United States District Court, N.D. California
ORDER GRANTING MOTION TO DISMISS Re: Dkt. No.
HAYWOOD S. GILLIAM, JR. United States District Judge
before the Court is Defendant Specialized Loan Servicing,
LLC's (“Specialized”) motion to dismiss
Plaintiff Henry Oseguera's (“Plaintiff”)
complaint. Dkt. No. 15 (“Mot.”). This motion
arises from Plaintiff's suit alleging that Specialized
violated the Fair Credit Reporting Act (“FCRA”)
and the California Consumer Credit Reporting Agencies Act
(“CCCRAA”). Dkt. No. 1 (“Compl.”).
Plaintiff has filed an opposition to Specialized's motion
to dismiss, Dkt. No. 18 (“Opp.”), and Specialized
has filed a reply, Dkt. No. 20 (“Rep”). For the
reasons set forth below, the Court GRANTS
Defendant's motion to dismiss without leave to amend.
purposes of this motion, the Court accepts the following
facts as true.
February 11, 2013, Plaintiff filed for Chapter 13 bankruptcy.
Compl. ¶ 87. Plaintiff's bankruptcy plan was
confirmed on December 9, 2013. Id. ¶ 91. Under
his plan, Plaintiff's unsecured creditors are allowed a
0% disbursement of their filed claims. Id. ¶
March 21, 2016, Plaintiff ordered a three-bureau report from
Experian Information Solutions, Inc.
(“Experian”). Id. ¶ 92. Plaintiff
noted seven different trade lines on his credit report, all
reporting “inaccurate, misleading, or incomplete
information that did not comport with credit reporting
industry standards.” Id. ¶ 93.
Specifically, Plaintiff found “multiple trade lines
continu[ing] to report [his] accounts with past due balances,
inaccurate balances, in collections, open, and/or charged
off, ” with some accounts failing to “register
that Plaintiff was making payments on the account through
[his] Chapter 13 plan.” Id. In response, on
June 22, 2016, Plaintiff sent dispute letters to the credit
reporting agencies (“CRAs”): Experian,
TransUnion, LLC (“TransUnion”), and Equifax, Inc.
(“Equifax”), noting that he had filed for
bankruptcy and that the “account was not reporting the
bankruptcy accurately or worse not at all.”
Id. ¶¶ 94-95. Plaintiff's letters
requested that his creditors investigate the correct way to
report his bankruptcy. Id. He asserted that, given
his bankruptcy filing, there should not be any past due
balance reported. Id. In addition, he 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 his
dispute to the data furnishers. Id. ¶ 96.
August 17, 2016, Plaintiff ordered another three-bureau
report from Experian. Id. ¶ 97. However,
Plaintiff was “not pleased to notice that the
inaccuracies had not been updated or removed.”
Id. ¶ 98. Instead, he noticed that his Equifax
score rose by 15 points, and his TransUnion score rose by 17
points, but that both were still below 600. Id.
Plaintiff asserts that his data furnisher, Specialized, did
not accurately characterize his debt in light of his Chapter
13 bankruptcy confirmation plan. Id. ¶ 99.
also contends that Specialized did not follow industry
standards for credit reporting. Id. 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.
October 5, 2016, Plaintiff filed this action against Experian
and Specialized. Compl. Plaintiff asserted a cause of action
under the FCRA against each defendant, as well as a cause of
action under the CCCRAA against Specialized. Id.
¶ 102-136. On November 1, 2016, Specialized filed the
present motion to dismiss the complaint. Dkt. No. 15.
Experian subsequently also filed its own motion to dismiss on
November 15, 2016. Dkt. No. 19. However, on April 14, 2017,
Plaintiff filed a notice of settlement with Experian. Dkt.
No. 55. The Court dismissed Plaintiff's action against
Experian on June 27, 2017. Dkt. No. 57. Thus, the only
pending motion is Specialized'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[.]” A
defendant may move to dismiss a complaint for failure to
state a claim upon which relief can be granted under Federal
Rule of Civil Procedure 12(b)(6). “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 ...