Richard Ichihara v. Chase Bank, USA NA et al

NOTICE OF MOTION AND MOTION to Dismiss Case

C.D. Cal.January 13, 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 NOTICE OF MOTION AND MOTION OF CHASE BANK USA N.A. TO DISMISS COMPLAINT Case No. 2:16-cv-07251-JAK-JC LA 52031971 STROOCK & STROOCK & LAVAN LLP STEPHEN J. NEWMAN (State Bar No. 181570) 2029 Century Park East Los Angeles, CA 90067-3086 Telephone: 310.556.5800 Facsimile: 310.556.5959 Email: lacalendar@stroock.com Attorneys for Defendant CHASE BANK USA, N.A. erroneously sued as CHASE BANK, USA NA UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA RICHARD ICHIHARA, Plaintiff, v. CHASE BANK, USA NA JAMES DIMON/CEO, Defendant. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. 2:16-cv-07251-JAK-JC [Assigned to the Honorable John A. Kronstadt] NOTICE OF MOTION AND MOTION OF DEFENDANT CHASE BANK USA N.A. TO DISMISS COMPLAINT Action Filed: September 27, 2016 Date: April 10, 2017 Time: 8:30 a.m. Room: 10B Case 2:16-cv-07251-JAK-JC Document 15 Filed 01/13/17 Page 1 of 20 Page ID #:131 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 1 - NOTICE OF MOTION AND MOTION OF CHASE BANK USA N.A. TO DISMISS COMPLAINT Case No. 2:16-cv-07251-JAK-JC LA 52031971 S T R O O C K & S T R O O C K & L A V A N L L P 20 29 C en tu ry P ar k E as t Lo s A ng el es , C al ifo rn ia 9 00 67 -3 08 6 TO THE COURT, ALL PARTIES AND THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that on April 10, 2017, at 8:30 a.m., or as soon thereafter as the matter may be heard before the Honorable John A. Kronstadt, in Courtroom 10B of the above entitled court, located at 350 W. 1st Street, Los Angeles, California 90012, defendant Chase Bank USA, N.A., erroneously sued as Chase Bank USA, NA (“Chase”), will and hereby does move this Court pursuant to Federal Rule of Civil Procedure 12(b)(6), for an order dismissing the Complaint filed on September 27, 2016 on the following grounds: First, plaintiff Richard Ichihara (“Plaintiff”) fails to sufficiently plead a claim for negligent or willful violations of the Fair Credit Reporting Act, 15 U.S.C. § 1681, et al. (“FCRA”) because Plaintiff fails to adequately allege that Chase received notice of a dispute from a consumer reporting agency or that Chase failed to reasonably investigate any such dispute. Second, Plaintiff has failed to allege a negligent violation of the FCRA because he has failed to allege actual damages. Third, Plaintiff has failed to adequately allege a willful violation of the FCRA. Fourth, Plaintiff lacks standing to bring a claim for violation of the FCRA. As a result of these deficiencies, the Complaint should be dismissed in its entirety and without leave to amend. This Motion is based upon this Notice of Motion and Motion, the accompanying Memorandum of Points and Authorities, the Request for Judicial Notice filed herewith, the pleadings and papers on file herein, all other matters of which the Court may take judicial notice and upon such other or further material as may be presented at or in connection with the hearing on this Motion. // // // Case 2:16-cv-07251-JAK-JC Document 15 Filed 01/13/17 Page 2 of 20 Page ID #:132 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 - 2 - NOTICE OF MOTION AND MOTION OF CHASE BANK USA N.A. TO DISMISS COMPLAINT Case No. 2:16-cv-07251-JAK-JC LA 52031971 S T R O O C K & S T R O O C K & L A V A N L L P 20 29 C en tu ry P ar k E as t Lo s A ng el es , C al ifo rn ia 9 00 67 -3 08 6 This Motion is exempt from the requirements of Local Rule 7-3 because Plaintiff appears pro se, is in custody and is not an attorney. (See Compl., ¶ 5.) Dated: January 13, 2017 STROOCK & STROOCK & LAVAN LLP STEPHEN J. NEWMAN By: /s/ Stephen J. Newman Stephen J. Newman Attorneys for Defendant CHASE BANK USA, N.A. erroneously sued as CHASE BANK, USA NA Case 2:16-cv-07251-JAK-JC Document 15 Filed 01/13/17 Page 3 of 20 Page ID #:133 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 - i - NOTICE OF MOTION AND MOTION OF CHASE BANK USA N.A. TO DISMISS COMPLAINT Case No. 2:16-cv-07251-JAK-JC LA 52031971 S T R O O C K & S T R O O C K & L A V A N L L P 20 29 C en tu ry P ar k E as t Lo s A ng el es , C al ifo rn ia 9 00 67 -3 08 6 TABLE OF CONTENTS Page I. INTRODUCTION .............................................................................................. 1 II. FACTUAL AND PROCEDURAL BACKGROUND ....................................... 2 A. Plaintiff’s Incarceration. ........................................................................... 2 B. Allegations in the Complaint and Disputed Information. ........................ 2 III. ARGUMENT ...................................................................................................... 3 A. Standard on a Motion to Dismiss ............................................................. 3 B. Plaintiff’s Claims for Violation of § 1681s-2(b) are Insufficiently Pleaded. .................................................................................................... 4 1. Plaintiff Fails to State a Claim Under § 1681s-2(b) Because He Does Not Allege that a CRA Notified Chase of His Disputes. ......................................................................................... 4 2. Plaintiff Fails To Show That Chase Neglected To Reasonably Investigate His Alleged Disputes ............................... 