Fair v. Experian Information Solutions, Inc. et al

Filing 62

ORDER by Judge Claudia Wilken: Experian and RoundPoint's Motions to Dismiss are GRANTED (No. 16-cv-5712 48 (Experian as to Marino); No. 16-cv-5714 19 (Experian as to Dahlen); No. 16-cv-6367 10 (RoundPoint as to Marino). Dismissal is WITH LEAVE TO AMEND consistently with this Order. Plaintiffs may amend only as specifically allowed in this Order and must be filed within 21 days of the date of this Order. (ig, COURT STAFF) (Filed on 3/29/2017).

1

IN THE UNITED STATES DISTRICT COURT

2

FOR THE NORTHERN DISTRICT OF CALIFORNIA

3
4

JEREMY FAIR,

5
6
7
8

Plaintiff,

EXPERIAN INFORMATION SOLUTIONS,
INC., et al.,
Defendants;

United States District Court
For the Northern District of California

STEVEN DAHLEN,
Plaintiff,

11
12

(Docket No. 48)

v.

9
10

No. C 16-5712 CW

No. C 16-5714 CW
(Docket No. 19)

v.

13

EXPERIAN INFORMATION SOLUTIONS,
INC., et al.,

14

Defendants;

15

PHILLIP MARINO,

16
17
18
19

Plaintiff,

EXPERIAN INFORMATION SOLUTIONS,
INC., et al.,
Defendants;
AARON SMITH,
Plaintiff,

22
23

v.

24

EXPERIAN INFORMATION SOLUTIONS,
INC., et al.,

25

Defendants;

26
27
28

(Docket No. 10)

v.

20
21

No. C 16-6367 CW

No. C 16-6382 CW

1

JOSHUA HEATH,
Plaintiff,

2
3

No. C 17-418 CW

v.

4

EXPERIAN INFORMATION SOLUTIONS,
INC., et al.,

5

Defendants.

6
7
8
9

United States District Court
For the Northern District of California

10
11
12
13
14
15
16
17

ORDER ON MOTIONS
TO DISMISS

________________________________/

Before the Court are multiple motions to dismiss.1

In

Dahlen, No. 16-cv-5714, Defendant Experian Information Solutions,
Inc. moves to dismiss (Docket No. 19).

Dahlen has filed an

opposition and Experian has filed a reply.

In Marino, No. 16-cv-

6367, Defendant RoundPoint Mortgage Servicing Corporation moves to
dismiss (Docket No. 10).

Marino has filed an opposition and

RoundPoint has filed a reply.

After these cases were

consolidated, Experian also moved to dismiss Marino’s Complaint,
simply incorporating by reference the motions to dismiss that it

18
19
At the hearing on these motions, Plaintiffs’ attorney moved
to dismiss Fair, No. 16-cv-5712, with prejudice, terminating
motions to dismiss filed by Defendants Experian Information
Solutions, Inc. (Docket No. 20), Equifax, Inc. (Docket No. 23) and
Verizon Wireless Services, LLC (Docket No. 36) in that case;
Smith, No. 16-cv-6382, was also dismissed with prejudice,
terminating a motion to dismiss filed by Defendant Bank of
America, N.A. (Docket No. 28), rendering moot Bank of America’s
Request for Judicial Notice (Docket No. 29) in that case, and
terminating the motion to dismiss filed by Experian against Smith
in Fair (Docket No. 48). Heath filed his Complaint on January 26,
2017, and it was consolidated on February 2. On March 22, Heath
settled with Defendant USCB, Inc., leaving only Experian as a
Defendant. Experian’s response to Heath’s Complaint is currently
due April 3.
1

20
21
22
23
24
25
26
27
28

2

1

filed in Fair and Dahlen (Docket No. 48).

Having considered the

2

parties’ papers and oral argument, the Court GRANTS Defendants

3

Experian and RoundPoint’s Motions to Dismiss and grants leave to

4

amend.

5

BACKGROUND

6

The Complaints of Plaintiffs Dahlen and Marino are nearly

7

identical and the Court summarizes their allegations here.

Dahlen

8

filed for Chapter 13 bankruptcy in October 2012 and Marino did so

9

in June 2014.

Chapter 13 of the Bankruptcy Code allows

United States District Court
For the Northern District of California

10

individuals receiving regular income to obtain relief from their

11

debts under a repayment plan that, if confirmed and fully carried

12

out, discharges the individual’s debts according to the plan.

13

Bullard v. Blue Hills Bank, 135 S. Ct. 1686, 1690 (2015).

14

Dahlen’s plan was confirmed in January 2013 and Marino’s plan was

15

confirmed in August 2014.

16

successfully paid off his debts or that his debts have been

17

discharged.

