United States District Court, N.D. California
ORDER GRANTING IN PART AND DENYING IN PART WELLS
FARGO'S MOTION TO DISMISS, WITH LEAVE TO AMEND RE: DKT.
NATHANAEL M. COUSINS United States Magistrate Judge.
Richard Conrad sued Wells Fargo Card Services, Inc. and
Experian Information Solutions, Inc. 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). This case arises out of Conrad's Chapter 13
bankruptcy, defendants' allegedly deficient reporting of
his debts, and the allegedly negative effects of such
reporting. Wells Fargo filed a motion to dismiss the claims
against it arguing (1) that Conrad should be judicially
estopped from bringing his claims; (2) that he failed to
state a claim for violations of the FCRA on multiple grounds;
(3) he has failed to allege actual damages, and (4) that his
CCRAA claim fails as a matter of law.
the Court declines to judicially estop Conrad's claims,
finds that he properly pled he was harmed, and finds that he
properly pled his claim under the FCRA and CCRAA under his
theory that Wells Fargo did not comply with industry
standards, the Court GRANTS IN PART and DENIES IN PART Wells
Fargo's motion to dismiss Conrad's complaint, WITH
LEAVE TO AMEND. The Court rejects Conrad's other theories
for finding Wells Fargo liable under the FCRA.
filed for Chapter 13 bankruptcy on December 31, 2012. Dkt. No.
15. at 9. Conrad's bankruptcy plan was confirmed on March
21, 2013. Id. at 10. As of filing the complaint in
this case, Conrad's bankruptcy has not been discharged.
On March 17, 2016, Conrad ordered a credit report.
Id. Conrad alleges the credit reports provided
“inaccurate, misleading, or incomplete information that
did not comport with credit reporting industry standards, and
“some” accounts did not “register”
that he was paying the accounts pursuant to his Chapter 13
plan. Id. (multiple unnamed accounts reporting
“late payments, inaccurate balances, in collections,
and/or charged off”).
response to the allegedly inaccurate information on the
credit report, Conrad disputed the alleged inaccuracies to
the credit reporting agencies (CRAs). Id. Conrad
used the e-OSCAR system, which enables data furnishers and
CRAs “to create and respond to consumer credit
disputes.” Id. at 6. “When a consumer
sends a dispute letter to a CRA the CRA then sends an
automated credit dispute verification” to the data
furnisher. Id. The dispute letters to the CRAs:
specifically requested each Creditor investigate the proper
way to report Plaintiff's bankruptcy. Plaintiff noted
that there should not be any past due balance reported, the
account should not be listed as charged off, transferred or
sold, with an inaccurate monthly payment or that the account
is in collections. There should not be any late payments
reported after Plaintiff's case was filed and to ensure
that the proper monthly payment was being reported. Last,
Plaintiff noted that under Gorman v. Wolpoff &
Abramson, Plaintiff expected the accounts to be reported
disputed if the Creditor disagreed with Plaintiff's
Id. at 10. On May 25, 2016, Conrad ordered a second
credit report, but the alleged errors persisted. Id.
sued Equifax, Experian, and Wells Fargo Card Services on
August 12, 2016. Dkt. No. 1. Equifax was dismissed as a
defendant. Dkt. No. 34. The amended complaint alleges claims
for violations of the FCRA and the CCRAA. Dkt. No. 15. Conrad
alleges Wells Fargo violated the FCRA for failure to
reinvestigate and the CCRAA for reporting inaccurate
information to the CRAs. Id. at 11, 13. Wells Fargo
filed a motion to dismiss the complaint. Dkt. No. 18.
Experian, Wells Fargo, and Conrad consented to the
jurisdiction of a magistrate judge under 28 U.S.C. §
636(c). Dkt. Nos. 9, 13, 29.
Federal Rule of Civil Procedure 12(b)(6)
motion to dismiss for failure to state a claim under Rule
12(b)(6) tests the legal sufficiency of a complaint.
Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001).
On a motion to dismiss, all allegations of material fact are
taken as true and construed in the light most favorable to
the non-movant. Cahill v. Liberty Mut. Ins. Co., 80
F.3d 336, 337-38 (9th Cir. 1996). The Court, however, need
not accept as true “allegations that are merely
conclusory, unwarranted deductions of fact, or unreasonable
inferences.” In re Gilead Scis. Secs. Litig.,
536 F.3d 1049, 1055 (9th Cir. 2008). Although a complaint
need not allege detailed factual allegations, it must contain
sufficient factual matter, accepted as true, to “state
a claim to relief that is plausible on its face.”
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.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009).
court grants a motion to dismiss, leave to amend should be
granted unless the pleading could not possibly be cured by
the allegation of other facts. Lopez v. Smith, 203
F.3d 1122, 1127 (9th Cir. 2000).
Leave to Amend
Federal Rule of Civil Procedure 15(a), a court should grant
leave to amend “when justice so requires, ”
because “the purpose of Rule 15. . . [is] to facilitate
decision on the merits, rather than on the pleadings or
technicalities.” Lopez, 203 F.3d at 1127. A
court may deny leave to amend for several reasons, including
“undue delay, bad faith, . . . [and] futility of
amendment.” Eminence Capital, LLC v. Aspeon,
Inc., 316 F.3d 1048, 1052 (9th Cir. 2003).
Fargo moves to dismiss Conrad's claims against it. Wells
Fargo argues (1) Conrad should be judicially estopped from
bringing his claims; (2) the FCRA claim fails as a matter of
law because Wells Fargo transferred his debt before Conrad
filed for bankruptcy, he fails to plead actionable
inaccuracy, and industry standards do not form a basis for
FCRA claims; and (3) that he does not allege he suffered any
actual harm. In addition, the Court sua sponte ...