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Messano v. Experian Information Solutions, Inc.

United States District Court, N.D. California

May 8, 2017

LISA MESSANO, Plaintiff,


          HAYWOOD S. GILLIAM, JR. United States District Judge

         Pending before the Court is the motion to dismiss filed by Defendant Equifax, Inc. (“Equifax”). Dkt. No. 27 (“Mot.”). Plaintiff Lisa Messano alleges that Equifax violated the Fair Credit Reporting Act (“FCRA”). Dkt. No. 1 (“Compl.”). Plaintiff filed an opposition to Equifax's motion to dismiss, Dkt. No. 41 (“Opp.”), and Equifax replied, Dkt. No. 46 (“Reply”). Having considered the parties' submissions, the Court finds the matter appropriate for decision without oral argument. See Civil L.R. 7-1(b). For the reasons set forth below, the Court GRANTS Equifax's motion to dismiss with prejudice in part and with leave to amend in part.

         I. BACKGROUND

         A. Factual History

         For purpose of this motion, the Court accepts the following facts as true.

         On February 9, 2012, Plaintiff pulled a credit report from third-party vendor CIN Legal Data Services (“CIN”). Compl. ¶¶ 87-88. The credit report from CIN was compiled from information gathered by the three major credit reporting agencies (“CRAs”): Experian Information Solutions, Inc. (“Experian”), Equifax, and TransUnion, LLC (“TransUnion”). Id. ¶ 89. This credit report reflected an estimated score of 569, and estimated Plaintiff's 12-month post-bankruptcy credit score as 590. Id. ¶¶ 90-91. Subsequently, on February 27, 2012, Plaintiff filed for Chapter 13 bankruptcy. Id. ¶ 93. Plaintiff's bankruptcy plan was confirmed on April 20, 2012. Id. ¶ 97. Under her plan, Plaintiff's unsecured creditors are allowed an 18.70% disbursement of their filed claims. Id. ¶ 96.

         On February 26, 2016, Plaintiff ordered another three-bureau report from Experian. Id. ¶ 98. Plaintiff noted seven different trade lines on her credit report, all reporting “inaccurate, misleading, or incomplete information that did not comport with credit reporting industry standards.” Id. ¶ 99. Specifically, Plaintiff found “multiple trade lines continu[ing] to report [her] accounts with past due balances, late payments, open, and/or repossessed, ” with some accounts failing to “register that Plaintiff was making payments on the account through [her] Chapter 13 plan.” Id. In response, on July 11, 2016, Plaintiff sent dispute letters to Experian, TransUnion, and Equifax, noting that she had filed for bankruptcy and that the “account was not reporting the bankruptcy accurately or worse not at all.” Id. ¶ 101. Plaintiff's letters requested that her creditors investigate the correct way to report her bankruptcy. Id. She asserted that, given her bankruptcy filing, there should not be any past due balance reported. Id. In addition, she contended that the account should not be listed as “charged off, transferred or sold, ” show an “inaccurate monthly payment, ” or contain any indication that it was in collections. Id. Plaintiff believes that each CRA received Plaintiff's dispute letter and sent her dispute to the data furnishers. Id. ¶ 102.

         On August 16, 2016, Plaintiff ordered another three-bureau report from Experian. Id. ¶ 103. However, Plaintiff was “not pleased to notice that the inaccuracies had not been updated or removed.” Id. ¶ 104. Instead, she noticed that her Experian score dropped by 32 points, Equifax score dropped by 29 points, and TransUnion score dropped by 48 points. Id. Plaintiff asserts that the reports did not accurately characterize her debt in light of her Chapter 13 plan. See Id. ¶¶ 105-06.

         Plaintiff also contends that her data furnisher, Bank of America, did not follow industry standards for credit reporting. Id. ¶ 105. The accuracy of credit scores relies on data furnishers and CRAs using the reporting industry standard format called Metro 2. See id. ¶ 49. Within the Metro 2 format, the Consumer Information Indicator (“CII”) is a field that sets out special conditions that apply to a particular consumer. Id. ¶ 55. Specifically, the CII code “D” indicates that a Chapter 13 bankruptcy petition has been filed and is active, but no discharge has been entered. Id. ¶ 59. A CII code D conveys to creditors that while payments were not made nor received, they are also not anticipated because the account is no longer in a collectable status. Id. ¶¶ 59, 77. A deviation from these standard reporting practices creates a negative inference with regard to a consumer's creditworthiness. Id. ¶ 86. Plaintiff asserts that Bank of America did not comply with industry standards when it failed to list the correct CII D code. Id. ¶ 105.

         B. Procedural History

         On October 5, 2016, Plaintiff filed the current suit against Experian, Bank of America, and Equifax. Compl. Plaintiff asserted a cause of action under the FCRA against each defendant, as well as a cause of action under the California Consumer Credit Reporting Agencies Act against Bank of America. Id. ¶¶ 109-43. On November 15, 2016, Experian moved to dismiss the complaint. Dkt. No. 22. Equifax subsequently also filed its own motion to dismiss on December 22, 2016. Dkt. No. 27. However, on April 19, 2017, Plaintiff filed a notice of settlement with Experian. Dkt. No. 55. Bank of America has not appeared. Thus, the only relevant pending motion is Equifax's motion to dismiss.


         Federal Rule of Civil Procedure 8(a) requires that a complaint contain “a short and plain statement of the claim showing that the pleader is entitled to relief[.]” Under Federal Rule of Civil Procedure 12(b)(6), a defendant may move to dismiss a complaint for failing to state a claim upon which relief can be granted. “Dismissal under Rule 12(b)(6) is appropriate only where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory.” Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008). To survive a Rule 12(b)(6) motion, a plaintiff must plead “enough facts 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 a plaintiff pleads “factual content that 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).

         In reviewing the plausibility of a complaint, courts “accept factual allegations in the complaint as true and construe the pleadings in the light most favorable to the nonmoving party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). Nonetheless, courts do not “accept as true allegations that are merely conclusory, unwarranted deductions of ...

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