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Neal v. Pentagon Federal Credit Union

United States District Court, D. Maryland

November 5, 2018

TIFFANY NEAL Plaintiff,
v.
PENTAGON FEDERAL CREDIT UNION, Defendant.

          MEMORANDUM OPINION

          Ellen L. Hollander United States District Judge.

         Plaintiff Tiffany Neal, a disabled veteran, filed a class action suit against Pentagon Federal Credit Union (“PenFed”), defendant. ECF 1 (the “Complaint”). In a “First Amended Class Action Complaint” (ECF 13, the “Amended Complaint”), she alleges that PenFed unlawfully withdrew disability benefits from her PenFed deposit account to cover overdue loan payments. Pursuant to Fed.R.Civ.P. 23(b)(3) and (b)(2), Neal brings the action “on behalf of herself and all other similarly situated veterans who have deposit accounts with PenFed and have received disability benefits through these same accounts which were . . . taken to cover loan defaults.” ECF 13, ¶ 4.[1]

         In her Amended Complaint, Neal asserts the proverbial kitchen sink of claims. She contends that PenFed's seizure of her benefits violated her federal rights under 38 U.S.C. § 5301, which statutorily protects disability benefits owed to veterans; the Truth in Lending Act, 15 U.S.C. §§ 1601 et seq. (“TILA”); and the Electronic Fund Transfer Act, 15 U.S.C. §§ 1693 et seq. (“EFTA”). Id. ¶ 6. In addition, she asserts State claims for breach of contract, negligence, negligent misrepresentation, constructive trust, accounting, unjust enrichment, conversion, as well as a violation of the Maryland Consumer Protection Act (“MCPA”), Md. Code (2013 Repl. Vol., 2017 Supp.), §§ 13-101 et seq. of the Commercial Law Article (“C.L.”). Id. ¶¶ 85-140. Neal seeks damages and injunctive relief, in addition to attorneys' fees and costs. Id. ¶ 4.

         PenFed has moved to dismiss the Amended Complaint, pursuant to Fed.R.Civ.P. 12(b)(6), for failure to state a claim. ECF 16 (the “Motion”). The Motion is supported by six exhibits. See ECF 16-1 to ECF 16-6. In the Motion, defendant argues that all claims fail as a matter of law. Id. at 1. Neal opposes the Motion. ECF 17 (“Opposition”). PenFed has replied. ECF 18 (“Reply”).

         No hearing is necessary to resolve the Motion. See Local Rule 105.6. For the reasons that follow, the Motion shall be granted in part and denied in part.

         I. Factual Background[2]

         PenFed is a “United States federal credit union headquartered in McClean, Virginia, chartered and regulated under the authority of the National Credit Union Administration.” ECF 13, ¶ 11. It “operates numerous locations in Maryland, ” but also has locations in Washington, D.C., Virginia, and at several military bases. Id.

         Neal is a disabled, honorably discharged veteran of the United States Army. Id. ¶ 10. In or around 2002, Neal opened an account with PenFed. Id. ¶ 14. Since then, “Neal has maintained several accounts” with PenFed (id. ¶ 15), including a deposit account in which “Neal has received her Veteran disability benefits.” Id. ¶ 16. Neal has relied on these benefits to “meet all her basic needs” and to “maintain and support her family and dependents.” Id. ¶ 17.

         In addition, “Neal entered into an agreement to access a loan and credit from PenFed.” Id. ¶ 18. Neal has two loan accounts with PenFed. Id. Plaintiff asserts that she “did not Specifically [sic] authorize electronic funds transfer and/or assignment of her disability benefits to [PenFed] in the event of a default on repayment of any of the loans or lines of credit.” Id. ¶ 20. Moreover, plaintiff asserts that, “[d]ue to the increased financial burden caused by sudden health emergencies she suffered, ” she “ended up defaulting on her monthly payments to PenFed on the loan accounts.” Id. ¶ 21. According to Neal, she “informed [PenFed] of the financial difficulties she was facing.” Id. ¶ 22.

