Freshta Nayab v. Capital One Bank (Usa), Na

FOR PUBLICATION

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

FRESHTA Y. NAYAB, individually and No. 17-55944
on behalf of others similarly situated,
Plaintiff-Appellant, D.C. No.
3:16-cv-03111-
v. CAB-MDD

CAPITAL ONE BANK (USA), N.A.,
Defendant-Appellee. OPINION

Appeal from the United States District Court
for the Southern District of California
Cathy Ann Bencivengo, District Judge, Presiding

Argued and Submitted December 6, 2018
Pasadena, California

Filed October 31, 2019

Before: Johnnie B. Rawlinson and Carlos T. Bea, Circuit
Judges, and Thomas O. Rice, * Chief District Judge.

Opinion by Chief District Judge Rice;
Partial Concurrence and Partial Dissent by
Judge Rawlinson

*
The Honorable Thomas O. Rice, Chief United States District Judge
for the Eastern District of Washington, sitting by designation.
2 NAYAB V. CAPITAL ONE BANK

SUMMARY **

Fair Credit Reporting Act / Standing

The panel reversed the district court’s dismissal of a Fair
Credit Reporting Act claim for lack of standing and failure
to state a claim and remanded the case to the district court.

Plaintiff alleged that Capital One Bank (USA), N.A.,
obtained her credit report for a purpose not authorized by the
FCRA, in violation of 15 U.S.C. § 1681b(f).

The panel held that plaintiff had Article III standing
because a consumer suffers a concrete injury in fact when a
third party obtains her credit report for an unauthorized
purpose, regardless of whether the credit report is published
or otherwise used by that third party.

The panel held that plaintiff stated a claim because a
consumer-plaintiff need allege only that her credit report was
obtained for a purpose not authorized by the statute to
survive a motion to dismiss, and the defendant bears the
burden of pleading it obtained the report for an authorized
purpose. The plaintiff does not have the burden of pleading
the actual purpose behind the defendant’s procurement of
her credit report, and she need allege only facts giving rise
to a reasonable inference that the defendant obtained the
credit report in violation of § 1681b(f)(1).

**
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
 NAYAB V. CAPITAL ONE BANK 3

Judge Rawlinson concurred in part and dissented in part.
Judge Rawlinson agreed that plaintiff had standing to pursue
her action under the FCRA but disagreed that she stated a
plausible claim. Judge Rawlinson wrote that, under the
Twombly/Iqbal standard and Federal Rule of Civil Procedure
8(a), the pleading was inadequate.

COUNSEL

Alex Asil Mashiri (argued), Mashiri Law Firm, San Diego,
California; Tamim Jami, The Jami Law Firm P.C., San
Diego, California; for Plaintiff-Appellant.

Hunter R. Eley (argued), Lloyd Vu, and Chelsea L. Diaz,
Doll Amir & Eley LLP, Los Angeles, California, for
Defendant-Appellee.

OPINION

RICE, Chief District Judge:

Freshta Nayab appeals the district court’s order which
dismissed her Fair Credit Reporting Act (“FCRA”) claim
with prejudice and without leave to amend for lack of
standing and for failure to state a claim. We have
jurisdiction pursuant to 28 U.S.C. § 1291. “We accept as
true all factual allegations in the operative complaint, and we
construe them in the light most favorable to Plaintiff as the
non-moving party.” Eichenberger v. ESPN, Inc., 876 F.3d
979, 981 (9th Cir. 2017). “We review de novo the district
court’s decision to grant a motion to dismiss a claim under
Rule 12(b)(6).” Id. at 982. “To survive a motion to dismiss,
the claim must be plausible on its face.” Id. “We must
4 NAYAB V. CAPITAL ONE BANK

uphold a district court’s decision to dismiss either if a
cognizable legal theory is absent or if the facts alleged fail
to suffice under a cognizable claim.” Id. (emphasis in
original).

This case presents two issues of first impression for this
Circuit: (1) whether a consumer suffers a concrete Article III
injury in fact when a third-party obtains her credit report for
a purpose not authorized by the FCRA and (2) whether the
consumer-plaintiff must plead the third-party’s actual
unauthorized purpose in obtaining the report to survive a
motion to dismiss. We hold that a consumer suffers a
concrete injury in fact when a third-party obtains her credit
report for a purpose not authorized by the FCRA. We also
hold that a consumer-plaintiff need allege only that her credit
report was obtained for a purpose not authorized by the
statute to survive a motion to dismiss; the defendant has the
burden of pleading it obtained the report for an authorized
purpose.

THE FAIR CREDIT REPORTING ACT

“Congress enacted the FCRA in 1970 in response to
concerns about corporations’ increasingly sophisticated use
of consumers’ personal information in making credit and
other decisions.” Syed v. M-I, LLC, 853 F.3d 492, 496 (9th
Cir.), cert. denied, 138 S. Ct. 447 (2017) (citation omitted);
see Spokeo, Inc. v. Robins (Spokeo II), 136 S. Ct. 1540, 1550
(2016). “Specifically, Congress recognized the need to
‘ensure fair and accurate credit reporting, promote efficiency
in the banking system, and protect consumer privacy.’”
Syed, 853 F.3d at 496 (quoting Safeco Ins. Co. v. Burr,
551 U.S. 47, 52 (2007)). In the context of the protections
afforded under the FCRA, we recently observed that “[t]he
modern information age has shined a spotlight on
information privacy, and on the widespread use of consumer
 NAYAB V. CAPITAL ONE BANK 5

credit reports to collect information in violation of
consumers’ privacy rights.” Id. at 495.

The FCRA defines a credit report as any written, oral, or
other communication of information “bearing on a
consumer’s credit worthiness, credit standing, credit
capacity, character, general reputation, personal
characteristics, or mode of living . . . .” 15 U.S.C.
§ 1681a(d)(1). The FCRA provides:

A person shall not use or obtain a consumer
report for any purpose unless–

(1) the consumer report is obtained for a
purpose for which the consumer report is
authorized to be furnished under this
section; and

(2) the purpose is certified in accordance with
section 1681e of this title by a prospective
user of the report through a general or
specific certification.

15 U.S.C. § 1681b(f). Section 1681b(a) provides the
authorized purposes for which a consumer report may be
furnished:

Subject to subsection (c), any consumer
reporting agency may furnish a consumer
report under the following circumstances and
no other:

(1) In response to the order of a court . . . or
a subpoena issued in connection with
proceedings before a Federal grand jury.
6 NAYAB V. CAPITAL ONE BANK

(2) In accordance with the written
instructions of the consumer . . . .

(3) To a person which it has reason to
believe–

(A) intends to use the information in
connection with a credit transaction
involving the consumer . . . and
involving the extension of credit to, or
review or collection of an account of,
the consumer; or

(B) intends to use the information for
employment purposes; or

(C) intends to use the information in
connection with the underwriting of
insurance involving the consumer; or

(D) intends to use the information in
connection with . . . a license or other
benefit granted by a governmental
instrumentality . . . ; or

(E) intends to use the information, as a
potential investor or servicer, or
current insurer, in connection with a
valuation of, or an assessment of the
credit or prepayment risks associated
with, an existing credit obligation; or

(F) otherwise has a legitimate business
need for the information–
 NAYAB V. CAPITAL ONE BANK 7

(i) in connection with a business
transaction that is initiated by the
consumer; or

(ii) to review an account to determine
whether the consumer continues
to meet the terms of the account.

