McDaniel v. Liberty Mutual Insurance Company et al
ORDER granting with prejudice 96 Motion to Dismiss claims against the LM Defendants; granting with prejudice 96 Motion to Dismiss for Failure to State a Claim against the LM Defendants; granting in part and denying in part 102 Motion to Dismiss claims against MIB Group, Inc. Signed by District Judge Frank D. Whitney on 1/18/2023. (clc)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NORTH CAROLINA
TIGRESS SYDNEY ACUTE MCDANIEL,
COMPANY et al.,
THIS MATTER is before the Court on Defendants’ Motions to Dismiss Plaintiff’s Third
Amended Complaint (“TAC”), (Docs. Nos. 96, 102) for Failure to State a Claim pursuant to Rule
12(b)(6) of the Federal Rules of Civil Procedure. These motions have been fully briefed and are
ripe for review. For the reasons set forth below, the Liberty Mutual Defendants’1 (“LM”) Motion
to Dismiss is GRANTED and Plaintiff’s claims against LM are DISMISSED WITH PREJUDICE;
Defendant MIB Group, Inc.’s (“MIB”) Motion to Dismiss is GRANTED IN PART with respect
to Plaintiff’s claims under 42 U.S.C. § 1981, 42 U.S.C. § 1986, North Carolina gross negligence
law, North Carolina defamation law, and § 1681e(b) of the Fair Credit Reporting Act (“FCRA”),2
which are DISMISSED WITH PREJUDICE, and DENIED IN PART with regard to Plaintiff’s
claims under § 1681g(a)(1) and § 1681i(a) of the FCRA.
All Defendants other than MIB Group, Inc., including: Liberty Mutual Insurance Company; Liberty Mutual Fire
Insurance Company; Liberty Mutual Capital Corporation; Liberty Mutual Equity Corporation; Liberty Mutual Equity,
LLC; Liberty Mutual Foundation, Inc.; Liberty Mutual Asset Management, Inc.; Liberty Mutual Group, Inc.; Liberty
Mutual Holdings Company, Inc.; Liberty Mutual Investment Advisors, LLC; Liberty Mutual Managed Care, LLC;
Liberty Mutual Managed Care, Inc.; Liberty Mutual Mid-Atlantic Insurance Company; Liberty Mutual Personal
Insurance Company; LM Insurance Corporation.
15 U.S.C. § 1681 et seq.
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On June 2, 2022, pro se3 Plaintiff Tigress McDaniel (“Plaintiff”) filed her TAC against
Defendants LM and MIB (collectively “Defendants”). (Doc. No. 91). In her TAC, Plaintiff
asserts five causes of action: (1) the violation of her rights under 42 U.S.C. § 1981; (2) the violation
of her rights under 42 U.S.C. § 1986; (3) violations of the FCRA; (4) Gross and Vicarious
Negligence under North Carolina law; and (5) Defamation under North Carolina law. (Id. at 3).
In 2019, Plaintiff sought and received renter’s and car insurance from LM, which she
subsequently terminated due to her suspicion of discriminatory underwriting practices resulting in
unfairly high premiums. Id. at 3–4. Specifically, Plaintiff alleges that, as an “African American
or Black or Black American or Diasporan African, of Haitian and Native American dissent,” she
was subjected to unlawful “[i]nsurance racial stratification” by Defendants. Id. at 6, 14. On
September 9, 2019, Plaintiff alleges she received notice from credit bureaus of an outstanding debt
of $434.00 to LM. Id. at 4. Plaintiff originally disputed this balance with Defendants, and, after
being denied a life insurance policy from United of Omaha Life Insurance Company due to her
criminal record, requested full disclosure of her MIB Consumer File. Id. On March 24, 2021,
Plaintiff received a copy of her MIB Consumer File, which she alleges contained “wholly or
partially falsified, inaccurate and/or otherwise misrepresentatively [sic] duplicative reports of
In her Response to Defendant MIB’s Motion to Dismiss, Plaintiff appears to take issue with Defendants’ and this
Court’s use of the term “pro se” in that the use of this term indicates prejudicial bias or implied discrimination.
Plaintiff alleges that this Court’s July 18, 2022, “Roseboro Order and Notice,” (Doc. No. 108), demonstrated an
“implicit bias against pro se litigants.” (Doc. No. 110, p. 2).
The Court notes, however, that the term “pro se” is a legal term of art that means “for oneself,” “on one’s own behalf,”
or “without a lawyer.” Pro Se, BLACK’S LAW DICTIONARY (11th ed. 2019). This term merely indicates that a party
is proceeding without a lawyer, and that as such, they must be held to less stringent standards than licensed attorneys.
Haines v. Kerner, 404 U.S. 519, 520 (1972) (per curiam); see also Engle v. U.S., 736 F. Supp. 670, 671–72 (D. Md.
1989). Thus, contrary to Plaintiff’s contentions, her status as a pro se litigant has no relevance to the merits of
Defendants’ Motions to Dismiss.
