DEFENDANT’S MOTION TO DISMISS
Case No. 2:16-cv-08795-AB (AJWx)
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ANGELA E. KLEINE (CA SBN 255643)
AKleine@mofo.com
SARAH N. DAVIS (CA SBN 275145)
SarahDavis@mofo.com
MORRISON & FOERSTER LLP
425 Market Street
San Francisco, California 94105-2482
Telephone: 415.268.7000
Facsimile: 415.268.7522
Attorneys for Defendant
ANNIEMAC HOME MORTGAGE
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
FRANCES CAMPBELL, an Individual,
Plaintiff,
v.
ANNIEMAC HOME MORTGAGE,
a business entity, form unknown; and
DOES 1-10, Inclusive,
Defendants.
Case No. 2:16-cv-08795-AB (AJWx)
DEFENDANT ANNIEMAC HOME
MORTGAGE’S MOTION TO
DISMISS
Date: February 27, 2017
Time: 10 am
Ctrm: 7B
District Judge André Birotte, Jr.
Magistrate Judge Andrew J. Wistrich
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TABLE OF CONTENTS
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I. INTRODUCTION ........................................................................................... 1
II. BACKGROUND ............................................................................................. 2
III. LEGAL STANDARD ..................................................................................... 3
IV. ARGUMENT .................................................................................................. 4
A. Plaintiff’s Conclusory Allegations of “Emotional Distress” Do
Not State a Negligent Violation Claim ................................................. 4
B. Plaintiff Lacks Standing to Bring Her UCL Claim............................... 8
C. The FCRA Preempts the Invasion of Privacy Claim ............................ 9
V. CONCLUSION ............................................................................................. 10
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TABLE OF AUTHORITIES
Page(s)
Cases
Ashcroft v. Iqbal,
556 U.S. 662 (2009) ........................................................................................ 4, 10
Ausherman v. Bank of Am. Corp.,
352 F.3d 896 (4th Cir. 2003) ................................................................................. 7
Bankston v. AmeriCredit Fin. Servs.,
No. C 09-04892,
2011 U.S. Dist. LEXIS 2408 (N.D. Cal. Jan. 10, 2011) ....................................... 8
Bell Atl. Corp. v. Twombly,
550 U.S. 544 (2007) ........................................................................................... 3-4
Biederman v. Nw. Tr. Servs., Inc.,
No. CV 15-02283-AB,
2015 U.S. Dist. LEXIS 82221 (C.D. Cal. June 24, 2015) (Birotte,
J.) ........................................................................................................................ 8-9
Birdsong v. Apple, Inc.,
590 F.3d 955 (9th Cir. 2009) ............................................................................. 8, 9
Burnell v. Marin Humane Soc’y,
No. 14-cv-05635-JSC,
2015 WL 6746818 (N.D. Cal. Nov. 5, 2015) ........................................................ 5
Burnthorne-Martinez v. Sephora USA, Inc.,
No. 16-cv-02843-YGR,
2016 WL 6892721 (N.D. Cal. Nov. 23, 2016) .............................................. 4, 5, 6
Cahill v. Liberty Mut. Ins. Co.,
80 F.3d 336 (9th Cir. 1996) ................................................................................... 4
Connolly v. Remkes,
No. 5:14-CV-01344-LHK,
2014 WL 5473144 (N.D. Cal. Oct. 28, 2014) ....................................................... 5
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Dewi v. Wells Fargo Bank,
No. CV 12-2891,
2012 WL 10423239 (C.D. Cal. Aug. 8, 2012) .................................................. 5, 6
Duarte v. J.P. Morgan Chase Bank,
No. CV 13-1105-GHK,
2014 U.S. Dist. LEXIS 190291 (C.D. Cal. Apr. 7, 2014) ..................................... 7
Gorman v. Wolpoff & Abramson, LLP,
584 F.3d 1147 (9th Cir. 2009) ............................................................................... 9
Guimond v. Trans Union Credit Info. Co.,
45 F.3d 1329 (9th Cir. 1995) ................................................................................. 4
Hernandez v. Specialized Loan Servicing, LLC,
No. CV 14-9404-GW(JEMx),
2015 U.S. Dist. LEXIS 8695 (C.D. Cal. Jan. 22, 2015) ........................................ 8
King v. Bank of Am. N.A.,
No. C-12-04168 JCS,
2012 U.S. Dist. LEXIS 141963 (N.D. Cal. Oct. 1, 2012) ..................................... 9
