Hughes v. Experian Information Solutions, Inc. et al
Filing
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ORDER GRANTING 54 IQD'S MOTION FOR SUMMARY JUDGMENT ON FCRA CLAIM AND DENYING 54 IQD'S MOTION FOR SUMMARY JUDGMENT ON CCRA CLAIM; DECLINING TO EXERCISE SUPPLEMENTAL JURISDICTION OVER CCRA CLAIM; AND DISMISSING CCRA CLAIM. Signed by Judge Beth Labson Freeman on 12/22/2016. (blflc1S, COURT STAFF) (Filed on 12/22/2016)
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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SAN JOSE DIVISION
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DAZZA HUGHES,
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Case No. 15-cv-05118-BLF
Plaintiff,
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v.
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IQ DATA INTERNATIONAL, INC.,
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United States District Court
Northern District of California
Defendant.
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ORDER GRANTING IQD’S MOTION
FOR SUMMARY JUDGMENT ON
FCRA CLAIM AND DENYING IQD’S
MOTION FOR SUMMARY JUDGMENT
ON CCRA CLAIM; DECLINING TO
EXERCISE SUPPLEMENTAL
JURISDICTION OVER CCRA CLAIM;
AND DISMISSING CCRA CLAIM
[RE: ECF 54]
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Plaintiff Dazza Hughes’ counsel has filed hundreds of cookie-cutter lawsuits alleging
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violations of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681s-2(b), and California’s
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Consumer Credit Reporting Agencies Act (“CCRA”), Cal. Civ. Code § 1785.25(a). To date,
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counsel has settled with most defendants in most cases at the pleading stage. This is the first case
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before the undersigned to advance to summary judgment, and it seems that counsel was ill-
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prepared for such a development, as he did not present any evidence in opposition to the summary
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judgment motion brought by the only defendant remaining in this action, IQ Data International,
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Inc. (“IQD”).
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For the reasons discussed below, the Court GRANTS summary judgment for IQD on
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Hughes’ FCRA claim, declines to exercise supplemental jurisdiction over Hughes’ CCRA claim,
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and on that basis DISMISSES the CCRA claim without prejudice to refiling it in state court.1
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In light of these rulings, IQD’s alternative motion to dismiss or transfer venue, ECF 53, is
MOOT.
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I.
FACTS
Hughes filed her fourth bankruptcy case, a Chapter 7 petition, in January 2015 and she
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obtained discharge in May 2015. See BR Docket, Exh. E to Def.’s Request for Judicial Notice,
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ECF 55-5. She filed this lawsuit in November 2015, alleging that after discharge her credit reports
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incorrectly listed certain accounts as open, in collections, or charged off when in fact they had
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been discharged. See Compl., ECF 1. Following the Court’s dismissal of the original and first
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amended complaints for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6),
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Hughes filed the operative second amended complaint (“SAC”) asserting two claims against IQD,
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the first for violation of the FCRA and the second for violation of the CCRA. See SAC, ECF 51.
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IQD is a national collections agency specializing in property management debt recovery.
United States District Court
Northern District of California
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See SAC ¶¶ 19-33, ECF 51; McDonald Decl. ¶ 2, ECF 54-1. In February 2014, Hughes’
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delinquent residential rental account was placed with IQD for collection. Id. ¶ 5. IQD furnished
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the delinquent account information on a monthly basis to the three major credit reporting agencies
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(“CRAs”), Equifax, Inc., Experian Information Solutions, Inc., and TransUnion LLC. Id.
Hughes claims that after her Chapter 7 discharge, she ordered a three-bureau credit report
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and discovered that the residential account still appeared as open, without reference to her Chapter
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7 filing or discharge. SAC ¶¶ 6-7. She claims that she disputed the inaccurate tradelines with the
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CRAs and that the CRAs in turn notified IQD, but that IQD failed to conduct a reasonable
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investigation and failed to correct the inaccurate tradelines in violation of the FCRA and CCRA.
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SAC ¶¶ 9-12.
IQD has seeks summary judgment on both the FCRA and CCRA claims.
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II.
LEGAL STANDARD
“A party is entitled to summary judgment if the ‘movant shows that there is no genuine
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dispute as to any material fact and the movant is entitled to judgment as a matter of law.’” City of
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Pomona v. SQM North America Corp., 750 F.3d 1036, 1049 (9th Cir. 2014) (quoting Fed. R. Civ.
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P. 56(a)). The moving party has the burden of establishing that there is no dispute as to any
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material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). “The court must view the
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evidence in the light most favorable to the nonmovant and draw all reasonable inferences in the
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nonmovant’s favor.” City of Pomona, 750 F.3d at 1049. “[T]he ‘mere existence of a scintilla of
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evidence in support of the plaintiff’s position’” is insufficient to defeat a motion for summary
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judgment. Id. (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986). “‘Where the
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record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there
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is no genuine issue for trial.’” Id. (quoting Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio
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Corp., 475 U.S. 574, 587 (1986)).
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III.
DISCUSSION
A.
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Claim 1 is asserted under the FCRA, which creates a private right of action against
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“furnishers” – individuals and entities who furnish information to CRAs – for noncompliance with
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United States District Court
Northern District of California
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duties imposed under 15 U.S.C. § 1681s-2(b). Gorman v. Wolpoff & Abramson, LLP, 584 F.3d
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1147, 1154 (9th Cir. 2009). That provision imposes certain obligations on a furnisher, such as a
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duty to conduct an investigation, when the furnisher receives notice from a CRA that a consumer
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disputes information reported by the furnisher. Id.
