Stuart Weichsel v. JP Morgan Chase Bank NA ( 2023 )

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
______________
No. 21-3371
______________
STUART WEICHSEL, individually and on behalf of all
others similarly situated,
Appellant
v.
JP MORGAN CHASE BANK, N.A.
______________
On Appeal from the United States District Court
for the District of New Jersey
(No. 2-20-cv-17849)
U.S. District Judge: Honorable Madeline C. Arleo
______________
Argued on March 8, 2023
______________
Before: SHWARTZ, BIBAS, and AMBRO, Circuit Judges.
(Filed: April 11, 2023)
Brian L. Bromberg [ARGUED]
Bromberg Law Office
352 Rutland Road
#1
Brooklyn, NY 11225
Counsel for Appellant
Olivia Greene
Noah A. Levine [ARGUED]
Alan E. Schoenfeld
WilmerHale
7 World Trade Center
250 Greenwich Street
New York, NY 10007
Counsel for Appellee
______________
OPINION OF THE COURT
______________
SHWARTZ, Circuit Judge.
Plaintiff Stuart Weichsel sued JP Morgan Chase Bank,
N.A. (“Chase”) for its alleged failure to itemize the annual fees
on his credit card renewal notice in violation of the Truth in
Lending Act (“TILA”), 15 U.S.C. § 1601 et seq. Although
Weichsel has standing, he failed to state a TILA violation
because there is no requirement to itemize annual fees on
2
renewal notices. Therefore, the District Court correctly
dismissed his claim, and we will affirm.
I
A
TILA, and its implementing regulation, Regulation Z
(12 C.F.R. § 1026), require creditors like Chase to make a
series of disclosures before and during the creditor-borrower
relationship. When a creditor solicits a consumer, and at the
time a consumer opens a credit account, a creditor must
disclose certain information, including any annual and periodic
fees, “in the form of a table with headings,” 15 U.S.C.
§ 1637(c)(1)(A)(ii)(I); 12 C.F.R. § 1026.60(a)(2)(i); 12 C.F.R.
§ 1026.6(b)(1), (2)(ii)(A); 12 C.F.R. § 1026.60(b)(2)(i). After
the credit account is opened, the creditor must make periodic
disclosures each billing statement, including the charges and
fees imposed during the billing cycle. 15 U.S.C. § 1637(b)(4);
12 C.F.R. § 1026.7(b)(6)(iii). TILA and Regulation Z require
that the charges and fees on these periodic statements be
“itemized.” 15 U.S.C. § 1637(b)(4); 12 C.F.R. §
1026.7(b)(6)(iii). 1
1
The statute requires disclosure of “[t]he amount of any
finance charge added to the account during the [billing] period,
itemized to show the amounts, if any, due to the application of
percentage rates and the amount, if any, imposed as a minimum
or fixed charge.” 15 U.S.C. § 1637(b)(4). The regulation
provides:
Charges imposed as part of the plan other than charges
attributable to periodic interest rates must be grouped
3
TILA also requires additional disclosures before a credit
account is renewed. 15 U.S.C. § 1637(d), (i); 12 C.F.R. §
1026.9. If a creditor imposes annual fees to renew an account,
then the creditor must send the borrower a notice at least thirty
days before the account renewal date (or one billing cycle
before the mailing of the billing statement charging the annual
fee). 15 U.S.C. § 1637(d)(1); 12 C.F.R. § 1026.9(e)(1). 2 This
renewal notice must provide “clear and conspicuous disclosure
of,” 15 U.S.C. § 1637(d)(1), among other things, “[a]ny annual
fee, other periodic fee, or membership fee imposed for the
issuance or availability of a credit card, including any account
maintenance fee or other charge imposed based on activity or
inactivity for the account during the billing cycle,” 15 U.S.C.
§ 1637(c)(1)(A)(ii)(I) (referenced in § 1637(d)(1)(B)); see also
12 C.F.R. § 1026.60(b)(2)(i) (referenced in § 1026.9(e)(1)(i))
(similar).3
together under the heading Fees, identified consistent
with the feature or type, and itemized, and a total of
charges, using the term Fees, must be disclosed for the
statement period and calendar year to date, using a
format substantially similar to Sample G–18(A) in
appendix G to this part.
12 C.F.R. § 1026.7(b)(6)(iii) (emphasis omitted).
2
Regulation Z permits creditors to include the renewal
notice in the borrower’s monthly billing statement. 12 C.F.R.
§ 1026.9(e)(2).