(G) executive departments and agencies
in connection with the issuance of
government-sponsored individually-
billed travel charge cards.

(4) In response to a request by the head of a
State or local child support enforcement
agency . . . .

(5) To an agency . . . for use to set an initial
or modified child support award.

(6) To the Federal Deposit Insurance
Corporation or the National Credit Union
Administration . . . .

15 U.S.C. § 1681b(a).

Notably, § 1681b(a)(3)(A) allows a third-party to obtain
a consumer’s credit report without having a previous
relationship with the consumer and without the consumer
initiating the transaction. See 15 U.S.C. §1681b(c)(1) (a
third-party may obtain a consumer’s credit report if “the
transaction consists of a firm offer of credit or insurance[,]”
even if the transaction “is not initiated by the consumer”);
S. REP. 103-209, 4 (1993) (“the Committee bill explicitly
permits consumer report information to be obtained in
connection with two types of transactions that are not
8 NAYAB V. CAPITAL ONE BANK

initiated by the consumer: direct marketing and
prescreening.”). In recognition “that some consumers may
find that direct marketing and prescreening entail an
undesirable invasion of their privacy[,]” S. REP. 104-185,
38 (1995), a “consumer may elect to have the consumer’s
name and address excluded from any list provided by a
consumer reporting agency under subsection (c)(1)(B) in
connection with a credit or insurance transaction that is not
initiated by the consumer[,]” 15 U.S.C. § 1681b(e)(1).

DISCUSSION

I. Standing

Does a consumer sustain a “concrete” injury when a
third-party obtains her credit report for a purpose not
authorized by the Fair Credit Reporting Act?

The judicial Power of the United States “extends only to
‘Cases’ and ‘Controversies[.]’” Spokeo II, 136 S. Ct. at 1547
(United States Constitution, Art. III, § 2). “Standing to sue
is a doctrine rooted in the traditional understanding of a case
or controversy.” Id. “[T]he ‘irreducible constitutional
minimum’ of standing consists of three elements. The
plaintiff must 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.” Id. (quoting Lujan v. Defs. of Wildlife, 504 U.S.
555, 560–61 (1992)).

This case, like Spokeo II, “primarily concerns injury in
fact, the ‘[f]irst and foremost’ of standing’s three elements.”
Id. (quoting Steel Co. v. Citizens for a Better Environment,
523 U.S. 83, 103 (1998)) (brackets in original). “To
establish injury in fact, a plaintiff must show that he or she
suffered ‘an invasion of a legally protected interest’ that is
 NAYAB V. CAPITAL ONE BANK 9

‘concrete and particularized’ and ‘actual or imminent, not
conjectural or hypothetical.’” Id. at 1548 (quoting Lujan,
504 U.S. at 560). “For an injury to be ‘particularized,’ it
‘must affect the plaintiff in a personal and individual way.’”
Id. (quoting Lujan, 504 U.S. at 560, n.1). “A ‘concrete’
injury must be ‘de facto’; that is, it must actually exist[,]”
meaning—“‘real,’ and not ‘abstract.’” Id. (citations
omitted). “‘Concrete’ is not, however, necessarily
synonymous with ‘tangible.’ Although tangible injuries are
perhaps easier to recognize. . . . intangible injuries can
nevertheless be concrete.” Id. at 1549.

“In determining whether an intangible harm constitutes
injury in fact, both history and the judgment of Congress
play important roles.” Id. “Because the doctrine of standing
derives from the case-or-controversy requirement, and
because that requirement in turn is grounded in historical
practice, it is instructive to consider whether an alleged
intangible harm has a close relationship to a harm that has
traditionally been regarded as providing a basis for a lawsuit
in English or American courts.” Id. (citing Vermont Agency
of Natural Resources v. United States ex rel. Stevens,
529 U.S. 765, 775–777 (2000)). “In addition, because
Congress is well positioned to identify intangible harms that
meet minimum Article III requirements, its judgment is also
instructive and important.” Id. “The . . . injury required by
Art. III may exist solely by virtue of ‘statutes creating legal
rights, the invasion of which creates standing.’” Lujan,
504 U.S. at 578 (quoting Warth v. Seldin, 422 U.S. 490, 500
(1975)).

The Supreme Court in Spokeo II—a case addressing
standing in the FCRA context—cautioned that a bare
procedural violation may not establish a concrete harm
sufficient for Article III standing. 136 S. Ct. at 1550. On
10 NAYAB V. CAPITAL ONE BANK

remand from the Supreme Court, however, we adopted the
Second Circuit’s holding that “an alleged procedural
violation [of a statute] can by itself manifest concrete injury
where Congress conferred the procedural right to protect a
plaintiff’s concrete interests and where the procedural
violation presents ‘a risk of real harm’ to that concrete
interest.” Robins v. Spokeo, Inc. (Spokeo III), 867 F.3d
1108, 1113 (9th Cir. 2017), cert. denied, 138 S. Ct. 931
(2018) (quoting Strubel v. Comenity Bank, 842 F.3d 181,
190 (2d Cir. 2016) (quoting Spokeo II, 136 S. Ct. at 1549)).

We have also recognized a distinction between
violations of a procedural right, at issue in Spokeo, and a
substantive right. See Eichenberger, 876 F.3d at 982–83 (the
“provision does not describe a procedure that [a person]
must follow. Rather, it protects generally a consumer’s
substantive privacy interest in his or her [private
information].”). A violation of a substantive right invariably
“offends the interests that the statute protects.” Id. at 983.

For example, in Eichenberger, we held that a consumer
had standing to sue under the Video Privacy Protection Act
(VPPA) when his or her video-viewing history was disclosed
in violation of 18 U.S.C. § 2710(b)(1). Id. at 984. We
explained the consumer has a “substantive privacy interest
in his or her video-viewing history[,]” which the VPPA
sought to protect “by ensuring that consumers retain control
over their personal information.” Id. at 983. We reasoned
the prohibition against disclosing one’s video-viewing
history does not “describe a procedure that video service
providers must follow” but rather “protects generally a
consumer’s substantive privacy interest in his or her video-
viewing history.” Id. We thus concluded that “every
disclosure . . . offends the interests that the statute protects”
 NAYAB V. CAPITAL ONE BANK 11

and plaintiff “need not allege any further harm to have
standing.” Id. at 983–84 (emphasis in original).

Nayab has standing to pursue her FCRA claim based on
Capital One’s alleged violation of 15 U.S.C. § 1681b(f)(1).
First, obtaining a credit report for a purpose not authorized
under the FCRA violates a substantive provision of the
FCRA. Like the VPPA interpreted in Eichenberger,
§ 1681b(f)(1)—which prohibits obtaining a credit report for
a purpose not otherwise authorized—protects the
consumer’s substantive privacy interest. The section does
not merely “describe a procedure” that one must follow.
Rather, § 1681b(f)(1) is the central provision protecting the
consumer’s privacy interest: every violation invades the
consumer’s privacy right that Congress sought to protect in
passing the FCRA. As such, every violation of § 1681b(f)(1)
“offends the interest that the statute protects” and the
Plaintiff “need not allege any further harm to have standing.”
See Eichenberger, 876 F.3d at 983–84.

