Eric D. Keller v. Bank of America, N.A.
MEMORANDUM AND ORDER granting in part and denying in part 9 Motion to Dismiss; denying 11 Motion to Remand to State Court. Signed by District Judge Carlos Murguia on 1/13/17.Mailed to pro se party Eric David Keller by regular and certified mail ; Certified Tracking Number: 70123460000082625811. (kao)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
ERIC DAVID KELLER,
Case No. 16-2538
BANK OF AMERICA, N.A.,
MEMORANDUM & ORDER
This matter comes before the court upon defendant Bank of America, N.A.’s Motion to
Dismiss pursuant to Fed. R. Civ. P. 12(b)(6) (Doc. 9) and plaintiff Eric David Keller’s Motion to
Remand (Doc. 11).
Plaintiff’s motion to remand
Plaintiff seeks to remand this case to the District Court of Douglas County, Kansas, because he
argues that his claims are all state law causes of action. (Doc. 11, at 1–2.) Plaintiff brings claims for
(1) fraudulent business practice; (2) neglect and lack of concern for consumer credit; (3) identity theft;
and (4) personal injury. (Doc. 1-1, at 2.) Defendant removed this action because it claims that
plaintiff’s “neglect and lack of concern for consumer credit” claim is completely preempted by the Fair
Credit Reporting Act (“FCRA”), 15 U.S.C. §§ 1681s-2(a), 1681t(b)(1)(F), and it argues that the court
should exercise supplemental jurisdiction over plaintiff’s remaining three claims because they arise out
of the same operative facts. (Doc. 1, at 1–2.)
Legal standard for motions to remand
“Federal courts are courts of limited jurisdiction; they must have a statutory basis for their
jurisdiction.” Dutcher v. Matheson, 733 F.3d 908, 984 (10th Cir. 2013) (quoting Rural Water Dist. No.
2 v. City of Glenpool, 698 F.3d 1270, 1274 (10th Cir. 2012)). A federal court has jurisdiction over a
claim if it is one “arising under the Constitution, laws, or treaties of the United States.” 28 U.S.C. §
1331. Civil actions filed in state courts over which district courts have original jurisdiction “may be
removed by the defendant or the defendants, to the district court of the United States for the district
and division embracing the place where such action is pending.” 28 U.S.C. § 1441(a). “If at any time
before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be
remanded.” 28 U.S.C. § 1447(c).
The well-pleaded complaint rule usually governs whether a claim arises under federal law.
Sharp v. Wellmark, Inc., 744 F. Supp. 2d 1191, 1194 (D. Kan. 2010). It provides that federal
jurisdiction lies where plaintiff’s “well-pleaded complaint establishes either that federal law creates the
cause of action or that the plaintiff’s right to relief necessarily depends on resolution of a substantial
question of federal law.” Smoky Hills Wind Farm, LLC v. Midwest Energy, Inc., No. 15-1116-JTM,
2015 WL 3833378, at *2 (D. Kan. June 22, 2015) (quoting Morris v. City of Hobart, 39 F.3d 1105,
1111 (10th Cir. 1993)). “Even if a federal question appears on the face of a well-pleaded complaint,
federal jurisdiction is not automatic.” Nicodemus v. Union Pac. Corp., 440 F.3d 1227, 1232 (10th Cir.
2006). For removal to be appropriate, the federal question must be “contested and substantial.” Id.
(quoting Grable & Sons Metal Prods., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308, 312 (2005)).
The well-pleaded complaint rule allows a plaintiff to be the master of his own claim by
allowing him to avoid federal jurisdiction by choosing to raise only state law claims. Id. Potential
defenses are generally not a sufficient basis for removal. Dutcher, 698 F.3d at 985. “As a general rule,
absent diversity jurisdiction, a case will not be removable if the complaint does not affirmatively allege
a federal claim.” Beneficial Nat’l Bank v. Anderson, 539 U.S. 1, 6 (2003).
The party claiming jurisdiction has the burden to show it by a preponderance of the evidence.