3
Unlike account-opening disclosures, the fees in a
renewal notice “need not appear in a tabular format.” 12
C.F.R. § 1026, Supp. I, Part 1, cmt. 9(e), ¶ 2.
4
B
Plaintiff holds a credit card account issued by Chase. 4A cardmember agreement governs the account. 5 The
agreement discloses that Plaintiff’s account has an “Annual
Membership Fee” that will be added to his billing statement
once a year. App. 36. The agreement also states Plaintiff may
ask Chase to issue an additional card for an authorized user.
The cardmember agreement includes a “Rates and Fees Table”
that discloses the annual membership fee, and explains the fee
is $450 plus $75 for each additional card. App. 33. Plaintiff
does not dispute that his total annual fee was $525 because he
had “previously opted to include one additional authorized
user” on his credit card account. Appellant’s Br. at 3.
Plaintiff alleges that his December 2019 billing
statement included a renewal notice. The notice appeared at
the bottom of the first page of the statement under a title written
in large font and all capitals: “YOUR ACCOUNT
MESSAGES.” App. 25, 52. The message stated that
Plaintiff’s “annual membership fee in the amount of $525.00
will be billed on 02/01/2020” and directed him to “[p]lease see
the Annual Renewal Notice section of your statement
disclosures for more information.” App. 25, 52. That section
4
All facts are drawn from Plaintiff’s amended
complaint.
5
Because the agreement and other documents discussed
herein are integral to the complaint, we may consider them.
Schmidt v. Skolas, 770 F.3d 241, 249 (3d Cir. 2014).
5
appeared on the following page and set forth the annual fee,
including how it would be charged and how Plaintiff could
avoid it. The renewal notice did not, however, specify that the
total annual fee of $525 comprised $450 for the primary
cardholder and $75 for the additional card for an authorized
user. Plaintiff does not dispute that his total annual fee was
$525 but rather complains that the renewal notice did not
“individually itemize” the fee’s two components: the base fee
of $450 and the additional fee of $75. App. 16.
The annual membership fee later appeared as two
separate fees on Plaintiff’s February 2020 billing statement.
The billing statement contained one charge for $450 and
another for $75, and each was labeled “ANNUAL
MEMBERSHIP FEE.” App. 59. The statement advised
Plaintiff, on a separate page, that the “annual membership fee
is non-refundable unless you notify us that you wish to close
your account within 30 days or one billing cycle (whichever is
less) after we provide the statement on which the annual
membership fee is billed.” App. 58. Plaintiff paid the full $525
fee in February 2020 but now claims that “[h]ad [he] been
aware” he could retain access to his credit card for $450, he
would have paid only that amount. App. 21.
Plaintiff filed a putative class action complaint, alleging
that Chase’s failure to itemize each component of the renewal
fee in the December 2019 renewal notice violated TILA and
Regulation Z. Plaintiff seeks $1 million on behalf of himself
and the putative class, or up to $5,000 in individual statutory
damages. Chase filed a motion to dismiss the amended
complaint pursuant to Federal Rules of Civil Procedure
12(b)(1), for lack of Article III standing, and 12(b)(6), for
failure to state a claim upon which relief can be granted.
6
The District Court granted the motion, holding that
Plaintiff had standing because he suffered an economic injury
based on his assertion that he would not have paid the full $525
if he had known it included the additional card fee, but he had
failed to allege a TILA violation because neither “TILA nor
Regulation Z expressly mandates disclosure of each individual
component of the total annual fee for a credit card account in a
renewal notice,” App. 6. The Court observed that Regulation
Z requires itemization of fees on other disclosures, such as fees
reported on a billing statement, but lacks such a requirement in
the provisions governing renewal notices, which “strongly
suggests that no such requirement was intended.” App. 6.
Plaintiff appeals.
II6
A
We first address Plaintiff’s standing. Article III of the
Constitution “confines the federal judicial power to the
resolution of ‘Cases’ and ‘Controversies.’” TransUnion LLC
v. Ramirez, 141 S. Ct. 2190, 2203 (2021). To satisfy the “case-
or-controversy requirement,” a plaintiff must establish
6
Plaintiff invoked jurisdiction in the District Court
under 28 U.S.C. §§ 1331 and 1337 and under 15 U.S.C. §
1640(e). Standing is a jurisdictional question that we review
de novo. Blunt v. Lower Merion Sch. Dist., 767 F.3d 247, 266,
280 (3d Cir. 2014). Similarly, we review a district court’s
decision to grant a motion to dismiss de novo. Krieger v. Bank
of Am., N.A., 890 F.3d 429, 437 (3d Cir. 2018).