Second, we have previously found the invasion of the
interest at issue—the right to privacy in one’s consumer
credit report—confers standing. See Syed, 853 F.3d at 499–
500. In Syed, the plaintiff alleged his employer improperly
obtained his credit report in violation of the FCRA. Id. at
498. Under the FCRA, a consumer report may be obtained
for employment purposes if the prospective employer (1)
provides a “document that consists solely of the disclosure”
and (2) receives written authorization from the applicant.
15 U.S.C. § 1681b(b)(2)(A)(i)–(ii) (emphasis added). The
plaintiff in Syed signed a document purporting to give the
prospective employer permission to obtain the credit report,
but the prospective employer included in the disclosure
document a provision for the disclosure of the applicant’s
information along with a liability waiver, in violation of the
12 NAYAB V. CAPITAL ONE BANK

FCRA. Syed, 853 F.3d at 496. We found that Syed’s
allegations that the prospective employer had “procured a
‘consumer report’ . . . based on the illegal disclosure and
authorization form” was “sufficient to infer that Syed was
deprived of the right to information and the right to privacy
guaranteed by [§] 1681b(b)(2)(A)(i)–(ii) because it indicates
that Syed was not aware that he was signing a waiver
authorizing the credit check when he signed it.” Id. at 499.
We explained that the “authorization requirement,
§ 1681b(b)(2)(A)(ii), creates a right to privacy by enabling
applicants to withhold permission to obtain the report from
the prospective employer, and a concrete injury when
applicants are deprived of their ability to meaningfully
authorize the credit check.” Id. Accordingly, we concluded
that “Syed did allege a concrete injury and has Article III
standing to bring this lawsuit.” Syed, 853 F.3d at 500 (citing
Thomas v. FTS USA, LLC, 193 F.Supp.3d 623, 628–638
(E.D. Va 2016)).

Third, historical practice also supports a finding of
standing. The harm attending a violation of § 1681b(f)(1) of
the FCRA is closely related to—if not the same as—a harm
that has traditionally been regarded as providing a basis for
a lawsuit: intrusion upon seclusion (one form of the tort of
invasion of privacy). See Spokeo II, 136 S. Ct. at 1549;
Restatement (Second) of Torts § 652B, cmt. a (1977).
According to the Restatement (Second) of Torts § 652B:

One who intentionally intrudes, physically or
otherwise, upon the solitude or seclusion of
another or his private affairs or concerns, is
subject to liability to the other for invasion of
his privacy, if the intrusion would be highly
offensive to a reasonable person.
 NAYAB V. CAPITAL ONE BANK 13

Intrusion upon seclusion “does not depend upon any
publicity given to the person whose interest is invaded or to
his affairs.” Id. Rather, “[i]t consists solely of an intentional
interference with his interest in solitude or seclusion, either
as to his person or as to his private affairs or concerns, of a
kind that would be highly offensive to a reasonable man.”
Id. at cmt. a. For example, “[t]he invasion may be . . . by
some [] form of investigation or examination into his private
concerns, as by opening his private and personal mail,
searching his safe or his wallet, examining his private bank
account, or compelling him by a forged court order to permit
an inspection of his personal documents.” Restatement
(Second) of Torts § 652B. Importantly, “[t]he intrusion
itself makes the defendant subject to liability, even though
there is no publication or other use of any kind of the
photograph or information outlined.” Id.

We have also recognized that “[v]iolations of the right to
privacy have long been actionable at common law” and,
referencing the tort of intrusion upon seclusion, “privacy
torts do not always require additional consequences to be
actionable.” Eichenberger, 876 F.3d at 983 (citing
Braitberg v. Charter Comm., Inc., 836 F.3d 925, 930 (8th
Cir. 2016) and Restatement (Second) of Torts § 652B cmt.
b. (1977)). As well, the Supreme Court has long recognized
that “both the common law and the literal understandings of
privacy encompass the individual’s control of information
concerning his or her person.” U.S. Dep’t of Justice v.
Reporters Comm. for Freedom of the Press, 489 U.S. 749,
763–64 (1989).

The harm at issue here—the release of highly personal
information in violation of the FCRA—is the same harm that
forms the basis for the tort of intrusion upon seclusion. See
Spokeo III, 867 F.3d at 1114 (“As other courts have
14 NAYAB V. CAPITAL ONE BANK

observed, the interests that FCRA protects also resemble
other reputational and privacy interests that have long been
protected in the law.” (citing e.g., In re Horizon Healthcare
Servs. Inc. Data Breach Litig., 846 F.3d 625, 638–40 (3d
Cir. 2017) (comparing FCRA’s privacy protections to
common law protections for “a person’s right to prevent the
dissemination of private information”; holding that “the
unauthorized dissemination of their own private
information” is “a de facto injury that satisfies the
concreteness requirement for Article III standing”). When a
third party obtains the consumer’s credit report in violation
of 15 U.S.C. § 1681b(f)—that is, for a purpose not
authorized by statute—the consumer is harmed because he
or she is deprived of the right to keep private the sensitive
information about his or her person. See Syed, 853 F.3d
at 499–500. This harm is highly offensive and is not trivial
because a credit report can contain highly personal
information.

Finally, the judgment of Congress further supports a
finding of standing. In passing the FCRA, Congress
specifically recognized the “elaborate mechanism []
developed for investigating and evaluating credit
worthiness, credit standing, credit capacity, character, and
general reputation of consumers” and the “need to insure that
consumer reporting agencies exercise their grave
responsibilities with fairness, impartiality, and a respect for
the consumer’s right to privacy.” 15 U.S.C. § 1681
(emphasis added). We have observed that “the FCRA was
designed in whole and in virtually each part to protect . . .
consumers themselves[,]” Hansen v. Morgan, 582 F.2d
1214, 1221 (9th Cir. 1978), and that one goal of the FCRA
is to allow the “release of credit report for certain purposes
only,” Comeaux v. Brown & Williamson Tobacco Co.,
915 F.2d 1264, 1274 (9th Cir. 1990). Congress’ concern for
 NAYAB V. CAPITAL ONE BANK 15

privacy in one’s consumer report is made clear by the
FCRA’s (1) general prohibition against obtaining a
consumer report except in limited circumstances, 15 U.S.C.
§ 1681b(f); (2) provision of civil liability for violations of
the FCRA, 15 U.S.C. § 1681n, including statutory damages
for willful violations, 15 U.S.C. § 1681n; and (3) provision
of criminal (and civil) 1 liability for those obtaining a credit
report under false pretenses, 15 U.S.C. § 1681q. 2 By
providing for statutory damages and “[b]y providing a
private cause of action for violations of [Sections 1681f and
1681q], Congress has recognized the harm such violations
cause, thereby articulating a ‘chain[ ] of causation that will
give rise to a case or controversy.’” See Syed, 853 F.3d at
499 (brackets in original) (quoting Spokeo II, 136 S. Ct.
at 1549 (quoting Lujan, 504 U.S. at 580 (Kennedy, J.,
concurring))).