18

creditors are allowed a zero percent disbursement of their filed

19

claims; Marino alleges 10.22 percent.

20

Neither Plaintiff alleges that he has

Dahlen alleges that, under his plan, unsecured

Both Plaintiffs ordered a three-bureau credit report from

21

Experian in March 2016.

Dahlen noticed that six different account

22

descriptions on his report contained “inaccurate, misleading, or

23

incomplete information that did not comport with credit reporting

24

industry standards” and, specifically, that the documents

25

“continued to report Plaintiff’s accounts with past due balances,”

26

inaccurate balances, or accounts in collections or charged off.

27

Dahlen, No. 16-cv-5714, Docket No. 1, Compl. ¶ 93.

28

that three different account descriptions on his report stated
3

Marino noticed

1

past due or inaccurate balances.

2

Marino, No. 16-cv-6367, Docket

No. 1, Compl. ¶ 106.
Both Plaintiffs disputed these alleged inaccuracies by mail

3
4

with the three consumer reporting agencies (CRAs) Experian,

5

Equifax, and TransUnion, LLC.

6

that they had filed for bankruptcy and that their creditors were

7

“not reporting the bankruptcy accurately or worse not at all;”

8

“requested each Creditor investigate the proper way to report

9

Plaintiff’s bankruptcy;” and noted that they believed that after

Both Plaintiffs’ letters stated

United States District Court
For the Northern District of California

10

they filed for bankruptcy their accounts should not be reported

11

with past due balance or any late payments, or as charged off,

12

sold or transferred.

13

¶ 95; Marino, No. 16-cv-6367, Docket No. 1, Compl. ¶ 108.

14

Plaintiffs allege that each CRA received their dispute letters and

15

forwarded the information to each data furnisher or, in the

16

alternative, that the CRAs did not forward their disputes.

Dahlen, No. 16-cv-5714, Docket No. 1, Compl.
Both

Later in 2016, both Plaintiffs ordered a second credit report

17
18

to ensure that their accounts had been updated.

Dahlen did so in

19

July and Marino did so in September.

20

notice a significant amount of the inaccuracies had been updated

21

or removed” in his second report.

22

¶ 98.

23

TransUnion score had risen seventy-six points.

24

specify whether his score changed.

25

inaccuracies in the first reports were still present in the

26

second.

27

Defendant Wells Fargo Bank, N.A. as charged off, even though Wells

28

Fargo failed to file a proof of claim in his bankruptcy proceeding

Dahlen “was pleased to

Dahlen, No. 16-5714, Compl.

His Equifax score had risen sixty-eight points and his
Marino does not

However, some of the alleged

Dahlen alleges his second report included a debt owed to

4

1

and the trustee accordingly would not pay Wells Fargo.

2

Wells Fargo did not comply with the Metro-2 industry standard by

3

reporting this debt as charged off.

4

second report RoundPoint inaccurately reported a “failure to pay”

5

on his account in the twenty-four month payment history even

6

though he “has never missed a payment to Defendant.”

7

16-cv-6367, Docket No. 1, Compl. ¶ 111.

8

RoundPoint did not comply with the Metro-2 industry standard by

9

reporting a failure to pay.

United States District Court
For the Northern District of California

Marino alleges that in his

Marino, No.

He also asserts that

LEGAL STANDARD

10
11

He alleges

A complaint must contain a “short and plain statement of the

12

claim showing that the pleader is entitled to relief.”

Fed. R.

13

Civ. P. 8(a).

14

state a claim, dismissal is appropriate only when the complaint

15

does not give the defendant fair notice of a legally cognizable

16

claim and the grounds on which it rests.

17

Twombly, 550 U.S. 544, 555 (2007).

18

complaint is sufficient to state a claim, the court will take all

19

material allegations as true and construe them in the light most

20

favorable to the plaintiff.

21

896, 898 (9th Cir. 1986).

22

to legal conclusions; “[t]hreadbare recitals of the elements of a

23

cause of action, supported by mere conclusory statements,” are not

24

taken as true.

25

(citing Twombly, 550 U.S. at 555).

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)

26

When granting a motion to dismiss, the court is generally

27

required to grant the plaintiff leave to amend, even if no request

28

to amend the pleading was made, unless amendment would be futile.
5

1

Cook, Perkiss & Liehe, Inc. v. N. Cal. Collection Serv. Inc., 911

2

F.2d 242, 247 (9th Cir. 1990).

3

would be futile, the court examines whether the complaint could be

4

amended to cure the defect requiring dismissal "without

5

contradicting any of the allegations of [the] original complaint."

6

Reddy v. Litton Indus., Inc., 912 F.2d 291, 296 (9th Cir. 1990).

