Jaishiri Mehta v. Wells Fargo Bank, N.A.

NOTICE OF MOTION AND MOTION to Dismiss Case

C.D. Cal.June 21, 2017

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 07685.1844/10759263.1 1 NOTICE OF MOTION AND WELLS FARGO BANK, N.A.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT MARK D. LONERGAN (State Bar No. 143622) REBECCA S. SAELAO (State Bar No. 222731) LASZLO LADI (State Bar No. 265564) ll@severson.com SEVERSON & WERSON A Professional Corporation One Embarcadero Center, Suite 2600 San Francisco, California 94111 Telephone: (415) 398-3344 Facsimile: (415) 956-0439 Attorneys for Defendant WELLS FARGO BANK, N.A. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA, WESTERN JAISHRI MEHTA, Plaintiff, vs. WELLS FARGO BANK, N.A., Defendant. Case No. 2:17-cv-02532 AB(SSx) NOTICE OF MOTION AND WELLS FARGO BANK, N.A.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Date: August 14, 2017 Time: 10:00 a.m. Crtrm.: 7B Action Filed: April 3, 2017 TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that on August 14, 2017 at 10:00 a.m., or as soon thereafter as the matter may be heard, in Courtroom 7B, of the above-entitled Court, located at 350 West 1st Street, Los Angeles, California, 90012, Defendant Wells Fargo Bank, N.A. (“Wells Fargo”) will and hereby does move for an order dismissing the complaint filed by Plaintiff Jaishri Mehta (“Plaintiff”). This motion is made pursuant to Rule 12(b)(6) and is based on the grounds that the complaint and each of its causes of action fails to state a claim against Wells Case 2:17-cv-02532-AB-SS Document 15 Filed 06/21/17 Page 1 of 26 Page ID #:95 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 07685.1844/10759263.1 2 NOTICE OF MOTION AND WELLS FARGO BANK, N.A.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Fargo upon which relief may be granted under Rule 12(b)(6) of the Federal Rules of Civil Procedure. This motion is based on this notice of motion and motion, the memorandum of points and authorities filed herewith, the complaint and all other pleadings and records on file in this action, and upon such other argument as the Court may consider at the hearing on this motion. This motion is made following the conference of counsel required by Local Rule 7-3, which took place on May 19, 2017. DATED: June 21, 2017 SEVERSON & WERSON A Professional Corporation By: /s/ Laszlo Ladi Laszlo Ladi Attorneys for Defendant WELLS FARGO BANK, N.A. Case 2:17-cv-02532-AB-SS Document 15 Filed 06/21/17 Page 2 of 26 Page ID #:96 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 07685.1844/10759263.1 3 NOTICE OF MOTION AND WELLS FARGO BANK, N.A.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT TABLE OF CONTENTS Page I. INTRODUCTION..................................................................................................10 II. STATEMENT OF FACTS ...................................................................................10 III. LEGAL STANDARD .........................................................................................11 IV. ARGUMENT ......................................................................................................12 A. Plaintiff’s FCRA Claim Fails to State a Claim.....................................12 1. Plaintiff Has Not Alleged That Wells Fargo Furnished Any Inaccurate, Incomplete, or Misleading Information to CRAs...........................................................................................13 2. Plaintiff Does Not Allege Any Facts to Support A Finding of Unreasonable Investigation. ...................................................13 B. Plaintiff has failed to Plead an Inaccuracy and Thus Cannot State a Claim for Violation of the CCRAA. ..................................................15 C. Plaintiff’s Libel Claim Fails as a Matter of Law. .................................16 1. Plaintiff’s Libel Claim is Preempted by the FCRA....................16 2. Plaintiff Fails to State A Cause of Action for Libel ...................21 D. Plaintiff Is Not Entitled to Declaratory Relief ......................................25 V. CONCLUSION.....................................................................................................26 Case 2:17-cv-02532-AB-SS Document 15 Filed 06/21/17 Page 3 of 26 Page ID #:97 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 07685.1844/10759263.1 4 NOTICE OF MOTION AND WELLS FARGO BANK, N.A.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT TABLE OF AUTHORITIES Page FEDERAL CASES Abbot v. Experian Info. Sols., Inc., 179 F.Supp.3d 940 (N.D. Cal. 2016) .............................................................................13, 14, 15 Balistreri v. Pacifica Police Dep't., 901 F.2d 696 (9th Cir. 1990)......................................................................................................12 Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) ...................................................................................................................11 Biggs v. Experian Info. Sols., Inc., 2016 WL 5235043 (N.D. Cal. Sept. 22, 2016)...........................................................................13 Buraye v. Equifax, 625 F.Supp.2d 894 (C.D. Cal. Jun. 6, 2008) ..............................................................................18 Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876 (9th Cir. 2010) ......................................................................................15, 16 Church of Scientology of Cal. v. Flynn, 744 F.2d 694 (9th Cir. 1984)......................................................................................................12 Cipollone v. Liggett Grp., Inc., 505 U.S. 504 (1992) (plurality opinion).....................................................................................21 Clegg v. Cult Awareness Network, 18 F.3d 752 (9th Cir. 1994)..................................................................................................12, 14 Davis v. Maryland Bank, 2002 WL 32713429 (N.D. Cal. June 19, 2002) ...................................................................16, 17 Dennis v. BEH–1, LLC, 520 F.3d 1066 (9th Cir. 2008)....................................................................................................13 El-Aheidab v. Citibank (S. Dakota), N.A., 2012 WL 506473 (N.D. Cal. Feb. 15, 2012)..............................................................................20 Erie R.R. v. Tompkins, 304 U.S. 64 (1938) .....................................................................................................................17 Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147 (9th Cir. 2009)............................................................................................ passim Grigoryan v. Bank of Am. Corp., 2012 WL 10423215 (C.D. Cal. Dec. 31, 2012) .........................................................................18 Case 2:17-cv-02532-AB-SS Document 15 Filed 06/21/17 Page 4 of 26 Page ID #:98 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 07685.1844/10759263.1 5 NOTICE OF MOTION AND WELLS FARGO BANK, N.A.