Bruno v. Equifax Credit Information Services, LLC, et al.

Filing 70

MEMORANDUM and ORDER signed by Senior Judge William B. Shubb on 6/30/2017 re 41 , 43 Plaintiff's Motions to Strike: IT IS ORDERED that plaintiff's Motions to strike defendants' defenses be, and the same hereby are, GRANTED IN PA RT as follows: 1) Equifax's first, second, third, fifth, sixth, and seventh defenses are stricken. 2) Geneva's first, third, fourth, sixth, eighth, ninth, tenth, eleventh, twelfth, thirteenth, fourteenth, fifteenth, and sixteenth defenses are stricken. Plaintiff's Motions are DENIED in all other respects. Defendants have twenty days from the date this Order is signed to file amended Answers, if they can do so consistent with this Order. (Kirksey Smith, K)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---- 11 12 13 DANIEL BRUNO, individually and on behalf of others similarly situated, 14 15 CIV. NO. 2:17-0327 WBS EFB MEMORANDUM AND ORDER RE: MOTIONS TO STRIKE Plaintiff, v. 16 17 18 EQUIFAX INFORMATION SERVICES, LLC and GENEVA FINANCIAL SERVICES, LLC, Defendants. 19 20 ----oo0oo---- 21 Plaintiff Daniel Bruno brought this putative class 22 23 action against defendants Equifax Information Services, LLC 24 (“Equifax”) and Geneva Financial Services, LLC (“Geneva”),1 25 26 27 28 1 Five other defendants--RMB World Enterprises, BB Direct, Genesis Marketing Group, American Marketing and Mailing Services, and Strategic Marketing Services--were named in this action. (Compl. ¶¶ 3-7 (Docket No. 1).) Plaintiff has dismissed each of those defendants from this action. (See Docket Nos. 22, 1 1 alleging that defendants sold his and putative class members’ 2 consumer reports to other parties for impermissible marketing 3 purposes in violation of the Fair Credit Reporting Act (“FCRA”). 4 (Compl. (Docket No. 1).) 5 Motions to strike each of the defenses alleged in defendants’ 6 Answers. 7 as to Geneva (Docket No. 43).) 8 I. Before the court are plaintiff’s (Pl.’s Mot. as to Equifax (Docket No. 41); Pl.’s Mot. Factual and Procedural Background 9 Plaintiff is a California resident. (See Compl. Ex. B, 10 Car Loan Notice (indicating plaintiff resides in California) 11 (Docket No. 1-2).) 12 (Compl. ¶ 37.) 13 credit information and intermediary between Equifax and various 14 marketing agencies. 15 Equifax is a credit reporting agency. Geneva is allegedly a collector of consumer (See id. ¶¶ 17, 28.) In February 2016, plaintiff received a notice from a 16 Hanlees Nissan Chevrolet (“Hanlees”) stating that he had been 17 prequalified for a car loan of $5,500 to $39,000. 18 Notice.) 19 Plaintiff alleges that the notice was sent to him because Geneva 20 obtained a copy of his consumer report from Equifax and forwarded 21 the report to a marketing agency that was working on Hanlees’ 22 behalf. 23 (Car Loan The notice identified Geneva as the lender. (Id.) (See Compl. ¶¶ 17, 21, 43.) After receiving the car loan notice, plaintiff 24 contacted Hanlees to apply for the loan the notice stated he had 25 been prequalified for. 26 contact Geneva regarding the loan. (Id. ¶ 23.) 27 28 29, 40, 56, and 62.) 2 Hanlees advised him to (Id.) When plaintiff 1 contacted Geneva regarding the loan, Geneva allegedly informed 2 him that it “did not finance vehicles for purchase and instructed 3 him to contact the . . . car dealership for financing approval.” 4 (Id. ¶ 26.) 5 Plaintiff thereafter filed this putative class action. 6 (Id. at 23.) Plaintiff alleges that his experience with Hanlees 7 and Geneva was the result of a nationwide scheme whereby Equifax 8 sells “tens of thousands of consumer reports” to Geneva and 9 Geneva sells such reports to and partners with various marketing 10 agencies for the purpose of “conduct[ing] promotional inquiries 11 [using] bogus firm offers of credit.” 12 Such a scheme, plaintiff contends, violates the FCRA. 13 1.) 