O'Loughlin v. Equifax, Inc. et al

Filing 20

ORDER denying 16 Defendant Flagstar Bank, FSB's Motion to Dismiss Complaint, or in the Alternative, for a More Definite Statement. Signed by Judge James I. Cohn on 7/21/2015. (ns)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 15-60660-CIV-COHN/SELTZER
MARK O'LOUGHLIN,
Plaintiff,
v.
EQUIFAX, INC., EXPERIAN INFORMATION
SOLUTIONS INC., and FLAGSTAR BANK,
FSB,
Defendants.
/
ORDER DENYING MOTION TO DISMISS
THIS CAUSE is before the Court upon Defendant Flagstar Bank, FSB's Motion to
Dismiss Complaint, or in the Alternative, for a More Definite Statement [DE 16]
("Motion"). The Court has reviewed the Motion and the record in this case, and is
otherwise advised in the premises. For the reasons discussed herein, the Court will
deny the Motion.
I.

BACKGROUND
Plaintiff Mark O'Loughlin asserts claims against each Defendant in this action for

violations of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681, et seq. On May
6, 2011, O'Loughlin received a discharge of debt upon completion of a payment plan
pursuant to a Chapter 13 bankruptcy. DE 1-2 at 2–13 (Complaint) ¶ 17.1 The plan

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For the purpose of resolving the Motion, the Court accepts as true the facts
alleged in the Complaint. See Nat'l Ass'n of Bds. of Pharmacy v. Bd. of Regents, 633
F.3d 1297, 1301 n.3 (11th Cir. 2011).

included payments on an account O'Loughlin maintained with Defendant Flagstar Bank,
FSB ("Flagstar"). Id. ¶ 18.
After the completion of the payment plan, O'Loughlin noticed that his credit
reports reflected incorrect information about his Flagstar account. Specifically, the credit
reports he received from Defendants Equifax, Inc. ("Equifax") and Experian Information
Solutions Inc. ("Experian") incorrectly stated that payments on the Flagstar account
were past due or had been charged off, instead of having been paid and discharged as
part of the bankruptcy payment plan. Id. ¶¶ 26–32. On the basis of these incorrect credit
reports, O'Loughlin has asserted claims for violations of the FCRA against Equifax and
Experian. Id. ¶¶ 44–67. O'Loughlin also has raised a single claim against Flagstar under
15 U.S.C. § 1681s-2(b), denominated Count V in the Complaint, alleging that Flagstar
failed to reasonably investigate O'Loughlin's disputes relating to his account and
furnished inaccurate information regarding the account to Equifax and Experian. Compl.
¶¶ 68–73. Flagstar has responded to Count V with the Motion, seeking dismissal of the
claim against it for failure to plead a cause of action.
II.

LEGAL STANDARD
Under Rule 12(b)(6), a court shall grant a motion to dismiss where the factual

allegations of the complaint cannot support the asserted cause of action. Glover v.
Liggett Group, Inc., 459 F.3d 1304, 1308 (11th Cir. 2006) (per curiam). "Factual
allegations must be enough to raise a right to relief above the speculative level . . . ."
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). The allegations must give a
defendant fair notice of the plaintiff's claims and the grounds upon which they rest. Id.
Thus, a complaint must contain "sufficient factual matter, accepted as true, to 'state a

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claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(quoting Twombly, 550 U.S. at 570).
A complaint must be liberally construed, assuming the facts alleged therein as
true and drawing all reasonable inferences from those facts in the plaintiff's favor.
Twombly, 550 U.S. at 555. A complaint should not be dismissed simply because the
court is doubtful that the plaintiff will be able to prove all of the necessary factual
allegations. Id. A well-pled complaint will survive a motion to dismiss "even if it appears
that a recovery is very remote and unlikely." Id. at 556 (internal quotation marks
omitted). Nevertheless, a plaintiff must provide "more than labels and conclusions, and
a formulaic recitation of the elements of a cause of action will not do." Id. at 555.
III. DISCUSSION
In the Motion, Flagstar argues that O'Loughlin's claim against it fails because the
claim rests upon violations of 15 U.S.C. § 1681s-2(a), for which Congress has not
created a private cause of action. However, facts giving rise to a violation of
§ 1681s-2(a) can also contribute to a violation of § 1681s-2(b), for which a private cause
of action does exist. Accordingly, that some of Flagstar's complained-of conduct might
violate § 1681s-2(a) does not foreclose O'Loughlin's claim upon that same conduct
under § 1681s-2(b).
The parties agree that Flagstar is a furnisher of information to a consumer
reporting agency for purposes of § 1681s-2. Section 1681s-2 imposes certain
obligations upon furnishers of information. Though § 1681s-2(a) and (b) both enumerate
duties of a furnisher, Congress has created a private cause of action only for violations
of subsection (b). See, e.g., Green v. RBS Nat'l Bank, 288 F. App'x 641, 642–43 (11th
Cir. 2008) (per curiam).
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O'Loughlin has premised Count V of the Complaint upon alleged violations of
§ 1681s-2(b), which requires a furnisher of information to a consumer reporting agency,
upon notice from the agency, to investigate information disputes and report to the
agency whether any information the furnisher had provided was incomplete or
inaccurate. See Rambarran v. Bank of Am., N.A., 609 F. Supp. 2d 1253, 1257 (S.D. Fla.
2009). Nevertheless, some of the conduct pled in Count V may also reflect violations of
§ 1681s-2(a). Flagstar argues that because Congress has not created a private right of
action for violations of § 1681s-2(a), those portions of Count V which implicate duties
arising from subsection (a) should be dismissed.
That facts giving rise to a violation of § 1681s-2(b) may also reflect a violation of
subsection (a) does not shield a defendant from a private suit under subsection (b) upon
those facts. Seamans v. Temple Univ., 744 F.3d 853, 867 (3d Cir. 2014); Gorman v.
Wolpoff & Abramson, LLP, 584 F.3d 1147, 1162–64 (9th Cir. 2009); see also Saunders
v. Branch Banking & Trust Co. of Va., 526 F.3d 142, 149–50 (4th Cir. 2008) ("No court
has ever suggested that a furnisher can excuse its failure to identify an inaccuracy when
reporting pursuant to § 1681s-2(b) by arguing that it should have already reported the
information accurately under § 1681s-2(a)."). In this case, O'Loughlin has alleged acts
by Flagstar resulting in the provision of inaccurate information to consumer reporting
agencies. Compl. ¶ 69. Whether these acts will ultimately give rise to liability under
§ 1681s-2(b) is a question for the factfinder. But that O'Loughlin's allegations may also

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suggest violations of § 1681s-2(a) does not warrant dismissal of his claim against
Flagstar. See Gorman, 584 F.3d at 1164.2 It is accordingly
ORDERED AND ADJUDGED that Defendant Flagstar Bank, FSB's Motion to
Dismiss Complaint, or in the Alternative, for a More Definite Statement [DE 16] is
DENIED.
DONE AND ORDERED in Chambers at Fort Lauderdale, Broward County,
Florida, this 21st day of July, 2015.

Copies provided to:
Counsel of record via CM/ECF

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The Court declines to address Flagstar's additional arguments for dismissal of
the Complaint that Flagstar has raised for the first time in its Reply. See, e.g., S.D. Fla.
L.R. 7.1(c); Powell v. Carey Int'l, Inc., 490 F. Supp. 2d 1202, 1206 n.4 (S.D. Fla. 2006).
Further, Flagstar's alternative request for a more definite statement (DE 16 at 8), which
does not address which allegations in the Complaint are so vague or ambiguous that
Flagstar could not formulate a response, fails as conclusory.

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