Nayab has standing to vindicate her right to privacy
under the FCRA when a third-party obtains her credit report
without a purpose authorized by the statute, regardless

1
A violation of § 1681q, which imposes criminal liability for
obtaining a credit report under false pretenses, is also a basis for civil suit
under § 1681n. Comeaux, 915 F.2d at 1274.
2
To obtain a credit report, the prospective user must certify the
purpose for obtaining the credit report. 15 U.S.C. § 1681b(f)(2). Credit
reporting agencies are allowed to provide a credit report only for an
authorized purpose. 15 U.S.C. § 1681b(a). As such, as long as the credit
reporting agencies follow the proper procedures, a third party will not be
able to obtain a credit report for a purpose authorized by the statute
without falsely certifying otherwise. Thus, by criminalizing the
procurement of a credit report under false pretenses, 15 U.S.C. § 1681q,
Congress recognized the very concern at issue here: that a person may
obtain another’s credit report by feigning a purpose authorized by the
statute.
16 NAYAB V. CAPITAL ONE BANK

whether the credit report is published or otherwise used by
that third-party.

II. Failure to State a Claim

Must the consumer-plaintiff plead the third-party’s
actual unauthorized purpose in obtaining the credit report to
survive a motion to dismiss?

The district court erred in holding that Nayab, as the
plaintiff, has the burden of pleading the actual purpose
behind Capital One’s procurement of her credit report. A
plaintiff need allege only facts giving rise to a reasonable
inference that the defendant obtained his or her credit report
in violation of § 1681b(f)(1) to meet their burden of
pleading. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (the
plaintiff must plead “factual content” giving rise to the
“reasonable inference that the defendant is liable for the
misconduct alleged”). Requiring otherwise would create an
often insurmountable legal barrier to the protection of the
interests the FCRA sought to protect. Notably, this question
centers around whether the plaintiff must plead facts which
establish the defendant’s actual purpose. This question is
separate from the question whether Nayab has pleaded facts
sufficient to meet her burden of pleading—although the
former informs the analysis of the latter.

As discussed below, because Nayab did not have the
burden of pleading Capital One’s actual unauthorized
purpose, and because she has alleged facts sufficient to give
rise to a reasonable inference that Capital One obtained her
credit report in violation of § 1681b(f)(1), Nayab stated a
plausible claim for relief and the District Court erred in
holding otherwise.
 NAYAB V. CAPITAL ONE BANK 17

1. Nayab is not required to plead Capital One’s
actual unauthorized purpose

The District Court erred by placing the burden of
pleading Defendant’s actual unauthorized purpose on
Plaintiff.

For context, it is important to note that the burden of
pleading (i.e. who bears the burden of pleading a fact)—not
the ultimate burden of production or persuasion—is at issue.
However, who bears the ultimate burden of proof and/or
persuasion is indicative of who bears the initial burden of
pleading, so we will rely on case law discussing the former.
See 2 McCormick On Evid. § 337 (7th ed.) (“In most cases,
the party who has the burden of pleading a fact will have the
burdens of producing evidence and of persuading the jury of
its existence as well[,]” so “[t]he pleadings [] provide the
common guide for apportioning the burdens of proof.”)

Federal Rule of Civil Procedure 8 sets the framework for
pleadings. Rule 8(a) provides: “[a] pleading that states a
claim for relief must contain: (1) a short and plain statement
of the grounds for the court’s jurisdiction . . . (2) a short and
plain statement of the claim showing that the pleader is
entitled to relief; and (3) a demand for the relief sought . . . .”
Rule 8(c)(1) in turn requires the party responding to a
pleading to “affirmatively state any avoidance or affirmative
defense, including: . . . license, payment, [and] release[,]”
among other things. Even under the more rigid pleading
standard of Federal Rule of Civil Procedure 9, however, the
pleader is not required to allege facts that are “peculiarly
within the opposing party’s knowledge,” and allegations
“based on information and belief may suffice,” “so long as
the allegations are accompanied by a statement of facts upon
which the belief is founded.” Wool v. Tandem Computers
Inc., 818 F.2d 1433, 1439 (9th Cir. 1987), overruled on other
18 NAYAB V. CAPITAL ONE BANK

grounds as stated in Flood v. Miller, 35 Fed. Appx. 701, 703
n.3 (9th Cir. 2002), (citing 5 C. Wright & A. Miller, Federal
Practice and Procedure § 1298, at 416 & n.96 (1969)); Puri
v. Khalsa, 674 F. Appx. 679, 687 (9th Cir. 2017). “When
we are determining the burden of proof under a statutory
cause of action, the touchstone of our inquiry is, of course,
the statute.” Schaffer ex rel. Schaffer v. Weast, 546 U.S. 49,
56 (2005). Where the statute is silent as to who bears the
burden of proof, we “begin with the ordinary default rule that
plaintiffs bear the risk of failing to prove their claims.” Id.
(citation omitted). “The ordinary default rule, of course,
admits of exceptions.” Id. (citation omitted). The
exceptions “owe their development partly to traditional
happen-so and partly to considerations of policy.”
2 McCormick on Evid. § 337 (7th ed.). For example, in
allocating the burden of pleading, courts have considered
“[t]he policy of handicapping a disfavored contention”;
“[c]onvenience in following the natural order of
storytelling”; and “the judicial estimate of the probabilities
of the situation.” Id.

“Among other considerations, allocations of burdens of
production and persuasion may depend on which party—
plaintiff or defendant, petitioner or respondent—has made
the ‘affirmative allegation’ or ‘presumably has peculiar
means of knowledge.’” Alaska Dep’t of Envtl. Conservation
v. E.P.A., 540 U.S. 461, 494, n.17 (2004). Relatedly, courts
have shifted the burden of “establish[ing] a negative” to the
defendant where holding otherwise “would impose upon the
plaintiffs a difficult, if not an impossible, task” of requiring
them to produce evidence that a fact is not the case, though
evidence to the contrary “could be readily produced by the
defendant.” United States v. Denver & Rio Grande R.R. Co.,
191 U.S. 84, 91–92 (1903). Indeed, “[i]t is a general rule of
evidence . . . that ‘where the subject-matter of a negative
 NAYAB V. CAPITAL ONE BANK 19

averment lies peculiarly within the knowledge of the other
party, the averment is taken as true unless disproved by that
party.’” Denver, 191 U.S. at 92. The rationale is simple:

when the opposite party must, from the
nature of the case, himself be in possession of
full and plenary proof to disprove the
negative averment, and the other party is not
in possession of such proof, then it is
manifestly just and reasonable that the party
which is in possession of the proof should be
required to adduce it; or, upon his failure to
do so, we must presume it does not exist,
which of itself establishes a negative.

Id. at 92–93 (citations omitted) (finding “error in requiring
plaintiffs to assume the burden of showing that the timber
was not cut for purposes of construction or repair . . . .”).

