United States District Court, N.D. California
ORDER RE: MOTIONS TO DISMISS, MOTION FOR LEAVE TO
AMEND, AND MOTION FOR ATTORNEYS' FEES RE: DKT. NOS. 25,
26, 36, 39
Gonzalez Rogers United States District Court Judge.
before the Court are (1) motions to dismiss filed by
defendants American Honda Finance Corporation (Dkt. No. 25)
and Experian Information Solutions Inc.
(“Experian”) (Dkt. No. 26); (2) a request for
leave to amend the complaint filed by plaintiff (Dkt. No.
36); and (3) Experian's motion for attorneys' fees
(Dkt. No. 39). Having carefully considered the pleadings and
the arguments of the parties, and for the reasons set forth
below, the Court hereby Denies as Moot the motions to
dismiss, Grants plaintiff's request for leave to amend,
and Tentatively Grants the motion for attorneys' fees.
the past year, plaintiff's attorney has brought hundreds
of nearly identical cases in this District alleging that
defendant Experian and others violated the Fair Credit
Reporting Act (“FCRA”) and/or the California
Consumer Credit Reporting Agencies Act (“CCRAA”).
(Dkt. No. 39 at 3.) Many of these complaints appear to be
copied and pasted from each other in substantial part, and to
contain factual errors and inconsistencies. Judge Freeman
warned plaintiff's counsel on October 6, 2016 that he
must stop filing careless pleadings in these cases:
“[Y]ou are utilizing not only the resources of your
opponents to bring motions on pleadings you know you need to
amend. You are using the resources of the court in an
extraordinary way that-that has got to stop. And I want to
just let you know that I certainly am obligated to give your
clients the opportunity to amend their pleading in a way that
is fair to your clients as plaintiffs and to the defendants.
But that doesn't mean that I won't begin sanctioning
you for careless pleading under Rule 11 which will be
sanctions against you and not your clients. . . .
I just want a record that makes it clear that it is not the
court's job to hear motions over and over again on
(Dkt. No. 39-10 at 5.)
November 1 2016, plaintiff's counsel filed the complaint
in this case, alleging claims under the FCRA and CCRAA. (Dkt.
No. 1). The complaint is internally contradictory. It
alleges, on the one hand, that plaintiff filed for Chapter 7
bankruptcy and that her bankruptcy was discharged.
(Id. ¶¶ 81, 84.) However, it then also
asserts that Experian's credit reporting was allegedly
inaccurate because it did not comply with the terms of
plaintiff's undischarged Chapter 13 reorganization plan.
(Id. ¶¶ 85, 93.) It appears that in
stitching together plaintiff's complaint from prior
similar pleadings, plaintiff's counsel inadvertently
copied and pasted contradictory allegations, and then failed
to conduct even a cursory review to ensure the complaint was
internally consistent prior to filing.
Court set a deadline for defendants to file a responsive
pleading in this case, including any motions to dismiss, by
no later than December 27, 2016. (Dkt. No. 21.) In light of
the complaint's critical errors, counsel for Experian
sent an email to plaintiff's counsel on December 22,
2016, informing him of the “serious
inconsistencies” and asking him whether he planned on
filing an amended complaint that corrected the deficiencies.
(Dkt. No. 39-2.) Counsel for Experian further informed
plaintiff's counsel this impacted defendants'
Court-ordered deadline for responding to the complaint.
(Id.) Plaintiff's counsel failed to respond. As
a result, Experian filed its motion to dismiss on December
27, 2016, consistent with the Court's deadline. (Dkt. No.
26.) Defendant American Honda Finance Corporation also filed
its motion to dismiss on December 27, 2016. (Dkt. No. 25.)
January 17, 2017, plaintiff's counsel filed a limited
opposition to the motions to dismiss. (Dkt. No. 36.)
Plaintiff's counsel declared that “several key
allegations” were missing from the complaint, and that
these missing allegations “entirely shift the focus of
the legal arguments made.” (Id. at
1.) Plaintiff's counsel also acknowledged
“there are some inconsistencies regarding the chapter
of bankruptcy that was filed.” (Id.)
Therefore, plaintiff's opposition was limited to a
request to file an amended complaint alleging these missing
allegations. (Id. at 2.) On February 7, 2017,
defendants filed a joint reply in support of the motions to
dismiss in this case and six other similar cases currently
pending before the Court. (Dkt. No. 45.) In their reply,
defendants agreed with the plaintiff that “the
Complaint is flawed” and “that there are several
key allegations missing from the complaint.”
(Id. at 32.)
Experian filed a motion for attorneys' fees on January
24, 2017, arguing that fees should be awarded pursuant to
either 28 U.S.C. § 1927 or the Court's inherent
authority as a result of having to respond to the flawed
complaint even after notifying plaintiff's counsel of the
problems. (Dkt. No. 39.)
Motion for Attorneys' Fees
Court's sanctioning powers “are governed not by
rule or statute but the control necessarily vested in courts
to manage their own affairs so as to achieve the orderly and
expeditious disposition of cases.” Chambers v.
NASCO, Inc.,501 U.S. 32, 43 (1991) (internal quotation
marks and citations omitted). To award sanctions, the court
must find that there was “conduct tantamount to bad
faith, ” which includes a “broad range of willful
improper conduct.” Fink v. Gomez, 239 F.3d
989, 992 (9th Cir. 2001) (citation omitted). Specifically,
“[b]ad faith” may be found when an attorney's
“reckless misstatements of law and fact” are
“combined with an additional factor such as
frivolousness, harassment, or an improper purpose.”
Id. at 994. Frivolous filings are “those that
are both baseless and made without a reasonable and competent
inquiry.” Estate of Blue v. Cty. of Los
Angeles,120 F.3d 982, 985 (9th Cir. 1997) (internal
quotation marks and citation omitted); see also Holgate
v. Baldwin, 425 F.3d 671, 677 (9th Cir. 2005)
(“[T]he mere existence of one ...