5 C. Plaintiff’s Claim for Negligent Violation of the FCRA is Insufficient Because He Fails to Allege Any Actual Damages. .............. 7 1. Plaintiff Fails to Allege a Causal Relationship Between His Alleged Physical Symptoms and Any Adverse Action Taken by Creditors. ........................................................................ 7 2. Nor Can Plaintiff Demonstrate Any Actual or Prospective Damages Because He Will Remain Incarcerated for the Entire Period During Which the Disputed Information on His Account Will Be Reported. ..................................................... 8 D. Plaintiff has Failed to Adequately Allege a Willful Violation of the FCRA. ................................................................................................. 9 E. Plaintiff Lacks Article III Standing. ....................................................... 10 IV. CONCLUSION ................................................................................................ 12 Case 2:16-cv-07251-JAK-JC Document 15 Filed 01/13/17 Page 4 of 20 Page ID #:134 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 - ii - NOTICE OF MOTION AND MOTION OF CHASE BANK USA N.A. TO DISMISS COMPLAINT Case No. 2:16-cv-07251-JAK-JC LA 52031971 S T R O O C K & S T R O O C K & L A V A N L L P 20 29 C en tu ry P ar k E as t Lo s A ng el es , C al ifo rn ia 9 00 67 -3 08 6 TABLE OF AUTHORITIES Page(s) Cases Ashcroft v. Iqbal, 556 U.S. 662 (2009) ................................................................................................. 3 Balistreri v. Pacifica Police Dep’t, 901 F.2d 696 (9th Cir. 1988) ................................................................................... 4 Banga v. First USA, NA, 29 F. Supp. 3d 1270, 1280 (N.D. Cal. 2014) ........................................................... 7 Banks v. ACS Educ., 638 F. App’x 587 (9th Cir. 2016) ............................................................................ 6 Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) ............................................................................................. 3, 5 Braitberg v. Charter Commc’ns, Inc., 836 F.3d 925 (8th Cir. 2016) ................................................................................. 10 Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876 (9th Cir. 2010) ................................................................................... 6 Chiang v. Verizon New England Inc., 595 F.3d 26 (1st Cir. 2010) ...................................................................................... 6 Cousin v. Trans Union Corp., 246 F.3d 359 (5th Cir. 2001) ................................................................................... 7 Crabill v. Trans Union, LLC, 259 F.3d 662 (7th Cir. 2001) ................................................................................... 7 Fahey v. Experian Info. Sols., Inc., 571 F. Supp. 2d 1082 (E.D. Mo. 2008) ................................................................... 7 Gorman v. JP Morgan Chase Bank, No. 13cv225 MMA (WMC), 2013 U.S. Dist. LEXIS 63866 (S.D. Cal. May 3, 2013) ........................................................................................... 4 Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147 (9th Cir. 2009) ......................................................................... 4, 5, 6 Case 2:16-cv-07251-JAK-JC Document 15 Filed 01/13/17 Page 5 of 20 Page ID #:135 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 - iii - NOTICE OF MOTION AND MOTION OF CHASE BANK USA N.A. TO DISMISS COMPLAINT Case No. 2:16-cv-07251-JAK-JC LA 52031971 S T R O O C K & S T R O O C K & L A V A N L L P 20 29 C en tu ry P ar k E as t Lo s A ng el es , C al ifo rn ia 9 00 67 -3 08 6 Howard v. Blue Ridge Bank, 371 F. Supp. 2d 1139 (N.D. Cal. 2005) ................................................................... 9 Lee v. Verizon Commc’ns, Inc., 837 F.3d 523 (5th Cir. 2016) ................................................................................. 10 Meyers v. Nicolet Rest. of De Pere, LLC, 843 F.3d 724 (7th Cir. 2016) ................................................................................. 10 Myers v. Bennett Law Offices, 238 F. Supp. 2d 1196 (D. Nev. 2002) ...................................................................... 7 Nicklaw v. Citimortgage, Inc., 839 F.3d 998 (11th Cir. 2016) ............................................................................... 10 Prosser v. Navient Sols., Inc., No. 15-CV-01036-SC, 2015 WL 5168635 (N.D. Cal. Sept. 3, 2015) ......................................................................................... 5 Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47 (2007) ............................................................................................. 9, 10 Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016), as revised (May 24, 2016) ......................................... 10, 11 Sprewell v. Golden State Warriors, 266 F.3d 979 opinion amended on denial of reh’g, 275 F.3d 1187 (9th Cir. 2001) ................................................................................. 3 Trikas v. Universal Card Servs. Corp., 351 F. Supp. 2d 37 (E.D.N.Y. 2005) ....................................................................... 7 Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036 (2016) ........................................................................................... 