Kwikset Corp. v. Superior Ct.,
51 Cal. 4th 310 (2011) ........................................................................................... 8
Levinson v. Transunion LLC,
No. CV 16-00837-RSWL-PLAx,
2016 WL 3135642 (C.D. Cal. June 2, 2016)- ................................................... 5, 6
Lopez v. Well Fargo Bank, N.A.,
No. 5:15-cv-04232-EJD,
2016 U.S. Dist. LEXIS 8415 (N.D. Cal. Jan. 25, 2016) ....................................... 4
Martinez v. Flagstar Bank, FSB,
No. 2:15-cv-01934-KJM-CKD,
2016 U.S. Dist. LEXIS 94124 (E.D. Cal. July 19, 2016) ................................... 10
Perl v. Am. Exp.,
2012 U.S. Dist. LEXIS 7719 (S.D.N.Y. Jan. 19, 2012) ........................................ 7
Phillips v. Grendahl,
312 F.3d 357 (8th Cir. 2002) ................................................................................. 7
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Rex v. Chase Home Fin. LLC,
905 F. Supp. 2d 1111 (C.D. Cal. 2012) ................................................................. 8
Rubio v. Capital One Bank,
613 F.3d 1195 (9th Cir. 2010) ........................................................................... 8, 9
Slack v. Suburban Propane Partners, L.P.,
No. 10-2548 (JLL),
2010 U.S. Dist. LEXIS 135530 (D.N.J. Dec. 22, 2010) ....................................... 7
Subhani v. JPMorgan Chase Bank,
No. C 12-01857 WHA,
2012 U.S. Dist. LEXIS 76447 (N.D. Cal. June 1, 2012) .................................... 10
Tran v. Select Portfolio Servicing, Inc.,
No. 14-cv-05404-HSG,
2015 WL 1739370 (N.D. Cal. Apr. 14, 2015) ...................................................... 3
Valle v. RJM Acquistions, LLC,
No. 3:12-cv-00957,
2015 U.S. Dist. LEXIS 20414 (D. Conn. Feb. 19, 2015) ..................................... 9
Young v. Harbor Motors Works, Inc.,
No. 2:07-CV-0031-JVB-PRC,
2008 U.S. Dist. LEXIS 111909 (N.D. Ind. Dec. 18, 2008),
adopted by 2009 U.S. Dist. LEXIS 5721 (N.D. Ind. Jan. 27, 2009) ..................... 7
Statutes
15 U.S.C.
§ 1681b(f) .............................................................................................................. 7
§ 1681h(e) .................................................................................................... 2, 9, 10
§ 1681n .................................................................................................................. 4
§ 1681o .............................................................................................................. 4, 7
§ 1681o(a)(1) ......................................................................................................... 4
§ 1681q .................................................................................................................. 7
Other Authorities
Fed. R. Civ. P.
12(b)(6) .............................................................................................................. 3, 4
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DEFENDANT’S MOTION TO DISMISS
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NOTICE OF MOTION AND MOTION TO DISMISS
TO PLAINTIFF AND HER ATTORNEYS OF RECORD:
PLEASE TAKE NOTICE THAT on February 27, 2017, at 10:00 a.m. in
Courtroom 7B, 7th Floor, of the United States District Court, Southern District of
California, located at 350 West First Street, Los Angeles, California, the Honorable
André Birotte Jr. presiding, defendant AnnieMac Home Mortgage (“Defendant” or
“AnnieMac”) will, and hereby does, move the Court for an order dismissing the
claim for negligent violation of the Fair Credit Reporting Act (“FCRA”) under 15
U.S.C. § 1681o, the claim for invasion of privacy, and the Unfair Competition Law
(“UCL”) claim in the Complaint of plaintiff Frances Campbell (“Plaintiff”). This
motion is made following the conference of counsel pursuant to L.R. 7-3 which
took place on January 5, 2017.
AnnieMac seeks dismissal of the negligent violation of the FCRA on the
grounds that Plaintiff fails to adequately plead the necessary element of actual
damages. AnnieMac seeks dismissal of the UCL claim on the grounds that Plaintiff
lacks standing to bring such claim as she fails to allege that she lost any money or
property as a result of the allegedly impermissible credit pull. Lastly, AnnieMac
seeks dismissal of the invasion of privacy claim on the grounds that it is preempted
by 15 U.S.C. 1681h(e).
