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Marpu Venugopal v. Citibank


April 3, 2013


The opinion of the court was delivered by: Claudia Wilken United States District Judge


United States District Court For the Northern District of California

Defendant Citibank, NA moves to dismiss Plaintiff Marpu 11 Venugopal's first amended complaint (1AC) for failure to state a 12 claim. Plaintiff opposes the motion. After considering the 13 parties' submissions and oral argument, the Court denies 14 Defendant's motion.*fn1


On January 22, 2013, Plaintiff filed a 1AC alleging that 17 Defendant reported inaccurate information about his finances to 18 various credit reporting agencies. 1AC ¶¶ 12-20. Specifically, 19 Plaintiff claims that Defendant reported an outstanding debt of 20 $197,466 even though that debt had been discharged in a June 2009 21 bankruptcy proceeding. Id. 22

According to the 1AC, Plaintiff first learned of the 23 inaccuracy on May 2, 2011, when he received a credit report 24 claiming that he still owed an outstanding debt to Defendant. Id. 25

Three days later, on May 5, Plaintiff sent letters to the three 26 credit reporting agencies who compiled the report -- Experian, 2 Equifax, and TransUnion -- to dispute the outstanding debt. Id. 3 The letters requested that the agencies conduct "a formal, full, 4 and complete investigation of the information [Defendant] 5 furnished" to the agencies about his finances. Id. ¶ 16. 6

Although Plaintiff himself never contacted Defendant to dispute 7 the debt, he alleges that Experian, Equifax, and TransUnion "sent 8 notice of his dispute" to Defendant. Id. 9 Two weeks after writing to the credit reporting agencies, 10 Plaintiff requested new credit reports to confirm that the 11 misreported debt had been removed. He has attached excerpts from four of these credit reports to his 1AC. Id. ¶¶ 17-20, Ex. A. 13

Plaintiff concedes that three of these four reports show that 14 Defendant properly reported the discharge of his debt to Equifax 15 and TransUnion.*fn2 Id. ¶ 17. He asserts, however, that the fourth 16 report provides documentation of Defendant's reporting failure. 17 That report, issued by Experian on May 17, 2011, displays an 12 18 outstanding debt of zero dollars and notes that Plaintiff's 19 previous debt to Defendant was "included in Chapter 7 Bankruptcy 20 on June 23, 2009." Id., Ex. B, at 1. But the next page of the 21 report includes a debt timeline indicating that Plaintiff owed 22 Defendant an outstanding debt of $197,466 between May 2009 and 23 March 2011. Id. at 2. Because the debt timeline does not refer 24 to his 2009 bankruptcy, Plaintiff alleges that the timeline shows 25 26 that Defendant "re-reported the disputed overdue payments" after 2 he initiated his dispute with Experian. Id. ¶ 18. 3

Based on this report, Plaintiff asserts that Defendant 4 misreported his debt to Experian in violation of the Fair Credit 5 Reporting Act (FCRA), 15 U.S.C. § 1681s-2(b); the Consumer Credit 6 Reporting Agencies Act (CCRAA), Cal. Civ. Code § 1785.25; and the 7 Unfair Competition Law (UCL), Cal. Bus. & Prof. Code § 17200. Id. 8 ¶¶ 24-65. 9

United States District Court For the Northern District of California


A complaint must contain a "short and plain statement of the 11 claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a). On a motion under Rule 12(b)(6) for failure to 13 state a claim, dismissal is appropriate only when the complaint 14 does not give the defendant fair notice of a legally cognizable 15 claim and the grounds on which it rests. Bell Atl. Corp. v. 16 Twombly, 550 U.S. 544, 555 (2007). In considering whether the 17 complaint is sufficient to state a claim, the court will take all 18 material allegations as true and construe them in the light most 19 favorable to the plaintiff. NL Indus., Inc. v. Kaplan, 792 F.2d 20 896, 898 (9th Cir. 1986). However, this principle is inapplicable 21 to legal conclusions; "threadbare recitals of the elements of a 22 cause of action, supported by mere conclusory statements," are not 23 taken as true. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) 24 (citing Twombly, 550 U.S. at 555). Although the court is 25 typically confined to consideration of the allegations in the 26 pleadings, when the complaint is accompanied by attached 27 documents, such documents are deemed part of the complaint and may 28 be considered in evaluating the merits of a Rule 12(b)(6) motion.

