Freshta Y. Nayab, individually and on behalf of others similarly situated, Plaintiff-Appellant,
Capital One Bank (USA), N.A., Defendant-Appellee.
and Submitted December 6, 2018 Pasadena, California
from the United States District Court No.
3:16-cv-03111-CAB-MDD for the Southern District of California
Cathy Ann Bencivengo, District Judge, Presiding
Asil Mashiri (argued), Mashiri Law Firm, San Diego,
California; Tamim Jami, The Jami Law Firm P.C., San Diego,
California; for Plaintiff-Appellant.
R. Eley (argued), Lloyd Vu, and Chelsea L. Diaz, Doll Amir
& Eley LLP, Los Angeles, California, for
Before: Johnnie B. Rawlinson and Carlos T. Bea, Circuit
Judges, and Thomas O. Rice, [*] Chief District Judge.
Credit Reporting Act / Standing
panel reversed the district court's dismissal of a Fair
Credit Reporting Act claim for lack of standing and failure
to state a claim and remanded the case to the district court.
alleged that Capital One Bank (USA), N.A., obtained her
credit report for a purpose not authorized by the FCRA, in
violation of 15 U.S.C. § 1681b(f).
panel held that plaintiff had Article III standing because a
consumer suffers a concrete injury in fact when a third party
obtains her credit report for an unauthorized purpose,
regardless of whether the credit report is published or
otherwise used by that third party.
panel held that plaintiff stated a claim because a
consumer-plaintiff need allege only that her credit report
was obtained for a purpose not authorized by the statute to
survive a motion to dismiss, and the defendant bears the
burden of pleading it obtained the report for an authorized
purpose. The plaintiff does not have the burden of pleading
the actual purpose behind the defendant's procurement of
her credit report, and she need allege only facts giving rise
to a reasonable inference that the defendant obtained the
credit report in violation of § 1681b(f)(1).
Rawlinson concurred in part and dissented in part. Judge
Rawlinson agreed that plaintiff had standing to pursue her
action under the FCRA but disagreed that she stated a
plausible claim. Judge Rawlinson wrote that, under the
Twombly/Iqbal standard and Federal Rule of Civil
Procedure 8(a), the pleading was inadequate.
Chief District Judge
Nayab appeals the district court's order which dismissed
her Fair Credit Reporting Act ("FCRA") claim with
prejudice and without leave to amend for lack of standing and
for failure to state a claim. We have jurisdiction pursuant
to 28 U.S.C. § 1291. "We accept as true all factual
allegations in the operative complaint, and we construe them
in the light most favorable to Plaintiff as the non-moving
party." Eichenberger v. ESPN, Inc., 876 F.3d
979, 981 (9th Cir. 2017). "We review de novo the
district court's decision to grant a motion to dismiss a
claim under Rule 12(b)(6)." Id. at 982.
"To survive a motion to dismiss, the claim must be
plausible on its face." Id. "We must
uphold a district court's decision to dismiss
either if a cognizable legal theory is absent
or if the facts alleged fail to suffice under a
cognizable claim." Id. (emphasis in original).
case presents two issues of first impression for this
Circuit: (1) whether a consumer suffers a concrete Article
III injury in fact when a third-party obtains her credit
report for a purpose not authorized by the FCRA and (2)
whether the consumer-plaintiff must plead the
third-party's actual unauthorized purpose in obtaining
the report to survive a motion to dismiss. We hold that a
consumer suffers a concrete injury in fact when a third-party
obtains her credit report for a purpose not authorized by the
FCRA. We also hold that a consumer-plaintiff need allege only
that her credit report was obtained for a purpose not
authorized by the statute to survive a motion to dismiss; the
defendant has the burden of pleading it obtained the report
for an authorized purpose.
FAIR CREDIT REPORTING ACT
enacted the FCRA in 1970 in response to concerns about
corporations' increasingly sophisticated use of
consumers' personal information in making credit and
other decisions." Syed v. M-I, LLC, 853 F.3d
492, 496 (9th Cir.), cert. denied, 138 S.Ct. 447
(2017) (citation omitted); see Spokeo, Inc. v. Robins
(Spokeo II), 136 S.Ct. 1540, 1550 (2016).
"Specifically, Congress recognized the need to
'ensure fair and accurate credit reporting, promote
efficiency in the banking system, and protect consumer
privacy.'" Syed, 853 F.3d at 496 (quoting
Safeco Ins. Co. v. Burr, 551 U.S. 47, 52 (2007)). In
the context of the protections afforded under the FCRA, we
recently observed that "[t]he modern information age has
shined a spotlight on information privacy, and on the
widespread use of consumer credit reports to collect
information in violation of consumers' privacy
rights." Id. at 495.
FCRA defines a credit report as any written, oral, or other
communication of information "bearing on a
consumer's credit worthiness, credit standing, credit
capacity, character, general reputation, personal
characteristics, or mode of living . . . ." 15 U.S.C.
§ 1681a(d)(1). The FCRA provides:
person shall not use or obtain a consumer report for any
(1) the consumer report is obtained for a purpose for which
the consumer report is authorized to be furnished under this
(2) the purpose is certified in accordance with section 1681e
of this title by a prospective user of the report through a
general or specific certification.
15 U.S.C. § 1681b(f). Section 1681b(a) provides the
authorized purposes for which a consumer report may be
Subject to subsection (c), any consumer reporting agency may
furnish a consumer report under the following circumstances
and no other:
(1) In response to the order of a court . . . or a subpoena
issued in connection with proceedings before a Federal grand
(2) In accordance with the written instructions of the
consumer . . . .
(3) To a person which it has reason to believe-
(A) intends to use the information in connection with a
credit transaction involving the consumer . . . and involving
the extension of credit to, or review or collection of an
account of, the consumer; or
(B) intends to use the information for employment purposes;
(C) intends to use the information in connection with the
underwriting of insurance involving the consumer; or
(D) intends to use the information in connection with . . . a
license or other benefit granted by a governmental
instrumentality . . .; or
(E) intends to use the information, as a potential investor
or servicer, or current insurer, in connection with a
valuation of, or an assessment of the credit or prepayment
risks associated with, an existing credit obligation; or
(F)otherwise has a legitimate business need for the
(i) in connection with a business transaction that is
initiated by the consumer; or
(ii) to review an account to determine whether the consumer
continues to meet the terms of the account.
(G) executive departments and agencies in connection with the
issuance of government-sponsored individually-billed travel
(4) In response to a request by the head of a State or local
child support enforcement agency . . . .
(5) To an agency . . . for use to set an initial or modified
child support award.
(6) To the Federal Deposit Insurance Corporation or the
National Credit Union ...