Defendant’s motion is based upon this Notice of Motion and Motion, the
Memorandum of Points and Authorities in support of the motion, any Reply
Memorandum, the pleadings and filings in this action, and any other evidence or
argument as may be presented before or at the hearing on this motion.
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DEFENDANT’S MOTION TO DISMISS
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Dated: January 12, 2017 ANGELA E. KLEINE
SARAH N. DAVIS
MORRISON & FOERSTER LLP
By: /s/ Angela E. Kleine
Angela E. Kleine
Attorneys for Defendant
AnnieMac Home Mortgage
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DEFENDANT’S MOTION TO DISMISS
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MEMORANDUM OF POINTS AND AUTHORITIES
I. INTRODUCTION
Plaintiff’s complaint is about a single, allegedly unauthorized pull of credit
information about her. She asserts that this pull constituted a negligent and a
willful violation of the Fair Credit Reporting Act (“FCRA”), invaded her privacy,
and violated the California’s Unfair Competition Law (“UCL”). Plaintiff does not,
however, allege that any actual harm resulted from the allegedly impermissible pull.
This failure to plead actual damages or economic harm is fatal to both her negligent
claim under the FCRA and her entire UCL claim.
1
Moreover, Plaintiff does not
contest that her invasion of privacy claim is preempted by the FCRA.
To state a claim for a negligent FCRA violation, Plaintiff must adequately
plead cognizable “actual damages” that she sustained as a result of the alleged
violation. Plaintiff pleads no such damages. Instead, she asserts only that she
suffered unspecified “emotional distress,” and that the credit pull may have
depressed her credit score. Under well-established law, conclusory allegations of
“emotional distress” are insufficient to state a claim. Her attempts to buttress her
claim of “emotional distress” with allegations that her credit score also may have
dropped do not save her claim. A drop in credit score alone is insufficient to state a
claim for actual damages. There must be some harm that flowed from the drop,
such as a denial of credit, to state a claim for actual damages. As Plaintiff does not
even allege a concrete drop in score—much less any harm that flowed from the
potential drop—Plaintiff fails to state a claim for a negligent violation of the FCRA.
Plaintiff lacks standing to bring her UCL claim for largely the same reasons.
Standing under the UCL is substantially narrower than Article III standing in that
1
While the facts will ultimately dispose of Plaintiff’s alleged willful
violation, AnnieMac does not challenge this claim on the Motion to Dismiss as, at
this stage, the Court must accept all of Plaintiff’s factual allegations as true.
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the Plaintiff’s alleged harm must be, at least in part, economic. As Plaintiff has not
alleged that she incurred any financial harm, Plaintiff lacks standing to assert her
UCL claim.
Lastly, Plaintiff’s claim for invasion of privacy is preempted by the express
language of 15 U.S.C. 1681h(e), so it too is subject to dismissal.
AnnieMac’s Motion to Dismiss should be granted in its entirety.
II. BACKGROUND
Defendant AnnieMac is a home loan mortgage company that does business
in Los Angeles, California. (Complaint (“Compl.”) ¶ 2, ECF No. 1.) Plaintiff
Frances Campbell is an individual residing in Encino, California. (Id. ¶ 1.)
2
Plaintiff alleges that on or about early October 2016, she became interested
in a home equity line of credit (“HELOC”) with a 90% loan-to-value ratio (“LTV”).
(Id. ¶ 6.) To obtain information on this product, she “submitted her name but not
her social security number to Lending Tree.” (Id.) The next day, Plaintiff received
an email and a phone call from AnnieMac, a preferred lender with Lending Tree,
offering loan services. (Id.) During the phone call, Plaintiff explained that she was
only interested in a HELOC and was not interested in refinancing. (Id.) Plaintiff
wanted to know if the product was available and what her chances were for
approval. (Id.) Plaintiff asked a loan officer with AnnieMac if it offered the high
LTV HELOC, and the loan officer promised to inquire and get back to Plaintiff.
(Id.) According to Plaintiff, the loan officer “never indicated that she would pull
[P]laintiff’s credit or otherwise start the application process.” (Id.) The next day,
Plaintiff discovered an “unauthorized” hard pull on her credit profile by AnnieMac.
(Id.)
2
All alleged facts relayed herein are taken from the Complaint and are
assumed true only for the purposes of this motion.
