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Conrad v. Experian Information Solutions, Inc.

United States District Court, N.D. California

May 4, 2017



          NATHANAEL M. COUSINS United States Magistrate Judge.

         Plaintiff Richard Conrad[1] 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.

         Because 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.


         Conrad filed for Chapter 13 bankruptcy[2] 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”).

         In 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 dispute.

Id. at 10. On May 25, 2016, Conrad ordered a second credit report, but the alleged errors persisted. Id.


         Conrad 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.


         A. Federal Rule of Civil Procedure 12(b)(6)

         A 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).

         If a 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).

         B. Leave to Amend

         Under 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).


         Wells 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 ...

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