Similarly, “the burden of persuasion as to certain
elements of a plaintiff’s claim may be shifted to defendants,
when such elements can fairly be characterized as
affirmative defenses or exemptions.” Schaeffer, 546 U.S.
at 57 (citing Fed. Trade Comm’n v. Morton Salt Co.,
334 U.S. 37, 44–45 (1948)). Indeed, “the general rule of
statutory construction [is] that the burden of proving
justification or exemption under a special exception to the
prohibitions of a statute generally rests on one who claims
its benefits.” Id. Stated another way, “[t]he general rule of
law is, that a proviso carves special exceptions only out of
the body of the act; and those who set up any such exception
must establish it[.]” Schlemmer v. Buffalo, Rochester, &
Pittsburg Ry. Co., 205 U.S. 1, 10 (1907) (quoting Ryan v.
Carter, 93 U.S. 78, 83 (1876)).
20 NAYAB V. CAPITAL ONE BANK

As such, the plaintiff need not “negative[]” the exception
to the statute. Id. “[I]f the defendant wishe[s] to rely upon
[the] proviso, the burden [is] upon it to bring itself within the
exception.” Schlemmer, 205 U.S. at 10. This is especially
true where the “exemptions [are] laid out apart from the
prohibitions[.]” Meacham v. Knolls Atomic Power Lab.,
554 U.S. 84, 91 (2008) (with the “exemptions laid out apart
from the prohibitions[,] it is no surprise that the” exemptions
are “spoken of” as “affirmative defenses . . . After looking
at the statutory text, most lawyers would accept that
characterization as a matter of course, thanks to the familiar
principle that ‘[w]hen a proviso . . . carves an exception out
of the body of a statute or contract those who set up such
exception must prove it.’” (quoting Javierre v. Cent.
Altagracia, 217 U.S. 502, 508 (1910) (citing Schlemmer,
205 U.S. at 10))). This “longstanding convention is part of
the backdrop against which the Congress writes laws, and
we respect it unless we have compelling reasons to think that
Congress meant to put the burden of persuasion on the other
side.” Id. at 91–92 (citing Schaffer, 546 U.S. at 57–58).

Capital One, as the defendant, has the burden of pleading
it had an authorized purpose to acquire Nayab’s credit report.
First, the FCRA generally prohibits obtaining a credit report,
15 U.S.C. § 1681b(f), but then provides a numerous and
diverse list of exceptions, 15 U.S.C. § 1681b(a). As such,
the authorized purposes under § 1681b(a) are matters of
exception that the defendant must plead as a defense. While
“[o]ften the result of this approach is an arbitrary allocation
of the burdens,” the distinction here is “valid [because] the
exceptions to [the] statute or promise are numerous[,]” so
“fairness [] requires that the adversary give notice of a
particular exception upon which it relies and . . . bear[s] the
burden of pleading [the exception].” See 2 McCormick on
Evid. § 337 (7th ed.). Second, placing the burden on the
 NAYAB V. CAPITAL ONE BANK 21

plaintiff would be unfair, as it would require the plaintiff to
plead a negative fact that would generally be peculiarly
within the knowledge of the defendant. 3 See id. (because the
“proof of the facts is inaccessible or not persuasive, it is []
fairer to act as if the exceptional situation did not exist and
therefore to place the burden of proof and persuasion on the
party claiming its existence.”). Holding otherwise would
effectively bar meritorious claims from ever coming to light
and frustrate Congress’ attempt to protect consumers’
privacy.

2. Nayab’s Complaint states a plausible claim for
relief

“To survive a motion to dismiss, a complaint must
contain sufficient factual matter, accepted as true, to ‘state a
claim to relief that is plausible on its face.’” Iqbal, 556 U.S.
at 678 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,
570 (2007)). “A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to draw
the reasonable inference that the defendant is liable for the
misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556).
“The plausibility standard is not akin to a ‘probability
requirement,’ but it asks for more than a sheer possibility

3
At oral argument, Capital One argued that Nayab should be aware
of the actual purpose behind Capital One obtaining her credit report.
Counsel for Capital One stated that the alleged purpose may be included
within a code on documentation sent to the consumer. However, this
would identify only Capital One’s alleged purpose, not necessarily the
actual purpose. Moreover, upon questioning at oral argument, counsel
for Capital One admitted they were not aware of the actual purpose for
obtaining Nayab’s credit report. Nor could counsel read any such code,
so to inform the court of Capital One’s purpose. If counsel for Capital
One still do not know the purpose of Capital One’s action, how can one
expect Nayab to know it?
22 NAYAB V. CAPITAL ONE BANK

that a defendant has acted unlawfully.” Id. “Determining
whether a complaint states a plausible claim for relief will
. . . be a context-specific task that requires the reviewing
court to draw on its judicial experience and common sense.”
Id. at 679 (citation omitted).

Nayab has pleaded facts sufficient to give rise to a
reasonable inference that Capital One obtained her credit
report for an unauthorized purpose. Nayab pleaded that she
did not have a credit relationship with Capital One of the
kind specified in 15 U.S.C. § 1681b(a)(3)(A)–(F). Pl’s First
Am. Compl. ¶¶ 11, 40, 47, 50. Nayab specifically pleaded
that, “upon review of her Experian credit report, Plaintiff
discovered that Defendant submitted numerous credit report
inquiries to Experian.” Id., ¶ 18. Nayab then puts forward
factual assertions which negative each permissible purpose
for which Capital One could have obtained her credit report
and for which Nayab could possibly have personal
knowledge:

(1) Plaintiff did not initiate any credit
transaction with Defendant as
provided in 15 U.S.C.
§ 1681b(a)(3)(A).

(2) Plaintiff was not involved in any
credit transaction with Defendant
involving the extension of credit to, or
review or collection of an account of,
the consumer as provided in
15 U.S.C. § 1681b(a)(3)(A).

(3) Plaintiff is not aware of any collection
accounts, including any accounts that
were purchased or acquired by
Defendant that would permit
 NAYAB V. CAPITAL ONE BANK 23

Defendant to obtain Plaintiff’s credit
report as provided in 15 U.S.C.
§ 1681b(a)(3)(A).

(4) Plaintiff does not have any existing
credit accounts that were subject to
collection efforts by Defendant as
provided in 15 U.S.C.
§ 1681b(a)(3)(A).

(5) Plaintiff did not engage Defendant for
any employment relationship as
provided in 15 U.S.C.
§ 1681b(a)(3)(B).

(6) Plaintiff did not engage Defendant for
any insurance as provided in 15
U.S.C. § 1681b(a)(3)(C).

(7) Plaintiff did not apply for a license or
other benefit granted by a
governmental instrumentality as
provided in 15 U.S.C.
§ 1681b(a)(3)(D).

(8) Plaintiff did not have an existing
credit obligation that would permit
Defendant to obtain her credit report
as provided in 15 U.S.C.
§ 1681b(a)(3)(E).