10 W. Mining Council v. Watt, 643 F.2d 618 (9th Cir. 1981) ................................................................................... 4 Wang v. Asset Acceptance LLC, No. C09-04797 SI, 2010 U.S. Dist. LEXIS 91946 (N.D. Cal. July 27, 2010) ......................................................................................... 4 Statutes 15 U.S.C. § 1681c ................................................................................................ passim Case 2:16-cv-07251-JAK-JC Document 15 Filed 01/13/17 Page 6 of 20 Page ID #:136 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 - iv - NOTICE OF MOTION AND MOTION OF CHASE BANK USA N.A. TO DISMISS COMPLAINT Case No. 2:16-cv-07251-JAK-JC LA 52031971 S T R O O C K & S T R O O C K & L A V A N L L P 20 29 C en tu ry P ar k E as t Lo s A ng el es , C al ifo rn ia 9 00 67 -3 08 6 15 U.S.C. § 1681i .......................................................................................................... 5 15 U.S.C. § 1681n ....................................................................................................... 10 15 U.S.C. § 1681o ......................................................................................................... 7 15 U.S.C. § 1681s-2 ............................................................................................. 4, 5, 9 Rules Fed. Rule of Civ. Proc. 8(a)(2) ..................................................................................... 3 Fed. Rule of Civ. Proc. 12(b)(2) ................................................................................... 1 Fed. Rule of Civ. Proc. 12(b)(6) ................................................................................... 4 Case 2:16-cv-07251-JAK-JC Document 15 Filed 01/13/17 Page 7 of 20 Page ID #:137 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - 1 - NOTICE OF MOTION AND MOTION OF CHASE BANK USA N.A. TO DISMISS COMPLAINT Case No. 2:16-cv-07251-JAK-JC LA 52031971 S T R O O C K & S T R O O C K & L A V A N L L P 20 29 C en tu ry P ar k E as t Lo s A ng el es , C al ifo rn ia 9 00 67 -3 08 6 MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION This is a Fair Credit Reporting Act case. Plaintiff Richard Ichihara (“Plaintiff”) is frustrated that Chase Bank USA, N.A. (“Chase”) has not acquiesced to his demands to delete a derogatory credit card account from his credit report and has elected to sue Chase for negligent and willful violation of the Fair Credit Reporting Act, 15 U.S.C. § 1681, et al. (“FCRA”).1 His Complaint, however, is woefully deficient and fails to state a plausible claim for relief for several reasons. As a threshold matter, Plaintiff fails to allege that Chase received notice of a dispute from a consumer reporting agency (“CRA”). This is an essential element of any FCRA claim against a furnisher and warrants immediate dismissal of the Complaint. Plaintiff further fails to allege facts suggesting that Chase failed to reasonably investigate his alleged disputes. To the contrary, Plaintiff attaches to his Complaint a letter from Chase indicating that an investigation was performed (at his request) and the account information was confirmed as accurate. Plaintiff’s disagreement with the results of the investigation does not support an assertion that the investigation was unreasonable or that Chase otherwise violated the FCRA. Plaintiff also fails to allege that he incurred any actual damages attributable to Chase. Plaintiff claims he suffered emotional distress, but he fails to allege that a creditor or third party actually saw the allegedly inaccurate information and took adverse action towards Plaintiff, and that as a result of the adverse action, some serious emotional distress followed. Given that Plaintiff is incarcerated, and will remain so until at least September 2020, he cannot plausibly allege that any adverse 1 The Complaint also names James Dimon (“Dimon”), Chairman of the Board and Chief Executive Offer (“CEO”) of JPMorgan Chase & Co., as a defendant in this action. However, Plaintiff makes no allegations that Dimon had any involvement whatsoever with the alleged reporting at issue or has any contacts within the State of California. Accordingly, no valid claims exist as to Dimon and this Court cannot exercise personal jurisdiction over Dimon. Dimon has separately filed a motion to dismiss the Complaint pursuant to Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction. Case 2:16-cv-07251-JAK-JC Document 15 Filed 01/13/17 Page 8 of 20 Page ID #:138 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 - 2 - NOTICE OF MOTION AND MOTION OF CHASE BANK USA N.A. TO DISMISS COMPLAINT Case No. 2:16-cv-07251-JAK-JC LA 52031971 S T R O O C K & S T R O O C K & L A V A N L L P 20 29 C en tu ry P ar k E as t Lo s A ng el es , C al ifo rn ia 9 00 67 -3 08 6 credit decision has been made as a result of the purportedly inaccurate information identified in the Complaint. Plaintiff’s allegations of willful violations of the FCRA are likewise deficient. They are boilerplate, conclusory and fail to plausibly allege grounds for statutory or punitive damages. And Plaintiff makes no effort to establish Article III standing to maintain his FCRA claims in this Court, which similarly warrants dismissal. II. FACTUAL AND PROCEDURAL BACKGROUND A. Plaintiff’s Incarceration. Plaintiff has been incarcerated in federal