United States District Court, N.D. California, San Jose Division
ORDER GRANTING DEFENDANT EXPERIAN'S MOTION TO
DISMISS FIRST AMENDED COMPLAINT WITH LEAVE TO AMEND [RE: ECF
LABSON FREEMAN United States District Judge
David Giusto sues Defendants Experian Information Solutions,
Inc. (“Experian”), Wells Fargo Bank, N.A.
(“Wells Fargo”), and JP Morgan Chase Bank, N.A.
(“JP Morgan”) for violations of the Fair Credit
Reporting Act (“FCRA”), 15 U.S.C. § 1681
et seq., and the California Consumer Credit
Reporting Agencies Act (“CCRAA”), California
Civil Code § 1785.25(a). Experian moves to dismiss
Plaintiff's first amended complaint (“FAC”)
pursuant to Federal Rule of Civil Procedure 12(b)(6) for
failure to state a claim upon which relief may be granted.
For reasons discussed below, the motion is GRANTED WITH LEAVE
filed for Chapter 13 bankruptcy protection on September 6,
2011 and his plan was confirmed on December 12, 2011. FAC
¶¶ 93, 97, ECF 22. On February 11, 2016, Plaintiff
“ordered a three bureau report from Experian
Information Solutions, Inc. to ensure proper reporting by
Plaintiff's Creditors.” Id. ¶ 98. He
alleges that this report (“February 2016 Credit
Report”) included eight different tradelines containing
inaccurate, misleading, or incomplete information.
Id. ¶ 99. Plaintiff neither attaches a copy of
the February 2016 Credit Report nor provides specifics
regarding the alleged inaccuracies contained therein.
Id. He asserts only that “multiple trade lines
continued to report Plaintiff's accounts with past due
balances, inaccurate balances, in collections, and/or charged
off. Some accounts even failed to register that Plaintiff was
making payments on the account through Plaintiff's
Chapter 13 plan.” Id.
disputed the inaccurate tradelines via certified mail sent to
three different credit reporting agencies
(“CRAs”), Experian, Equifax, Inc., and
TransUnion, LLC on May 31, 2016. Id. ¶ 100.
Each CRA received Plaintiff's dispute letter and in turn
notified the entities that had furnished the disputed
information (“furnishers”) by means of automated
credit dispute verifications (“ACDVs”).
Id. ¶ 102.
ordered a second three bureau report from Experian on July
20, 2016 (“July 2016 Credit Report”).
Id. ¶ 103. Plaintiff alleges that “the
inaccuracies had not been updated or removed.”
Id. ¶ 104. Plaintiff also alleges that Wells
Fargo improperly reported Plaintiff's account as being
“in collections and charged off, ” and that JP
Morgan improperly reported Plaintiff's account with a
past due balance, both in violation of industry standards for
credit reporting. Id. ¶ 107-108.
filed this action on August 12, 2016, and filed the operative
FAC as of right on October 3, 2016. Several defendants have
been dismissed from the case, leaving claims against
Experian, Wells Fargo, and JP Morgan. Experian moves to
dismiss the FAC.
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.
contains two claims, one for violation of the FCRA (Claim 1)
and the other for violation of the CCRAA (Claim 2). Although
the label of the CCRAA claim indicates that it is asserted
against “Defendants, ” it is clear from the body
of the FAC that the CCRAA claim is not asserted against
Experian. FAC ¶¶ 136-145. Accordingly, this order
addresses only the FCRA claim.
FCRA claim against Experian is subheaded “Failure to
Reinvestigate Disputed Information.” Id.
¶¶ 120-121. Plaintiff alleges that after he
“disputed the accounts mentioned above” - which
the Court takes to mean the eight unspecified tradelines in
the February 2016 Credit Report referenced earlier in the FAC
- Experian was required to conduct a reasonable investigation
and to delete any information that was not accurate.
Id. ¶ 122. Plaintiff claims that each CRA was
required to “send all relevant information via an ACDV
to the furnishers which they did not do.” Id.