In determining whether amendment

7

DISCUSSION

8

Both Plaintiffs bring two causes of action, one under the
Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq.,2 and

10
United States District Court
For the Northern District of California

9

one under the California Consumer Credit Reporting Agencies Act

11

(CCRAA), California Civil Code section 1785.1 et seq.

12

Marino bring the FCRA claim against their respective creditors,

13

Wells Fargo and RoundPoint (Creditor Defendants).

14

brings a FCRA claim against Experian and Equifax, and Marino

15

brings it against Experian (CRA Defendants).

16

bring their CCRAA claim against only their respective Creditor

17

Defendants.

18

neither moved to dismiss Dahlen’s Complaint nor answered it.

19

Dahlen and

Dahlen also

Both Plaintiffs

Wells Fargo answered Dahlen’s Complaint.

Equifax has

Both Plaintiffs’ claims as described in their Complaints

20

depend primarily on the legal theory that it is inaccurate under

21

the FCRA and the CCRAA to report a consumer’s delinquent debts

22

after the consumer’s bankruptcy plan has been confirmed.

23

“courts in this district have consistently held that it is not

24

misleading or inaccurate to report delinquent debts that have not

25

been discharged.”

However,

Blakeney v. Experian Info. Sols., Inc., 2016 WL

26
27
28

All citations to U.S. Code sections are to Title 15 unless
otherwise stated.
2

6

1

4270244, at *5 (N.D. Cal.) (collecting cases); see also Jaras v.

2

Experian Info. Sols., Inc., 2016 WL 7337540, at *3 (N.D. Cal.);

3

Mortimer v. Bank of Am., Nat’l Ass’n, 2013 WL 1501452, at *4 (N.D.

4

Cal.).

5

judgment, it constitutes a final judgment only as to ‘the manner

6

in which the debtor will discharge his financial obligations,’ not

7

the legal validity of the debt.”

8

(citation omitted); see also Mestayer v. Experian Info. Sols.,

9

Inc., 2016 WL 631980, at *3 (N.D. Cal.); Biggs v. Experian Info.

“[E]ven if a confirmation order constitutes a final

Jaras, 2016 WL 7337540, at *4

United States District Court
For the Northern District of California

10

Sols., Inc., 2016 WL 5235043, at *2 (N.D. Cal.); Adkins v.

11

Experian Info. Sols., Inc., 2016 WL 6841700, at *2 (N.D. Cal.).

12

Furthermore, “[i]f a debtor fails to comply with the Chapter 13

13

plan, the debtor's bankruptcy petition may be dismissed and the

14

debtor will then owe the entirety of the debt.”

15

7337540 at *4 (citing 11 U.S.C. § 1307(c)(6)).

16

good policy in light of the goals of bankruptcy protection to bar

17

reporting of late payments while a bankruptcy petition is pending,

18

neither the bankruptcy code nor the FCRA does so.”

19

Morgan Chase Bank, Nat'l Ass'n, 2012 WL 3155563, at *3 (N.D.

20

Cal.).

21

Jaras, 2016 WL
“While it might be

Mortimer v. JP

Both Plaintiffs also point out that reporting a delinquency

22

during the pendency of a bankruptcy proceeding violates certain

23

credit industry reporting standards.

24

alleges that this is inherently inaccurate under the FCRA or

25

provides any authority to that effect, and case law indicates the

26

contrary.

27

inaccurate reporting claim failed in part because plaintiff

28

“failed to point to any authority indicating that a failure to

However, neither Plaintiff

See Mestayer, 2016 WL 631980, at *4 (finding CCCRA

7

1

comply with an industry standard is a failure to comply with the

2

law”); Mortimer v. Bank of Am., Nat’l Ass’n, 2013 WL 1501452, at

3

*12; Giovanni v. Bank of Am., Nat'l Ass'n, 2013 WL 1663335, at *6

4

(N.D. Cal.).
Because the CCRAA is substantially based on the FCRA,

5
6

judicial interpretation of the latter is persuasive as to the

7

former, and the rule that it is not inaccurate to report

8

delinquent debts prior to discharge applies in the CCRAA context.

9

Blakeney, 2016 WL 4270244, at *6.

Accordingly, to the extent

United States District Court
For the Northern District of California

10

Plaintiffs’ claims rely on this theory they fail as a matter of

11

law.

12

At the hearing, Plaintiffs’ counsel explained that the only

13

inaccuracy Dahlen now wishes to allege is a failure to report the

14

fact of his bankruptcy.

15

that this may constitute an inaccuracy under the FCRA.

16

v. Experian Info. Sols., Inc., 2017 WL 264401 at *6 (N.D. Cal.);

17

Connors v. Experian Info. Sols., Inc., 2017 WL 168493, at *5 (N.D.

