United States District Court, S.D. California
ORDER DENYING MOTION TO DISMISS
Dana M. Sabraw United States District Judge.
before the Court is Defendant Equifax Information Services,
LLC's (“Equifax”) motion to dismiss pursuant
to Federal Rule of Civil Procedure 12(b)(6). Plaintiff
Hordelicia Sanchez filed an opposition, and Defendant filed a
reply. For the reasons set forth below, the motion is denied.
alleges she had an outstanding balance on her Chase credit
card account, which has been discharged when Department
Stores National Bank (“DSNB”) issued a Form
1099-C, “Cancellation of Debt, ” on October 7,
2013. (Compl. ¶ 13.) Nevertheless, when Plaintiff
obtained a consumer report from Equifax on September 25,
2016, she discovered that DSNB had been inaccurately
reporting a balance due on her credit card account.
(Id. ¶ 21.) On January 5, 2017, Plaintiff sent
a letter to Equifax, disputing the accuracy of the
outstanding debt. (Id. ¶ 22.) Equifax, however,
failed to conduct a reasonable reinvestigation regarding the
disputed information and continued to report false
information on her consumer report. (Id. ¶ 24.)
On July 18, 2017, Plaintiff brought suit against Equifax and
DSNB, alleging violations of the Fair Credit Reporting Act
(“FCRA”) and the California Consumer Credit
Reporting Agencies Act (“CCCRAA”). Equifax filed
the present motion in response to the Complaint.
motion to dismiss pursuant to Federal Rule of Civil Procedure
12(b)(6) tests the legal sufficiency of the claims asserted
in the complaint. Fed.R.Civ.P. 12(b)(6); Navarro v.
Block, 250 F.3d 729, 731 (9th Cir. 2001). In deciding a
motion to dismiss, all material factual allegations of the
complaint are accepted as true, as well as all reasonable
inferences to be drawn from them. Cahill v. Liberty Mut.
Ins. Co., 80 F.3d 336, 338 (9th Cir. 1996). However, a
court need not accept all conclusory allegations as true.
Rather, it must “examine whether conclusory allegations
follow from the description of facts as alleged by the
plaintiff.” Holden v. Hagopian, 978 F.2d 1115,
1121 (9th Cir. 1992) (citation omitted); see Benson v.
Ariz. St. Bd. of Dental Exam'rs, 673 F.2d 272,
275-76 (9th Cir. 1982) (court need not accept conclusory
legal assertions). A motion to dismiss should be granted if a
plaintiff's complaint fails to contain “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 has facial plausibility when
the 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) (citing
Twombly, 550 U.S. at 556).
moves to dismiss Plaintiff's FCRA claim under 15 U.S.C.
§ 1681e, arguing Plaintiff has failed to allege
Defendant prepared a consumer report to a third party, which
is a requisite element of the claim. Specifically, Defendant
contends the consumer credit disclosure Plaintiff obtained
from Defendant solely for her own review was not a
“consumer report” within the meaning of the
statute, which requires delivery to a third party. However,
Plaintiff has alleged Defendant communicated inaccurate
information in her consumer report to third parties.
Specifically, Plaintiff has stated “Defendant Equifax
willfully failed to maintain and/or follow reasonable
procedures to assure maximum accuracy of the information it
reported to one or more third parties pertaining to the
Account, in violation of 15 U.S.C. § 1681e.”
(Compl. ¶ 34.)
event, under Ninth Circuit case law, transmission of a
consumer report to a third party is not a prerequisite to
establishing liability under § 1681e(b). Guimond v.
Trans Union Credit Info. Co., 45 F.3d 1329, 1333 (9th
Cir. 1995); see Ottiano v. Credit Data Sw., Inc., 54
F. App'x 640 (9th Cir. 2003) (“neither the
transmission of the report to third parties, nor a denial of
credit, is a prerequisite to recovery under the FCRA”)
(citing Guimond, 45 F.3d at 1333); see also
Neill v. Experian Info. Sols., Inc., No.
CV-16-04326-PHX-JJT, 2017 WL 3838671, at *3 (D. Ariz. Sept.
1, 2017) (“the statute does not explicitly require
delivery to a third party in order to be a ‘consumer
report.'”); Larson v. Trans Union, LLC,
No. 12-CV-05726-WHO, 2013 WL 5665629, at *4 n.7 (N.D. Cal.
Oct. 15, 2013) (“transmission of a credit report to a
third party is not a prerequisite to recovery under the
FCRA.”); Baker v. Trans Union LLC, No.
CV-10-8038-PCT-NVW, 2010 WL 2104622, at *4 (D. Ariz. May 25,
2010) (“transmission of the report to third parties is
not a prerequisite to establishing liability under §
under § 1681e(b) is predicated on the reasonableness of
the credit reporting agency's procedures in obtaining
credit information.” Guimond, 45 F.3d at 1333
(citing Cahlin v. Gen. Motors Acceptance Corp., 936
F.2d 1151, 1156 (11th Cir. 1991)). Therefore, to state a
claim under § 1681e(b), a plaintiff must allege “a
credit reporting agency prepared a report containing
inaccurate information.” Id. (citing
Cahlin, 936 F.2d at 1156). Here, Plaintiffs
allegation that Equifax prepared a consumer report that
included incorrect information regarding the balance due on
her credit card account is sufficient to state a prima facie
claim under § 1681e(b) at this stage of the proceeding.
Defendant's motion is therefore denied.
foregoing reasons, Defendant's motion to dismiss is