Ilodianya v. Capital One Bank USA NA et al

Filing 28

ORDER granting in part and denying in part 11 Motion to Dismiss. Signed by Judge D. P. Marshall Jr. on 2/15/12. (kpr)

IN THE UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF ARKANSAS

WESTERN DIVISION

EMMANUEL ILODIANYA

v.

PLAINTIFF

No.4:11-cv-637-DPM

CAPITAL ONE BANK USA NA;
EXPERIAN INFORMATION
SOLUTIONS, INC.; and TRANS
UNIONLLC

DEFENDANTS
ORDER

Emmanuel Ilodianya is suing Capital One Bank for alleged Fair Credit
Reporting Act violations, defamation of credit, and intentional infliction of
emotional distress. Ilodianya asks, among other things, for declaratory relief
against Capital One - he wants the company to correct any remaining false
information on his credit report. Capital One moves to dismiss. The motion,

Document No. 11, is granted in part and denied in part.
1. A Private Right of Action? Capital One argues for dismissal of
Ilodianya's FCRA claims on the basis that the Act contains no private right of
action. Under 15 U.S.C. §§ 1681n & 16810, any person who willfully or
negligently fails to comply with any of the FCRA's requirements is subject to
civil liability.

For entities that furnish information to credit reporting

agencies, entities such as Capital One, the FCRA sets out two general

requirements: (1) the duty to provide accurate information; and (2) the duty

to investigate the accuracy of reported information upon receiving notice of
a dispute. 15 U.S.C. § 1681s-2(a) & (b).
The FCRA is clear that there is no private right of action for alleged
violations of section 1681s-2(a), the requirement that furnishers provide
accurate information to credit reporting agencies. 15 U.S.C. § 1681s-2(c)(1);
Huertas v. Galaxy Asset Management, 641 F.3d 28,34 (3d Cir. 2011); Gordon v.
Greenpoint Credit, 266 F. Supp. 2d 1007, 1010 (S.D. Iowa 2003). There is no

statutory bar, however, against pursuing a private claim against a furnisher
for a violation of section 1681s-2(b), the requirement that furnishers
investigate the accuracy of reported information after getting notice of a
dispute.
Whether a consumer can pursue this type of claim is an open question
in our Circuit. But most other Courts of Appeals to consider the issue have
answered the question yes. See, e.g., SimmsParris v. Countrywide Financial
Corp., 652 F.3d 355 (3d Cir. 2011); Chiang v. Verizon New England Inc., 595 F.3d

26 (1st Cir. 2010); Saunders v. Branch Banking & Trust Co. of Virginia, 526 F.3d
142 (4th Cir. 2008); Nelson v. Chase Manhattan Mortgage Corp., 282 F.3d 1057

-2­

(9th Cir. 2002); but see Geeslin v. Nissan Motor Acceptance Corp., No. 99-60410,

2000 WL 1056120 (5th Cir. 2000) (per curiam).
This Court agrees with the greater weight of authority: private suits are
allowable under section 1681s-2(b).

Capital One's motion to dismiss

Ilodianya's § 1681s-2(a) claim with prejudice is granted; Ilodianya's § 1681s­
2(b) claim survives.
2. Preemption of State-Law Claims? Capital One next argues that
Ilodianya's state-law claims - defamation of credit and intentional infliction
of emotional distress - are preempted by the the FCRA. The FCRA has two
preemption provisions. Section 1681t(b)(1)(F) says this:
No requirement or prohibition may be imposed under the laws of
any State with respect to any subject matter regulated under
section 1681s-2 of this title, relating to the responsibilities of
persons who furnish information to consumer reporting agencies,
except that this paragraph shall not apply to [certain inapplicable
state statutes.]
The other preemption provision, § 1681h(e), says this:
[N]o consumer may bring any action or proceeding in the nature
of defamation, invasion of privacy, or negligence with respect to
the reporting of information against ... any person who furnishes
information to a consumer reporting agency ... except as to false
information furnished with malice or willful intent to injure such
consumer.