         On June 28, 2017, Neal “received a direct deposit of her Veterans disability benefits . . . in the amount of $3, 282.78.” Id. ¶ 23. However, on July 4, 2017, PenFed transferred $49.66 of her disability benefits “to cover a delinquency on her loans accounts without Neal's knowledge, authorization or consent.” Id. ¶ 24. That same day, PenFed “subjected” Neal “to a $35.84 interest charge . . . and a $227.14 finance charge” on her loan accounts. Id. PenFed also “transferred $559.26 of [Neal's] veteran's disability benefits from her” deposit account “to cover a default on repayment of her loan.” Id. ¶ 25. Further, Neal contends that she “was not immediately notified that her veteran's disability benefits had been taken out by PenFed.” Id. ¶ 25.

         A few weeks later, on July 29, 2017, Neal received another direct deposit of benefits in the amount of $3, 282.78. Id. ¶ 26. Neal claims that on August 2, 2017, PenFed again “transferred $550.65 of [Neal's] veteran disability benefits” from her deposit account “to cover a loan payment delinquency without her knowledge, authorization or consent.” Id. ¶ 27.

         On August 30, 2017, Neal received another direct deposit of $3, 282.78. Id. ¶ 28. And, on September 2, 2017, defendant “transferred $559.26 of [Neal's] Veteran Disability Benefits . . . to cover a default on repayment of her loans.” Id. ¶ 29.

         Then, Neal received a fourth direct deposit of $3, 282.78 on September 27, 2017. Id. ¶ 30. Over the following week, PenFed withdrew money on three separate occasions- $1, 124.00 on September 28, 2017, and $59.05 and $551.59 on October 3, 2017-“to repay a delinquency on her loans.” Id. ¶¶ 31-33.

         Neal emphasizes that “[f]or all of the foregoing withdrawals PenFed never gave Neal notice that her veteran's disability benefits would be unilaterally taken out to repay any loan delinquencies on her loan accounts with PenFed.” Id. ¶ 34. Further, Neal maintains that “PenFed never notified Neal which specific loan delinquencies [were] being repaid.” Id. ¶ 35. Moreover, Neal argues that PenFed's “assignment of funds from deposit accounts of members without prior notice deprived Neal” and others of their veterans' benefits. Id. ¶ 42.

         Additional facts are included in the Discussion.

         II. Legal Standards

         A. Rule 12(d)

         Defendant's Motion is styled as a motion to dismiss under Fed.R.Civ.P. 12(b)(6). However, buried in a footnote (ECF 16 at 3 n.4), PenFed asks the Court to consider the Motion, in the alternative, as one for summary judgment under Fed.R.Civ.P. 56. A motion styled in this manner implicates the Court's discretion under Fed.R.Civ.P. 12(d). See Kensington Vol. Fire Dept., Inc. v. Montgomery Cty., 788 F.Supp.2d 431, 436-37 (D. Md. 2011).

         Ordinarily, a court “is not to consider matters outside the pleadings or resolve factual disputes when ruling on a motion to dismiss.” Bosiger v. U.S. Airways, 510 F.3d 442, 450 (4th Cir. 2007). However, under Rule 12(b)(6), a court, in its discretion, may consider matters outside of the pleadings, pursuant to Rule 12(d). If the court does so, “the motion must be treated as one for summary judgment under Rule 56, ” and “[a]ll parties must be given a reasonable opportunity to present all the material that is pertinent to the motion.” Fed.R.Civ.P. 12(d). When the movant expressly captions its motion “in the alternative” as one for summary judgment, and submits matters outside the pleadings for the court's consideration, the parties are deemed to be on notice that conversion under Rule 12(d) may occur; the court “does not have an obligation to notify parties of the obvious.” Laughlin v. Metro. Wash. Airports Auth., 149 F.3d 253, 261 (4th Cir. 1998).