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Haddock v. Countrywide Bank, NA, 2015 WL 9257316 (C.D. Cal. Oct. 27, 2015) ............................................................................18 Howard v. Blue Ridge Bank, 371 F.Supp.2d 1139 (N.D. Cal. 2005) .................................................................................25, 26 Jaramillo v. Experian Information Solutions, Inc., 155 F.Supp.2d 356 (E.D. Pa. 2001) ...........................................................................................17 Javaheri v. JPMorgan Chase Bank, N.A., 2012 WL 3426278 (C.D. Cal. Aug. 13, 2012), aff'd, 561 F. App'x 611 (9th Cir. 2014)...........................................................................................................................................25 Jensen v. U.S. Bank N.A., 615 F. App'x 870 (9th Cir. 2015) ...............................................................................................13 Johnson v. JP Morgan Chase Bank DBA Chase Manhattan, 536 F.Supp.2d 1207 (E.D. Cal. 2008)........................................................................................18 Kodrick v. Ferguson, 54 F.Supp.2d 768 (N.D. Ill. 1999) .............................................................................................17 Lane v. Vitek Real Estate Indus. Grp., 713 F. Supp. 2d 1092 (E.D. Cal. 2010)......................................................................................25 Lazo v. Bank of Am., N.A., 2012 WL 12883902 (C.D. Cal. Nov. 19, 2012) .........................................................................20 Lin v. Universal Card Servs. Corp., 238 F.Supp.2d 1147 (N.D. Cal. 2002) .......................................................................................26 Mack v. South Bay Beer Distributors, 798 F.2d 1279 (9th Cir. 1986)....................................................................................................12 Macpherson v. JPMorgan Chase Bank, N.A., 665 F.3d 45 (2d Cir. 2011).........................................................................................................17 Mann v. Wells Fargo Bank, 2012 WL 3727369 (N.D. Cal. Aug. 27, 2012)...........................................................................20 Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996) ...................................................................................................................21 Mehta v. Konica Bus. Machines USA Inc., 243 F.3d 548 (9th Cir. 2000)......................................................................................................24 Miller v. Bank of Am., Nat. Ass'n, 858 F.Supp.2d 1118 (S.D. Cal. 2012) ........................................................................................20 Case 2:17-cv-02532-AB-SS Document 15 Filed 06/21/17 Page 5 of 26 Page ID #:99 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 07685.1844/10759263.1 6 NOTICE OF MOTION AND WELLS FARGO BANK, N.A.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Montgomery v. PNC Bank, N.A., 2012 WL 3670650 (N.D. Cal. Aug. 24, 2012)...........................................................................18 Morris v. Equifax Information Services, LLC, 457 F.3d 460 (5th Cir. 2006) ............................................................................................19 Mullis v. U.S. Bankr. Ct., 828 F.2d 1385 (9th Cir. 1987)....................................................................................................12 Nelson v. Chase Manhattan Mortg. Corp., 282 F.3d 1057 (9th Cir. 2002)....................................................................................................13 Pacheco v. Citibank, 07–1276, 2007 WL 1241934 (N.D. Cal. Apr. 27, 2007) ...........................................................16 Padayachi v. Indymac Bank, 2010 WL 1460309 (N.D. Cal. Apr. 9, 2010) .............................................................................25 Parks Sch. of Bus., Inc. v. Symington, 51 F.3d 1480 (9th Cir. 1995)......................................................................................................12 Pham v. Bank of Am., N.A., 2010 WL 3184263 (N.D. Cal. Aug. 11, 2010)...........................................................................24 Purcell v. Bank of America, 659 F.3d 622 (7th Cir. 2011)................................................................................................17, 20 Reagan v. Am. Home Mortg. Servicing Inc., 2011 WL 2149100 (N.D. Cal. May 31, 2011) ...........................................................................14 Riegel v. Medtronic, Inc., 552 U.S. 312 (2008) ...................................................................................................................21 Roybal v. Equifax, 405 F.Supp.2d 1177 (E.D. Cal. 2005)..................................................................................16, 17 Ruiz v. Cent. Mortg. Co., 2015 WL 12683873 (C.D. Cal. Apr. 2, 2015)............................................................................26 Schreiber v. Siemons, 07–2467, 2007 WL 2344885 (N.D. Cal. Aug. 14, 2007)...........................................................16 Sprewell v. Golden State Warriors, 266 F.3d 979 (9th Cir. 2001)......................................................................................................12 St. Amant v. Thompson, 390 U.S. 727 (1968) ...................................................................................................................19 Steinmetz v. Gen. Elec. Co., 2009 WL 3461133 (S.D. Cal. Oct. 22, 2009).............................................................................24 Case 2:17-cv-02532-AB-SS Document 15 Filed 06/21/17 Page 6 of 26 Page ID #:100 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 07685.1844/10759263.1 7 NOTICE OF MOTION AND WELLS FARGO BANK, N.A.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Subhani v. JPMorgan Chase Bank, Nat. Ass'n, 2012 WL 1980416 (N.D. Cal. June 1, 2012) .......................................................................19, 25 Sui v. Southside Towing, 2011 WL 2940990 (C.D. Cal. July 18, 2011) ............................................................................15 Trout v. BMW of N. America, 2007 WL 602230 (D. Nev. Feb. 20, 2007) ................................................................................18 Vartanian v. Portfolio Recovery Assocs., LLC, 2013 WL 877863 (C.D. Cal. Mar. 7, 2013) .........................................................................18, 21 Weseman v. Wells Fargo Home Mortg., Inc., 2008 WL 542961 (D. Or. Feb. 22, 2008) ...................................................................................19 White v. E-Loan, Inc., 409 F.Supp.2d 1183 (N.D. Cal. 2006) .......................................................................................25 Woods v. Protection One Alarm Monitoring, Inc., 628 F.Supp.1173 (E.D. Cal. 2007).............................................................................................16 Woods v. Protection One Alarm Monitoring, Inc., 628 F.Supp.2d 1173 (E.D. Cal. 2007)..................................................................................23, 24 Yeagley v. Wells Fargo & Co., 2006 WL 193257 (N.D. Cal. 2006)............................................................................................26 STATE CASES Forsher v. Bugliosi, 26 Cal.3d 792 (1980)..................................................................................................................24 Francis v. Dun & Bradstreet, Inc., 3 Cal.App.4th 535 (1992)...........................................................................................................24 Gautier v. General Telephone Company, 234 Cal.App.2d 302 (1965)........................................................................................................22 Gomes v. Fried, 136 Cal.App 3d 924 (1982)........................................................................................................24 Ingraham v. Lyon, 105 Cal. 254 (1894)....................................................................................................................22 MacLeod v. Tribune Publishing Co., 52 Cal.2d 536 (1959)..................................................................................................................22 Pavlovsky v. Board of Trade, 171 Cal.App.2d 110 (1959)........................................................................................................23 Case 2:17-cv-02532-AB-SS Document 15 Filed 06/21/17 Page 7 of 26 Page ID #:101 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 07685.1844/10759263.1 8 NOTICE OF MOTION AND WELLS FARGO BANK, N.A.