Anthony Heras v. Nelnet, Inc., et al

NOTICE OF MOTION AND MOTION to Dismiss Case

C.D. Cal.September 27, 2016

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Andrew H. Dubin (State Bar No. 292645) adubin@jonesday.com JONES DAY 555 South Flower Street Fiftieth Floor Los Angeles, CA 90071.2300 Telephone: +1.213.489.3939 Facsimile: +1.213.243.2539 Attorney for Defendant Experian Information Solutions, Inc. IN THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA ANTHONY HERAS, Plaintiff, v. NELNET, INC., U.S. DEPARTMENT OF EDUCATION, EXPERIAN INFORMATION SOLUTIONS, INC., TRANSUNION, LLC, and EQUIFAX INC., Defendants. Case No. 2:16-cv-06388-FMO-PLA Assigned to Hon. Fernando M. Olguin NOTICE OF MOTION AND MOTION TO DISMISS FIRST AMENDED COMPLAINT [[PROPOSED] ORDER FILED CONCURRENTLY HEREWITH] Hearing Date: October 27, 2016 Hearing Time: 10:00 a.m. Location: Courtroom No. 22 Judge: Fernando M. Olguin Case 2:16-cv-06388-FMO-PLA Document 31 Filed 09/27/16 Page 1 of 2 Page ID #:231 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TO ALL PARTIES AND THEIR COUNSEL OF RECORD: PLEASE TAKE NOTICE that, on October 27, 2016, or as soon thereafter as counsel may be heard by the Honorable Fernando M. Olguin, Courtroom 22, United States District Court for the Central District of California, 312 N. Spring St, Los Angeles, CA 90012, defendant Experian Information Solutions, Inc. (“Experian”) will and hereby does move to dismiss the complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Defendant seeks to dismiss each and every cause of action asserted in the complaint for failure to state a claim. Defendant further requests that the dismissal be with prejudice. This motion is based on this notice of motion and motion, the accompanying memorandum of points and authorities, all pleadings and papers on file in this action, and such further evidence and argument as may be presented at or before the hearing on this matter. Dated: September 27, 2016 JONES DAY By:/s/ Andrew H. Dubin Andrew H. Dubin Attorney for Defendants EXPERIAN INFORMATION SOLUTIONS, INC. Case 2:16-cv-06388-FMO-PLA Document 31 Filed 09/27/16 Page 2 of 2 Page ID #:232 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MEMO. IN SUPPORT OF MOTION TO DISMISS FIRST AMENDED COMPLAINT Andrew H. Dubin (State Bar No. 292645) adubin@jonesday.com JONES DAY 555 South Flower Street Fiftieth Floor Los Angeles, CA 90071.2300 Telephone: +1.213.489.3939 Facsimile: +1.213.243.2539 Attorney for Defendant Experian Information Solutions, Inc. IN THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA ANTHONY HERAS, Plaintiff, v. NELNET, INC., U.S. DEPARTMENT OF EDUCATION, EXPERIAN INFORMATION SOLUTIONS, INC., TRANSUNION, LLC, and EQUIFAX INC., Defendants. Case No. 2:16-cv-06388-FMO-PLA Assigned to Hon. Fernando M. Olguin MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS FIRST AMENDED COMPLAINT Hearing Date: October 27, 2016 Hearing Time: 10:00 a.m. Location: Courtroom No. 22 Judge: Hon. Fernando M. Olguin Case 2:16-cv-06388-FMO-PLA Document 31-1 Filed 09/27/16 Page 1 of 18 Page ID #:233 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF CONTENTS Page - i - MEMO. IN SUPPORT OF MOTION TO DISMISS FIRST AMENDED COMPLAINT I. INTRODUCTION ........................................................................................... 1 II. LEGAL ARGUMENT .................................................................................... 3 A. Plaintiff Fails To State A Claim Against Experian For Violation Of The Fair Credit Reporting Act ......................................................... 3 B. Plaintiff Fails To State A Claim Against Experian For Violation Of The Fair Debt Collection Practices Act ......................................... 10 C. The Court Should Dismiss The Complaint With Prejudice Because Amendment Would Be Futile ............................................... 11 III. CONCLUSION ............................................................................................. 12 Case 2:16-cv-06388-FMO-PLA Document 31-1 Filed 09/27/16 Page 2 of 18 Page ID #:234 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES Page - ii - MEMO. IN SUPPORT OF MOTION TO DISMISS FIRST AMENDED COMPLAINT CASES Acton v. Bank One Corp., 293 F. Supp. 2d 1092 (D. Ariz. 2003) ................................................................... 