Betty Grinder v. Experian Information Solutions, Inc. et al

Filing 80

ORDER RE MOTION FOR SUMMARY JUDGMENT AND MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT [re 64 MOTION for Summary Judgment filed by JPMorgan Chase Bank]. Signed by Judge William Alsup on 8/14/2017. (whasec, COURT STAFF) (Filed on 8/14/2017)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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BETTY GRINDER,

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For the Northern District of California

United States District Court

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Plaintiff,

No. C 17-00343 WHA

v.
EXPERIAN INFORMATION SOLUTIONS,
INC.; WELLS FARGO BANK, NATIONAL
ASSOCIATION; JPMORGAN CHASE BANK;
COMENITY, LLC; DISCOVER FINANCIAL
SERVICES, INC.; TD BANK USA, NATIONAL
ASSOCIATION; and DOES 1 through 100
inclusive,

ORDER RE MOTION FOR
SUMMARY JUDGMENT
AND MOTION FOR
LEAVE TO FILE SECOND
AMENDED COMPLAINT

Defendants.
/
INTRODUCTION
In this action for alleged violation of the Fair Credit Reporting Act (“FCRA”), defendant

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bank moves for summary judgment and plaintiff moves for leave to file a second amended

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complaint to add a claim under the California Consumer Credit Reporting Agencies Act

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(“CCRAA”). For the reasons discussed below, defendant bank’s summary judgment motion is

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GRANTED and plaintiff’s motion for leave to file a second amended complaint is GRANTED.

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STATEMENT

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Plaintiff Betty Grinder filed for Chapter 7 bankruptcy in October 2015 (Amend. Compl.

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¶ 70). The bankruptcy proceedings included Chase as a creditor. In May 2016, the bankruptcy

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court discharged debts held by all creditors, including Chase (id. ¶ 71–105).

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Four months later, Grinder ordered credit reports from Experian Information Solutions,

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Inc.; Equifax, Inc.; and TransUnion, LLC. Grinder noticed “[nine] different trade lines” on the

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September 2016 credit report that purportedly contained inaccurate, misleading, or incomplete

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information not “comport[ing] with credit reporting industry standards.” Specifically, Grinder

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alleges Chase still reported an account as “charged off” with a balance of $1,335.00 rather than

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discharged (id. ¶ 73, 89).

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Grinder allegedly disputed Chase’s inaccurate trade line via certified mail with Experian,

(“CRAs”) received her dispute letter and subsequently sent Chase an automated credit dispute

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verification (ACDV) through an online reporting system, e-OSCAR. Grinder ordered a second

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For the Northern District of California

Equifax, and TransUnion on November 8, 2016, and believed the credit reporting agencies

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United States District Court

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credit report from these CRAs in December 2016 to confirm her accounts had been corrected.

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The report allegedly continued to show a Chase account balance that was past due, and the status

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remained “charged off” (id. ¶ 78–79, 89–92).

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On January 23, 2017, Grinder commenced this action, alleging Chase violated the FCRA,

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Section 1681s-2(b) of Title 15 of the United States Code. She contends Chase failed to conduct

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a reasonable investigation after being notified by Experian of her dispute and continued to report

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that purportedly misleading and inaccurate account information (id. ¶ 109–21).

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Chase now moves for summary judgment on Grinder’s FCRA claim. Grinder seeks

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leave to amend to add a claim under the California Consumer Credit Reporting Agencies Act,

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California Civil Code Section 1785.25(a), against Chase; Wells Fargo Bank, National

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Association; and RC Willey Home Furnishings, Inc.

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This order follows full briefing and oral argument.

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ANALYSIS
CHASE’S MOTION FOR SUMMARY JUDGMENT.

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1.

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To state a claim under the FCRA, Grinder must show that (1) she found an inaccuracy

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in her credit report; (2) she notified a credit reporting agency; (3) the credit reporting agency

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notified the furnisher of the information about the dispute; and (4) the furnisher failed

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to investigate the inaccuracies or otherwise failed to comply with the requirements of
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Section 1681s-2(b). Robinson v. TransUnion, LLC, 2016 WL 5339807, at *5 (N.D. Cal.

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Sept. 23, 2016) (Judge Edward Davila); see also Gorman v. Wolpoff & Abramson, LLP, 584 F.3d

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1147, 1154 (9th Cir. 2009) (A furnisher’s “duties [are] triggered upon notice of a dispute from a

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CRA.”). Summary judgment is appropriate when there is no genuine issue of material fact and

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the moving party is entitled to judgment as a matter of law. F.R.C.P. 56(a).

