Green v. First Premier Bank
Filing
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ORDER granting 12 Motion to Dismiss. Signed by Chief Judge Karen E. Schreier on 11/21/2011. (KC)
UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
SOUTHERN DIVISION
DONNIE GREEN,
Plaintiff,
vs.
FIRST PREMIER BANK,
Defendant.
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Civ. 11-4039-KES
ORDER GRANTING
MOTION TO DISMISS
Plaintiff, Donnie Green, filed a pro se complaint against defendant, First
Premier Bank (First Premier), alleging violations of the Fair Credit Reporting Act
(FCRA) and a series of state common law claims. First Premier moves to dismiss
Green’s complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil
Procedure. Green has not responded to the motion to dismiss and the time for
response has passed.
FACTS
Green alleges that in March 2011 he experienced emotional distress in
connection with a charge-off listed by First Premier on his credit report. Green
states that he disputed the information listed by First Premier by filing an
online form via Experian, a consumer reporting agency. Experian subsequently
contacted First Premier. First Premier then reported to Experian that it had
verified the disputed information on Green’s credit report.
Based on these facts, Green asserts that First Premier furnished
inaccurate information about a debt and failed to comply with the FCRA. Green
also asserts that he “suffered loss of self-esteem and peace of mind” and
“emotional distress, humiliation and embarrassment, and defamation of Credit.”
In addition to his FCRA claims, Green asserts state-law claims for negligent,
reckless, and wanton conduct, harassment, invasion of privacy, defamation,
and intentional misrepresentation.
STANDARD OF REVIEW
The court must assume as true all facts well pleaded in the complaint.
Estate of Rosenberg by Rosenberg v. Crandell, 56 F.3d 35, 37 (8th Cir. 1995).
Also, "although liberally construed, a pro se complaint must contain specific
facts supporting its conclusions." Allen v. Purkett, 5 F.3d 1151, 1153 (8th Cir.
1993) (citations omitted). A plaintiff’s complaint “does not need detailed factual
allegations . . . [but] requires more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action will not do.” Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 555 (2007). If it does not contain these bare essentials,
dismissal pursuant to Rule 12(b)(6) is appropriate. Beavers v. Lockhart, 755
F.2d 657, 663 (8th Cir. 1985). Twombly requires that a complaint’s factual
allegations must be “enough to raise a right to relief above the speculative level
on the assumption that all the allegations in the complaint are true.” Id. at
1965; Abdullah v. Minnesota, No. 06-4142, 2008 WL 283693 (8th Cir. Feb. 4,
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2008) (citing Twombly and noting complaint must contain either direct or
inferential allegations regarding all material elements necessary to sustain
recovery under some viable legal theory). But broad and conclusory statements
unsupported by factual allegations are not sufficient. Ellingburg v. King, 490
F.2d 1270 (8th Cir. 1974). Finally, although pro se complaints are to be
construed liberally, “they must still allege facts sufficient to support the claims
advanced.” Stone v. Harry, 364 F.3d 912, 914 (8th Cir. 2004). The court is not
required to supply additional facts for a pro se plaintiff, nor construct a legal
theory that assumes facts which have not been pleaded. Id.
DISCUSSION
The FCRA was enacted “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 (2007). In enacting the FCRA,
Congress sought to make “consumer reporting agencies exercise their grave
responsibilities [in assembling and evaluating consumers’ credit and
disseminating information about consumers’ credit] with fairness, impartiality,
and a respect for the consumer’s right to privacy.” 15 U.S.C. § 1681(a)(4).
Consequently, the FCRA has “several mechanisms to protect consumer credit
information, some of which apply to consumer reporting agencies while others
apply to users of the information provided by those agencies.” Poehl v.
Countrywide Home Loans, Inc., 528 F.3d 1093, 1096 (8th Cir. 2008). The act
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also imposes duties on the sources that provide credit information to consumer
reporting agencies, called “furnishers” in the statute; these duties are set forth
at § 1681s-2. “The most common . . . furnishers of information are credit card
issuers, auto dealers, department and grocery stores, lenders, utilities, insurers,
collection agencies, and government agencies. See H.R. Rep. No. 108-263, at 24
(2003). This action concerns the duties of First Premier Bank as a furnisher of
credit information.
I.
Green’s FCRA claims fail to state a claim upon which relief may be
granted.
A.
There is no private right of action under 15 U.S.C.
§ 1681s-2(a).
Green alleges that First Premier violated its duty to provide accurate
information to credit reporting agencies. While Green does not provide a specific
statutory reference to support his allegation, First Premier argues that to the
extent Green’s claim is based on an alleged violation of 15 U.S.C. § 1681s-2(a),
it should be dismissed because there is no private right of action against a
furnisher of information under that particular section of the FCRA.