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Plaintiff alleges that she then contacted the loan officer “stating she did not
authorize the hard pull and asked [the loan officer] to remove it.” (Id. ¶ 7.) On
November 2, 2016, Plaintiff alleges that the loan officer promised to look into the
steps to have the hard inquiry removed. (Id. ¶ 8.) Plaintiff alleges that the hard
inquiry remains on her credit report. (Id.)
Plaintiff alleges that when AnnieMac obtained credit reporting information
on her, it did so without a permissible purpose, in violation of the FCRA. (Id. ¶¶ 9,
11-12.) She seeks statutory damages for a “willful” violation of the statute, and
alleges AnnieMac’s conduct was “willful” because it “use[d] false pretenses” and
was “fraudulent, malicious, oppressive and willful.” (Id. ¶¶ 9, 11.) In the
alternative, she seeks unspecified actual damages for a negligent violation of the
statute. (Id. ¶¶ 11-12.) In support of her claim for actual damages, Plaintiff makes
a conclusory allegation that she “suffered emotional distress, humiliation and
embarrassment” as a result of AnnieMac’s conduct, but does not provide any more
details. (Id.¶ 10.)
To support the “concreteness” of her allegations, Plaintiff also alleges that
“‘hard inquiries’ routinely depress credit scores from 5 to 50 points, depending on
the credit scoring model, thereby depressing [her] ability to obtain credit and also
making her credit score more vulnerable to adverse events.” (Id. ¶ 13.) Plaintiff
does not allege any information about any alleged changes in her own credit score.
(See id.)
Plaintiff alleges that the same conduct supports a claim for invasion of
privacy and a violation of the UCL. (See id. ¶¶ 14-20.)
III. LEGAL STANDARD
A district court must dismiss a complaint under Rule 12(b)(6) for failure to
state a claim “when it does not contain sufficient facts to state a plausible claim on
its face.” Tran v. Select Portfolio Servicing, Inc., No. 14-cv-05404-HSG, 2015 WL
1739370, at *2 (N.D. Cal. Apr. 14, 2015); see Bell Atl. Corp. v. Twombly, 550 U.S.
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544, 570 (2007). In considering a Rule 12(b)(6) motion, a court must accept all
factual allegations pleaded in the complaint as true, Cahill v. Liberty Mut. Ins. Co.,
80 F.3d 336, 337-38 (9th Cir. 1996), but need not accept unreasonable inferences or
legal conclusions cast in the form of factual allegations, see Ashcroft v. Iqbal, 556
U.S. 662, 681 (2009). A complaint fails to state a claim, where the asserted causes
of action are preempted by federal law. See Lopez v. Well Fargo Bank, N.A., No.
5:15-cv-04232-EJD, 2016 U.S. Dist. LEXIS 8415, at *1 (N.D. Cal. Jan. 25, 2016)
(granting a motion to dismiss in full where the state law claims were preempted)
The FCRA is not a strict liability statute; it creates a private right of action
only for a negligent or willful violation of the Act. 15 U.S.C. §§ 1681n, 1681o.
Consumers may recover only “actual damages” they have sustained as a result of a
negligent FCRA violation. See 15 U.S.C. § 1681o(a)(1). Thus, to bring a claim for
negligent violation of the FCRA, Plaintiff must adequately plead, among other
things, cognizable actual damages that she has suffered as a result of the alleged
negligent violation. Id.; see, e.g., Burnthorne-Martinez v. Sephora USA, Inc., No.
16-cv-02843-YGR, 2016 WL 6892721, at *6 (N.D. Cal. Nov. 23, 2016).
IV. ARGUMENT
A. Plaintiff’s Conclusory Allegations of “Emotional Distress”
Do Not State a Negligent Violation Claim.
In order to state a claim for a negligent violation under the FCRA, Plaintiff
must adequately plead actual damages. 15 U.S.C. § 1681o; Burnthorne-Martinez,
2016 WL 6892721, at *6. While well-pled allegations of emotional distress can
sometimes be sufficient,
3
the “plaintiff must support her claim for pain and
3
The Ninth Circuit in Guimond v. Trans Union Credit Info. Co., 45 F.3d
1329, 1333 (9th Cir. 1995), recognized that “actual damages” under the FCRA may
include pain and suffering. Guimond, however, did not address the pleading
standard for actual damages based on emotional distress. After Twombley and
Iqbal, courts in the Ninth Circuit have required that plaintiffs plead more than
conclusory allegations of emotional distress to state a claim. See supra at 4-5.
