Yurkovic v. New Jersey Higher Education Student Assistance Authority et al

BRIEF in Opposition

D.N.J.February 7, 2017

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY TRENTON VICINAGE MICHAEL V. YURKOVIC, Plaintiff; vs. NEW JERSEY HIGHER EDUCATION STUDENT ASSISTANCE AUTHORITY, et al., Defendants. case no. 3:16-cv-05339-pgs-lhg the honorable peter g. sheridan magistrate judge goodman Plaintiff’s Brief in Opposition to Defendant Goldman’s Fed. R. Civ. P. 12(b)(6) Motion to Dismiss (Returnable Feb. 17, 2017) BAHGAT + BAHGAT LLC Joseph A. Bahgat (006502008) 2 Hiram Square New Brunswick NJ 08901-1269 732 733 2385 joe@hubcitylawgroup.com Counsel for Plaintiff Clara Kalhous (001892009) On the brief Case 3:16-cv-05339-PGS-LHG Document 31 Filed 02/07/17 Page 1 of 35 PageID: 341 plaintiff’s brief in opposition to goldman motion to dismiss TABLE OF CONTENTS TABLE OF CONTENTS .................................................................................... 2 TABLE OF AUTHORITIES ................................................................................. 4 PRELIMINARY STATEMENT ............................................................................ 7 FACTUAL & PROCEDURAL BACKGROUND .................................................... 8 STATEMENT OF FACTS ................................................................................... 9 STANDARD OF REVIEW ................................................................................. 12 LEGAL ARGUMENT ....................................................................................... 13 1. Defendant Goldman’s Motion to Dismiss Counts Two and Three on the Grounds that He Is Not An “Information Furnisher” Within the Meaning of 15 U.S.C. § 1681s-2 Should Be Denied. .............................. 13 1.1. The Motion to Dismiss Should Be Denied Because Goldman Acted as an “Information Furnisher.” ................................................. 14 1.2. The Motion to Dismiss Should Be Denied Because Lt. Yurkovic’s Claim Under 15 U.S.C. § 1681s-2(b) Is Adequately Pleaded. ........................................................................................... 16 2. Defamation is Not Preempted by the FCRA, and Count Four Should Therefore Stand Against Defendant Goldman. ......................... 20 2.1. Defendant Goldman is a “Person” Within the Meaning of 15 U.S.C. § 1681a(b), so Lt. Yurkovic’s Defamation Claim Cannot be Preempted Here. ............................................................................... 21 2.2. Lt. Yurkovic’s Defamation Claim Against Defendant Goldman as an “Information Furnisher” Is Not Preempted Because the Amended Complaint Alleges that Defendant Goldman’s Conduct Case 3:16-cv-05339-PGS-LHG Document 31 Filed 02/07/17 Page 2 of 35 PageID: 342 plaintiff’s brief in opposition to goldman motion to dismiss was Willful and Malicious, and Outside the Purview of what is Regulated by the FCRA. ................................................................... 23 3. Lt. Yurkovic’s Claim for Invasion of Privacy Claim is Pleaded Properly in Count Five of the Amended Complaint. ............................. 26 4. Lt. Yurkovic is Entitled to a Declaratory Judgment. ............................... 30 CONCLUSION .............................................................................................. 33 CERTIFICATE OF SERVICE ............................................................................. 35 Case 3:16-cv-05339-PGS-LHG Document 31 Filed 02/07/17 Page 3 of 35 PageID: 343 plaintiff’s brief in opposition to goldman motion to dismiss TABLE OF AUTHORITIES Cases Akalwadi v. Risk Mgmt. Alternatives, Inc., 336 F. Supp. 2d 492 (D. Md. 2004) ....... 15 Ashcroft v. Iqbal, 556 U.S. 662 (2009) ..................................................... 13, 30, 34 Ausherman v. Bank of America Corp., 352 F.3d 896 (4th Cir. 2003) ...................... 22 Bank of United States v. Dandridge, 25 U.S. 64 (1827) ........................................ 18 Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) ...................................... 12, 13, 34 Bisbee v. John C. Conover Agency, Inc., 186 N.J.Super. 335 (App.Div. 1982) ......... 