Alston v. Equifax Information Services, LLC

Filing 43

MEMORANDUM OPINION. Signed by Judge George Levi Russell, III on 2/11/14. (dass, Deputy Clerk)(c/m 2/11/14-das)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
KIMBERLY ANN ALSTON,

:

Plaintiff,

:

v.

:
Civil Action No. GLR-13-934

EQUIFAX INFORMATION SERVICES,
LLC, et al.,

:
:

Defendants.
:
MEMORANDUM OPINION
THIS MATTER is before the Court on Plaintiff’s, Kimberly
Ann

Alston,

Motion

to

Strike

Defendant

Experian

Information

Solutions, Inc.’s Affirmative Defenses Pursuant to Rule 12(f)
(“Motion to Strike”) (ECF No. 25), and Defendant’s, Dimensions
Health

Corporation

d/b/a

Prince

George’s

Hospital

Center

(“DHC”), Motion to Dismiss or, in the Alternative, for Summary
Judgment (“Motion to Dismiss”) (ECF No. 31).
before

the

Court

are

whether

Experian’s

The questions

affirmative

defenses

should be stricken for failure to plead within the Twombly and
Iqbal standards, and whether Ms. Alston’s claims against DHC
under

the

Maryland

Consumer

Protection

Act

and

the

Maryland

Consumer Debt Collection Act are preempted by the Fair Credit
Reporting

Act.

The

issues

have

been

fully

briefed

and

hearing is necessary. See Local Rule 105.6 (D.Md. 2011).
the reasons below, both Motions will be granted.

no
For

BACKGROUND1

I.

In November 2006, Ms. Alston received treatment at Prince
George’s

Hospital

Center

Patient

Financial

and

Services

was

billed

division

accordingly.

forwarded

Ms.

DHC’s
Alston’s

account to the United Collection Bureau, Inc. (“UCB”), DHC’s
contracted collections agency, on February 23, 2007.
At the time DHC forwarded the account, there allegedly was
an outstanding balance of $299.30.

UCB attempted to collect the

debt, but Ms. Alston disputed the amount owed on three separate
occasions.2

On each occasion, UCB investigated Ms. Alston’s

claim and determined it was without merit.
collect

on

the

debt

for

five

years,

UCB

After attempting to
stopped

collection

attempts because the statute of limitations would bar any legal
claim.
In the Complaint and her Opposition to the pending Motion,
Ms. Alston alleges she satisfied the debt and confirmed that
fact with DHC.

She does not, however, specify in either the

Complaint or her Opposition when the debt was satisfied.

1

She

Unless otherwise noted, the following facts are taken from
the Second Amended Complaint and the statement of undisputed
facts in DHC’s Motion to Dismiss. The well-pled allegations in
the Second Amended Complaint are accepted as true and viewed in
the light most favorable to Ms. Alston. See Erickson v. Pardus,
551 U.S. 89, 94 (2007) (citing Bell Atl. Corp. v. Twombly, 550
U.S. 555-56 (2007)).
2
On October 25, 2011, and October 27, 2011, Ms. Alston
stated the account was not her debt.
On May 29, 2012, Ms.
Alston claimed she was unaware of the account.
2

further alleges she did not realize DHC was still claiming the
debt until she viewed her credit report a number of years later.
The Complaint avers Equifax and Experian inaccurately published
the UCB account and, notwithstanding her disputes, verified the
account without proper investigation.
On February 5, 2013, Ms. Alston filed suit against Equifax
in

the

Circuit

Court

for

Prince

George’s

County,

Maryland,

alleging, inter alia, violations of the Fair Credit Reporting
Act (“FCRA”), 15 U.S.C. §§ 168li(a)(1) & (a)(5)(A) (2012).
No. 2).
Court.

(ECF

On March 27, 2013, Equifax removed the action to this
(ECF No. 1).

After obtaining leave from the Court, Ms.

Alston amended her Complaint, adding Experian as a Defendant.
(ECF Nos. 10, 11).
leave

from

the

On August 12, 2013, Ms. Alston again sought

Court

to

file

a

second

amendment

Complaint, which the Court granted on August 15.
22).

to

her

(ECF Nos. 20,

The Second Amended Complaint added DHC as a Defendant and

alleged

violations

2(b)(1)(A),(D),

&

of

(E);

the
the

FCRA,

Maryland

15

U.S.C.

Consumer

§

1681s-

Protection

Act

(“MCPA”), Md. Code Ann., Com. Law § 13-301(14)(iii) (West 2014);
and the Maryland Consumer Debt Collection Act (“MCDCA”), Md.
Code Ann., Com. Law § 14-202(3) (West 2014).

