Finley v. Transunion ( 2020 )

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 LATONYA RENA FINLEY, Case No. 17-cv-07165-HSG 8 Plaintiff, ORDER GRANTING MOTIONS TO DISMISS 9 v. Re: Dkt. Nos. 103, 105 10 TRANSUNION, et al., 11 Defendants. 12 13 Pending before the Court are motions to dismiss Plaintiff Latonya Rena Finley’s third 14 amended complaint, filed by Defendant Plaza Services LLC, see Dkt. No. 103, and Defendants 15 Experian Information Solutions, Inc., Trans Union, LLC, and Equifax Information Services LLC 16 (collectively, “Consumer Reporting Agencies” or “CRAs”), see Dkt. No. 105. The Court held a 17 hearing on January 23, 2020. For the reasons detailed below, the Court GRANTS the motions to 18 dismiss. 19 I. BACKGROUND 20 Plaintiff, proceeding pro se, filed this action against Defendants on December 18, 2017, 21 alleging that Defendants violated the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. §§ 1681 et 22 seq., and related state laws, based on a disputed debt that remains on Plaintiff’s credit report. See 23 Dkt. No. 1. Plaintiff filed her first amended complaint on April 27, 2018. See Dkt. No. 51 24 (“FAC”). On February 26, 2019, the Court granted Defendants’ motions to dismiss the FAC, 25 finding that Plaintiff had failed to meet the pleading standard for each of her claims. See Dkt. No. 26 80. The Court nevertheless granted leave to amend and reminded Plaintiff that “she must provide 27 specific facts to support each of her causes of action” and should “clearly distinguish between 1 provide specific facts about what the alleged debt is, how the information in her credit file is 2 inaccurate, how she disputed the alleged debt with [the Consumer Report Agencies], and whether 3 [the Consumer Reporting Agencies] provided notice of those disputes to Plaza [Services] . . . .” 4 Id. at 5. 5 Plaintiff filed a second amended complaint on March 24, 2019. See Dkt. No. 82 (“SAC”). 6 Again, the Court granted Defendants’ motions to dismiss the SAC, explaining that Plaintiff’s 7 second amended complaint still failed to provide the necessary factual detail sufficient to survive a 8 motion to dismiss. See Dkt. No. 101. The Court again directed Plaintiff to file an amended 9 complaint and “plead the facts she proffered to the Court [during the hearing on the motion to 10 dismiss] about her credit file being combined with that of her daughter, as well as her 11 communications with the Defendants (including the dates, method, and content of any 12 communication).” See id. at 4. The Court cautioned that “[t]hough Plaintiff should continue to 13 state the legal claims and causes of action in her complaint, she should also tell her story of what 14 happened factually so that the Court can assess whether the facts in the complaint can support her 15 legal claims.” Id. 16 Plaintiff filed her third amendment complaint on August 13, 2019. See Dkt. No. 102 17 (“TAC”). Defendants have all moved to dismiss the TAC, arguing that Plaintiff still has not 18 addressed the deficiencies that the Court previously identified. See Dkt. Nos. 103, 105. 19 II. LEGAL STANDARD 20 Federal Rule of Civil Procedure 8(a) requires that a complaint contain “a short and plain 21 statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). A 22 defendant may move to dismiss a complaint for failing to state a claim upon which relief can be 23 granted under Rule 12(b)(6). “Dismissal under Rule 12(b)(6) is appropriate only where the 24 complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory.” 25 Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008). To survive a Rule 26 12(b)(6) motion, a plaintiff need only plead “enough facts to state a claim to relief that is plausible 27 on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible 1 the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). 2 In reviewing the plausibility of a complaint, courts “accept factual allegations in the 3 complaint as true and construe the pleadings in the light most favorable to the nonmoving party.” 4 Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). Nevertheless, 5 courts do not “accept as true allegations that are merely conclusory, unwarranted deductions of 6 fact, or unreasonable inferences.” In re Gilead Scis. Secs. Litig., 536 F.3d 1049, 1055 (9th Cir. 7 2008) (quoting Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001)). 8 Additionally, “[p]leadings must be construed so as to do justice.” Fed. R. Civ. P. 8(e). 