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Kozlowski v. Bank of America, N.A.

United States District Court, E.D. California

May 4, 2018

MYUNG JIN MYRA KOZLOWSKI, Plaintiff,
v.
BANK OF AMERICA, N.A., et al., Defendants.

          ORDER GRANTING DEFENDANTS' MOTIONS TO DISMISS AND GRANTING PLAINTIFF LEAVE TO AMEND (DOC. NOS. 14, 15)

         This matter came before the court on two separate motions to dismiss. (Doc. Nos. 14, 15.) A hearing on the motions was held on April 17, 2018. Plaintiff Kozlowski appeared on her own behalf at that hearing. Attorney Alexander J. Gershen appeared on behalf of defendant Bank of America, N.A., and attorney Ramin Mahdavi appeared on behalf of defendants The Moore Law Group, APC and Harvey M. Moore. Attorney Scott Brady appeared on behalf of defendant TransUnion, LLC and attorney Donna Woo appeared on behalf of Experian Information Solutions, Inc. The court has considered the parties' briefs and oral arguments, and for the reasons set forth below, will grant the defendants' motions to dismiss and also grant plaintiff leave to file an amended complaint.

         BACKGROUND

         Plaintiff's complaint alleges as follows. On March 14, April 14, and July 12, 2017, plaintiff sent Bank of America, N.A. (“BANA”) notices of dispute, demanding validation of an alleged account with BANA. (Doc. No. 1 (“Compl.”) at 5.) On April 4, April 27, May 9, June 16, August 16, and August 21, 2017, BANA responded to plaintiff's notices of dispute. (Id.)

         On October 26, 2017, The Moore Law Group (“TMLG”) sent plaintiff a letter informing her that it had been retained by BANA to collect on the debt, and provided plaintiff an opportunity to dispute the alleged debt. (Id. at 6.) On December 6, 2017, TMLG sent plaintiff a letter stating their intent to sue plaintiff on behalf of BANA. (Id.) Plaintiff alleges that on October 11, October 25, and November 22, 2017, TMLG accessed plaintiff's credit report through defendant Experian, without plaintiff's authorization. (Id.)

         On November 7 and November 26, 2017, plaintiff sent TMLG notices of dispute, again demanding validation of an alleged account with BANA. (Id.) On November 10 and November 30, 2017, TMLG responded to plaintiff's notices of dispute. (Id.)

         Plaintiff alleges generally that defendants BANA and TMLG have failed to lawfully validate the alleged debt, failed to timely respond to plaintiff's notices of dispute, and reported derogatory and inaccurate information about plaintiff to one or more consumer reporting agencies.[1] (Id. at 6-7.)

         On January 25, 2018, plaintiff filed this action against BANA, Equifax, Inc., Equifax Information Services, LLC, Experian Information Solutions, Inc., TransUnion, LLC, TMLG, and Harvey M. Moore, alleging violations of the Fair Credit Reporting Act, violations of the Fair Debt Collection Practices Act, breach of contract, negligence, and defamation. (Doc. No. 1.) On February 15, 2018, defendant BANA filed a motion to dismiss. (Doc. No. 14.) On February 23, 2018, defendants TMLG and Harvey M. Moore (collectively “Moore defendants”) also filed a motion to dismiss. (Doc. No. 15.) Plaintiff filed oppositions on February 28 and March 7, 2018. (Doc. Nos. 21, 31.) The Moore defendants filed a reply in support of their motion to dismiss on March 26, 2018. (Doc. No. 39.) BANA filed a reply in support of its motion to dismiss on April 10, 2018. (Doc. No. 41.)

         LEGAL STANDARD

         The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test the legal sufficiency of the complaint. N. Star Int'l v. Ariz. Corp. Comm'n, 720 F.2d 578, 581 (9th Cir. 1983). A dismissal may be warranted where there is “the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory.” Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). A plaintiff must allege “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 plausible on its face “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).