prison since February 8, 2008 for various drug-related convictions. (Request For Judicial Notice (“RJN”), Exhs. A, B and C (Exhibit C referred to herein as “Second Amended Judgment of Conviction”); Compl., Exh. C.) Following entry of initial and amended judgments in 2009, a second amended judgment was entered on June 18, 2015, which reduced Plaintiff’s imprisonment period to 151 months with credit for time served. (Id., Exh. C.) Thus, Plaintiff is set to be released in September of 2020. (Id.) A $1,000,000 monetary judgment previously imposed was not changed and does not appear to have been paid as of the date of filing of this motion. (RJN, Exh. D.) B. Allegations in the Complaint and Disputed Information. On September 27, 2016, Plaintiff filed his Complaint in the Central District of California asserting claims for negligent and willful violations of the FCRA. (Compl., ¶¶ 6-16.) Plaintiff alleges that in April, March, February, January and December of 2011, Chase furnished data stating that payments on a revolving loan were past due and the account was charged off. (Id., ¶ 4.) Although Plaintiff does not allege why this information is purportedly inaccurate, he appears to claim that because the account was allegedly opened while he was in prison, it must have been fraudulently opened in his name. (Id., Exh. C.) Plaintiff alleges he sent three dispute letters to Chase. (Id. ¶¶ 4-5.) He acknowledges Chase responded to his initial dispute on April 10, 2016, stating that Case 2:16-cv-07251-JAK-JC Document 15 Filed 01/13/17 Page 9 of 20 Page ID #:139 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 - 3 - NOTICE OF MOTION AND MOTION OF CHASE BANK USA N.A. TO DISMISS COMPLAINT Case No. 2:16-cv-07251-JAK-JC LA 52031971 S T R O O C K & S T R O O C K & L A V A N L L P 20 29 C en tu ry P ar k E as t Lo s A ng el es , C al ifo rn ia 9 00 67 -3 08 6 Chase had completed the investigation he requested and “confirmed the information [Chase is] providing is accurate.” (Id. ¶ 4; Exh. A) Plaintiff alleges that on June 29, 2016, he sent letters to Experian, Trans Union and Equifax disputing the information Chase was reporting as incorrect, incomplete and misleading, but that Chase failed to correct the “incorrect, inaccurate[,] misleading and false information” and “never conducted [an] investigation.” (Id., ¶ 6.) According to the TransUnion credit report referenced in Exhibit C of the Complaint, the initial delinquency on Plaintiff’s account commenced in December 2011. (Compl., Exh. C.) As required by 15 U.S.C. §§ 1681c, this delinquency will cease to appear on Plaintiff’s TransUnion credit report by June 2019, at the latest, before Plaintiff is likely to be released from federal custody. 15 U.S.C. §§ 1681c(a)4, (c)(1). Moreover, Plaintiff’s Experian credit report, provided by Plaintiff as Exhibit C to the Complaint expressly states that “this account is scheduled to continue on record until Sep 2018.” (Compl., Exh. C.) III. ARGUMENT A. Standard on a Motion to Dismiss To survive a motion to dismiss, a complaint “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). A complaint does not suffice “if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’” Iqbal, 556 U.S. at 678 (citation omitted). Where “the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged - but it has not ‘show[n]’ - ‘that the pleader is entitled to relief.’” Id. at 679 (quoting Fed. R. Civ. P. 8(a)(2)). A court is not required to credit conclusory legal allegations cast in the form of factual allegations, unwarranted deductions of fact, or unreasonable inferences. Sprewell v. Golden State Warriors, 266 F.3d 979, 985-86 opinion amended on denial Case 2:16-cv-07251-JAK-JC Document 15 Filed 01/13/17 Page 10 of 20 Page ID #:140 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 - 4 - NOTICE OF MOTION AND MOTION OF CHASE BANK USA N.A. TO DISMISS COMPLAINT Case No. 2:16-cv-07251-JAK-JC LA 52031971 S T R O O C K & S T R O O C K & L A V A N L L P 20 29 C en tu ry P ar k E as t Lo s A ng el es , C al ifo rn ia 9 00 67 -3 08 6 of reh’g, 275 F.3d 1187 (9th Cir. 2001); W. Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981). A Rule 12(b)(6) dismissal is proper where there is either a “lack of a cognizable legal theory” or “the absence of sufficient facts alleged under a cognizable legal theory.” Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1988). B. Plaintiff’s Claims for Violation of § 1681s-2(b) are Insufficiently Pleaded. 1. Plaintiff Fails to State a Claim Under § 1681s-2(b) Because He Does Not Allege that a CRA Notified Chase of His Disputes. Duties under § 1681s-2(b) “arise only after the furnisher receives notice of dispute from a CRA; notice of a dispute received directly from the consumer does not trigger furnishers’ duties under subsection (b).” Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147, 1154 (9th Cir. 2009) (emphasis added) (“Gorman I”). Plaintiff is required to allege “the credit reporting agency notified the furnisher of the [disputed] information …” Gorman v. JP Morgan Chase Bank, No. 13cv225 MMA (WMC), 2013 U.S. Dist. LEXIS 63866, at *15 (S.D. Cal. May 3, 2013) (quoting Von Brincken, citing Gorman I, 584 F.3d at 1162). These allegations must be specific as to the fact that a CRA did notify defendant of the dispute. See Wang v. Asset Acceptance LLC, No. C09-04797 SI, 2010 U.S. Dist. LEXIS 91946, at *12 (N.D. Cal. July 27, 2010) (“[A] ‘reasonable inference’ cannot be drawn from the fact that § 1681i(a)(2) required Trans Union to report Wang’s disputes to Asset. Simply because the statute requires CRAs to take action, does not mean CRAs do so.”). Plaintiff fails to allege that Chase received notice of a dispute from a CRA. He makes a conclusory assertion that “the credit reporting agency notified the furnisher (Chase) of the incorrect information” (Compl., ¶ 8), but this allegation is not supported by the facts he pled. Plaintiff alleges he sent three dispute letters to Chase and then “decided that it was best to directly communicate this information to the CRAs.” (Compl., ¶¶ 6, 8.) Plaintiff nowhere alleges facts suggesting that any of the CRAs relayed his alleged disputes to Chase. The law is clear that direct disputes Case 2:16-cv-07251-JAK-JC Document 15 Filed 01/13/17 Page 11 of 20 Page ID #:141 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 - 5 - NOTICE OF MOTION AND MOTION OF CHASE BANK USA N.A. TO DISMISS COMPLAINT Case No. 2:16-cv-07251-JAK-JC LA 52031971 S T R O O C K & S T R O O C K & L A V A N L L P 20 29 C en tu ry P ar k E as t Lo s A ng el es , C al ifo rn ia 9 00 67 -3 08 6 received from consumers do not trigger a furnisher’s duties under § 1681s-2(b). See Gorman, 584 F.3d at 1154 (holding that a furnisher’s duties under 15 U.S.C. § 1681s-2(b) “arise only after the furnisher receives notice of dispute from a CRA; notice of a dispute received directly from the consumer does not trigger furnishers’ duties under subsection (b)”). Moreover, a CRA may decline to pass along a dispute to furnishers by deeming the dispute frivolous or irrelevant. 15 U.S.C. § 1681i(a)(3). It is therefore entirely possible that upon receiving a dispute from Plaintiff and determining that he was a prison inmate, the CRAs considered the dispute frivolous, and did not forward it to Chase. Thus, it is Plaintiff’s burden to allege specific detailed facts showing that Chase received notice of his dispute from the CRAs, when such notice supposedly was received and that Chase failed to conduct a reasonable investigation in response to such notice. Plaintiff fails to meet this burden in the Complaint. 2. Plaintiff Fails To Show That Chase Neglected To Reasonably Investigate His Alleged Disputes Had Plaintiff adequately alleged notice, his FCRA claims would nonetheless fail. “[A]n FCRA violation is tied to the reasonableness of an investigation rather than the accuracy of its results.” Prosser v. Navient Sols., Inc., No. 15-CV-01036- SC, 2015 WL 5168635, at *7 (N.D. Cal. Sept. 3, 2015) (internal citations omitted) (holding plaintiff’s claims under 15 U.S.C. § 1681s-2(b) failed as a matter of law where he did not allege facts to show the investigation by CRA was unreasonable). “An 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 I, 584 F.3d at 1161. Plaintiff “bears the burden of showing the investigation was unreasonable,” and a “formulaic recitation of the elements . . . are insufficient to survive a motion to dismiss.” Prosser, 2015 WL 5168635, at *7 (citing Gorman I and Twombly). Case 2:16-cv-07251-JAK-JC Document 15 Filed 01/13/17 Page 12 of 20 Page ID #:142 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 - 6 - NOTICE OF MOTION AND MOTION OF CHASE BANK USA N.A. TO DISMISS COMPLAINT Case No. 2:16-cv-07251-JAK-JC LA 52031971 S T R O O C K & S T R O O C K & L A V A N L L P 20 29 C en tu ry P ar k E as t Lo s A ng el es , C al ifo rn ia 9 00 67 -3 08 6 Plaintiff fails to plausibly allege that Chase neglected to reasonably investigate his disputes. Plaintiff concedes that Chase did, at his request, investigate how the subject account was reporting. (Compl., Exh. A.) The April 10, 2016 letter attached to the Complaint indicates that Chase completed the investigation Plaintiff requested and confirmed the information reported was accurate: “This account was charged off on May 31, 2012. The outstanding balance of $1,324.50 was not paid.” Id., see also Compl. ¶ 4. Plaintiff complains about the brevity of the letter, asserting that it was “only . . . a ‘template’ letter” (Id., ¶ 8), but he fails to allege facts indicating that the investigation Chase performed at his request was not reasonable or that Chase failed to perform reasonable investigations in response to his subsequent disputes. Rather, Plaintiff assumes that Chase’s investigation was not reasonable simply because the result was unfavorable to him. (Compl., ¶ 5) (alleging “no correction has been made . . . despite several attempts made by Plaintiff to correct the dispute [sic] that’s in error”). The Gorman I court made clear that an investigation is not unreasonable because it results in a substantive conclusion that is unfavorable to the customer, even if that conclusion turns out to be inaccurate. Gorman, 584 F.3d at 1161. To be sure, there are no facts alleged in the Complaint suggesting that Chase’s conclusion following its investigation was inaccurate.2 Plaintiff appears to conclude that, because the subject account was opened while he was in federal custody, it was fraudulently opened. But his incarceration does not foreclose his ability to permit an authorized agent to apply for a credit card account in his name and otherwise manage his financial affairs during his period of incarceration. Thus, the fact of his 2 Plaintiff’s failure to adequately