9 “[A] pro se complaint, however inartfully pleaded, must be held to less stringent standards than 10 formal pleadings drafted by lawyers.” Erickson v. Pardus, 551 U.S. 89, 94 (2007) (quotation 11 omitted). However, even a “liberal interpretation of a . . . complaint may not supply essential 12 elements of the claim that were not initially pled.” See Ivey v. Bd. of Regents of Univ. of Alaska, 13 673 F.2d 266, 268 (9th Cir. 1982). “[P]ro se litigants are bound by the rules of procedure,” 14 Ghazali v. Moran, 46 F.3d 52, 54 (9th Cir. 1995), which require “a short and plain statement of 15 the claim showing that the pleader is entitled to relief,” Fed. R. Civ. P. 8(a). 16 III. DISCUSSION 17 In the TAC, Plaintiff again alleges that Defendants violated the FCRA and related state law 18 claims when Defendant Plaza Services “misrepresented the amount of the debt” Plaintiff owed it 19 and reported to the Consumer Reporting Agencies that she “owed a debt in the amount of over 20 $100.00.” See TAC at ¶ 1. Plaintiff alleges that she mailed Defendants a letter “asking that the 21 debt be validated.” See id. at ¶ 2. However, the letter to Defendant Equifax was returned to 22 sender, and Defendants Plaza Services, Trans Union, and Experian “never responded with any 23 information that will hold plaintiff liable [for] any debt.” See id. Plaintiff further alleges that she 24 “refused to make payment to the bogus debt,” but Defendant Plaza Services continued to collect 25 the alleged debt and reported it to the Consumer Reporting Agencies. See id. at ¶¶ 2–3. Based on 26 the allegations, Plaintiff contends that Defendants failed to investigate her disputes properly and 27 took “aggressive actions” against her. Id. at ¶¶ 3–4. The Court finds that these allegations are still 1 A. Plaza Services 2 Plaintiff first alleges a claim against Defendant Plaza Services under Section 1681s-2 of 3 the FCRA as a “furnisher” that provided inaccurate information to consumer reporting agencies. 4 See, e.g., TAC at ¶ 14. “To ensure that credit reports are accurate, the FCRA imposes duties on 5 entities called ‘furnishers,’ which are the sources that provide credit information to credit reporting 6 agencies.” Snyder v. Nationstar Mortg. LLC, No. 15-CV-03049-JSC, 2015 WL 7075622, at *3 7 (N.D. Cal. Nov. 13, 2015) (citing Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147, 1153-54 8 (9th Cir. 2009)). Under the statute, furnishers have a duty to conduct an investigation into the 9 accuracy of reported information after receiving notice of a dispute from a consumer reporting 10 agency. See 15 U.S.C. § 1681s-2(b)(1); see also 15 U.S.C. § 1681i(a)(2). “[I]f an item of 11 information disputed by a customer is found to be inaccurate or incomplete” following an 12 investigation, the furnisher must modify, delete or block reporting of that information. See 15 13 U.S.C. § 1681s-2(b)(1). Critically, “[t]hese duties arise only after the furnisher receives notice of 14 dispute from a CRA; notice of a dispute received directly from the consumer does not trigger 15 furnishers’ duties under [Section 1681s-2(b)].” Gorman, 584 F.3d at 1154. 16 In her third amended complaint, Plaintiff has identified the disputed debt as “a debt in the 17 amount of over $100.00 to [Defendant Plaza Services].” See TAC at ¶ 1. Plaintiff indicates that 18 she asked Defendant Plaza Services by letter to “validate[]” the debt, but that it “never responded 19 with any information that will hold plaintiff liable” for it. See id. at ¶ 2. But Plaintiff does not 20 allege that the Consumer Reporting Agencies notified Defendant Plaza Services of any dispute. 21 Plaintiff’s complaint does not even disclose the content of the letter(s) that she sent to Defendants. 22 Even assuming Defendant Plaza Services had been notified of the dispute as required under the 23 statute, Plaintiff’s allegation that Defendant Plaza Services “failed to conduct a proper and lawful 24 reinvestigation” of the debt, see TAC at ¶ 18, is still conclusory and lacks sufficient factual 25 support. Without more detail about how Defendant Plaza Services has allegedly failed to fulfill its 26 duties under Section 1681s–2, there is insufficient “factual content” for the Court to “draw the 27 reasonable inference” that Defendant Plaza Services is liable for violating the FCRA. See Iqbal, 1 sufficient facts to establish that Defendant Plaza Services engaged in inaccurate credit reporting. 