Rieger v. American Express Company

Filing 14

ORDER by Judge Maria-Elena James granting 4 Motion to Dismiss (cdnS, COURT STAFF) (Filed on 10/25/2011)

1
2
3

UNITED STATES DISTRICT COURT

4

Northern District of California

5
6

SCOTT RIEGER,

No. C 11-4202 MEJ
Plaintiff,

7

ORDER GRANTING DEFENDANT’S
MOTION TO DISMISS

v.
8
AMERICAN EXPRESS COMPANY,

(Docket No. 4)

9
10

Defendant.
_____________________________________/

12
For the Northern District of California

UNITED STATES DISTRICT COURT

11

13

I. INTRODUCTION
Plaintiff Scott Rieger (“Plaintiff”) brings this action against Defendant American Express

14

Company (“Defendant”), alleging violations of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C.

15

§ 1681 et seq. Currently pending before the Court is Defendant’s Motion to Dismiss pursuant to

16

Federal Rule of Civil Procedure 12(b)(6). Dkt. No. 4. Because the Court finds this matter suitable

17

for resolution based on the parties’ written submissions, the Court VACATES the hearing set for

18

November 3, 2011. See Civil L.R. 7-1(b). After careful consideration of the parties’ arguments, the

19

Court GRANTS Defendant’s motion for the reasons set forth below.

20
21

II. BACKGROUND
The following factual background is taken from Plaintiff’s Complaint. Dkt. No. 1. Plaintiff

22

alleges that in June 2011, after examining his Experian consumer credit report, he discovered that

23

Defendant pulled his credit report. Id. ¶¶ 6-7. Specifically, Plaintiff alleges that on the following

24

dates, Defendant “initiated a pull of Plaintiff’s credit report from Experian without permissible

25

purpose”: September 23, 2009; October 26, 2009; November 19, 2009; December 14, 2009; January

26

22, 2010; February 22, 2010; March 25, 2010; April 30, 2010; May 21, 2010; and June 23, 2010. Id.

27

¶¶ 8-17. Plaintiff further alleges these acts constitute violations of the FCRA. Id. ¶¶ 21, 25.

28

On September 22, 2011, Defendant filed the present Motion to Dismiss. Dkt. No. 4. In its

1

motion, Defendant argues that Plaintiff fails to allege any improper purpose under the FCRA and it

2

is not required to guess as to which provision of law Plaintiff believes was violated, or what conduct

3

Plaintiff contends amounts to a violation. Id. at 6. Defendant further argues that while Plaintiff

4

asserts a claim under 15 U.S.C. § 1681b(f), this provision only applies to consumer reporting

5

agencies, not furnishers of credit information. Id. As Plaintiff admits that Defendant is a furnisher

6

of information within the meaning of the FCRA, (Compl. ¶¶ 20, 24), Defendant argues that no claim

7

can be brought against it under § 1681b(f).

8

Plaintiff filed his Opposition to Defendant’s Motion on October 5, 2011. Dkt. No. 9. In his

which appears to have been filed in bad faith.” Id. at 1. Plaintiff argues that the allegations in his

11

Complaint are “crystal clear”: “[Defendant] initiated 10 pulls of Plaintiff’s credit report from

12
For the Northern District of California

Opposition, Plaintiff states that “It is difficult to comprehend the basis for [Defendant’s] motion,

10

UNITED STATES DISTRICT COURT

9

Experian without permissible purpose,” and this “is inherently a clear-cut violation of the [FCRA].”

13

Id. at 2. Plaintiff maintains that the Court “should not tolerate an utterly frivolous motion such as

14

this by a party who does not wish to have its illegal activities exposed.” Id.

15
16

III. LEGAL STANDARD
A motion to dismiss a complaint under Federal Rule of Civil Procedure (“Rule”) 12(b)(6)

17

tests the legal sufficiency of the claims asserted in the complaint. Navarro v. Black, 250 F.3d 729,

18

732 (9th Cir. 2001). Rule 8(a)(2) requires that a pleading stating a claim for relief contain “a short

19

and plain statement of the claim showing that the pleader is entitled to relief.” The function of this

20

pleading requirement is to “give the defendant fair notice of what the . . . claim is and the grounds

21

upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). “While a complaint

22

attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff’s

23

obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and

24

conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual

25

allegations must be enough to raise a right to relief above the speculative level.” Id. at 555 (internal

26

citations and parentheticals omitted). In considering a 12(b)(6) motion, “[a]ll allegations of material

27

fact are taken as true and construed in the light most favorable to plaintiff. However, conclusory

28
2

1

allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss for

2

failure to state a claim.” Epstein v. Wash. Energy Co., 83 F.3d 1136, 1140 (9th Cir. 1996); see also

3

Twombly, 550 U.S. at 555. The court “may generally consider only allegations contained in the

4

pleadings, exhibits attached to the complaint, and matters properly subject to judicial notice[.]”

