United States District Court, N.D. California, San Jose Division
ORDER GRANTING MOTIONS TO DISMISS FIRST AMENDED
COMPLAINT WITH LEAVE TO AMEND [RE: ECF 59, 66]
LAB SON FREEMAN United States District Judge
CIG Financial, LLC (“CIG”) and Wells Fargo Bank,
N.A. (“Wells Fargo”) move to dismiss Plaintiff
Ron Franco's claims against them 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). For reasons
discussed below, the motions are GRANTED WITH LEAVE TO AMEND.
filed for Chapter 13 bankruptcy protection on September 5,
2013 and his plan was confirmed on January 7, 2014. First
Am'd Compl. (“FAC”) ¶¶ 93, 97, ECF
55. On August 11, 2015, Plaintiff “ordered a three
bureau report from Equifax, Inc. to ensure proper reporting
by Plaintiff's Creditors.” Id. ¶ 98.
He alleges that this report (“August 2015 Credit
Report”) included thirteen different trade lines
containing inaccurate, misleading, or incomplete information.
Id. ¶ 99. Plaintiff neither attaches a copy of
the August 2015 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 trade lines via certified mail sent
to three different credit reporting agencies
(“CRAs”), Experian, Equifax, Inc., and
TransUnion, LLC on February 11, 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 Equifax, Inc. on
April 11, 2016 (“April 2016 Credit Report”).
Id. ¶ 103. Plaintiff alleges that at that time
a number of furnishers, including CIG and Wells Fargo,
improperly were reporting Plaintiff's accounts as having
balances and past due balances, which was inconsistent with
Plaintiff's confirmed Chapter 13 plan. FAC ¶¶
filed this action on June 15, 2016, asserting violations of
the FCRA and CCRAA against multiple CRAs and furnishers.
Compl., ECF 1. CIG moved to dismiss Plaintiff's complaint
and instead of opposing CIG's motion, Plaintiff filed the
operative FAC. CIG and Wells Fargo now move to dismiss the
FAC under Federal Rule of Civil Procedure 12(b)(6).
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). CIG and
Wells Fargo seek dismissal of both claims under Rule
FCRA (Claim 1)
FCRA creates a private right of action against furnishers for
noncompliance with duties imposed under 15 U.S.C. §
1681s-2(b). Gorman, 584 F.3d at 1154. Section
1681s-2(b) imposes certain obligations on a furnisher, such
as a duty to conduct an investigation, when the furnisher
receives notice from a CRA that a consumer disputes
information reported by the furnisher. Id. A
plaintiff is required to plead and prove four elements to
prevail on an FCRA claim against a credit furnisher:
“(1) a credit reporting inaccuracy existed on
plaintiff's credit report; (2) plaintiff notified the
consumer reporting agency that plaintiff disputed the
reporting as inaccurate; (3) the consumer reporting agency
notified the furnisher of the alleged inaccurate information
of the dispute; and (4) the furnisher failed to investigate
the inaccuracies or further failed to comply with the
requirements in 15 U.S.C. § 1681s-2(b)
(1)(A)-(E).” Denison v. Citifinancial Servicing
LLC, No. C 16-00432 WHA, 2016 WL 1718220, at *2 (N.D.
Cal. Apr. 29, 2016). A furnisher's duties under §
1681s-2(b) of the FCRA arise “only after the furnisher
receives notice of dispute from a CRA.”
Gorman, 584 F.3d at 1154.
FCRA claim against CIG and Wells Fargo is subheaded
“Failure to Reinvestigate.” FAC ¶ 115-16.
Plaintiff alleges that CIG and Wells Fargo “violated
section 1681s-2(b) by failing to conduct a reasonable
investigation and re-reporting misleading and inaccurate
account information.” Id. ¶ 118.
Presumably, this claim is based upon the conduct of CIG and
Wells Fargo upon receiving notice of Plaintiff's dispute
regarding the August 2015 Credit Report. Plaintiff alleges
that he sent dispute letters to Experian and other CRAs
regarding unidentified inaccuracies ...