(9) Plaintiff did not conduct any business
transaction nor incur any additional
financial obligations to Defendant as
provided in 15 U.S.C.
§ 1681b(a)(3)(F).
24 NAYAB V. CAPITAL ONE BANK

(10) Defendant’s inquiry for Plaintiff’s
consumer report information falls
outside the scope of any permissible
use or access included in 15 U.S.C.
section 1681b.

Id. ¶¶ 24–35. These are factual allegations that, when taken
as true, rule out many of the potential authorized purposes
for obtaining a credit report. Further, Nayab alleges that she
discovered Capital One obtained her credit report only upon
review of her Experian credit report. The implication is that
she never received a firm offer of credit from Capital One.
These allegations, together with Nayab’s allegation that
Capital One, in fact, obtained her report, state a plausible
claim for relief. These are not simply bare conclusions
devoid of facts supporting them.

By contrast, in Twombly the Court determined that the
plaintiff had not adequately pleaded an antitrust claim where
he alleged parallel conduct by the defendants but did not
include facts tending to exclude the possibility they acted
independently. Twombly, 550 U.S. at 554–55. The Court
decided a claim for restraint of trade under the Sherman Act,
15 U.S.C.A. § 1, must allege facts sufficient for a court to
infer an illegal agreement among the defendants and that
discovery would reveal evidence of that illegal agreement.
Id. at 556–57. The Court decided the plaintiff instead
alleged facts that were merely consistent with an illegal
agreement (parallel activity among competitors), but more
likely explained by lawful market behavior and, therefore,
failed to state a claim. Id. at 565, 570.

Similarly, the Court in Iqbal held the plaintiff failed to
state a Bivens claim for purposeful and unlawful
discrimination for an alleged policy of holding post-
September 11th detainees in the ADMAX SHU facility once
 NAYAB V. CAPITAL ONE BANK 25

they were categorized as of “high interest.” Iqbal, 556 U.S.
at 682. The Court determined that a showing the defendants’
adopted the policies “for the purpose of discriminating” was
a necessary factor in stating the Bivens claim alleged. Id.
at 676–77. The Court concluded the plaintiff must, in his
complaint, allege facts sufficient to show the defendants
purposefully adopted and implemented the policy of
classifying detainees as “high interest”, so that defendants
could then house detainees in the ADMAX SHU, because of
the detainees’ race, religion, or national origin. Id.

The plaintiff’s only factual allegations to support his
contention were that many Arab Muslim men had been
arrested and held at the ADMAX SHU with defendants’
approval. Id. at 681. The Court decided that because there
were more likely explanations for the “disparate, incidental
impact” of defendants’ activity on Arab Muslims than a
discriminatory motive, the plaintiff had not shown, and a
court could not infer, that the defendants had acted with a
discriminatory state of mind. Id. at 683. Further, the Court
concluded, because showing the defendants acted “for the
purpose of discriminating” was a necessary factor in stating
the Bivens claim the plaintiff alleged, and the plaintiff had
not done so, the plaintiff failed to state a claim. Id. at 676–
77.

Neither Twombly nor Iqbal dealt with a plaintiff who had
stated a prima facie case in the complaint but had failed to
also negative each possible affirmative defense. Here,
Nayab asserts a claim under the FCRA, which generally
prohibits any person from using or obtaining a consumer’s
credit report unless for an authorized purpose provided under
section 1681b(a). 15 U.S.C. § 1681b(a), (f) (“A person
shall not use or obtain a consumer report for any purpose
26 NAYAB V. CAPITAL ONE BANK

unless—”). 4 When this Court has evaluated similarly
drafted provisions of other statutes, it has decided that the
provision is an affirmative defense, which a plaintiff need
not negative in his complaint. Van Patten v. Vertical Fitness
Group, LLC, 847 F.3d 1037, 1044 (9th Cir. 2017); see
Tourgeman v. Nelson & Kennard, 900 F.3d 1105, 1110 (9th
Cir. 2018).

In Van Patten, the court affirmed a district court’s grant
of summary judgment in favor of defendants on a claim for
violation of the Telephone Consumer Protection Act
(“TCPA”), 47 U.S.C.A. § 227. Van Patten, 847 F.3d
at 1049. The TCPA generally prohibited using automatic
dialing systems to make unsolicited advertising phone calls
to recipients within the United States, unless the call was
“for emergency purposes or made with the prior express
consent of the called party.” Id. at 1041–42; 47 U.S.C.A.
§ 227(b)(1). This court determined that express consent was
“not an element of a plaintiff’s prima facie case” but was “an
affirmative defense for which the defendant bears the burden
of proof.” Id. at 1044 (citing Grant v. Capital Mgmt. Servs.,
L.P., 449 Fed. Appx. 598, 600 n.1 (9th Cir. 2011); In the
Matter of Rules & Regulations Implementing the Tel.
Consumer Prot. Act of 1991, 23 F.C.C. Rcd. 559, 565 (Jan.
4, 2008)). The Court decided the consumer had given prior
express consent and not revoked it. Id. at 1046, 1048. In
Tourgeman, this court reviewed provisions of the Fair Debt
Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692, et

4
“Plaintiff is informed and believes, and thereupon alleges, that
Defendant acquired Plaintiff’s credit information through an
unauthorized inquiry of Plaintiff’s ‘consumer report’ as that term is
defined by 15 U.S.C. section 1681a(d)(1).” Pl’s First Am. Compl. ¶ 11;
“Defendant’s inquiry for Plaintiff’s consumer report information falls
outside the scope of any permissible use or access included in 15 U.S.C.
section 1681b.” Pl’s First Am. Compl. ¶ 35.
 NAYAB V. CAPITAL ONE BANK 27

seq., in affirming a district court’s dismissal of the plaintiff’s
consumer class action. Tourgeman, 900 F.3d at 1107. The
court stated that “certain elements of a plaintiff’s claim may
be shifted to defendants, when such elements can fairly be
characterized as affirmative defenses or exemptions.” Id.
at 1109 (quoting Schaffer ex rel. Schaffer, 546 U.S. at 57).
The court determined that evidence of the defendant’s net
worth was a required element of the provision at issue,
§ 1692k(a)(2)(B), rather than an affirmative defense because
the statute required the fact finder to determine the amount
in calculating statutory damages. Id. The provision limited
statutory damaged to “the lesser of $500,000 or one percent
of the defendant’s net worth,” so the defendant’s net worth
was a prerequisite to establishing statutory damage. Id.

The court compared § 1692k(a)(2)(B) with another
provision of the FDCPA, section § 1692b(3). Tourgeman,
900 F.3d at 1110. Section 1692b(3) prohibits a debt
collector from contacting a third party “more than once
unless requested to do so by” the third party. Id. (emphasis
added) (citing Evankavitch v. Green Tree Servicing, LLC,
793 F.3d 355, 362 (3d Cir. 2015)). In Evankavitch, the Third
Circuit reasoned that use of “unless” in § 1692b(3), was
“telltale language . . . indicative of an affirmative defense.”
Evankavitch, 793 F.3d at 362. The Third Circuit affirmed a
jury verdict for the plaintiff, deciding the plaintiff did not
have the burden of disproving an exception in its case-in-
chief, but rather the “party seeking shelter in an exception—
[the defendant]—has the burden to prove it.” Id. at 360, 363.
The Tourgeman court reasoned that if Congress intended to
make net worth an affirmative defense or exemption to a
rule, like the affirmative defenses in § 1692b(3), it could
have used the same telltale language and “limited liability to
$500,000 unless the defendant could establish that one
28 NAYAB V. CAPITAL ONE BANK

percent of its net worth is less than that amount.”
Tourgeman, 900 F.3d at 1110 (emphasis original).

