MacPherson v. JPMorgan Chase Bank, NA

Filing 37

ORDER granting 9 Motion to Dismiss. Signed by Judge Alvin W. Thompson on 8/4/2010. (Lynch, C.)

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MacPherson v. JPMorgan Chase Bank, NA Doc. 37 UNITED STATES DISTRICT COURT DISTRICT OF CONNECTICUT -----------------------------------x SEAN MACPHERSON : : Plaintiff, : : v. : CIV. NO. 3:09CV1774(AWT) : J P MORGAN CHASE BANK, N.A., : : Defendant. : -----------------------------------x R U L I N G ON MOTION TO DISMISS T h e plaintiff filed a complaint in Connecticut Superior C o u r t , Judicial District of Danbury, claiming defamation and i n t e n t i o n a l infliction of emotional distress; the defendant s u b s e q u e n t l y filed a notice of removal. The defendant has filed a m o t i o n to dismiss both claims pursuant to Fed. R. Civ. P. 12(b)(6). granted. I. F a c t u a l Background For purposes of a motion to dismiss for failure to state a c l a i m , the court accepts as true the factual allegations in the complaint. The plaintiff maintained a credit card account with On May 10, 2009, having received an account For the reasons set forth below, the motion is being t h e defendant. s t a t e m e n t covering the time period from April 2, 2009 to May 1, 2 0 0 9 which indicated a balance due of $1,734.13 and a payment due d a t e of May 26, 2009, the plaintiff sent payment of $1,734.13 to t h e address specified by the defendant in the account statement. T h e next statement that the plaintiff received from the Dockets.Justia.com defendant indicated that the balance was paid in full on May 14, 2 0 0 9 , but included an additional finance charge of $15.23. The p l a i n t i f f called the defendant's customer service department and s e n t a written notice to the defendant dated July 25, 2009 d i s p u t i n g the charge. The plaintiff's next statement "included a l a t e fee of $15, almost double the already bogus additional f i n a n c e charge, raised the previous balance from $15.23 to $16.23 f o r no apparent reason, and added additional finance charges of $1.50." (Compl. ¶ 9.) On August 8, 2009, the plaintiff received n o t i f i c a t i o n from Equifax Information Services ("Equifax") that h i s credit score had been reduced because of a notice by the d e f e n d a n t to Equifax that the plaintiff's account balance had d o u b l e d and that he had more than two payments past due. At the t i m e the defendant notified Equifax of this information, it knew t h a t the plaintiff disputed the charges at issue. II. L e g a l Standard W h e n deciding a motion to dismiss under Rule 12(b)(6), the c o u r t must accept as true all factual allegations in the complaint a n d must draw inferences in a light most favorable to the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974). Although a complaint "does not need detailed factual allegations, a p l a i n t i f f ' s obligation to provide the `grounds of his e n t i t l e [ m e n t ] to relief' requires more than labels and c o n c l u s i o n s , and a formulaic recitation of the elements of a cause -2- of action will not do." Bell Atlantic Corporation v. Twombly, 550 U . S . 544, 555 (2007) (citing Papasan v. Allain, 478 U.S. 265, 286 ( 1 9 8 6 ) (on a motion to dismiss, the courts "are not bound to a c c e p t as true a legal conclusion couched as a factual allegation")). "Nor does a complaint suffice if it tenders naked Ashcroft v. a s s e r t i o n s devoid of further factual enhancement." I q b a l , ___ U.S. ___, 129 S.Ct. 1937, 1949 (2009) (quoting Twombly, 5 5 0 U.S. at 557). While "[f]actual allegations must be enough to r a i s e a right to relief above the speculative level, on the a s s u m p t i o n that all allegations in the complaint are true (even if d o u b t f u l in fact)," Twombly, 550 U.S. at 555 (2007) (citations o m i t t e d ) (footnote omitted), the plaintiff is required to plead " o n l y enough facts to state a claim to relief that is plausible on i t s face." Id. at 570. "The function of a motion to dismiss is `merely to assess the l e g a l feasibility of the complaint, not to assay the weight of the e v i d e n c e which might be offered in support thereof.'" Mytych v. M a y Dept. Stores Co., 34 F. Supp. 2d 130, 131 (D.Conn. 1999) ( q u o t i n g Ryder Energy Distribution v. Merrill Lynch Commodities, I n c . , 748 F.2d 774, 779 (2d Cir. 1984)). "The issue on a motion t o dismiss is not whether the plaintiff will prevail, but whether t h e plaintiff is entitled to offer evidence to support his claims." United States v. Yale New Haven Hosp., 727 F. Supp. 784, 7 8 6 (D.Conn. 1990) citing Scheuer, 416 U.S. at 236. -3- III. D i s c u s s i o n T h e defendant argues