14 furnishing and failing to maintain reasonable procedures designed 15 to avoid furnishing consumer reports to other parties for 16 “impermissible marketing purposes” in violation 15 U.S.C. §§ 17 1681b and 1681e(a). 18 causes of action against Geneva for obtaining consumer reports 19 for “impermissible marketing purposes” in violation of 15 U.S.C. 20 §§ 1681b(f) and 1681e(e), and obtaining such reports under false 21 pretenses in violation of 15 U.S.C. § 1681q. (See id. ¶¶ 17, 21, 30.) (Id. at Plaintiff brings a cause of action against defendants for 22 (Id. at 16-18.) Plaintiff also brings (Id. at 18-21.) Defendants have filed separate Answers to plaintiff’s 23 Complaint. (See Equifax’s Answer (Docket No. 32); Geneva’s 24 Answer (Docket No. 34).) 25 Answer. Equifax alleges seven defenses2 in its (Equifax’s Answer at 12-13.) Geneva alleges sixteen 26 27 28 2 The term “defense” in this Order refers to both affirmative defenses and challenges to plaintiff’s prima facie case. 3 1 defenses in its Answer. 2 now moves to strike each of the defenses alleged in defendants’ 3 Answers under Federal Rule of Civil Procedure 12(f). 4 as to Equifax; Pl.’s Mot. as to Geneva.) 5 II. (Geneva’s Answer at 11-14.) Plaintiff (Pl.’s Mot. Legal Standard 6 Rule 12(f) authorizes the court to strike 7 “insufficient” affirmative defenses3 and “redundant, immaterial, 8 impertinent, or scandalous matter[s]” from pleadings. 9 Civ. P. 12(f). 10 Fed. R. Affirmative defenses may be insufficient “as a matter 11 of law” or “as a matter of pleading.” Harris v. Chipotle Mexican 12 Grill, Inc., 303 F.R.D. 625, 627 (E.D. Cal. 2014) (citing Dodson 13 v. Strategic Rests. Acquisition Co. II, LLC, 289 F.R.D. 595, 603 14 (E.D. Cal. 2013) (Karlton, J.)). 15 insufficient as a matter of law “if it lacks merit under any set 16 of facts the defendant might allege.” 17 F.R.D. at 603). 18 matter of pleading if it fails to provide “fair notice” of its 19 nature and grounds to the plaintiff. 20 Inc., 779 F.3d 1016, 1019 (9th Cir. 2015).4 An affirmative defense is Id. (citing Dodson, 289 An affirmative defense is insufficient as a Kohler v. Flava Enters., “Fair notice” of an 21 22 23 24 25 26 27 28 3 “An affirmative defense is a defense that does not negate the elements of the plaintiff’s claim, but instead precludes liability even if all of the elements of the plaintiff’s claim are proven.” Hernandez v. Dutch Goose, Inc., No. C 13-03537 LB, 2013 WL 5781476, at *3 (N.D. Cal. Oct. 25, 2013). “A defendant bears the burden of proof on its affirmative defenses.” Id. 4 Plaintiff argues that Kohler “did not specifically hold” that the “fair notice” standard applies to affirmative defenses, and the court should apply the “plausibility” standard stated in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) and 4 1 affirmative defense only requires that the defendant describe the 2 defense in “general terms.” 3 Id. “[R]edundant” matters are those “that are needlessly 4 repetitive.” City of Colton v. Am. Promotional Events, Inc., No. 5 EDCV 09-1864 PSG SSX, 2012 WL 32606, at *2 (C.D. Cal. Jan. 5, 6 2012). 7 essential or important relationship to the claim[s] for relief or 8 the defenses being pleaded.” 9 those “that do not pertain, and are not necessary, to the issues “[I]mmaterial” matters are those “which [have] no “[I]mpertinent” matters are 10 in question.” 11 “improperly cast[] a derogatory light on someone, usually a 12 party.” 13 2005) (O’Neill, J.). 