         In evaluating whether a complaint states a claim on which relief may be granted, the court accepts as true the allegations in the complaint and construes the allegations in the light most favorable to the plaintiff. Hishon v. King & Spalding, 467 U.S. 69, 73 (1984); Love v. United States, 915 F.2d 1242, 1245 (9th Cir. 1989). However, the court will not assume the truth of legal conclusions cast in the form of factual allegations. United States ex rel. Chunie v. Ringrose, 788 F.2d 638, 643 n.2 (9th Cir. 1986). While Rule 8(a) does not require detailed factual allegations, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 676. A complaint must do more than allege mere “labels and conclusions” or “a formulaic recitation of the elements of a cause of action.” Twombly, 550 U.S. at 555.

         In ruling on such a motion, the court is permitted to consider material which is properly submitted as part of the complaint, documents that are not physically attached to the complaint, if their authenticity is not contested and the plaintiff's complaint necessarily relies on them, and matters of public record. Lee v. City of Los Angeles, 250 F.3d 668, 688-89 (9th Cir. 2001).

         ANALYSIS

         A. Fair Credit Reporting Act

         Plaintiff's first cause of action is brought against defendants BANA and TMLG for violation of the Fair Credit Reporting Act, 15 U.S.C. § 1681s-2. Plaintiff alleges that on multiple occasions, BANA reported inaccurate and derogatory information to one or more consumer reporting agencies, in violation of § 1681s-2(a). (Compl. at 8.) Plaintiff further alleges that, despite having sent written requests to BANA and TMLG demanding that they investigate the accuracy of the information they reported, BANA and TMLG failed to investigate the claims and notify plaintiff of the results, in violation of § 1681s-2(b). (Id.)

         Under the FCRA, furnishers of information[2] to consumer reporting agencies have two distinct duties: first, under § 1681s-2(a), furnishers have a duty to provide accurate information; and second, under § 1681s-2(b), furnishers have a duty to investigate upon receipt of a notice of dispute from a consumer reporting agency. See Bey v. Hollingsworth, No. 2:16-cv-02248 MCE GGH, 2017 WL 495777, at *3 (E.D. Cal. Feb. 6, 2017). Defendants argue that plaintiff does not have a private right of action for claims under § 1681s-2(a). (Doc. No. 14 at 10; Doc. No. 15-1 at 9-11.) With respect to plaintiff's allegations under § 1681s-2(b), defendant BANA argues that plaintiff fails to state a claim (Doc. No. 14 at 10-13), while the Moore defendants argue that TMLG is not a furnisher of information under the FCRA and therefore cannot be liable pursuant to that section. (Doc. No. 15-1 at 11-12.) The court will address these arguments in turn.

         1. § 1681s-2(a)

         Defendants argue in both motions to dismiss that plaintiff has no private right of action for claims brought under § 1681s-2(a). (Doc. No. 14 at 10; Doc. No. 15-1 at 9-11.) The Ninth Circuit has held that duties imposed on furnishers of credit information under § 1681s-2(a) are enforceable only by federal or state agencies. See Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147, 1162 (9th Cir. 2009) (“[T]he statute expressly provides that a claim for violation of this requirement can be pursued only by federal or state officials, and not by a private party.”); Nelson v. Chase Manhattan Mortg. Corp., 282 F.3d 1057, 1060 (9th Cir. 2002) (“Congress limited the enforcement of the duties imposed by § 1681s-2(a) to governmental bodies.”); see also Bey, 2017 WL 495777, at *3 (“It is well-settled . . . that there is no private right of action for violations of section 1681s-2(a).”).

         Plaintiff fails to address the decisions relied upon by defendants in support of their argument that this claim is subject to dismissal.[3] In her oppositions, plaintiff instead simply states that she has a private right of action under § 1681s-2(a), and quotes an unrelated provision that does not stand for that proposition. (See Doc. No. 21 at 8-9; Doc. No. 31 at 6 (quoting ยง 1681s-2(a)(8)(A), which provides that the Consumer Financial Protection Bureau shall prescribe regulations identifying the circumstances under which a furnisher, in response to the request of a consumer, shall be required to reinvestigate a dispute regarding the accuracy of ...


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