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suffering ‘with something more than [her] own conclusory allegations[.]’” Dewi v.
Wells Fargo Bank, No. CV 12-2891 ABC SHx, 2012 WL 10423239, at *8-9 (C.D.
Cal. Aug. 8, 2012) (striking assertion of damages for “pain and suffering” as
“insufficient to state a plausible entitlement to these damages”); see also Levinson
v. Transunion LLC, No. CV 16-00837-RSWL-PLAx, 2016 WL 3135642, at *7
(C.D. Cal. June 2, 2016) (dismissing FCRA claim for the same reason).
It is well-established that unsupported allegations of “pain and suffering” or
“mental and emotional distress” do not give rise to a plausible inference that a
plaintiff has actually incurred damages. See, e.g., Burnthorne-Martinez, 2016 WL
6892721, at *6 (dismissing FCRA claim because plaintiff’s allegation of
“emotional distress” was “general and conclusory”); Burnell v. Marin Humane
Soc’y, No. 14-cv-05635-JSC, 2015 WL 6746818, at *19 (N.D. Cal. Nov. 5, 2015)
(dismissing intentional infliction of emotional distress claim where complaint
lacked “any facts pertaining to the nature and extent of [p]laintiffs’ emotional or
mental suffering”); Connolly v. Remkes, No. 5:14-CV-01344-LHK, 2014 WL
5473144, at *13 (N.D. Cal. Oct. 28, 2014) (finding allegation that plaintiff
“suffered great worry and concern” insufficient). Therefore, to sufficiently plead
actual damages for emotional distress, Plaintiff must assert hard facts that illustrate
the manner in which she suffered and that plausibly suggest such suffering related
to the alleged violation. See id.
Plaintiff alleges no such facts. Instead, her sole claim is that she “suffered
emotional distress, humiliation and embarrassment.” (Compl. ¶ 10.) This
conclusory allegation is exactly the type of allegation that courts regularly deem
insufficient. For example, in Burnthorne-Martinez, plaintiff argued that a
“violation of privacy” resulting from an alleged FCRA violation, “and the
emotional distress caused by such can give rise to a claim for actual damages.”
2016 WL 6892721, at *6. While acknowledging that emotional distress can
constitute actual damages, the court dismissed the claims because merely stating as
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much in the complaint is “bald and conclusory.” Id. The emotional distress
allegations in this case are functionally indistinguishable from those in Burnthorne-
Martinez. Here, Plaintiff alleges—in just one brief sentence—that “[a]s a direct
result of Defendants’ conduct [she] has suffered emotional distress, humiliation and
embarrassment.”
4
(Compl. ¶ 10.) Yet, Plaintiff does not explain how AnnieMac’s
allegedly impermissible credit pull caused her distress, what exactly that emotional
distress was, or how it manifested. Without “something more than [her] own
conclusory allegations,” Plaintiff’s negligence claim must be dismissed. See Dewi,
2012 WL 10423239, at *8; Levinson, 2016 WL 3135642, at *7 (“Plaintiffs’
identification of the general category of ‘pain and suffering’ is insufficient to state a
plausible entitlement to damages.”).
Plaintiff’s implication that her credit score may have been impaired by the
allegedly impermissible “hard inquiry” does not save her negligence claim. At the
end of her FCRA allegations, Plaintiff tacks on one additional paragraph to support
the purported “concreteness” of her injury.
5
(Compl. ¶ 13.) In addition to repeating
her conclusory allegation as to “emotional distress, humiliation and
embarrassment,” Plaintiff alleges that “‘hard inquiries’ routinely depress credit
scores from 5 to 50 points, depending on the credit scoring model, thereby
depressing plaintiff’s ability to obtain credit and also making her credit score more
vulnerable to future adverse credit events.” (Id.)
Plaintiff, though, does not allege how the allegedly improper pull impacted
her own credit score, if at all. (See id.) The Complaint’s vague allegations about
credit scores generally should be disregarded for this reason alone. Moreover, even
4
Plaintiff repeats this same conclusory statement in support of her claim on
concrete injury under Spokeo (Compl. ¶ 13) and in support of the purported harm
incurred as a result of her alleged invasion of privacy (id. ¶ 17), but repeating the
same conclusory statement does not make it true or entitle it to any weight.
5
Defendant does not challenge Plaintiff’s standing to bring her FCRA claim.