(ECF No. 20-2).

After Experian filed its Answer on September 11, 2013, Ms.
Alston filed the pending Motion to Strike.

(ECF Nos. 24, 25).

DHC filed its Motion to Dismiss on October 16, 2013.
3

(ECF No.

31).

In the Opposition to DHC’s pending Motion, Ms. Alston

withdrew her FCRA claim as to DHC.

(ECF No. 37).

On January 2,

2014, pursuant to a stipulation agreement, the Court dismissed
Ms. Alston’s claims against Equifax with prejudice.

(ECF No.

42).
II.
A.

DISCUSSION

Motion to Strike
1.

Standard of Review

Ms. Alston moves to strike Experian’s affirmative defenses
pursuant to Rule 12(f) of the Federal Rules of Civil Procedure.
A “court may strike from a pleading an insufficient defense or
any redundant, immaterial, impertinent, or scandalous matter.”
Fed.R.Civ.P.
discretion

12(f).

in

Although

determining

the

whether

court

to

strike

maintains
an

wide

affirmative

defense, see Haley Paint Co. v. E.I. Du Pont De Nemours & Co,
279

F.R.D.

331,

336

(D.Md.

2012),

“Rule

12(f)

motions

are

generally viewed with disfavor because striking a portion of a
pleading is a drastic remedy and because it is often sought by
the movant simply as a dilatory tactic.”

Waste Mgmt. Holdings,

Inc. v. Gilmore, 252 F.3d 316, 347 (4th Cir. 2001) (quoting 5A
Charles

Alan

Wright

&

Arthur

R.

Miller,

Procedure § 1380, 647 (2d ed. 1990)).

4

Federal

Practice

&

2.

Analysis

The Court will grant Ms. Alston’s Motion to Strike, but
will

also

grant

Experian

leave

to

amend

its

affirmative

defenses.
Ms.

Alston

avers

the

Court

must

strike

Experian’s

affirmative defenses because they fail to adhere to the pleading
standards articulated in Bell Atl. Corp. v. Twombly, 550 U.S.
544,

555

(2009).

(2007),

and

Ashcroft

v.

Iqbal,

556

U.S.

662,

678

Experian counters that the Twombly and Iqbal standards

do not apply to affirmative defenses.

Experian also argues its

affirmative defenses meet the Rule 8 pleading requirement.
Neither

the

U.S.

Supreme

Court

Appeals have addressed this issue.

nor

any

U.S.

Courts

of

As a result, there is a

split within, and outside of, the District of Maryland regarding
the applicability of Twombly and Iqbal to affirmative defenses.
Some judges within this District have found that the standards
do apply, while other judges have either reached an inconclusive
determination
applicable.

or

have

concluded

that

the

standards

are

not

See Lockheed Martin Corp. v. U.S., --- F.Supp.2d --

-, No. 8:12-cv-03725-AW, 2013 WL 5405654, at *2 (D.Md. Sept. 26,
2013) (collecting cases).

The majority view, which this Court

adopts, is that affirmative defenses must meet the Twombly and
Iqbal standards because defendants should be held to the same
pleading standard as plaintiffs and boilerplate defenses compel
5

counsel to conduct unnecessary discovery.

See id.; see also

Bradshaw v. Hilco Receivables, LLC, 725 F.Supp.2d 532, 535-36
(D.Md. 2010).

Under this standard, affirmative defenses must

“ensure

that

factual

basis

Haley

Paint

an

opposing

for

Co.,

an

party

assertion

279

F.R.D.

at

receives
contained
336

fair
in

notice
a

(quoting

[]

of

the

defense.”

Bradshaw,

725

F.Supp.2d at 536).
In this case, Ms. Alston alleges Experian violated the FCRA
by failing to conduct a reasonable investigation of her disputes
before

reporting

the

account

as

accurate

and

by

failing

to

promptly delete the collections account following Ms. Alston’s
May 2012 dispute.

(2d Am. Compl. ¶¶ 17-18, ECF No. 20-2).