Karnes v. Boeing Co., 335 F.3d 1189, 1193 (10th Cir. 2003). There is a presumption against finding
federal jurisdiction, until the party invoking it makes an adequate showing. Id. at 1194. “Doubtful
cases must be resolved in favor of remand.” Colbert v. Union Pac. R. R. Co., 485 F. Supp. 2d 1236,
1239 (D. Kan. 2007) (quoting Thurkill v. The Menninger Clinic, Inc., 72 F. Supp. 2d, 1232, 1234 (D.
Defendant argues that this case is removable because plaintiff’s state law credit reporting claim
is preempted by the FCRA. The complete preemption exception to the well-pleaded complaint rule
provides that “when a federal statute wholly displaces the state-law cause of action through complete
pre-emption,” the state claim can be removed. Sharp, 744 F. Supp. 2d at 1195 (quoting Beneficial
Nat’l Bank, 539 U.S. at 8). Complete preemption differs from ordinary preemption because it involves
a “situation in which a federal law not only preempts a state law to some degree but also substitutes a
federal cause of action for the state cause of action, thereby manifesting Congress’s intent to permit
removal.” Colbert, 485 F. Supp. 2d at 1240 (quoting Schmeling v. NORDAM, 97 F.3d 1336, 1342
(10th Cir. 1996)). To employ the exception, a court must find that a claim falls within the scope of a
federal statute that Congress intended to completely displace all state law on the issue and
comprehensively regulate the area. Hansen v. Harper Excavating, Inc., 641 F.3d 1216, 1221 (10th Cir.
“Complete preemption is a rare doctrine, one that represents an extraordinary pre-emptive
power.” Devon Energy Prod. Co. v. Mosaic Potash Carlsbad, Inc., 693 F.3d 1195, 1204 (10th Cir.
2012) (internal citations omitted). The United States Supreme Court warns not to imply the doctrine
lightly and has recognized complete preemption in only three areas: § 301 of the Labor Management
Relations Act of 1947 (“LMRA”); § 502 of the Employee Retirement Income Security Act of 1974
(“ERISA”); and actions for usury against national banks under the National Bank Act. Id. (citing
Hanson, 641 F.3d at 1221; Avco Corp. v. Aero Lodge No. 735 Ass’n of Machinists and Aerospace
Workers, 390 U.S. 557 (1968) (LMRA); Metro. Life Ins. Co. v. Taylor, 481 U.S. 58 (1987) (ERISA);
and Beneficial Nat. Bank, 539 U.S. 1 (2003) (National Bank Act). There is a two-part test to determine
whether complete preemption is appropriate: (1) whether the federal regulation at issue preempts the
state law plaintiff relies on; and (2) whether Congress intended to allow removal in such cases,
manifested by the creation of a federal cause of action to enforce the regulation. Devon, 693 F.3d at
1205. For complete preemption to apply, the federal remedy must provide some vindication for the
same basic right or interest alleged by the plaintiff. Id. at 1207.
The FCRA’s purpose is “to require that consumer reporting agencies adopt reasonable
procedures for meeting the needs of commerce for consumer credit in a manner which is fair and
equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper
utilization of such information . . . .” 15 U.S.C. § 1681(b). The “FCRA enables consumers to protect
their reputations, and to protect themselves against the dissemination of false or misleading credit
information.” Holland v. GMAC Mortg. Corp., No. 03-2666-CM, 2006 WL 1133224, at *11 (D. Kan.
Apr. 26, 2006). “The FCRA places distinct obligations on three types of entities: (1) consumer
reporting agencies; (2) users of consumer reports; and (3) furnishers of information.” Aklagi v.
Nationscredit Fin., 196 F. Supp. 2d 1186, 1192 (D. Kan. 2002).
Defendant argues that the FCRA completely preempts state law claims based on a furnisher’s
alleged failure to investigate a consumer’s credit dispute. (Doc. 15, at 3.) Although plaintiff does not
specifically claim that defendant is a “furnisher,” plaintiff alleges sufficient facts that he is a consumer
within the meaning of the statute, and that defendant has provided incorrect information concerning
plaintiff’s bank account.