4 Ashcroft v. Iqbal, 556 U.S. 662 (2009) .............................................................................................. 3 Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) .......................................................................................... 3, 5 Cahlin v. General Motors Acceptance Corp., 936 F.2d 1151 (11th Cir. 1991) ............................................................................. 9 Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876 (9th Cir. 2010) ......................................................................... 4, 5, 6 Casella v. Equifax Credit Info. Servs., 56 F.3d 469 (2d Cir. 1995) .................................................................................... 5 Coleman v. Kohl's Dep't Stores, Inc., 2015 WL 5782352 (N.D. Cal. Oct. 5, 2015) ......................................................... 7 Darrin v. Bank of Am., N.A., 2014 WL 1922819 (E.D. Cal. May 14, 2014) ....................................................... 4 De Dios v. Int’l Realty & Invs., 641 F.3d 1071 (9th Cir. 2011) ............................................................................. 10 Guimond v. Trans Union Credit Info. Co., 45 F.3d 1329 (9th Cir. 1994) ................................................................................. 9 Hauser v. Equifax, Inc., 602 F.2d 811 (8th Cir. 1979) ............................................................................... 10 Katz v. Am. Exp. Co., 2014 WL 6470595 (D. Haw. Nov. 18, 2014) ........................................................ 4 Case 2:16-cv-06388-FMO-PLA Document 31-1 Filed 09/27/16 Page 3 of 18 Page ID #:235 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES (continued) Page - iii - MEMO. IN SUPPORT OF MOTION TO DISMISS FIRST AMENDED COMPLAINT Lyles v. Ford Motor Credit Co., 2012 WL 7687772 (C.D. Cal. Dec. 17, 2012) .................................................... 11 Mangum v. Action Collection Serv., Inc., 575 F.3d 935 (9th Cir. 2009) ............................................................................... 10 Robinson v. Managed Accounts Receivable Corp., 654 F. Supp. 2d 1051 (C.D. Cal. 2009) ............................................................... 10 Sepulvado v. CSC Credit Servs., 158 F.3d 890 (5th Cir. 1998) ............................................................................... 10 STATUTES 15 U.S.C. § 1681g ........................................................................................... 6, 7, 8, 9 15 U.S.C. § 1681g(a)(1) ............................................................................................. 8 15 U.S.C. § 1681g(a)(1)(A) ................................................................................ 4, 6, 7 15 U.S.C. § 1681i ........................................................................................... 4, 5, 6, 8 15 U.S.C. § 1681i(5)(A) ............................................................................................. 4 15 U.S.C. § 1681i(a)(1)(A) ..................................................................................... 3, 5 15 U.S.C. § 1681i(a)(5)(A) ..................................................................................... 3, 4 15 U.S.C. § 1681o ................................................................................................... 4, 9 15 U.S.C. § 1692a(6) ................................................................................................ 11 15 U.S.C. § 1692g ..................................................................................................... 10 FCRA ................................................................................................................. passim FDCPA .................................................................................................... 1, 2, 3, 10, 11 Case 2:16-cv-06388-FMO-PLA Document 31-1 Filed 09/27/16 Page 4 of 18 Page ID #:236 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES (continued) Page - iv - MEMO. IN SUPPORT OF MOTION TO DISMISS FIRST AMENDED COMPLAINT OTHER AUTHORITIES 16 C.F.R. pt. 600, App. ............................................................................................. 