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Chand v. Experian Information Solutions, Inc.

United States District Court, N.D. California

March 20, 2017

Saleshni Chand, Plaintiff,
v.
Experian Information Solutions, Inc., et al., Defendants.

          ORDER RE: MOTIONS TO DISMISS, MOTION FOR LEAVE TO AMEND, AND MOTION FOR ATTORNEYS' FEES RE: DKT. NOS. 25, 26, 36, 39

          Yvonne Gonzalez Rogers United States District Court Judge.

         Pending 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.

         I. Background

         Over 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 pleadings.

(Dkt. No. 39-10 at 5.)

         On 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.

         This 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.)

         On 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.)

         Defendant 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.)

         II. Discussion

         A. Motion for Attorneys' Fees

         The 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 ...


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