7
“standing to sue.” Raines v. Byrd, 521 U.S. 811, 818 (1997).
To do so at the pleading stage, a plaintiff must adequately
allege that he “(1) suffered an injury in fact, (2) that is fairly
traceable to the challenged conduct of the defendant, and (3)
that is likely to be redressed by a favorable judicial decision.”
Spokeo, Inc. v. Robins, 578 U.S. 330, 338 (2016). “In
assessing whether a plaintiff has carried this burden, we
separate our standing inquiry from any assessment of the
merits of the plaintiff’s claim,” and “assume for the purposes
of our standing inquiry that a plaintiff has stated valid legal
claims.” Cottrell v. Alcon Lab’ys, 874 F.3d 154, 162 (3d Cir.
2017).
To establish injury in fact, a plaintiff must assert that he
suffered “an invasion of a legally protected interest” that is
“concrete and particularized” and “actual or imminent.”
Spokeo, 578 U.S. at 339 (quoting Lujan v. Defs. of Wildlife,
504 U.S. 555, 560 (1992)). To be concrete, the injury must be
“real, and not abstract,” id. at 340 (internal quotation marks
omitted), “even in the context of a statutory violation,” id. at
341. An alleged injury is “particularized” when it has
“affect[ed] the [P]laintiff in a personal and individual way.”
Id. at 339 (quoting Lujan, 504 U.S. at 560 n.1).
Plaintiff alleges that he suffered a $75 economic injury
by paying the full $525 renewal fee. 7 Typically, a plaintiff’s
7
Plaintiff’s complaint also suggests a theory of
informational injury, but he failed to raise this basis for
standing in his briefs and so he has not preserved this argument.
See Potter v. Cozen & O’Connor, 46 F.4th 148, 156 (3d Cir.
2022); Nichols v. City of Rehoboth Beach, 836 F.3d 275, 282
n.1 (3d Cir. 2016).
8
allegation of financial harm satisfies “each of [the] components
[of the injury-in-fact requirement].” Cottrell, 874 F.3d at 163.
By alleging monetary harm of $75, Plaintiff has satisfied the
injury-in-fact requirement. See Czyzewski v. Jevic Holding
Corp., 580 U.S. 451, 464 (2017) (“For standing purposes, a
loss of even a small amount of money is ordinarily an
‘injury.’”).
Plaintiff also satisfies the traceability element. It
requires that “the alleged injury-in-fact is causally connected
and traceable to an action of the defendant[].” Edmonson v.
Lincoln Nat’l Life Ins. Co., 725 F.3d 406, 418 (3d Cir. 2013)
(alteration in original) (quoting Pitt News v. Fisher, 215 F.3d
354, 360 (3d Cir. 2000)). “We have described this requirement
as akin to ‘but for’ causation and found the traceability
requirement met even where the conduct in question might not
have been a proximate cause of the harm, due to intervening
events.” Id. Plaintiff has adequately alleged that his injury is
“causally connected” to Chase’s conduct. Plaintiff asserts that
(1) he received and reviewed the renewal notice, which
identified the “pending annual membership fee of $525.00,”
App. 15; (2) he subjectively “understood that the Renewal
Notice . . . represented that this fee had to be paid in its entirety
for continued availability of credit,” App. 20; (3) he “paid the
$525.00 fee,” App. 21; and (4) had he “been aware” of the
separate $75 additional card fee, he would not have paid it,
App. 21. Plaintiff has thus plausibly alleged that Chase caused
him economic injury by failing to itemize the annual fees.
It is immaterial to the traceability requirement that the
February 2020 credit card statement advised Plaintiff he could
avoid the additional charge by notifying Chase that he “wished
to close [his] account within 30 days.” App. 58. Even though
9
Plaintiff “could have prevented” the harm from occurring by
taking a particular action, such as cancelling one or both cards
assigned to the account either upon receipt of the December
2019 renewal notice or when he received the February 2020
billing statement, his injury remains fairly traceable to the
issuance of the non-itemized notice that required payment of
$525 to keep the account open. Edmondson, 725 F.3d at 418.
Therefore, Plaintiff has satisfied the traceability requirement.
Plaintiff’s injury is also redressable. This element is
established by “showing that the injury will be redressed by a
favorable decision.” Const. Party of Pa. v. Aichele, 757 F.3d
347, 368 (3d Cir. 2014) (internal quotation marks omitted). If
Plaintiff prevails, his injury could be redressed by a favorable
decision because a court could award him actual and statutory
damages, both of which TILA authorizes. 15 U.S.C. § 1640(a)
(authorizing actual damages and statutory damages).
