Stone v. Equifax Information Services LLC

Filing 40

ORDER denying 38 Motion for Reconsideration. Signed by Magistrate Judge Elayna J. Youchah on 9/23/2024. (Copies have been distributed pursuant to the NEF - MAM)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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***

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THERESA STONE, individually and on
behalf of all others similarly situated,

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ORDER

Plaintiff,

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Case No. 2:24-cv-00195-GMN-EJY

v.
EQUIFAX INFORMATION SERVICES LLC,
Defendant.

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Pending before the Court is Plaintiff Theresa Stone’s Motion for Reconsideration (ECF No.

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38) that asks the Court to review its Order granting a stay of discovery in this matter (ECF No. 37).

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Plaintiff does not discuss the standard for reconsideration albeit she applies the standard arguing the

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Court misapprehends the facts and law. ECF No. 38 at 2-6.

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I.

The Reconsideration Standard.

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Although not mentioned in any of the Federal Rules of Civil Procedure, motions for

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reconsideration may be brought under both Rules 59(e) and 60(b). Rule 60(b) is not applicable here.

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“Under Rule 59(e), a motion for reconsideration should not be granted, absent highly unusual

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circumstances, unless the district court is presented with newly discovered evidence, committed

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clear error, or if there is an intervening change in the controlling law.” 389 Orange Street Partners

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v. Arnold, 179 F.3d 656, 665 (9th Cir. 1999). United States District Court for the District of Nevada

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Local Rule 59-1 states: “The court possesses the inherent power to reconsider an interlocutory order

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for cause, so long as the court retains jurisdiction. Reconsideration also may be appropriate if (1)

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there is newly discovered evidence that was not available when the original motion or response was

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filed, (2) the court committed clear error or the initial decision was manifestly unjust, or (3) if there

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is an intervening change in controlling law.” This authority, however, “is governed by the doctrine

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that a court will generally not reexamine an issue previously decided by the same or higher court in

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the same case.” Mkhitaryan v. U.S. Bank, N.A., Case No. 2:11-cv-01055-JCM-CWH, 2013 WL

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211091, at *1 (D. Nev. Jan. 18, 2013) citing Lucas Auto. Eng’g, Inc. v. Bridgestone/Firestone, Inc.,

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275 F.3d 762, 766 (9th Cir. 2001).

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II.

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The Court Misstated Plaintiff’s Reference to AES, Which is Apparently a DBA of
PHEAA, but Did Not Misstate the Basis of Plaintiff’s Complaint.

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Plaintiff alleges the Court misapprehended two facts warranting reconsideration. Plaintiff

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says her Complaint asserts “that it was not reasonable for Equifax to rely upon the creditor’s

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information in issuing its credit report because the creditor, a student lender, was not a reasonable

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source.” ECF No. 38 at 2. Plaintiff says she has pointed out to the Court (in opposition to Equifax’s

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Motion to Dismiss) that the Consumer Financial Protection Bureau (“CFPB”) found “private student

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loan servicers such as” Plaintiff’s loan servicer (PHEAA) treated student loans as non-dischargeable

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when such loans were discharged in bankruptcy. Id. Plaintiff argues that whether Equifax’s reliance

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on the information from her loan servicer was reasonable is, therefore, a question of fact. Id.

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More specifically to the reconsideration Plaintiff seeks, she argues the Court made an error

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of fact when it did not recognize her loan servicer as the loan servicer mentioned in an exhibit she

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filed with the Court attached to her Complaint. Id. at 2 citing ECF No. 1, Ex. B, and ECF No. 18,

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Exhibit A. ECF No. 1 is Plaintiff’s Complaint. Exhibit B, one of eight exhibits in a single 142 page

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submission, is Plaintiff’s schedule of creditors filed with the bankruptcy court. This schedule lists

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“AES Bank of America” as a “Student Loan” after which the word “Educational” appears. ECF No.

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1-3 at 9. PHEAA is not mentioned anywhere in Plaintiff’s schedule of creditors. Id. at 7-23. Exhibit

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A to ECF No. 18—Equifax’s Motion to Dismiss—is the Bankruptcy Court Docket. ECF No. 18-2.

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This document mentions neither AES nor PHEAA.

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Nevertheless, Plaintiff argues AES is identified in her Complaint as a trade name for

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PHEAA. ECF No. 38 at 2. This is true. ECF No. 1 ¶ 36. To the extent the Court misstated the

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relationship between PHEAA and AES, the Motion for Reconsideration is granted to correct this

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error.

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Plaintiff argues the Court made a second error of fact when it considered her case based on

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the issuance of a particular credit report when her 140 paragraph Complaint was actually based on

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“the continued reference in Equifax’s records to Plaintiffs’ [sic] debt as past due” or “charged off.”

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ECF No. 38 at 3 citing ECF No. 1 ¶ 51. Here, the Court made no error.

