United States District Court, E.D. California
KELLIE GADOMSKI, individually and on behalf of all others similarly situated, Plaintiff,
EQUIFAX INFORMATION SERVICES, LLC, Defendant.
ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANT'S PARTIAL MOTION TO DISMISS AND STRIKE
PLAINTIFF'S CLASS ALLEGATIONS
L. Nuhley, United States District Judge
matter is before the Court pursuant to Defendant Equifax
Information Services, LLC's (“Defendant”)
Partial Motion to Dismiss and Strike Plaintiff's Class
Allegations. (ECF No. 17.) Plaintiff Kellie Gadomski
(“Plaintiff”) opposes the motion. (ECF No. 20.)
After carefully considering the parties' briefing, the
Court hereby GRANTS IN PART AND DENIES IN PART
Defendant's Partial Motion to Dismiss and Strike
Plaintiff's Class Allegations. (ECF No. 17.)
FACTUAL AND PROCEDURAL BACKGROUND
is a natural person who resides in Tracy, California.
(Compl., ECF No. 1 ¶ 15.) She is a
“consumer” as that term is defined by Cal. Civ.
Code § 1785.3(b) and 15 U.S.C. § 1681a(c). (ECF No.
1 ¶ 15.)
is a corporation authorized to do business in the State of
California, with a primary corporate address in Atlanta,
Georgia. (ECF No. 1 ¶ 16.) Defendant is a
“consumer reporting agency” (“CRA”)
within the meaning of the Fair Credit Reporting Act
(“FCRA”), 15 U.S.C. § 1681a(f), because it
uses means and facilities of interstate commerce for the
purpose of furnishing credit reports. (ECF No. 1 ¶ 17.)
alleges that around September 2009, she opened an account
with Wells Fargo for a consumer credit card. (ECF No. 1
¶ 117.) On or about 2012, Plaintiff fell behind on her
payments leading Wells Fargo to “charge off” her
account around August 2012. (ECF No. 1 ¶ 118.) On April
24, 2013, Plaintiff filed a “no asset” Chapter 7
bankruptcy in the U.S. Bankruptcy Court for this district.
(ECF No. 1 ¶ 96.) As a result of the filing, the bankruptcy
court allegedly discharged the Wells Fargo account. (ECF No.
1 ¶¶ 101, 120.)
to Plaintiff, Wells Fargo informed Defendant that
Plaintiff's account was “charged off” or
otherwise past due/unpaid, rather than “Discharged in
Bankruptcy.” (ECF No. 1 ¶¶ 104, 119.)
Plaintiff alleges that Defendant failed to realize
Plaintiff's debt was subject to bankruptcy and therefore,
Defendant erroneously listed Plaintiff's discharged debt
as due and owing in the “Public Records” section
of Plaintiff's credit report. (ECF No. 1 ¶¶
125, 127.) Plaintiff alleges that in a consumer report dated
November 13, 2016, Defendant reported, based on information
it received from Wells Fargo, that, as of December 2012, the
“current (pay) status” on Plaintiff's account
was “charged off.” (ECF No. 1 ¶ 119.)
in November 2016, Plaintiff sent a letter to Defendant
requesting that it remove the reported Wells Fargo
information. (ECF No. 1 ¶¶ 133-134.) Defendant
timely forwarded the dispute to Wells Fargo, and Wells Fargo
reaffirmed the reported information. (ECF No. 1 ¶ 135.)
December 15, 2016, Defendant notified Plaintiff of the
results of the reinvestigation. (ECF No. 1 ¶ 138.) After
Defendant's reinvestigation of Plaintiff's dispute,
it continued to list Plaintiff's current pay status as
“charged off, ” as opposed to discharged in
Plaintiff's Bankruptcy. (ECF No. 1 ¶ 141.) Plaintiff
alleges that in her case and those similarly situated,
Defendant failed to list bankruptcy in the public records
section of their credit reports even though Defendant
utilizes the computerized court reporting service known as
PACER to regularly obtain access to every discharge order
issued by a U.S. Bankruptcy Court in Chapter 7 proceedings.