in support of its motion to dismiss that t h e plaintiff's claims for defamation and intentional infliction o f emotional distress are preempted by the Fair Credit Reporting A c t , 15 U.S.C. § 1681, et seq. (the "FCRA"). Specifically, the d e f e n d a n t contends that under § 1681t(b)(1)(F), federal law p r e e m p t s state law claims against persons who furnish information t o consumer reporting agencies with respect to subject matter r e g u l a t e d under § 1681s-2, which addresses the responsibilities of t h o s e persons when providing that information. I n response,1 the plaintiff points to § 1681h(e) and notes t h a t there is a split among district courts about which provision o f the FCRA governs the preemption analysis in this type of case. Compare Holtman v. Citifinancial Mortg. Co., Inc., No. Civ.A. 3 : 0 5 - C V - 1 5 7 1 ( J C H ) , 2006 WL 1699589 (D. Conn. June 19, 2006) ( h o l d i n g that § 1681t(b)(1)(F) preempts state common law, The defendant filed its motion to dismiss and the plaintiff filed an objection to the notice of removal (Doc. No. 11) within a few days of each other. The court deemed the plaintiff's objection to the notice of removal a motion to remand. The arguments made in support of and in opposition to the two motions substantially overlap; the plaintiff addresses the defendant's preemption arguments in his Memorandum of Law in Support of Plaintiff's Objection and Supplemental Objection to Defendant's Notice of Removal of Action (Doc. No. 15-2), while his Memorandum of Law in Support of Plaintiff's Opposition to Defendant's Motion to Dismiss (Doc. No. 23) addresses jurisdictional arguments disposed of in the court's Order Re Motion to Remand (Doc. No. 20). Consequently, the court will treat all relevant arguments as having been made for the purposes addressing the present motion. -4- 1 including defamation and intentional infliction of emotional d i s t r e s s )2 with Beuster v. Equifax Info. Servs., 435 F. Supp. 2d 4 7 1 (D. Md. 2006) (holding that state common law defamation claim i s not preempted because § 1681t(b)(1)(F) preempts state statutory l a w only, while § 1681h(e) preempts state common law). To that e n d , the plaintiff argues that § 1681t(b)(1)(F) preempts only s t a t e or federal statutory claims, while state common law claims s u c h as those that he brings here are governed by § 1681h(e). This reading of the FCRA, sometimes called the "statutory a p p r o a c h " to FCRA preemption, has previously been adopted by some c o u r t s facing this question. See, e.g., Beuster, 435 F. Supp. 2d a t 478-79; Manno v. Am. Gen. Fin. Co., 439 F. Supp. 2d 418, 426 ( E . D . Pa. 2006). T h e court finds the plaintiff's argument unpersuasive, and c o n c l u d e s that § 1681t(b)(1)(F) is applicable here. Prior to 1 9 9 6 , the provision of the FCRA that would have governed the p r e e m p t i o n analysis of the plaintiff's claims was § 1681h(e). Section 1681h(e) provides that The court in Holtman noted that "on its face section 1681t(b)(1)(F) only applies to persons who provide information to consumer reporting agencies. The plain language, of section 1681h(e), however, applies just to consumer reporting agencies and those who take adverse actions against consumers based on consumer reports." Holtman, 2006 WL 1699589, at *4. But it should be noted that the focus of § 1681t(b)(1)(F) is claims with respect to subject matter regulated under specified provisions of the FCRA, and the focus of § 1681h(e) is three types of claims if they are based on information disclosed under the circumstances described there. -5- 2 [e]xcept as provided in sections 1681n and 1681o o f this title, no consumer may bring any action or p r o c e e d i n g in the nature of defamation, invasion o f privacy, or negligence with respect to the r e p o r t i n g of information against any consumer r e p o r t i n g agency, any user of information, or any p e r s o n who furnishes information to a consumer r e p o r t i n g agency, based on information disclosed p u r s u a n t to section 1681g, 1681h, or 1681m of this t i t l e , or based on information disclosed by a user o f a consumer report to or for a consumer against w h o m the user has taken adverse action, based in w h o l e or in part on the report except as to false i n f o r m a t i o n furnished with malice or willful i n t e n t to injure such consumer. 