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Roemer v. Retail Credit Co., 44 Cal.App.3d 926 (1975)..........................................................................................................23 Smith v. Maldonado, 72 Cal.App.4th 637 (1999).........................................................................................................22 FEDERAL STATUTES 11 U.S.C. § 541(a)(2) .................................................................................................................10, 16 15 U.S.C. § 1681 et seq...............................................................................................................................10 § 1681-s(2)(b)(1)(A) ............................................................................................................11, 14 § 1681-s(2)(b)(1)(B).............................................................................................................11, 14 § 1681-s(2)(b)(1)(C).............................................................................................................11, 14 § 1681-s(2)(b)(1)(D) ..................................................................................................................11 § 1681-s(2)(b)(1)(E) ...................................................................................................................11 § 1681d.......................................................................................................................................20 § 1681e .......................................................................................................................................20 § 1681h.......................................................................................................................................20 § 1681h(e) ............................................................................................................................19, 20 § 1681k.......................................................................................................................................20 § 1681l........................................................................................................................................20 § 1681n.......................................................................................................................................25 § 1681o.......................................................................................................................................25 § 1681s–2(a) ...............................................................................................................................16 § 1681s–2(b)...................................................................................................................12, 13, 14 § 1681s–2(b)(1) ..........................................................................................................................14 § 1681s–2(b)(1)(A)–(E) .............................................................................................................13 § 1681s-2 ..................................................................................................................16, 18, 20, 21 § 1681s-2(1) ...............................................................................................................................18 § 1681t(b) ...................................................................................................................................20 § 1681t(b)(1)(F).................................................................................................................. passim § 1681t(b)(1)(F)..........................................................................................................................20 STATE STATUTES Cal. Civ. Code § 44.............................................................................................................................................21 § 45.............................................................................................................................................21 § 45a ...........................................................................................................................................24 § 47(c) ........................................................................................................................................23 § 48a(d)(2)..................................................................................................................................24 § 48a(d)(4)..................................................................................................................................23 § 1785.25(a) ...............................................................................................................................10 Case 2:17-cv-02532-AB-SS Document 15 Filed 06/21/17 Page 8 of 26 Page ID #:102 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 07685.1844/10759263.1 9 NOTICE OF MOTION AND WELLS FARGO BANK, N.A.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT RULES Fed. R. Civ. P. Rule 12(b)(6) ..............................................................................................................................11 Case 2:17-cv-02532-AB-SS Document 15 Filed 06/21/17 Page 9 of 26 Page ID #:103 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 07685.1844/10759263.1 10 NOTICE OF MOTION AND WELLS FARGO BANK, N.A.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION Jaishri Mehta (“Plaintiff”) filed a complaint against Wells Fargo Bank, N.A. (“Wells Fargo”) alleging that Wells Fargo violated the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. §§ 1681 et seq. (“FCRA”) and the California Consumer Credit Reporting Agencies Act, Cal. Civ. Code § 1785.25(a) (“CCRAA”) based on alleged inaccurate, incomplete, and misleading information reported to Experian. Plaintiff has also asserted causes of action against Wells Fargo for libel and declaratory relief based on the same alleged credit reporting violations. All of Plaintiff’s causes of action fail because she has filed to plead the requisite elements of such claims. Plaintiff does not allege any inaccurate reporting because Plaintiff does not allege she made any payments between October 7, 2013 and August 9, 2016, and therefore the reporting of delinquencies in the account was correct. Additionally, Plaintiff’s causes of action for libel and declaratory relief are preempted by the FCRA and must be dismissed with prejudice. For these and additional reasons, further discussed below, Wells Fargo respectfully requests that the Court grant the instant motion with prejudice. II. STATEMENT OF FACTS Plaintiff and her husband Rajendra Mehta (“Mehta”) had a joint credit card with Wells Fargo. Mehta filed Chapter 7 bankruptcy on October 7, 2013. Complaint (“Compl.”) ¶ 9; Request for Judicial Notice (“RJN”) Ex A. Plaintiff did not file for bankruptcy. Compl. ¶ 10; RJN Ex A. After the bankruptcy was filed, Wells Fargo stopped sending statements to Mehta and Plaintiff because sending account statements during Mehta’s bankruptcy could be construed as an attempt to collect on Mehta’s community property, in violation of the bankruptcy automatic stay. Compl. ¶ 11; see 11 U.S.C. § 541(a)(2). Mehta’s bankruptcy was discharged on July 13, 2015. RJN Ex. B. However, the account statements did not resume because the account had been charged off by then. Plaintiff made a payment on or about August Case 2:17-cv-02532-AB-SS Document 15 Filed 06/21/17 Page 10 of 26 Page ID #:104 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 07685.1844/10759263.1 11 NOTICE OF MOTION AND WELLS FARGO BANK, N.A.