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setting aside that Plaintiff does not actually allege that her credit score dropped,
allegations that Plaintiff “suffered a reduction in [her] credit score[,] without more,
fail to raise the possibility of relief above the speculative level.” Slack v. Suburban
Propane Partners, L.P., No. 10-2548 (JLL), 2010 U.S. Dist. LEXIS 135530, at
*39-40 (D.N.J. Dec. 22, 2010); see also Duarte v. J.P. Morgan Chase Bank, No.
CV 13-1105-GHK (MANx), 2014 U.S. Dist. LEXIS 190291, at *10-11 (C.D. Cal.
Apr. 7, 2014) (holding that impaired credit score alone was insufficient to state
actual damages under the CCRAA, which parallels the FCRA). It is well-
established that to state a claim for actual damages based on a decrease in credit
score, Plaintiff must allege that she suffered actual damages “flowing from the
alleged decrease in credit score such as that [she] was denied credit, lost credit, had
[her] credit limits lowered, or was required to pay a higher interest rate for credit.”
Young v. Harbor Motors Works, Inc., No. 2:07-CV-0031-JVB-PRC, 2008 U.S.
Dist. LEXIS 111909, at *13-14 (N.D. Ind. Dec. 18, 2008), adopted by 2009 U.S.
Dist. LEXIS 5721 (N.D. Ind. Jan. 27, 2009); Perl v. Am. Exp., 2012 U.S. Dist.
LEXIS 7719, at *10 (S.D.N.Y. Jan. 19, 2012) (holding that a reduced credit score
must proximately cause actual injury to support a claim for actual damages under
the FCRA). Thus, even assuming Plaintiff’s score did in fact drop, Plaintiff’s
negligence claim still fails because Plaintiff has not alleged that she incurred any
actual damages as a result. The Court should dismiss Plaintiff’s claims for a
negligent violation of the FCRA, 15 U.S.C. § 1681o.
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To the extent Plaintiff attempts to assert a separate claim of False Pretenses
under 15 U.S.C. § 1681q (see Compl. ¶ 9), that claim should be dismissed because
Section 1681q is a criminal statute, and courts have recognized that after the
enactment of 15 U.S.C. § 1681b(f) reliance on “section 1681q for civil liability is
anachronistic and unnecessary.” Phillips v. Grendahl, 312 F.3d 357, 364 (8th Cir.
2002) (dismissing claim brought under 1681q); Ausherman v. Bank of Am. Corp.,
352 F.3d 896, 900 n.3 (4th Cir. 2003) (noting that the addition of § 1681b(f)
rendered the use of 1681q to impose civil liability for using and obtaining credit
reports largely unnecessary).
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B. Plaintiff Lacks Standing to Bring Her UCL Claim.
Standing under the UCL is “substantially narrower than federal standing
under article III.” Kwikset Corp. v. Superior Ct., 51 Cal. 4th 310, 324 (2011). The
“injury must be economic, at least in part, for a plaintiff to have standing under [the
UCL.]” Biederman v. Nw. Tr. Servs., Inc., No. CV 15-02283-AB (JCx), 2015 U.S.
Dist. LEXIS 82221, at *15 (C.D. Cal. June 24, 2015) (Birotte, J.) (citation omitted).
The alleged injury must also be concrete and particularized—the threat of possible
future economic harm will not suffice. See Birdsong v. Apple, Inc., 590 F.3d 955,
960-61 (9th Cir. 2009) (finding a lack of standing based on the “conjectural and
hypothetical nature of the alleged injury”).
Here, Plaintiff’s only possible allegation of harm is that AnnieMac’s credit
pull may have depressed her credit score. (Compl. ¶¶ 13, 18.) She does not allege
that any theoretical drop in score resulted in any monetary impact on her
whatsoever. Because a drop in credit score cannot “standing alone . . . constitute
lost ‘money or property’ sufficient to confer UCL standing,” Plaintiff’s UCL claim
is subject to dismissal. Hernandez v. Specialized Loan Servicing, LLC, No. CV
14-9404-GW(JEMx), 2015 U.S. Dist. LEXIS 8695, at *23-24 (C.D. Cal. Jan. 22,
2015); Bankston v. AmeriCredit Fin. Servs., No. C 09-04892 SBA, 2011 U.S. Dist.
