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
Robert Kragen sues Defendants Experian Information Solutions,
Inc. (“Experian”) and Citigroup, Inc.
(“Citigroup”) 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 October 22,
2011 and his plan was confirmed on December 9, 2015. FAC
¶¶ 93, 97, ECF 17. On February 10, 2016, Plaintiff
“ordered a three bureau report from Experian, Inc. to
ensure proper reporting by Plaintiff's creditors.”
Id. ¶ 98. He alleges that this report
(“February 2016 Credit Report”) included twelve
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, with late payments 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 June 1, 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 August
4, 2016 (“August 2016 Credit Report”).
Id. ¶ 103. Plaintiff alleges that “the
inaccuracies had not been updated or removed.”
Id. ¶ 104. Plaintiff also alleges that
“Plaintiff's Experian score dropped by 88 points,
” which “was well below what accurate credit
reporting industry standards would project.”
Id. ¶ 104, 105. Plaintiff further alleges that
Citigroup's report of past due balance did not comport
with industry standards, and that as of August 4, 2016, he
owed only $568.22 while Citigroup reported the account with a
balance of $42, 751. Id. ¶ 106.
filed this action on August 12, 2016, asserting violations of
the FCRA and CCRAA against Experian, Citigroup and JP Morgan
Chase Bank, N.A. Compl., ECF 1. Experian moved to dismiss
Plaintiff's complaint on September 13, 2016. Instead of
opposing Experian's motion, Plaintiff filed the operative
FAC against the same defendants. Plaintiff subsequently
dismissed JP Morgan Chase Bank, N.A. Experian now 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 ¶¶ 135-144. Accordingly, this order
addresses only the FCRA claim.
FCRA claim against Experian is subheaded “Failure to
Reinvestigate Disputed Information.” Id.
¶¶ 119-120. Plaintiff alleges that after he
“disputed the accounts mentioned above” - which
the Court takes to mean the twelve 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. ¶ 121. Plaintiff claims that each CRA was
required to “send all relevant information via an ACDV
to the furnishers which they did not do.” Id.
¶ 122. Plaintiff alleges generally that Experian
“failed to conduct a reasonable investigation and
failed to correct the misleading and or inaccurate
statements.” Id. ¶ 123. Plaintiff asserts
that “any basic investigation would have uncovered that
certain DFs [data furnishers] were not following credit
reporting industry standards.” Id. ¶129.
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.
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. 13-CV-03461-TEH, 2014 WL 3381578, at *3 (N.D.
Cal. July 10, 2014). In particular, courts in this district
have applied the “patently incorrect or materially
misleading” standard to the inaccuracy requirement
under § 1681i. See, e.g., Banneck v. HSBC Bank USA,
N.A., No. 15-cv-02250-HSG, 2016 WL 3383960, at *6 (N.D.
Cal. June 20, 2016); Prianto, 2014 WL 3381578, at
argues that he has alleged inaccuracies in his credit reports
under the above standards. The Court disagrees based ...