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Oseguera v. Experian Information Solutions, Inc.

United States District Court, N.D. California

July 5, 2017



          HAYWOOD S. GILLIAM, JR. United States District Judge

         Pending 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.

         I. BACKGROUND

         A. Factual History

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

         On 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. ¶ 90.

         On 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.

         On 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.

         Plaintiff 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.

         B. Procedural History

         On 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.


         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[.]” 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).

         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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