2 B. Consumer Reporting Agencies 3 Plaintiff next alleges that Defendants Experian, Equifax, and Trans Union violated Section 4 1681e(b) of the FCRA by “fail[ing] to follow reasonable procedures to assure maximum possible 5 accuracy of Plaintiff’s credit report” and “fail[ing] to conduct a proper and lawful reinvestigation.” 6 See TAC at ¶¶ 17–18. Plaintiff’s allegation mirrors the language of Sections 1681e(b) and 1681i. 7 Section 1681e(b) requires consumer reporting agencies to prepare consumer reports using 8 “reasonable procedures to assure maximum possible accuracy.” See 15 U.S.C. § 1681e(b). 9 Section 1681i, on the other hand, requires consumer reporting agencies to “conduct a reasonable 10 reinvestigation” into consumer disputes of inaccurate information. 15 U.S.C. § 1681i. 11 Here, Plaintiff’s claim under Section 1681e(b) fails because Plaintiff still has not provided 12 factual support explaining what reasonable procedures the Consumer Reporting Agencies failed to 13 follow in reporting the disputed debt. Plaintiff characterizes the debt as “bogus,” but she does not 14 explain why she believes it is bogus, or why the Consumer Reporting Agencies should have 15 known this when preparing a consumer report. See, e.g., TAC at ¶ 2. Similarly, Plaintiff’s claim 16 under Section 1681i fails because Plaintiff has not alleged how the Consumer Reporting Agencies 17 failed to properly investigate the disputed debt. Although she alleges that she mailed them a letter, 18 see id. at ¶ 2, she does not provide the detail that the Court indicated was important, including 19 when she communicated with them, what she said in the letter, and how they responded. See Dkt. 20 No. 101 at 4. Significantly, Plaintiff appears to acknowledge that at least the letter to Defendant 21 Equifax was “returned back to sender.” See TAC at ¶ 2. There are thus no allegations that 22 Defendant Equifax was ever aware of a disputed debt. See 15 U.S.C. § 1681i(a)(1)(A) (to 23 establish a Section 1681i claim, a consumer must allege facts showing that she notified the 24 Consumer Reporting Agencies “directly” of the dispute). As to the other Defendants, Plaintiff 25 suggests that their responses were insufficient as they “never responded with any information that 26 will hold plaintiff liable [for] any debt,” id., but she does not explain what, if anything, they did 27 provide her, or what more they should have done. Plaintiff again simply alleges that Defendants 1 not explain how they failed to properly investigate. Without these facts, Plaintiff has failed to 2 || plead “enough facts to state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 3 || 570. 4 * * * 5 As before, Plaintiff has also not amended her state law claims against the Defendant to add 6 || any additional allegations, and they continue to contain conclusory recitations of the elements. 7 They too fail to provide Defendant “fair notice of what the . . . claim is and the grounds upon 8 which it rests,” and the Court finds that dismissal is warranted. See id. 555 (quotation omitted). 9 IV. CONCLUSION 10 The Court has provided Plaintiff with multiple opportunities to amend her complaint to 11 state a claim under the FCRA, and has repeatedly encouraged Plaintiff to seek assistance with her 12 case through the Legal Help Center. See, e.g., Dkt. Nos. 75 at 2, 80 at 10-11, 101 at 5. However, 13 as explained above, Plaintiff's TAC still fails to plead facts with sufficiently particularity to 14 support her claims. 15 While leave to amend should be liberally granted, dismissal with prejudice is warranted a 16 when any amendment would be futile, Steckman v. Hart Brewing, Inc., 143 F.3d 1293, 1298 (9th 3 17 Cir. 1998), or when the plaintiff has repeatedly failed to cure deficiencies in previous 18 amendments, see Foman v. Davis, 371 U.S. 178, 182 (1962). Here, over two years after initiating 19 this action, Plaintiff has had three opportunities to amend her complaint but has failed to cure the 20 || deficiencies the Court identified. The Court finds that Plaintiffs repeated failure to cure these 21 deficiencies indicates that granting leave to amend would be futile. The Court therefore 22 || GRANTS the motions to dismiss without leave to amend. The clerk is directed to close the case. 23 IT IS SO ORDERED. 24 || Dated: 1/24/2020 25 Alaipured 8 MbL □□□ HAYWOOD S. GILLIAM, JR. 26 United States District Judge 27 28