14 III. Discussion 15 A. Id. Id. “[S]candalous” matters are those that Wilkerson v. Butler, 229 F.R.D. 166, 170 (E.D. Cal. Defenses That Are Not Affirmative Defenses 16 i. Equifax 17 The court has reviewed Equifax’s Answer and determined 18 19 20 21 22 23 24 25 26 27 28 Ashcroft v. Iqbal, 556 U.S. 662 (2009) to the defenses stated in defendants’ Answers. (See Pl.’s Reply as to Equifax at 2 (Docket No. 65).) The court acknowledges that a number of decisions from the Northern District of California have continued to apply the “plausibility” standard to affirmative defenses post-Kohler. See, e.g., Murphy v. Trader Joe’s, No. 16-CV-02222 SI, 2017 WL 235193, at *2 (N.D. Cal. Jan. 19, 2017). This court, however, has generally understood Kohler to have held that the “fair notice” standard applies to affirmative defenses. See Jing Jing Yao v. City of Folsom, No. 2:16-CV-2609 MCE AC, 2017 WL 1383274, at *2 (E.D. Cal. Apr. 18, 2017) (“[T]his Court has . . . held that Kohler resolves the issue of which pleading standard applies to affirmative defenses . . . .”); Rodriguez v. Brown, No. 1:15CV-1754 LJO EPG (PC), 2017 WL 1090161, at *1 (E.D. Cal. Mar. 22, 2017) (same); Television Educ., Inc. v. Contractors Intelligence Sch., Inc., No. CV 2:16-1433 WBS EFB, 2016 WL 7212791, at *1 n.2 (E.D. Cal. Dec. 12, 2016) (same). 5 1 that Equifax’s first, second, third, fifth, sixth, and seventh 2 defenses are not affirmative defenses. 3 pled in Equifax’s Answer although they may still be raised later 4 in this action. 5 defenses. Such defenses need not be Accordingly, the court will strike such 6 ii. Geneva 7 The court has reviewed Geneva’s Answer and determined 8 that Geneva’s first, tenth, eleventh, twelfth, fourteenth, 9 fifteenth, and sixteenth defenses are not affirmative defenses. 10 Such defenses need not be pled in Geneva’s Answer although they 11 may still be raised later in this action. 12 will strike such defenses. 13 B. Accordingly, the court Defenses That Are Affirmative Defenses But Fail to Give 14 Fair Notice 15 Geneva’s fourth defense states that “[a]t all relevant 16 times, [Geneva] acted within the absolute and qualified 17 privileges afforded it under the FCRA, the United States 18 Constitution, applicable State Constitutions, and the common 19 law.” 20 what privilege Geneva asserts or explain how that privilege might 21 be relevant in this action. 22 failed to provide plaintiff fair notice of this defense, and will 23 strike the defense. 24 (Geneva’s Answer at 12.) This defense does not specify The court finds that Geneva has Geneva’s sixth defense states that “[p]laintiff’s 25 claims are barred, in whole, or in part, by the equitable 26 theories of estoppel, waiver, and laches.” 27 not explain, and it is not apparent to the court, how the legal 28 doctrines cited in this defense are relevant in this action. 6 (Id.) Geneva does 1 Without providing such information, Geneva cannot be said to have 2 provided plaintiff fair notice of this defense. 3 court will strike this defense. 4 Accordingly, the Geneva’s eighth defense states that “Plaintiff, though 5 under a duty to do so, has failed and neglected to reasonably 6 mitigate his alleged damages and, therefore, cannot recover 7 against [Geneva].” 8 in plaintiff’s Complaint are for “mental distress and emotional 9 anguish stemming from the ongoing invasion of [plaintiff’s] (Id. at 13.) 10 privacy.” 11 not apparent to the court, how plaintiff could have mitigated 12 such damages. 13 plaintiff fair notice of its mitigation defense, and will strike 14 that defense. 15 (Compl. ¶ 100.) The only actual damages alleged Geneva does not explain, and it is The court finds that Geneva has not provided Geneva’s ninth defense states that “[a]ny credit report 16 or other information released by [Geneva] to a third party 17 concerning Plaintiff was done pursuant to the express provisions 18 of the FCRA.” 19 fourth defense, this defense states neither the specific FCRA 20 provision Geneva allegedly acted pursuant to nor how that 21 provision might be relevant in this action. 22 court will strike this defense. 23 C. (Geneva’s Answer at 13.) Similar to Geneva’s Accordingly, the Defenses That Are Affirmative Defenses and Provide Fair 24 Notice 25 i. 26 Equifax’s fourth defense states that the FCRA Equifax 27 violations alleged in plaintiff’s Complaint are “the fault of 28 other persons or entities and Plaintiff’s damages, if any, should 7 1 be apportioned according to the principles of comparative fault.” 