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criminal activity in her file,” as well as the disputed debt, which had been furnished to MIB by
LM. Id. at 4–5. Plaintiff was convicted of Identity Theft and Obtaining Property by False
Pretenses in Cabarrus County in 2006. Id. at 15. Plaintiff mentions a defamation suit she alleges
to have filed in connection with the Charlotte Observer’s reporting on her convictions, but she
does not mention any direct appeal of these convictions. Id. Plaintiff submitted new disputes to
Defendants on July 15, 2021, and subsequently filed her original complaint on November 10, 2021,
(Doc. No. 1), after LM ‘“maintain[ed] its position”’ on the $434.00 balance and MIB failed to
respond to her dispute. (Doc. No. 91, p. 5).
This Court granted Plaintiff’s request to proceed in forma pauperis, (Doc. No. 2), and
during its subsequent review,4 dismissed without prejudice plaintiff’s § 1985 and § 1986 claims
against all defendants, as well as Plaintiff’s FCRA claim against LM, while allowing Plaintiff’s
FCRA claim against MIB and her negligence claims against Defendants to proceed.5 (Doc. No.
4, § III). Plaintiff’s first Motion for Leave to Amend her Original Complaint was granted on
February 2, 2022. (Doc. No. 40). Plaintiff filed her First Amended Complaint on March 3, 2022,
(Doc. No. 41). This Court construed her Second Amended Complaint, (Doc. No. 86), as a Motion
for Leave to Amend, which the Court granted with caution to Plaintiff that “she will not be given
a third opportunity to amend her complaint absent extraordinary circumstances.” (Doc. No.
90, p. 3).
On June 3, 2022, Plaintiff filed her TAC. (Doc. No. 91). Defendants LM moved to Dismiss
Plaintiff’s TAC on June 16, 2022, (Docs. Nos. 96, 97), and Defendant MIB moved to Dismiss
After granting a plaintiff’s petition to proceed in forma pauperis, the Court must review the complaint to determine
whether it is subject to dismissal on the grounds that it is “frivolous or malicious [or] fails to state a claim on which
relief may be granted.” 28 U.S.C. § 1915(e)(2).
Plaintiff did not make a claim for defamation in her original complaint.
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Plaintiff’s TAC on July 7, 2022. (Docs. Nos. 102, 103). Plaintiff responded to LM’s Motion to
Dismiss on July 15, 2022, (Doc. No. 105), and LM filed its Reply on July 21, 2022, (Doc. No.
109). Plaintiff responded to MIB’s Motion to Dismiss on July 22, 2022, (Doc. No. 110), and MIB
filed its reply on July 28, 2022, (Doc. No. 112). Plaintiff also filed two Motions for Leave to File
Sur-Reply, (Docs. Nos. 111, 113), which this Court denied.6
Standard of Review
Rule 12(b)(6) of the Federal Rules of Civil Procedure provides that a motion may be
dismissed for failure to state a claim upon which relief can be granted. A Rule 12(b)(6) inquiry is
limited to determining if the pleader’s allegations constitute “a short and plain statement of the
claim showing the pleader is entitled to relief.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). To
survive a 12(b)(6) motion to dismiss, Plaintiff’s “complaint must contain sufficient factual matter,
accepted as true, to state a claim to relief that is plausible on its face.” Id. (quoting Bell Atlantic
Pursuant to the principles set forth in Roseboro v. Garrison, 528 F.2d 309, 310 (4th Cir. 1975), following Defendants’
Motions to Dismiss, this Court issued a Roseboro Order and Notice to advise Plaintiff of the burden she carried in
responding to those motions. (Doc. No. 108). Plaintiff, in her response to Defendant MIB’s Motion, also responded
to the Court’s Roseboro Order and Notice, writing:
Regarding Judge Whitney’s July 18, 2022 notice and order, oddly implying that Plaintiff is to be
likened to the supposedly uninformed or otherwise underinformed Plaintiff inmate in the case upon
which he attempts to establish a basis for a misplaced and markedly undue sua sponte warning and
directive to Plaintiff, and likely purported to be exercised in his discretionary authority, as opposed
to implicit bias against pro se litigants . . . .”
(Doc. No. 110, p. 2). Following Roseboro, the Fourth Circuit has “has held that pro se litigants are entitled to specific
notice of the consequences of various legal actions.” Carter v. Hutto, 781 F.2d 1028, 1033 (4th Cir. 1986); see e.g.,
Wright v. Collins, 766 F.2d 841 (4th Cir. 1985); Davis v. Zahradnick, 600 F.2d 458 (4th Cir. 1979); Hudson v. Hardy,
412 F.2d 1091 (D.C. Cir. 1968). The purpose of a Roseboro notice is to advise a pro se litigant of her right to respond
and to alert her to the fact that failure to do so might result in the entry of judgment against her. Davis, 600 F.2d at
460. As such, “the Roseboro notice must be sufficiently clear to be understood by a Pro se litigant and calculated to
apprise [her] of what is required” of her. Id. This Court filed its Roseboro Order and Notice to do so in compliance
with the Fourth Circuit’s directive not because this Court was implying Plaintiff was “uninformed or underinformed,”
but because Plaintiff is proceeding pro se—without a lawyer. As discussed above, Plaintiff’s pro se status carries
with it only the fact that she is litigating on her own behalf without the assistance of a trained lawyer and does not
indicate any implicit bias against pro se litigants by this Court.
