United States District Court, N.D. California, San Jose Division
ORDER GRANTING DEFENDANT IQ DATA INTERNATIONAL,
INC.’S MOTION TO DISMISS PLAINTIFF'S FIRST AMENDED
COMPLAINT WITH LEAVE TO AMEND [Re: ECF 36]
BETH
LABSON FREEMAN UNITED STATES DISTRICT JUDGE
Defendant
IQ Data International, Inc. (“IQ Data”) moves to
dismiss Plaintiff’s first amended complaint
(“FAC”) for failure to state a claim under
Federal Rule of Civil Procedure 12(b)(6).[1] The Court granted
IQ Data’s prior motion to dismiss Plaintiff’s
complaint on the ground that the complaint was so devoid of
factual specificity that it failed to meet even the most
basic pleading requirements. See Order Granting
Defendant IQ Data International’s Motion to Dismiss the
Complaint with Leave to Amend, ECF 31. For the reasons stated
on the record at the hearing on July 7, 2016, and discussed
below, the Court concludes that Plaintiff has fared little
better with respect to her FAC. Defendant IQ Data’s
motion is GRANTED WITH LEAVE TO AMEND.
I.
BACKGROUND
Plaintiff
asserts claims under the Fair Credit Reporting Act
(“FCRA”), 15 U.S.C. § 1681s-2(b), and the
California Consumer Credit Reporting Agencies Act
(“CCRA”), Cal. Civ. Code § 1785.25(a), based
upon alleged inaccuracies in her credit reports. Plaintiff
alleges that she filed for Chapter 7 bankruptcy protection in
January 2015; her Chapter 7 bankruptcy was discharged in May
2015; and following discharge she “noticed several
tradelines reporting a misleading and or inaccurate account
status or listing of the account as in collections and or
charged off rather than discharged in Bankruptcy.” FAC
¶¶ 5-7. Plaintiff alleges that the inaccurate
tradelines were reported by Defendants HSBC Bank, USA
(“HSBC Bank”) and IQ Data. FAC ¶¶ 8-9.
With respect to IQ Data, Plaintiff alleges only that IQ Data
reported Plaintiff’s account as being
“open” and did not reference Plaintiff’s
Chapter 7 discharge. FAC ¶ 9.
Plaintiff
alleges that she disputed the inaccurate tradelines via
certified mail to consumer reporting agencies Experian
Information Solutions, Inc., Equifax, Inc., and TransUnion,
LLC, and that each of those agencies “sent each
Defendant notification that plaintiff was disputing the
accuracy of what it was reporting to them.” FAC
¶¶ 10-11. Plaintiff claims that
“Defendants” failed to conduct a reasonable
investigation and reported misleading and inaccurate
information to Experian, Equifax, and TransUnion, and that
Experian failed to perform its own reasonable investigation
or to correct inaccuracies. FAC ¶¶ 12-13. Based on
those allegations, Plaintiff sues Experian, IQ Data, and HSBC
Bank for violations of the FCRA and CCRA. The present motion
to dismiss is brought only by IQ Data.
II.
LEGAL STANDARD
“A
motion to dismiss under Federal Rule of Civil Procedure
12(b)(6) for failure to state a claim upon which relief can
be granted ‘tests the legal sufficiency of a
claim.’” Conservation Force v. Salazar,
646 F.3d 1240, 1241-42 (9th Cir. 2011) (quoting Navarro
v. Block, 250 F.3d 729, 732 (9th Cir. 2001)). When
determining whether a claim has been stated, the Court
accepts as true all well-pled factual allegations and
construes them in the light most favorable to the plaintiff.
Reese v. BP Exploration (Alaska) Inc., 643 F.3d 681,
690 (9th Cir. 2011). However, the Court need not
“accept as true allegations that contradict matters
properly subject to judicial notice” or
“allegations that are merely conclusory, unwarranted
deductions of fact, or unreasonable inferences.” In
re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th
Cir. 2008) (internal quotation marks and citations omitted).
While a complaint need not contain detailed factual
allegations, it “must contain sufficient factual
matter, accepted as true, to ‘state a claim to relief
that is plausible on its face.’” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting 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.” Id.
III.
DISCUSSION
As
noted above, Plaintiff asserts claims under the FCRA and the
CCRA. The Court addresses those claims in turn.
A.Claim
1 - FCRA
Congress
enacted the FCRA “‘to ensure fair and accurate
credit reporting, promote efficiency in the banking system,
and protect consumer privacy.’” Gorman v.
Wolpoff & Abramson, LLP, 584 F.3d 1147, 1153 (9th
Cir. 2009) (quoting Safeco Ins. Co. of Am. v. Burr,
127 S.Ct. 2201, 2205 (2007). To ensure that credit reports
are accurate, the FCRA imposes two categories of duties upon
“furnishers” of credit information to consumer
reporting agencies, often referred to as “CRAs”
in the case law. Id. Section 1681s-2(a)
“details the duty ‘to provide accurate
information, ’” while Section 1681s-2(b) sets
forth other obligations that “are triggered ‘upon
notice of dispute.’” Id. at 1154
(quoting 15 U.S.C. § 1681s-2). The “notice of
dispute” referenced by the statute occurs when a person
who furnished information to a consumer reporting agency
receives notice from the consumer reporting agency that the
consumer disputes the information. Id. Upon
receiving a notice of dispute, the furnisher
“‘has four duties: to conduct an investigation
with respect to the disputed information; to review all
relevant information provided by the CRA; to report the
results of its investigation to the CRA; and if the
investigation finds the information is incomplete or
inaccurate to report those results to all [nationwide]
consumer reporting agencies to which the person furnished the
information.” Nelson v. Chase Manhattan Mortg.
Corp., 282 F.3d 1057, 1059 (9th Cir. 2002) (internal
quotation marks and citation omitted) (alteration in
original).
“The
FCRA expressly creates a private right of action for willful
or negligent noncompliance with its requirements.”
Gorman, 584 F.3d at 1154. “However, §
1681s-2 limits this private right of action to claims arising
under subsection (b), the duties triggered upon notice of a
dispute” from a consumer reporting agency. Id.
“Duties imposed on furnishers under subsection (a) are
enforceable only by federal or state agencies.”
Id.
A
plaintiff suing under § 1681s-2(b) “is required to
plead the following four elements to state a claim against a
credit furnisher: (1) a credit reporting inaccuracy existed
on plaintiff’s credit report; (2) plaintiff notified
the consumer reporting agency that plaintiff disputed the
reporting as inaccurate; (3) the consumer reporting agency
notified the furnisher of the alleged inaccurate information
of the dispute; and (4) the furnisher failed to investigate
the inaccuracies or further failed to comply with the
requirements in 15 U.S.C. 1681s-2(b)(1)(A)-(E).”
Denison v. Citifinancial Servicing LLC, No. C
16-00432 WHA, 2016 WL 1718220, at *2 (N.D. Cal. April 29,
2016).
IQ Data
contends that the FAC does not allege facts showing a credit
reporting inaccuracy. The Court agrees. Plaintiff alleges
that IQ Data reported Plaintiff’s account as being
“open” and did not reference Plaintiff’s
Chapter 7 discharge. FAC ¶ 9. However, she does not
allege facts showing why that report was misleading or
inaccurate. In her opposition brief, Plaintiff argues that
her allegations that IQ Data “reported Plaintiffs [sic]
account open and in collections while also failing to report
that Plaintiff had filed a chapter 7 bankruptcy” are
adequate to state a claim. Pl.’s Opp. at 5, ECF 40.
Plaintiff misstates her FAC. The FAC does not allege
that IQ Data reported that her account was ...