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT 9, 2016 for the account balance. Compl. ¶ 15. After this date, the reporting reflects that the account has been paid. Compl. Ex. 7 at p. 3. Plaintiff filed the complaint on March 31, 2017. Compl. Plaintiff alleges four causes of action based on alleged inaccurate credit reporting. Id. Plaintiff alleges that she was reported “delinquent” and/or “charged off” after Wells Fargo did not send her statements. Compl. ¶ 14. Plaintiff further contends that Wells Fargo “failed to conduct a reasonable investigation of the dispute, as required by 15 U.S.C. § 1681-s(2)(b)(1)(A); instead, Wells Fargo merely reported the same inaccurate information that it had previously reported to Experian.” Compl. ¶ 22. Plaintiff also alleges that Wells Fargo failed to review all relevant information provided to it as required by 15 U.S.C. § 1681-s(2)(b)(1)(B) and that Wells Fargo should have updated any incomplete or inaccurate information as required by 15 U.S.C. § 1681- s(2)(b)(1)(C), (D) & (E). Compl. ¶ 23–24. As a result of Wells Fargo’s credit reporting, Plaintiff alleges that she has been “damaged, defamed, disparaged, and injured” as well as experienced “pain and suffering.” Compl. ¶ 25. III. LEGAL STANDARD To survive a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a complaint must contain “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007); id. at 554–56, 562–63 (stating that the 12(b)(6) standard that dismissal is warranted if plaintiff can prove no set of facts in support of his claims that would entitle him to relief “has been questioned, criticized, and explained away long enough,” and that having “earned its retirement,” it “is best forgotten as an incomplete, negative gloss on an accepted pleading standard”). Thus, the facts pleaded in the complaint must amount to “more than labels and conclusions” or a “formulaic recitation of the elements of a cause of action.” Id. at 555. Instead, the “[f]actual 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 (even if Case 2:17-cv-02532-AB-SS Document 15 Filed 06/21/17 Page 11 of 26 Page ID #:105 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 07685.1844/10759263.1 12 NOTICE OF MOTION AND WELLS FARGO BANK, N.A.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT doubtful in fact).” Id. (citation omitted). Dismissal may be based either on the lack of cognizable legal theories or the lack of pleading sufficient facts to support cognizable legal theories. Balistreri v. Pacifica Police Dep't., 901 F.2d 696, 699 (9th Cir. 1990). The complaint’s factual allegations are accepted as true. Church of Scientology of Cal. v. Flynn, 744 F.2d 694, 696 (9th Cir. 1984). The court construes the pleading in the light most favorable to Plaintiff and resolves all doubts in Plaintiff’s favor. Parks Sch. of Bus., Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). However, the court is not required to accept as true allegations contradicted by judicially noticed facts. Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001) (citing Mullis v. U.S. Bankr. Ct., 828 F.2d 1385, 1388 (9th Cir. 1987)). The court may consider matters of public record, including pleadings, orders, and other papers filed with the court. Mack v. South Bay Beer Distributors, 798 F.2d 1279, 1282 (9th Cir. 1986). “[T]he court is not required to accept legal conclusions cast in the form of factual allegations if those conclusions cannot reasonably be drawn from the facts alleged.” Clegg v. Cult Awareness Network, 18 F.3d 752, 754–55 (9th Cir. 1994). Nor need the court accept unreasonable inferences, or unwarranted deductions of fact. Id. IV. ARGUMENT A. Plaintiff’s FCRA Claim Fails to State a Claim. Plaintiff alleges that Wells Fargo violated 15 U.S.C. § 1681s–2(b). To state a claim for violation of the Section 1981s-2(b) against a furnisher of credit information such as Wells Fargo, Plaintiff must allege that after receiving notice of a dispute from credit reporting agencies (“CRAs”), Wells Fargo failed to conduct a reasonable investigation. Specifically, Plaintiff must allege: “(1) [s]he found an inaccuracy in his credit report; (2)[s]he notified a credit reporting agency; (3) the credit reporting agency notified the furnisher of the information about the dispute; Case 2:17-cv-02532-AB-SS Document 15 Filed 06/21/17 Page 12 of 26 Page ID #:106 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 07685.1844/10759263.1 13 NOTICE OF MOTION AND WELLS FARGO BANK, N.A.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT and (4) the furnisher failed to investigate the inaccuracies or otherwise failed to comply with the requirements of 15 U.S.C. § 1681s–2(b)(1)(A)–(E).” Biggs v. Experian Info. Sols., Inc., 2016 WL 5235043, at *1 (N.D. Cal. Sept. 22, 2016). 1. Plaintiff Has Not Alleged That Wells Fargo Furnished Any Inaccurate, Incomplete, or Misleading Information to CRAs. To state claim for violation of the FCRA, Plaintiff must “prima facie showing of inaccurate reporting.” Dennis v. BEH–1, LLC, 520 F.3d 1066, 1069 (9th Cir. 2008). She must further allege facts sufficient to demonstrate that the dispute was sufficient to trigger an investigation of credit reporting and that the investigation was unreasonable. Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147, 1160 (9th Cir. 2009); Abbot v. Experian Info. Sols., Inc., 179 F.Supp.3d 940 (N.D. Cal. 2016). Plaintiff’s allegations regarding Wells Fargo purported inaccurate reporting are insufficient. Plaintiff alleges that she was not sent statements, was, therefore, prevented from paying her credit card, and accordingly the resulting delinquencies reported were inaccurate. See, e.g., Compl. ¶¶ 10–11, 14. However, Plaintiff fails to allege that she made any payments between October 7, 2013 and August 9, 2016. Id. There is nothing inaccurate or misleading about reporting delinquencies correctly. See Jensen v. U.S. Bank N.A., 615 F. App'x 870, 873 (9th Cir. 2015) (creditor justified in reporting borrower delinquent who failed to make payments). 2. Plaintiff Does Not Allege Any Facts to Support A Finding of Unreasonable Investigation. Section 1681s–2(b) instructs that once a furnisher is put on notice of a dispute by a credit reporting CRA, “the furnisher of the disputed information, has four duties: to conduct an ‘investigation with respect to the disputed information;’ to review all relevant information provided by the CRA; to report the results of its investigation to the CRA; and if the investigation finds the information is incomplete or inaccurate to report those results ‘to all [nationwide] consumer reporting agencies to which the person furnished the information.’” Nelson v. Chase Case 2:17-cv-02532-AB-SS Document 15 Filed 06/21/17 Page 13 of 26 Page ID #:107 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 07685.1844/10759263.1 14 NOTICE OF MOTION AND WELLS FARGO BANK, N.A.