Durning v. First Boston Corp., 815 F.2d 1265, 1267 (9th Cir. 2 1987). 3

When granting a motion to dismiss, the court is generally 4 required to grant the plaintiff leave to amend, even if no request 5 to amend the pleading was made, unless amendment would be futile. 6 Cook, Perkiss & Liehe, Inc. v. N. Cal. Collection Serv. Inc., 911 7 F.2d 242, 246-47 (9th Cir. 1990). In determining whether 8 amendment would be futile, the court examines whether the 9 complaint could be amended to cure the defect requiring dismissal 10 "without contradicting any of the allegations of [the] original complaint." Reddy v. Litton Indus., Inc., 912 F.2d 291, 296 (9th Cir. 1990). 13


A. Violations of the FCRA (First Cause of Action) 15

The FCRA was enacted "to ensure fair and accurate credit 16 reporting, promote efficiency in the banking system, and protect 17 consumer privacy." Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 18 52 (2007). To achieve this goal, it "imposes some duties on the 19 sources that provide credit information to CRAs, called 20 'furnishers' in the statute." Gorman v. Wolpoff & Abramson, LLP, 21 584 F.3d 1147, 1162 (9th Cir. 2009). These duties are triggered 22 whenever a credit reporting agency notifies the furnisher that a 23 consumer has disputed information that it provided to the agency. 24 Id.; 15 U.S.C. § 1681s-2(b)(1). Once this occurs, the furnisher 25 must "conduct an investigation with respect to the disputed 26 information," "review all relevant information provided by the 27 consumer reporting agency" about the dispute, and correct any 28 inaccuracies. Id.; see also Nelson v. Chase Manhattan Mortg. Corp., 282 F.3d 1057, 1059 (9th Cir. 2002) (describing furnisher's 2 duties under the FCRA). If the furnisher fails to carry out any 3 of these duties, the consumer who initiated the dispute may sue 4 the furnisher. 15 U.S.C. § 1681o; Nelson, 282 F.3d at 1059. 5

Here, Plaintiff asserts that Defendant breached its FCRA 6 duties by failing to notify Experian that his debt had been 7 discharged in a prior bankruptcy proceeding. As noted above, this 8 allegation is based entirely on the May 17, 2011 credit report 9 attached to Plaintiff's 1AC. 10

The May 17, 2011 credit report issued by Experian expressly states that Plaintiff's debt to Defendant was "included in [his] 12 Chapter 7 Bankruptcy on June 23, 2009." 1AC, Ex. B, at 1. 13

However, another section of the credit report -- the debt 14 timeline -- indicates that Plaintiff owed a debt to Defendant 15 between May 2009 and March 2011. Construed in the light most 16 favorable to Plaintiff, this report supports Plaintiff's claim 17 that Citibank continued to misreport Plaintiff's debt history even 18 after Plaintiff initiated his dispute with Experian. Accordingly, 19 he has stated a valid claim under the FCRA. 20

B. Violations of the CCRAA (Second Cause of Action) 21

The CCRAA prohibits "furnish[ing] information on a specific 22 transaction or experience to any consumer credit reporting agency 23 if the person knows or should know the information is incomplete 24 or inaccurate." Cal. Civ. Code § 1785.25(a). The CCRAA imposes 25 civil liability for a broader range of conduct than the FCRA, 26

Mortimer, 2012 WL 3155563, at *5 ("Unlike the FCRA, the CCRAA 27 includes a private right of action to enforce the prohibition 28 against supplying incomplete or inaccurate consumer credit information."). Because Plaintiff has alleged sufficient facts to 2 support his FCRA claim, he has also alleged sufficient facts to 3 support his CCRAA claim. 4

C. Violations of the UCL (Third Cause of Action) 5

Plaintiff's UCL claim is based on violations of the FCRA and CCRAA. Because both of those claims survive, so, too, does his 7 UCL claim. 8


For the reasons set forth above, the Court DENIES Defendant's 10 motion to dismiss (Docket No. 29). Defendant must file its answer 11 within twenty-one days of this order.


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