United States District Court, N.D. California
ORDER GRANTING DEFENDANT EQUIFAX'S MOTION TO
DISMISS RE: DKT. NO. 27
HAYWOOD S. GILLIAM, JR. United States District Judge
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.
purpose of this motion, the Court accepts the following facts
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.
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.
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.
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.
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.
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).
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 ...