         A district judge has “complete discretion to determine whether or not to accept the submission of any material beyond the pleadings that is offered in conjunction with a Rule 12(b)(6) motion and rely on it, thereby converting the motion, or to reject it or simply not consider it.” 5C Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1366 (3d ed. 2018). This discretion “should be exercised with great caution and attention to the parties' procedural rights.” Id. In general, courts are guided by whether consideration of extraneous material “is likely to facilitate the disposition of the action, ” and “whether discovery prior to the utilization of the summary judgment procedure” is necessary. Id.

         In my view, the footnote in defendant's Motion does not provide adequate notice that it “could be disposed of as one for summary judgment.” Laughlin, 149 F.3d at 261; see also Tsai v. Md. Aviation, 306 Fed.Appx. 1, 4 (4th Cir. 2008) (finding that the defendant's caption “Motion to Dismiss, or in the Alternative, Motion for Summary Judgment” provided notice of Rule 12(d) conversion). Therefore, I shall consider the Motion as one for dismissal under Rule 12(b)(6).

         B. Rule 12(b)(6)

         A defendant may test the legal sufficiency of a complaint by way of a motion to dismiss under Rule 12(b)(6). In re Birmingham, 846 F.3d 88, 92 (4th Cir. 2017); Goines v. Valley Cmty. Servs. Bd., 822 F.3d 159, 165-66 (4th Cir. 2016); McBurney v. Cuccinelli, 616 F.3d 393, 408 (4th Cir. 2010), aff'd sub nom., McBurney v. Young, 569 U.S. 221 (2013); Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). A Rule 12(b)(6) motion constitutes an assertion by a defendant that, even if the facts alleged by a plaintiff are true, the complaint fails as a matter of law “to state a claim upon which relief can be granted.”

         Whether a complaint states a claim for relief is assessed by reference to the pleading requirements of Fed.R.Civ.P. 8(a)(2). That rule provides that a complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” The purpose of the rule is to provide the defendants with “fair notice” of the claims and the “grounds” for entitlement to relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007).

         To survive a motion under Rule 12(b)(6), a complaint must contain facts sufficient to “state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570; see Ashcroft v. Iqbal, 556 U.S. 662, 684 (2009) (“Our decision in Twombly expounded the pleading standard for ‘all civil actions' . . . .”) (citation omitted); see also Willner v. Dimon, 849 F.3d 93, 112 (4th Cir. 2017). But, a plaintiff need not include “detailed factual allegations” in order to satisfy Rule 8(a)(2). Twombly, 550 U.S. at 555. Moreover, federal pleading rules “do not countenance dismissal of a complaint for imperfect statement of the legal theory supporting the claim asserted.” Johnson v. City of Shelby, Miss., ___ U.S. ___, 135 S.Ct. 346, 346 (2014) (per curiam).

         Nevertheless, the rule demands more than bald accusations or mere speculation. Twombly, 550 U.S. at 555; see Painter's Mill Grille, LLC v. Brown, 716 F.3d 342, 350 (4th Cir. 2013). If a complaint provides no more than “labels and conclusions” or “a formulaic recitation of the elements of a cause of action, ” it is insufficient. Twombly, 550 U.S. at 555. Rather, to satisfy the minimal requirements of Rule 8(a)(2), the complaint must set forth “enough factual matter (taken as true) to suggest” a cognizable cause of action, “even if . . . [the] actual proof of those facts is improbable and . . . recovery is very remote and unlikely.” Twombly, 550 U.S. at 556 (internal quotation marks omitted).

