United States District Court, D. Minnesota
Dana D. Kruckow, Plaintiff,
Merchants Bank, Rushford State Bank, Craig Schroeder, individually, and Paul A. Kruckow, individually, Defendants.
J. Lyons, Jr, Esq., Consumer Justice Center P.A., counsel for
Charles E. Nelson, Esq., Kathryn E. Wendt, Esq., and Kirstin
D. Kanski, Esq., Lindquist & Vennum LLP; and Patrick D.
Newman, Esq., Bassford Remele, counsel for Defendant
P. Boyle, Esq., and Sarah E. Doerr, Esq., Moss & Barnett,
PA, counsel for Defendant Rushford State Bank.
Christopher J. Haugen, Esq., and Kristin B. Rowell, Esq.,
Anthony Ostlund Baer & Louwagie P.A., counsel for
Defendant Craig Schroeder.
Charles A. Bird, Esq., and Grant M. Borgen, Esq., Bird,
Jacobsen & Stevens, P.C., counsel for Defendant Paul A.
MEMORANDUM OPINION AND ORDER
DONOVAN W. FRANK United States District Judge
case is before the Court on Defendants' Motions to
Dismiss. (Doc. Nos. 45, 50, 58, 62.) The plaintiff brought
this action after learning in divorce proceedings that her
husband had obtained a number of loans by allegedly forging
her signature as a co-signer. After this revelation, the
plaintiff filed suit against the banks, the loan officer, and
her husband alleging violations of the Fair Credit Reporting
Act (“FCRA”) as well as various state law claims.
The defendants have individually moved to dismiss for lack of
subject matter jurisdiction and for failure to state a claim.
As explained in more detail below, the Court denies the
defendants' motions to dismiss for lack of subject matter
jurisdiction, and the Court grants in part and denies in part
the defendants' motions to dismiss for failure to state a
September 21, 2016, Plaintiff Dana Kruckow (generally,
“D. Kruckow”) filed an amended complaint (Doc.
No. 35) against Defendants Merchants Bank
(“Merchants”), Rushford State Bank
(“Rushford Bank”), Craig Schroeder, and her
husband Paul Kruckow (generally, P. Kruckow”) after she
learned that P. Kruckow obtained a number of loans by
allegedly forging her signature as a co-signer. Craig
Schroeder was the loan officer for all of the loans (he moved
from Merchants to Rushford Bank). Much of D. Kruckow's
Amended Complaint retraces her steps investigating the
alleged fraud. After notifying the banks, Rushford Bank
agreed not to hold D. Kruckow responsible for the outstanding
loans, and Merchants informed her that there was no
relevant here, Plaintiff brought claims related to three
credit reports about D. Kruckow obtained by Defendants. The
first two credit reports-February 8, 2013, and November 8,
2013-were obtained by Schroeder during the life of the
allegedly fraudulent loans held by Merchants and Rushford
Bank, respectively. The last credit report-October 31,
2014-was allegedly obtained by Schroeder for P. Kruckow to
use for his divorce petition, which was filed in mid-December
2014. Plaintiff's Amended Complaint contains claims for
violations of FCRA and state law claims for invasion of
privacy and negligence. Plaintiff seeks to hold Defendants
jointly liable through a claim for civil conspiracy and to
hold the banks vicariously liable for Schroeder's
actions. Defendants have moved to dismiss for lack of subject
matter jurisdiction and for failure to state a claim.
Motion to Dismiss for Lack of Subject Matter
motion to dismiss under Rule 12(b)(1) challenges the
Court's subject matter jurisdiction. Fed.R.Civ.P.
12(b)(1). To survive a motion under Rule 12(b)(1), the party
asserting jurisdiction has the burden of proof. V S Ltd.
P'ship v. Dep't of Hous. & Urban Dev., 235
F.3d 1109, 1112 (8th Cir. 2000). “Subject-matter
jurisdiction is a threshold requirement which must be assured
in every federal case.” Kronholm v. Fed. Deposit
Ins. Corp., 915 F.2d 1171, 1174 (8th Cir. 1990).
12(b)(1) motion may challenge a plaintiff's complaint
either on its face or on the factual truthfulness of its
averments. Osborn v. United States, 918 F.2d 724,
729 n.6 (8th Cir. 1990). When a defendant brings a facial
challenge-that is, even if the allegations were true, they
lack an essential element for jurisdiction-a court reviews
the pleadings alone and assumes the allegations are true.
Titus v. Sullivan, 4 F.3d 590, 593 (8th Cir. 1993);
accord Osborn, 918 F.2d at 729 n.6. In a factual
challenge to jurisdiction, the court may consider matters
outside the pleadings and weigh the accuracy of the
allegations. Titus, 4 F.3d at 593; accord
Osborn, 918 F.2d at 729 n.6.
Subject Matter Jurisdiction and Spokeo
argue that the Court does not have jurisdiction because D.
