Andrew Gale v. Hyde Park Bank

Majority - Easterbrook

No, as to the delayed posting claim under § 1693h, a plaintiff's complaint does not state a claim for which relief can be granted because Gale's own pleadings demonstrate that his errors caused the loss and he was not within the zone of interests protected by the timeliness provision for transferors. However, yes, as to the error investigation claim under § 1693f, a plaintiff's complaint alleging a bank's failure to provide detailed results of an error investigation does state a claim for which relief can be granted, even if specific regulations are not cited, because complaints plead claims, not legal theories, and statutory damages are available for such violations without proof of actual injury. The court affirmed the dismissal of Gale's claim under 15 U.S.C. § 1693h (timeliness of transfer), reasoning that Gale's own complaint showed his failure to maintain sufficient funds, rather than the Bank's delay, was the cause of the overdraft. The court stated that using a debit card, like writing a check, requires the account holder to record transactions and ensure funds are available, regardless of posting. Furthermore, the timeliness requirement of § 1693h(a)(l) primarily benefits the transferee (recipient of funds), as delay typically benefits the transferor (sender of funds, like Gale). Gale did not allege any injury to his credit rating or deprivation of a bargain. However, the court reversed the dismissal of Gale's claim under 15 U.S.C. § 1693f (error resolution procedures). This section mandates that financial institutions investigate reported errors, determine if an error occurred, and report the results of the investigation to the consumer. If no error is found, the bank must provide an explanation of its findings and, upon request, reproductions of relied-upon documents. Violations of § 1693f can result in statutory damages even without proof of actual injury, unlike § 1693h claims. The court found that Gale's complaint could be reasonably interpreted to allege that the Bank failed to provide a timely report of the investigation's 'results,' a sufficient explanation of its findings, or the required information regarding error resolution procedures under 12 C.F.R. §§ 205.7(b)(10), 205.8(b), and 205.11(a). The court emphasized that under Fed.R.Civ.P. 8, complaints plead 'claims,' not specific 'legal theories' or regulations, and therefore Gale was not required to cite these regulations explicitly. The district court erred by relying on facts adverse to the plaintiff when dismissing under Rule 12(b)(6), and should have converted the motion to one for summary judgment if it considered external email evidence.