Venugopal v. Citibank, National Association

Filing 42

ORDER by Judge Claudia Wilken DENYING 29 Motion to Dismiss (cwlc3S, COURT STAFF) (Filed on 4/3/2013)

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1 IN THE UNITED STATES DISTRICT COURT 2 FOR THE NORTHERN DISTRICT OF CALIFORNIA 3 4 MARPU VENUGOPAL, 5 No. C 12-2452 CW Plaintiff, ORDER DENYING MOTION TO DISMISS (Docket No. 29) 6 v. 7 CITIBANK, NA, 8 Defendant. ________________________________/ 9 United States District Court For the Northern District of California 10 Defendant Citibank, NA moves to dismiss Plaintiff Marpu 11 Venugopal’s first amended complaint (1AC) for failure to state a 12 claim. 13 parties’ submissions and oral argument, the Court denies 14 Defendant’s motion.1 Plaintiff opposes the motion. After considering the 15 BACKGROUND 16 On January 22, 2013, Plaintiff filed a 1AC alleging that 17 Defendant reported inaccurate information about his finances to 18 various credit reporting agencies. 19 Plaintiff claims that Defendant reported an outstanding debt of 20 $197,466 even though that debt had been discharged in a June 2009 21 bankruptcy proceeding. 22 1AC ¶¶ 12-20. Specifically, Id. According to the 1AC, Plaintiff first learned of the 23 inaccuracy on May 2, 2011, when he received a credit report 24 claiming that he still owed an outstanding debt to Defendant. 25 Three days later, on May 5, Plaintiff sent letters to the three 26 The Court indicated at the hearing that it would grant Defendant’s motion with leave to amend. However, after further consideration of the parties’ papers, the Court finds that further amendment is unnecessary. 1 27 28 Id. 1 credit reporting agencies who compiled the report -- Experian, 2 Equifax, and TransUnion -- to dispute the outstanding debt. 3 The letters requested that the agencies conduct “a formal, full, 4 and complete investigation of the information [Defendant] 5 furnished” to the agencies about his finances. 6 Although Plaintiff himself never contacted Defendant to dispute 7 the debt, he alleges that Experian, Equifax, and TransUnion “sent 8 notice of his dispute” to Defendant. 9 Id. Id. ¶ 16. Id. Two weeks after writing to the credit reporting agencies, United States District Court For the Northern District of California 10 Plaintiff requested new credit reports to confirm that the 11 misreported debt had been removed. 12 four of these credit reports to his 1AC. 13 Plaintiff concedes that three of these four reports show that 14 Defendant properly reported the discharge of his debt to Equifax 15 and TransUnion.2 16 report provides documentation of Defendant’s reporting failure. 17 Id. ¶ 17. He has attached excerpts from Id. ¶¶ 17-20, Ex. A. He asserts, however, that the fourth That report, issued by Experian on May 17, 2011, displays an 18 outstanding debt of zero dollars and notes that Plaintiff’s 19 previous debt to Defendant was “included in Chapter 7 Bankruptcy 20 on June 23, 2009.” 21 report includes a debt timeline indicating that Plaintiff owed 22 Defendant an outstanding debt of $197,466 between May 2009 and 23 March 2011. 24 to his 2009 bankruptcy, Plaintiff alleges that the timeline shows Id., Ex. B, at 1. Id. at 2. But the next page of the Because the debt timeline does not refer 25 26 27 28 Plaintiff initially argued that two of the four reports contained evidence of Defendant’s alleged reporting failures but conceded at the hearing that only one report actually supports his allegations here. 2 2 1 that Defendant “re-reported the disputed overdue payments” after 2 he initiated his dispute with Experian. Id. ¶ 18. 3 Based on this report, Plaintiff asserts that Defendant 4 misreported his debt to Experian in violation of the Fair Credit 5 Reporting Act (FCRA), 15 U.S.C. § 1681s-2(b); the Consumer Credit 6 Reporting Agencies Act (CCRAA), Cal. Civ. Code § 1785.25; and the 7 Unfair Competition Law (UCL), Cal. Bus. & Prof. Code § 17200. 8 ¶¶ 24-65. 9 United States District Court For the Northern District of California 10 Id. LEGAL STANDARD A complaint must contain a “short and plain statement of the 11 claim showing that the pleader is entitled to relief.” Fed. R. 12 Civ. P. 8(a). 13 state a claim, dismissal is appropriate only when the complaint 14 does not give the defendant fair notice of a legally cognizable 15 claim and the grounds on which it rests. 16 Twombly, 550 U.S. 544, 555 (2007). 17 complaint is sufficient to state a claim, the court will take all 18 material allegations as true and construe them in the light most 19 favorable to the plaintiff. 20 896, 898 (9th Cir. 1986). 21 to legal conclusions; “threadbare recitals of the elements of a 22 cause of action, supported by mere conclusory statements,” are not 23 taken as true. 24 (citing Twombly, 550 U.S. at 555). 