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Mamisay v. Experian Information Solutions Inc.

United States District Court, N.D. California

March 21, 2017

Juana Mamisay, Plaintiff,
v.
Experian Information Solutions, Inc., et al., Defendants. Trout, Plaintiff,
v.
Experian Information Solutions, Inc., et al., Defendants. King, Plaintiff,
v.
Experian Information Solutions, Inc., et al., Defendants. Gatchalian, Plaintiff,
v.
Equifax, Inc., et al., Defendants. Petrie, Plaintiff,
v.
Experian Information Solutions, Inc., et al., Defendants. Ethridge, Plaintiff,
v.
Experian Information Solutions, Inc., et al., Defendants.

          ORDER GRANTING MOTIONS TO DISMISS RE: DKT. NOS. 21, 27, 28, 40, 46, 48, 26, 36, 37, 46, 50, 31, 45, 55, 56, 57, 58, 17, 30, 32, 34, 20, 23, 24

          Yvonne Gonzalez Rogers United States District Court Judge.

         The above-captioned cases constitute a fraction of approximately 170 nearly identical cases filed in this District over the past year pursuant to (1) the federal Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681s-2(b), and (2) the California Consumer Credit Reporting Agencies Act (“CCRAA”), California Civil Code § 1785.25(a).[1] In summary, the law firm that filed all the cases asserts claims based on the following factual scenario: each plaintiff filed for Chapter 13 bankruptcy protection, whereupon a bankruptcy court confirmed a financial reorganization plan. Thereafter, each plaintiff asserts that they ordered credit reports which showed effectively “inaccurate, misleading, or incomplete” information for accounts that were included in their confirmed bankruptcy plans. Despite each plaintiff notifying the credit reporting agencies of the alleged inaccuracy, they assert that their credit reports continued to show the inaccurate account information. The lawsuits followed. Plaintiffs concede that the gravamen of each complaint remains constant, albeit each contains specific allegations outlining the alleged “inaccurate, misleading, or incomplete” account information. Further, plaintiffs agree that these differences do not impact the legal issue at hand, namely whether the FCRA and CCRAA prohibit defendants from reporting historically accurate information about delinquent accounts-such as the account's outstanding balance-after a Chapter 13 bankruptcy plan is confirmed, but before the debt has been discharged.

         For the reasons set forth below, and as a matter of law, the Court finds the alleged reporting at issue does not violate the FCRA or CCRAA. Accordingly, the Court Grants defendants' motions to dismiss in each of the above-captioned cases and Dismisses the complaints.[2] Given the unique status of these cases-and because the Court is skeptical that any amendment will prove useful-the Court will allow further briefing on whether the dismissal should be with prejudice so that plaintiffs may proceed directly to appeal.

         I. Legal Standard

         Pursuant to Federal Rule of Civil Procedure 12(b)(6), a complaint may be dismissed for failure to state a claim upon which relief may be granted. Dismissal for failure to state a claim under Rule 12(b)(6) is proper if there is a “lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory.” Conservation Force v. Salazar, 646 F.3d 1240, 1242 (9th Cir. 2011) (citing Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1988)). The complaint must plead “enough facts to state a claim [for] relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is plausible on its face “when the plaintiff pleads factual content that 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). If the facts alleged do not support a reasonable inference of liability, stronger than a mere possibility, the claim must be dismissed. Id. at 678-79. Mere “conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss.” Adams v. Johnson, 355 F.3d 1179, 1183 (9th Cir. 2004).

         II. Discussion

         As noted above, plaintiffs allege FCRA and/or CCRAA claims against defendants. Prior to addressing the merits of plaintiffs' claims, however, defendants argue that plaintiffs do not have standing to bring their claims pursuant to Spokeo, Inc. v. Robins, 136 S.Ct. 1540 (2016). (See TD Bank Mot., King v. Experian Info. Sols., 4:16-cv-5711, Dkt. No. 57, at 4-7.) Thus, the Court first addresses the threshold issue of Article III standing, before turning to plaintiffs' underlying claims.