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Manhattan Mortg. Corp., 282 F.3d 1057, 1059 (9th Cir. 2002) (quoting 15 U.S.C. § 1681s–2(b)). Further, Plaintiff must allege facts sufficient to demonstrate that the dispute was sufficient to trigger an investigation of credit reporting and that the investigation was unreasonable. Gorman, 584 F.3d at 1160; see also Abbot, 179 F.Supp.3d at 945 (N.D. Cal. 2016). Plaintiff's alleges that Wells Fargo “failed to conduct a reasonable investigation of the dispute, as required by 15 U.S.C. § 1681-s(2)(b)(1)(A); instead, Defendant merely reported the same inaccurate information that it had previously reported to Experian.” Compl. ¶ 22. Plaintiff further alleges that Wells Fargo failed to review all relevant information provided to it as required by 15 U.S.C. § 1681- s(2)(b)(1)(B) and that Wells Fargo should have updated any incomplete or inaccurate information as required by 15 U.S.C. § 1681-s(2)(b)(1)(C), (D) & (E). Compl. ¶¶ 23–24. These are mere legal conclusions, which are not sufficient to support Plaintiff’s claim that Wells Fargo failed to conduct a reasonable investigation. Reagan v. Am. Home Mortg. Servicing Inc., 2011 WL 2149100, at *2 (N.D. Cal. May 31, 2011) (allegations that defendant did not “conduct an appropriate investigation ... review all relevant information ... report the results to the credit reporting agencies ... [and] modify, delete or permanently block the reporting of the inaccurate information” were a recitation of § 1681s–2(b)(1), and legal conclusions, not factual allegations needed to support a claim under this section); see Clegg v. Cult Awareness Network, 18 F.3d 752, 754–55 (9th Cir. 1994) (court not required to accept legal conclusions in the form of factual allegations to support a motion to dismiss.) Although the FCRA requires a furnisher to “conduct an investigation with respect to the disputed information” after the furnisher receives notice of a dispute from a consumer reporting agency, 15 U.S.C. § 1681s–2(b)(1), and the Ninth Circuit has imposed a reasonableness requirement on such an investigation, “[a]n Case 2:17-cv-02532-AB-SS Document 15 Filed 06/21/17 Page 14 of 26 Page ID #:108 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 07685.1844/10759263.1 15 NOTICE OF MOTION AND WELLS FARGO BANK, N.A.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT investigation is not necessarily unreasonable because it results in a substantive conclusion unfavorable to the consumer, even if that conclusion turns out to be inaccurate.” Gorman, 584 F.3d at 1157, 1161. Whether an investigation is reasonable “depends in large part on the allegations provided to the furnisher by the credit reporting agency.” Id. at 1160; see also Abbot, 179 F.Supp.3d at 945. The reasonableness of any investigation is judged “in light of what [a creditor] learned about the nature of the dispute from the description in the CRA's notice of dispute.” Sui v. Southside Towing, 2011 WL 2940990, at *6 (C.D. Cal. July 18, 2011). Even considering the dispute letter attached to the complaint fails to support Plaintiff’s allegation that the investigation was not reasonable. The dispute letter reasserts Plaintiff’s allegations in the complaint that she was prevented from paying her credit card because she did not get credit card statements and thus the negative reporting was inaccurate. As shown above, this allegation is insufficient to show that the credit reporting was inaccurate. Accordingly, without any allegation of inaccurate reporting, one cannot support a claim that an investigation was inaccurate when the investigation resulting in the same reporting. Since Plaintiff alleges no facts in support of Wells Fargo having failed to conduct a reasonable investigation or that the credit reporting was inaccurate in the first place, her FCRA claim should be dismissed with prejudice. B. Plaintiff has failed to Plead an Inaccuracy and Thus Cannot State a Claim for Violation of the CCRAA. Plaintiff must raise a genuine issue as to whether the disputed item was inaccurate or her CCRAA claim fails as a matter of law. Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876, 890 (9th Cir. 2010). Plaintiff must show that the credit reporting was “patently incorrect or materially misleading.” Id. at 890-91 (quoting Gorman, 584 F.3d at 1163). As stated above, Plaintiff does not contend that the delinquencies and charge off reported on her were incorrect or materially misleading, but only that they were Case 2:17-cv-02532-AB-SS Document 15 Filed 06/21/17 Page 15 of 26 Page ID #:109 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 07685.1844/10759263.1 16 NOTICE OF MOTION AND WELLS FARGO BANK, N.A.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT inaccurate because she was not sent statements. However, again, after the bankruptcy was filed, Wells Fargo stopped sending statements to Mehta and Plaintiff because sending account statements during Mehta’s bankruptcy could be construed as an attempt to collect on Mehta’s community property, in violation of the bankruptcy automatic stay. Compl. ¶ 11; see 11 U.S.C. § 541(a)(2). In any event, Plaintiff does not claim that she actually made credit card payments between October 2013 and August 2016. When credit reports contain correct reporting, they are not patently incorrect. Carvalho, 629 F.3d at 891. Because the reporting of Plaintiff’s account was accurate, the Court should dismiss Plaintiff’s CCRAA claim with prejudice. C. Plaintiff’s Libel Claim Fails as a Matter of Law. 1. Plaintiff’s Libel Claim is Preempted by the FCRA. The majority of courts in the Ninth Circuit have ruled that 15 U.S.C. § 1681t(b)(1)(F) totally preempts all “state statutory and common law causes of action which fall within the conduct proscribed under § 1681 s–2.” Woods v. Protection One Alarm Monitoring, Inc., 628 F.Supp.1173, 1183 (E.D. Cal. 2007); see also Schreiber v. Siemons, 07–2467, 2007 WL 2344885, *3 n. 8 (N.D. Cal. Aug. 14, 2007) (“the majority of district courts in the Ninth Circuit have held that the FCRA preempts state statutory and common law causes of action which fall within the conduct proscribed under § 1681 s–2(a),” quoting Pacheco v. Citibank, 07–1276, 2007 WL 1241934, *2 (N.D. Cal. Apr. 27, 2007)); Roybal v. Equifax, 405 F.Supp.2d 1177, 1181 (E.D. Cal. 2005) (“Because Plaintiffs’ State Claims are based on alleged injury arising purely from the reporting of credit information by a furnisher of credit, they are completely preempted [by the FCRA]. Several courts that have analyzed this preemption clause concur” (citations and footnote omitted)); Davis v. Maryland Bank, 2002 WL 32713429, *13 (N.D. Cal. June 19, 2002) (holding that § 1681t(b)(1)(F) preempts all state claims falling within the coverage of § 1681s–2, including those involving malicious and willful tortious conduct). Case 2:17-cv-02532-AB-SS Document 15 Filed 06/21/17 Page 16 of 26 Page ID #:110 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 07685.1844/10759263.1 17 NOTICE OF MOTION AND WELLS FARGO BANK, N.A.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT The court in Davis reasoned: ‘The plain language of section 1681t(b)(1)(F) clearly eliminated all state causes of action against furnishers of information, not just ones that stem from statutes that relate specifically to credit reporting. To allow causes of action under state statutes that do not specifically refer to credit reporting, but to bar those that do, would defy the Congressional rationale for the elimination of state causes of action.’ Davis, 2002 WL 32713429 at *13 (quoting Jaramillo v. Experian Information Solutions, Inc., 155 F.Supp.2d 356, 362 (E.D. Pa. 2001)). The court further observed that: Indeed, the legislative history demonstrates that Congress enacted section 1681t(b)(1)(F) in order to create a uniform scheme governing the disclosure of credit information. See Kodrick v. Ferguson, 54 F.Supp.2d 768, 794 (N.D. Ill. 1999) (discussing legislative history of FCRA's preemption provisions). Allowing common law tort claims which implicate the same subject matter as section 1681s– 2(1) would undermine Congress’ intention to create a uniform system of protection for consumers. Id.; see also Roybal, 405 F. Supp. 2d at 1181. While the Ninth Circuit has yet to rule on the total preemption approach, two other circuit courts have adopted it, ruling that Section 1681t(b)(1)(F) preempts both state statutory and common law causes of action in their entirety insofar as they are predicated on conduct that arises out of reports furnished to credit agencies. See Purcell v. Bank of America, 659 F.3d 622, 624–25 (7th Cir. 2011); Macpherson v. JPMorgan Chase Bank, N.A., 665 F.3d 45, 48 (2d Cir. 2011). Both courts of appeal, relying on Erie R.R. v. Tompkins, 304 U.S. 64 (1938), reasoned that Congress’ use of the word “laws” in Section 1681t(b)(1)(F) “comprises all sources of legal rules,” noting that “[m]any modern decisions about preemption follow Erie and hold that a federal statute preempts state common law to the same extent as it preempts state statutory law.” Purcell, 659 F.3d at 624–26. Additionally, courts in the Central District of California have routinely Case 2:17-cv-02532-AB-SS Document 15 Filed 06/21/17 Page 17 of 26 Page ID #:111 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 07685.1844/10759263.1 18 NOTICE OF MOTION AND WELLS FARGO BANK, N.A.