Section 1681s-2(a) provides that “[a] person shall not furnish any
information relating to a consumer to any consumer reporting agency if the
person knows or has reasonable cause to believe that the information is
inaccurate.” 15 U.S.C. § 1681s-2(a)(1). The FCRA also imposes a duty to notify
consumer reporting agencies that the debt is disputed by a consumer. Section
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1681s-2(a)(3) provides that “[i]f the completeness or accuracy of any information
furnished by any person to any consumer reporting agency is disputed to such
person by a consumer, the person may not furnish the information to any
consumer reporting agency without notice that such information is disputed by
the consumer.” But the FCRA expressly provides that a violation of these
sections “shall be enforced exclusively . . . by the Federal agencies and officials
and the State officials identified in Section 1681s of this title.” 15 U.S.C.
§ 1681s-2(d). Thus, Green does not have a private right of action to bring claims
based on First Premier’s duty to furnish accurate information to Experian and
the other consumer reporting agencies. See, e.g., Thulin v. EMC Mortgage Corp.,
No. 06-3514, 2007 WL 3037353 at * 6 (D. Minn. Oct. 16, 2007) (finding that
“there is no private right of action against one who furnishes inaccurate
information to a credit bureau in violation of Section 1681s-2(a)”) (citing
Yutesler v. Sears Roebuck & Co., 263 F. Supp. 2d 1209, 1210-11 (D. Minn.
2003); Gordon v. Greenpoint Credit, 266 F. Supp. 2d 1007, 1010 (S.D. Iowa
2003)). Accordingly, Green’s claims based upon First Premier’s duty to furnish
accurate information are dismissed for failure to state a claim upon which relief
may be granted pursuant to Rule 12(b)(6) of the Federal Rules of Civil
Procedure.
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B.
Green has not alleged that he does not actually owe the
reported debt.
Green also appears to assert claims based upon First Premier’s statutory
duty to investigate upon receiving notice from Experian that he disputed the
debt. Green cites 15 U.S.C. § 1681s-2(b) and states “[d]efendant First Premier
Bank furnished inaccurate information about this debt, namely that said
account was disputed by the Plaintiff in violation of . . . 15 U.S.C. § 1681s-2(b).”
First Premier concedes that there is a private right of action under this
provision of the FCRA, but it argues that Green’s claim must be dismissed
because he has not alleged that he does not actually owe the debt reported on
his credit report.
A furnisher cannot be held liable under section 1681s-2(b) simply for
failing to report that a debt is disputed. Rather, a furnisher may only be liable if
the omission is “misleading in such a way and to such an extent that it can be
expected to have an adverse effect.” See Gorman v. Wolpoff & Abramson, LLP,
584 F.3d 1147, 1163 (9th Cir. 2009); Saunders v. Branch Banking & Trust Co. of
Virginia, 526 F.3d 142, 148 (4th Cir. 2008); Selpulvado v. CSC Credit Servs., Inc.,
158 F.3d 890, 895-95 (5th Cir. 1998); Koropoulos v. Credit Bureau, Inc., 734
F.2d 37, 40 (D.C. Cir. 1984). The Ninth Circuit explained that:
In other words, a furnisher does not report “incomplete or
inaccurate” information within the meaning of Section 1681s-2(b)
simply by failing to report a meritless dispute, because reporting
an actual debt without noting that it is disputed is unlikely to be
materially misleading. It is the failure to report a bona fide dispute,
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a dispute that could materially alter how the reported debt is
understood, that gives rise to a furnisher’s liability under Section
1681s-2(b).
Gorman, 584 F.3d at 1163.
Here, Green refers to the debt in question as an “invalid debt.” Docket 1
at 3. But he does not allege that he paid the debt or that he is not the individual
responsible for the debt. Thus, Green has not alleged a bona fide dispute that
would require First Premier to report Green’s debt as disputed to Experian. In
Beyer v. Firstar Bank, N.A., 447 F.3d 1106, 1107-08 (8th Cir. 2006), the Eighth
Circuit Court of Appeals affirmed a grant of summary judgment in favor of the
defendant bank because the plaintiff “failed to produce any evidence from which
a reasonable jury could have determined that the report was false[.]” In Beyer,
the plaintiff at least alleged in his complaint that he had paid the debt owed to
the defendant bank in full and that the bank falsely reported the status of his
credit account. Id. But when the defendant bank moved for summary judgment,
the plaintiff failed to provide an affidavit, copy of a canceled check, credit
statement, receipt, or other documentation that would demonstrate that the
debt had been paid in full. Id. In the present case, Green does not allege in his
complaint that he has paid the debt nor does he allege any facts that suggest he
does not legitimately owe the debt reported by First Premier or that the reported
debt was inaccurate or incomplete. Accordingly, Green fails to state a claim and
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dismissal is appropriate pursuant to Rule 12(b)(6) of the Federal Rules of Civil
Procedure.
C.
First Premier has no duty to update Green’s credit report.
