17‐2212‐cv (L)
Schwartz v. HSBC Bank USA, N.A.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY
ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE
OF APPELLATE PROCEDURE 32.1 AND THIS COURTʹS LOCAL RULE 32.1.1. WHEN CITING A
SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE
FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION ʺSUMMARY ORDERʺ). A
PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED
BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second
Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in
the City of New York, on the 13th day of September, two thousand eighteen.
PRESENT: ROBERT D. SACK,
REENA RAGGI,
DENNY CHIN,
Circuit Judges.
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BRUCE SCHWARTZ, individually and on behalf of
all others similarly situated,
Plaintiff‐Appellant‐Cross‐Appellee,
v. 17‐2212‐cv, 17‐2309‐cv
HSBC BANK USA, N.A.,
Defendant‐Appellee‐Cross‐Appellant.
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FOR PLAINTIFF‐APPELLANT‐ BRIAN BROMBERG, Bromberg Law Office,
CROSS‐APPELLEE: P.C., New York, New York (Harley Schnall,
Law Office of Harley Schnall, New York, New
York, on the brief).
FOR DEFENDANT‐APPELLEE‐ LOUIS SMITH (Rebecca Garibotto Zisek, on
CROSS‐APPELLANT: the brief), Greenberg Traurig, LLP, Florham
Park, New Jersey.
Appeal from the United States District Court for the Southern District of
New York (Failla, J.).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the judgment of the district court is AFFIRMED.
Plaintiff‐appellant‐cross‐appellee Bruce Schwartz brings suit on behalf of
himself and all others similarly situated against defendant‐appellee‐cross‐appellant
HSBC Bank USA, N.A. (ʺHSBCʺ) alleging that HSBC violated and continues to violate
certain provisions of the Truth in Lending Act (ʺTILAʺ), 15 U.S.C. §§ 1601‐1667f, and its
implementing regulation, Regulation Z, 12 C.F.R. Part 1026, stemming from Schwartzʹs
holding of a personal‐use open end consumer credit card account with HSBC. We
assume the partiesʹ familiarity with the underlying facts, procedural history, and issues
on appeal.
This appeal centers on a claim in Schwartz’s Second Amended Complaint
(the ʺSACʺ) which alleges that HSBC failed to warn him, in violation of the TILA, 15
U.S.C. § 1637(b)(12)(B), that late payments on his credit card balance would result in the
imposition of a penalty annual percentage rate or APR (the ʺLate Payment Warning
Claimʺ). Schwartz does not allege that he was ever charged such a penalty, but rather
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contends that the violation of the TILA is sufficient by itself to demonstrate standing
under Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016).
HSBC moved to dismiss pursuant to Federal Rule of Civil Procedure
12(b)(1) based on the absence of Article III standing. On January 9, 2017, the district
court dismissed the SAC for failure to allege a plausibly concrete and particularized
injury. The district court did not grant leave to amend because it was not requested by
Schwartz and instructed that the case be closed.
On January 23, 2017, Schwartz filed a Motion to Reopen the Case and
Vacate the Judgment or for Leave to File Third Amended Complaint Nunc Pro Tunc.
The district court denied the motion.
Schwartz appealed.1 HSBC cross‐appealed an earlier ruling of the district
court, which rejected HSBCʹs argument that the Late Payment Warning Claim was
untimely and precluded by collateral estoppel.
We review the granting of a motion to dismiss for lack of subject matter
jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1) de novo, ʺconstruing the
1 Schwartz’s notice of appeal cites the January 9, 2017 opinion and the resulting judgment
and the June 19, 2017 opinion denying reconsideration. Schwartz does not appeal an earlier
February 9, 2017 opinion concerning claims in an earlier Complaint. Additionally, in his briefs
Schwartz does not address any claim aside from the Late Payment Warning Claim and does not
challenge the district courtʹs decision to not reconsider its earlier ruling or grant leave to amend.
Accordingly, these arguments are waived and the only argument Schwartz has raised on appeal
is his standing to sue. See, e.g., Norton v. Samʹs Club, 145 F.3d 114, 117 (2d Cir. 1998) (noting that
issues not briefed are waived).
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complaint in plaintiffʹs favor and accepting as true all material factual allegations
contained therein.ʺ Katz v. Donna Karan Co., 872 F.3d 114, 118 (2d Cir. 2017).