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A review of Plaintiff’s Complaint (ECF No. 1) shows there is no allegation identifying AES,

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which is defined as the “furnisher” of information to Equifax (a credit reporting agency or “CRA”),

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as a source on which Equifax could not rely. Rather, Plaintiff attacks AES as knowing her loan was

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discharged, but not reporting it as such. Id. ¶ 49. Plaintiff then makes the leap that because AES

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should have reported the student loan as discharged, Equifax’s report of the loan as not discharged

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was a violation of the FCRA at 15 U.S.C. § 1681e(b). Id ¶ 59. In between, Plaintiff references two

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complaint letters she sent to Equifax. ECF No. 1-3 at 117, 128. These letters are virtually identical,

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do not mention PHEAA, do not explain why Plaintiff believes the loans were discharged, and do not

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cite to anything in the bankruptcy record or other source on which Equifax was supposed to rely to

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credit her statement as true. Id. Further, Plaintiff admits that Equifax responded to both letters. Id.

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at 121-124, 131-142. These responses show Equifax followed up on each complaint letter received

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from Plaintiff updating the credit report and verifying the information Plaintiff disputed was

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accurate. Id. at 123-24; 135, 137.

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Plaintiff’s two legal claims arise under one statute, 15 U.S.C. § 1681e(b). Id. at 18:25 and

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¶¶ 118-128 (alleging a negligent violation of the statute); at 20:7 and 20-21 ¶¶ 129-139 (alleging a

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willful violation of the statute). 15 U.S.C. § 1681e(b) states: “Whenever a consumer reporting

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agency prepares a consumer report it shall follow reasonable procedures to assure maximum possible

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accuracy of the information concerning the individual about whom the report relates.” (Underlines

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removed.) Plaintiff alleges that “[i]n preparing Credit Reports, Defendant … failed to use reasonable

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procedures to ensure maximum possibly [sic] accuracy of information relating to the discharged

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Non-Qualified Education Loans of Plaintiff and the Class, in violation of 15 U.S.C. § 1681e(b).”

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ECF No. 1 ¶¶ 122, 133. Plaintiff further alleges Equifax “has no procedure at all to evaluate whether

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a student loan is a Qualified Education Loan[] that is non-dischargeable[] or a Non-Qualified

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Education that is discharged in bankruptcy.” Id. ¶¶ 123, 134. Plaintiff goes on to allege Equifax

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inaccurately reports private student loans even after they are discharged in bankruptcy, and that

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Equifax could adopt reasonable procedures “such as by requiring furnishers of credit information to
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indicate through a binary code whether each education loan reported was issued for attendance at a

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Title IV institution” that would then allow a determination of whether the debt was discharged. Id.

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¶¶ 124-25, 135-36.

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After complaining about what her lender (the “furnisher” of information to Equifax) knew,

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Plaintiff alleges “Equifax accepts whatever information is provided by furnishers without having

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any procedure to ensure that reporting of that debt is accurate.” Id. ¶ 70. Plaintiff also alleges

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Equifax did not take “any action to ensure accuracy of dischargeable student loan accounts post-

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bankruptcy, let alone maximum possible accuracy.” Id. ¶ 71.

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In its Motion to Dismiss Equifax argues Plaintiff’s contention can be summarized as

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“Equifax should not have relied on representations by the owner and servicer of her Student Loan

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that it was past due with an outstanding balance,” should have rejected the representations, and

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should have done its own research to determine if Plaintiff’s loan was discharged. ECF No. 18 at 7.

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Equifax, pointing to Plaintiff’s Exhibit C to her Complaint—the Order of Discharge—correctly

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states the Order does not mention Plaintiff’s student loans specifically and instead states “some debts

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are not discharged” including “debts for most student loans.” ECF No. 1-3 at 27. Equifax also

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correctly notes that the docket regarding Plaintiff’s bankruptcy proceeding is silent with respect to

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an adversary proceeding in which Plaintiff seeks a determination that her student loans were

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discharged. ECF No. 18-2. The Court’s Order granting Defendant’s Motion to Stay Discovery

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stated Plaintiff’s Complaint alleges Equifax is a Consumer Reporting Agency that violated the

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FCRA “by failing to maintain reasonable procedures to assure maximum accuracy of information

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contained in her credit report as required by 15 U.S.C. 1681e(b).” ECF No. 37 at 1 (internal quote

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marks omitted).

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Based on the above discussion the Court finds this summary is accurate. The Court was

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correct when it stated PHEAA is not listed as a servicer of Plaintiff’s loan on any of her bankruptcy

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filings; and, Plaintiff points to nothing in the record to the contrary. Instead, Plaintiff points to

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paragraph 36 in her Complaint in which she states AES is a dba of PHEAA. Importantly, Plaintiff’s

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Complaint was filed long after Equifax credit reports were created based on then-available

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information. Further, even assuming Plaintiff’s reference to PHEAA as an entity the CFPB
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determined improperly failed to report the discharge of student loans, Plaintiff does not offer

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evidence that this fact was part of any information reasonably available to Equifax within the

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confines of the law to which it is bound under 15 U.S.C. § 1681e(b). The Court finds there is no

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error in fact requiring revision to its decision to stay discovery.