In

its Answer, Experian propounds five3 affirmative defenses:
1. The

Second

Amended

Complaint

fails

to

state

a

claim

against Experian upon which relief can be granted.;
2. If Plaintiff suffered any damages or injury, they were not
proximately caused by any act or omission of Experian, but
instead, if incurred, were proximately caused by the acts
or omissions of others or by Plaintiff.;
3. While

completely

Experian,

while

denying

any

maintaining

3

negligence

on

that

did

it

its
not

part,
act

Experian
acknowledges
the
“sixth
defense”
is
a
typographical error.
(See Experian’s Opp’n to Pl.’s Mot. to
Strike Affirmative Defenses at 7 n.3, ECF No. 36).
6

negligently, avers, that Plaintiff’s action is barred by
the doctrine of contributory negligence.;
4. Plaintiff’s
claim

for

Experian

Second
relief

states

Amended
for

Complaint

punitive

that

fails

damages.

punitive

damages

to

state

a

Additionally,
violate

its

constitutional rights under the United States Constitution
and any applicable state constitution or applicable law.;
and
5. Plaintiff’s claims are barred, in whole or in part, by the
applicable statute of limitations.
(Experian’s Answer at 5-6, ECF No. 24).

Each of Experian’s

affirmative

without

defenses

must

be

stricken,

prejudice,

because they fail to provide fair notice of the factual basis
for the assertions presented.
Accordingly,
Strike.

the

Experian,

affirmative defenses.

Court

however,

grants
is

Ms.

granted

Alston’s

Motion

leave

amend

to

to
its

See Bradshaw, 725 F.Supp.2d at 535 (“when

affirmative defenses are stricken, the defendant should normally
be granted leave to amend.” (citing Banks v. Realty Mgmt. Serv.,
Inc., No. 1:10cv14 (JCC/TCB), 2010 WL 420037, at *1 (E.D.Va.
Jan. 29, 2010))).

7

B.

Motion to Dismiss
1.

Standard of Review

The

purpose

of

a

motion

to

dismiss

filed

pursuant

to

Federal Rule of Civil Procedure 12(b)(6) is to test the legal
sufficiency of a complaint.

Edwards v. City of Goldsboro, 178

F.3d 231, 243 (4th Cir. 1999).

Pursuant to Federal Rule of

Civil Procedure 8(a)(2), a complaint need only contain “a short
and plain statement of the claim showing that the pleader is
entitled to relief, in order to give the defendant fair notice
of what the . . . claim is and the grounds upon which it rests.”
Twombly, 550 U.S. at 555 (quoting Conley v. Gibson, 355 U.S. 41,
47 (1957)).
In

considering

construe

the

a

Rule

complaint

in

12(b)(6)
the

light

motion,
most

this

Court

favorable

to

must
the

plaintiff, read the complaint as a whole, and take the facts
asserted therein as true.

See Harrison v. Westinghouse Savannah

River Co., 176 F.3d 776, 783 (4th Cir. 1999). However, “[a]
pleading

that

offers

labels

and

conclusions

or

a

formulaic

recitation of the elements of a cause of action will not do.”
Ashcroft, 556 U.S. at 678 (2009) (citing Twombly, 550 U.S. at
555).

A complaint is also insufficient if it relies upon “naked

assertions devoid of further factual enhancement.”
U.S.

at

678

(quoting

Twombly,

quotation marks omitted).
8

550

U.S.

at

557)

Iqbal, 556
(internal

2.

Analysis

DHC argues Ms. Alston is unable to state a claim to relief
under the MCDCA or MCPA because both claims are preempted by the
FCRA.4

The Court agrees.

The doctrine of preemption is derived from the Supremacy
Clause, which provides “the Laws of the United States . . .
shall be the supreme Law of the Land.”
2.

U.S. Const. art. VI, cl.

The Supremacy Clause permits Congress to preempt state law

through express terms.
Med.

Labs.,

Inc.,

Hillsborough Cnty., Fla. v. Automated

471

U.S.

707,

713

(1985).

When

Congress

originally enacted the FCRA, the statute preempted only those
state laws in conflict with its provisions.

See Ross v. Fed.

Deposit

(4th

Ins.

Co.,

625

F.3d

808,

812-13

Cir.

2010)

(explaining the original version of the preemption provision in
15 U.S.C. § 1681t preempted state laws to the extent they were
inconsistent
amendments
§ 1681t,
provision.

with
to

the

any

of

FCRA,

significantly
Id. at 813.

the

FCRA’s

however,

provisions).

added

strengthening

the

The

subsection
Act’s

(b)

1996
to

preemption

This allowed for the preemption of,

4

DHC also avers that, due to Ms. Alston’s withdrawal of her
FCRA claim against it, this Court may not exercise jurisdiction
over her claims under neither federal question jurisdiction, 28
U.S.C. § 1331, nor diversity jurisdiction, 28 U.S.C. § 1332.
Although Ms. Alston withdrew her FCRA claim as to DHC, that
claim remains live as to Experian, giving this Court original
jurisdiction over the action under § 1331 and allowing the Court
to exercise supplemental jurisdiction over the pendent state law
claims against DHC pursuant to 28 U.S.C. § 1367(a).
9

among

other

things,

claims

related

to

the

information to consumer reporting agencies.

furnishing

of

Id.