10 Fed. R. Civ. Proc. 12(b)(6) ..................................................................................... 1, 3 Case 2:16-cv-06388-FMO-PLA Document 31-1 Filed 09/27/16 Page 5 of 18 Page ID #:237 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 - 1 - MEMO. IN SUPPORT OF MOTION TO DISMISS FIRST AMENDED COMPLAINT Defendant Experian Information Solutions, Inc. (“Experian”) submits this memorandum in support of its Motion to Dismiss the First Amended Complaint of Anthony Heras (the “FAC”). The FAC fails to state a claim against Experian upon which relief can be granted and merits dismissal pursuant to Federal Rule of Civil Procedure 12(b)(6). I. INTRODUCTION On or about September 12, 2016, Plaintiff Anthony Heras (“Plaintiff”) filed a First Amended Complaint in this Court against Experian. The FAC does not articulate any specific cause of action against Experian but rather alleges confusing, vague, and conclusory allegations stemming from what are assumed to be student loan(s) serviced by Defendant Nelnet, Inc. and Plaintiff’s request for documentation or verification of those debt(s). Plaintiff’s FAC appears to assert claims under the Fair Credit Report Act, 15 U.S.C. § 1681 (“FCRA”) and the Fair Debt Collection Practices Act, 15 U.S.C. 1692 (“FDCPA”). However, Plaintiff’s barebones citations to these statutes fail to state or support a cause of action against Experian. These citations are, if anything, legal conclusions unsupported by the alleged facts. Plaintiff fails to allege what debt(s) or account(s) are at issue, whether any debt(s) or account(s) were inaccurately reported, whether he disputed the accuracy of any debt(s) or account(s), what alleged violations of law occurred, when the causes of action arose, against whom, what facts form the basis of the claims, and how, if at all, any action or inaction by Experian caused harm to Plaintiff. Plaintiff’s factual allegations against Experian consist of the following six paragraphs in the FAC:1 1 Plaintiff has improperly numbered the paragraphs in the FAC and thus Experian cites to the FAC’s paragraph headings and page number for reference. This summary of factual allegations regarding Experian is herein referred to as the “Factual Allegations.” Case 2:16-cv-06388-FMO-PLA Document 31-1 Filed 09/27/16 Page 6 of 18 Page ID #:238 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 - 2 - MEMO. IN SUPPORT OF MOTION TO DISMISS FIRST AMENDED COMPLAINT • FAC, ¶ “Defendant 4” at 3: stating the address of Experian’s principal place of business, State of incorporation, and that Experian “does business in California.” • FAC, ¶ “Claim III” at 4: alleging that the “credit bureaus state that Nelnet needs to correct the problem.” • FAC, ¶ “Claim IV” at 5: alleging that “the credit reporting bureaus state that they report information from Nelnet at wholesale – that it is not their job to verify the information.” Plaintiff further alleges that he “asked Experian…either by phone or by mail for a transcript or explanation of how they verified the information was correct from Nelnet” and Experian refused to provide the requested information. • FAC, ¶ “Claim VIII” at 6: alleging that Plaintiff “contacted Experian and Experian credit reporting bureau has refused to ask Nelnet to validate the accounts. [Experian] stated that Experian reports whatever Nelnet tells them to report even if there is a doubt that items are false or seem to be false.” • FAC, ¶ “Claim XXIV” at 11: stating that Plaintiff “holds Experian…responsible for all items in question due to [its] wrongdoing or refusal to take action that is in [its] power to solve the problem.” • FAC, ¶ “Claim XXV” at 11: alleging that “the three credit bureaus have an obligation to report only information that is 100% verifiable and clearly they have also not complied with requests made that Plaintiff is legally allowed to make from them.” These disjointed allegations, even if taken as true and liberally construed in favor of Plaintiff, allege only that Plaintiff contacted Experian on one or more occasions, that Experian made certain statements to Plaintiff, that Experian “refused to ask Nelnet” to validate unspecified accounts, and Experian refused to provide Plaintiff an explanation of how it verified that Nelnet’s information was correct. The Factual Allegations are insufficient to plausibly state any claims for relief against Experian under either the FCRA or FDCPA. Therefore, the Court should dismiss the FAC in its entirety as to Experian and with prejudice. Case 2:16-cv-06388-FMO-PLA Document 31-1 Filed 09/27/16 Page 7 of 18 Page ID #:239 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 - 3 - MEMO. IN SUPPORT OF MOTION TO DISMISS FIRST AMENDED COMPLAINT II. LEGAL ARGUMENT Federal Rule of Civil Procedure 12(b)(6) requires dismissal of a complaint when a plaintiff’s allegations fail to set forth a set of facts which, if true, would entitle the complainant to relief. Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009) (holding that a claim must be facially plausible in order to survive a motion to dismiss). The pleadings must raise the right to relief beyond the speculative level, and a plaintiff must provide “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). On a motion to dismiss, the court is not required to accept as true legal conclusions couched as factual allegations. Iqbal, 556 U.S. at 678. Under this standard, Plaintiff’s FAC should be dismissed as to Experian. The six paragraphs in the complaint that purport to state facts regarding Experian contain insufficient allegations to state any cause of action against Experian and are supported by legal citations to the FCRA that are, if anything, “mere conclusory statements [that] do not suffice.” Id. Plaintiff’s minimal, fragmentary Factual Allegations against Experian do not sufficiently support any claim for relief under the FCRA or FDCPA, and must be dismissed accordingly. A. Plaintiff Fails To State A Claim Against Experian For Violation Of The Fair Credit Reporting Act Plaintiff fails to state a cognizable claim against Experian under the FCRA because his allegations are insufficient to raise any recognized claim against a consumer reporting agency (“CRA”). Plaintiff appears to link the Factual Allegations to several sections of the FCRA in a failed attempt to state causes of action. Specifically, Plaintiff cites 15 U.S.C. § 1681i(a)(1)(A), 15 U.S.C. Case 2:16-cv-06388-FMO-PLA Document 31-1 Filed 09/27/16 Page 8 of 18 Page ID #:240 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 - 4 - MEMO. IN SUPPORT OF MOTION TO DISMISS FIRST AMENDED COMPLAINT § 1681i(a)(5)(A),2 15 U.S.C. § 1681g(a)(1)(A), and 15 U.S.C. § 1681o. Yet none of the paragraphs in the FAC, taken on their own or construed together, contain sufficient factual allegations to state causes of action for violations of any sections of the FCRA. In particular, nowhere in the FAC does Plaintiff provide a comprehensible story of his interaction(s) with Experian, let alone sufficient facts to properly assert a cause of action. “Instead, [Plaintiff makes] a number of vague allegations that Experian did not respond to Plaintiff[], and expect[s] Defendants and the court to fill in the blanks.” Katz v. Am. Exp. Co., 2014 WL 6470595, at *8 (D. Haw. Nov. 18, 2014) (dismissing FCRA claims against Experian for similarly ill-pleaded allegations). 1. The Factual Allegations do not identify any failure of Experian to reinvestigate any specific dispute in violation of § 1681i(a). To state a claim under § 1681i, Plaintiff must establish that “(1) [his] credit files contained inaccurate or incomplete information; (2) [he] notified CRA Defendants directly of the inaccuracy; (3) the dispute is not frivolous or irrelevant; (4) and that the CRA Defendants failed to respond to the dispute; and (5) this failure to reinvestigate caused Plaintiff to suffer actual damages.” Darrin v. Bank of Am., N.A., 2014 WL 1922819, at *7 (E.D. Cal. May 14, 2014) (citing Thomas v. TransUnion, LLC, 197 F.Supp.2d 1233, 1236 (D. Or. 2002)); Acton v. Bank One Corp., 293 F. Supp. 2d 1092, 1098 (D. Ariz. 2003). Nowhere do the Factual Allegations against Experian include any detail as to what specific information in Plaintiff’s consumer report was inaccurate, let alone that it even was inaccurate. Inaccuracy is an essential element for any FCRA claim. See Carvalho v. Equifax 2 Plaintiff’s actual citation is 15 U.S.C. § 1681i(5)(A), which does not exist. Experian assumes Plaintiff’s citation was intended to be 15 U.S.C. § 1681i(a)(5)(A). Case 2:16-cv-06388-FMO-PLA