27 Campbell v. Chase Manhattan Bank, USA, N.A., No. 02-3489-JWB, 2005 WL 1514221 (D.N.J. June 27, 2005), order amended on reconsideration sub nom. No. 02- 3489-JWB, 2005 WL 1924669 (D.N.J. Aug. 10, 2005) ........................................ 24 City of Pittsburgh Comm’n on Human Relations v. Key Bank USA, 163 F. App’x 163 (3d Cir. 2006) ................................................................................................. 32 Davin, LLC v. Daham, 329 N.J. Super. 54 (App. Div. 2000) ................................. 26 Dimedio v. HSBC Bank, No. 08-5521-JBS-KMW, 2009 WL 1796072 (D.N.J. June 22, 2009) ............................................................................................................. 25 DiMezza v. First USA Bank, Inc., 103 F. Supp. 2d 1296 (D.N.M. 2000) ................. 19 Edwards v. Equable Ascent, FNCL, LLC, No. 11-2638-CCC, 2012 WL 1340123 (D.N.J. Apr. 16, 2012) ................................................................................. 20, 24 Ehling v. Monmouth-Ocean Hosp. Serv. Corp., 961 F. Supp. 2d 659 (D.N.J. 2013) . 27 Gorman v. Wolpoff & Abramson, LLP, 552 F.3d 1008 (9th Cir. 2009) ................... 23 Himmelstein v. Comcast of the Dist., LLC, 931 F. Supp. 2d 48 (D.D.C. 2013)18, 23, 24, 25 Case 3:16-cv-05339-PGS-LHG Document 31 Filed 02/07/17 Page 4 of 35 PageID: 344 plaintiff’s brief in opposition to goldman motion to dismiss In re Nickelodeon Consumer Privacy Litigation, 827 F.3d 262 (3d Cir. 2016) .......... 30 Japan Gas Lighter Ass’n v. Ronson Corp., 257 F. Supp. 219 (D.N.J. 1966) .............. 31 Lang v. TCF Nat. Bank, 249 F. App’x 464 (7th Cir. 2007) .................................... 18 O’Donnell v. United States, 891 F.2d 1079 (3d Cir. 1989) ..................................... 27 Oates v. Wells Fargo Bank, N.A., 880 F. Supp. 2d 620 (E.D. Pa. 2012) .................. 22 Pace v. Bank of Am. Corp., 537 F. App’x 735 (9th Cir. 2013) ................................ 19 Port Auth. v. Arcadian Corp., 189 F.3d 305 (3d Cir. 1999) .................................... 12 Rush v. Portfolio Recovery Assocs. LLC, 977 F. Supp. 2d 414 (D.N.J. 2013) ...... 28, 29 Saint Torrance v. Firstar, 529 F. Supp. 2d 836 (S.D. Ohio 2007) ............................ 23 Scheuer v. Rhodes, 416 U.S. 232 (1974) ............................................................. 13 Sheffer v. Experian Info. Solutions, Inc., 249 F. Supp. 2d 560 (E.D. Pa. 2003) ......... 19 SimmsParris v. Countrywide Fin. Corp., 652 F.3d 355 (3d Cir. 2011) ...................... 14 State v. Hempele, 120 N.J. 182 (1990) ............................................................... 28 Watson v. Trans Union, No. 04–205, 2005 WL 995687 (D.Me. April 28, 2005) ...... 19 White v. Green Tree Servicing, LLC, 118 F. Supp. 3d 867 (D. Md. 2015) ............. 17, 18 White v. White, 344 N.J. Super. 211 (App. Div. 2001) ......................................... 28 Statutes 15 U.S.C. § 1681a ....................................................................................... 14, 21 15 U.S.C. § 1681h ....................................................................................... 21, 23 15 U.S.C. § 1681i .............................................................................................. 17 Case 3:16-cv-05339-PGS-LHG Document 31 Filed 02/07/17 Page 5 of 35 PageID: 345 plaintiff’s brief in opposition to goldman motion to dismiss 15 U.S.C. § 1681s ...................................................................................... passim 15 U.S.C. § 1681t ................................................................................. 20, 23, 24 28 U.S.C. § 1367(c) ......................................................................................... 31 28 U.S.C. § 2201 ............................................................................................. 31 N.J.S.A. § 59:3-14(a) ...................................................................................... 16 N.J.S.A. § 9A:10-6.16(b) ................................................................................. 15 Other Authorities Advisory Comm. Notes to Fed. R. Civ. P. 57 (1937) ............................................. 32 Rules Fed. R. Civ. P. 12(b)(6) ........................................................................ 