Green also alleges that First Premier violated the FCRA when it refused to
properly update his credit report with Experian after Experian notified First
Premier that Green was disputing the debt. First Premier argues that this claim
is subject to dismissal because First Premier verified the information in the
credit report.
Under § 1681s-2(b)(1), a furnisher only has a duty to “update” a
consumer’s credit report if the furnisher’s investigation finds the information to
be incomplete or inaccurate. See 15 U.S.C. § 1681s-2(b)(1)(D) (stating that “if
the investigation finds that the information is incomplete or inaccurate, [a
furnisher of information] must report those results to all other consumer
reporting agencies to which the person furnished the information . . . ”); 15
U.S.C. § 1681s-2(b)(1)(E) (stating that “if an item of information disputed by a
consumer is found to be inaccurate or incomplete or cannot be verified after any
reinvestigation,” a furnisher of information must modify, delete, or permanently
block the reporting of that item of information”).
But Green does not allege that First Premier found his credit report to be
inaccurate or incomplete. Conversely, he admits that First Premier verified the
information with Experian. See Docket 1, Complaint, Factual Summary, ¶ 1
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(“Defendant reported this information as verified to Defendant Experian.”).1
Because First Premier verified the information, it had no duty under the FCRA
to update Green’s credit report. Thus, Green fails to state a claim upon which
relief may be granted, and his claim is dismissed.
D.
Green had not alleged sufficient facts to support a claim that
First Premier violated the reinvestigation procedures of the
FCRA.
Green’s final claim under the FCRA is that First Premier “willfully and/or
negligently [failed] to comport with [the] reinvestigation procedures listed by the
FCRA.” Docket 1, Complaint, FCRA Claims ¶ 2(a). The FCRA’s “reinvestigation
procedures” are triggered by notice from a consumer reporting agency that the
consumer is disputing a debt. 15 U.S.C. § 1681s-2(b)(1). When the furnisher
receives notice that the debt is disputed, it must conduct an investigation with
respect to the disputed information, review all relevant information provided by
the consumer reporting agency, and report the results of the investigation to the
consumer reporting agency. 15 U.S.C. § 1681s-2(b)(1). Green fails to allege any
facts in support of his claim that First Premier failed to comply with these
procedures. Despite the liberal construction afforded to pro se complaints,
Green must still “allege facts sufficient to support the claims” he advances. See
Stone v. Harry, 364 F.3d 912, 914 (8th Cir. 2004). Green actually admits that
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Green refers to Experian as a defendant in his complaint, but Experian is
not named as a defendant in this action.
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First Premier complied with these procedures when he states that First Premier
reported the information as verified to Experian after he initiated his dispute.
Thus, Green has failed to state a claim upon which relief may be granted and
his FCRA claims are dismissed pursuant to Rule 12(b)(6).
II.
The court declines to exercise jurisdiction over Green’s pendent
state-law claims.
Green also alleges state-law claims for negligent, reckless, and wanton
conduct, harassment, invasion of privacy (intrusion into private affairs),
defamation, and intentional misrepresentation. He bases these state-law claims
on First Premier’s actions in furnishing credit information to Experian, a
consumer reporting agency. First Premier asserts that it is entitled to dismissal
of Green’s state-law claims because they are preempted by the FCRA.
A district court may decline to exercise its supplemental jurisdiction over
state-law claims “if the district court has dismissed all claims over which it has
original jurisdiction.” 28 U.S.C. § 1367(c)(3). “Congress unambiguously gave
district courts discretion in 28 U.S.C. § 1367(c) to dismiss supplemental state
law claims when all federal claims have been dismissed.” Gibson v. Weber, 431
F.3d 339, 342 (8th Cir. 2005). See also Keating v. Nebraska Public Power Dist.,
No. 10-2441, slip. op. at *7 (8th Cir. Nov. 7, 2011) (“ ‘In the usual case in which
all federal-law claims are eliminated before trial, the balance of factors to be
considered under the pendent jurisdiction doctrine–judicial economy,
convenience, fairness, and comity–will point toward declining to exercise
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jurisdiction over the remaining state-law claims.’ ”) (quoting Carnegie-Mellon
Univ. v. Cohill, 484 U.S. 343, 350 n.7 (1988)). Because Green’s FCRA claims are
dismissed for failure to state a claim upon which relief may be granted, the
court finds that considerations of judicial economy, fairness, and comity weigh
in favor of dismissing Green’s state-law claims without prejudice. Therefore, it is
ORDERED that First Premier’s motion to dismiss (Docket 12) is granted
pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure.
IT IS FURTHER ORDERED that Green’s state-law claims are dismissed
without prejudice pursuant to 28 U.S.C. § 1367(c).
Dated November 21, 2011.
BY THE COURT:
/s/ Karen E. Schreier
KAREN E. SCHREIER
CHIEF JUDGE
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