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT applied the total preemption approach in analyzing where state law and common law claims are preempted by the FCRA. See, e.g. Buraye v. Equifax, 625 F.Supp.2d 894, 900 (C.D. Cal. Jun. 6, 2008) (apply the “total preemption” approach and concluding that plaintiff’s “state law negligence and defamation claims are preempted by the FCRA”); Grigoryan v. Bank of Am. Corp., 2012 WL 10423215, at *10, 12 (C.D. Cal. Dec. 31, 2012) (applying the “total preemption” approach to find defamation claim preempted by FCRA and dismissing it with prejudice); Haddock v. Countrywide Bank, NA, 2015 WL 9257316, at *21-22 (C.D. Cal. Oct. 27, 2015) (dismissing plaintiff’s misrepresentation cause of action under the “total preemption” approach). Here, Plaintiff’s claim for libel is entirely based on alleged false reporting by Wells Fargo to Experian . Compt. ¶¶ 36–37. Because Plaintiff’s libel claim is based on credit reporting under 15 U.S.C. § 1681s-2, it is preempted by the FCRA. Buraye, 625 F.Supp.2d at 900–901 (concluding that plaintiff’s “state law negligence and defamation claims are preempted by the FCRA”…because the “allegations in [the] complaint clearly implicate the subject matter of § 1681s-2.”); Johnson v. JP Morgan Chase Bank DBA Chase Manhattan, 536 F.Supp.2d 1207, 1215 (E.D. Cal. 2008) (applying “total preemption” approach to find defamation claim preempted by FCRA). Vartanian v. Portfolio Recovery Assocs., LLC, 2013 WL 877863, at *7 (C.D. Cal. Mar. 7, 2013) (finding that plaintiff’s libel claim was preempted by FCRA); Montgomery v. PNC Bank, N.A., 2012 WL 3670650, at *6 (N.D. Cal. Aug. 24, 2012) (plaintiff’s libel claim, among others, is preempted by the FCRA). The conduct prohibited by furnishers of information pursuant to § 1681s2-(1) includes the reporting of information with actual knowledge of errors and reporting of information after notice and confirmation of errors. 15 U.S.C. § 1681s-2(1). In summary, furnishers of information cannot provide inaccurate information, but if they do, any state statutory and common law causes of action brought as a result of this conduct are preempted by the FCRA. Trout v. BMW of N. America, 2007 WL Case 2:17-cv-02532-AB-SS Document 15 Filed 06/21/17 Page 18 of 26 Page ID #:112 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 07685.1844/10759263.1 19 NOTICE OF MOTION AND WELLS FARGO BANK, N.A.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT 602230, at *2 (D. Nev. Feb. 20, 2007). There are some courts in the 9th Circuit that have applied what is known as the “statutory approach” rather than the total preemption approach under section 1681t(b)(1)(F). See, e.g. Weseman v. Wells Fargo Home Mortg., Inc., 2008 WL 542961, at *4 (D. Or. Feb. 22, 2008). Under the “statutory approach,” § 1681t(b)(1)(F) preempts only statutory state law claims against credit information furnishers and § 1681h(e) preempts only common law claims. Subhani v. JPMorgan Chase Bank, Nat. Ass'n, 2012 WL 1980416, at *4 (N.D. Cal. June 1, 2012) (citations omitted). Section 1681h(e) provides: 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 the reporting of information against any consumer reporting agency, any user of information, or any person who furnishes information to a consumer reporting agency, 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).1 1 Even under the statutory approach, Plaintiff has failed to alleged that Wells Fargo acted with “malice” under the FCRA. To show malice, Plaintiff must show the information was published “with knowledge that it was false or with reckless disregard of whether it was false or not.” Gorman, 584 F.3d at 1168 (citations omitted). To show “reckless disregard,” a plaintiff must put forth “sufficient evidence to permit the conclusion that the defendant in fact entertained serious doubts as to the truth of his publication.” St. Amant v. Thompson, 390 U.S. 727, 731 (1968); see also Morris v. Equifax Information Services, LLC, 457 F.3d 460, 471 (5th Cir. 2006). Here, Plaintiff has not alleged that Wells Fargo reported her late when she made payments. Rather, Plaintiff alleges that not sending statements and reporting her late is inaccurate and/or misleading. See, e.g., Compl. ¶¶ 10–11, 14. Plaintiff’s allegations are sufficient to show only that Wells Fargo knew that Plaintiff contested the accuracy of the credit information, not that Defendant knew the credit information was false. Plaintiff also has not adequately alleged that Wells Fargo acted with reckless disregard of the published information’s falsity. Plaintiff asserted that Wells Fargo continued to report derogatory credit information, even though Plaintiff disputed it (Compl. ¶ 22), but Plaintiff has not alleged that Wells Fargo entertained serious doubts as to the truth of the reported information. Gorman, 584 F.3d at 1168. Accordingly, because Plaintiff has not (footnote continued) Case 2:17-cv-02532-AB-SS Document 15 Filed 06/21/17 Page 19 of 26 Page ID #:113 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 07685.1844/10759263.1 20 NOTICE OF MOTION AND WELLS FARGO BANK, N.A.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT However, the “statutory approach” does not properly interpret the interplay between sections 1681t(b)(1)(F) and 1681h(e). Contrary to what the statutory approach suggests, reading section 1681t(b)(1)(F) to preempt all statutory and common law causes of action against furnishers based on conduct governed by § 1681 s–2 is not inconsistent with § 1681h(e) and does not render this section superfluous. El-Aheidab v. Citibank (S. Dakota), N.A., 2012 WL 506473, at *8 (N.D. Cal. Feb. 15, 2012) (citing Purcell, 659 F.3d at 625). “Section 1681h(e) applies to a range of conduct covered by the Act that is not specifically preempted by § 1681t(b).” El-Aheidab, 2012 WL 506473 at *8. Section 1681t(b) only preempts certain conduct, including conduct relating to the responsibilities of furnishers under section 1681s-2, which is at issue here. 15 U.S.C. § 1681t(b). However, section 1681t(b) does not mention other provisions of the FCRA, including §§ 1681d, 1681e, 1681h, 1681k, and 1681l, which would still be subject to § 1681h(e)’s more limited preemption clause. El-Aheidab, 2012 WL 506473 at *8; Purcell, 659 F.3d at 625. Accordingly, interpreting § 1681t(b) to preempt both statutory and common law claims relating to the responsibilities of furnishers under section 1681s-2 would not create an irreconcilable conflict with § 1681h(e). Id. Courts in the Ninth Circuit have followed this analysis. Miller v. Bank of Am., Nat. Ass'n, 858 F.Supp.2d 1118, 1126–27 (S.D. Cal. 2012) (applying the reasoning of El-Aheidab and dismissing plaintiff’s negligence claims with prejudice because, even though they contained allegations of willful conduct, there were within the purview of section 1681s-2, and were therefore preempted by section 1681t(b)(1)(F)); Mann v. Wells Fargo Bank, 2012 WL 3727369, at *4 (N.D. Cal. Aug. 27, 2012) (finding the rationale in El–Aheidab persuasive and holding that sufficiently alleged that Wells Fargo published the credit information with knowledge of or reckless disregard to the information’s falsity, her claim for libel is preempted by the FCRA. Lazo v. Bank of Am., N.A., 2012 WL 12883902, at *4 (C.D. Cal. Nov. 19, 2012). Case 2:17-cv-02532-AB-SS Document 15 Filed 06/21/17 Page 20 of 26 Page ID #:114 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 07685.1844/10759263.1 21 NOTICE OF MOTION AND WELLS FARGO BANK, N.A.