Chase counters by arguing that Plaintiff’s allegations
fall short because his injury is not tied to the statute’s
“underlying concrete interest.” Resp. Br. at 17 (quoting Kamal
v. J. Crew Grp., Inc., 918 F.3d 102, 112 (3d Cir. 2019)). That
is, he “makes no allegation whatsoever that Chase’s notice
failed to protect the interests it is designed to serve—to ensure
the cardholder is adequately reminded of a coming obligation.”
Id. at 16.
Chase is mistaken. Its argument conflates (1) standing
and causes of action as well as (2) necessary and sufficient
conditions. First, while a statutory violation gives Plaintiff his
cause of action, 15 U.S.C. § 1640, that statutory cause of action
is distinct from his Article III injury, see TransUnion, 141 S.
Ct. at 2214. Because he alleges a monetary injury, he need not
10
allege any additional injury with a connection to the statute’s
purpose. Second, though a procedural violation might confer
standing to sue if there is an impact on an underlying concrete
interest, we need not decide whether Plaintiff here has standing
under that theory because a monetary injury is always enough.
Plaintiff has plausibly traced a connection between the
purported procedural violation and his monetary injury, and so
he has standing. See id. at 2205 (requiring “downstream
consequences from failing to receive the required
information”).
Because Plaintiff has plausibly alleged that he suffered
an injury in fact that is fairly traceable to Chase’s conduct and
could be redressed by a favorable decision, he has established
Article III standing to bring this suit.
B
Although Plaintiff has standing, he has failed to allege
that the Chase renewal notice violated TILA or Regulation Z.
Under TILA and Regulation Z, a renewal notice must contain
“clear and conspicuous disclosure[s]” of the following:
(1) “the date by which, the month by which, or the billing
period at the close of which, the account will expire if not
renewed”; (2) “[a]ny annual fee, other periodic fee, or
membership fee imposed for the issuance or availability of a
credit card, including any account maintenance fee or other
charge imposed based on activity or inactivity for the account
during the billing cycle”; 8 and (3) “the method by which the
8
The obligation to disclose the fee is found in the
statute’s reference to two other subsections. The statute
provides that a renewal notice must disclose “the information
11
consumer may terminate continued credit availability under the
account.” 15 U.S.C. § 1637(d)(1); see also 12 C.F.R.
§ 1026.9(e)(1) (setting forth substantially similar
requirements). The renewal notice regulation further provides
that a renewal notice must “reflect the terms actually in effect
at the time of renewal.” 12 C.F.R. § 1026, Supp. I, Part 1, cmt.
9(e), ¶ 3.
There is no dispute that the notice provided the date on
which the account would close if not renewed and the method
described in subsection (c)(1)(A) or (c)(4)(A) that would apply
if the account were renewed . . . .” 15 U.S.C. § 1637(d)(1)(B).
Those two “subsection[s]” are contained in the provisions that
govern account-opening disclosures. Subsection (c)(1)(A)
governs credit cards and (c)(4)(A) covers “charge cards.” Both
require disclosure of “[a]ny annual fee, other periodic fee, or
membership fee imposed for the issuance or availability of a
credit card, including any account maintenance fee or other
charge imposed based on activity or inactivity for the account
during the billing cycle.” 15 U.S.C. § 1637(c)(1)(A)(ii)(I); see
also 15 U.S.C. § 1637(c)(4)(A)(i) (similar). The regulation
governing renewal notices imposes a nearly identical
requirement by referencing the regulations governing
application and solicitation disclosures. 12 C.F.R.
§ 1026.9(e)(1)(i) (requiring that a renewal notice include the
“disclosures contained in § 1026.60(b)(1) through (b)(7) that
would apply if the account were renewed”); 12 C.F.R.
§ 1026.60(b)(2)(i) (requiring disclosure of “[a]ny annual or
other periodic fee that may be imposed for the issuance or
availability of a credit or charge card, including any fee based
on account activity or inactivity; how frequently it will be
imposed; and the annualized amount of the fee”).
12
for cancelling Plaintiff’s account. Moreover, the notice
disclosed the terms actually in effect at the time of renewal
because, as stated in Plaintiff’s cardholder agreement, Plaintiff
was required to pay an annual fee of $525 for the primary card
and the additional card for an authorized user. The notice
therefore clearly and conspicuously disclosed the “annual fee .