18

Cal.); Keller v. Experian Info. Sols., Inc., 2017 WL 130285, at *8

19

(N.D. Cal.); Devincenzi v. Experian Info. Sols., Inc., 2017 WL

20

86131 (N.D. Cal.).

21

that RoundPoint failed to report the fact of his bankruptcy; his

22

theory is an inaccuracy unrelated to his bankruptcy.

23

clear whether Marino wishes to allege that Experian failed to

24

report the fact of his bankruptcy.

25
26
27
28

I.

Courts in this district have indicated
See Doster

Counsel conceded that Marino does not allege

It is not

Fair Credit Reporting Act
A. Defendants’ State of Mind

The FCRA creates a private right of action only for willful
or negligent noncompliance with its requirements.
8

§§ 1681n

1

(willful), o (negligent); Gorman v. Wolpoff & Abramson, LLP, 584

2

F.3d 1147, 1154 (9th Cir. 2009).

3

or statutory damages, as well as punitive damages and attorneys’

4

fees, for willful noncompliance, § 1681n, but only actual damages

5

for negligent noncompliance, § 1681o.
1.

6
7

A plaintiff may recover actual

Willfulness

A plaintiff may demonstrate “willfulness” by showing a

8

“reckless disregard” of statutory duty.

9

Burr, 551 U.S. 47, 56-60 (2007).

Safeco Ins. Co. of Am. v.

Willfulness “may be alleged

United States District Court
For the Northern District of California

10

generally.”

11

Plaintiffs plead generally that all Defendants acted willfully or

12

at least recklessly.

13

Fed. R. Civ. P. 9(b).

As noted above, both

Marino adequately pleads that Creditor Defendant RoundPoint

14

acted willfully and RoundPoint does not challenge Marino’s

15

Complaint on this basis.

16

Both Plaintiffs adequately plead that CRA Defendant Experian

17

acted willfully.

Experian argues that Plaintiffs’ allegations

18

rely on the legal theory rejected above and accordingly do not

19

allege that its reporting was actually inaccurate, let alone

20

willfully so.

21

were correct that it was reporting inaccurately, under Safeco they

22

would need to show that it relied on an “objectively unreasonable”

23

reading of the FCRA to show a reckless disregard of the statutory

24

requirements.

25

Plaintiffs plead that CRA Defendants simply did not send all

26

relevant information to furnishers in response to the Plaintiffs’

27

disputes, a facial violation of the requirement in § 1681i(a)(2)

28

that CRAs notify furnishers of consumers’ disputes.

Experian further argues that even if Plaintiffs

Safeco, 551 U.S. at 69-70.

9

However, as noted, both

Failure to

1

send notice of the dispute to furnishers would also constitute a

2

straightforward violation of the reinvestigation requirement in

3

§ 1681i(a)(1) because one of the basic elements of a

4

reinvestigation is to notify furnishers of a dispute.

5

v. Trans Union, LLC, 462 F. Supp. 2d 1079, 1083 (C.D. Cal. 2006).

6

Thus, both Plaintiffs’ allegations that Experian failed to forward

7

their disputes to the furnishers is alone sufficient to imply that

8

any such failure was a willful violation of both § 1681i(a)(1) and

9

§ 1681i(a)(2).

See White

See King v. Bank of America, Nat’l Ass’n, 2012 WL

United States District Court
For the Northern District of California

10

4685993, at *6 (N.D. Cal.).

11

sufficient facts to support an inference that Experian did fail to

12

notify furnishers of Plaintiffs’ disputes.

13

However, neither Plaintiff pleads

Accordingly, both Plaintiffs’ claims against Experian of

14

willful noncompliance under § 1681n must be dismissed with leave

15

to amend to reassert the claims supported by sufficient factual

16

allegations.

17

willfulness, his claim against RoundPoint must be dismissed for

18

the reasons set forth below.

19
20

And although Marino adequately plead Roundpoint’s

2.

Negligence

Because a plaintiff may only recover actual damages for

21

negligent noncompliance, § 1681o, courts have “required a

22

plaintiff to plead actual damages in order to allege an FCRA claim

23

based on a negligent violation.”

24

Ass’n, 2013 WL 1501452, at *9 (collecting cases).

25

Mortimer v. Bank of Am., Nat’l

Both Plaintiffs plead that as a “direct and proximate result

26

of Defendants’ willful and untrue communications” they have

27

suffered “actual damages including but not limited to inability to

28

properly reorganize under Chapter 13, reviewing credit reports
10

1

from all three consumer reporting agencies, time reviewing reports

2

with counsel, sending demand letters, diminished credit score, and

3

such further expenses in an amount to be determined at trial.”