(ECF No. 1 ¶ 125.) Plaintiff alleges that “were
[Defendant] to employ procedures of which it is fully aware,
[Defendant] could achieve close to 100 percent accuracy in
the reporting of the status of pre-bankruptcy debts.”
(ECF No. 1 ¶ 126.)
alleges that Defendant willfully and negligently failed to
follow reasonable procedures to assure maximum possible
accuracy of credit information in violation of 15 U.S.C.
1681e(b) and Defendant willfully and negligently failed to
conduct a reasonable reinvestigation to assure maximum
possible accuracy of credit reports in violation of 15 U.S.C.
§ 1681i(a). (ECF No. 1 ¶¶ 172-196.)
Consequently, Plaintiff alleges Defendant violated both her
and Class Members' statutory rights to be able to apply
for credit based on accurate information. (ECF No. 1
¶¶ 178, 183, 194.) Specifically, Plaintiff alleges
that as a result of Defendant's inaccurate reporting and
unreasonable reinvestigation procedures, she and Class
Members are at increased risk of not being able to obtain
valuable credit and their creditworthiness has been adversely
affected. (ECF No. 1 ¶¶ 178, 183, 189, 196.)
seeks to represent a purported nationwide class of consumers
and two purported nationwide subclasses. (ECF No. 1
¶¶ 153, 160, 166.) The purported class includes all
Chapter 7 and Chapter 13 debtors whose Defendant's
consumer reports included “one or more…tradeline
accounts or debts [which were] not reported as
discharged.” (ECF No. 1 ¶ 153.) The alleged
“Dispute Subclass” includes the same debtors
whose allegedly discharged debts “continued to be
erroneously reported by [Defendant]” after they
disputed those debts. (ECF No. 1 ¶ 160.) Finally, the
alleged “Public Record Subclass” includes debtors
“whose record of Chapter 7 and Chapter 13 Bankruptcies
fail to report in the ‘Public Records' section of
[Defendant's] credit reports any time.” (ECF No. 1
STANDARD OF LAW
Motion to Dismiss Pursuant to 12(b)(6)
motion to dismiss for failure to state a claim under Rule
12(b)(6) tests the legal sufficiency of a complaint.
Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001).
Federal Rule of Civil Procedure 8(a) requires that a pleading
contain “a short and plain statement of the claim
showing that the pleader is entitled to relief.”
See Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009).
Under notice pleading in federal court, the complaint must
“give the defendant fair notice of what the claim . . .
is and the grounds upon which it rests.” Bell
Atlantic v. Twombly, 550 U.S. 544, 555 (2007) (internal
quotation omitted). “This simplified notice pleading
standard relies on liberal discovery rules and summary
judgment motions to define disputed facts and issues and to
dispose of unmeritorious claims.” Swierkiewicz v.
Sorema N.A., 534 U.S. 506, 512 (2002).
motion to dismiss, the factual allegations of the complaint
must be accepted as true. Cruz v. Beto, 405 U.S.
319, 322 (1972). A court is bound to give plaintiff the
benefit of every reasonable inference to be drawn from the
“well-pleaded” allegations of the complaint.
Retail Clerks Int'l Ass'n v. Schermerhorn,
373 U.S. 746, 753 n.6 (1963). A plaintiff need not allege
“ ‘specific facts' beyond those necessary to
state his claim and the grounds showing entitlement to
relief.” Twombly, 550 U.S. at 570. “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.” Iqbal, 556 U.S. at 678 (citing
Twombly, 550 U.S. 544, 556 (2007)).
a court “need 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, “it demands more than an
unadorned, the defendant-unlawfully-harmed-me
accusation.” Iqbal, 556 U.S. at 678. A
pleading is insufficient if it offers mere “labels and
conclusions” or “a formulaic recitation of the
elements of a cause of action.” Twombly, 550
U.S. at 555; see also Iqbal, 556 U.S. at 678
(“Threadbare recitals of the elements of a cause of
action, supported by mere conclusory statements, do not
suffice.”). Moreover, it is inappropriate to assume
that the plaintiff “can prove facts that it ...