5

Williston Basin Interstate Pipeline Co. v. An Exclusive Gas Storage Leasehold and Easement in the

6

Cloverly Subterranean, Geological Formation, 524 F.3d 1090, 1096 (9th Cir. 2008); United States

7

v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003).

8
9

If the court dismisses the complaint, it should grant leave to amend even if no request to
amend is made “unless it determines that the pleading could not possibly be cured by the allegation
of other facts.” Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (quoting Cook, Perkiss and

11

Liehe, Inc. v. N. Cal. Collection Serv. Inc., 911 F.2d 242, 247 (9th Cir. 1990)).

12
For the Northern District of California

UNITED STATES DISTRICT COURT

10

13

IV. DISCUSSION
The purpose of the FCRA is “to require that consumer reporting agencies adopt reasonable

14

procedures for meeting the needs of commerce for consumer credit . . . in a manner which is fair and

15

equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper

16

utilization of such information . . . .” 15 U.S.C. § 1681(b). “There are essentially three types of

17

actors which interplay in suits under the FCRA, namely 1) consumer reporting agencies, 2) users of

18

consumer reports, and 3) the furnishers of information to consumer reporting agencies.”

19

Vazquez–Garcia v. Trans Union De Puerto Rico, 222 F. Supp. 2d 150, 153-54 (D.P.R. 2002). Here,

20

Plaintiff admits that Defendant “is a furnisher of information within the meaning of the FCRA.”

21

Compl. ¶¶ 20, 24.

22

Under the FCRA, “furnishers” of credit are only liable as set forth in 15 U.S.C. § 1681s-2.

23

Under § 1681s-2, a furnisher of credit is liable for violating “the duty to provide accurate

24

information, [§ 1681s-2(a),] and the duty to undertake an investigation upon receipt of notice of

25

dispute from a consumer reporting agency [§ 1681s-2(b)].” Gibbs v. SLM Corp., 336 F. Supp. 2d 1,

26

11 (D. Mass. 2004) (quoting Carney v. Experian Info. Solutions, Inc., 57 F. Supp. 2d 496, 501 (W.

27

D. Tenn. 1999)). Pursuant to 15 U.S.C. §§ 1681s–2(c)(1) and 1681s–2(d), enforcement of violations

28
3

1

of § 1681s–2(a) is limited exclusively to designated state and federal officials. Consequently, courts

2

have consistently held that there is no private action for violations of § 1681s–2(a). See, e.g., Gibbs,

3

336 F. Supp. 2d at 11; Aklagi v. NationsCredit Fin. Servs. Corp., 196 F. Supp. 2d 1186, 1192 (D.

4

Kan. 2002); Carney, 57 F. Supp. 2d at 502.

However, such an action is only triggered when a furnisher of information receives a notice of a

7

consumer dispute from a credit reporting agency. Peasley v. Verizon Wireless (VAW) LLC, 364 F.

8

Supp. 2d 1198, 1200 (S.D. Cal. 2005) (“Courts have consistently held that for the duty imposed by §

9

1681s-2(b) to be triggered, the furnisher of information must have received notice of the dispute

10

from a consumer reporting agency, not from the consumer.”); Roybal v. Equifax, 405 F. Supp. 2d

11

1177, 1179-80 (E.D. Cal. 2005) (recognizing “that a private right of action against a furnisher of

12
For the Northern District of California

A private cause of action is available under § 1681s-2(b). Gibbs, 336 F. Supp. 2d at 11.

6

UNITED STATES DISTRICT COURT

5

credit information exists only if the disputatious consumer notifies the CRAs in the first instance”).

