Callahan v. Equifax Information Services, LLC et al
Filing
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ORDER RE MOTIONS TO DISMISS AND VACATING HEARINGS by Judge William Alsup [granting 19 Motion to Dismiss; taking under advisement 24 Motion to Dismiss for Lack of Jurisdiction]. (whasec, COURT STAFF) (Filed on 8/15/2013)
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IN THE UNITED STATES DISTRICT COURT
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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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KRISTEN L. CALLAHAN,
No. C 13-2181 WHA
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For the Northern District of California
United States District Court
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Plaintiff,
v.
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ORDER RE MOTIONS
TO DISMISS AND
VACATING HEARINGS
EQUIFAX INFORMATION SERVICES
LLC, et al.,
Defendants.
/
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INTRODUCTION
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In this action arising out of a Fair Credit Reporting Act claim, the immediate question is
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whether to grant two motions to dismiss. For the reasons stated below, the motion to dismiss
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for failure to state a claim is GRANTED and the motion to dismiss for lack of jurisdiction will be
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HELD IN ABEYANCE until a factual record is developed on the question of personal jurisdiction.
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The hearings scheduled for AUGUST 22, 2013, are VACATED.
STATEMENT
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On May 13, plaintiff Kristen Callahan filed a complaint under the FCRA against multiple
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defendants. The complaint identifies two distinct groups of defendants: credit reporting agency
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(“CRA”) defendants and furnisher defendants. The former are defendants Equifax Information
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Services LLC, CSC Credit Services, and TransUnion LLC, while the latter are defendants
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Roanoke Valley Community Credit Union, SunTrust Mortgage, Inc., and GE Capital Retail
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Bank.
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The complaint alleges that CRA defendants have been reporting inaccurate information
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about plaintiff’s credit history since June 2011 and that this inaccurate reporting has damaged
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plaintiff’s ability to obtain credit (Compl. ¶¶ 13–15). The complaint states that plaintiff disputed
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the reports but that each CRA defendant failed to investigate plaintiff’s credit file and continued
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to report the allegedly false information (id. at ¶¶ 19–24). It is alleged, moreover, that CRA
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defendants reported plaintiff’s dispute to furnisher defendants but that furnisher defendants
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continued to provide CRA defendants with inaccurate information (id. at ¶¶ 26–27). Plaintiff
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prays for relief based upon the alleged negligent and willful noncompliance with FCRA by both
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CRA and furnisher defendants.
On July 1, furnisher defendant SunTrust filed a motion to dismiss for failure to state a
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For the Northern District of California
United States District Court
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claim (Dkt. No. 19). SunTrust states that the complaint “does not satisfy basic notice pleading
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requirements” (id. at 5).
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On July 16, defendant Roanoke Valley filed a motion to dismiss for lack of personal
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jurisdiction (Dkt. No. 24). Roanoke Valley contends that personal jurisdiction is lacking
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because Roanoke Valley’s federal charter limits its business to “those members living, working
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or worshiping in the Roanoke Valley in the state of Virginia” (id. at 3). Roanoke Valley also
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submitted an affidavit stating that Roanoke Valley has never done any business with plaintiff
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nor has it furnished any information to CRA defendants regarding plaintiff’s credit file (Dkt.
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No. 24-1). In her opposition, plaintiff appended multiple exhibits showing that CRA defendants
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reported an auto loan from defendant Roanoke Valley (Dkt. No. 29-1 at 4, 6).
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For the reasons stated below, defendant SunTrust’s motion is GRANTED and defendant
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Roanoke Valley’s motion is HELD IN ABEYANCE until a factual record is developed on the
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question of personal jurisdiction.
ANALYSIS
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1.
DEFENDANT SUNTRUST’S MOTION TO DISMISS.
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To survive a motion to dismiss, a complaint must contain sufficient factual matter,
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accepted as true, to state a claim for relief that is plausible on its face. Ashcroft v. Iqbal, 556
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U.S. 662, 663 (2009). A claim is facially plausible when there are sufficient factual allegations
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to draw a reasonable inference that the defendant is liable for the misconduct alleged. While a
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court “must take all of the factual allegations in the complaint as true,” it is “not bound to accept
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as true a legal conclusion couched as a factual allegation.” Bell Atl. Corp. v. Twombly, 550 U.S.
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544, 555 (2007). “[C]onclusory allegations of law and unwarranted inferences are insufficient
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to defeat a motion to dismiss for failure to state a claim.” Epstein v. Wash. Energy Co., 83 F.3d
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1136, 1140 (9th Cir. 1996) (citation omitted).
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The complaint falls short of the standard established by Iqbal and Twombly. The entirety
received notice of the dispute from CRA defendants and (2) plaintiff believes SunTrust
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continued to report inaccurate information about plaintiff after receiving notice (Compl.