         In reviewing a Rule 12(b)(6) motion, a court “must accept as true all of the factual allegations contained in the complaint” and must “draw all reasonable inferences [from those facts] in favor of the plaintiff.” E.I. du Pont de Nemours & Co., 637 F.3d at 440 (citations omitted); see Semenova v. Md. Transit Admin., 845 F.3d 564, 567 (4th Cir. 2017); Houck v. Substitute Tr. Servs., Inc., 791 F.3d 473, 484 (4th Cir. 2015); Kendall v. Balcerzak, 650 F.3d 515, 522 (4th Cir. 2011), cert. denied, 565 U.S. 943 (2011). But, a court is not required to accept legal conclusions drawn from the facts. See Papasan v. Allain, 478 U.S. 265, 286 (1986). “A court decides whether [the pleading] standard is met by separating the legal conclusions from the factual allegations, assuming the truth of only the factual allegations, and then determining whether those allegations allow the court to reasonably infer” that the plaintiff is entitled to the legal remedy sought. A Soc'y Without a Name v. Cmm'w of Va., 655 F.3d 342, 346 (4th. Cir. 2011), cert. denied, 566 U.S. 937 (2012).

         Courts generally do not “resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses” through a Rule 12(b)(6) motion. Edwards, 178 F.3d at 243 (quotation marks and citation omitted). The purpose of the rule is to ensure that defendants are “given adequate notice of the nature of a claim” made against them. Twombly, 550 U.S. at 555-56. But, “in the relatively rare circumstances where facts sufficient to rule on an affirmative defense are alleged in the complaint, the defense may be reached by a motion to dismiss filed under Rule 12(b)(6).” Goodman v. Praxair, Inc., 494 F.3d 458, 464 (4th Cir. 2007) (en banc); accord Pressley v. Tupperware Long Term Disability Plan, 533 F.3d 334, 336 (4th Cir. 2009); see also U.S. ex rel. Oberg v. Penn. Higher Educ. Assistance Agency, 745 F.3d 131, 148 (4th Cir. 2014). However, because Rule 12(b)(6) “is intended [only] to test the legal adequacy of the complaint, ” Richmond, Fredericksburg & Potomac R.R. Co. v. Forst, 4 F.3d 244, 250 (4th Cir. 1993), “[t]his principle only applies . . . if all facts necessary to the affirmative defense ‘clearly appear[ ] on the face of the complaint.'” Goodman, 494 F.3d at 464 (quoting Forst, 4 F.3d at 250) (emphasis added in Goodman).

         C. Rule 9(b)

         To the extent that the Amended Complaint lodges a claim of fraud, Fed.R.Civ.P. 9(b) is pertinent.

         As a preliminary matter, claims that sound in fraud, whether rooted in common law or arising under a statute, implicate the heightened pleading standard of Fed.R.Civ.P. 9(b). See, e.g., E-Shops Corp. v. U.S. Bank N.A., 678 F.3d 659, 665 (8th Cir. 2012) (“Rule 9(b)'s heightened pleading requirement also applies to statutory fraud claims.”); see also Spaulding v. Wells Fargo Bank, N.A., 714 F.3d 769, 781 (4th Cir. 2013) (stating that an MCPA claim that “sounds in fraud[] is subject to the heightened pleading standards of Federal Rule of Civil Procedure 9(b)”).

         Rule 9(b) states: “In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally.” Under the rule, a plaintiff alleging claims that sound in fraud “‘must, at a minimum, describe the time, place, and contents of the false representations, as well as the identity of the person making the misrepresentation and what he obtained thereby.'” United States ex rel. Owens v. First Kuwaiti Gen'l Trading & Contracting Co., 612 F.3d 724, 731 (4th Cir. 2010) (citation omitted). In other words, “‘Rule 9(b) requires plaintiffs to plead the who, what, when, where, and how: the first paragraph of any newspaper story.'” Crest Construction II, Inc. v. Doe, 660 F.3d 346, 353 (8th Cir. 2011) (citation omitted).

         Rule 9(b) serves several salutary purposes:

First, the rule ensures that the defendant has sufficient information to formulate a defense by putting it on notice of the conduct complained of . . . . Second, Rule 9(b) exists to protect defendants from frivolous suits. A third reason for the rule is to eliminate fraud actions in which all the facts are learned after discovery. Finally, Rule 9(b) protects defendants from harm to their goodwill and reputation.

Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 784 (4th Cir. 1999) (citation omitted).