Defendant does not claim that it is a consumer reporting agency (“CRA”) or user of consumer
reports. “The FCRA does not define the term ‘furnisher,’ but courts have defined the term as an entity
which transmits information concerning a particular debt owed by a particular consumer to consumer
reporting agencies.” Jarrett v. Bank of Am., 421 F. Supp. 2d 1350, 1352 n.1 (D. Kan. 2006). At this
stage in the litigation, the court makes all reasonable inferences in plaintiff’s favor, and concludes that
plaintiff’s complaint adequately alleges that defendant is a furnisher for purposes of the FCRA. Cf.
Jarrett, 421 F. Supp. 2d at 1351–52. Therefore, the obligations set forth in 15 U.S.C. § 1681s–2 apply
to defendant as a furnisher of credit information. See Aklagi, 196 F. Supp. 2d at 1192.
Plaintiff claims that there is an existing account in his name at Bank of America, defendant’s
bank, but he never opened or attempted to open the account. (Doc. 1-1, at 1.) Plaintiff states that he
contacted defendant about this account. (Id. at 2.) Plaintiff claims that defendant was negligent by not
taking action to resolve the matter and that he has been unable to continue banking at a preexisting
financial institution because of defendant’s negligence. He claims that this account is negatively
affecting his credit. In plaintiff’s response, he alleges that defendant failed to investigate and resolve
his credit dispute. (Doc. 12, at 1.) Based on these allegations, the court finds that plaintiff is
challenging defendant’s conduct after defendant was notified of plaintiff’s dispute.
Section 1681s–2 of the FCRA identifies two types of obligations owed by furnishers of
information: “those addressing their duty ‘to provide accurate information’ to credit reporting
agencies, as stated in [s]ection 1681s–2(a); and their duty under [s]ection 1681s–2(b), upon receiving
notice of consumer disputes from reporting agencies, to investigate said disputes and report the results
to consumer reporting agencies.” Cox v. Beneficial Kansas, Inc., No. 04-4128-JAR, 2005 WL 627974,
at *3 (D. Kan. Mar. 9, 2005) (internal citation omitted). Plaintiff claims that he notified defendant of
the account, therefore Section 1681s–2(a)(1)(B)(i)—which prohibits furnishers from providing
inaccurate information to CRAs after the furnisher has been notified by the consumer of the
inaccuracy—applies. Id. “Section 1681t(b)(1)(F) of the FCRA provides that ‘[n]o requirement or
prohibition may be imposed under the laws of any State . . . with respect to any subject matter
regulated under . . . section 1681s–2 of this title, relating to the responsibilities of [furnishers] of
information to consumer reporting agencies . . . .’” Id.
Two other courts in this district have held that § 1681t preempts state law claims only to the
extent that defendant’s alleged unlawful actions occurred after defendant received notice of plaintiff’s
dispute. See Cox, 2005 WL 627974 at *3; Aklagi, 196 F. Supp. 2d at 1194–95. Plaintiff claims that
defendant was notified of the dispute and that it neglected to resolve the matter, therefore, plaintiff’s
“neglect and lack of concern for consumer credit” claim is completely preempted by the FCRA and his
motion to remand is denied.
Defendant’s motion to dismiss
Plaintiff proceeds pro se. Defendant argues that plaintiff’s petition fails to meet basic pleading
requirements pursuant to Fed. R. Civ. P. 8. and that plaintiff fails to state his fraud claim with
particularity as required by Fed. R. Civ. 9. (Doc. 10, at 5–6.)