8, 12, 13, 17 Fed. R. Civ. P. 15(a)(2) ..................................................................................... 34 Fed. R. Civ. P. 57 ........................................................................................ 31, 32 Fed. R. Civ. P. 9(b) .......................................................................................... 21 N.J. Rules Prof’l Conduct r. 1.2(d) ..................................................................... 29 N.J. Rules Prof’l Conduct r. 3.3(a) ..................................................................... 29 Case 3:16-cv-05339-PGS-LHG Document 31 Filed 02/07/17 Page 6 of 35 PageID: 346 PRELIMINARY STATEMENT This case is the result of willful and malicious conduct by a New Jersey attorney perpetrated against a decorated public servant, who was harassed by the de- fendant for years, and was forced to spend thousands of dollars to defend a frivolous lawsuit that the defend- ant knew was frivolous from the start. After being granted leave to amend his state court complaint, Lt. Michael Yurkovic filed a well-pleaded complaint setting forth facially plausible claims against defendant Rus- sell Goldman for declaratory judgment, violations of the Fair Credit Reporting Act, and state law claims for defamation and invasion of privacy. Defendant Goldman has never denied committing the unlawful actions al- leged in the amended complaint, and based on the second motion to dismiss he filed, it is evident that he does not want to have to face the merits of this case. De- fendant Goldman not only loses this case on the merits, but also loses here, because the allegations in the amended complaint satisfy the plausibility standard, and are more than sufficient to withstand a motion brought under Fed. R. Civ. P. 12(b)(6). Lt. Yurkovic respectfully submits this brief in opposition to defendant Goldman’s motion to dismiss the first amended complaint against (ECF 28), and asks that this Court deny the motion for the following reasons: Case 3:16-cv-05339-PGS-LHG Document 31 Filed 02/07/17 Page 7 of 35 PageID: 347 plaintiff’s brief in opposition to goldman motion to dismiss (1) Defendant Goldman meets the statutory definition of an “information furnisher” under the Fair Credit Re- porting Act; (2) Defendant Goldman’s actions were will- ful and malicious, and the defamation claim in this lawsuit is therefore not preempted by the FCRA; (3) De- fendant Goldman’s actions were highly offensive to any reasonable person, and the allegations set forth a proper claim for invasion of privacy under New Jersey law; and (4) Regardless of the outcome of the other claims, Lt. Yurkovic is entitled to a declaratory judg- ment, to settle the ongoing controversy that has fol- lowed him around for the past five years. This Court should therefore deny defendant Goldman’s motion be- cause the amended complaint is well pleaded, and the motion to dismiss falls well short of the high standard required under Fed. R. Civ. P. 12(b)(6). FACTUAL & PROCEDURAL BACKGROUND Lt. Yurkovic filed the initial complaint in this matter on July 12, 2016, in the Superior Court of New Jersey, Law Division, Middlesex County. On Aug. 31, 2016, the case was removed to this Court. (ECF 1.) De- fendant Goldman filed a motion to dismiss on Sep. 21, 2016. (ECF 10.) Following oral argument on defendant Goldman’s motion on Nov. 7, 2016, the Court dismissed the complaint, and granted Lt. Yurkovic leave to file Case 3:16-cv-05339-PGS-LHG Document 31 Filed 02/07/17 Page 8 of 35 PageID: 348 plaintiff’s brief in opposition to goldman motion to dismiss an amended complaint within 30 days. (ECF 20.) Accord- ingly, Lt. Yurkovic filed the Amended complaint that is the subject of defendant Goldman’s current motion to dismiss on Dec. 7, 2016. (ECF 22.) Defendant Goldman filed a second motion to dismiss on Jan. 4, 2017. (ECF 28.) In addition, defendant New Jersey Higher Education Student Assistance Authority (HESAA) filed a motion to dismiss Counts Four and Five and all punitive damages claims. (ECF 27.) Oral argument on these motions is scheduled for Feb. 21, 2017, at 11:00 a.m., and this response is respectfully submitted in