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Hasan v. Chase Bank USA, N.A.

United States Court of Appeals, Tenth Circuit

January 26, 2018

MALIK M. HASAN, M.D., Plaintiff - Appellant,
v.
CHASE BANK USA, N.A., Defendant-Appellee. MALIK M. HASAN, M.D., Plaintiff - Appellant,
v.
AMERICAN EXPRESS CENTURION BANK, Defendant-Appellee.

         Appeal from the United States District Court for the District of Colorado (D.C. No. 1:16-CV-01991-RPM) and (D.C. No. 1:16-CV-02549-RBJ)

          Glenn W. Merrick, G.W. Merrick & Associates, LLC, Centennial, Colorado, for Plaintiff-Appellant.

          Alan E. Schoenfeld, Wilmer Cutler Pickering Hale and Dorr LLP, New York, New York (Arpit K. Garg, Wilmer Cutler Pickering Hale and Dorr, Washington D.C., with him on the brief), for Defendant-Appellee Chase Bank USA, N.A.

          Steven M. McCartan, Shook, Hardy & Bacon LLP, Kansas City, Missouri, (Eric J. Hobbs, Shook, Hardy & Bacon LLP, Denver, Colorado, with him on the brief), for Defendant-Appellee American Express Centurion Bank.

          Before MORITZ, KELLY, and MURPHY, Circuit Judges.

          MORITZ, CIRCUIT JUDGE.

         Malik Hasan ordered wine from Premier Cru Fine Wines (Premier Cru) and paid with credit cards issued by Chase Bank USA, N.A. (Chase) and American Express Centurion Bank (AmEx). Premier Cru declared bankruptcy while Hasan was still waiting for delivery of wine that he paid nearly $1 million for. Hasan asserts that under a provision of the Fair Credit Billing Act (FCBA), 15 U.S.C. §§ 1666-66j, Chase and AmEx must refund his accounts the amount he paid for wine that Premier Cru failed to deliver. But because we reject Hasan's interpretation of that FCBA provision-§ 1666i-we affirm the district court's orders dismissing his complaints against Chase and AmEx.

         I

         Hasan used his Chase and AmEx credit cards to purchase wine from Premier Cru for future delivery: Hasan paid up front, and Premier Cru agreed to deliver the wine sometime in the future. Premier Cru fulfilled some, but not all, of Hasan's orders. And in January 2016, Premier Cru declared bankruptcy. At that time, Hasan had paid $689, 176.92 with his Chase card and $379, 153.72 with his AmEx card for wine he never received.

         Hasan asked both companies to refund his accounts for the undelivered wine under § 1666i of the FCBA. Chase complied in part and credited Hasan's account $100, 136.88.[1] AmEx refused to credit Hasan's account. So Hasan filed a lawsuit against each company, seeking $589, 040.04 from Chase and $379, 153.72 from AmEx.

         Chase and AmEx each filed a motion to dismiss, arguing primarily that because Hasan had fully paid the balance on his credit cards, he had no claim under § 1666i. The district court in Chase's case ruled first, agreed with Chase's interpretation of § 1666i, and dismissed the case. The district court in AmEx's case adopted the statutory-interpretation reasoning of the earlier decision and dismissed Hasan's case. Hasan appeals.[2]

         II

         We review de novo a district court's dismissal of a complaint for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). Alvarado v. KOB-TV, LLC, 493 F.3d 1210, 1215 (10th Cir. 2007). Likewise, we independently interpret statutes. United States v. Black, 773 F.3d 1113, 1115 (10th Cir. 2014).

         Statutory interpretation begins with the words in the statute. Levorsen v. Octapharma Plasma, Inc., 828 F.3d 1227, 1231 (10th Cir. 2016). The statute at issue in this case, § 1666i, has two sections. The first makes credit-card issuers "subject to all claims (other than tort claims) and defenses arising out of any transaction in which the credit card is used as a method of payment or extension of credit." § 1666i(a). This broadly worded first section, though, is "[s]ubject to the limitation contained in subsection (b)." Id. And subsection (b) limits the amount of a cardholder's claims or defenses to "the amount of credit outstanding with respect to [the disputed] transaction at the time the cardholder first ...


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