Baker v. Midland Funding LLC et al

Filing 92

ORDER denying 71 Motion to Dismiss for Failure to State a Claim. Signed by Judge David G Campbell on 5/28/2014.(DGC, nvo)

1

WO

2
3
4
5
6

IN THE UNITED STATES DISTRICT COURT

7

FOR THE DISTRICT OF ARIZONA

8
9

Christine Baker,

No. CV-13-08169-PCT-DGC
Plaintiff,

10
11

v.

12

ORDER

Midland Funding LLC, et al.,

13

Defendants.

14

Defendants Midland Funding LLC and Midland Credit Management, Inc. have

15

filed a motion to dismiss Plaintiff Christine Baker’s First Amended Complaint pursuant

16

to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Doc. 71. The motion is fully

17

briefed. For the reasons that follow, the Court will deny the motion.

18

I.

Background.

19

Plaintiff asserts that Defendants “provided false and misleading information to the

20

credit bureaus” and “verified incorrect information with credit bureau Equifax after [she]

21

disputed with Equifax directly.” Doc. 70, ¶ 7. She alleges that Defendants reported

22

several pieces of incorrect information, including incorrect balances, and that her

23

accounts were “open” instead of “revolving.”

24

Defendants “willfully and negligently failed to correct the information furnished to

25

Equifax in violation of FCRA § 1681s-2(b).” Id., ¶ 21.

26

II.

Id., ¶ 8.

She further alleges that

Legal Standard.

27

When analyzing a complaint for failure to state a claim to relief under Rule

28

12(b)(6), the well-pled factual allegations are taken as true and construed in the light

1

most favorable to the nonmoving party. Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th

2

Cir. 2009). Legal conclusions couched as factual allegations are not entitled to the

3

assumption of truth, Ashcroft v. Iqbal, 556 U.S. 662, 680 (2009), and therefore are

4

insufficient to defeat a motion to dismiss for failure to state a claim, In re Cutera Sec.

5

Litig., 610 F.3d 1103, 1108 (9th Cir. 2010). To avoid a Rule 12(b)(6) dismissal, the

6

complaint must plead enough facts to state a claim to relief that is plausible on its face.

7

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). This plausibility standard “is not

8

akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a

9

defendant has acted unlawfully.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at

10

556). “[W]here the well-pleaded facts do not permit the court to infer more than the mere

11

possibility of misconduct, the complaint has alleged B but it has not ‘show[n]’ B ‘that the

12

pleader is entitled to relief.’” Id. at 679 (quoting Fed. R. Civ. P. 8(a)(2)).

13

III.

14

Analysis.
Defendants argue that Plaintiff fails to state a claim because she does not allege

15

that credit bureaus contacted them regarding Plaintiff’s dispute.

Doc. 71 at 6.

16

Defendants cite Roybal v. Equifax, 405 F. Supp. 2d. 1177, 1180 (E.D. Cal. 2005), for the

17

proposition that “if a Plaintiff fails to allege that he contacted the credit agencies and that

18

the credit reporting agencies contacted the furnisher, the complaint is subject to a motion

19

to dismiss the FCRA claim against the furnisher.” Id. Defendants argue that Plaintiff has

20

not specified what date she contacted the credit reporting agency, nor that any credit

21

reporting agency contacted Defendants in response to her dispute. Doc. 71 at 6. They

22

argue that Plaintiff “cannot show that [Defendants] failed to reasonably respond to a

23

notice of dispute without demonstrating what the notice said about the dispute or when it

24

was sent.” Id. at 7.

25

Plaintiff responds that her complaint states several times that she disputed

26

information with Equifax and that the disputed information was subsequently verified by

27

Defendants. Doc. 81 at 2. In response to Defendants argument that Plaintiff has failed to

28

allege any facts about the specific contents of communications between Equifax and

-2-

1

Defendants, Plaintiff notes that she “cannot show that [Defendants] failed to reasonably

2

respond to a notice of dispute, demonstrate what the notice said about the dispute or when

3

it was sent prior to conducting discovery.” Id.

4

Plaintiff need not plead every detail of the transaction in order to state a claim.

5

Her allegation that Defendants verified incorrect information to Equifax necessarily

6

implies that Defendants were contacted by Equifax about the dispute. Defendants also

7

argue that Plaintiff cannot show that they failed to reasonably respond to a notice of

8

dispute, but Plaintiff’s complaint does not make such an allegation. Rather, Plaintiff

9

alleges that she notified Equifax that she disputed information reported by Defendants

10

and, in response, Defendants verified incorrect information.

11

These allegations are

sufficient to state a claim under 15 U.S.C. § 1681s-2(b).

12

Defendants also argue that “Plaintiff’s claims for statutory and punitive damages

13

are unavailable” because she “has not alleged that [Defendants] intentionally violated a

14

duty to conduct a reasonable investigation.” Doc. 71 at 8 (emphasis original). The Court

15

disagrees. Plaintiff has alleged that Defendants willfully verified incorrect information in

16

violation of § 1681s-2(b). Punitive and statutory damages are available for willful failure

17

to comply with requirements imposed by the FCRA. 15 U.S.C. § 1681n.

18

IT IS ORDERED that Defendants’ motion to dismiss (Doc. 71) is denied.

19

Dated this 28th day of May, 2014.

20
21
22
23
24
25
26
27
28

-3-