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Jugoz v. Experian Information Solutions, Inc.

United States District Court, N.D. California

June 23, 2017



          MAXINE M. CHESNEY United States District Judge.

         Before the Court are five motions to dismiss: (1) defendant Experian Information Solutions, Inc.'s (“Experian”) motion, filed November 15, 2016, in Case No. 16-5687; (2) defendant Equifax, Inc.'s (“Equifax”) motion, filed December 19, 2016, in Case No. 16-5687; (3) defendant Wells Fargo Bank, National Association's (“Wells Fargo”) motion, filed December 19, 2016, in Case No. 16-5693; (4) Equifax's motion, filed December 27, 2016, in Case No. 16-5693; and (5) Equifax's motion, filed December 27, 2016, in Case No. 16-6347. All five motions have been fully briefed. Having considered the parties' written submissions, the Court rules as follows.[1]


         In the above-titled actions, brought, respectively, by plaintiffs Rudolph Jugoz (“Jugoz”), Teresa Robles (“Robles”), and Janet Perkins (“Perkins”), each plaintiff has filed a complaint alleging defendants failed to report his/her debts accurately in light of a pending bankruptcy. In particular, each plaintiff alleges the following:

         Plaintiff filed for bankruptcy pursuant to Chapter 13 of the Bankruptcy Code and his/her plan was confirmed. (See Jugoz Compl. ¶¶ 93, 97; Robles Compl. ¶¶ 93, 97; Perkins Compl. ¶¶ 87, 94.) Thereafter, plaintiff ordered a three bureau credit report and noticed numerous tradelines therein contained “inaccurate, misleading, or incomplete information that did not comport with credit reporting industry standards.” (See Jugoz Compl. ¶¶ 98-99; Robles Compl. ¶¶ 98-99; Perkins Compl. ¶¶ 105-106.)

         Plaintiff “disputed the inaccurate tradelines via certified mail with” credit reporting agencies (“CRAs”) Experian, Equifax, and TransUnion, LLC, which dispute letter plaintiff is “informed and believes” was sent to the creditors in question. (See Jugoz Compl. ¶¶ 100, 102; Robles Compl. ¶¶ 100, 102; Perkins Compl. ¶¶ 107, 109.) Thereafter, plaintiff ordered another three bureau report and noticed “some of the inaccuracies had not been updated.” (See Jugoz Compl. ¶¶ 103-04; Robles ¶¶ 103-04; Perkins Compl. ¶ 110.) In particular, defendants continued to report outstanding and past due balances on plaintiff's debts, which reporting did not reflect the terms of plaintiff's Chapter 13 plan, and continued to fail to “comport[] with Metro 2 industry standards” by “not listing the correct CII D indicator.”[2] (See Jugoz Compl. ¶¶ 105-06; Robles Compl. ¶¶ 106-09; Perkins Compl. ¶¶ 111-13.)

         Based thereon, each plaintiff asserts two causes of action against multiple defendants, comprising creditors of plaintiff (hereinafter, “Creditor Defendants”) and two of the three CRAs (hereinafter, “CRA Defendants”). In each of the three cases, the first cause of action is asserted against all defendants under the Fair Credit Reporting Act (“FCRA”), and the second cause of action is asserted against the Creditor Defendants under the California Consumer Credit Reporting Agencies Act (“CCRAA”).

         Defendants Experian, Equifax, and Wells Fargo (hereinafter, “Moving Defendants”), have, as noted, filed the above-referenced five motions to dismiss; specifically, Equifax seeks dismissal of all three plaintiffs' complaints, Experian seeks dismissal of Jugoz's complaint, [3] and Wells Fargo seeks dismissal of Robles' complaint.[4]


         Dismissal under Rule 12(b)(6) of the Federal Rules of Civil Procedure “can be based on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory.” See Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). Rule 8(a)(2), however, “requires only ‘a short and plain statement of the claim showing that the pleader is entitled to relief.'” See Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Fed.R.Civ.P. 8(a)(2)). Consequently, “a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations.” See id. Nonetheless, “a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” See id. (internal quotation, citation, and alteration omitted).

         In analyzing a motion to dismiss, a district court must accept as true all material allegations in the complaint, and construe them in the light most favorable to the nonmoving party. See NL Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986). “To survive a motion to dismiss, a complaint must contain sufficient factual material, 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 Twombly, 550 U.S. at 570). “Factual allegations must be enough to raise a right to relief above the speculative level[.]” Twombly, 550 U.S. at 555. Courts “are not bound to accept as true a legal conclusion couched as a factual allegation.” See Iqbal, 556 U.S. at 678 (internal quotation and citation omitted).


         At the outset, the Court notes that over 170 complaints nearly identical to the three complaints at issue herein have been filed in the Northern District of California over the past year by the same law firm. Consequently, a number of other judges in this District have ruled on the issues raised by Moving Defendants, and the Court has considered those decisions in connection with the below analysis.[5]

         A. First Cause of Action - “Violation of Fair Credit Reporting Act 15 U.S.C. § 1681s-2(b)”

         In the First Cause of Action, plaintiffs allege that defendants violated the FCRA by failing to investigate and remedy the allegedly inaccurate reporting raised in plaintiffs' dispute letters. In that regard, plaintiffs allege that the Creditor Defendants, which include Wells Fargo, violated 15 U.S.C. § 1681s-2(b) by “failing to conduct a reasonable investigation and re-reporting misleading and inaccurate account information” and that the CRA Defendants, namely, Experian and Equifax, violated 15 U.S.C. § 1681i-(a)1 by failing to “conduct a reasonable investigation and fail[ing] to correct the misleading and/or inaccurate statements on the account within the statutory time frame or at all.” (See Jugoz Compl. ¶¶ 111, 120, 122; Robles Compl. ¶¶ 114, 123, 125; Perkins Compl. ¶ 118, 127, 129.)

         Moving Defendants seek dismissal of the First Cause of Action for failure to plead either an inaccuracy or damages, and Wells Fargo additionally argues that Robles' claims are barred by judicial estoppel.

         1. Inaccuracy

         “To state a claim for violation of 15 U.S.C. § 1681i or § 1681s-2(b), a plaintiff must demonstrate ‘that an actual inaccuracy exist[s].” Mensah v. Experian Info. Sols., Inc., No. 16-cv-05689 WHO, 2017 WL 1246892, at *5 (N.D. Cal. Apr. 5, 2017) (alteration in original) (quoting Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876, 890 (9th Cir. 2010)). If a plaintiff is unable to make a “prima facie showing of inaccurate reporting, ” his or her claim “fail[s] as a matter of law.” See Carvalho, 629 F.3d at 890 (internal quotation and citation omitted). An item on a credit report is inaccurate under § 1681i or § 1681s-2(b) either where “it is patently incorrect” or “it is misleading in such a way and to such an extent that it can be expected to adversely affect credit decisions.” Id. (internal quotation and citation omitted) (setting forth standard under § 1681s-2(b)); Mensah, 2017 WL 1246893, at *5 (applying standard to § 1681i).

         In the instant cases, plaintiffs rely on two separate theories to support their allegation that defendants' reporting is inaccurate, both of which theories, Moving Defendants argue, fail to plead a claim under the FCRA.

         a. Chapter 13 Confirmation

         Plaintiffs allege, as noted above, that defendants' reporting was incorrect or misleading because, after plaintiffs' Chapter 13 plans were confirmed, defendants did not alter their reporting to reflect the terms of the confirmed plans, which plans, plaintiffs further allege, provided for a reduced balance or no balance owed on certain debts. Moving Defendants contend their continuing to report the full outstanding balance of those debts and/or the delinquency of ...

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