         A. Article III Standing

         In order to establish Article III standing, a “plaintiff must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Spokeo, 136 S.Ct. at 1547. The first prong, injury in fact, requires a plaintiff to “show that he or she suffered ‘an invasion of a legally protected interest' that is ‘concrete and particularized' and ‘actual or imminent, not conjectural or hypothetical.'” Id. at 1548. In the context of a statutory violation, a plaintiff cannot simply “allege a bare procedural violation, divorced from any concrete harm, and satisfy the injury-in-fact requirement of Article III.” Id. at 1549. Rather, the injury “must actually exist.” Id. at 1548.

         Although an injury must be “concrete, ” however, it need not be “tangible.” Id. at 1549. Even the “risk of real harm [may] satisfy the requirement of concreteness.” Id. Further, “[i]n determining whether an intangible harm constitutes injury in fact, both history and the judgment of Congress play important roles.” Id. For example, “the law has long permitted recovery by certain tort victims even if their harms may be difficult to prove or measure.” Id. “[A] plaintiff in such a case need not allege any additional harm beyond the one Congress has identified.” Id.

         Here, defendants argue that plaintiffs have failed to satisfy the injury-in-fact requirements of Article III under Spokeo because their complaints do not disclose an actual injury resulting from the alleged FCRA violations. The Court disagrees. “[T]he purpose of the FCRA . . . is ‘to protect consumers from the transmission of inaccurate information about them.'” Carvalho, v. Equifax Info. Servs., LLC, 629 F.3d 876, 890 (9th Cir. 2010) (quoting Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147, 1157 (9th Cir. 2009)). By providing a private cause of action for violations of section 1681s-2(b), “Congress has recognized the harm such violations cause, thereby articulating a ‘chain[ ] of causation that will give rise to a case or controversy.'” Syed v. M-I, LLC, 846 F.3d 1034, 1040 (9th Cir. 2017) (quoting Spokeo, 136 S.Ct. at 1549).

         In Spokeo, the Court held that the reporting of an incorrect zip code could not confer Article III standing. 136 S.Ct. at 1549-50. By contrast, plaintiffs allege here that the injury stems from defendants' inaccurate reporting of debts and debt delinquency. This inaccurate reporting of debt constitutes the precise harm Congress sought to protect against in enacting the FCRA, and thus, cannot be classified as a “mere procedural violation.” See Artus v. Experian Info. Sols., Inc., No. 5:16-CV-03322-EJD, 2017 WL 346022, at *3 (N.D. Cal. Jan. 24, 2017) (finding that plaintiffs have Article III standing under Spokeo when alleging FCRA violations for inaccurate reporting); Keller v. Experian Info. Sols., Inc., No. 16-CV-04643-LHK, 2017 WL 130285, at *4 (N.D. Cal. Jan. 13, 2017) (same).

         Accordingly, assuming that the defendants' reporting of plaintiffs' debt was in fact inaccurate, the Court finds that plaintiffs have alleged a sufficiently “concrete” injury for purposes of Article III standing. Spokeo, 136 S.Ct. at 1549-50. The Court therefore turns to address whether defendants' reporting of plaintiffs' debts was inaccurate under the FCRA.

         B. 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, 551 U.S. 47, 52 (2007)). To achieve these goals, the FCRA imposes duties on both credit reporting agencies (“CRAs”) and “on the sources that provide credit information to CRAs, called ‘furnishers' in the statute.” Id.

         The obligations of CRAs and furnishers are described in 15 U.S.C. §§ 1681i and 1681s-2(b), respectively. Pursuant thereto, CRAs must conduct a reasonable “reinvestigation” of reported credit information if a consumer disputes the contents of the report. 15 U.S.C. § 1681i(a)(1)(A). Additionally, a CRA is required to “provide notification of the dispute to any person who provided any item of information in ...


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