requesting attorney's
fees in connection with claim for unfair and deceptive trade
practices); Wiener v. AXA Equitable Life Ins. Co., No. 3:18-cv-
00106, 2020 WL 3035222, at *9 (W.D.N.C. June 5, 2020) (order
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B. Rule 12(b)(6) Arguments
Because the district court did not address MIB's Rule
12(b)(6) arguments, we leave it to the district court to consider
those arguments on remand. See Webb, 72 F.4th at 378 (remanding
case for district court to consider alternative bases for
dismissal); In re Evenflo, 54 F.4th at 41 (same). We express no
view on those arguments.
IV. CONCLUSION
For all these reasons, we reverse the district court's
order dismissing Wiener's amended complaint on Article III
standing grounds and remand for further proceedings consistent
with this opinion.
dismissing, inter alia, claim for unfair and deceptive trade
practices).
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