Here, the FCRA § 1681b(f), like the TCPA § 227(b)(1)
and FDCPA § 1692b(3), uses the “telltale language” of
prohibiting defendant from engaging in conduct “unless” an
affirmative defense or exception applies. As with the other
provisions, the exceptions to the general prohibition in
§ 1681b(f) are not elements of Nayab’s prima facie case
which she must negative to state a claim, rather they are
affirmative defenses for which Capital One bears the burden.
Van Patten, 847 F.3d at 1044; see Tourgeman, 900 F.3d
at 1109. By alleging facts giving rise to a reasonable
inference that Capital One obtained her credit report for a
purpose not authorized by statute, Nayab has asserted a
plausible claim for relief under the FCRA. See Northrop v.
Hoffman of Simsbury, Inc., 134 F.3d 41, 49 (2d Cir. 1997)
(“Although Northrop’s complaint does not allege the
purpose for which defendants obtained her [credit] report,
we believe it would be premature, in light of the liberal
pleading principles of Rule 8 of the Federal Rules of
Civil Procedure, to dismiss the complaint prior to
discovery . . . .”).

REVERSED and REMANDED.
 NAYAB V. CAPITAL ONE BANK 29

RAWLINSON, Circuit Judge, concurring in part and
dissenting in part:

Although I agree that Plaintiff Freshta Nayab (Nayab)
had standing to pursue her action under the Fair Credit
Reporting Act, I decidedly disagree that Nayab stated a
plausible claim.

As an initial matter, I take issue with the characterization
of the pleading standard as an issue of first impression. See
Majority Opinion, p.4. Rather, this is a routine pleading
question that has been definitively addressed in Supreme
Court precedent.

The majority rests its analysis on the language of Rule
8(a) of the Federal Rules of Civil Procedure, which requires
only “a short and plain statement of the claim.” Id., p.17
(quoting Fed. R. Civ. P. 8(a)). From that premise, the
majority concludes that Nayab sufficiently stated a claim by
alleging that “her credit report was obtained for a purpose
not authorized by the statute.” Id., p.4. But the analysis is
not quite that simple, because the United States Supreme
Court in the seminal cases of Bell Atl. Corp. v. Twombly,
550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662
(2009), expounded considerably on the pleading
requirements of Rule 8(a).

In Twombly, the plaintiffs filed an antitrust action against
local exchange telephone and wireless carriers. See 550 U.S.
at 550. The complaint alleged:

In the absence of any meaningful
competition between the [carriers] in one
another’s markets, and in light of the parallel
course of conduct that each engaged in to
prevent competition from [carriers] within
30 NAYAB V. CAPITAL ONE BANK

their respective local telephone and/or high
speed internet services markets and the other
facts and market circumstances alleged
above, plaintiffs allege upon information and
belief that [the carriers] have entered into a
contract, combination or conspiracy to
prevent competitive entry in their respective
local telephone and/or high speed internet
services markets and have agreed not to
compete with one another and otherwise
allocated customers and markets to one
another.

Id. at 551 (citation and footnote reference omitted).

The district court dismissed the complaint for failure to
state a claim, but the Second Circuit reversed. The Supreme
Court in turn reversed the Second Circuit, agreeing with the
district court that the complaint failed to state a claim. See
id. at 552–53.

The Supreme Court proceeded to clarify the pleading
standards under Rule 8(a). The Court acknowledged that
Rule 8(a) only requires a “short and plain statement of the
claim.” Id. at 555. Nevertheless, the Court clarified that a
“short and plain statement of the claim” requires “more than
labels and conclusions, and a formulaic recitation of the
elements of a cause of action will not do.” Id. at 555 (citation
omitted). The Court emphasized that “on a motion to
dismiss, courts are not bound to accept as true a legal
conclusion couched as a factual allegation.” Id. (citation
omitted).

The Supreme Court reiterated this analysis in Iqbal. In
that case, a pretrial detainee asserted various constitutional
violations against the former Attorney General (AG) and the
 NAYAB V. CAPITAL ONE BANK 31

Director of the Federal Bureau of Investigation (FBI). The
complaint alleged that the AG and FBI Director “adopted an
unconstitutional policy that subjected [the detainee] to harsh
conditions of confinement on account of his race, religion or
national origin.” 556 U.S. at 666. The defendants moved to
dismiss the complaint for failure to state a claim, and the
district court denied the motion. See id. at 669. While appeal
was pending before the Second Circuit, the Supreme Court
decided Twombly. Applying Twombly, the Second Circuit
agreed with the district court that the pleading was adequate
to state a claim. See id. at 669–70. However, the Supreme
Court reversed, holding that the pre-trial detainee did not
sufficiently “plead factual matter that, if taken as true, states
a claim that [defendants] deprived him of his clearly
established constitutional rights.” Id. at 666, 670.

As in Twombly, the Supreme Court again acknowledged
that Rule 8(a) of the Federal Rules of Civil Procedure
requires “a short and plain statement of the claim showing
that the pleader is entitled to relief.” Id. at 677–78. And
again the Supreme Court explained that Rule 8 “demands
more than an unadorned, the-defendant-unlawfully-harmed-
me accusation.” Id. at 678 (citation omitted). The Supreme
Court further clarified: “A pleading that offers labels and
conclusions or a formulaic recitation of the elements of a
cause of action will not do. Nor does a complaint suffice if
it tenders naked assertions devoid of further factual
enhancement.” Id. (citations and internal quotation marks
omitted).

The Supreme Court left no doubt that a complaint must
contain allegations of some substance. The Supreme Court
emphasized that “[t]hreadbare recitals of the elements of a
cause of action, supported by mere conclusory statements,
do not suffice.” Id. (citation omitted). Against this
32 NAYAB V. CAPITAL ONE BANK

analytical backdrop, the Supreme Court concluded that the
allegations of Iqbal’s complaint did not state a plausible
claim. See id. at 680.

The Supreme Court identified the following allegations
as insufficient under Rule 8:

• That the defendants “knew of, condoned and
willfully and maliciously agreed to subject” Iqbal to
harsh conditions of confinement;

• That the defendant’s actions were taken “as a matter
of policy, solely on account of [Iqbal’s] religion, race
and/or national origin”;

• That the actions were not based on any “legitimate
penological interest”;

• That the AG was the “principal architect of [the]
invidious policy”; and

• That the FBI Director was “instrumental in adopting
and executing” the policy.

Id. at 680–81 (citations and internal quotation marks
omitted).