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Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Facial plausibility exists only when the factual
content allows a court to draw the reasonable inference that the defendant is liable for the
misconduct. Iqbal 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). The Court must draw all
reasonable factual inferences in favor of the party asserting the claim. Priority Auto Grp., Inc. v.
Ford Motor Co., 757 F.3d 137, 139 (4th Cir. 2014).
In a Rule 12(b)(6) analysis, the Court must separate facts from legal conclusions, as mere
conclusions are not entitled to a presumption of truth. Iqbal, 556 U.S. at 678. Importantly,
“[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory
statements, do not suffice.” Id. However, well-pled factual allegations are entitled to a presumption
of truth, and the court should determine whether the allegations plausibly give rise to an entitlement
to relief. Id. at 679.
Complaints written by pro se plaintiffs are construed liberally in favor of the plaintiff, so
courts will hold a pro se plaintiffs’ documents “to a less stringent standard than those drafted by
attorneys.” See Smith v. Greenville Cnty. Sch. Dist., No. 6:10-2478, 2010 WL 4484099 at *1
(Oct. 5, 2010) (citing Erickson v. Pardus, 551 U.S. 89 (2007); Estelle v. Gamble, 429 U.S. 97
(1976)). However, even under this less stringent standard, “the pro se complaint is subject to
summary dismissal” if the court is unable to “reasonably read the pleadings to state a valid claim
on which plaintiff could prevail” without “construct[ing] plaintiff’s legal arguments for her.” Id.
(citing Small v. Endicott, 988 F.2d 411, 417-18 (7th Cir. 1993). To survive a Rule 12(b)(6) motion,
a pro se complaint must allege sufficient facts to support all the legal elements of the claim. Bass
v. E.I. Dupont de Nemours & Co., 324 F.3d 761 (4th Cir. 2003) (“While a plaintiff is not charged
with pleading facts sufficient to prove her case, as an evidentiary matter, in her complaint, a
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plaintiff is required to allege facts that support a claim for relief.” (emphasis in original)); see also
Iqbal, 556 U.S. at 678 (“Threadbare recitals of the elements of a cause of action, supported by
mere conclusory statements, do not suffice.”).
Finally, a court has the discretion to dismiss under Rule 12(b)(6) either with or without
prejudice. See Ostrzenski v. Seigel, 177 F.3d 245, 252–53 (4th Cir. 1999). The Fourth Circuit
has held that:
A dismissal under Rule 12(b)(6) generally is not final or on the merits and the court
normally will give plaintiff leave to file an amended complaint. The federal rule
policy of deciding cases on the basis of the substantive rights involved rather than
on technicalities requires that plaintiff be given every opportunity to cure a formal
defect in his pleading. This is true even though the court doubts that plaintiff will
be able to overcome the defects in his initial pleading. Amendment should be
refused only if it appears to a certainty that plaintiff cannot state a claim. The better
practice is to allow at least one amendment regardless of how unpromising the
initial pleading appears because except in unusual circumstances it is unlikely that
the court will be able to determine conclusively on the face of a defective pleading
whether plaintiff actually can state a claim.
Id. (quoting 5A Charles Allen Wright & Arthur R. Miller, Federal Practice and Procedure § 1357,
at 360–67 (2d ed. 1990)) (emphasis omitted). Thus, even where a plaintiff is proceeding pro se, a
court may refuse to allow amendments to the pleadings where permitting proposed changes would
be futile, and in such cases dismissal with prejudice is appropriate. Id.; see also Foman v. Davis,
371 U.S. 178, 182 (1962) (holding that permissible reasons for denying leave to amend pleadings
include “repeated failure to cure deficiencies by amendments previously allowed . . . [and] futility
Plaintiff, in her TAC, asserts five claims for relief, stemming from violations under 42
U.S.C. § 1981, 42 U.S.C. § 1986, North Carolina defamation law, North Carolina gross negligence
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law, and the FCRA. Defendants move for dismissal of all Plaintiff’s claim, arguing her TAC fails
to state a claim for which relief can be granted. As such, the Court will address each claim in turn.