4

Dahlen, No. 16-cv-5714, Docket No. 1, Compl. ¶ 136; Marino, No.

5

16-cv-6367, Docket No. 1, Compl. ¶ 149.

6

Both Plaintiffs have alleged sufficient actual damages under

7

the FCRA.

In Saenz v. Trans Union, LLC, 621 F. Supp. 2d 1074,

8

1085 (D. Or. 2007), the plaintiff had “requested copies of his

9

credit report in order to ascertain whether Trans Union had

United States District Court
For the Northern District of California

10

removed the disputed information, and incurred costs for copying

11

and faxing the documentary evidence he provided in connection with

12

his disputes.”

13

pocket costs constitute cognizable economic damages for FCRA

14

purposes.”

15

second credit reports, spent time reviewing them with counsel, and

16

spent time drafting their dispute letters; the first and third of

17

these allegations are supported by their separate factual

18

pleadings.

19

under the FCRA.

20

Id.

Id. at 1084.

The court found, “These out-of-

Here, both Plaintiffs plead that they ordered

These alleged damages are sufficient to state a claim

Plaintiffs’ other two damages allegations--inability to

21

reorganize and diminished credit--add nothing.

Neither Plaintiff

22

explains what sort of injury it is to be unable to “properly”

23

reorganize under Chapter 13.

24

credit scores, the Court could infer diminished access to credit.

25

And an actual denial of credit is not a prerequisite to recovery

26

under FCRA.

27

1329, 1333 (9th Cir. 1995).

28

allegations of diminished access are conclusory at best.

From Plaintiffs’ claim of diminished

Guimond v. Trans Union Credit Info. Co., 45 F.3d
Nonetheless, both Plaintiffs’

11

As noted

1

above, Dahlen pleads that his credit score improved between his

2

first and second reports, and Marino does not allege that his

3

score was affected.

4

from which the Court can infer that this damage took place and was

5

the result of Defendants’ actions.

6

They simply do not plead sufficient facts

In sum, both Plaintiffs adequately plead they have suffered

7

actual damages necessary to support a private right of action

8

under § 1681o.
B. Furnishers’ Duties Under § 1681s-2(b)

9

United States District Court
For the Northern District of California

10

The “FCRA imposes some duties on the sources that provide

11

credit information to CRAs, called ‘furnishers’ in the statute.”

12

Gorman, 584 F.3d at 1153 (quoting Safeco, 551 U.S. at 52).

13

Creditor Defendant RoundPoint moves to dismiss Marino’s claims

14

against it.3

15

dispute from a CRA, the furnisher shall:

16
17
18

The FCRA provides that, after receiving a notice of

(A) conduct an investigation with respect to the disputed
information;
(B) review all relevant information provided by the [CRA]
pursuant to section 1681i(a)(2) . . .;
(C) report the results of the investigation to the [CRA];

19
20
21
22
23
24

(D) if the investigation finds that the information is
incomplete or inaccurate, report those results to all
other [CRAs] to which the person furnished the
information . . .; and
(E) if an item of information disputed by a consumer is found
to be inaccurate or incomplete or cannot be verified
after any reinvestigation under paragraph (1) . . . (i)
modify . . . (ii) delete [or] (iii) permanently block the
reporting of that item of information [to the CRAs].

25
26
27
28

As mentioned, Wells Fargo has not moved to dismiss Dahlen’s
Complaint; however, Dahlen’s claims against Wells Fargo suffer
from some of the same deficiencies as Marino’s claims against
RoundPoint.
3

12

1
2

§ 1681s–2(b)(1); see also Gorman, 584 F.3d at 1154.
Marino alleges that RoundPoint violated § 1681s–2(b) in two

3

ways: first, by failing to conduct a reasonable investigation into

4

the information Marino disputed, and second, by re-reporting

5

inaccurate information.
1.

6
7
8
9

United States District Court
For the Northern District of California

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27

Reasonable Investigation Into Disputed
Information

“To state a claim under the FCRA against the Defendants as a
furnisher of credit information, the Plaintiff must allege that:
(1) he contacted the CRA; (2) the CRA pursued the claim; and (3)
the CRA contacted the Defendants regarding the dispute, triggering
the Defendants' duty to investigate.”

Mortimer v. Bank of Am.,

Nat’l Ass’n, 2013 WL 1501452, at *8 (citation omitted).

Whether

an investigation “conducted by a furnisher in response to a
consumer's notice of dispute is reasonable depends in large part
on the allegations provided to the furnisher by the credit
reporting agency.”

Gorman, 584 F.3d at 1160 (citation and

alterations omitted).
As discussed above, Marino alleges that his dispute letter
challenged the manner in which his bankruptcy was being reported,
which does not allege an actual inaccuracy.