25 typically confined to consideration of the allegations in the 26 pleadings, when the complaint is accompanied by attached 27 documents, such documents are deemed part of the complaint and may 28 be considered in evaluating the merits of a Rule 12(b)(6) motion. On a motion under Rule 12(b)(6) for failure to Bell Atl. Corp. v. In considering whether the NL Indus., Inc. v. Kaplan, 792 F.2d However, this principle is inapplicable Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) 3 Although the court is 1 Durning v. First Boston Corp., 815 F.2d 1265, 1267 (9th Cir. 2 1987). 3 When granting a motion to dismiss, the court is generally 4 required to grant the plaintiff leave to amend, even if no request 5 to amend the pleading was made, unless amendment would be futile. 6 Cook, Perkiss & Liehe, Inc. v. N. Cal. Collection Serv. Inc., 911 7 F.2d 242, 246-47 (9th Cir. 1990). 8 amendment would be futile, the court examines whether the 9 complaint could be amended to cure the defect requiring dismissal In determining whether United States District Court For the Northern District of California 10 “without contradicting any of the allegations of [the] original 11 complaint.” 12 Cir. 1990). Reddy v. Litton Indus., Inc., 912 F.2d 291, 296 (9th 13 14 15 DISCUSSION A. Violations of the FCRA (First Cause of Action) The FCRA was enacted “to ensure fair and accurate credit 16 reporting, promote efficiency in the banking system, and protect 17 consumer privacy.” 18 52 (2007). 19 sources that provide credit information to CRAs, called 20 ‘furnishers’ in the statute.” 21 584 F.3d 1147, 1162 (9th Cir. 2009). 22 whenever a credit reporting agency notifies the furnisher that a 23 consumer has disputed information that it provided to the agency. 24 Id.; 15 U.S.C. § 1681s-2(b)(1). 25 must “conduct an investigation with respect to the disputed 26 information,” “review all relevant information provided by the 27 consumer reporting agency” about the dispute, and correct any 28 inaccuracies. Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, To achieve this goal, it “imposes some duties on the Gorman v. Wolpoff & Abramson, LLP, These duties are triggered Once this occurs, the furnisher Id.; see also Nelson v. Chase Manhattan Mortg. 4 1 Corp., 282 F.3d 1057, 1059 (9th Cir. 2002) (describing furnisher’s 2 duties under the FCRA). 3 of these duties, the consumer who initiated the dispute may sue 4 the furnisher. 5 If the furnisher fails to carry out any 15 U.S.C. § 1681o; Nelson, 282 F.3d at 1059. Here, Plaintiff asserts that Defendant breached its FCRA 6 duties by failing to notify Experian that his debt had been 7 discharged in a prior bankruptcy proceeding. 8 allegation is based entirely on the May 17, 2011 credit report 9 attached to Plaintiff’s 1AC. As noted above, this United States District Court For the Northern District of California 10 The May 17, 2011 credit report issued by Experian expressly 11 states that Plaintiff’s debt to Defendant was “included in [his] 12 Chapter 7 Bankruptcy on June 23, 2009.” 13 However, another section of the credit report -- the debt 14 timeline -- indicates that Plaintiff owed a debt to Defendant 15 between May 2009 and March 2011. 16 favorable to Plaintiff, this report supports Plaintiff’s claim 17 that Citibank continued to misreport Plaintiff’s debt history even 18 after Plaintiff initiated his dispute with Experian. 19 he has stated a valid claim under the FCRA. 20 B. 21 1AC, Ex. B, at 1. Construed in the light most Accordingly, Violations of the CCRAA (Second Cause of Action) The CCRAA prohibits “furnish[ing] information on a specific 22 transaction or experience to any consumer credit reporting agency 23 if the person knows or should know the information is incomplete 24 or inaccurate.” 25 civil liability for a broader range of conduct than the FCRA, 26 Mortimer, 2012 WL 3155563, at *5 (“Unlike the FCRA, the CCRAA 27 includes a private right of action to enforce the prohibition 28 against supplying incomplete or inaccurate consumer credit Cal. Civ. Code § 1785.25(a). 5 The CCRAA imposes 1 information.”). 2 support his FCRA claim, he has also alleged sufficient facts to 3 support his CCRAA claim. 4 C. 5 Because Plaintiff has alleged sufficient facts to Violations of the UCL (Third Cause of Action) Plaintiff’s UCL claim is based on violations of the FCRA and 6 CCRAA. 7 UCL claim. Because both of those claims survive, so, too, does his 8 9 CONCLUSION For the reasons set forth above, the Court DENIES Defendant’s United States District Court For the Northern District of California 10 motion to dismiss (Docket No. 29). 11 within twenty-one days of this order. 12 Defendant must file its answer IT IS SO ORDERED. 13 14 15 Dated: April 3, 2013 CLAUDIA WILKEN United States District Judge 16 17 18 19 20 21 22 23 24 25 26 27 28 6

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