Document 31-1 Filed 09/27/16 Page 9 of 18 Page ID #:241 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 - 5 - MEMO. IN SUPPORT OF MOTION TO DISMISS FIRST AMENDED COMPLAINT Info. Servs., LLC, 629 F.3d 876, 890 (9th Cir. 2010) (requiring that an actual inaccuracy exist for a plaintiff to state a § 1681i claim). Even assuming, in the most liberal construction of the FAC, that Plaintiff’s single reference to “inaccurate information” applies to specific information on his Experian credit file (which Plaintiff does not allege), Plaintiff nonetheless fails to allege a single fact as to why, how, or even which information is inaccurate. FAC, ¶ “Claim 1” at 4. Plaintiff’s citation to § 1681i does not incorporate an allegation of inaccurate information by reference, nor should such an allegation be inferred by this citation. “A plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions” and a single reference to unspecified inaccurate information in the FAC is not enough to overcome the standard on a motion to dismiss. Twombly, 550 U.S. 544, at 555. Furthermore, the Factual Allegations also fail to allege facts supporting the remaining elements of a § 1681i claim against Experian. It is well established that a CRA has a duty to reinvestigate only after it has received notification of a dispute from a consumer. As the language of § 1681i(a)(1)(A) suggests, absent a complaint by the consumer, the FCRA does not impose on CRAs an affirmative duty to investigate a consumer’s credit history. Rather, “[p]rior to being notified by a consumer, a [CRA] generally has no duty to reinvestigate the credit information.” Casella v. Equifax Credit Info. Servs., 56 F.3d 469, 474 (2d Cir. 1995); Carvalho, 629 F.3d 876, at 892. The FAC fails to allege facts sufficient to show that Plaintiff disputed any specific information with Experian. It appears to allege that Plaintiff “contacted Experian” on one or more occasions but fails to identify any content of this “contact” or whether there were communications that amounted to a specific dispute, much less one that was not frivolous or that properly specified what was allegedly inaccurate and why. FAC, ¶ “Claim IV” at 5; ¶ “Claim VIII” at 6. Even Case 2:16-cv-06388-FMO-PLA Document 31-1 Filed 09/27/16 Page 10 of 18 Page ID #:242 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 - 6 - MEMO. IN SUPPORT OF MOTION TO DISMISS FIRST AMENDED COMPLAINT assuming arguendo that Plaintiff’s alleged contact with Experian put Experian on notice of a disputed item of information in Plaintiff’s credit file (which the FAC does not allege), nowhere do the Factual Allegations state that Experian failed to reinvestigate the disputed item, failed to either record its current status or delete it within thirty days, failed to send confirmation or otherwise respond to the dispute within thirty days, or that this hypothetical failure caused Plaintiff injury. The FAC alleges that Experian “refused to ask Nelnet to validate the accounts.” However, Experian is under no duty to validate information or conduct a reinvestigation absent a direct complaint to Experian by the consumer about specific information, all of which Plaintiff has failed to allege in the FAC. To the extent Plaintiff asked Experian to ask Nelnet to investigate accounts on Plaintiff’s behalf, the FCRA imposes no such obligation on a CRA. See Carvalho, 629 F.3d 876, at 892 (“With respect to the accuracy of disputed information, the CRA is a third party, lacking any direct relationship with the consumer, and its responsibility is to re investigate a matter once already investigated in the first place.”) (internal citations omitted). Therefore, Plaintiff’s Factual Allegations regarding Experian fail to state sufficient facts to support a § 1681i claim. Plaintiff does not allege the existence of specific inaccurate information on his Experian file, does not allege he disputed this information directly with Experian, does not allege why the information is inaccurate, and does not allege that Experian failed to respond to Plaintiff regarding a specific dispute. As such, the § 1681i claim, to the extent it is even articulated in the FAC apart from Plaintiff’s citation to the FCRA, is fatally flawed and must be dismissed. 