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.