42 U.S.C. § 1981 Claims
Plaintiff’s first claim for relief alleges Defendants violated 42 U.S.C. § 1981 by
“intentionally depriv[ing] Plaintiff of the enjoyment of all benefits, privileges, terms, and
conditions of the contractual relationship inherent and explicit to insurance coverage and policy
agreement.” (Doc. No. 91, p. 14). Specifically, Plaintiff alleges that she belongs to a racial
minority and that Defendants “intentionally deprived Plaintiff of equal rights to fairness in the
United States as is enjoyed by white citizens.” (Id.). She argues Defendants “wholly or partially
falsified, inaccurate and/or otherwise misrepresentatively [sic] duplicative reports of criminal
activity in her file” based on her 2006 state court conviction, that they failed to verify the accuracy
of that information, and that it was the basis for the denial of her insurance applications and the
determination of her insurance premiums. (Id. at 4–5). Defendants argue Plaintiff’s § 1981 claim
should be dismissed for two reasons: (1) she was granted an insurance contract for which her
premium was determined based on her criminal record, and (2) Plaintiff failed to allege any facts
to support a reasonable inference that Defendants’ actions were motivated by race. (Doc. No. 103,
p. 7; Doc. No. 97, p. 7).
Section 1981 provides that “[a]ll persons within the jurisdiction of the United States shall
have the same right in every State and Territory to make and enforce contracts.” 42 U.S.C. § 1981.
The statute defines “make and enforce contracts” as “the making, performance, modification, and
termination of contracts, and the enjoyment of all benefits, privileges, terms, and conditions of the
contractual relationship.” § 1981(a). To establish a claim for contractual discrimination sufficient
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to survive a motion to dismiss, plaintiffs must allege: “(1) they are members of a racial minority;
(2) the Defendants had an intent to discriminate against them on the basis of race; and (3) the
alleged discrimination concerned one or more of the activities enumerated in the statute; in this
case, the making of a contract.” Nadendla v. WakeMed, 24 F.4th 299, 305 (4th Cir. 2022); see
also Ziccardi-Colson v. Turner, No. 5:18-CV-00094, 2020 WL 97457 at *4 (W.D.N.C. Jan. 8,
2020) (citing Bellows v. Amoco Oil Co., 118 F.3d 268, 274 (5th Cir. 1997)).
Here, Plaintiff cannot satisfy that burden. Plaintiff has fulfilled the first requirement by
showing that she is a member of a racial minority. (Doc. No. 91, p. 6). However, Plaintiff’s claim
fails on the second and third elements of a claim for § 1981 contractual discrimination. At the
motion to dismiss stage, to satisfy the second element a plaintiff must show “facts that, if accepted
as true, would allow the court to draw a reasonable inference” that the defendant’s action was
motivated by race. Ziccardi-Colson, 2020 WL 97457, at *4 (citing Bellows, 118 F.3d at 274;
Woods v. City of Greensboro, 855 F.3d 639, 648 (4th Cir. 2017)). Plaintiff alleges uncited
statistics relating to racial discrimination in general in insurance practices and the court system,
that Plaintiff’s “conviction was ill-gotten and motivated by racial discrimination against her,” and
that “but for her race and ethnicity,” Defendants would not have believed the information
concerning Plaintiff’s conviction found in the allegedly libelous Charlotte Observer articles, nor
would Defendants have furnished this information for the consideration of her insurance
applications, or “ignored and even mocked Plaintiff’s dispute of the false and/or otherwise
inaccurate information and request to bring the account to a zero balance in her favor and for
immediate deletion of such information from the CRAs.” (Doc. No. 91, p. 14–16). However,
Plaintiff “provides no details about any of these conclusory allegations.” Nadendla, 24 F.4th at
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305. Instead, Plaintiff merely states “vague and conclusory allegations” that because racial
discrimination exists generally in insurance practices and the criminal justice system, but for her
race, she would not have been convicted, the Charlotte Observer would not have published its
allegedly libelous articles, and Defendants would not have discriminated against her regarding her
insurance policies. (Doc. N. 91, p. 15–16). However, Plaintiff has not pled any facts to support
this conclusory sequence of discrimination, nor has she alleged any facts demonstrating
Defendants intended to discriminate against her based on her race. Such “labels, conclusions,
recitations of a claims’ elements and naked assertions devoid of further factual enhancement” are
insufficient to show Defendants had the intent to discriminate against Plaintiff on the basis of her
race. Nadendla, 24 F.4th at 306 (citing ACA Fin. Guar. Corp. v. City of Buena Vista, Va., (917
F.3d 206, 211 (4th Cir. 2019); see also Iqbal, 556 U.S. at 678.
Similarly, Plaintiff has failed to show that Defendants’ alleged discrimination concerned
the making of an insurance contract. As this Court has previously determined, Plaintiff’s
“allegation that the Defendants violated § 1981 is self-defeating” for two reasons. (Doc. No. 4, p.
5). First, Plaintiff admits LM did in fact grant her an insurance contract and that the premium
decision was based on her criminal record. (Doc. No. 91, p. 3–4). Second, Plaintiff acknowledges
that she was in fact convicted of Identity Theft and Obtaining Property by False Pretenses in
Cabarrus County in 2006. (Id. at 15). Even taking as true Plaintiff’s contention that her conviction
was wrongfully and discriminatorily obtained,7 this alone does not make Defendants liable for
discrimination for including her conviction—which Plaintiff does not claim to have appealed—in
Plaintiff asserts that she “was wrongfully convicted by a Caucasian/White judge and an all-White and markedly allmale jury in Cabarrus,” and that the “conviction was ill-gotten and motivated by racial discrimination against her.”