-3­

Though the Eighth Circuit has yet to consider the application of these

two statutes, other Courts of Appeals have. The Seventh Circuit provided this
analysis:
[W]e do not perceive any inconsistency between the two statutes.
Section 1681h(e) preempts some state claims that could arise out
of reports to credit agencies; § 1681t(b)(1)(F) preempts more of
these claims. Section 1681h(e) does not create a right to recover
for wilfully false reports; it just says that a particular paragraph
does not preempt claims of that stripe. Section 1681h(e) was
enacted in 1970. Twenty-six years later, in 1996, Congress added
§ 1681t(b)(1)(F) to the United States Code. The same legislation
also added § 1681s-2. The extra federal remedy in § 1681s-2 was
accompanied by extra preemption in § 1681t(b)(1)(F), in order to
implement the new plan under which reporting to credit agencies
would be supervised by state and federal administrative agencies
rather than judges. Reading the earlier statute, § 1681h(e), to
defeat the later-enacted system in § 1681s-2 and § 1681t(b)(1)(F),
would contradict fundamental norms of statutory interpretation.

Purcell v. Bank ofAmerica, 659 F.3d 622,625 (7th Cir. 2011) (emphasis omitted).
And Macpherson v. JPMorgan Chase Bank, N.A.,665 F.3d 45 (2d Cir. 2011)

(per curiam) is similar to this case. There, as here, Macpherson's FCRA claim
was under § 1681s-2 and he also asserted state-law claims for defamation and
intentional infliction of emotional distress. 665 F.3d at 46-47. The district
court dismissed Macpherson's state-law claims, holding that they were

-4­

preempted by section 1681t(b)(1)(F). The Second Circuit affirmed, relying

heavily on Purcell. 665 F.3d at 47-48.

Purcell and Macpherson are well reasoned and persuasive. This Court
therefore holds that Ilodianya's claims for defamation and intentional
infliction of emotional distress are preempted. Capital One's motion to
dismiss these claims with prejudice is granted.
3. Declaratory Relief? Ilodianya also asks for declaratory relief. More
specifically, he asks the Court to order Capital One" to correct any remaining
such false information that is at issue[.]" Document No. 1-1. Capital One
argues that this is really a request for an injunction, which it says is not
allowed under the FCRA. Ilodianya maintains that he wants a declaration,
not an injunction.
A declaratory judgment is a "binding adjudication that establishes the
rights and other legal relations of the parties without providing for or
ordering enforcement." BLACK'S LAW DICTIONARY (9th ed. 2009); see also 28
US.C. § 2201(a). An injunction, on the other hand, "orders an affirmative act
or mandates a specified course of conduct." BLACK'S LAW DICTIONARY (9th
ed. 2009); see also FED. R. CIV. P. 65. But here we should, as Holmes said, think

-5­

things, not words. Ilodianya wants the Court to order Capital One to scrub
any remaining mistakes off his credit report. Document No. 1-1 at 13. This is
the essence of injunctive, not declaratory, relief.
Whether injunctive relief is available to a private plaintiff under the
FCRA is another open question in our Circuit. Only one Court of Appeals
appears to have decided the point. The Fifth Circuit has held that
the affirmative grant of power to the FTC to pursue injunctive
relief, coupled with the absence of a similar grant to private
litigants when they are expressly granted the right to obtain
damages and other relief, persuasively demonstrates that
Congress vested the power to obtain injunctive relief solely with
the FTC.

Washington v. CSC Credit Services Inc., 199 F.3d 263, 268 (5th Cir. 2000).
Writing for the Sixth Circuit, Judge Sutton stuck a cautionary note about

Washington in some careful dicta. Beaudry v. Telecheck Services, Inc., 579 F.3d
702, 708-09 (6th Cir. 2009). District courts have divided, with recent decisions
tending to follow Washington. E.g., Young v. HSBC Mortgage Services, Inc., No.
4:07CV646 HEA, 2007 WL 2083680, at *1 (E.D. Mo. 13 July 2007) (collecting
cases); Washington, 199 F.3d at 268 (same).
While there is a solid argument and authority to the contrary, this Court
is persuaded that Washington reads the Fair Credit Reporting Act correctly.
-6­

Congress provided for injunctions in other parts of the Act but did not do so
in the sections specifying the remedies available to aggrieved individuals like
Ilodianya. Expressio unius est exclusio alterius. Injunctive relief is thus not
available to private plaintiffs in an FCRA action. Captial One's motion is
granted on this point; and the Court dismisses Ilodianya's request for an
injunction styled as a declaration.
So Ordered.

D.P. Marshall Jr. tI
United States District Judge

-7­