advance thereof. STATEMENT OF FACTS1 Since at least the spring of 2012, defendant Gold- man has been aware that Lt. Yurkovic’s signature on the promissory note for his ex-wife’s student loan was forged. (Am.Compl. ¶¶ 11, 14-16.) Yet, undeterred by this knowledge, defendant Goldman has continued to har- ass Lt. Yurkovic in an attempt to collect the full amount owed by Lt. Yurkovic’s ex-wife through tactics including the filing of a lawsuit on behalf of defend- 1 In addition to the factual summary herein, the Court is respectfully referred to Lt. Yurkovic’s amended complaint (ECF 22) for a complete exposition of Lt. Yurkovic’s claims. Case 3:16-cv-05339-PGS-LHG Document 31 Filed 02/07/17 Page 9 of 35 PageID: 349 plaintiff’s brief in opposition to goldman motion to dismiss ant Goldman’s client HESAA in superior court, in July 2012, and opposition to Lt. Yurkovic’s motion to lift the automatic stay in the bankruptcy court to permit adjudication of the dispute on the merits. (Id. ¶¶ 19, 33.) In support of his claims against defendant Gold- man, Lt. Yurkovic has alleged that, “Upon information and belief, defendants HESAA and/or Goldman, acting on its behalf, furnished false information about the accu- racy and status of the alleged debt” to the consumer credit reporting agencies. (Am.Compl. ¶ 40.) As a re- sult, Count One seeks a declaratory judgment against all defendants, to establish that Lt. Yurkovic’s signa- ture on the promissory note is a forgery, and that he is not liable for repayment of the subject account, Ad- ditionally, Lt. Yurkovic is seeking a declaration that defendant Goldman knew, or should have known, that the guarantor signature on the promissory note was forged, which is tantamount to recovering his attorney’s fees (Am.Compl. ¶ 54.) In Count Two, Lt. Yurkovic alleges that defendant Goldman willfully violated the Fair Credit Reporting Act: “As information furnishers under the FCRA, defend- ants HESAA and Goldman . . . willfully failed to follow reasonable procedures to assure that the information they provided about the student loan was accurate, and Case 3:16-cv-05339-PGS-LHG Document 31 Filed 02/07/17 Page 10 of 35 PageID: 350 plaintiff’s brief in opposition to goldman motion to dismiss willfully failed to conduct a reasonable investigation pursuant to 15 U.S.C. § 1681s-2(b).” (Am.Compl. ¶ 59.) Count Three alleges that defendant Goldman negli- gently violated the Fair Credit Reporting Act: As information furnishers under the FCRA, de- fendants HESAA and Goldman also owed Lt. Yurkovic a duty of reasonable care to inves- tigate his consumer credit dispute, to exam- ine the underlying document(s) at issue, and to re- quest that any inaccurate or incom- plete information about Lt. Yurkovic be cor- rected. By failing to follow reasonable procedures, and failing to properly investigate the dis- pute, defendants HESAA and Goldman breached the duty of care they owed to Lt. Yurkovic under the FCRA. (Am.Compl. ¶¶ 65-66.) Count Four avers that in late 2015, despite being aware that Lt. Yurkovic disputed his responsibility for the subject account, defendant Goldman failed to inves- tigate the disputed information, and “instead of exam- ining the forged signature on the promissory note,” “willfully and maliciously reported to the agencies” that Lt. Yurkovic had in fact defaulted on the subject account. (Am.Compl. ¶ 70.) Finally, Count Five claims that defendant Goldman — who is a licensed attorney, and required by the New Case 3:16-cv-05339-PGS-LHG Document 31 Filed 02/07/17 Page 11 of 35 PageID: 351 plaintiff’s brief in opposition to goldman motion to dismiss Jersey Rules of Professional Conduct to act with hones- ty and candor to the courts, and with fairness and re- spect toward adversaries — is liable to Lt. Yurkovic for the willful and malicious invasion of privacy “by virtue of harassing him in connection with a debt he did not owe, conversion of his personal property, and reporting the delinquent debt to numerous third parties and in his consumer credit file, all of which was high- ly offensive to him, and would be highly offensive to any reasonable person.” (Am.Compl. ¶ 80.) As discussed below, Lt. Yurkovic has alleged suf- ficient