(Doc. No. 91, p. 15).
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her Consumer File, or for considering her factual criminal record when making its premium
decision. Therefore, Plaintiff has failed to show facts that, even if accepted as true, allow the Court
to reasonably infer Defendants intended to discriminate against her based on her race, and that this
discrimination interfered with the making or enforcement of her insurance contracts. Because this
is Plaintiff’s Third Amended Complaint, the Court finds Plaintiff has had ample opportunity to
cure any defects in her pleadings concerning her § 1981 claim.8 Thus, because Plaintiff has failed
to do so, any further amendment would be futile. Accordingly, the Court holds that Plaintiff’s
§ 1981 claims against both Defendants are DISMISSED WITH PREJUDICE.
B. 42 U.S.C. § 1986 Claims
Next, Plaintiff asserts a claim under 42 U.S.C. § 1986. Plaintiff alleges Defendants failed
to verify the accuracy of the information they reported in Plaintiff’s Consumer File and to
investigate Plaintiff’s disputes to correct any false or inaccurate information. (Doc. No. 91, p. 18–
19). Defendants move for dismissal of Plaintiff’s § 1986 claim, arguing Plaintiff did not allege
the necessary elements for a conspiracy under § 1985, and as such Plaintiff’s § 1986 claim fails.
For the reasons stated below, the Court agrees with Defendants.
In her response to Defendant MIB’s Motion to Dismiss, Plaintiff emphasizes that “Judge Whitney’s dismissal of
Plaintiff’s §§ 1981 and 1986 claims upon the initial review for pro se litigants does NOT constitute res judicata, and
thus sets no precedent, especially where an amended complaint addresses the purported deficiencies in stating claims
regarding these statutes.” (Doc. No. 110, p. 5). In Defendant MIB argued that Plaintiff’s § 1981 and § 1986 claims
fail “for the same reasons outlined in this Court’s previous frivolity review.” (Doc. No. 103, p. 7). In addition,
Defendant MIB further outlined its contentions for why Plaintiff’s allegations in her TAC failed to state a claim for
relief. (Id.). Thus, this Court construes MIB’s reference to the initial review as showing Plaintiff’s continued inability
to state a claim, and not as alleging Plaintiff’s claims should be dismissed under the principles of res judicata.
Further, the Court notes that its references to the initial frivolity review throughout this Order are not to be construed
as applying res judicata to dismiss Plaintiff’s claims. This Court has allowed Plaintiff to amend her original Complaint
on three occasions. Instead, the Court discusses the initial review to highlight that despite having multiple
opportunities to cure any defects identified at the outset, Plaintiff has failed to do so. Thus, Defendants are entitled to
dismissal not under res judicata but for failure to state a claim under Rule 12(b)(6).
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Section 1986 provides a cause of action against any party with knowledge of a conspiracy
in violation of § 1985 who fails to take action to prevent the violation. The civil conspiracy
prohibition contained in § 1985(3), in turn, imposes liability on two or more persons who
“conspire . . . for the purpose of depriving . . . a person or class of persons of the equal protection
of the laws.” Ziglar v. Abbasi, 137 S.Ct. 1843 (2017) (quoting 42 U.S.C. § 1985(3)). To bring a
claim under § 1985, a plaintiff must demonstrate:
(1) a conspiracy of two or more persons, (2) who are motivated by a specific classbased, invidiously discriminatory animus to (3) deprive the plaintiff of the equal
enjoyment of rights secured by the law to all, (4) and which results in injury to the
plaintiff as (5) a consequence of an overt act committed by the defendants in
connection with the conspiracy.
Thomas v. The Salvation Army S. Territory, 841 F.3d 632, 637 (4th Cir. 2016) (quoting Simmons
v. Poe, 47 F.3d 1370, 1376 (4th Cir. 1995)). A cause of action under § 1986 “is dependent upon
the existence of a claim under § 1985.” Davis v. Hudgins, 896 F. Supp. 561, 571 (E.D. Va. 1995)
(quoting Trerice v. Summons, 755 F.2d 1081, 1085 (4th Cir. 1985)); Dingle v. Maris, 2021 WL
2324357 (E.D.N.C., June 7, 2021) (same). Thus, “the failure of a Section 1985 claim also defeats
the Section 1986 claim.” Davis, 896 F. Supp. at 571 (quoting Burcher v. McCauley, 871 F. Supp.
864, at 869 n.4 (E.D. Va. 1994)); see also Trerice, 755 F.2d at 1085.