The court construes pro se filings liberally and judges them against a less stringent standard
than pleadings filed by attorneys. Erickson v. Pardus, 551 U.S. 89, 94 (2007); Hall v. Bellmon, 935
F.2d 1106, 1110 (10th Cir. 1991). It is not the proper function of the district court to assume the role
of advocate for a pro se litigant. Whitney v. N.M., 113 F.3d 1170, 1173–74 (10th Cir. 1997). Pro se
litigants are required to follow the same rules as other litigants. Hall v. Witteman, 584 F.3d 859, 864
(10th Cir. 2009) (citing Garrett v. Selby Connor Maddux & Janer, 425 F.3d 836, 840 (10th Cir. 2005).
However, a court may “make some allowances for ‘the pro se plaintiff’s failure to cite proper legal
authority, his confusion of various legal theories, his poor syntax and sentence construction, or his
unfamiliarity with pleading requirements.’” Garrett, 425 F.3d at 840 (quoting Bellmon, 935 F.2d at
Fraudulent business practices
Plaintiff brings a claim for fraudulent business practices. (Doc. 1-1, at 2.) However, plaintiff
alleges no facts that defendant committed any type of fraudulent business practice. “In alleging fraud
or mistake, a party must state with particularity the circumstances constituting fraud or mistake.” Fed.
R. Civ. P. 9(b).
In plaintiff’s response, he notes that defendant has knowledge of the fraudulent account, but
fails to correct the matter. (Doc. 12, at 1.) Plaintiff also claims that defendant’s fraud department
informed him that the only way to resolve the matter was to pay the negative balance in full. (Id. at 2.)
Plaintiff argues that defendant’s failure to take action on the suspicious account amounts to a negligent
and malicious business practice. But these allegations do not state a claim for fraud or suggest that
defendant deceived plaintiff in any way. Plaintiff fails to state a claim for fraud under Rules 9(b) and
12(b)(6); his fraudulent business practices claim is therefore dismissed.
Plaintiff’s FCRA claim consists of two separate claims: (1) defendant, as a furnisher of
information, failed to provide accurate information in violation of § 1681s–2(a); and (2) defendant
failed to investigate the dispute in violation of § 1681s–2(b)(1).
Furnishers are required to provide accurate information to CRAs under 15 U.S.C. § 1681s–2(a).
Jarrett, 421 F. Supp. 2d at 1353 n.2 (D. Kan. 2006). But Congress did not create a private right of
action for violation of this provision. Id. (citing Whisenant v. First Nat’l Bank & Trust Co., 258 F.
Supp. 2d 1312, 1316 (N.D. Okla. 2003)). The FCRA provides that section § 1681s–2(a) “shall be
enforced exclusively . . . by Federal agencies and State officials.” 15 U.S.C. § 1681s–2(d); Cox, 2005
WL 627974 at *5.
On the other hand, § 1681s–2(b) does create a private cause of action by a consumer against a
furnisher of credit information for failing to investigate after receiving notice of a dispute by a CRA.
Tilley v. Glob. Payments, Inc., 603 F. Supp. 2d 1314, 1322 (D. Kan. 2009). A consumer may obtain
his or her actual damages, costs of the action, and attorney’s fees if a furnisher of information is
negligent in failing to comply with a requirement of § 1681s–2(b). Id.
In order to state a claim under § 1681s–2(b)(1), plaintiff must plausibly allege: (1) that after he
notified a CRA of a dispute; (2) the CRA notified defendant, furnisher of the information of the
dispute; and (3) after notification, defendant failed to adequately investigate. See Campbell v. Wells
Fargo Bank, N.A., 73 F. Supp. 3d 644, 651 (E.D.N.C. 2014). Notice by a consumer directly to the
furnisher of the information does not trigger the furnisher’s duties under section 1681s–2(b). Aklagi,
196 F. Supp. 2d at 1193. Instead, the furnisher must be notified by a CRA to trigger the duty. Id.
Defendant claims that plaintiff fails to show that defendant is a “furnisher.” (Doc. 10, at 6.)
For the reasons set out above, the court finds that defendant is a furnisher under the FCRA.