plead an inaccuracy is an independent ground for dismissing this action. A plaintiff may not maintain an FCRA claim unless “the reported information is inaccurate.” Banks v. ACS Educ., 638 F. App’x 587, 590 (9th Cir. 2016); see also Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876, 890 (9th Cir. 2010) (although the FCRA “does not on its face require that an actual inaccuracy exist for a plaintiff to state a claim, many courts, including our own, have imposed such a requirement”). This rule applies to claims against furnishers like Chase. See, e.g., Banks, 638 F. App’x at 590; Chiang v. Verizon New England Inc., 595 F.3d 26, 38 (1st Cir. 2010) (“a plaintiff’s required showing” in a claim against a furnisher “is factual inaccuracy”). Case 2:16-cv-07251-JAK-JC Document 15 Filed 01/13/17 Page 13 of 20 Page ID #:143 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 - 7 - NOTICE OF MOTION AND MOTION OF CHASE BANK USA N.A. TO DISMISS COMPLAINT Case No. 2:16-cv-07251-JAK-JC LA 52031971 S T R O O C K & S T R O O C K & L A V A N L L P 20 29 C en tu ry P ar k E as t Lo s A ng el es , C al ifo rn ia 9 00 67 -3 08 6 incarceration alone does not substantiate a claim that the information Chase allegedly furnished was inaccurate or that Chase’s investigation was unreasonable. Because Plaintiff fails to plead facts showing a failure by Chase to reasonably investigate his alleged disputes, the Complaint cannot survive dismissal. C. Plaintiff’s Claim for Negligent Violation of the FCRA is Insufficient Because He Fails to Allege Any Actual Damages. 1. Plaintiff Fails to Allege a Causal Relationship Between His Alleged Physical Symptoms and Any Adverse Action Taken by Creditors. To plead a claim for negligent violation of the FCRA, Plaintiff must allege he suffered actual damages as a result of Chase’s alleged violation of the FCRA. See 15 U.S.C. § 1681o(a). To obtain an award for actual damages, Plaintiff must allege a “causal relation between the violation of the statute and the loss of credit, or some other harm.” Crabill v. Trans Union, LLC, 259 F.3d 662, 664 (7th Cir. 2001); see also Banga v. First USA, NA, 29 F. Supp. 3d 1270, 1280 (N.D. Cal. 2014) (citing Crabill, 259 F.3d at 664) (granting summary judgment where plaintiff failed to establish a “causal connection between Chase’s alleged statutory violations and her injuries”); Fahey v. Experian Info. Sols., Inc., 571 F. Supp. 2d 1082, 1089 (E.D. Mo. 2008) (“[P]laintiff has the burden of proving that [a defendant’s] credit report was a causal factor in his inability to secure financing.”). Further, “claiming private mental distress, without any showing that a creditor or other third party saw the erroneous information or took any negative action towards the allegedly aggrieved party because of it, is not enough for pain and suffering damages.” Trikas v. Universal Card Servs. Corp., 351 F. Supp. 2d 37, 45 (E.D.N.Y. 2005). A “plaintiff must support a claim for damages based on emotional distress with something more than his or her own conclusory allegations.” Myers v. Bennett Law Offices, 238 F. Supp. 2d 1196, 1206 (D. Nev. 2002) (citing to Cousin v. Trans Union Corp., 246 F.3d 359, 371 (5th Cir. 2001)). Case 2:16-cv-07251-JAK-JC Document 15 Filed 01/13/17 Page 14 of 20 Page ID #:144 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 - 8 - NOTICE OF MOTION AND MOTION OF CHASE BANK USA N.A. TO DISMISS COMPLAINT Case No. 2:16-cv-07251-JAK-JC LA 52031971 S T R O O C K & S T R O O C K & L A V A N L L P 20 29 C en tu ry P ar k E as t Lo s A ng el es , C al ifo rn ia 9 00 67 -3 08 6 Plaintiff fails to adequately allege actual damages. He claims he “experienced headaches, chest pains, depression, sleepless nights, neck tension [and] nervousness” due to Chase’s “actions to ignore the Plaintiff’s request of removing the derogatory affecting his personal credit profile.” (Compl., ¶ 13.) But this allegation must, at the very least, accompany an allegation that a creditor or third party actually saw the allegedly inaccurate information and took adverse action towards Plaintiff because of such information, and further that as a result of the adverse action, some serious emotional distress followed. Plaintiff has made no such allegation. (See id.) Given that Plaintiff will be incarcerated until 2020 and remains subject to substantial financial obligations to the United States because of the matters that resulted in his conviction, he cannot plausibly allege that any adverse credit decision has been made (or will be made) as a result of the purportedly inaccurate information identified in the Complaint. This defect is fatal to his claim for negligent violation of the FCRA. 2. Nor Can Plaintiff Demonstrate Any Actual or Prospective Damages Because He Will Remain Incarcerated for the Entire Period During Which the Disputed Information on His Account Will Be Reported. Pursuant to 15 U.S.C. § 1681c, CRAs are prohibited from reporting accounts that have been charged to profit and loss which antedate the report by more than seven years. 