He also alleges that

he asserted in his dispute letter that some accounts may not have
reported the fact of his bankruptcy at all.

As discussed above,

this may constitute an inaccuracy under the FCRA.

However, Marino

does not plead that his letter specified that RoundPoint was
failing to report the fact of his bankruptcy.

Marino does not

allege that his dispute letter alleged other inaccuracies,
specifically, his payments to RoundPoint.

28
13

1

However, the only inaccuracy Marino now alleges in his second

2

credit report was the inaccurate reporting of a failure to pay on

3

his RoundPoint account.

4

his bankruptcy.

5

letter raised any actual inaccuracy on RoundPoint’s part, he has

6

not adequately plead that RoundPoint failed to investigate.

8
9

Because Marino does not allege that his dispute

2.

7

This alleged inaccuracy is independent of

Re-reporting Inaccurate Information

A private plaintiff may bring a claim against a creditor for
failing to correct its reporting of “incomplete or inaccurate”

United States District Court
For the Northern District of California

10

credit information after investigation.

11

see also Drew v. Equifax Info. Servs., LLC, 690 F.3d 1100, 1108

12

(9th Cir. 2012) (“The most thorough investigation means nothing,

13

however, if the results of the investigation are not put to good

14

use.”).

15

Gorman, 584 F.3d at 1162;

Marino alleges that, after receiving notice of his dispute,

16

RoundPoint violated § 1681s–2(b) by re-reporting inaccurate

17

account information to the CRAs concerning his alleged failure to

18

pay, resulting in an actual inaccuracy in his second report.

19

However, Marino does not allege that this inaccuracy was present

20

in his first credit report or that he raised the inaccuracy in his

21

dispute letter.

22

action to enforce furnishers’ independent duty under § 1681s-2(a)

23

to provide accurate information.

24

Marino’s pleading concerning the inaccuracy lacks sufficient

25

specificity.

26

debt or allege that he consistently made timely payments pursuant

27

to those terms.

The FCRA does not provide a private right of

§ 1681s-2(c)(1).

Furthermore,

For example, he does not provide the terms of the

28
14

1

In sum, Marino’s § 1681s-2(b) claim must be DISMISSED.

If

2

Marino can truthfully allege that he raised actual inaccuracies

3

concerning RoundPoint’s reporting in his dispute letter, he may be

4

able to state a claim against RoundPoint for failing to

5

investigate those inaccuracies.

6

that RoundPoint failed to conduct a reasonable investigation are

7

dismissed WITH LEAVE TO AMEND to reassert the claim based on

8

actual inaccuracies, if any, raised in his dispute letter, if he

9

can do so without contradicting any of the allegations in his

Accordingly, Marino’s allegations

United States District Court
For the Northern District of California

10

original Complaint.

11

dismissed WITH LEAVE TO AMEND to reassert the claim based on

12

actual inaccuracies, if any, raised in his dispute letter, if he

13

can do so without contradicting any of the allegations in his

14

original Complaint.

15

terms of the debt and the facts of his consistent timely payments

16

according to those terms.

17

to the Amended Complaint would be an efficient way of pleading

18

what it said.

19

Marino’s re-reporting claim is likewise

Marino must include a clear statement of the

Attaching a copy of his dispute letter

C. CRAs’ Duties Under § 1681i

20

The FCRA requires CRAs, in response to a dispute by a

21

consumer, to “conduct a reasonable reinvestigation to determine

22

whether the disputed information is inaccurate and record the

23

current status of the disputed information, or delete the item

24

from the file” within thirty days of receiving notice of the

25

consumer’s dispute.

26
27
28

§ 1681i(a)(1)(A).

In order to state a claim for negligent violation of section
1681i, Plaintiff must establish that: 1) his credit files
contained inaccurate or incomplete information; 2) he
directly notified Defendant of the inaccuracy; 3) the dispute
15

1
2

is not frivolous or irrelevant; 4) Defendant failed to
respond to the dispute; and 5) Defendant's failure to
reinvestigate caused Plaintiff to suffer actual damages.

3

Taylor v. First Advantage Background Servs. Corp., 2016 WL

4

4762268, at *5 (N.D. Cal.).

5

a claim of willful violation except for actual damages.

6

Saenz, 621 F. Supp. 2d at 1082.

7

within five days of receiving notice of the consumer’s dispute,

8

CRAs must “provide notification of the dispute to any person who

9

provided any item of information in dispute.”

The same allegations are required for
See

Section 1681i also requires that

§ 1681i(a)(2).