         Notably, however, Rule 9(b) by its plain text permits general averment of aspects of fraud that relate to a defendant's state of mind. And, a “court should hesitate to dismiss a complaint under Rule 9(b) if the court is satisfied (1) that the defendant has been made aware of the particular circumstances for which she will have to prepare a defense at trial, and (2) that plaintiff has substantial prediscovery evidence of those facts.” Id. Moreover, Rule 9(b) is “less strictly applied with respect to claims of fraud by concealment” or omission of material facts, as opposed to affirmative misrepresentations, because “an omission ‘cannot be described in terms of the time, place, and contents of the misrepresentation or the identity of the person making the misrepresentation.'” Shaw v. Brown & Williamson Tobacco Corp., 973 F.Supp. 539, 552 (D. Md. 1997) (quoting Flynn v. Everything Yogurt, HAR-92-3421, 1993 WL 454355, at *9 (D. Md. Sept. 14, 1993)).

         D. Exhibits

         Under limited circumstances, when resolving a Rule 12(b)(6) motion, a court may consider documents beyond the complaint without converting the motion to dismiss to one for summary judgment. Goldfarb v. Mayor & City Council of Baltimore, 791 F.3d 500, 508 (4th Cir. 2015).

         “Generally, when a defendant moves to dismiss a complaint under Rule 12(b)(6), courts are limited to considering the sufficiency of allegations set forth in the complaint and the ‘documents attached or incorporated into the complaint.'” Zak v. Chelsea Therapeutics Int'l, Ltd., 780 F.3d 597, 606 (4th Cir. 2015) (quoting E.I. du Pont de Nemours & Co., 637 F.3d at 448). In particular, a court may properly consider documents that are “explicitly incorporated into the complaint by reference and those attached to the complaint as exhibits.” Goines, 822 F.3d at 166 (citation omitted); see also U.S. ex rel. Oberg v. Pa. Higher Educ. Assistance Agency, 745 F.3d 131, 136 (4th Cir. 2014); Anand v. Ocwen Loan Servicing, LLC, 754 F.3d 195, 198 (4th Cir. 2014); Am. Chiropractic Ass'n v. Trigon Healthcare, Inc., 367 F.3d 212, 234 (4th Cir. 2004), cert. denied, 543 U.S. 979 (2004); Phillips v. LCI Int'l Inc., 190 F.3d 609, 618 (4th Cir. 1999).

         However, “before treating the contents of an attached or incorporated document as true, the district court should consider the nature of the document and why the plaintiff attached it.” Goines, 822 F.3d at 167 (citing N. Ind. Gun & Outdoor Shows, Inc. v. City of S. Bend, 163 F.3d 449, 455 (7th Cir. 1998)). Of import here, “[w]hen the plaintiff attaches or incorporates a document upon which his claim is based, or when the complaint otherwise shows that the plaintiff has adopted the contents of the document, crediting the document over conflicting allegations in the complaint is proper.” Goines, 822 F.3d at 167. Conversely, “where the plaintiff attaches or incorporates a document for purposes other than the truthfulness of the document, it is inappropriate to treat the contents of that document as true.” Id.

         Neal did not attach any exhibits to her Amended Complaint. But, FedPen attached six exhibits to its Motion. ECF 16-1 to ECF 16-6. These include the Promissory Note (ECF 16-1) that appears to be signed by “Tiffany Neal”; the Membership Agreement (ECF 16-2), which defines the terms of membership for PenFed account holders; and the Cardholder Agreement (ECF 16-3), which details the terms and agreements of a PenFed credit card. The Membership Agreement and the Cardholder Agreement are both unsigned. ECF 16-2 at 2; ECF 16-3 at 2-4. PenFed also appended to the Motion excerpts from Neal's bank statements for the period June 25, 2017, through October 25, 2017 (ECF 16-4, the “Consolidated Bank Statements”), as well as an excerpt from Neal's credit card statement of October 2, 2017. ECF 16-5 (the “Credit Card Statement”). Finally, FedPen submitted a letter of September 28, 2017, from the “Delinquency Control Center” to Neal, notifying Neal that funds were taken from her savings account “to pay the past due amount” on her credit card account. ECF 16-6 (the “Notification Letter”).