2. The Factual Allegations fail to state a claim under § 1681g. Plaintiff cites 15 U.S.C. § 1681g(a)(1)(A) yet fails to allege any facts sufficient to state a claim for violation of that section. § 1681g(a)(1)(A) requires Case 2:16-cv-06388-FMO-PLA Document 31-1 Filed 09/27/16 Page 11 of 18 Page ID #:243 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 - 7 - MEMO. IN SUPPORT OF MOTION TO DISMISS FIRST AMENDED COMPLAINT CRAs to truncate “the first 5 digits of the Social Security Number (or similar identification number) of the consumer” in the consumer’s file disclosure if requested by the consumer and if the CRA “has received appropriate proof of the identity of the requester.” Yet the FAC fails to state a single fact as to the contents of Plaintiff’s consumer file, or any request by Plaintiff to Experian regarding those contents. Nowhere in the Factual Allegations does Plaintiff allege that he requested his file disclosure, that Experian refused to provide it or failed to provide all information on Plaintiff’s file, or more specifically that Plaintiff requested that Experian truncate his Social Security Number in his file. There are simply no facts whatsoever in the FAC that permit a reasonable inference that Experian failed to comply with § 1681g(a)(1)(A) and as such this claim must be dismissed. See Coleman v. Kohl's Dep't Stores, Inc., 2015 WL 5782352, at *7 (N.D. Cal. Oct. 5, 2015) (dismissing § 1681g claim where FAC only alleged that “Defendants did not comply with Section 1681g(c)”). To the extent that Plaintiff intended to state a broader claim under § 1681g (which the FAC does not do), the Factual Allegations do not support such a claim. Plaintiff does not allege that he requested a file disclosure from Experian. Rather, Plaintiff alleges that he “asked Experian…either by phone or by mail for a transcript or explanation of how they verified the information was correct from Nelnet” and that he made unspecified requests “that Plaintiff is legally allowed to make from [the CRAs].” FAC, ¶ “Claim IV” at 5; FAC, ¶ “Claim XXV” at 11. If these allegations are meant to state a claim, then Plaintiff’s FAC advances a wholly novel theory of liability: that Experian violated the FCRA by failing to provide Plaintiff with documentation of its verification of unspecified and undisputed accounts, and that somehow Experian’s failure to provide such documentation means that it did not adequately verify the credit information about those Case 2:16-cv-06388-FMO-PLA Document 31-1 Filed 09/27/16 Page 12 of 18 Page ID #:244 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 - 8 - MEMO. IN SUPPORT OF MOTION TO DISMISS FIRST AMENDED COMPLAINT unspecified accounts. Any attempt to formulate a claim based on this allegation is frivolous, as the FCRA imposes no such requirement. There is no requirement in the statue that CRAs provide the consumer with any additional documentation regarding the inner-workings of their reinvestigations or internal policies and procedures. See generally 15 U.S.C. § 1681i and 15 U.S.C. § 1681g. § 1681g requires only that a CRA disclose “all information in the consumer’s file.” See 15 U.S.C. § 1681g(a)(1). However, nothing in § 1681g suggests that this section requires a CRA to disclose copies of the documents supporting the information which it discloses to a consumer, or any other documents related to the CRA’s internal policies and procedures; instead, CRAs are merely required to provide the information itself. Similarly, Plaintiff may be alleging (it is unclear) that the purported statements made by Experian give rise to a cause of action under the FCRA. Plaintiff makes vague references to statements made by the “credit bureaus” regarding Nelnet and reporting Nelnet’s information. FAC, ¶ “Claim III” at 4; FAC, ¶ “Claim IV” at 5; FAC, ¶ “Claim VIII” at 6. It is unclear when these alleged statements were made, who made them, in what context, or even whether Experian was one of the “credit bureaus” who allegedly made such statements. It is clear, however, even taking the alleged statements as true in the light most favorable to Plaintiff, that there is no section of the FCRA that proscribes Experian from making statements to Plaintiff in communications with Plaintiff. It is highly implausible that these statements were even