LEXIS 2408, at *21 (N.D. Cal. Jan. 10, 2011) (finding that plaintiff could not
establish UCL standing because she “failed to proffer any evidence that she
suffered any actual loss of money or property as a result of [defendant’s] alleged
report to the credit bureaus”);
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Some courts have found that a drop in credit score is sufficient to confer
standing. These cases are inconsistent with the California Supreme Court’s
decision in Kwikset and the Ninth Circuit’s decision in Birdsong. See, e.g., Rex v.
Chase Home Fin. LLC, 905 F. Supp. 2d 1111, 1147-48 (C.D. Cal. 2012). Rex cites
Rubio v. Capital One Bank, 613 F.3d 1195, 1204 (9th Cir. 2010), for the
proposition “that damage to credit alone satisfies UCL standing.” 905 F. Supp. 2d
at 1147-48. However, Rubio neither stands for that proposition, nor supports
standing in this case. Rubio had nothing to do with credit scores, it concerned
credit. There, a plaintiff who already had an account with the defendant was given
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at *15 (dismissing UCL claim where plaintiff failed to alleged any facts
establishing that he wrongfully lost any money or property within the meaning of
the UCL”).
C. The FCRA Preempts the Invasion of Privacy Claim.
Prior to the filing of the present motion, the parties met and conferred
pursuant to Local Rule 7-3, during which Plaintiff agreed to dismiss the invasion of
privacy claim without prejudice. This is the correct result.
The express language of 15 U.S.C. Section 1681h(e) preempts claims for
invasion of privacy:
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 . . .
any user of information . . . 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); see, e.g., Gorman v. Wolpoff & Abramson,
LLP, 584 F.3d 1147, 1165-66 (9th Cir. 2009); Valle v. RJM Acquistions, LLC, No.
3:12-cv-00957, 2015 U.S. Dist. LEXIS 20414, at *12 (D. Conn. Feb. 19, 2015)
(dismissing plaintiff’s claim of invasion of privacy claim based on an allegedly
a choice to either close her credit account and pay off the outstanding balance at her
current interest rate, or keep the account open and accept a doubled interest rate.
Rubio, 613 F.3d at 1198. Under both scenarios, the plaintiff suffered a monetary
loss—not just damage to credit score—either by losing her ability to use her credit
card or by paying a higher interest rate. A decreased credit score does not
necessarily affect a consumer’s credit outcomes. It creates the mere possibility of
loss of money or property. If a decreased credit score causes a consumer to be
denied credit, the loss of credit may constitute an actionable loss; the change in
score does not. See Birdsong, 590 F.3d at 960-61; see also King v. Bank of Am.
N.A., No. C-12-04168 JCS, 2012 U.S. Dist. LEXIS 141963, at *19 (N.D. Cal. Oct.
1, 2012).
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impermissible credit pull based on 15 U.S.C. § 1681h(e)). The only exceptions to
Section 1681h(e)’s preemptive force are claims for invasion of privacy that are
based on “information furnished with malice or willful intent to injure such
consumer.” 15 U.S.C. § 1681h(e) (emphasis added); Martinez v. Flagstar Bank,
FSB, No. 2:15-cv-01934-KJM-CKD, 2016 U.S. Dist. LEXIS 94124, at *14 (E.D.
Cal. July 19, 2016). As AnnieMac is not alleged to have furnished any information
on Plaintiff, this exception cannot apply. Moreover, while irrelevant, Plaintiff’s
conclusory
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allegations that AnnieMac’s “conduct was undertaken with fraud,
oppression and/or malice towards [her]” are insufficient to state a claim. Subhani v.
JPMorgan Chase Bank, No. C 12-01857 WHA, 2012 U.S. Dist. LEXIS 76447, at
*23-24 (N.D. Cal. June 1, 2012) (holding general and conclusory statements that
defendant acted with malice are insufficient to escape preemption); 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.”). Plaintiff’s claim for
invasion of privacy should be dismissed as preempted by Section 1681h(e).
V. CONCLUSION
For all the foregoing reasons, Defendant’s motion to dismiss should be
granted in its entirety.
Dated: January 12, 2017
ANGELA E. KLEINE
SARAH N. DAVIS
MORRISON & FOERSTER LLP
By: /s/ Angela E. Kleine
Angela E. Kleine
Attorneys for Defendant
ANNIEMAC HOME MORTGAGE
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The conclusory nature of these allegations are highlighted by the fact that
they appear copy and pasted from another complaint with a male plaintiff. (See,
e.g., Compl. ¶¶ 15, 18.)
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