15 U.S.C. § 1681c(a)(4). This seven year period begins to run upon expiration of the 180-day period beginning on the date of the commencement of the delinquency immediately preceding the charge to profit and loss. 15 U.S.C. § 1681c(c)(1). According to the TransUnion credit report referenced in Exhibit C of the Complaint, the initial delinquency on Plaintiff’s account commenced in December 2011. (Compl., Exh. C.) Thus, the 180-day period beginning on the date of the commencement of this delinquency expired in June 2012. This delinquency will Case 2:16-cv-07251-JAK-JC Document 15 Filed 01/13/17 Page 15 of 20 Page ID #:145 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 - 9 - NOTICE OF MOTION AND MOTION OF CHASE BANK USA N.A. TO DISMISS COMPLAINT Case No. 2:16-cv-07251-JAK-JC LA 52031971 S T R O O C K & S T R O O C K & L A V A N L L P 20 29 C en tu ry P ar k E as t Lo s A ng el es , C al ifo rn ia 9 00 67 -3 08 6 cease to appear on Plaintiff’s credit report by June 2019, at the absolute latest.3 Pursuant to the Second Amended Judgment of Conviction, Plaintiff will be incarcerated through September 2020. (RJN, Exh. C.) Thus, Plaintiff will still have over a full year remaining on his sentence when the disputed information is deleted from his credit history. Because Plaintiff has failed to allege that he is eligible to apply for any employment, housing or other consumer credit obligations which would render consideration of his credit history relevant prior to September 2020, there is simply no basis for Plaintiff to allege he is currently being, or will be, harmed by the disputed information contained in his credit report. Because Plaintiff has not and cannot allege any actual damages, Plaintiff’s claim for negligent violation of the FCRA must be dismissed. D. Plaintiff has Failed to Adequately Allege a Willful Violation of the FCRA. Plaintiff requests statutory and punitive damages for Chase’s alleged willful violation of the FCRA. (Compl., ¶¶ 10-11.) A furnisher acts willfully when it knowingly violates the FCRA or acts in reckless disregard of its requirements. Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 56-57 (2007). “[A] company subject to [the] FCRA does not act in reckless disregard of it unless the action is not only a violation under a reasonable reading of the statute’s terms, but shows that the company ran a risk of violating the law substantially greater than the risk associated with a reading that was merely careless…” Id. at 69. To allege a willful violation, Plaintiff must allege more than a conclusory allegation that Chase acted willfully. See Howard v. Blue Ridge Bank, 371 F. Supp. 2d 1139, 1143 (N.D. Cal. 2005) (granting motion to dismiss claim for willful violation of 15 U.S.C. § 1681s-2 where complaint contains conclusory allegation that Defendants “[willfully] failed to comply with the requirements of 15 U.S.C. § 1681s-2”). 3 Indeed, Plaintiff’s Experian credit report in Exhibit C of the Complaint expressly states that “This account is scheduled to continue on record until Sep 2018.” (Compl., Exh. C.) Case 2:16-cv-07251-JAK-JC Document 15 Filed 01/13/17 Page 16 of 20 Page ID #:146 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 - 10 - NOTICE OF MOTION AND MOTION OF CHASE BANK USA N.A. TO DISMISS COMPLAINT Case No. 2:16-cv-07251-JAK-JC LA 52031971 S T R O O C K & S T R O O C K & L A V A N L L P 20 29 C en tu ry P ar k E as t Lo s A ng el es , C al ifo rn ia 9 00 67 -3 08 6 Here, Plaintiff makes perfunctory allegations that Chase willfully violated the FCRA by “knowingly, willfully, intentionally and recklessly fail[ing] to conduct any investigation.” (Compl., ¶ 8.) This boilerplate allegation, without more, is insufficient to allege a claim for statutory and punitive damages under the FCRA. Moreover, these allegations are contradicted elsewhere in the Complaint. Plaintiff alleges that Chase did perform an investigation at his request and informed him that the information being reported to the credit bureaus was accurate. (Compl., Exh. A.) Plaintiff’s apparent displeasure in the results of Chase’s investigation does not support a claim that Chase willfully violated the FCRA. E. Plaintiff Lacks Article III Standing. The Supreme Court recently held that more than a “bare procedural violation, divorced from any concrete harm” is required to satisfy Article III’s injury-in-fact requirement. Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1549 (2016), as revised (May 24, 2016); see also Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036, 1050 (2016). To satisfy this standing requirement, Plaintiff must allege an injury that is “concrete and particularized” and “actual or imminent, not conjectural or hypothetical.” Spokeo, 136 S. Ct. 1543 (emphasis added). In reaching its holding in Spokeo, the Supreme Court explained that a technical violation of one of “FCRA’s procedural requirements may result in no harm,” for example where information is entirely accurate or inaccuracies do not present any material risk of harm. Id. at 1550; see also Safeco Ins. Co., 551 U.S. at 63-64 (FCRA case requiring proof of “some practical consequence of reading the report, not merely some subsequent adverse occurrence that would have happened anyway”). Since the Supreme Court’s decision less than a year ago, Courts across the country have continued to hold that more than a bare procedural violation is necessary to confer standing. See Meyers v. Nicolet Rest. of De Pere, LLC, 843 F.3d 724 (7th Cir. 2016) (alleged statutory violation alone could not confer standing to seek statutory damages under § 1681n(a)); Nicklaw v. Citimortgage, Inc., 839 F.3d Case 2:16-cv-07251-JAK-JC Document 15 Filed 01/13/17 Page 17 of 20 Page ID #:147 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 - 11 - NOTICE OF MOTION AND MOTION OF CHASE BANK USA N.A. TO DISMISS COMPLAINT Case No. 2:16-cv-07251-JAK-JC LA 52031971 S T R O O C K & S T R O O C K & L A V A N L L P 20 29 C en tu ry P ar k E as t Lo s A ng el es , C al ifo rn ia 9 00 67 -3 08 6 998, 1002-03 (11th Cir. 2016) (no standing where plaintiff did not allege harm flowing from defendant’s alleged failure to timely record a satisfaction of judgment); Lee v. Verizon Commc’ns, Inc., 837 F.3d 523, 529-30 (5th Cir. 2016) (no standing for ERISA claims where no harm alleged); Braitberg v. Charter Commc’ns, Inc., 836 F.3d 925 (8th Cir. 2016) (claim based on wrongful retention of data barred by Spokeo because the data was not actually used in a manner that harmed plaintiff). Here, Plaintiff fails to plausibly allege concrete and particularized injury stemming from the alleged procedural violation at issue. Plaintiff claims he suffered various symptoms of emotional distress due to Chase’s “actions to ignore the Plaintiff’s request of removing the derogatory [sic] affecting his personal credit report.” (Compl. ¶ 13.) But as these allegations make clear, these injuries were caused (if at all) by Plaintiff’s desire for a particular outcome of an investigation, not by the reasonableness or unreasonableness of the investigation itself. These alleged injuries are not causally linked to the alleged procedural violation at issue and therefore cannot provide a basis for Article III standing. Plaintiff’s vague assertion that misleading information “can adversely affect credit decisions by other creditors” is likewise insufficient. (Compl., ¶ 4.) He alleges nothing more than the mere possibility that the subject account, which Chase investigated and confirmed as accurate, could cause him future harm. He has not alleged that he is gainfully employed, or will be attempting to apply for credit or housing at any time over the three year period Plaintiff has remaining on his sentence. As discussed above, any allegedly inaccurate information will be removed from Plaintiff’s credit report pursuant to the FCRA long before his release from federal prison. See 15 U.S.C. § 1681c. As such, Plaintiff fails to allege injury in fact and will be unable to do so at any time in the future. Consequently, the Complaint should be dismissed in its entirety without leave to amend for lack of Article III standing. Case 2:16-cv-07251-JAK-JC Document 15 Filed 01/13/17 Page 18 of 20 Page ID #:148 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 - 12 - NOTICE OF MOTION AND MOTION OF CHASE BANK USA N.A. TO DISMISS COMPLAINT Case No. 2:16-cv-07251-JAK-JC LA 52031971 S T R O O C K & S T R O O C K & L A V A N L L P 20 29 C en tu ry P ar k E as t Lo s A ng el es , C al ifo rn ia 9 00 67 -3 08 6 IV. CONCLUSION For the foregoing reasons, Chase respectfully requests that the Court grant this Motion in its entirety and dismiss the Complaint without leave to amend. Dated: January 13, 2017 STROOCK & STROOCK & LAVAN LLP STEPHEN J. NEWMAN By: /s/ Stephen J. Newman Stephen J. Newman Attorneys for Defendant CHASE BANK USA, N.A. erroneously sued as CHASE BANK, USA NA Case 2:16-cv-07251-JAK-JC Document 15 Filed 01/13/17 Page 19 of 20 Page ID #:149 -4 z 10 00 C < r 'C U o o O vU Ho 'c V) Q rq U o - 0 H 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Executed on January 13, 2017, at Los Angeles, California. 0 \k-ft 24 25 26 27 X Richard Ichihara 02820093 Federal Correctional Institute Terminal Island Post Office Box 3007 San Pedro, California 90733 (VIA PERSONAL SERVICE By causing the document(s), in a sealed envelope, to be delivered to the person(s) at the address(es) set forth above. (VIA U.S. MAIL) In accordance with the regular mailing collection and processing practices of this office, with which I am readily familiar, by means of which mail is deposited with the United States Postal Service at Los Angeles, California that same day in the ordinary course of business, I deposited such sealed envelope, with postage thereon fully prepaid, for collection and mailing on this same date following ordinary business practices, addressed as set forth above. (VIA E-MAIL) Based on a court order or an agreement of the parties to accept service by e-mail, I caused the documents to be sent to the persons at the e-mail addresses listed in the attached Service List. (VIA OVERNIGHT DELIVERY) By causing the document(s), in a sealed envelope to be delivered to the office of the addressee(s) at the address(es) set forth above by overnight delivery via Federal Express, or by a similar overnight delivery service. IN II IN IN tJ tiII] SJ 31 4'i i I am employed in the County of Los Angeles, State of California, over the age of eighteen years, and not a party to the within action. My business address is: 2029 Century Park East, Los Angeles, CA 90067-3086. On January 13, 2017, I served the foregoing document(s) described as: DEFENDANT CHASE BANK USA'S NOTICE OF MOTION AND MOTION TO DISMISS COMPLAINT on the interested parties in this action as follows: I declare that I am employed in the office of a member of the bar of this court, at whose direction the service was made. I declare under penalty of perjury under the laws of the State ofc ,1 1 1 !at fl"(! iho e is true and correct. Case 2:16-cv-07251-JAK-JC Document 15 Filed 01/13/17 Page 20 of 20 Page ID #:150