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Ervin-Andrews v. Experian Information Solutions, Inc.

United States District Court, N.D. California, San Jose Division

April 10, 2017



          BETH LAB SON FREEMAN, United States District Judge

         Plaintiff 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.

         I. BACKGROUND[1]

         Plaintiff 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 plan.” Id.

         Plaintiff 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. ¶ 106.

         Plaintiff 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. ¶¶ 114-15.

         Plaintiff 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.


         “A 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.


         The FAC 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.

         With 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.

         Before 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.

         A. Code Sections Applicable to CRAs (Experian and Equifax)

         “Congress 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 & o.

         Both 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.

         B. Inaccuracy (Experian and Equifax)

         The 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).[2] “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).

         In 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. ...

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