. . imposed for the issuance or availability of a credit card,” 15
U.S.C. § 1637(c)(1)(A)(ii)(I); 12 C.F.R. § 1026.60(b)(2)(i), as
required under “the terms actually in effect at the time of
renewal,” 12 C.F.R. § 1026, Supp. I, Part 1, cmt. 9(e), ¶ 3.
Plaintiff’s contention that TILA requires itemization of
each component of the renewal fee lacks any basis. First, while
there is an itemization requirement in the statutes and
regulations governing periodic disclosures, the same
requirement is not included in the statutes and regulations
applicable to renewal notices. See 12 C.F.R.
§ 1026.7(b)(6)(iii) (requiring that each separate “[c]harge[]
imposed as part of the plan” during a billing period must be
“grouped together . . . and itemized”); see also 15 U.S.C. §
1637(b)(4) (similar). Where a statute or regulation uses
“specific language in one [provision] but different language in
another,” the Court “presume[s] different meanings were
intended.” Doe v. Mercy Cath. Med. Ctr., 850 F.3d 545, 554
(3d Cir. 2017) (citing Sosa v. Alvarez-Machain, 542 U.S. 692,
711 n.9 (2004)). The lack of an express itemization
requirement in the renewal notice provisions indicates that no
such requirement was intended. 9
9
Similarly, the official commentary for the renewal
notice regulation provides that “[i]f a renewal fee is billed more
often than annually, the renewal notice should be provided
each time the fee is billed” but “the fee need not be disclosed
13
The Supreme Court’s instruction to construe TILA
narrowly bolsters this conclusion. The Court has stated that
TILA and its regulations reflect a policy that “meaningful
disclosure” does not necessarily mean “more disclosure,” Ford
Motor Credit Co. v. Milhollin, 444 U.S. 555, 568 (1980)
(emphasis omitted), and has further cautioned that “creditors
need sure guidance through the ‘highly technical’ [TILA],” id.
at 566. Accordingly, courts should not “read into the statute
the necessity for particularized disclosure beyond what the
plain language of the statute requires.” Singer v. Am. Express
Centurion Bank, No. 17-CV-2507, 2018 WL 2138626, at *4
(S.D.N.Y. May 9, 2018).
Second, renewal notices are not subject to the same
disclosure requirements as solicitations and applications,
which are provided to consumers before the parties have any
relationship. At that point, a solicitation or application must
disclose “optional” additional card fees because the creditor
does not yet know whether the consumer will add an
authorized user to the account. 12 C.F.R. § 1026, Supp. I, Part
4, cmt. 60(b)(2), ¶ 2. At account renewal, however, TILA and
Regulation Z require only that a creditor disclose terms “that
would apply if the account were renewed.” 15 U.S.C.
§ 1637(d)(1)(B); 12 C.F.R. § 1026.9(e)(i); see also 12 C.F.R.
§ 1026, Supp. I, Part 1, cmt. 9(e), ¶ 3 (requiring that a renewal
notice “reflect the terms actually in effect at the time of
as an annualized amount.” 12 C.F.R. § 1026, Supp. I, Part 1,
cmt. 9(e), ¶ 5. While this does not expressly require
itemization as other parts of the regulation do, it demonstrates
that the agency was sensitive to circumstances in which more
granular disclosure is necessary.
14
renewal”).10
This conclusion is consistent with the purpose of TILA
and Regulation Z. Before a consumer opens his account, he
needs more detailed disclosures to be fully informed of the
obligations he would take on. Household Credit Servs., Inc. v.
Pfennig, 541 U.S. 232, 243 (2004). At account renewal, the
“initial credit choice” has been made and thus detailed
disclosures do not “particularly enhance[]” TILA’s “primary
goal[]” of ensuring that consumers are aware of their
responsibilities when they first enter a credit agreement. Id.(quoting 45 Fed. Reg. 80649 (1980)).
Thus, neither TILA nor Regulation Z required Chase to
itemize in the renewal notice the fees to be paid to keep
Plaintiff’s account open.
III
For these reasons, we will affirm.
10
Moreover, an argument that the words “a credit card”
in the regulation means that the credit card company needs to
provide separate information about each card ignores
Regulation Z’s rules of construction, which provide that
“[w]here appropriate, the singular form of a word includes the
plural form.” 12 C.F.R. § 1026.2(b)(1). Applying that rule,
the renewal regulation is properly understood as requiring
disclosure of “[a]ny annual fee[s]” for “credit or charge
card[s]” that would apply “if the account were renewed.” 12
C.F.R. § 1026.9(e)(1)(i) (citing 12 C.F.R. § 1026.60(b)(2)(i));
12 C.F.R. § 1026.60(b)(2)(i).
15