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FCRA
A plaintiff is required to plead and prove four elements to prevail on an FCRA claim
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against a credit furnisher: “(1) a credit reporting inaccuracy existed on plaintiff's credit report;
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(2) plaintiff notified the consumer reporting agency that plaintiff disputed the reporting as
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inaccurate; (3) the consumer reporting agency notified the furnisher of the alleged inaccurate
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information of the dispute; and (4) the furnisher failed to investigate the inaccuracies or further
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failed to comply with the requirements in 15 U.S.C. 1681s-2(b) (1)(A)-(E).” Denison v.
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Citifinancial Servicing LLC, No. C 16-00432 WHA, 2016 WL 1718220, at *2 (N.D. Cal. Apr. 29,
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2016). A furnisher’s duties under § 1681s-2(b) of the FCRA arise “only after the furnisher
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receives notice of dispute from a CRA.” Gorman, 584 F.3d at 1154.
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In support of its motion for summary judgment, IQD submits the declaration of its
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employee, Heather MacDonald, who states that “at no time did IQD ever receive an Automated
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Consumer Dispute Verification form (“ACDV”) or other notice of dispute from any of the CRA[s]
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related to the Account.” MacDonald Decl. ¶ 9. This evidence is sufficient to meet IQD’s burden
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on summary judgment, as it negates the third element of the FCRA claim, that a CRA notified
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IQD of the alleged inaccurate information. Thus the burden shifts to Hughes to submit evidence
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sufficient to create a triable issue of fact as to whether any CRA notified IQD of the dispute.
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Hughes presents no evidence whatsoever in opposition to IQD’s motion for summary
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judgment. She argues in her opposition brief that she obtained a credit report in August 2015
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showing that IQD had reported the account to Experian as “open” after the Chapter 7 discharge
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while reporting the account to Equifax as “closed.” However, those statements are pure attorney
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argument, unsupported by any evidence. “[W]here a furnisher has produced evidence that it was
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not notified by the CRA of the consumer’s dispute, the CRA’s statutory obligation to provide
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notice is alone insufficient to raise a genuine dispute at the summary judgment stage.” Sheridan v.
FIA Card Servs., N.A., No. C13-01179 HRL, 2014 WL 587739, at *4 (N.D. Cal. Feb. 14, 2014)
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United States District Court
Northern District of California
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(collecting cases). Because IQD has met its initial burden on summary judgment by submitting
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evidence to negate an element of Hughes’ FCRA claim, and Hughes has not met her burden of
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submitting evidence to create a triable issue of material fact, IQD is entitled to summary judgment
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on the FCRA claim.
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IQD’s motion for summary judgment is GRANTED on Claim 1 for violation of the FCRA.
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B.
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Claim 2 is asserted under § 1785.25(a) of the CCRA, which provides that “[a] person shall
CCRA
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not furnish information on a specific transaction or experience to any consumer credit reporting
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agency if the person knows or should know the information is incomplete or inaccurate.” Cal.
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Civ. Code § 1785.25(a). IQD argues that it is entitled to summary judgment on the CCRA claim
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for the same reasons that it is entitled to summary judgment on the FCRA claim. However, the
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CCRA does not contain the same statutory prerequisite to liability – a CRA’s notification to the
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furnisher of the dispute – which entitles IQD to summary judgment on the FCRA claim. IQD has
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not shown the absence of disputed issues as to whether IQD furnished information to a CRA that it
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knew or should have known was incomplete or inaccurate.
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However, in light of the Court’s determination that IQD is entitled to summary judgment
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on the FCRA claim, the Court declines to exercise supplemental jurisdiction over the remaining
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CCRA claim. “A district court ‘may decline to exercise supplemental jurisdiction’ if it ‘has
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dismissed all claims over which it has original jurisdiction.’” Sanford v. MemberWorks, Inc., 625
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F.3d 550, 561 (9th Cir. 2010) (quoting 28 U.S.C. § 1367(c)(3)). “‘[I]n the usual case in which all
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federal-law claims are eliminated before trial, the balance of factors to be considered under the
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pendent jurisdiction doctrine – judicial economy, convenience, fairness, and comity – will point
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toward declining to exercise jurisdiction over the remaining state-law claims.”” Id. (quoting
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Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 n. 7 (1988)). To date, the Court’s oversight
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of the case has been limited to approving stipulated dismissals of three defendants and issuing two
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orders noting the deficiencies in Hughes’ pleadings with respect to IQD. The Court therefore
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perceives no reason to depart from the “usual case” in which state law claims are dismissed
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following disposition of all federal claims.
Accordingly, IQD’s motion for summary judgment is DENIED on Claim 2 for violation of
United States District Court
Northern District of California
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the CCRA. However, the Court declines to exercise supplemental jurisdiction over Claim 2 and
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therefore Claim 2 is DISMISSED without prejudice to the refiling of that claim in state court.
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IV.
ORDER
(1)
violation of the FCRA and DENIED on Claim 2 for violation of the CCRA; and
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Defendant IQD’s motion for summary judgment is GRANTED on Claim 1 for
(2)
Claim 2 for violation of the CCRA is DISMISSED without prejudice to the refiling
of that claim in state court.
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Dated: December 22, 2016
______________________________________
BETH LABSON FREEMAN
United States District Judge
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