Here, Plaintiff has failed to allege the existence of a conspiracy under § 1985, and
accordingly, her § 1986 claim necessarily fails. Plaintiff neither alleges the existence of a
conspiracy between LM and MIB, nor alleges any facts suggesting a conspiracy between these
Though Plaintiff, in her Responses to Defendants’ Motions, does allege that
Defendants did conspire against her and that “the elements of a § 1985 conspiracy are indefensibly
met,” (Doc. No. 105, p. 7; Doc. No. 110, p. 5–6), Plaintiff’s conclusory allegation lacks any
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factual support demonstrating a conspiracy. See Nadendla, 24 F.4th at 306. By contrast, Plaintiff
alleges that MIB and LM individually “failed to verify the accuracy of the information they
reported about Plaintiff” and failed to adequately investigate Plaintiff’s subsequent disputes. (Doc.
No. 91, p. 17). Even taking these allegations as true, they demonstrate individual failures rather
than a conspiracy to discriminate against Plaintiff. Further, as discussed in greater detail in
analyzing the § 1981 claim, Plaintiff’s pleadings are again devoid of any factual assertions
supporting the existence of invidiously discriminatory animus, beyond mere conclusory
supposition. Thus, because Plaintiff has not satisfied the elements necessary for a § 1985 claim,
her § 1986 claim necessarily fails.
Finally, the Court finds that, as above, Plaintiff has had two previous opportunities to cure
any defects in her original Complaint. However, Plaintiff’s TAC is nearly identical to her original
Complaint with regard to her § 1986 claim, both of which fail to allege facts supporting a
conspiracy between Defendants. Further, Plaintiff’s additional pleadings similarly lack any facts
to support a discriminatory conspiracy. Thus, it is apparent that Plaintiff is unable to state a claim
for relief, and any further opportunity to amend her pleadings would be futile. Therefore,
Plaintiff’s § 1986 claim against both Defendants is DISMISSED WITH PREJUDICE.
C. Gross Negligence Claims
Plaintiff’s third cause of action appears to allege Defendants violated the FCRA in their
roles as furnishers of information,9 and stemming from this violation, Defendants are liable for
gross negligence. Defendants move for dismissal of Plaintiff’s gross negligence claim for three
Though Plaintiff does not expressly allege a cause of action for FCRA violations in her TAC, she does allege
Defendants are furnishers of information and that they breached the duties owed to Plaintiff under FCRA. (Doc. No.
91, p. 9–10). The Court addresses this claim below.
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reasons: (1) it is preempted by the FCRA; (2) it is preempted by North Carolina law; and (3) it
fails on the merits.
In enacting the FCRA, Congress sought “to ensure fair and accurate credit reporting,
promote efficiency in the banking system, and protect consumer privacy.” Safeco Ins. Co. of Am.
V. Burr, 551 U.S. 47, 52 (2007); Dreher v. Experian Info. Sols., Inc., 856 F.3d 337, 346 (4th Cir.
2017). The FRCA thus imposes civil liability for willful or negligent noncompliance with its
requirements. U.S. v. Bormes, 568 U.S. 6, 8 (2012). However, such relief is only available under
certain conditions. The FCRA provides:
Except 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 credit 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, or based on information disclosed by a user
of a consumer report to or for a consumer against whom the user has taken adverse
action, based in whole or in part on the report except as to false information
furnished with malice or willful intent to injure such consumer.
15 U.S.C. § 1681h(e) (emphasis added). Thus, there is a narrow exception to the FCRA’s general
bar on state law actions for defamation, invasion of privacy, and negligence: the plaintiff must
show “malice or [the] willful intent to injure [the] consumer.” Id. To determine whether a claim
falls within that exception, courts follow a two-step inquiry, asking: (1) whether the claim falls
within the scope of § 1681h(e), and if so, (2) whether the “malice or willful intent to injure”
exception applies. Ross v. F.D.I.C., 625 F.3d 808, 814 (4th Cir. 2010). The parties do not dispute
that the first inquiry is satisfied. Thus, the Court must proceed to the second inquiry to determine
whether Plaintiff has alleged facts sufficient to show Defendants furnished false information about
Plaintiff with either malice or the willful intent to injure her.
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Though the FCRA does not define malice, North Carolina courts have held that a plaintiff
can show malice through “evidence of ill-will or personal hostility on the part of the declarant or
by a showing that the declarant published the defamatory statement with knowledge that it was
false, with reckless disregard for the truth or with a high degree of awareness of its probable
falsity.” Ross, 625 F.3d at 815 (citing Dobson v. Harris, 530 S.E.2d 829, 837 (N.C. 2000))
(internal quotation marks omitted) (applying the knowledge of falsity standard to affirm dismissal
of plaintiff’s defamation complaint as preempted by the FCRA); Joiner v. Revco Disc. Drug
Centers, Inc., 467 F. Supp. 2d 508, 514 (W.D.N.C. 2006). “An act is wanton when it is done of
wicked purpose, or when done needlessly, manifesting a reckless indifference to the rights of
others.” Yancy v. Lea, 550 S.E.2d 155, 157 (N.C. 2001) (quoting Foster v. Hyman, 148 S.E. 36,
37-38 (N.C. 1929)). “Wanton and willful negligence rests on the assumption that [defendant]
knew the probable consequences, but was recklessly, wantonly, or intentionally indifferent to the
results.” Clayton v. Branson, 623 S.E.2d 269, 264 (N.C. Ct. App. 2005) (quoting Wagoner v.
