United States District Court, N.D. California, San Jose Division
ORDER GRANTING CRA DEFENDANTS' MOTIONS TO DISMISS
FIRST AMENDED COMPLAINT WITH LEAVE TO AMEND [RE: ECF 30,
LAB SON FREEMAN, United States District Judge
Kimberley Ervin-Andrews sues Defendants Experian Information
Solutions, Inc. (“Experian”), Equifax, Inc.
(“Equifax”), and Wells Fargo Bank, N.A.
(“Wells Fargo”) 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 and Equifax move to
dismiss Plaintiff's first amended complaint
(“FAC”) pursuant to Federal Rule of Civil
Procedure 12(b)(6). For reasons discussed below, those
motions are GRANTED WITH LEAVE TO AMEND.
filed for Chapter 13 bankruptcy protection on August 7, 2015
and her plan was confirmed on October 5, 2015. FAC
¶¶ 94, 98, ECF 22. On February 9, 2016, Plaintiff
“ordered a three bureau report from Experian to ensure
proper reporting by her creditors.” Id. ¶
99. She alleges that this report (“February 2016 Credit
Report”) included seventeen different trade lines
containing inaccurate, misleading, or incomplete information.
Id. ¶ 102. Plaintiff neither attaches a copy of
the February 2016 Credit Report nor provides specifics
regarding the alleged inaccuracies contained therein.
Id. She asserts only that “multiple trade
lines continued to report Plaintiff delinquent on payments,
past due balances, inaccurate balances, in collections, and
some accounts even failed to register that Plaintiff was
making payments on the account through her Chapter 13
disputed the inaccurate tradelines via certified mail sent to
three different credit reporting agencies
(“CRAs”), Experian, Equifax, Inc., and
TransUnion, LLC on March 28, 2016. FAC ¶ 103. 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.
ordered a second three bureau report from Experian on May 17,
2016 (“May 2016 Credit Report”). FAC ¶ 107.
Plaintiff alleges that the May 2016 Credit report reflected
that Wells Fargo had reported two different accounts as owing
balances and being past due in a manner that did not comport
with industry standards. FAC ¶¶ 110-116. For
example, Plaintiff alleges that Wells Fargo reported one
account as owing a balance of $10, 436 even though under the
terms of Plaintiff's confirmed Chapter 13 plan Wells
Fargo agreed to be paid only $4, 538.42. Id.
filed this action on June 15, 2016 and filed the operative
FAC as of right on September 16, 2016. Experian and Equifax
now seek dismissal of 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 or Equifax. FAC ¶¶ 146-155. Accordingly,
this order addresses only the FCRA claim.
respect to the FCRA claim, Experian and Equifax each assert
that dismissal is warranted because Plaintiff has sued under
the wrong provision of the FCRA and has not alleged facts
showing inaccurate credit reporting. In addition, Experian
argues that Plaintiff has not alleged facts sufficient to
entitle her to recovery of damages or to show that
Experian's response to her 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 Wells Fargo in Plaintiff's bankruptcy.
See Pl.'s RJN, ECF 58. The request for judicial
notice was filed after completion of the briefing on the
pending motions to dismiss - indeed, it was filed the day
before 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.
Code Sections Applicable to CRAs (Experian and
enacted [the] FCRA in 1970 to ensure fair and accurate credit
reporting, promote efficiency in the banking system, and
protect consumer privacy.” Safeco Ins. Co. of Am.
v. Burr, 551 U.S. 47, 52 (2007). To that end, the FCRA
imposes specific obligations on CRAs, furnishers, and other
categories of persons not at issue here. See
generally 15 U.S.C. § 1681 et seq. Many of
the obligations of CRAs are described in 15 U.S.C. §
1681i. That section provides that if a consumer disputes
“the completeness or accuracy of any item of
information, ” the 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.
§ 1681i(a)(2). Such notification by the CRA triggers the
furnisher's obligation to conduct its own investigation.
15 U.S.C. § 1681s-2(b). The FCRA expressly creates a
private right of action for willful or negligent
noncompliance with these requirements. 15 U.S.C. § 1681n
Experian and Equifax argue that Plaintiff's FCRA claim is
asserted only under § 1681s-2(b), applicable to
furnishers, and not under § 1681i, applicable to CRAs.
Plaintiff acknowledges in her opposition briefs that the FAC
does not reference § 1681i. The FAC therefore is subject
to dismissal with leave to amend on this ground.
Inaccuracy (Experian and Equifax)
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. ...