The Supreme Court described these allegations as “bare
assertions, much like the pleading of conspiracy in Twombly,
amount[ing] to nothing more than a formulaic recitation of
the elements of a constitutional discrimination claim.” Id.
at 681 (citation and internal quotation marks omitted). The
Court further observed that “the allegations [were]
conclusory and not entitled to be assumed true.” Id. (citation
omitted).
 NAYAB V. CAPITAL ONE BANK 33

Measuring the allegations in this case against the
Twombly/Iqbal standard reveals a patent lack of adequate
pleading. The majority deems it sufficient that Nayab
alleged that the defendant “obtained [her credit report] for a
purpose not authorized by the statute.” Majority Opinion,
p.4. Indeed, the majority goes so far as to conclude, without
citation to any authority, that Nayab had no obligation to
plead the unauthorized purpose for which the credit report
was obtained. See Majority Opinion, p.16. However, not
only is that conclusion inconsistent with Twombly and Iqbal,
it diverges from the specific allegations in cases that have
been litigated under the Fair Credit Reporting Act. For
example, in Syed v. M-I, LLC, 853 F.3d 492, 498 (9th Cir.
2017) the plaintiff “[s]pecifically . . . allege[d]” that the
Disclosure Release provided by a prospective employer
violated the Fair Credit Reporting Act by including a
liability waiver in addition to the disclosure, when the statute
required “that the disclosure document consist ‘solely’ of the
disclosure.” Id. (citing § 16816(b)(2)(A)(i). Similarly, in
Guimond v. Trans Union Credit Information Co., 45 F.3d
1329, 1331–32 (9th Cir. 1995), the plaintiff not only alleged
that the credit reporting agency generated an inaccurate
credit report, she identified the specific inaccuracies.

The majority delineates allegations from the complaint
purporting to “negative each permissible purpose for which
Capital One could have obtained her credit report and for
which Nayab could possibly have personal knowledge.”
Majority Opinion, p.22 (second emphasis in the original).
However, as discussed, these speculative allegations fall
short of the specific allegations reflected in our precedent.
See e.g., Syed, 853 F.3d at 498; Guimond, 45 F.3d at 1331–
32. And under the precepts of Twombly/Iqbal, no fair
inference of liability follows from these speculative
assertions. See Twombly, 550 U.S. at 555 (“Factual
34 NAYAB V. CAPITAL ONE BANK

allegations must be enough to raise a right to relief above the
speculative level . . . [and] the pleading must contain
something more than a statement of facts that merely creates
a suspicion of a legally cognizable right of action . . .”)
(citations, alterations, footnote reference, and internal
quotation marks omitted) (emphasis added); see also Iqbal,
556 U.S. at 678 (“Where a complaint pleads facts that are
merely consistent with a defendant’s liability, it stops short
of the line between possibility and plausibility of entitlement
to relief.”) (citation and internal quotation marks omitted).
At best, the assertions highlighted by the majority “are
merely consistent with [the] defendant’s liability.” Id.
(citation and internal quotation marks omitted). Tellingly,
the majority characterizes plaintiff’s claim in terms of
“possibility.” Majority Opinion, p.22. However, Iqbal
clearly held that a mere possibility of liability does not plead
a plausible claim. See Iqbal, 556 U.S. at 678.

Rather than assessing compliance with the
Twombly/Iqbal pleading standard, the majority opinion
relies on cases addressing the burden of production and the
burden of proof. See Schaffer ex rel. Schaffer v. Weast,
546 U.S. 49, 56 (2005) (addressing the burden of proof);
Alaska Dep’t of Envtl. Conserv. v. E.P.A., 540 U.S. 461,
493–94 (2004) (discussing “the burdens of production and
persuasion”); United States v. Denver & Rio Grande R.R
Co., 191 U.S. 84, 91–92 (1903) (commenting on the burden
of proof); Schlemmer v. Buffalo, Rochester, & Pittsburg Ry.
Co., 205 U.S. 1, 10 (1907) (explaining the burden-of-proof
requirement for an exception to a statutory provision);
Meacham v. Knolls Atomic Power Lab., 554 U.S. 84, 91
(2008) (same); see also Majority Opinion, p.20 (citing an
evidence treatise). These cited references not only fail to
address Rule 8(a), they were largely decided before
Twombly and Iqbal, in two instances approximately a
 NAYAB V. CAPITAL ONE BANK 35

century previously. The majority’s reliance on these
references is untenable. The same is true for the majority’s
reliance on the Second Circuit’s decision in Northrop v.
Hoffman of Simsbury Inc., 134 F.3d 41 (2nd Cir. 1997),
decided a decade before Twombly, and Wool v. Tandem
Computers, Inc., 818 F.2d 1433, 1439 (9th Cir. 1987),
decided two decades before Twombly.

The majority seeks to distinguish Twombly and Iqbal on
the basis that they did not deal “with a plaintiff who had
stated a prima facie case in the complaint but had failed to
also negative each possible affirmative defense.” Majority
Opinion, p.25. But this attempt to distinguish Twombly and
Iqbal simply begs the question by presupposing that a prima
facie case has been stated. This presupposition blithely
ignores the requirements set forth in Twombly and Iqbal to
state a plausible claim. See Iqbal, 556 U.S. at 678 (noting
that no plausible claim is made if the complaint “tenders
naked assertions devoid of further factual enhancement”).
This language is fatal to Nayab’s so-called prima facie case
because her allegations contain only “naked assertions”
parroting the language of the statute in a “formulaic
recitation of the elements of a cause of action.” Id.

The majority’s reliance on Van Patten v. Vertical Fitness
Group, LLC, 847 F.3d 1037, 1044 (9th Cir. 2017) and
Tourgeman v. Nelson & Kennard, 900 F.3d 1105, 1110 (9th
Cir. 2018), is similarly unavailing because neither case
involved pleading standards under Rule 8 or grapples with
the Twombly/Iqbal requirements. Like the other cases cited
by the majority, these two cases discussed the burden of
proof rather than pleading standards. See Van Patten,
847 F.3d at 1044 (“Express consent is not an element of a
plaintiff’s prima facie case but is an affirmative defense for
which the defendant bears the burden of proof. . . .”)
36 NAYAB V. CAPITAL ONE BANK

(citation and footnote reference omitted) (emphasis added);
see also Tourgeman, 900 F.3d at 1109 (“When allocating the
burden of proof, the touchstone of our inquiry is, of course,
the statute. . . .”) (citation and internal quotation marks
omitted) (emphasis added).

Finally, and without citation to any authority, the
majority states that “the defendant [Capital One] has the
burden of pleading it had an authorized purpose to acquire
Nayab’s credit report,” because the authorized purposes
under the statute must be pled as defenses. Majority
Opinion, p.20. However, the Supreme Court has expressly
placed the burden of pleading a plausible claim squarely on
the plaintiff rather than on the defendant. See Twombly,
550 U.S. at 554–55. As Nayab offered only conclusory
allegations and “formulaic recitation of the elements of a
cause of action” under the Fair Credit Reporting Act, she
failed to state a plausible claim. Id. at 555.

In sum, although Nayab had standing to assert her claim,
I respectfully, but emphatically, disagree with the conclusion
that she stated a plausible claim. I would affirm the district
court’s ruling on this issue.