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT plaintiffs’ common law tort claims, including negligence and defamation, were preempted by section 1681t(b)(1)(F)). Further, when Congress amended FCRA in 1996, it expressly preempted any state laws that imposed any “requirement or prohibition” on, among others, any subject matter regulated under § 1681s–2. § 1681t(b)(1) (F). While the phrase “requirement or prohibition” has not been interpreted in relation to the FCRA, the United States Supreme Court has interpreted the phrase “no requirement or prohibition” several times with respect to preemption provisions in other federal statutes. Interpreting the term in the Public Health Cigarette Smoking Act of 1969, the Supreme Court reasoned that the “phrase ‘[n]o requirement or prohibition’ sweeps broadly and suggests no distinction between positive enactments and common law; to the contrary, those words easily encompass obligations that take the form of common law rules.” Cipollone v. Liggett Grp., Inc., 505 U.S. 504, 521 (1992) (plurality opinion). The Court subsequently confirmed this reasoning at least twice. Riegel v. Medtronic, Inc., 552 U.S. 312, 324 (2008); Medtronic, Inc. v. Lohr, 518 U.S. 470, 510–11 (1996).The central district in Vartanian, used this reasoning to conclude that the plaintiff’s libel claim was preempted by the FCRA. 2013 WL 877863 at *7. Accordingly, here too, for all of the above reasons, Plaintiff’s libel claim should be dismissed without leave to amend because it is preempted by the FCRA. 2. Plaintiff Fails to State A Cause of Action for Libel Even if Plaintiff’s libel claim is not preempted by FCRA, it fails to state a claim. Under California law, libel, which is a subcategory of defamation, “is a false and unprivileged publication…which exposes any person to hatred, contempt, ridicule, or obloquy, or which causes him to be shunned or avoided, or which has a tendency to injure him in his occupation.” Cal. Civ. Code §§ 44–45. The elements of a libel claim are: (1) an intentional publication, (2) which is false, (3) defamatory, and (4) unprivileged, and (5) which has natural tendency to injure or that causes Case 2:17-cv-02532-AB-SS Document 15 Filed 06/21/17 Page 21 of 26 Page ID #:115 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 07685.1844/10759263.1 22 NOTICE OF MOTION AND WELLS FARGO BANK, N.A.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT special damage. Smith v. Maldonado, 72 Cal.App.4th 637, 645 (1999)). Frist, Plaintiff has not alleged the credit reporting by Wells Fargo was false. Second, Plaintiff has not shown that the credit reporting was defamatory. Where the words or other matters that are the subject of a defamation action are of ambiguous meaning, or are innocent on their face and defamatory only in the light of extrinsic circumstances, the plaintiff must plead and prove that as used, the words had a particular meaning, or “innuendo,” that makes them defamatory. Maldonado, 72 Cal.App.4th at 645–46. This includes the requirement that in an instance of ambiguous language, i.e., where the language is susceptible of either a defamatory or innocent interpretation, the plaintiff must also allege the extrinsic circumstances which show that the third person reasonably understood it in its derogatory sense (the “inducement”). Id. Whether a statement is reasonably susceptible of a defamatory meaning is a question for the Court. MacLeod v. Tribune Publishing Co., 52 Cal.2d 536, 546 (1959). A mere allegation of not paying debts is not defamatory per se. Gautier v. General Telephone Company, 234 Cal.App.2d 302, 309 (1965). It may be defamatory where it may be implied that a plaintiff failed to pay an obligation from dishonest motives or from a desire to defraud a creditor; further, it may be sufficient where there is an allegation that the plaintiffs were engaged in a vocation where credit is an important asset and necessary for the proper conduct of their business. Id. at 309–10. Further, where there are allegations in the complaint that it was understood as an allegation that the debtor never intended to pay and thus was dishonest and not worthy or any credit, it may likewise be defamatory. Ingraham v. Lyon, 105 Cal. 254, 257 (1894). Here, Plaintiff merely alleges that Wells Fargo reported her account as delinquent and charged off. See, e.g., Compl. ¶ 14. There are no allegations that Wells Fargo believed Plaintiff was dishonest or that she was attempted to defraud anyone. Plaintiff does not even dispute that she failed to make credit card payments, Case 2:17-cv-02532-AB-SS Document 15 Filed 06/21/17 Page 22 of 26 Page ID #:116 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 07685.1844/10759263.1 23 NOTICE OF MOTION AND WELLS FARGO BANK, N.A.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT only that Wells Fargo failed so send her statements, and then reported her late when she did not make payments. Third, Plaintiff has failed to plead that the privileged credit reporting by Wells Fargo to the CRAs2 was done with the requisite malice. “Malice in defamation cases means actual or express malice, including a state of mind arising from hatred or ill will toward the plaintiff, or the state of mind demonstrated by a showing that the defendant lacked reasonable grounds for belief in the truth of the publication and therefore acted in reckless disregard of the plaintiff's rights.” Woods v. Protection One Alarm Monitoring, Inc., 628 F.Supp.2d 1173, 1188 (E.D. Cal. 2007) (citing Roemer v. Retail Credit Co., 44 Cal.App.3d 926, 936 (1975)). However, a good faith belief by Wells Fargo that the credit reporting was correct at the time it was reported does not constitute actual malice. Cal. Civ. Code § 48a(d)(4); Gorman, 584 F.3d at 1169 (if the “creditor has a good faith reason for believing that the debt is in fact owed, reporting the debt without reporting the dispute does not convey ‘false’ information ‘with malice or willful intent to injure the consumer.’”) While Plaintiff alleges that Wells Fargo “fail[ed] to conduct a reasonable investigation of the Disputed Information on Plaintiff’s credit report” and “continu[ed] to furnish and disseminate inaccurate, incomplete, and derogatory credit reporting information…to Experian,” and that this conduct was “willful, fraudulent, malicious, oppressive and done with intent or injure,” these general and conclusory statements do not support a claim that defendant acted with “a state of mind arising from hatred or ill will toward” Plaintiff or “the state of mind demonstrated by a showing that the defendant lacked reasonable grounds for belief 2 Wells Fargo’s communications to CRAs is a privileged communication under California Civil Code section 47(c) and are therefore not actionable if made without malice. Roemer, 3 Cal.App.3d at 370–71 (applying it to mercantile agencies); Pavlovsky v. Board of Trade, 171 Cal.App.2d 110, 113–14 (1959) (applying it to credit reports of mercantile agencies that collect information and sell it for a profit). Case 2:17-cv-02532-AB-SS Document 15 Filed 06/21/17 Page 23 of 26 Page ID #:117 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 07685.1844/10759263.1 24 NOTICE OF MOTION AND WELLS FARGO BANK, N.A.