Kruckow does not have standing to pursue her claims. Federal
courts are courts of limited jurisdiction. Spokeo, Inc.
v. Robins, 136 S.Ct. 1540, 1546-47 (2016). Article III
of the Constitution limits the courts' jurisdiction to
“Cases” and “Controversies.”
Id. at 1547. “Standing to sue is a doctrine
rooted in the traditional understanding of a case or
controversy.” Id. Standing has 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. (citing
Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61
argue that D. Kruckow has not shown that she suffered a
concrete injury. In Spokeo, the Supreme Court
reiterated that an injury in fact requires both a concrete
and particularized injury. In addressing whether an injury is
concrete, the question is whether the injury is
“real” and “not abstract.”
Id. at 1548. While real injuries are most closely
associated with tangible harm, the harm can also be
intangible. Id. at 1549. When evaluating intangible
harm, “it is instructive to consider whether [the]
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.
As the Supreme Court noted, Congress is well positioned to
elevate intangible harms to concrete injuries. Id.
But the Court cautioned against concluding that a plaintiff
will automatically demonstrate an injury in fact merely by
showing that a statute authorized her to sue. Id.
That is, the plaintiff must allege more than a “bare
procedural violation” of that statute. Id. at
Kruckow alleges that she was injured because Defendants
invaded her privacy by obtaining a consumer report without a
permissible purpose. D. Kruckow argues that unauthorized
access of information has long constituted a concrete injury.
Courts have struggled with deciding whether a plaintiff has
suffered a concrete injury when a defendant fails to follow
FCRA's statutory prerequisites to obtain the
plaintiff's information. Compare Shoots v. iQor
Holdings U.S. Inc., Civ. No. 15-563, 2016 WL 6090723, at
*4 (D. Minn. Oct. 18, 2016) (“By contending that
non-compliance with one provision of the FCRA automatically
renders a defendant's subsequent actions an invasion of
privacy, [the plaintiff] would raise every technical
violation of any statute to the realm of a major substantive
harm.”), with Thomas v. FTS USA, LLC, 193
F.Supp.3d 623, 636 (E.D. Va. 2016) (“[W]here a
defendant fails to comply with statutory prerequisites
protecting the plaintiff's privacy, the plaintiff's
privacy has been unlawfully invaded and he has suffered
concrete injury, regardless of actual damages.”).
arguing that Plaintiff did not suffer any concrete injuries,
Defendants rely on Reed v. Experian Information
Solutions, Inc., 321 F.Supp.2d 1109 (D. Minn. 2004). But
in Reed, the court concluded on a motion for summary
judgment that the plaintiff had not demonstrated actual
damages or a willful violation of FCRA. Id. at 1114
(“The remainder of plaintiff's FCRA claims fail[s]
for want of evidence of either harm or willful noncompliance
with the Act.”). Thus, Reed has little to do
with whether a consumer suffers a concrete injury when an
entity obtains the consumer's credit report without a
Plaintiff has adequately pleaded a concrete injury to her
privacy. Congress has allowed a person to access consumer
reports but only when the person has a permissible purpose.
Requiring a proper purpose works as bulwark against
intrusions into the sensitive information contained in a
consumer report. Thus, when a plaintiff alleges that the
person obtained the plaintiff's consumer report without a
permissible purpose, the plaintiff has adequately alleged a
concrete injury to her privacy. See, e.g., In re
Ocwen Loan Servicing LLC Litig., Civ. No. 16-483, 2017
WL 1289826, at *5 (D. Nev. Mar. 3, 2017); Firneno v.
Nationwide Mktg. Servs., Inc., Civ. No. 14-10104, 2017
WL 85831, at *3 (E.D. Mich. Jan. 10, 2017); Perrill v.
Equifax Info. Servs., LLC, 205 F.Supp.3d 869, 875 (W.D.
Tex. 2016); see also Engebretson v. Aitkin Cty.,
Civ. No. 14-1435, 2016 WL 5400363, at *4 (D. Minn. Sept. 26,
2016) (finding that the plaintiff had standing to sue under
the DPPA for claims based on Defendants viewing her motor
vehicle records without a proper purpose). But see
Bultemeyer v. CenturyLink, Inc., Civ. No. 14-02530, 2017
WL 634516, at *3 (D. Ariz. Feb. 15, 2017) (finding the
plaintiff did not have standing merely because her consumer
report was obtained without a proper purpose). Because D.
Kruckow has pleaded that Defendants accessed her consumer
report without a permissible purpose, she has adequately
alleged a concrete injury. The Court therefore denies
Defendants' Motions to Dismiss for Lack of Subject Matter
Motion to Dismiss for Failure to State a Claim
individually moved to dismiss Plaintiff's Amended
Complaint, which brings claims for: (1) violation of FCRA;
(2) invasion of privacy-seclusion; (3) negligence; (4)
vicarious liability; and (5) civil conspiracy. While Defendants
moved individually, many of their arguments overlap or are
duplicative, and thus the Court will address the arguments