BOLDUC v. EXPERIAN INFORMATION SOLUTIONS, INC. et al

Filing 20

MEMORANDUM AND ORDER THAT DEFENDANT STATE FARM BANK, FSB'S MOTION TO DISMISS IS GRANTED IN PART AND DENIED IN PART; ETC.. SIGNED BY HONORABLE J. WILLIAM DITTER, JR ON 1/11/17. 1/12/17 ENTERED AND E-MAILED.(jl, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA

CIVIL ACTION

JANICE BOLDUC
v.
EXPERIAN INFORMATION SOLUTIONS,
INC., et al.

No. 16-1367

FILED

MEMORANDUM AND ORDER
Ditter, J.
Plaintiff filed a complaint against Experian Information Solutions, Equifax
Information Services, and State Farm Bank for the issuance of incorrect credit reports. In
her complaint, Plaintiff set forth claims for violations of the Fair Credit Reporting Act
("FCRA"), 15 U.S.C. § 1681, et seq., and defamation of character. State Farm has filed a
motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) alleging that
Plaintiff has failed to state a claim upon which relief can be granted for claims pursuant to
15 U.S.C. §§ 1681s-2(a) and 1681s-2(b) of the FCRA. State Farm also contends that
Plaintiffs defamation claim is preempted by the FCRA. For the following reasons, I will
grant State Farm's motion, in part, and deny it, in part.
Under Rule 12(b)(6), a complaint may be dismissed for failure to state a claim
upon which relief can be granted. I must accept as true the factual allegations contained
in the complaint and all reasonable inferences drawn therefrom and view the facts in the
light most favorable to the plaintiff. Federal Rule of Civil Procedure 8(a)(2) only requires

"a short and plain statement of the claim showing that the pleader is entitled to relief;"
however, the Supreme Court has stated that there must be "enough facts to state a claim
to relief that is plausible on its face." Bell Atlantic Corporation v. Twombly, 550 U.S.
544, 570 (2007); Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
Plaintiff entered into a mortgage agreement with State Farm sometime prior to
2010. On July 10, 2010, Plaintiff filed for relief under Chapter 13 of the United States
Bankruptcy Code. She ultimately received a discharge under Chapter 13, but her
mortgage debt with State Farm was not discharged. In early 2016, Plaintiff noted that her
credit reports inaccurately reported that her mortgage was "discharged through Chapter
13 Bankruptcy," that Plaintiff had been delinquent in September 2013, that Plaintiffs
recent payment amounts were not reported, that $6,090 was written off, and that Plaintiff
had a $18, 709 balance which was past due and charged off.
On February 9, 2016, Plaintiff disputed the accuracy of State Farm's information
with Defendants Experian and Equifax. The same day, Defendants Equifax and Experian
acknowledged receipt of Plaintiffs dispute. Experian and Equifax ultimately notified
Plaintiff that her account with State Farm had been "verified." As of the filing of
Plaintiffs complaint, neither Equifax nor Experian had marked the account "disputed" by
Plaintiff. Moreover, according to Plaintiff, Equifax and Experian have not changed the
information reported regarding Plaintiffs State Farm mortgage. 1 Plaintiff contends that
1

Plaintiff notes that as of the filing of her complaint, Defendants Equifax and Experian had
changed Plaintiff's past due and charged off amount from $18,709 to $18,546.

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as a result of the defendants' actions, she has suffered actual damages, including serious
financial and dignitary harm.
1.

15 U.S.C. § 168ls-2(a): Duty of Furnishers of Information to
Provide Accurate Information

Under§ 1681s-2(a) of the FCRA, a person shall not furnish any information
relating to a consumer to a consumer reporting agency if the person knows or has
reasonable cause to believe that the information is inaccurate. State Farm is a "furnisher"
of information under the FCRA. State Farm contends that portions of Paragraph 33 of the
complaint alleging violations of§ 1681s-2(a) should be dismissed because there is no
private right of action for alleged violations under that provision of the FCRA. In her
complaint, Plaintiff asserts that State Farm reported information with actual errors in
violation of§ 1681s-2(a)(l)(A); reported information after notice and confirmation of
errors in violation of § 1681s-2(a)(l)(B); failed to correct and update information in
violation of§ 1681s-2(a)(2)(B); failed to provide notice of dispute in violation of§
1681s-2(a)(3); and failed to conduct an investigation with respect to disputed information
in violation of§ 1681s-2(a)(8).
There is no private right of action for alleged violations of§ 1681s-2(a). Huertus
v. Galaxy Asset Management, 641F.3d28, 34 (3d Cir. 2011); Vullings v. Trans Union,
LLC, 115 F.Supp.3d 538, 540-541 (E.D. Pa. 2015). The exclusive remedy for violations