         The Promissory Note is integral to the Amended Complaint because it is referenced repeatedly, and because it appears to be the basis of the Amended Complaint. ECF 13, ¶¶ 13, 18, 78, 86-88, 90, 93. But, Neal objects to the authenticity of the Promissory Note. ECF 17 at 13. Specifically, she claims that PenFed never provided her with a copy of the Promissory Note. Id. In response, PenFed stresses that the Amended Complaint “explicitly admits that the loan agreement is an ‘enforceable contract' that was ‘signed by plaintiff.'” ECF 18 (citing ECF 13, ¶¶ 88, 130).

         In paragraph 130 of the Amended Complaint, Neal states, in part: “The loan agreement signed by plaintiff and PenFed is in violation of 38 U.S.C.S. § 5301 and is accordingly void.” However, it is not clear if the loan agreement and the Promissory Note are one and the same.

         As noted, the general rule is that “extrinsic evidence should not be considered at the 12(b)(6) stage.” Am. Chiropratic Ass'n v. Trigon Healthcare, Inc., 367 F.3d 212, 234 (4th Cir. 2004). “At the motion to dismiss stage, documents attached to a motion to dismiss need not be accompanied by a formal declaration authenticating them.” Six v. Generations Fed. Credit Union, 891 F.3d 508, 512-13 (4th Cir. 2018) (quotation marks and citation omitted). However, the Fourth Circuit has concluded “that when a defendant attaches a document to its motion to dismiss, a court may consider it in determining whether the dismiss the complaint if it was integral to and explicitly relied on in the complaint and if the plaintiffs do not challenge its authenticity.” Id. (internal quotation marks, parentheses, and citation omitted) (emphasis added).

         Although the Amended Complaint references a loan agreement Neal signed with PenFed (ECF 13, ¶¶ 88, 130), Neal has not admitted that the proffered Promissory Note is, in fact, the agreement she signed. Despite PenFed's assertions that the agreement is authentic, there is no other evidence supporting the authenticity of the document, aside from what appears to be Neal's signature on the Promissory Note. ECF 16-1 at 2. Therefore, at this juncture, I decline to consider the Promissory Note as evidence.

         In addition, Neal questions the authenticity of the Membership and Cardholder Agreements. ECF 17 at 13. As a result, I may not consider those exhibits. But, even if those agreements were of unquestioned authenticity, neither document is incorporated into the Amended Complaint. As such, the exhibits are inappropriate to consider in connection with a motion to dismiss. See Zak, 780 F.3d at 606 (“Consideration of extrinsic documents during the pleading stage of litigation improperly converts the motion to dismiss into a motion for summary judgment.”).

         The Consolidated Bank Statements are foundational to the Amended Complaint, because Neal explicitly relies on them (ECF 13, ¶ 23-33) and does not challenge their authenticity. ECF 17 at 13. The other exhibits-the Credit Card Statement (ECF 16-5) and the September 28, 2017 Notification Letter (ECF 16-6)-are not integral to the Amended Complaint. Therefore, it would be inappropriate to consider them at this stage. See Zak, 780 F.3d at 606.

         E. Choice of Law

         Jurisdiction is founded on federal question jurisdiction, supplemental jurisdiction, as well as diversity of citizenship. ECF 13, ¶ 8-9. Neal assumes, without discussion, that Maryland law applies to her State claims. See ECF 17 at 16-30. And, one of Neal's State claims is brought under the MCPA. ECF 13, ¶ 164-76. But, PenFed argues that the Amended Complaint “does not allege sufficient facts to determine whether Maryland law applies to Neal's state-law claims.” ECF 16 at 8 n.5. For the purpose of this Motion, however, PenFed assumes all State claims are asserted under Maryland law. Id.

