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Boyd v. JP Morgan Chase Bank

United States District Court, D. New Mexico

September 24, 2019

JOHN R. BOYD, Plaintiff,



         In 2005, Plaintiff John R. Boyd received a brochure for a credit card Defendant Chase Bank offered which advertised an introductory APR of 0% for 15 months and a 7.99% fixed APR after that. In a footnote attached to the word APR, the brochure advised that the APR was subject to change at Chase’s discretion. Plaintiff asserts he did not read the footnote. He applied for the card, was approved, and continued using it for decades. Chase eventually advised him that it was changing the APR to a variable rate and Plaintiff, believing he was entitled to a fixed APR of 7.99% forever, sued. Plaintiff’s claim to an enduring 7.99% APR is undermined by contracts accompanying Plaintiff’s credit card that reserved Chase’s right to change the APR and by the notice Chase sent to Plaintiff about the change to the APR. Because this contractual language and notice also fulfills Chase’s obligations under federal law, the Court grants Chase summary judgment on all claims in Plaintiff’s complaint.


         A. Factual history

         Plaintiff received a solicitation to sign up for a credit card from Defendant Chase Bank USA, N.A. (“Chase”) in 2005. Affidavit of Ronald Boyd (“Boyd Aff.”), Doc. 20-1 at 1 ¶ 2; Exhibit E to Boyd Aff., Doc. 20-1 at 11-12. That solicitation advised him he was pre-approved for a credit card at an introductory rate of 0% APR until February 1, 2007. Doc. 20-1 at 11. “Keep saving, ” the solicitation advised, “after the introductory period with a 7.99% fixed APR3 on purchases and balance transfers. Still lower than most cards.” Id. (superscript in original). The text of footnote 3 appears on the following page. It states:

You understand that the terms of your account, including the APRs, are subject to change. This means that the APRs for this offer are not guaranteed; APRs may change to higher APRs, fixed APRs may change to variable APRs, or variable APRs may change to fixed APRs. We reserve the right to change the terms (including the APRs) at any time for any reason, in addition to APR increases that may occur for failure to comply with the terms of your account. Any changes will be in accordance with your Cardmember Agreement. Please read very carefully the “Rate, Fee and Other Cost Information” section included with this offer.

Doc. 20-1 at 12. Plaintiff noticed that there was a footnote 3, but didn’t read it. Boyd Aff., Doc. 20-1 at 1-2 ¶ 5.

         Plaintiff applied for the credit card and was approved. Boyd Aff., Doc. 20-1 at 1 ¶ 4. The Cardmember Agreement that accompanied the credit card (hereinafter “Original Cardmember Agreement”) stated:

We can change this agreement at any time, regardless of whether you have access to your account, by adding, deleting, or modifying any provision. Our right to add, delete, or modify provisions includes financial terms, such as the APRs and fees, and other terms such as the nature, extent, and enforcement of the rights and obligations you or we may have relating to this agreement. Modifications, additions, or deletions are called “Changes” or a “Change.”

         Def’s Mot. for Summary Judgment, Fact #12, [1] Doc. 30 at 5-6; Def’s Exhibit 1-C, Doc. 26-3 at 4.

         In 2010, Chase notified Plaintiff that it was increasing the APR on the card. Boyd Aff., Doc. 20-1 at 2 ¶ 6. Plaintiff filed suit in state court in May 2010, bringing counts for fraud, unfair trade practices, bad faith, and a putative class action. Boyd Aff., Exhibit E, Doc. 20-1 at 4-10. Plaintiff and Chase settled that lawsuit, agreeing to return Plaintiff’s card to a fixed APR of 7.99% and providing Plaintiff with a certain sum of money.[2] Boyd Aff., Doc. 20-1 at 2 ¶ 8. The APR remained 7.99% from that time until early 2018. Boyd Aff., Doc. 20-1 at 2 ¶ 9.

         At some unspecified time prior to 2018, Chase sent Plaintiff a new Cardmember Agreement amending the terms governing his account. Def’s Mot. for Summary Judgment, Fact # 13, Doc. 30 at 6. The new agreement (hereinafter “the New Cardmember Agreement”) similarly stated:

We may change the terms of this agreement including APRs and fees from time to time. We may also add new terms or delete terms. APRs or other terms may also change without amendment, for example when the Prime Rate changes.

         Def’s Exhibit 1-G, Doc. 26-7 at 6. Plaintiff does not dispute this fact, but points out that “If the change from a fixed to a variable APR is rejected Plaintiff loses his credit card.” Doc. 37 at 2.

         Also at an unspecified time, but after issuing the New Cardmember Agreement, Chase sent Plaintiff a change-in-terms notification to inform him that, as of January 22, 2018, the APR for his account would change from a fixed APR to a variable APR at a base rate of 12.99%. Boyd Aff., Doc. 20-1 at 2 ¶ 9; Def’s Exhibit 1-E, Doc. 26-5. The notice stated that Plaintiff could reject the change by contacting Chase by January 21, 2018. Def’s Exhibit 1-E, Doc. 26-5 at 1. If contacted, Chase would close the credit card account. Id. Plaintiff did not contact Chase until March 8, 2018. Boyd Aff., Exhibit F, Doc. 20-1 at 13. In his March 8 letter, Plaintiff did not request his account be closed, but stated he would sue Chase unless they restored the APR to 7.99%. Id. Chase responded to the letter, pointing to the language in the New Cardmember Agreement permitting such changes. Boyd Aff., Exhibit D, Doc. 20-1 at 14-15. Chase accordingly refused to restore the APR to 7.99% on his card. Id. at 14.

         B. Procedural history

         Plaintiff filed this case in state court on June 12, 2018. Doc. 1-1. He then filed a First Amended Complaint and a Second Amended Complaint. Docs. 1-2 & 1-3. The Second Amended Complaint alleges that Defendant violated “Truth In Lending and Regulation Z” by “unilaterally changing the rate of interest on this account.” Doc. 1-3 ¶ 6. Defendant removed the case to federal court on August 6, 2018, explaining that the Truth in Lending Act (“TILA”) and Regulation Z are both federal laws, thus conferring original jurisdiction on federal district courts pursuant to 28 U.S.C. § 1331. Doc. 1 at ¶¶ 6-7. Plaintiff did not file a motion to remand and has subsequently argued in his briefing that Defendant violated federal law by changing the APR on his credit card. E.g., Doc. 21 at 1 (citing TILA and Regulation Z); Doc. 37 at 3. Thus, the Court finds that it has original jurisdiction over this matter.

         Currently pending before the Court are three motions: (1) Motion for Judgment on the Pleadings, filed by Defendant on March 20, 2019 (Doc. 19); (2) Motion for Partial Summary Judgment, filed by Plaintiff on March 28, 2019 (Doc. 20); and (3) Motion for Summary Judgment, filed by Defendant on May 3, 2019 (Doc. 30). On September 10, 2019, the parties consented to the undersigned to “conduct any and all proceedings and enter a final order as to each motion.” Doc. 47. Under 28 U.S.C. § 636(c)(3), appeal of this order lies to the Tenth Circuit Court of Appeals.

         The Court grants Chase’s Motion for Summary Judgment and denies Plaintiff’s Motion for Partial Summary Judgment. Chase’s Motion for Judgment on the Pleadings is accordingly denied as moot.

         STANDARD ...

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