Defendant claims that plaintiff does not allege that he notified a CRA or that a CRA notified
defendant of his dispute. (Doc. 10, at 7–8.) Plaintiff makes no such allegation in his petition. Plaintiff
does state in his response that he contacted two CRAs, Experian and Tans Union, about this dispute.
(Doc. 12, at 2.) Plaintiff further claims that these CRAs informed him that plaintiff’s dispute and
police report had been filed and sent to defendant for review.
Under the plain language of § 1681s–2(b), a furnisher of credit information has a duty to
investigate a dispute only after receiving notice from a CRA—not merely notice from a consumer. See
Aklagi, 196 F. Supp. 2d at 1193; Hasvold v. First USA Bank, N.A., 194 F. Supp. 2d 1228, 1236 (D.
Wyo. 2002) (reasoning that a § 1681s–2(b) private cause of action is available only where the furnisher
received notice of the dispute from a CRA, as opposed to the consumer)). A plaintiff’s FCRA claim is
plausible to the extent that he or she alleges that a furnisher failed to reasonably investigate the dispute
when notified by a CRA. Id.
Here, plaintiff’s petition contains no such allegation. Plaintiff does claim in his response brief
that he notified two CRAs about his dispute and that these CRAs contacted defendant with this
information. “‘[I]f it is at all possible that the party against whom the dismissal is directed can correct
the defect in the pleading or state a claim for relief, the court should dismiss with leave to amend.’”
Brever v. Rockwell International Corp., 40 F.3d 1119, 1131 (10th Cir. 1994) (quoting 6 C. Wright &
A. Miller, Federal Practice & Procedure § 1483, at 587 (2d ed. 1990) and United States v. McGee, 993
F.2d 184, 187 (9th Cir. 1993)). The court therefore grants plaintiff leave to amend his FCRA claim
under § 1681s–2(b).
Defendant argues that identity theft is a crime under Kan. Stat. Ann. § 21-6107 that cannot be
brought in a civil action. (Doc. 10, at 8.) Plaintiff is a private citizen and does not have standing to
bring criminal prosecutions. See Sump v. Schaulis, No. 07-4014-RDR, 2007 WL 1054277, at *1 (D.
Kan. Apr. 9, 2007). Therefore, plaintiff’s claim for identity theft is dismissed.
Defendant claims that plaintiff fails to allege any facts to support a claim based on personal
injury. Plaintiff responds that he was injured from his inability to open up a new account or retain an
active account in good standing as a result of defendant’s conduct. (Doc. 12, at 3).
While plaintiff’s claims show that he was injured as a result defendant’s conduct, plaintiff fails
to plead a separate claim of “personal injury.” Defendant argues that Kansas does not recognize a
stand-alone personal injury cause of action. (Doc. 10, at 8.) Plaintiff does not add any context to his
claim of personal injury and the court will not try to find a factual and/or legal basis for such a claim.
See, e.g., Elstun v. Spangles, Inc., 217 P.3d 450, 453 (Kan. 2009) (“In a personal injury action based
upon negligence, the plaintiff must show ‘the existence of a duty, breach of that duty, injury, and a
causal connection between the duty breached and the injury suffered.’”). Plaintiff fails to sufficiently
plead a personal injury claim under Fed. R. Civ. P. 8(a) and 12(b)(6).
IT IS THEREFORE ORDERED that plaintiff Eric David Keller’s Motion to Remand (Doc.
11) is denied. The court has jurisdiction over plaintiff’s FCRA and supplemental state claims.
IT IS FURTHER ORDERED that defendant Bank of America, N.A.’s Motion to Dismiss
pursuant to Fed. R. Civ. P. 12(b)(6) (Doc. 9) is granted in part and denied in part. The court grants
plaintiff leave to amend his FCRA claim under § 1681s–2(b)(1)—defendant’s duty to investigate after
notice from the CRAs. Plaintiff has until January 31, 2017 to file an amended complaint. If no
amended complaint is filed defendant’s motion will be granted in full and this case will be dismissed
Dated January 13, 2017, at Kansas City, Kansas.
s/ Carlos Murguia
United States District Judge
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