of 15 U.S.C. § 1681s-2(a) is through administrative enforcement. Id.; see also 15 U.S.C.
§ 1681s-2(c), (d). Plaintiff does not attempt to dispute this argument or even address§
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1681s-2(a) in her response. Thus, subparagraphs 33(a), (b), and (d) through (h) of
Plaintiffs complaint are dismissed. 2
2.

15 U.S.C. § 1681s-2(b): Duties of Furnishers of Information
Upon Notice of Dispute

Under the FCRA, after receiving notice of a dispute regarding the completeness or
accuracy of any information provided by a person to a consumer reporting agency, the
furnisher of information shall conduct an investigation with respect to the disputed
information. 15 U.S.C. § 1681s-2(b)(l)(A). State Farm argues that portions of Paragraph
33 of the complaint alleging violations of§ 1681s-2(b) should be dismissed because
Plaintiff has failed to allege that the credit reporting agencies provided State Farm with
notice of the dispute. State Farm also contends that Plaintiff failed to allege that State
Farm did not conduct an investigation.
Dismissal on these grounds would be premature. "Although§ 1681s-2(b)
seemingly 'requires a pleading that a consumer reporting agency notified a furnisher of a
dispute,' this information would, at the pleading stage, be unknowable by the plaintiff."
Sullivan v. Equifax, Inc., 2002 WL 799856, at *2 n.3 (E.D. Pa. Apr. 19, 2002) (quoting
Jaramillo v. Experian Info. Sols., Inc., 155 F. Supp. 2d 356, 363 (E.D. Pa. 2001)).
Plaintiff contacted Equifax and Experian to dispute information provided by State Farm.
After allegedly investigating the disputed information, the credit reporting agencies failed
2

Although subparagraphs 33(a) and (b) do not specifically reference which provision of the
FCRA forms the basis for its claims, they allege the same violations of the FCRA found at subparagraphs
33(d) and (t) which cite to§§ 1681s-2(a)(l)(A) and 1681s-2(a)(2)(B).

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to remove the disputed information from Plaintiffs credit report. These facts create a
reasonable inference that State Farm was notified and failed to adequately respond to the
credit reporting agencies' investigatory inquiries. Richard L. Sheffer v. Experian
Information Solutions, Inc., et al., 249 F.Supp.2d 560 (E.D. Pa. 2013).

Because discovery is needed to determine if State Farm was notified of the dispute
and conducted an investigation into the accuracy of the disputed information, Defendant's
motion to dismiss subparagraph 33(c), brought pursuant to§ 1681s-2(b), is denied.
Defendant may renew its challenge if discovery reveals the State Farm was not notified of
the dispute. Sullivan, 2002 WL 799856 at *2 n.3; Cicala v. Trans Union, LLC, 2016 WL
2622377, at *3 (E.D. Pa. May 9, 2016).

3.

Defamation of Character

State Farm argues that Plaintiffs defamation claims are preempted by§
168 lt(b )(1 )(F). Plaintiff counters that FCRA' s preemption language applies only to state
statutory claims and does not preempt state common law claims based on malice or
willful intent to injure. Because she alleges that she has sufficiently pled the element of
malice necessary to bring an action for defamation, Plaintiff concludes that her
defamation claims survive Plaintiffs motion to dismiss.
Section 1681 t(b )( 1)(F) preempts both statutory and common law causes of action.
See Purcell v. Bank ofAm., 659 F .3d 622 (7th Cir. 2011) (discussing the interplay of§

168lt(b)(l)(F) and§ 1681h(e) and concluding that the statutes are not inconsistent but

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rather preempt additional state claims); Cicala, 2016 WL 2622377, at *4; Vu/lings, 115
F.Supp. at 543; Grossman v. Trans Union, LLC, 992 F.Supp.2d 495, 500 (E.D. Pa. 2014).
Thus, Plaintiffs defamation claims found in Count II are dismissed with prejudice.
An appropriate order follows.

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