N.C.R. Co., 77 S.E.2d 701, 706 (N.C. 1953)).
Similarly, North Carolina law provides that:
No cause of action in the nature of defamation, invasion of privacy, or negligence
shall arise against any person for disclosing personal or privileged information in
accordance with this Article, nor shall such a cause of action arise against any
person for furnishing personal or privileged information to an insurance institution,
agent, or insurance-support organization: Provided, however, this section shall
provide no immunity for disclosing or furnishing false information with malice or
willful intent to injure any person.
N.C.G.S. § 58-39-110. As with FCRA’s preemption provision, the parties do not dispute that the
information at issue here falls within the scope of this statute. Thus, Plaintiff’s gross negligence
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action will be barred unless Defendants disclosed or furnished false information about her with
either malice or the willful intent to injure Plaintiff.
Finally, under North Carolina law, to state a claim for gross negligence a plaintiff must
show the defendant was negligent, and that such negligence was “willful, wanton, or done with
reckless indifference.” Sawyer v. Food Lion, 549 S.E.2d 867, 870 (N.C. Ct. App. 2001). Thus,
whether Plaintiff can bring a claim for gross negligence turns on whether Plaintiff can demonstrate
Defendants acted with malice, or with reckless indifference. For the following reasons, the Court
finds that Plaintiff has not done so.
Plaintiff fails to provide any factual allegations that support her conclusory assertions that
LM’s furnishing of information regarding Plaintiff’s unpaid balance of $434.00, and that MIBs
furnishing of information about Plaintiff’s criminal record, were done with malice or willful intent
to injure. Plaintiff instead asserts that, in taking these actions, Defendants negligently breached a
litany of duties established under the FCRA, as well as a generalized “duty of care to uphold
fairness in reporting and underwriting.” (Doc. 91, 8–10, 19). She claims this breach occurred
because Defendants were “reasonably or otherwise expressly aware” of the injuries Plaintiff would
suffer due to “insurance stratification,” yet persisted in furnishing false information about
Plaintiff’s outstanding debt and criminal history. Id. at 19. Plaintiff appears to argue that, because
Defendants allegedly had knowledge of her race, this Court should presume that Defendants acted
with malice or willful intent to injure Plaintiff by subjecting her to insurance stratification. Id. at
6; (Doc. No. 105, p. 14 (arguing that “racially discriminatory insurance underwriting practices are
inherently willful.”)). However, the law does not support such a presumption; rather, Plaintiff has
the burden of stating a valid cause of action upon which relief may be granted, which requires
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allegations of plausible facts supporting a finding of malice or willful intent to injure. Iqbal, 556
U.S. at 679.
Even accepting as true Plaintiff’s assertion that Defendant LM erred in reporting that
Plaintiff owed a $434.00 debt, Plaintiff makes no allegation of any facts supporting her conclusion
that LM furnished this information recklessly, wantonly, or with intentional indifference to the
effect it would have on Plaintiff. Further, Plaintiff does not assert a single fact demonstrating LM
had actual knowledge of the falsity of this debt at the time the information was furnished. See
Ross, 625 F.3d at 815. Similarly, as outlined above, Plaintiff admits her felony conviction;
therefore, Defendants cannot have acted with malice or willful intent in accurately reporting or
considering this conviction as part of Plaintiff’s criminal history. 10 (Doc. No. 91, p. 15).
Accordingly, Plaintiff’s TAC fails to demonstrate Defendants acted with malice, and the
narrow exception to the FCRA’s and North Carolina’s general bar on negligence actions does not
apply. Further, because Plaintiff has not provided any factual support for her allegation that
Defendants acted with malice, her gross negligence claim fails on the merits. Finally, the FCRA
explicitly precludes any standard negligence claim against Defendants that may be inferred from
For the same reasons this Court stated above with reference to Plaintiff’s § 1981 and § 1986
claims, the Court finds Plaintiff has failed to state a claim for relief as to her gross negligence
claim, and any further opportunity to amend would be futile.
Therefore, Plaintiff’s gross
negligence claim against both Defendants is DISMISSED WITH PREJUDICE.
Plaintiff’s assertions that she was wrongfully convicted, (Doc. 91, p. 15–16), does not rebut Plaintiff’s admission
that she was factually convicted of a felony offense, Id. at 13.
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D. Defamation Claims
Plaintiff’s fourth cause of action alleges Defendants are liable for defamation in the form
of either libel or slander, because they made and reported false statements relating to her criminal
record and her 2006 state court conviction, and further that LM falsely communicated that she
owed a $434.00 debt, to third parties. (Doc. No. 91, p. 20–21). However, as explained above,
both the FCRA and North Carolina law preempts defamation claims in addition to negligence
claims against furnishers of information absent a showing of malice. 15 U.S.C. § 1681h(e);
N.C.G.S. § 58-39-110. As with her gross negligence claim, Plaintiff has failed to allege any facts
to support her conclusory allegations that Defendants acted either maliciously or with reckless
disregard for the truth.