made, let alone that all three CRAs made identical statements to Plaintiff that mischaracterize their own procedures and businesses. Nonetheless, even assuming that these statements were in fact made, the FCRA provides no cause of action for liability for making such statements and Plaintiff’s Case 2:16-cv-06388-FMO-PLA Document 31-1 Filed 09/27/16 Page 13 of 18 Page ID #:245 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 - 9 - MEMO. IN SUPPORT OF MOTION TO DISMISS FIRST AMENDED COMPLAINT claim in this regard must be dismissed. Any claim under § 1681g must be dismissed because Plaintiff has alleged no facts sufficient to support any recognizable cause of action under § 1681g, nor could Plaintiff provide any authority which supports such an expansive reading of the statute subjecting Experian to liability for the actions described in the Factual Allegations. 3. The Factual Allegations fail to support any other cognizable causes of action under the FCRA. The only other section of the FCRA Plaintiff cites in the FAC is 15 U.S.C. § 1681o. However, there is no cause of action for violation of § 1681o, as this section merely provides remedies for negligent noncompliance with the FCRA. See generally 15 U.S.C. § 1681o. Plaintiff has alleged no facts sufficient to state any cause of action under the FCRA, let alone demonstrate any plausible liability under the FCRA, and as such these remedies are irrelevant. To the extent that Plaintiff asserts a nonexistent § 1681o claim against Experian, it must be dismissed. Additionally, in regard to Plaintiff’s allegation that “the three credit bureaus have an obligation to report only information that is 100% verifiable,” Plaintiff misinterprets the FCRA and fails to state a cause of action under the FCRA with this allegation. FAC, ¶ “Claim XXV” at 11. The FCRA is not a strict liability statute. When the FCRA was enacted, Congress recognized that, given the massive volume of credit information that must be maintained and updated, perfection is not possible. Consequently, the FCRA does not require error-free credit reports, nor does it impose strict liability for any inaccurate report. See, e.g. Guimond v. Trans Union Credit Info. Co., 45 F.3d 1329, 1333 (9th Cir. 1994) (holding that the FCRA does not impose strict liability on CRAs for preparing reports which contain inaccurate information); Cahlin v. General Motors Acceptance Corp., 936 F.2d 1151, 1156 (11th Cir. 1991) (ruling that the FCRA does not make reporting Case 2:16-cv-06388-FMO-PLA Document 31-1 Filed 09/27/16 Page 14 of 18 Page ID #:246 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 - 10 - MEMO. IN SUPPORT OF MOTION TO DISMISS FIRST AMENDED COMPLAINT agencies strictly liable for all inaccuracies); Sepulvado v. CSC Credit Servs., 158 F.3d 890, 896 (5th Cir. 1998) (ruling that the FCRA “does not impose strict liability for inaccurate entries.”); Hauser v. Equifax, Inc., 602 F.2d 811, 814-815 (8th Cir. 1979) (“the Act does not render [CRAs] strictly liable for inaccuracies in a report.”); FTC Commentary on the FCRA, 16 C.F.R. Pt. 600, App. (stating that the FCRA “does not require error free consumer reports”). Therefore, Plaintiff cannot maintain a cause of action for strict liability under the FCRA on the false assertion that the CRAs are obligated to report only information that is “100% verifiable.” For this and the foregoing reasons, all of Plaintiff’s FCRA claims against Experian must be dismissed. B. Plaintiff Fails To State A Claim Against Experian For Violation Of The Fair Debt Collection Practices Act Plaintiff includes one citation to the FDCPA in the FAC: 15 U.S.C. § 1692g. FAC, ¶ “Claim I” at 4. As a threshold matter, this reference to the FDCPA does not allege a specific violation of the FDCPA by Experian, nor does it even appear related to Experian. However, even if Plaintiff did intend to assert an FDCPA claim against Experian, Plaintiff does not and cannot allege sufficient facts in his Complaint that, accepted as true, would subject Experian to liability under the FDCPA because Experian is not a “debt collector” as defined by the FDCPA. To recover under the FDCPA, a plaintiff must show “(1) the plaintiff is a “consumer”, (2) the defendant is a “debt collector”, and (3) the defendant acted or failed