The opinion of the court was delivered by: James Ware, United States District Judge.
MOTION TO DISMISS
This is a consumer credit reporting case which presents the issue of
whether federal law preempts state law regarding the fights and
obligations of furnishers of consumer credit information. Defendant
Citibank*fn1("Citibank") filed a motion to dismiss Plaintiff Hua Lin's
("Lin") state law claims for violations of the California Consumer Credit
Reporting Agencies Act ("CCRAA")*fn2 §§ 1785.25(a)-(c)*fn3 on the
ground that the federal Fair Credit
Reporting Act ("FCRA")*fn4,
15 U.S.C. § 1681 et seq., preempts such claims and bars any private
right of action under the state statute.*fn5 The Court found it
appropriate to determine Citibank's motion based on the papers without
oral argument pursuant to Civil L.R. 7-1(b).
Lin concedes that his third and fourth claims for relief, filed
pursuant to CCRAA §§ 1785.25(b)-(c), are preempted by FCRA. Therefore,
the Court will only address Lin's second claim for relief, filed pursuant
to CCRAA § 1785.25(a). For the reasons discussed below, the Court
finds that Lin's second claim is not preempted by FCRA, but also finds
that CCRAA § 1785.25(a) does not permit a consumer to bring a private
right of action against a furnisher of consumer credit information.
Accordingly, the Court grants Citibank's motion to dismiss.
On July 19, 2002, Lin filed a lawsuit against Citibank in the Santa
Clara County Superior Court. Citibank properly removed the action to this
Court pursuant to 28 U.S.C. § 1441(b) and 1331. Lin's complaint
states that Citibank allegedly furnished adverse credit information about
him to a credit reporting agency regarding a credit card account which
Lin contends he never opened with Citibank.*fn6 Lin alleges that
Citibank inaccurately reported that he owned the account and that the
account was delinquent without first providing him with a notice of the
delinquent account. When Lin attempted to correct these errors with
Citibank, he alleges that Citibank failed to correct the inaccuracies.
Thereafter, Lin contacted the credit reporting agency directly and asked
it to investigate the dispute.
When the credit reporting agency called Citibank to verify the account
information, Lin alleges that Citibank did not convey the truth about his
credit information, but instead affirmed that the delinquent account
belonged to Lin. Based on the conduct of Citibank, Lin contends that
Citibank violated the following statutes: CCRAA §§ 1785.26,
FCRA 15 U.S.C. § 1681s-2(b)*fn8. Citibank
does not contend that Lin's claim filed pursuant to CCRAA § 1785.26,
nor his claim filed pursuant to FCRA 15 U.S.C. § 1681s-2(b), are
preempted by federal law. Rather, Citibank seeks to dismiss only Lin's
claims based upon CCRAA §§ 1785.25(a)-(c) on the ground that the FCRA
preempts these state law claims.
Motions to dismiss are viewed with disfavor and are rarely granted.
Hall v. City of Santa Barbara, 833 F.2d 1270, 1274 (9th Cir. 1986);
United States v. City of Redwood City, 640 F.2d 963, 966 (9th Cir.
1981). A claim may be dismissed as a matter of law for one of two
reasons: "(1) lack of a cognizable legal theory or (2) insufficient facts
under a cognizable legal theory." Robertson v. Dean Witter Reynolds.
Co., 749 F.2d 530, 534 (9th Cir. 1984).
"A complaint cannot be dismissed for failure to state a claim unless it
appears beyond doubt that the plaintiff can prove no set of facts in
support of his claim which would entitle him to relief." Conley v.
Gibson, 355 U.S. 41, 45-46 (1957); Moore v. City of Costa Mesa,
886 F.2d 260, 262 (9th Cir. 1989). "[A] complaint should not be dismissed
if it states a claim under any legal theory, even if the plaintiff
erroneously relies on a different legal theory." Haddock v. Board of
Dental Examiners, 777 F.2d 462, 464 (9th Cir. 1985).
"All material allegations in the complaint are to be taken as true and
construed in the light most favorable to the non-moving party." Sanders
v. Kennedy, 794 F.2d 478, 481 (9th Cir. 1986); NL Indus., Inc. v.
Kaplan, 792 F.2d 896, 898 (9th Cir. 1986). However, the Court will not
accept wholly conclusory allegations. Western Mining Council v. Watt,
643 F.2d 618, 624 (9th Cir. 1981), cert. denied, 454 U.S. 1031 (1981);
Kennedy v. H & M Landing, Inc., 529 F.2d 987, 989 (9th Cir. 1976).
A determination of Citibank's motion depends on two issues: (1) whether
the FCRA completely preempts the CCRAA in matters relating to the
responsibilities of furnishers of consumer credit information; and, (2)
whether, absent complete preemption, the CCRAA § 1785.25(a)
specifically confers upon consumers a ...