The

United States District Court
For the Northern District of California

10

Ninth Circuit has held that in order to state a claim against a

11

CRA under § 1681i, a plaintiff must identify an actual inaccuracy

12

in the credit report.

13

F.3d 876, 890 (9th Cir. 2010).

14

Carvalho v. Equifax Info. Servs., LLC, 629

Both Plaintiffs allege separate violations of both of the

15

subsections cited above.

Both Plaintiffs allege that the CRAs

16

failed to conduct reasonable reinvestigations in response to their

17

disputes.

18

that his second report failed to report the fact of his

19

bankruptcy; however, he does not allege this in his Complaint.

20

Furthermore, although Dahlen’s dispute letter alleged that some

21

creditors’ accounts were not reporting the fact of his bankruptcy,

22

he does not allege his dispute letter identified which creditors’

23

accounts were reporting this way or that Experian did so.

24

may now wish to allege that his second report failed to report the

25

fact of his bankruptcy.

26

same deficiencies as Dahlen’s.

27

his second report inaccurately listed a failure to pay on his

28

RoundPoint account.

As explained above, Dahlen now wishes to allege only

Marino

Such an allegation would suffer from the
Marino also wishes to allege that

Marino does not allege that his dispute
16

1

letter stated that he was current on his debt to RoundPoint.

2

Accordingly, neither Plaintiff adequately pleads that his dispute

3

letter adequately identified an actual inaccuracy sufficient to

4

trigger Experian’s duty to reinvestigate.

5

Furthermore, neither Plaintiff adequately pleads that

6

Experian failed to conduct reasonable reinvestigations in response

7

to their disputes.

8

Plaintiffs make two arguments.

9

alternative to allegations elsewhere, that the CRAs failed to

In their pleadings on this point, both
First, they claim, in the

United States District Court
For the Northern District of California

10

reinvestigate their disputes in that they failed to notify the

11

furnishers.

12

required each CRA to send all relevant information via an ACDV to

13

the furnishers which they did not do.”

14

Docket No. 1, Compl. ¶ 114; Marino, No. 16-cv-6367, Docket No. 1,

15

Compl. ¶ 126.

16

Plaintiff pleads any facts from which to infer that Experian

17

failed to notify furnishers.

18

relevant information from their dispute letters Experian allegedly

19

failed to transmit to furnishers.

20

They assert that “the most basic investigation

Dahlen, No. 16-cv-5714,

This alternative pleading is conclusory.

Neither

Neither Plaintiff identifies what

Both Plaintiffs also argue that each CRA had an independent

21

duty under § 1681i(a)(1) to conduct a reasonable reinvestigation.

22

Both Plaintiffs argue that CRAs are not “passive” entities “bound

23

to report whatever information a [furnisher] provides” and that

24

they can and do suppress inaccurate information.

25

cv-5714, Docket No. 1, Compl. ¶ 117; Marino, No. 16-cv-6367,

26

Docket No. 1, Compl. ¶ 129.

27

familiar with credit reporting standards and instruct furnishers

28

on how properly to report information when consumers are in

Dahlen, No. 16-

Both Plaintiffs assert that CRAs are

17

bankruptcy.

2

required to reanalyze the information provided by furnishers and,

3

regardless of how it was reported in, to report it out only in a

4

way that conforms with credit reporting standards.

5

argues that Plaintiffs are essentially asking the CRAs to review

6

and determine the legal implications of Chapter 13 plans.

7

Ninth Circuit has held that the fundamental flaw in a “conception

8

of the reinvestigation duty” requiring legal analysis “is that

9

credit reporting agencies are not tribunals.

They simply collect

10
United States District Court
For the Northern District of California

1

Both Plaintiffs appear to allege that Experian was

and report information furnished by others.”

Carvalho, 629 F.3d

11

at 891.

12

independent duty under § 1681i(a)(1) to conform its reporting to

13

Plaintiffs’ bankruptcy plans.

Experian

The

Accordingly, the Court finds Experian was not under an

Experian also argues that neither Plaintiff demonstrates that

14
15

Experian is bound by Plaintiffs’ confirmed plans in a way that

16

requires Experian to report debts as they may be modified under

17

the plan.

18

not inaccurate to report delinquent debts during the pendency of a

19

bankruptcy prior to discharge.

20

*5.

21

This argument was addressed above.

As discussed, it is

See Blakeney, 2016 WL 4270244, at

Experian correctly points out that neither Plaintiff pleads

22

that Experian in particular violated the FCRA; both Plaintiffs

23

plead that they ordered reports from Experian, but not that

24

Experian was the CRA that reported the allegedly inaccurate

25

information.

26

For the foregoing reasons, Dahlen and Marino’s § 1681i claims

27

against Experian must be DISMISSED.