The FCRA also contains a conflicting preemption provision
at 15 U.S.C. § 1681h(e).

Several district courts within the

Fourth Circuit have reconciled the conflict between § 1681t(b)
and

§

1681h(e)

by

adopting

preemption provisions.

a

“statutory”

approach

to

these

See Beuster v. Equifax Info. Servs., 435

F.Supp.2d 471, 478-79 (D.Md. 2006) (collecting cases); Jeffery
v. Trans Union, LLC, 273 F.Supp.2d 725, 727–28 (E.D.Va. 2003)
(explaining and applying statutory approach); Alabran v. Capital
One Bank, No. 3:04CV935, 2005 WL 3338663, at *5 (E.D.Va. Dec. 8,
2005)

(adopting

statutory

approach

as

outlined

in

Jeffery);

Barnhill v. Bank of Am., N.A., 378 F.Supp.2d 696, 703-04 (D.S.C.
2005) (discussing and applying statutory approach); Johnson v.
MBNA Am. Bank Nat’l Ass’n, No. 1:05CV00150, 2006 WL 618077, at
*7 (M.D.N.C. Mar. 9, 2006) (discussing and applying statutory
approach).

This

approach

posits

§

1681t(b)

applies

to

state

statutory provisions, while § 1681h(e) applies to state common
law claims.
Section

Beuster, 435 F.Supp.2d at 479.
1681t(b)(1)(F)

expressly

preempts

all

state

law

claims arising from a breach of the responsibilities contained
in 15 U.S.C. § 1681s-2, which applies to “persons who furnish
information

to

consumer

U.S.C. § 1681t(b)(1)(F).

reporting

agencies.”

15

Under § 1681s-2(a)(1)(A), a furnisher
10

of

information

is

prohibited

from

providing

to

a

consumer

reporting agency (“CRA”) information he knows is not accurate.
Similarly,

the

MCDCA

prohibits

a

collector

from

disclosing

“information which affects the debtor’s reputation for credit
worthiness with knowledge that the information is false.” Md.
Code Ann., Com. Law § 14-202(3).

The MCDCA defines a collector

as a “person collecting or attempting to collect an alleged debt
arising out of a consumer transaction.”

Id. § 14-201(b).

statute’s definition of a person includes corporations.

The
Id.

§ 14-201(d).
Applying

the

statutory

preemption

approach

outlined

in

Beuster to the present case, Ms. Alston’s MCDCA and MCPA claims
against

DHC

are

§ 1681t(b).

directly

preempted

by

the

language

of

Ms. Alston alleges DHC’s referral of the debt to

UCB, which was subsequently listed on her credit reports as a
collections account, was a knowing disclosure of false credit
information that harmed her creditworthiness.

Both § 1681s-

2(a)(1)(A) and § 14-202(3) contemplate the prevention of knowing
disclosures of false credit information to CRAs because of the
potential

harm

Nevertheless,

to

Congress’s

an

individual’s

intent

in

§

creditworthiness.

1681t(b)

is

clear

that

§ 1681s-2(a)(1)(A) preempts any state law claims related to such
knowing

disclosures.

See,

e.g.,

Ross,

625

F.3d

at

817

(explaining that claims relying on the reporting of false credit
11

information to the CRAs under North Carolina’s analogue to the
MCDCA are preempted by § 1681t(b)(1)(F)).
Accordingly,

Ms.

Alston

cannot

state

a

claim

under

the

MCDCA because her claim falls squarely within the language of
§ 1681t(b)(1)(F) and is, therefore, preempted.

Additionally,

Ms. Alston has failed to state a claim under the MCPA because
that

claim

MCDCA.

is

premised

upon

DHC’s

alleged

violation

See Md. Code Ann., Com. Law § 13-301(14)(iii).

of

the

DHC is,

therefore, dismissed from this action.
III. CONCLUSION
For

the

foregoing

reasons,

the

Court

will,

by

separate

Order, GRANT Ms. Alston’s Motion to Strike Defendant Experian
Information Solutions, Inc.’s Affirmative Defenses Pursuant to
Rule 12(f) (ECF No. 25), and GRANT DHC’s Motion to Dismiss or,
in the Alternative, for Summary Judgment (ECF No. 31).
Entered this 11th day of February, 2014
/s/
_____________________________
George L. Russell, III
United States District Judge

12