To satisfy the ʺʹirreducible constitutional minimumʹ of standing,ʺ Schwartz
ʺmust have (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.ʺ Spokeo, 136 S. Ct. at 1547 (citing Lujan v. Defs. of Wildlife, 504 U.S. 555, 560
(1992)). An ʺinjury in factʺ must be a ʺʹlegally protected interestʹ that is both ʹ(a)
concrete and particularized, and (b) actual or imminent, not conjectural or
hypothetical.ʹʺ Crupar‐Weinmann v. Paris Baguette Am., Inc., 861 F.3d 76, 79 (2d Cir. 2017)
(quoting Lujan, 504 U.S. at 560‐61). To be ʺparticularized,ʺ an injury ʺmust affect the
plaintiff in a personal and individualized way.ʺ Spokeo, 136 S. Ct. at 1548 (internal
quotation marks omitted). To be ʺconcrete,ʺ an injury ʺmust actually exist,ʺ i.e., it must
be ʺreal and not abstract.ʺ Id. (internal quotation marks omitted). Certain procedural
violations may alone be enough to demonstrate a concrete injury. Strubel v. Comenity
Bank, 842 F.3d 181, 190 (2d Cir. 2016) (citing Spokeo, 136 S. Ct. at 1549). In Strubel we
formulated a two‐part test to identify concrete harm with respect to such procedural
violations: ʺan alleged procedural violation can by itself manifest concrete injury where
[1] Congress conferred the procedural right to protect a plaintiffʹs concrete interests and
[2] where the procedural violation presents a ʹrisk of real harmʹ to that concrete
interest.ʺ Id. (quoting Spokeo, 136 S. Ct. at 1549).
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When evaluating standing at the pleading stage, ʺgeneral factual
allegations of injury resulting from the defendantʹs conductʺ may be sufficient. John v.
Whole Foods Mkt. Grp., Inc., 858 F.3d 732, 736 (2d Cir. 2017) (internal quotation marks
omitted). Moreover, when a defendant challenges a complaint facially, as HSBC does
here, we ʺdetermine whether the Pleading allege[s] facts that affirmatively and
plausibly suggest that [the plaintiff] has standing to sueʺ and ʺdraw all reasonable
inferences in favor of the plaintiff.ʺ Id. (quoting Carter v. HealthPort Techs., LLC, 822 F.3d
47, 56‐57 (2d Cir. 2016)) (internal quotation marks omitted) (brackets in original)
(alteration omitted).
Schwartz fails to allege either a particularized or concrete ʺrisk of real
harmʺ sufficient to satisfy the injury‐in‐fact requirement of Article III standing. Strubel,
842 F.3d at 190. Indeed, Schwartzʹs pleading regarding injury is limited to three short,
conclusory paragraphs. Two of the paragraphs fail to mention Schwartz and plead only
with relation to the class, alleging in a conclusory manner that the lack of proper
notification ʺimpinge[d] on consumersʹ awareness of the cost of credit.ʺ App. 177, 181.
The third paragraph, the only one of the three to mention Schwartz, concludes without
explanation that the alleged notice deficiencies ʺconstituted a concrete harm and created
a material risk of concrete harm to Schwartz and to other credit consumers,ʺ without
providing any explanation or support. App. 182. The district court correctly concluded
that these conclusory allegations were insufficient. See Ashcroft v. Iqbal, 556 U.S. 662, 678
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(2009). While a bare statutory violation may be sufficient under Spokeo and Strubel to
present a particularized risk of real harm to a concrete interest in certain circumstances,
a plaintiff still must plead those circumstances affirmatively and plausibly. See Spokeo,
136 S. Ct. at 1547 (noting that plaintiff ʺmust clearly allege facts demonstrating each
elementʺ of standing.). Schwartz does not do so here. The pleadings and exhibits
attached thereto show that Schwartz received an initial disclosure about the penalty
APR in his cardmember agreement with HSBC, and that partial disclosure about the
penalty APR appeared on the backside of at least one monthly billing statement sent
during the putative class period. While the TILA requires that such disclosures appear
on the front of each periodic statement, see 15 U.S.C. § 1637(b)(12)(B); 12 C.F.R. §
1026.7(b)(11), Schwartz nowhere pleads how HSBCʹs alleged noncompliance with such
a repetitive notice requirement impinged his own awareness of the cost of credit in light
of the earlier notice received. In these circumstances, his pleadings fail to state a
plausible particular and concrete injury. Accordingly, we identify no error in the
dismissal of Schwartzʹs Late Payment Warning Claim.
We have considered all of Schwartzʹs remaining arguments and find them
to be without merit. Accordingly, we AFFIRM the judgment of the district court.
FOR THE COURT:
Catherine OʹHagan Wolfe, Clerk
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