28

that Experian violated § 1681i(a)(1)(A) by failing to
18

Both Plaintiffs’ allegations

1

reinvestigate are inadequately plead because they do not allege

2

that their dispute letters raised inaccuracies other than those

3

based entirely on an invalid legal theory.

4

allegations that Experian violated § 1681i(a)(2) by failing to

5

notify furnishers are inadequately plead because the pleadings are

6

conclusory.

7

AMEND.

8

allegations of a failure to reinvestigate if Plaintiffs can allege

9

actual inaccuracies that they identified in their dispute letters.

Both Plaintiffs’

Accordingly, the claims are dismissed WITH LEAVE TO

In any Amended Complaint, Plaintiffs may reassert the

United States District Court
For the Northern District of California

10

As Plaintiffs’ counsel explained at the hearing, the actual

11

inaccuracies in question are the failure to report the fact of

12

Plaintiffs’ bankruptcies, and in Marino’s case an assertion that

13

his debt to RoundPoint was delinquent.

14

the allegations of a failure to notify furnishers if they can

15

plead facts supporting a reasonable inference that Experian failed

16

to do so.

17

contradict the allegations in Plaintiffs’ original Complaints.

Plaintiffs may reassert

The allegations in any Amended Complaint may not

18

II.

California’s Consumer Credit Reporting Agencies Act

19

Under the CCRAA, it is unlawful to “furnish information on a

20

specific transaction or experience to any consumer credit

21

reporting agency if the person knows or should know the

22

information is incomplete or inaccurate.”

23

§ 1785.25(a).

24

inaccuracy that renders the report “patently incorrect or

25

materially misleading.”

26

discussed, it is not inherently inaccurate to report a debtor’s

27

delinquent debts during the pendency of a bankruptcy proceeding.

Cal. Civ. Code

A claim under the CCRAA must be based on an actual

Carvalho, 629 F.3d at 889-91.

28
19

As

1

Marino alleges RoundPoint violated the CCRAA in two ways.

2

First, he alleges that RoundPoint violated section 1785.25(a) by

3

knowingly reporting inaccurate information.

4

above, Marino does not unambiguously plead that he was always

5

current on all the terms of the debt he owed to RoundPoint.

6

must include a clear statement of the terms of the debt and the

7

facts of his consistent timely payments according to those terms.

8

Accordingly, this claim is DISMISSED WITH LEAVE TO AMEND

9

consistently with this Order, if Marino can do so without

United States District Court
For the Northern District of California

10
11

However, as described

He

contradicting any of the allegations of the original Complaint.
Second, Marino alleges that RoundPoint failed to notify the

12

CRAs that the information was incorrect within thirty days of

13

receiving notice of his dispute, in violation of section

14

1785.25(f).4

15

FCRA.

16

DISMISSED WITHOUT LEAVE TO AMEND.

Carvalho, 629 F.3d at 889.

Accordingly, this claim is

CONCLUSION

17
18

Claims under this subsection are preempted by the

For the foregoing reasons, Experian and RoundPoint’s Motions

19

to Dismiss are GRANTED (No. 16-cv-5712, Docket No. 48 (Experian as

20

to Marino); No. 16-cv-5714, Docket No. 19 (Experian as to Dahlen);

21

No. 16-cv-6367, Docket No. 10 (RoundPoint as to Marino).

22

Dismissal is WITH LEAVE TO AMEND consistently with this Order.

23

Plaintiffs may amend only as specifically allowed in this Order.

24

Any additional amendments must be supported by a motion for leave

25
26
27
28

Plaintiffs cite section 1785.25(a) for this claim; however,
this requirement is found in subsection (f).
4

20

1

to amend.

2

filed within twenty-one days of the date of this Order.

3

Any Amended Complaint permitted by this Order must be

Fair v. Experian Information Solutions, et al., No. 16-cv-

4

5712 is dismissed with prejudice, terminating motions to dismiss

5

filed by Defendants Experian (Docket No. 20), Equifax (Docket No.

6

23) and Verizon (Docket No. 36) in that case; and Smith v.

7

Experian Information Solutions, et al., No. 16-cv-6382 is also

8

dismissed with prejudice, terminating a motion to dismiss filed by

9

Defendant Bank of America (Docket No. 28) and rendering moot Bank

United States District Court
For the Northern District of California

10

of America’s Request for Judicial Notice (Docket No. 29) in that

11

case, as well as terminating the motion to dismiss filed by

12

Experian against Smith in Fair, No. 16-cv-5712 (Docket No. 48).

13

IT IS SO ORDERED.

14
15
16

Dated: March 29, 2017
CLAUDIA WILKEN
United States District Judge

17
18
19
20
21
22
23
24
25
26
27
28
21