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT in the truth of the publication.” Woods, 628 F. Supp. 2d at 1187; see also Steinmetz v. Gen. Elec. Co., 2009 WL 3461133, at *5 (S.D. Cal. Oct. 22, 2009) (allegations that defendants acted “knowingly” and “with malice,” were “general and conclusory statements [that] do not support a claim that defendants acted with ‘a state of mind arising from hatred or ill will toward the plaintiff’ or with a reckless disregard for plaintiff's rights” (citations omitted)); Pham v. Bank of Am., N.A., 2010 WL 3184263, at *5 (N.D. Cal. Aug. 11, 2010) (alleging that defendants acted “willfully” and “with actual malice and/or reckless disregard for the consequences of their actions,” were general and conclusory statements); Mehta v. Konica Bus. Machines USA Inc., 243 F.3d 548 (9th Cir. 2000) (district court properly granted summary judgment on plaintiff’s defamation claim because plaintiff presented only conclusory allegations of malice unsupported by factual data). Plaintiff has not alleged any facts that Wells Fargo doubted that the debt was owed or that it believed Plaintiff had a meritorious dispute. Under these circumstances, Plaintiff has failed to show that Wells Fargo acted with malice. Francis v. Dun & Bradstreet, Inc., 3 Cal.App.4th 535, 539–40 (1992) (holding that a defamation claim cannot be sustained for truthful information in a credit report, even if the information reported supports misleading inferences). Finally, Plaintiff has not adequately plead special damages. Where a statement is not defamatory on its face, Plaintiff must prove special damages. Cal. Civ. Code § 45a; Forsher v. Bugliosi, 26 Cal.3d 792, 806–07 (1980). Special damages are “damages that plaintiff alleges and proves that he or she has suffered in respect to his or her property, business, trade, profession, or occupation, including the amounts of money the plaintiff alleges and proves he or she has expended as a result of the alleged libel, and no other.” Cal. Civ. Code § 48a(d)(2). Injuries for which special damages are sought must be plead and proved precisely. Gomes v. Fried, 136 Cal.App 3d 924, 940 (1982). Plaintiff’s allegation here that the credit reporting “damaged, defamed, Case 2:17-cv-02532-AB-SS Document 15 Filed 06/21/17 Page 24 of 26 Page ID #:118 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 07685.1844/10759263.1 25 NOTICE OF MOTION AND WELLS FARGO BANK, N.A.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT disparaged, and injured [her] and her reputation, and has also caused pain and suffering,” (Compl. at ¶ 25), is not sufficient. Plaintiff does not allege any loss of property or money or loss of business, trade, profession or occupation and therefore has failed to plead special damages. Because Plaintiff failed to plead all the required elements, her claim for libel should be dismissed. See, e.g. Subhani v. JP MOrgan Chase Bank, Nat Ass’n, 2012 WL 1980416, at *7, *9 (N.D. Cal. Jun. 1, 2012) (finding that allegations that defendant “allowed and continues to allow credit reporting agencies to report that [he] currently owes money to [defendant] and is delinquent in not paying this alleged debt” were insufficient to plead a cause of action for defamation.) D. Plaintiff Is Not Entitled to Declaratory Relief Plaintiff’s claim for declaratory relief fails because there is no viable substantive basis for such relief. Declaratory relief is available only where independent claims supporting such relief are viable. See, e.g., Padayachi v. Indymac Bank, 2010 WL 1460309, at *2 (N.D. Cal. Apr. 9, 2010) (one “may not maintain a claim for declaratory relief unless one of his other claims survives the motion to dismiss”); Javaheri v. JPMorgan Chase Bank, N.A., 2012 WL 3426278, at *8 (C.D. Cal. Aug. 13, 2012), aff'd, 561 F. App'x 611 (9th Cir. 2014) (citing Lane v. Vitek Real Estate Indus. Grp., 713 F. Supp. 2d 1092, 1104 (E.D. Cal. 2010)) (“Claims for declaratory and injunctive relief are ultimately prayers for relief, not causes of action.”) As set forth above, each of Plaintiff’s claims fails to state a claim. Moreover, an alleged violation of the FCRA does not support declaratory relief. 15 U.S.C. § 1681n; 15 U.S.C. § 1681o; Howard v. Blue Ridge Bank, 371 F.Supp.2d 1139, 1145 (N.D. Cal. 2005) (“the express inclusion of injunctive relief in certain provisions of the FCRA and its omission from the provisions creating plaintiff's cause of action to be a sufficiently ‘clear command’ from Congress that injunctive relief is not available to plaintiff”); White v. E-Loan, Inc., 409 F.Supp.2d 1183, 1187 n. 6 (N.D. Case 2:17-cv-02532-AB-SS Document 15 Filed 06/21/17 Page 25 of 26 Page ID #:119 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 07685.1844/10759263.1 26 NOTICE OF MOTION AND WELLS FARGO BANK, N.A.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Cal. 2006) (granting judgment on the pleadings sua sponte on claims for injunctive and declaratory relief under the FCRA); Yeagley v. Wells Fargo & Co., 2006 WL 193257, at *2 (N.D. Cal. 2006) (“By limiting the remedies for private rights of action to damages and attorneys' fees Congress demonstrated that it did not intend for private litigants to obtain injunctive or declarative relief.”). Further, declaratory relief under the CCRAA is preempted by the FCRA. See Howard v. Blue Ridge Bank, 371 F.Supp.2d at 1146 (“[T]he provision of [the CCRAA] providing for injunctive relief is preempted by the FCRA”); see also Lin v. Universal Card Servs. Corp., 238 F.Supp.2d 1147, 1152 (N.D. Cal. 2002) (finding preemption of the CCRAA where “Congress intended to have exclusive authority to enforce such claims through the Federal agencies and officials” that were identified in the corresponding section of the FCRA). Here, because Plaintiff has failed to state a claim for any of her causes of action and, even if she succeeded in stating a claim, none of her alleged claims entitles her to declaratory relief, Plaintiff’s request for this relief should be dismissed with prejudice. See, e.g., Ruiz v. Cent. Mortg. Co., 2015 WL 12683873, at *9 (C.D. Cal. Apr. 2, 2015). V. CONCLUSION Based on the foregoing, Wells Fargo respectfully requests that Plaintiff’s complaint be dismissed with prejudice. DATED: June 21, 2017 SEVERSON & WERSON A Professional Corporation By: /s/ Laszlo Ladi Laszlo Ladi Attorneys for Defendant WELLS FARGO BANK, N.A. Case 2:17-cv-02532-AB-SS Document 15 Filed 06/21/17 Page 26 of 26 Page ID #:120 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 07685.1844/10788960.1 1 [PROPOSED] ORDER GRANTING MOTION TO DISMISS COMPLAINT MARK D. LONERGAN (State Bar No. 143622) REBECCA S. SAELAO (State Bar No. 222731) LASZLO LADI (State Bar No. 265564) ll@severson.com SEVERSON & WERSON A Professional Corporation One Embarcadero Center, Suite 2600 San Francisco, California 94111 Telephone: (415) 398-3344 Facsimile: (415) 956-0439 Attorneys for Defendant WELLS FARGO BANK, N.A. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA, WESTERN JAISHRI MEHTA, Plaintiff, vs. WELLS FARGO BANK, N.A., Defendant. Case No. 2:17-cv-02532 AB(SSx) [PROPOSED] ORDER GRANTING MOTION TO DISMISS COMPLAINT Action Filed: April 3, 2017 Defendant Wells Fargo Bank, N.A. (“Wells Fargo”) has moved this Court to dismiss plaintiff Jaishri Mehta’s (“Plaintiff”) complaint in this action pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. The Court, having considered the briefs and other documents in support of and in opposition to the motion and being full advised in this matter finds as follows: IT IS HEREBY ORDERED that Wells Fargo’s motion to dismiss is GRANTED. The complaint in this case is dismissed with prejudice. IT IS SO ORDERED. Case 2:17-cv-02532-AB-SS Document 15-1 Filed 06/21/17 Page 1 of 2 Page ID #:121 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 07685.1844/10788960.1 2 [PROPOSED] ORDER GRANTING MOTION TO DISMISS COMPLAINT DATED: August ___, 2017 Honorable André Birotte Jr. United States District Judge Case 2:17-cv-02532-AB-SS Document 15-1 Filed 06/21/17 Page 2 of 2 Page ID #:122