         “When choosing the applicable state substantive law while exercising diversity or supplemental jurisdiction, a federal district court applies the choice of law rules of the forum state.” Ground Zero Museum Workshop v. Wilson, 813 F.Supp.2d 678, 696 (D. Md. 2011); see also Colgan Air, Inc. v. Raytheon Aircraft Co., 507 F.3d 270, 275 (4th Cir. 2007) (per curiam); Baker v. Antwerpen Motorcars Ltd., 807 F.Supp.2d 386, 389 n.13 (D. Md. 2011). Maryland is, of course, the forum state.

         As to contract claims, Maryland applies the law of the state in which the contract was formed (“lex loci contractus”), unless the parties to the contract agreed to be bound by the law of another state. See, e.g., Am. Motorists Ins. Co. v. ARTRA Group, Inc., 338 Md. 560, 573, 659 A.2d 1295, 1301 (1995); TIG Ins. Co. v. Monongahela Power Co., 209 Md.App. 146, 161, 58 A.3d 497, 507 (2012), aff'd, 437 Md. 372, 86 A.3d 1245 (2014). Neal does not explicitly allege that she entered into the contract while in Maryland, but notes that she resides in Howard County, Maryland (ECF 13, ¶ 10); that PenFed “operates numerous locations in Maryland” (id. ¶ 11); and that PenFed was engaged in “providing a variety of loans, savings and deposit accounts, credit cards and other financial services to Veterans in the State of Maryland . . .” Id. ¶ 12. As noted, PenFed does not dispute the application of Maryland law. ECF 16 at 8 n.5. Therefore, as to Neal's contract claims, I shall apply Maryland law.

         F. Class Certification

         The question of class certification is not before the Court. At this juncture, Neal need only show that she has stated a cause of action. Popoola v. M.D. Individual Practice Ass'n, Inc., DKC-03-3653, 230 F.R.D. 424, 433 (D. Md. 2005).

         Rule 23(c)(1) provides: “At an early practicable time after a person sues or is sued as a class representative, the court must determine by order whether to certify the action as a class action.” As a result, “[e]ither plaintiff or defendant may move for a determination of whether the action may be certified under Rule 23(c)(1).” 7AA Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1785 (3d ed. 2018). Here, neither Neal nor PenFed has moved, pursuant to Rule 23(c)(1), for a ruling on class certification. Thus, whether Neal has satisfied the requirements under Rule 23 for a class action is not ripe for resolution. See Lesser v. Balt. City Bd. of Sch. Comm'rs, JKB-17-046, 2017 WL 2733938, at *2 (D. Md. June 26, 2017) (“[A]nalysis of a prospective class's compliance with Rule 23 is not appropriately considered on a motion to dismiss, but should instead be addressed in a motion brought pursuant to Rule 23(c)(1)(a).”) (citation omitted); see also Marx v. Centran Corp., 747 F.2d 1536, 1552 (6th Cir. 1984) (noting that to certify a class in a meritless action would “promote inefficiency for its own sake”); Gilibeau v. City of Richmond, 417 F.2d 426, 432 (9th Cir. 1969) (“[C]ompliance with Rule 23 is not to be tested by a motion to dismiss for failure to state a claim.”).

         Even if neither party moves for a Rule 23(c)(1) decision, “the court has an independent obligation to decide whether an action brought on a class basis is to be so maintained.” 7AA Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1785 (3d ed. 2018). But, as the Seventh Circuit has noted, “there is no fixed requirement that the court must always defer a decision on a Rule 12(b)(6) motion until after the court addresses class certification.” McReynolds v. Merrill Lynch & Co., Inc., 694 F.3d 873, 879 n.4 (7th Cir. 2012) (emphasis in McReynolds). Although “a Rule 12(b)(6) dismissal operates as a final decision on the merits if leave to replead is not granted, it is sometimes appropriate to decide a Rule 12(b)(6) motion ahead of class certification.” Id. (citing Twombly, 550 U.S. 544, 550 (2007) (affirming dismissal of antitrust claims prior to ruling on class certification)).

         III. ...


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