United States District Court, E.D. California
ORDER ON DEFENDANT EQUIFAX INC.'S MOTION TO
DISMISS (DOC. NO. 14)
INTRODUCTION
Pro
se Plaintiff Noreena Meza brought an action in Fresno
Superior Court alleging various common law claims and claims
under the Fair Credit Reporting Act (“FCRA”)
against Experian Information Solutions, Inc.
(“Experian”), Transunion Corp.
(“Transunion”) and Equifax, Inc.
(“Equifax”) (together, “Defendants”).
That action was removed to this Court by Transunion, and
Equifax now seeks dismissal of all claims against it pursuant
to Rule 12(b)(6) of the Federal Rules of Civil Procedure. For
the reasons set forth below, the Court will grant
Equifax's motion to dismiss in its entirety, with leave
to amend.
FACTUAL
BACKGROUND
In June
2019, Meza requested “three credit reports”
through “creditreport.com” and discovered
“almost 12-14 accounts … on his credit report
without his knowledge.” Doc. No. 1-3 at 2:18-20. On
June 27, 2019, Meza wrote to “three credit report
companies”- Experian, Transunion and Equifax-
requesting an investigation into the accounts. Id.
at 2:20-22. Meza also wrote to the “financial
institution” associated with each of the accounts
“requesting an internal investigation” and
information on “how, when and where these accounts were
opened and established.” Id. at 2:21-24. Each
Defendant responded to Meza's inquiry on or about July
31, 2019. Id. at 2:23-26. According to Meza,
however, the Defendants failed to “investigate this
matter and continue to report negative information that
should not be reported.” Id. at 2:27 -3:2.
Further, Meza alleges that “Defendants failed to follow
reasonable procedures to assure the maximum possible accuracy
of information in [Meza's] consumer report, ”
id. at 4:12-14, and that the Defendants incorrectly
reported that Meza was “severely delinquent in paying
on his account and had an outstanding balance” even
though they “knew the statements were false or had no
factual basis for making the statements.” Id.
at 4:26-28. This conduct adversely affected Meza's
credit, prevented him from purchasing an automobile, and
damaged his reputation. Id. at 4.
Based
on this alleged wrongdoing, Meza brings the following claims
against all three Defendants: (i) “Violation of the
Fair Credit Reporting Act”; (ii) “Loss of
Opportunity”; (iii) “Defamation”; (iv)
“Negligence”; (v) “Intentional Infliction
of Emotional Distress”; and (vi) “Intentional
Infliction of Willful Misconduct.” Doc. No. 1-3 at
4:6-7:4.
DEFENDANT'S
MOTION
Equifax
argues that the claims against it should be dismissed under
Rule 12(b)(6) of the Federal Rules of Civil Procedure for
four reasons. First, Equifax argues that Meza has “sued
the wrong party” because Equifax “is not a
consumer reporting agency” (“CRA”) subject
to the FCRA. Doc. No. 1-3, Arguments and Authorities, Part I.
Second, Equifax contends that the Complaint is insufficient
under Rule 8 of the Federal Rules of Civil Procedure because
Meza “does not explain … what he contends was
inaccurate on his credit file, what Equifax [] allegedly did
or didn't do with respect to [his] dispute, how Equifax
[] acted willfully or negligently, or any detail sufficient
for Equifax [] to respond to the Complaint.”
Id., Argument and Authorities, Part II. Third,
Equifax argues that the FCRA preempts the causes of action
that arise under state law and common law. Id.,
Arguments and Authorities, Part III. And finally, Equifax
argues that the Complaint fails to set forth allegations
showing that Equifax's alleged wrongdoing was
“willful” under the FCRA. Id., Arguments
and Authorities, Part IV. Meza has not filed an opposition to
Equifax's motion to dismiss.
Legal
Standard
Under
Rule 8(a)(2) of the Federal Rules of Civil Procedure, a
complaint must provide “a short and plain statement of
the claim showing that the pleader is entitled to relief
… in order to give the defendant fair notice of what
the … claim is and the grounds upon which it
rests.” Bell Atl. Corp. v. Twombly, 550 U.S.
544, 555 (2007) (quoting Conley v. Gibson, 355 U.S.
41, 47 (1957) and Fed.R.Civ.P. 8(a)(2)) (internal quotations
omitted).
A court
may grant a motion to dismiss under Rule 12(b)(6) of the
Federal Rules of Civil Procedure where the plaintiff fails to
“state a claim upon which relief can be granted.”
Fed.R.Civ.P. 12(b)(6). A dismissal under Rule 12(b)(6) may be
based on the lack of a cognizable legal theory or on the
absence of sufficient facts alleged under a cognizable legal
claim. Mollett v. Netflix, Inc., 795 F.3d 1062, 1065
(9th Cir.2015).
To
avoid a Rule 12(b)(6) dismissal for a lack of facts, “a
complaint must contain sufficient factual matter, accepted as
true, to state a claim to relief that is plausible on its
face.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (citation omitted); Mollett, 795 F.3d at
1065. Rule 12(b)(6)'s plausibility standard “is not
akin to a ‘probability requirement,' but it asks
for more than a sheer possibility that a defendant has acted
unlawfully.” Iqbal, 556 U.S. at 678 (citation
omitted). A claim is plausible “when the plaintiff
pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged.” Id.