1 5 U.S.C. § 1681h(e).3 This section does not by its terms bar all s t a t e law claims­-it only bars certain claims of defamation, i n v a s i o n of privacy, and negligence. It does not bar all d e f a m a t i o n , invasion of privacy, and negligence claims, but only t h o s e claims based on information disclosed pursuant to 15 U.S.C. § § 1681g, 1681h, or 1681m, or based on information disclosed by a u s e r of a consumer report to or for a consumer against whom the u s e r has taken adverse action. Moreover, even claims based on Before the 1996 amendments, § 1681h(e) provided that: [e]xcept as provided in sections 1681n and 1681o of this title, no consumer may bring any action or proceeding in the nature of defamation, invasion of privacy, or negligence with respect to the reporting of information against any consumer reporting agency, any user of information, or any person who furnishes information to a consumer reporting agency, based on information disclosed pursuant to section 1681g, 1681h, or 1681m of this title, except as to false information furnished with malice or willful intent to injure such consumer. 15 U.S.C.A. § 1691h(e) (West 1996). -6- 3 such information can be brought if the information was false and h a d been furnished with malice or willful intent to injure the c o n s u m e r bringing the claim, or if falling within an exception p r o v i d e d in 15 U.S.C. §§ 1681n or 1681o. H o w e v e r , "[i]n 1996, Congress amended the FCRA to include a d d i t i o n a l preemption provisions, including 15 U.S.C. § 1681t(b)(1)(F)." Marcum v. G.L.A. Collection Co., Inc., 646 F. Congress also added provisions S u p p . 2d 870, 874 (E.D. Ky. 2008). p r e e m p t i n g claims based on §§ 1681g(c) and 1681m(a), (b) and (d) e v e n if they were not claims of defamation, invasion of privacy, o r negligence, and even if they were claims for false information t h a t was furnished with malice or willful intent to injure. See 1 5 U.S.C.A. § 1681t (West 1998); cf. 15 U.S.C.A. § 1681t (West 1996). Congress has since amended § 1681t to preempt claims based See 15 U.S.C. § 1681t. o n other portions of §§ 1681g and 1681m. Consequently, understanding § 1681t to operate to preempt certain s t a t e common law claims does not make § 1681h(e) surplusage, or e f f e c t i v e l y repeal it, as some courts have in effect suggested. See, e.g., Beuster, 435 F. Supp. 2d. at 475; Manno, 439 F. Supp. 2 d at 426. S e c t i o n 1681s-2 imposes two sets of duties on persons who f u r n i s h information to consumer reporting agencies. See Kane v. G u a r . Residential Lending, Inc., No. 04-CV-4847 (ERK), 2005 WL 1 1 5 3 6 2 3 , at *3 (E.D.N.Y. May 16, 2005). First, under § 1681s- -7- 2(a), the statute imposes a duty on furnishers of information to " p r o v i d e accurate information" to consumer reporting agencies. U . S . C . § 1681s-2(a). Second, under § 1681s-2(b), the statute 15 i m p o s e s additional duties on furnishers of information after they h a v e been informed pursuant to § 1681i(a)(2) that the information i s disputed. See 15 U.S.C. § 1681s-2(b). S e c t i o n 1681s-2(a) provides that "[a] person shall not f u r n i s h information relating to a consumer to any consumer r e p o r t i n g agency if­ (i) the person has been notified by the c o n s u m e r , at the address specified by the person for such notices, t h a t specific information is inaccurate; and (ii) the information i s , in fact, inaccurate." 15 U.S.C. § 1681s-2(a)(1)(B). It also p r o h i b i t s the reporting of information that a person knows or has r e a s o n a b l e cause to believe is inaccurate, although any person who c l e a r l y and conspicuously identifies an address to receive notices b y the consumer that information is inaccurate is exempt from this provision. See 15 U.S.C. §§ 1681s-2(a)(1)(A) & 1681s-2(a)(1)(C). S e c t i o n 1681s-2(b) provides that "[a]fter receiving notice p u r s u a n t to [15 U.S.C. § 1681i(a)(2)] of a dispute with regard to t h e completeness or accuracy of any information provided by a p e r s o n to a consumer reporting agency, the person shall" conduct a n investigation with respect to the dispute, including a review o f the information provided by the consumer reporting agency, r e p o r t the results of the investigation to the consumer reporting -8- agency, and take certain steps if the person finds the information t o be inaccurate, incomplete, or impossible to verify. § 1681s-2(b)(1). 