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For the Northern District of California
of the complaint’s factual allegations against SunTrust are (1) plaintiff believes SunTrust
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United States District Court
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¶¶ 26–27). These allegations are too conclusory. Plaintiff must explain why she believes
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that defendant SunTrust received notice of the dispute. Any amended complaint must provide
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specific allegations as to when SunTrust received notice of plaintiff’s dispute and why she
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believes SunTrust failed to properly investigate the information it allegedly furnished to CRA
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defendants. An amended complaint must also append as exhibits the disputed credit reports
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including the allegedly inaccurate information furnished by defendant SunTrust.
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2.
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Rule 12(b)(2) governs dismissal for lack of personal jurisdiction. It is plaintiff’s burden
DEFENDANT ROANOKE VALLEY’S MOTION TO DISMISS.
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to establish a court’s personal jurisdiction over a defendant. Evidence presented in affidavits
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may be considered to assist in the determination and discovery on jurisdictional issues may be
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ordered. However, when a district court acts on a defendant’s motion to dismiss without holding
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an evidentiary hearing, plaintiff need make only a prima facie showing of jurisdictional facts
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to withstand the motion to dismiss. That is, plaintiff need only demonstrate facts that, if true,
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would support jurisdiction over defendant. Where not directly controverted, plaintiff’s version
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of the facts is taken as true for the purposes of a Rule 12(b)(2) motion to dismiss. Likewise,
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“conflicts between the facts contained in the parties’ affidavits must be resolved in plaintiffs’
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favor for purposes of deciding whether a prima facie case for personal jurisdiction exists.”
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Doe v. Unocal Corp., 248 F.3d 915, 922 (9th Cir. 2001) (citations omitted).
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The complaint states that jurisdiction is proper because “furnisher defendants were
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notified by the CRA defendants that plaintiff was disputing information that they were reporting
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to the CRAs” and that “defendant continued to report inaccurate information about plaintiff
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to the CRA defendants” (Compl. ¶¶ 26–27). The complaint bases these allegations on the
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fact that “RKE Valley Fed Credit Union” showed up on plaintiff’s credit reports obtained
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from TransUnion and Equifax. The reports show that plaintiff took out an auto loan of $15,248
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in April 2008 from Roanoke Valley (Dkt. No. 29-1 at 4). In her opposition to defendant’s
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motion, plaintiff states that (1) CRA defendants must have notified Roanoke Valley of plaintiff’s
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dispute, (2) CRA defendants must have informed Roanoke Valley that plaintiff lived in
California, and (3) that Roanoke Valley continued to furnish inaccurate information about
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For the Northern District of California
United States District Court
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plaintiff, thereby purposefully directing its activities at a resident of the forum state (Dkt. No. 28
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at 2–5). Defendant Roanoke Valley supplies an affidavit from the president of the credit union
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stating that plaintiff has never been a member of the credit union and Roanoke Valley has never
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made any reports to any credit reporting agencies concerning plaintiff (Dkt. No. 24-1 at 3).
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Given the conflicting accounts between defendant’s affidavit and plaintiff’s complaint
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and affidavit, it is too early to rule on Roanoke Valley’s motion. Each side may take two
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depositions on the issue of personal jurisdiction and may propound six narrowly directed
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document requests, five requests for admission, and five interrogatories. This must be done
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promptly and supplements based thereon may be filed on or before SEPTEMBER 13, 2013.
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All briefs will be limited to five pages in length, double-spaced with no footnotes. Counsel must
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cooperate to streamline this discovery. This discovery must go forward now even though there
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is the possibility that a motion to dismiss will eventually be granted. This will not be interpreted
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as a de facto stay of other discovery.
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CONCLUSION
For the reasons set forth above, defendant SunTrust’s motion is GRANTED. Plaintiff may
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seek leave to amend the complaint and will have until AUGUST 26, 2013, to file a motion,
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noticed on the normal 35-day calendar, for leave to file an amended complaint. A proposed
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amended complaint must be appended to this motion. Plaintiff should plead her best case.
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The motion should clearly explain how the amendments to the complaint cure the deficiencies
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identified herein, and should include as an exhibit a redline or highlighted version identifying all
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changes. If such a motion not is not made, the answer will be due ten calendar days thereafter.
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Defendant Roanoke Valley’s motion will be HELD IN ABEYANCE.
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The hearings scheduled for AUGUST 22, 2013, are VACATED.
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IT IS SO ORDERED.
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WILLIAM ALSUP
UNITED STATES DISTRICT JUDGE
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For the Northern District of California
United States District Court
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Dated: August 15, 2013.
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