2 (Equifax’s Answer at 13.) 3 defense to negligence claims. 4 Delgado, No. 1:12-CV-1945 LJO SKO, 2013 WL 3288564, at *5 (E.D. 5 Cal. June 28, 2013). 6 plaintiff has alleged a negligence cause of action under the FCRA 7 in this action. 8 relevant issue in this action, and plaintiff is aware of the 9 general terms of that defense. 10 Comparative fault is an affirmative See J & J Sports Prods., Inc. v. At oral argument, the parties agreed that It is thus apparent that comparative fault is a Accordingly, the court will not strike this defense.5 11 ii. Geneva 12 Geneva’s second defense states that at all relevant 13 times, Geneva “had in place reasonable and appropriate procedures 14 in compliance with the Fair Credit Reporting Act (‘FCRA,’ 15 15 U.S.C. §§ 1681a-v) in its handling of all credit data, including 16 . . . data relating to Plaintiff.” 17 Geneva cites Taylor v. First Advantage Background Servs. Corp, 18 207 F. Supp. 3d 1095 (N.D. Cal. 2016) in support of its 19 contention that this defense is an affirmative defense, which 20 plaintiff did not oppose at oral argument. 21 the issue of whether defendants employed reasonable procedures to 22 help ensure compliance with the FCRA in his Complaint, (see 23 Compl. ¶¶ 94, 106), the court finds that he has fair notice of 24 this defense. (Geneva’s Answer at 11.) As plaintiff raised 25 26 27 28 5 Plaintiff stated at oral argument that this defense should be stricken because Equifax has not joined the other allegedly liable parties to this action. Plaintiff does not cite, and the court is not aware of, an authority that requires such joinder in order to assert a comparative fault defense. 8 1 2 The court will strike Geneva’s third defense, as it is redundant of Geneva’s second defense. 3 Geneva’s fifth defense states that “Plaintiff has 4 failed to join a party needed for the just adjudication of [this] 5 action pursuant to the requirements of Rule 19 of the Federal 6 Rules of Civil Procedure (Fed. R. Civ. P. 19), in that if Geneva 7 is liable to Plaintiff . . . it is liable to Plaintiff jointly 8 with Datamyx LLC and/or Deluxe Corporation.” 9 12.) (Geneva’s Answer at As this defense both cites a specific authority and 10 provides the names of the specific parties at issue, the court 11 finds that Geneva has provided plaintiff fair notice of this 12 defense. 13 Geneva’s seventh defense states that “any purported 14 damages to Plaintiff . . . are the result of the actions, 15 omissions, and/or errors of individuals and/or entities . . . 16 over whom [Geneva] has neither authority [nor] ability to 17 control.” 18 that this defense is the same defense as Equifax’s comparative 19 fault defense. 20 same reason it declines to strike Equifax’s comparative fault 21 defense. 22 (Id. at 12-13.) Geneva represented at oral argument The court declines to strike this defense for the Geneva’s thirteenth defense states that “[s]ome or all 23 of Plaintiff[’s] claims are barred by applicable statutes of 24 limitations, including but not limited to 15 U.S.C. § 1681[p].” 25 (Id. at 14.) 26 defense is without merit and conceded that it should be stricken. 27 Accordingly, the court will strike this defense. 28 Geneva represented at oral argument that this IT IS THEREFORE ORDERED that plaintiff’s Motions to 9 1 strike defendants’ defenses be, and the same hereby are, GRANTED 2 IN PART as follows: 3 (1) 4 5 Equifax’s first, second, third, fifth, sixth, and seventh defenses are stricken. (2) Geneva’s first, third, fourth, sixth, eighth, ninth, 6 tenth, eleventh, twelfth, thirteenth, fourteenth, 7 fifteenth, and sixteenth defenses are stricken. 8 Plaintiff’s Motions are DENIED in all other respects. 9 Defendants have twenty days from the date this Order is 10 signed to file amended Answers, if they can do so consistent with 11 this Order. 12 Dated: June 30, 2017 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10

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