to act in violation of the FDCPA. Robinson v. Managed Accounts Receivable Corp., 654 F. Supp. 2d 1051, 1057 (C.D. Cal. 2009). “Under the statutory scheme, liability under the Act requires that the defendant be a ‘debt collector.’” De Dios v. Int’l Realty & Invs., 641 F.3d 1071, 1073 (9th Cir. 2011); Mangum v. Action Collection Serv., Inc., 575 F.3d 935, 942 (9th Cir. 2009). Case 2:16-cv-06388-FMO-PLA Document 31-1 Filed 09/27/16 Page 15 of 18 Page ID #:247 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 - 11 - MEMO. IN SUPPORT OF MOTION TO DISMISS FIRST AMENDED COMPLAINT The FDCPA defines “debt collector” as: “…any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.” 15 U.S.C. § 1692a(6). Plaintiff fails to allege that Experian is a debt collector and has failed to plead facts that permit the reasonable inference that Experian is a debt collector within the meaning of the FDCPA. Plaintiff has not established a debt that he owes, much less one that Experian sought to collect. Plaintiff has not identified (and cannot identify) any debt collection activity, prohibited or otherwise, in which Experian was allegedly engaged. Therefore, Experian is not a “debt collector” and cannot be held liable under the FDCPA. C. The Court Should Dismiss The Complaint With Prejudice Because Amendment Would Be Futile Plaintiff has now had two bites at the apple to plead any facts sufficient to support a cause of action under the FCRA and has failed to do so. Indeed, the factual allegations in the FAC are identical to those alleged in Plaintiff’s original Complaint. The only significant difference between the two pleadings is that Plaintiff added citations to the FCRA in the FAC. There is nothing to suggest that Plaintiff will or can amend the Complaint further to include sufficient factual allegations to state any causes of action under the FCRA. Moreover, Plaintiff does not and cannot allege sufficient facts in the FAC that, accepted as true, would subject Experian to liability under the FDCPA. Experian is not a “debt collector” under the FDCPA. See Lyles v. Ford Motor Credit Co., 2012 WL 7687772, at *6 (C.D. Cal. Dec. 17, 2012) (dismissing FDCPA claim without leave to amend where defendant was not a debt collector). Experian Case 2:16-cv-06388-FMO-PLA Document 31-1 Filed 09/27/16 Page 16 of 18 Page ID #:248 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 - 12 - MEMO. IN SUPPORT OF MOTION TO DISMISS FIRST AMENDED COMPLAINT therefore requests dismissal with prejudice. III. CONCLUSION For the foregoing reasons, Defendant Experian Information Solutions, Inc. respectfully requests that the Court dismiss Plaintiff’s Complaint in its entirety, and with prejudice. Dated: September 27, 2016 JONES DAY By: /s/ Andrew H. Dubin Andrew H. Dubin Attorney for Defendant Experian Information Solutions, Inc. Case 2:16-cv-06388-FMO-PLA Document 31-1 Filed 09/27/16 Page 17 of 18 Page ID #:249 Case 2:16-cv-06388-FMO-PLA Document 31-1 Filed 09/27/16 Page 18 of 18 Page ID #:250 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 [PROPOSED] ORDER ON MOTION TO DISMISS FIRST AMENDED COMPLAINT UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA ANTHONY HERAS, Plaintiff, v. NELNET, INC., U.S. DEPARTMENT OF EDUCATION, EXPERIAN INFORMATION SOLUTIONS, INC., TRANSUNION, LLC, and EQUIFAX INC., Defendants. Case No. 2:16-cv-06388-FMO-PLA Assigned to Hon. Fernando M. Olguin [PROPOSED] ORDER ON DEFENDANT EXPERIAN INFORMATION SOLUTIONS, INC.’S MOTION TO DISMISS FIRST AMENDED COMPLAINT Case 2:16-cv-06388-FMO-PLA Document 31-2 Filed 09/27/16 Page 1 of 2 Page ID #:251 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 1 - [PROPOSED] ORDER ON MOTION TO DISMISS FIRST AMENDED COMPLAINT TO ALL PARTIES AND THEIR COUNSEL OF RECORD: The Court, having considered the Motion to Dismiss the Complaint (“Motion”) of Defendant Experian Information Solutions, Inc. (“Experian”) pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, and good cause appearing therefore, IT IS HEREBY ORDERED that Experian’s Motion is GRANTED in its entirety and Plaintiff’s Complaint against Experian is dismissed with prejudice. IT IS SO ORDERED. Dated: HON. FERNANDO M. OLGUIN UNITED STATES DISTRICT JUDGE Case 2:16-cv-06388-FMO-PLA Document 31-2 Filed 09/27/16 Page 2 of 2 Page ID #:252