15 U.S.C. However, the notice must be from a consumer See 15 U.S.C. r e p o r t i n g agency for this provision to apply. § 1681i(a)(2); see also Kane, 2005 WL 1153623, at *4 ("[T]he duty t o investigate in Subsection (b) [of § 1681s-2] is triggered only a f t e r a furnisher of information receives notice from a credit r e p o r t i n g agency of a consumer's dispute."). I n this case, the plaintiff alleges that his credit score was r e d u c e d by Equifax based on information provided by the defendant t o Equifax. He further alleges that he provided notice to the d e f e n d a n t in writing on July 25, 2009 disputing the $15.23 finance c h a r g e that appeared on his bill from the defendant. In addition, t h e plaintiff alleges that the defendant did not report i n f o r m a t i o n until after it had notice that the information was i n a c c u r a t e .4 In other words, the plaintiff alleges that the d e f e n d a n t furnished inaccurate information relating to him, a c o n s u m e r , to Equifax, a consumer reporting agency, even though the d e f e n d a n t had been notified by him that the specific information w a s inaccurate, which is conduct expressly prohibited by 15 U.S.C. § 1681s-2(a)(1)(B). 5 The plaintiff also alleges that he called the defendant's customer service line to dispute the charge. The plaintiff does not allege that Equifax or another consumer reporting agency notified the defendant that the -95 4 As the court noted in Kane, [t]o the extent that a furnisher of information p r o v i d e s inaccurate information after receiving n o t i c e of inaccuracy from a credit reporting a g e n c y , that conduct is regulated under 15 U.S.C. § 1681s-2(b). To the extent that a furnisher p r o v i d e s inaccurate information after receiving n o t i c e from the consumer himself, the "conduct f a l l s squarely within § 1681s-2(a)(1)(B)." K a n e , 2005 WL 1153623, at *8 (citations omitted). Thus, the p l a i n t i f f ' s claims are with respect to "subject matter regulated u n d e r " 15 U.S.C. § 1681s-2. 15 U.S.C. § 1681t(b)(1)(F). S e c t i o n 1671t(b)(1)(F) provides in pertinent part that [ n ] o requirement or prohibition may be imposed u n d e r the laws of any State . . . with respect to a n y subject matter regulated under . . . section 1 6 8 1 s - 2 of [Title 15 of the United States Code], r e l a t i n g to the responsibilities of persons who f u r n i s h information to consumer reporting agencies . . . . Id. Consequently, because the plaintiff brings state law claims w i t h respect to subject matter regulated under § 1681s-2(a)(1)(B), h i s claims are preempted by § 1681t(b)(1)(F). 6 information it provided about the plaintiff was in dispute before August 8, 2009, when the plaintiff received notice from Equifax that his credit score had been reduced. Consequently, it does not appear that his claims arise under laws with respect to subject matter regulated under § 1681s-2(b). The court notes that although the facts alleged by the plaintiff would, if proven, constitute a violation of the FCRA, the plaintiff does not allege facts for which there is a private right of action under the FCRA. The FCRA provides any consumer with a private right of action against "[a]ny person who willfully fails to comply with any requirement imposed" by the statute with respect to that consumer and against "[a]ny person who is negligent in failing to comply with any requirement -106 IV. Conclusion F o r the reasons set forth above, the defendant's motion to d i s m i s s (Doc. No. 9) is hereby GRANTED. T h e Clerk shall close this case. I t is so ordered. S i g n e d this 4th day of August, 2010 at Hartford, Connecticut. ________/s/AWT______________ A l v i n W. Thompson U n i t e d States District Judge imposed" by the statute. 15 U.S.C. §§ 1681n(a) & 1681o(a). However, these sections do not apply to violations of section 1681s-2(a). See 15 U.S.C. § 1681s-2(c)(1). Accordingly, there is no private right of action for such a violation, and individuals aggrieved by a violation based on this provision must rely on state or federal officials to sue on their behalf pursuant to 15 U.S.C. § 1681s(c). See 15 U.S.C. §§ 1681s(c)(1) & (2), 1681s(d); see also Kane, 2005 WL 1153623, at *4 ("While plaintiffs may not enforce the terms of § 1681s-2(a) through a private cause of action, they can report violations to the Federal Trade Commission, which is authorized to enforce the terms of Subsection[ ](a) under the FCRA."). There is a private right of action under § 1681s-2(b). However, in order for this provision to apply, the person reporting information must have received notice of the dispute from a consumer reporting agency. See 15 U.S.C. § 1681i(a)(2); Kane, 2005 WL 1153623, at *4. In this case, the plaintiff does not allege that Equifax or another consumer reporting agency notified the defendant about his dispute. See supra note 5. Accordingly, he has not alleged facts sufficient to establish that he has a private right of action under § 1681s-2(b). Based on the factual allegations in the complaint, it is not apparent how the plaintiff could allege facts stating some other claim. Accordingly, the motion to dismiss is being granted without leave to amend. -11-

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