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Chase argues there is no dispute of material fact that it was never notified of the credit

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dispute Grinder allegedly submitted to the CRAs. In support of its argument, Chase has

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submitted a declaration of David Rivera, an operations analyst for Chase Bankcard Services,

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Inc., a wholly-owned subsidiary of Chase, in which he states that Chase has no record it received
an ACDV or any other communication from Experian or another CRA related to Grinder’s

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For the Northern District of California

United States District Court

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Chase account (Dkt. No. 64-1 ¶ 5). At oral argument, counsel for Experian also confirmed that it

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did not send an ACDV or other notice of Grinder’s dispute to Chase. Grinder did not submit any

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evidence to the contrary. Her counsel also admitted at oral argument to not having a FCRA

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claim against Chase if Experian did not send an ACDV to Chase.

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In short, Chase is entitled to summary judgment on Grinder’s FCRA claim. The motion
is GRANTED.

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2.

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Rule 15(a)(2) advises, “[t]he court should freely give leave when justice so requires.”

GRINDER’S MOTION FOR LEAVE TO AMEND.

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In ruling on motions for leave to amend, courts consider (1) bad faith, (2) undue delay,

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(3) prejudice to the opposing party, (4) futility of amendment, and (5) whether the plaintiff has

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previously amended their complaint. Nunes v. Ashcroft, 375 F.3d 805, 808 (9th Cir. 2003).

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Courts may decline to grant leave to amend only “if there is strong evidence” of one or more

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of these factors. Sonoma Cty. Ass’n of Retired Emps. v. Sonoma Cty., 708 F.3d 1109, 1117

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(9th Cir. 2013).

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Chase opposes as follows. First, it points out Grinder has already amended the complaint

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once, and there has been undue delay by Grinder in bringing the CCRAA claim against Chase.

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Grinder filed her motion in compliance with the case management order (Dkt. No. 51).

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True, Grinder is now seeking to amend her complaint five months after this action was filed
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and two months after the case management conference in which her counsel acknowledged

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the absence of that claim in her first amended complaint; however, undue delay by itself is

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insufficient to justify denying a motion to amend a complaint. Howey v. United States, 481 F.2d

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1187, 1190–91 (9th Cir. 1973) (reversing the denial of a motion for leave to amend where the

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district court did not provide a contemporaneous specific finding of prejudice, bad faith, or

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futility.).

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Second, Chase argues because Grinder’s counsel now has its employee’s uncontroverted

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declaration attesting to never receiving an ACDV from Experian, he has broken an earlier

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promise to dismiss Chase and is now acting in bad faith (see Dkt. Nos. 63 at 20:17–20; 65 at 4).
The declaration from Chase’s employee, however, is dated June 28, 2017. Grinder filed her

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For the Northern District of California

United States District Court

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motion for leave to file an amended on June 21, 2017. Nowhere in Chase’s opposition does it

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mention providing Grinder with this declaration prior to her filing.

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Moreover, Chase argues that Grinder’s attempt to assert new claims while not presenting

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new facts or evidence is “nothing more than a tactic to harass Chase [to] increase [its] litigation

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costs” and “extract[] a nuisance-value settlement” (Dkt. No. 65 at 5). Chase relies on Kaneka

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Corp. v. SKC Kolon PI, Inc., 2013 WL 11237203 (C.D. Cal. May 6, 2013) (Judge Jesus Bernal)

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in support of its position. In Kaneka, the plaintiff moved to add a new party more than six

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months after it requested the court to lift the fifteen-month stay, and three years after it filed its

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initial complaint. That court denied leave to amend in part because the motion was not just to

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obtain leverage after three years of litigation or to harass the defendants, but also to attempt

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to “re-do discovery” despite a lengthy International Trade Commission investigation, and

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the fact plaintiff had opportunities to add parties to the ITC investigation but opted not to.

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WL 11237203, at *3–4. By contrast, our action has been pending for approximately six months,

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not three years. Moreover, discovery is still ongoing; it does not close until October 31 (see Dkt.

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No. 51).

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Third, the addition of the CCRAA claim will not prejudice Chase (see Dkt. No. 65 at 5).

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Chase cites our court of appeals for the proposition that “a motion for leave to amend is a not a

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vehicle to circumvent summary judgment.” Burdett v. Reynoso, 399 F. App’x 276, 278 (9th Cir.
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2010). Again, Grinder filed her motion before Chase filed its motion for summary judgment.

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Moreover, this order is without prejudice to Chase bringing a motion to dismiss regarding

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Grinder’s CCRAA claim.

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In sum, there is insufficient evidence of undue delay, bad faith or prejudice to decline
Grinder’s motion for leave to file a second amended complaint. Her motion is GRANTED.

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CONCLUSION
For the foregoing reasons, defendant’s motion for summary judgment is GRANTED and

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plaintiff’s motion for leave to file a second amended complaint is GRANTED and must be filed by

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AUGUST 21, 2017. This order is without prejudice to defendant bringing a motion to dismiss
regarding plaintiff’s CCRAA claim.

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For the Northern District of California

United States District Court

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IT IS SO ORDERED.

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Dated: August 14, 2017.

WILLIAM ALSUP
UNITED STATES DISTRICT JUDGE

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