13

“A furnisher is liable under the FCRA only if it does not respond to a formal notice of consumer

14

dispute from a consumer reporting agency.” Arikat v. JP Morgan Chase & Co., 430 F. Supp. 2d

15

1013, 1023-25 (N.D. Cal. 2006) (dismissing cause of action for violation of FCRA for failure to

16

state a claim); see also 15 U.S.C. § 1681s-2; 15 U.S.C. § 1681i(a)(2); Nelson v. Chase Manhattan

17

Mortgage Corp., 282 F.3d 1057, 1060 (9th Cir. 2002) (holding that Congress set up 15 U.S.C. §

18

1681s-2(b) as a “filtering mechanism” wherein a disputatious consumer notifies a consumer

19

reporting agency which in turns notifies the furnisher, and only a nonresponsive furnisher may be

20

privately sued).

21

When a furnisher receives such a notice, it must conduct an investigation, review

22

information from the credit reporting agency, report the results of the investigation to the credit

23

reporting agency, and, if the investigation uncovers that information was incorrectly furnished,

24

report the inaccuracies to all consumer reporting agencies possessing the incorrect information.

25

Nelson, 282 F.3d at 1060; 15 U.S.C. §1681s-2(b).

26

Here, Plaintiff fails to allege that Defendant received any notice of his dispute from a credit

27

reporting agency, which is necessary to trigger a private cause of action under § 1681s-2(b). Thus,

28
4

1

Plaintiff’s claim is subject to dismissal because he has failed to allege the perquisites to bring a

2

claim under §1681s-2(b). See Peasley, 364 F. Supp. 2d at 1200 (dismissing action because “[t]he

3

first amended complaint does not allege that [Defendant] was ever notified by a credit reporting

4

agency . . . . Thus, the complaint fails to state a claim for violation of §1681s-2(b) upon which relief

5

can be granted.”); Abouelhassan v. Chase Bank, 2007 WL 3010421, at *3 (N.D. Cal. Oct. 12, 2007)

6

(FCRA claim dismissed because “Plaintiff has not met the pleading requirements for a §

7

1681s-2(a)(1)(B) claim against a furnisher. Specifically, Plaintiff does not allege that: (1) he

8

notified the CRA of any inaccuracies; (2) the CRA determined they were viable; and (3) Chase was

9

contacted by the CRA.”).

10

V. CONCLUSION
For the reasons set forth above, the Court GRANTS Defendant’s motion to dismiss.

12
For the Northern District of California

UNITED STATES DISTRICT COURT

11

However, the Court finds that the deficiencies in Plaintiff’s Complaint could possibly be cured by

13

the allegation of other facts. Accordingly, dismissal is with leave to amend. Within 30 days from

14

the date of this Order, Plaintiff may file an amended complaint if he is able to allege the following

15

under 15 U.S.C. § 1681s-2(b): (1) he contacted a credit reporting agency; (2) the agency, in turn,

16

submitted a formal notice of consumer dispute to Defendant; and (3) Defendant failed to respond to

17

the notice. As Plaintiff could have provided this information in support of his Opposition, he should

18

be mindful that bare allegations will not be accepted. Ideally, Plaintiff should attach documentation

19

of the consumer dispute from the credit reporting agency. If documentation is not available, he must

20

at least provide factual allegations to support his claim, such as when he submitted his claim and to

21

which credit reporting agency. If Plaintiff fails to file an amended complaint in compliance with this

22

Order, this case shall be deemed dismissed with prejudice and the Clerk of Court shall terminate the

23

case.

24

IT IS SO ORDERED.

25
26

Dated: October 25, 2011
_______________________________
Maria-Elena James
Chief United States Magistrate Judge

27
28
5

1
UNITED STATES DISTRICT COURT
FOR THE
NORTHERN DISTRICT OF CALIFORNIA

2
3
4

SCOTT RIEGER
Case Number: 11-04202 MEJ

5

Plaintiff,
CERTIFICATE OF SERVICE

6
7
8

v.
AMERICAN EXPRESS
Defendant.

/

9
10

12
For the Northern District of California

UNITED STATES DISTRICT COURT

11

13
14
15

I, the undersigned, hereby certify that I am an employee in the Office of the Clerk, U.S. District
Court, Northern District of California.
That on October 25, 2011, I SERVED a true and correct copy(ies) of the attached, by placing said
copy(ies) in a postage paid envelope addressed to the person(s) hereinafter listed, by depositing said
envelope in the U.S. Mail, or by placing said copy(ies) into an inter-office delivery receptacle
located in the Clerk's office.
Scott Rieger
2697 Parkside Drive
Fremont, CA 94536

16
17
18

Dated: October 25, 2011
Richard W. Wieking, Clerk
By: Brenda Tolbert, Deputy Clerk

19
20
21
22
23
24
25
26
27
28
6