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Shaw v. Experian Information Solutions, Inc.

United States District Court, S.D. California

September 29, 2014

JOHN T. SHAW; KENNETH COKE; and RAYMOND RYDMAN, on behalf of themselves and all others similarly situated, Plaintiffs,
v.
EXPERIAN INFORMATION SOLUTIONS, INC.; WELLS FARGO BANK, N.A.; and CITIMORTGAGE, INC., Defendants

For John T. Shaw, on behalf of himself and all others similarly situated, Plaintiff: Matthew J. Zevin, LEAD ATTORNEY, Stanley Iola, LLP, San Diego, CA; Deyar Jamil, PRO HAC VICE, DMJ Law PC, Chicago, IL; Eric S. Pavlack, PRO HAC VICE, Pavlack Law, LLC, Indianapolis, IN; G. John Cento, PRO HAC VICE, Centro Law, LLC, Indianapolis, IN; Mara McRae, PRO HAC VICE, McRae Brooks Warner LLC, Atlanta, GA.

For Kenneth Coke, Raymond Rydman, Plaintiffs: Mara McRae, PRO HAC VICE, McRae Brooks Warner LLC, Atlanta, GA; Matthew J. Zevin, Stanley Iola, LLP, San Diego, CA.

For Experian Information Solutions, Inc., Defendant: Kelly V. O'Donnell, LEAD ATTORNEY, Jones Day, San Diego, CA; Adam W. Wiers, PRO HAC VICE, Jones Day, Chicago, IL.

For Wells Fargo Bank, NA, Defendant: David A. Berkley, LEAD ATTORNEY, Severson & Werson, APC, Irvine, CA; Scott J Hyman, LEAD ATTORNEY, Severson and Werson, Irvine, CA; Steven E Rich, LEAD ATTORNEY, Mayer Brown LLP, Los Angeles, CA.

For CitiMortgage, Inc., Defendant: Steven E Rich, LEAD ATTORNEY, Mayer Brown LLP, Los Angeles, CA; Lucia Nale, Matthew D. Provance, Thomas Panoff, PRO HAC VICE, Mayer Brown LLP, Chicago, IL.

Page 703

ORDER: (1) GRANTING IN PART AND DENYING IN PART DEFENDANT CITIMORTGAGE, INC.'S MOTION TO DISMISS; (2) GRANTING IN PART AND DENYING IN PART DEFENDANT WELLS FARGO BANK, N.A.'S MOTION TO DISMISS; AND (3) DENYING AS MOOT DEFENDANTS CITIMORTGAGE, INC. AND WELLS FARGO BANK, N.A.'S MOTION TO MAINTAIN THE STAY OF DISCOVERY (ECF Nos. 58, 60, 61)

Honorable Janis L. Sammartino, United States District Judge.

Presently before the Court are Defendant CitiMortgage, Inc.'s (" CitiMortgage" ) Motion to Dismiss Second Amended Complaint or, in the Alternative, to Dismiss

Page 704

and/or Strike Class Allegations (" MTD" ) (ECF No. 58); Defendant Wells Fargo Bank, N.A.'s (" Wells Fargo" ) Motion to Dismiss and Partial Joinder in CitiMortgage's Motion to Dismiss Plaintiff's Second Amended Complaint or, in the Alternative, to Strike Class Allegations (ECF No. 60); and CitiMortgage and Wells Fargo's (collectively, " Furnishers" ) Motion to Maintain the Stay of Discovery Pending Resolution of Their Motions to Dismiss and Joinder of Experian Information Solutions, Inc. (ECF No. 61). Also before the Court are Plaintiffs John T. Shaw (" Shaw" ), Kenneth Coke (" Coke" ), and Raymond Rydman's (" Rydman," and, collectively, " Plaintiffs" ) Combined Response to Furnishers' MTDs (ECF No. 66), Plaintiffs' Combined Response to Furnishers' Motion to Maintain the Stay of Discovery (ECF No. 67), and Furnishers and Defendant Experian Information Solutions, Inc.'s (collectively, " Defendants" ) Combined Reply Brief in Support of the Motions (ECF No. 68). The Court vacated the hearings scheduled for July 31, 2014 and took the matters under submission without oral argument pursuant to Civil Local Rule 7.1(d)(1). (ECF No. 69.) Having considered the parties' arguments and the law, the Court GRANTS IN PART AND DENIES IN PART Furnishers' MTDs and DENIES AS MOOT Furnishers' Motion to Maintain the Stay of Discovery.

BACKGROUND

Plaintiffs--all " consumers" as defined by § 1681a(c) of the Fair Credit Reporting Act (" FCRA" ), 15 U.S.C. § § 1681-1681x--bring this putative class action against Experian Information Solutions, Inc. (" Experian" )--a " consumer reporting agency" as defined by § 1681a(f) of the FCRA--and Wells Fargo and CitiMortgage, both " furnishers of information" under the FCRA.[1] (Second Am. Class Action Compl. (" SAC" ) ¶ ¶ 6-12, ECF No. 56.) Plaintiffs bring the action on behalf of four (4) classes, each of which comprises thousands of consumers who engaged in short sales that were inaccurately, incompletely, and/or misleadingly reported by Defendants. ( Id. ¶ ¶ 4-5, 83.)

As a consumer reporting agency, " Experian collects consumer credit information from tens of thousands of furnishers," electronically processing that information and storing it in its databases. ( Id. ¶ ¶ 16-18.) Allegedly, " [f]urnishers report consumer credit information to Experian and other consumer reporting agencies through the use of coded tapes" that utilize the Metro 2 standardized format. ( Id. ¶ ¶ 24-25.)

Metro 2 provides both a basic reporting format and standard codes for reporting certain kinds of information. ( Id. ¶ 39.) To promote the standardized reporting of consumer credit information, the Consumer Data Industry Association (" CDIA" ) publishes the Credit Reporting Resource Guide (" the Guide" ), " a comprehensive overview of the Metro 2 format" that " also contains certain recommended credit reporting procedures for certain types of consumer credit reporting." ( Id. ¶ ¶ 40-44.)

Page 705

One such recommended credit reporting procedure concerns the reporting of short sales. ( Id. ¶ 45.) The Guide provides two options for reporting short sales, depending on whether or not the deficiency between the sale price and the balance owed on the loan is forgiven. ( Id. ¶ ¶ 47-49.) Plaintiffs allege that " [Furnishers] did not report and Experian did not maintain [Plaintiffs'] short sale results and the accounts related thereto as required by the Guide, Metro 2 formatting and their own dedicated policies and procedures for the proper reporting of the results of a short sale." ( Id. ¶ 53.)

In or around October 2004, Shaw obtained a mortgage with account number XXXXXXXXX1080 from Wells Fargo to finance the real property located at 212 Tenwood Court in Durham, North Carolina. ( Id. ¶ 59.) In or around March 2008, Shaw obtained another mortgage with account number XXXXXX8137 from CitiMortgage for said property. ( Id.) On March 26, 2010, Shaw sold the property through a short sale approved by Furnishers, both of which forgave the unpaid balance on Shaw's loans. ( Id.)

On September 21, 2005, Coke obtained a mortgage with account number XXXXXXXXX6335 from Wells Fargo to finance the real property located at 20 Ryland Park Drive #314 in San Jose, California. ( Id. ΒΆ 60.) On April 15, 2011, Coke sold the property through a short sale ...


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