Therefore, Plaintiff’s defamation claims against LM and MIB are
DISMISSED WITH PREJUDICE.
E. FCRA Claims
Finally, though Plaintiff’s TAC does not expressly allege a cause of action for FCRA
violations but instead discusses them with regard to her gross negligence claim, Defendants argue
any potential FCRA claim must be dismissed for two reasons: (1) it is time-barred, and (2) it fails
on the merits.
Plaintiff’s FCRA claims against LM are time-barred, as § 1681p requires that any action
to enforce liability under the FCRA be filed within two years after the date the plaintiff discovers
the violation that is the basis for such liability. 15 U.S.C. § 1681p. Plaintiff’s TAC alleges that
she discovered the allegedly inaccurate debt of $434.00 reported by LM on or about September 9,
2019, approximately twenty-six months before her original complaint was filed on November 11,
2021. In addition, the Court finds Plaintiff’s argument that she had five years after the date of the
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alleged violations by which to bring her FCRA claim as unpersuasive. The language of § 1681p—
which Plaintiff’s response states in full—provides:
An action to enforce any liability created under this subchapter may be brought in
any appropriate United States district court, without regard to the amount in
controversy, or in any other court of competent jurisdiction, not later than the earlier
(1) 2 years after the date of discovery by the plaintiff of the violation that is the
basis for such liability; or
(2) 5 years after the date on which the violation that is the basis for such liability
15 U.S.C. § 1681p. Because Plaintiff’s discovery of the debt was the earliest of the two events,
the statute of limitations began to run on September 9, 2019. Thus, for the reasons outlined above,
Plaintiff’s FCRA claims against LM are DISMISSED WITH PREJUDICE.
Construed liberally, Plaintiff’s TAC appears to raise causes of action against MIB under
three sections of the FCRA: § 1681e(b), § 1681g(a)(1), and § 1681i(a). (Doc. No. 91, p. 5–6).
A CRA violates § 1681e(b) when they create a consumer report that “(1) contains
inaccurate information and (2) the reporting agency did not follow reasonable procedures to assure
maximum possible accuracy.” Dalton v. Capital Associated Industries, Inc., 257 F.3d 409, 415
(4th Cir. 2001). As discussed above, Plaintiff was convicted of a felony, and thus the indication
of such on her consumer report is not inaccurate. Further, Plaintiff makes no factual assertions
about whether MIBs accuracy-verifying procedures were reasonable; she simply disputes the
validity of her criminal record. (Doc. No. 91, p. 15). Thus, Plaintiff fails to state a claim upon
which relief can be granted under § 1681e(b).
Next, § 1681g(a)(1) of FCRA requires that “[e]very consumer reporting agency shall, upon
request, . . . clearly and accurately disclose to the consumer . . . [a]ll information in the consumer’s
file at the time of the request.” 15 U.S.C. § 1681g(a)(1). FCRA § 1681i(a)(1) requires a CRA to
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investigate within 30 days if a consumer disputes the accuracy of any item of information on a
consumer report. 15 U.S.C. § 1681i(a)(1). The agency may determine such a complaint is
frivolous, but it must provide notice of such a determination within 5 business days.
Plaintiff alleges she made a request to MIB for her consumer file and disputed the debt and
criminal record reflected on her consumer report on July 15, 2021. (Doc. No. 91, p. 5). She further
alleges MIB never responded to this request and dispute. Id. Thus, Plaintiff has sufficiently stated
claims under § 1681g(a)(1) and § 1681i(a) of the FCRA, and MIB’s motion to dismiss is DENIED
with regards to Plaintiff’s claims under these two sections of the FCRA.
IT IS THEREFORE ORDERED that Defendant LM’s Motion to Dismiss Plaintiff’s Third
Amended Complaint, (Doc. No. 96), is GRANTED and Plaintiff’s claims against the LM
Defendants are DISMISSED WITH PREJUDICE.
IT IS FURTHER ORDERED that Defendant MIB Group, Inc.’s (“MIB”) Motion to
Dismiss, (Doc. No. 102), is GRANTED IN PART and DENIED IN PART. Specifically, with
respect to Plaintiff’s claims under 42 U.S.C. § 1981, 42 U.S.C. § 1986, North Carolina gross
negligence law, North Carolina defamation law, and § 1681e(b) of the FCRA, Defendant MIB’s
Motion is GRANTED, and these are DISMISSED WITH PREJUDICE. With respect to Plaintiff’s
claims under § 1681g(a)(1) and § 1681i(a) of the FCRA, Defendant MIB’s Motion is DENIED.
IT IS SO ORDERED.
Signed: January 18, 2023
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