On July 7, 2009, the U.S. District Court for the Southern District of New York ruled that the Federal Fair Credit Reporting Act (“FCRA”) preempted an identity exposure plaintiff’s state law claims for, among other things, negligence, breach of contract, and violation of the New York Deceptive Trade Practices Act (“DTPA”).

In Willey v. J.P. Morgan Chase, N.A., No. 09 Civ. 1397 (CM), 2009 WL 1938987 (S.D.N.Y. July 7, 2009), the plaintiff sued J.P. Morgan Chase, N.A. (“Chase”) after Chase issued a press release announcing that the personal information of approximately 2.6 million current and former holders of a Chase-Circuit City credit card had been mistakenly identified as trash and thrown out. The plaintiff brought eight causes of action against Chase on behalf of himself and all persons whose personal information was thrown out. These causes of action included both willful and negligent violations of the FCRA, negligence and negligence per se, breach of implied contract, breach of contract, violation of the DTPA and breach of bailment. Chase filed a motion to dismiss under Fed. R. Civ. P 12(b)(6) for failure to state a claim.

With respect to the plaintiff’s FCRA claims, the Court held that the plaintiff’s complaint fell well short under pleading standards articulated in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009), because the plaintiff failed to “make factual allegations with enough specificity to plausibly allege that Chase violated OCC regulations.” Accordingly, the Court dismissed these claims as formulaic recitations of the elements of the plaintiff’s cause of action. The Court also noted that even if the plaintiff could amend his complaint to satisfactorily plead these causes of action, they would be barred by the FCRA’s statute of limitations.


With respect to the plaintiff’s state law claims, the Court found that the FCRA preempts the claims. Specifically, the Court noted that Chase was regulated by the Office of the Comptroller of the Currency (“OCC”) and that the OCC’s Interagency Guidelines Establishing Information Security Standards, promulgated pursuant to FCRA, touch on precisely the conduct about which the plaintiff was complaining. The Court stated that “Willey’s . . . claims boil down to a rephrasing of the allegation that Chase failed to follow the OCC Guidelines in violation of the FCRA.” As such, the Court ruled that the FCRA preempted all of the plaintiff’s state law claims. In addition, relying on Pisciotta v. Old National Bancorp (see our blog post here), Shafran v. Harley Davidson and Caudle v. Towers, Perrin, Forster & Crosby, Inc., the Court found that the plaintiff failed to show any actual damages sufficient to support his claims. Consequently, the Court granted Chase’s motion to dismiss in its entirety.