When
considering a motion to dismiss, all well-pleaded allegations
of material fact are taken as true and construed in the light
most favorable to the non-moving party. Faulkner v. ADT
Sec. Servs., 706 F.3d 1017, 1019 (9th Cir.2013); see
also, Iqbal, 556 U.S. at 678. A court, however,
is not “bound to accept as true a legal conclusion
couched as a factual allegation.” Iqbal, 556
U.S. at 678. Nor is a court obliged to credit conclusory
allegations, allegations contradicted by exhibits attached to
the complaint or matters properly subject to judicial notice,
unwarranted deductions of fact or unreasonable inferences.
Daniels-Hall v. National Educ. Ass'n, 629 F.3d
992, 998 (9th Cir.2010); see also, Epstein v.
Wash. Energy Co., 83 F.3d 1136, 1140 (9th Cir.1996)
(stating that “unwarranted inferences” are
“insufficient to defeat a motion to dismiss for failure
to state a claim”).
In
short, the Ninth Circuit has distilled the following
principles for motions under Rule 12(b)(6):
First, to be entitled to the presumption of truth,
allegations in a complaint or counterclaim may not simply
recite the elements of a cause of action, but must contain
sufficient allegations of underlying facts to give fair
notice and to enable the opposing party to defend itself
effectively. Second, the factual allegations that are taken
as true must plausibly suggest an entitlement to relief, such
that it is not unfair to require the opposing party to be
subjected to the expense of discovery and continued
litigation.
Levitt v. Yelp! Inc., 765 F.3d 1123, 1135 (9th
Cir.2014) (citation omitted).
When
evaluating a pro se complaint, the pleadings are
“to be liberally construed, and … however
inartfully pleaded, must be held to less stringent standards
than formal pleadings drafted by lawyers.” Erickson
v. Pardus, 551 U.S. 89, 94 (2007). However, the court
still may not “accept as true allegations that are
merely conclusory.” In re Gilead Scis. Sec.
Litig., 536 F.3d 1049, 1055 (9th Cir.2008).
Under
Rule 15(a) of the Federal Rules of Civil Procedure, leave to
amend “shall be freely granted when justice so
requires, ” bearing in mind “the underlying
purpose of Rule 15 to facilitate decisions on the merits,
rather than on the pleadings or technicalities.”
Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir.2000)
(en banc) (ellipses omitted). A court may, however,
“exercise its discretion to deny leave to amend due to
‘undue delay, bad faith or dilatory motive on part of
the movant, repeated failure to cure deficiencies by
amendments previously allowed, undue prejudice to the
opposing party ..., [and] futility of amendment.'”
Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876,
892-93 (9th Cir.2010) (alterations in original) (quoting
Foman v. Davis, 371 U.S. 178, 182 (1962)); see
also, Garmon v. County of L.A., 828 F.3d 837,
842 (9th Cir.2016).
ANALYSIS
The
Court first addresses Equifax's arguments for dismissal
of Meza's claims under the FCRA, and then addresses
Equifax's arguments for dismissal of claims arising under
common law.
I.
Fair Credit Reporting Act Claims
The
Court begins by ascertaining what claims Meza is bringing
against Equifax under the FCRA, applying the forgiving
standards of construction applicable to pro se
complaints. See Erickson, 551 U.S. at 94 (2007).
Meza
alleges that the Defendants in this action “provid[e]
credit information and risk management services to businesses
and consumers.” Doc. No. 1-3 at 1:20-25. Further, he
refers to Defendants collectively as the “three Credit
report agencies” and the “three Credit
borough[s], ” while distinguishing them from
“financial institutions” that allegedly furnished
information to the Defendants. Id. at 2:18-26. He
also alleges that the Defendants have collectively engaged in
“incorrect negative reporting.” Id. at
2:26-28. The Court, therefore, understands that Meza is suing
the Defendants (including Equifax) as “consumer
reporting agencies”-the term for “credit
reporting agencies” in the FCRA-even though the
Complaint contains various references to obligations on the
part of “furnisher[s] of credit information”
under the FCRA.[1] See, e.g., id.
at 3:23-26.
As to
Meza's claims against the Defendants under the FCRA, the
Complaint makes express reference to 15 U.S.C. §§
1681i(a), 1681n, 1681o and 1681s-2. See Doc. No. 1-3
at 3:8-15, 5:7-9. As stated in the Complaint, itself, 15
U.S.C. § 1681s-2 pertains to furnishers of information
who have failed to perform certain duties upon valid notice
of a credit reporting dispute. Doc. No. 1-3 at 3:10-12;
see 15 U.S.C. § 1681s-2 (entitled
“Responsibilities of furnishers of information to
consumer reporting agencies”). Since Meza is suing
Equifax and the other Defendants as CRAs, as opposed to
furnishers of information, 15 U.S.C. § 1681s-2 does not
appear to be relevant to this action and will not be
addressed in this Order.
In
addition to referencing the aforementioned FCRA provisions,
the Complaint alleges “negligent noncompliance [] and
willful failure to reinvestigate disputed entries.”
Doc. No. 1-3 at 5:7-9. It also states that Defendants
“failed to investigate” the reporting
inaccuracies at issue in this case, “report[ed]
negative information that should not be reported, ”
id. at 3:1-2, and “failed to follow reasonable
procedures to assure the maximum possible accuracy of
information in [Meza's] consumer report.”
Id. at 4:12-14.
15
U.S.C. § 1681i-entitled “Procedure in case of
disputed accuracy”-governs “[r]einvestigations of
...