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Rand v. Citibank

United States District Court, N.D. California

February 6, 2015

DAVID L. RAND, Plaintiff,
CITIBANK, N.A., Defendant.


NATHANAEL M. COUSINS, Magistrate Judge.

Plaintiff David Rand brings this action against Citibank alleging that Citibank obtained his credit report without authorization, made a false report to credit reporting agencies, and refused to remove incorrect information, in violation of federal and state law. Citibank now moves to dismiss the first amended complaint for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). Because the Court finds that Rand has sufficiently stated a claim for relief, the motion is DENIED.


A. The Allegations of the Operative Complaint

In analyzing claims under Federal Rule of Civil Procedure 12(b)(6), the Court assumes that all material facts alleged in the complaint are true. Coal. For ICANN Transparency, Inc. v. Verisign, Inc., 611 F.3d 495, 501 (9th Cir. 2010). The operative, first amended complaint alleges that Rand is a long-time customer of Citibank, who was a victim of identity theft in early 2014. Dkt. No. 10 ¶¶ 8-9. On June 14, 2014, an unknown individual attempted to obtain a Zales credit card from Citibank using Rand's stolen information. Id. ¶ 10. This application did not contain Rand's correct social security number. Id. Citibank then requested Rand's credit report from a credit reporting agency in connection with the fraudulent credit application. Id. ¶ 12. Citibank denied the application due to the fact that the social security information provided was inaccurate. Id. ¶ 13. This left a "hard credit inquiry" on Rand's credit report. Id. Shortly thereafter, Citibank received notice from both Rand and the credit reporting agency that the credit application was fraudulent and thus that the credit inquiry was unauthorized. Id. ¶¶ 16-19.

The first amended complaint further alleges that Rand repeatedly contacted Citibank seeking the removal of the unauthorized inquiry on his credit report and Citibank promised that it will remove it. Id. ¶¶ 19-22. Citibank informed Rand by letter that it was investigating his concerns about the fraudulent credit application and that it had submitted a request to the credit reporting agency to change the unauthorized "hard inquiry" to a "soft inquiry." Id. ¶¶ 24-25. However, Citibank did not change the status of the credit inquiry on Rand's credit report, and did not remove the unauthorized credit inquiry. Id. ¶ 26. Furthermore, that same month, Citibank rejected Plaintiff's request for a line of credit increase in the amount of at least $4, 300. Id. ¶ 23. The sole reason given for this rejection was "excessive recent credit inquiries." Id.

B. Procedural History

Rand initially filed this action in the Small Claims Court of the Superior Court of the State of California for the County of Santa Clara on September 29, 2014. Dkt. No. 1-1. The small claim alleged that Citibank violated 15 U.S.C. § 1681n. Id. at 3. On October 27, 2014, Citibank removed the small claims case to this Court pursuant to 28 U.S.C. § 1331 and § 1441(a) based on federal question jurisdiction and then moved to dismiss the complaint. Dkt. Nos. 1, 7. Instead of opposing the motion, Rand filed the first amended complaint. Dkt. No. 10.

In his first amended complaint, Rand brings three claims against Citibank: (1) for violation of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681s-2(b) by furnishing inaccurate information about Rand, failing to report the results of its investigation, and failing to modify, delete, or permanently block the inaccurate information; (2) for violation of FCRA, 15 U.S.C. § 1681b(f), by willfully and/or negligently obtaining information from a consumer reporting agency without having a permissible purpose; and (3) for violation of the California Consumer Credit Reporting Agencies Act ("CCCRAA"), Cal. Civ. Code, § 1785.25(a) by intentionally processing a fraudulent credit application in Rand's name, passing on adverse and incorrect credit information to credit agencies, and failing to correct the false information. Dkt. No. 10.

On December 4, 2014, Citibank moved under Federal Rule of Civil Procedure 12(b)(6) to dismiss the first amended complaint for failure to state a claim. Dkt. No. 12.

The Court has federal question jurisdiction over the FCRA claims under 28 U.S.C. § 1331, and supplemental jurisdiction over the state law claim under 28 U.S.C. § 1367. Both parties consented to the jurisdiction of a United States Magistrate Judge under 28 U.S.C. § 636(c). Dkt. Nos. 6, 8.


A motion to dismiss for failure to state a claim under Rule 12(b)(6) tests the legal sufficiency of a complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). On a motion to dismiss, all allegations of material fact are taken as true and construed in the light most favorable to the non-movant. Coal. For ICANN Transparency, Inc., 611 F.3d at 501. The Court, however, need not accept as true "allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." In re Gilead Scis. Secs. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008). While a complaint need not allege detailed factual allegations, it must contain sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible when it "allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

"[I]n dismissing for failure to state a claim under Rule 12(b)(6), a district court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts.'" Lopez v. Smith, 203 F.3d 1122, 1127 ...

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