¶ 123. Plaintiff alleges generally that Experian
“failed to conduct a reasonable investigation and
failed to correct the misleading and or inaccurate
statements.” Id. ¶ 124. Plaintiff asserts
that “any basic investigation would have uncovered that
certain DFs [data furnishers] were not following credit
reporting industry standards.” Id. ¶130.
moves to dismiss the FCRA claim on three grounds. First,
Experian asserts that Plaintiff has not alleged facts showing
that Experian's credit reporting was inaccurate. Second,
Experian argues that Plaintiff has not alleged facts showing
an entitlement to damages under the FCRA. And third, Experian
asserts that Plaintiff has not alleged any facts showing that
Experian's response to his dispute letter was improper.
turning to the parties' arguments on these points, the
Court notes that Plaintiff has filed a request for judicial
notice of a document that appears to be a proof of claim
filed by JP Morgan in Plaintiff's bankruptcy.
See Pl.'s RJN, ECF 49. The request for judicial
notice was filed after completion of the briefing on
Experian's motion to dismiss - indeed, it was filed the
morning of the motion hearing - and the Court is at a loss to
understand its intended significance. Accordingly, while the
Court may take judicial notice of documents filed in other
judicial proceedings under appropriate circumstances, See
Reyn's Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d
741, 746 n.6 (9th Cir. 2006), Plaintiff's request for
judicial notice in this case is DENIED.
argues that Plaintiff's claim fails because he has not
alleged facts showing that Experian's credit reporting
was inaccurate. If a consumer disputes “the
completeness or accuracy of any item of information, ”
a CRA must “conduct a reasonable reinvestigation to
determine whether the disputed information is inaccurate and
record the current status of the disputed information, or
delete the item.” 15 U.S.C. § 1681i(a)(1). In
addition, the CRA must provide notification of the dispute to
the furnisher of the information. 15 U.S.C. §
Ninth Circuit has observed that “[a]lthough the
FCRA's reinvestigation provision, 15 U.S.C. § 1681i,
does not on its face require that an actual inaccuracy exist
for a plaintiff to state a claim, many courts, including our
own, have imposed such a requirement.” Carvalho v.
Equifax Info. Servs., LLC, 629 F.3d 876, 890 (9th Cir.
2010). “Thus, even if a . . . CRA fails to
conduct a reasonable investigation or otherwise fails to
fulfill its obligations under the FCRA, if a plaintiff cannot
establish that a credit report contained an actual
inaccuracy, then the plaintiff's claims fail as a matter
of law.” Doster v. Experian Info. Sols., Inc.,
No. 16-CV-04629-LHK, 2017 WL 264401, at *3 (N.D. Cal. Jan.
20, 2017) (internal quotation marks and citation omitted).
Carvalho, the Ninth Circuit noted that it previously
had “explained that an item on a credit report can be
‘incomplete or inaccurate' within the meaning of
the FCRA's furnisher investigation provision, 15 U.S.C.
§ 1681s-2(b)(1)(D), ‘because it is patently
incorrect, or because it is misleading in such a way and to
such an extent that it can be expected to adversely affect
credit decisions.'” Carvalho, 629 F.3d at
890 (quoting Gorman v. Wolpoff & Abramson, LLP,
584 F.3d 1147, 1163 (2009)). The Ninth Circuit went on to
affirm “‘the maxim of statutory construction that
similar terms appearing in different sections of a statute
should receive the same interpretation, '”
id. (quoting United States v. Nordbrock, 38
F.3d 440, 444 (9th Cir. 1994)), and to cite with approval a
First Circuit case, Chiang, which the Ninth Circuit
summarized as “deeming the term ‘inaccurate'
in section 1681i(a) to be ‘essentially the same' as
the term ‘incomplete or inaccurate' in section
1681s-2(b), ” id. (citing Chiang v.
Verizon New Eng. Inc., 595 F.3d 26, 37 (1st Cir. 2010)).
Relying on Carvalho, district courts have
“applied this ‘patently incorrect or materially
misleading' standard to claims arising under various
provisions of the FCRA that involve the accuracy of
information.” Prianto v. Experian Info. Sols.,
Inc., No. ...