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III.

The Court Did Not Misapprehend the Law.

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Plaintiff argues the Court’s reliance on Gauci v. Citi Mortgage, Case No. 2:11-cv-1387, 2012

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WL 1535654 (C.D. Cal. Apr. 30, 2012), was misplaced. 1 ECF No. 38 at 4. The court in Gauci

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plainly states: “In the Ninth Circuit, credit reports are considered accurate under the FCRA where

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the credit reporting agencies correctly report information furnished by the creditor, even when there

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is a pending legal dispute between plaintiff and creditor as to the validity of the debt.” Gauci, 2012

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WL 1535654 at *5. Plaintiff says, despite this language, it was unreasonable for Equifax to rely on

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PHEAA’s report that her loan was past due. ECF No. 38 at 5. Plaintiff argues the language of Gauci

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is taken out of context in her case because Gauci relies on Cravallo v. Equifax Info. Servs., LLC, 629

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F.3d 876 (9th Cir. 2010), which Grigoryan v. Experian Info Sol. Inc., 84 F.Supp.3d 1044 (C.D. Cal.

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2014), says was misinterpreted. Id. Plaintiff contends the issue in neither her case nor in Grigoryan

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was an ongoing legal dispute. Id. at 4-5. Instead, Plaintiff says the information reported by her

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lender was “objectively false information.” Id. at 5. Interestingly, Plaintiff does not cite the

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objective false information or the evidence that demonstrate the false information was, in fact,

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objectively (patently) false. Id. at 5-6. Plaintiff also cites only a portion of the Grigoryan decision.

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Id. at 5.

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The Court in Grigoryan explains that in Cravallo and Gauci, as is true here, there was a clear

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dispute regarding whether the report of the underlying debt was accurate. 84 F.Supp.3d at 1066.

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Grigoryan goes on to state, credit reporting agencies are “ill-suited” to resolve such disputes. Id.

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Grigoryan does state the fact of the dispute in that case did not stop the plaintiff from “making a

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prima face showing” that information on her credit report was factually inaccurate. Id. However,

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the distinction Grigoryan draws, which Plaintiff ignores, is between patent errors and latent errors

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in a credit report. Id. at 1066-67 (citing Starkey v. Experian Solutions, Inc., 32 F.Supp.3d 1105 (C.D.

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Plaintiff misidentifies the title of this case as “Gauche.” ECF No. 38 at 4:1.
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Cal. 2014). In Grigoryan, the court held credit report agencies do not violate 15 U.S.C. § 1681e(b)

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when they “accurately transcribe … information received from a source that the … [agencies]

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reasonably believe[] to be reputable, and which is credible on its face …” Id. at 1067-68 (collecting

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cases). Moreover, Grigoryan takes pains to make clear it is not unreasonable for CRAs to rely on

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information provided by creditors even when the information contains errors. Id. at 1068.

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Here, the evidence Plaintiff points to suggesting Equifax could not rely on what AES reported

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is a report that post-dates one credit report at issue and, in any event, does not mention PHEAA.

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Compare ECF No. 1-3 at 12 (dated January 26, 2023) and ECF No. 25-2. Further “[t]he fact that

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the information may have been inaccurate does not demonstrate … [Equifax] did not employ

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reasonable procedures to ensure the accuracy of the information under § 1681e(b) … as its

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obligations under … the … statute relate to the maintenance and operation of its own internal

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database rather than to investigation of the accuracy of information received from external sources.”

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Grigoryan, 84 F.Supp.3d at 1068 (internal citation omitted). Importantly, as explained in Ashcraft

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v. Welk Resort Group, Corp., Case No. 2:16-cv-02978-JAD-NJK, 2021 WL 950658, at *10 (D. Nev.

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Mar. 12, 2021), “[t]he Ninth Circuit has not interpreted the … [FCRA] as requiring CRAs to

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determine if a debt has been discharged when obtaining information or reinvestigating a consumer’s

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dispute.” See also Cristobal v. Equifax, Inc., Case No. 16-cv-06329-JST, 2017 WL1489274, at *3

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n.4 (N.D. Cal. Apr. 26, 2017) (noting that the FCRA does not require CRAs to “act as a tribunal or

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‘scour’ a bankruptcy file and make judgments about which debts are included”).
The above demonstrates the Court made no error of law. In the absence of an error in law,

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together with an immaterial error of fact, the Court finds no basis for reconsideration.

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IV.

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Order
Accordingly, IT IS HEREBY ORDERED that Plaintiff’s Motion for Reconsideration (ECF

No. 38) is DENIED.
Dated this 23rd day of September, 2024.

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ELAYNA J. YOUCHAH
UNITED STATES MAGISTRATE JUDGE
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