facts to state a facially plausible claim to relief on each count, and defendant Goldman’s motion to dismiss the amended complaint should be denied. STANDARD OF REVIEW Under Fed. R. Civ. P. 12(b)(6), a motion to dis- miss should be granted only if it appears the plaintiff can prove no set of facts that would entitle him to re- lief. See Port Auth. v. Arcadian Corp., 189 F.3d 305, 311 (3d Cir.1999). It is well established that “a com- plaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (emphasis, citations, and internal quotation marks omitted). Alt- hough “[f]actual allegations must be enough to raise a Case 3:16-cv-05339-PGS-LHG Document 31 Filed 02/07/17 Page 12 of 35 PageID: 352 plaintiff’s brief in opposition to goldman motion to dismiss right to relief above the speculative level,” an ade- quately stated claim “may be supported by showing any set of facts consistent with the allegations in the complaint,” Twombly, 550 U.S. at 544, 563. A plaintiff must allege “enough facts to state a claim to relief that is plausible on its face.” Id. at 570. A claim is plausible on its face “when the plaintiff pleads factu- al content that allows the court to draw the reasonable inference that the defendant is liable for the miscon- duct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). At the motion to dismiss stage, “[t]he issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims.” Scheuer v. Rhodes, 416 U.S. 232, 236 (1974). A court’s belief or disbelief in a com- plaint’s factual allegations or its belief that a “re- covery is very remote and unlikely” does not factor in- to a decision under Fed. R. Civ. P. 12(b)(6). See id. LEGAL ARGUMENT 1. Defendant Goldman’s Motion to Dismiss Counts Two and Three on the Grounds that He Is Not An “Information Furnisher” Within the Meaning of 15 U.S.C. § 1681s-2 Should Be Denied. Case 3:16-cv-05339-PGS-LHG Document 31 Filed 02/07/17 Page 13 of 35 PageID: 353 plaintiff’s brief in opposition to goldman motion to dismiss 1.1. The Motion to Dismiss Should Be Denied Because Goldman Acted as an “Information Furnisher.” The FCRA defines the term “person” to include “any individual.” See 15 U.S.C. § 1681a(b). The section of the FCRA under which Lt. Yurkovic brings this action, 15 U.S.C. § 1681s-2(b)2 requires a “person” who re- ceives notice “of a dispute with regard to the com- pleteness or accuracy of any information provided by a person to a consumer reporting agency” to “conduct an investigation,” “review all relevant information pro- vided by the consumer reporting agency,” “report the results of the investigation to the consumer reporting agency,” and, “if the investigation finds that the in- formation is incomplete or inaccurate, report those re- sults to all other consumer reporting agencies to which the person furnished the information . . .” 15 U.S.C. §§ 1681s-2(b)(1)(A)—(D). The FCRA does not contain a separate definition for “information furnisher.” 2 To the extent defendant Goldman questions the pri- vate right of action under this statute, that argu- ment must be dismissed out of hand. See SimmsParris v. Countrywide Fin. Corp., 652 F.3d 355, 358 (3d Cir. 2011) (“15 U.S.C. § 1681s–2(b) [i]s the only section that can be enforced by a private citizen seeking to recover damages caused by a furnisher of information.”). Case 3:16-cv-05339-PGS-LHG Document 31 Filed 02/07/17 Page 14 of 35 PageID: 354 plaintiff’s brief in opposition to goldman motion to dismiss Defendant Goldman does not dispute that he is an “individual” or even that the record at this point does not disprove that defendant Goldman took the actions of which Lt. Yurkovic complains, namely furnishing inaccu- rate information to the credit bureaus (the “consumer reporting agencies” or “CRA”s in the statute) despite being aware that that information was false. His asser- tion that he may not have been the one who actually furnished the information to the CRAs is a factual mat- ter for discovery, not a basis for dismissal of Lt. Yurkovic’s Amended complaint. Nor is defendant Goldman shielded from liability by his ostensible role as an attorney acting in the role of debt collector for HESAA. See Akalwadi v. Risk Mgmt. Alternatives, Inc., 336 F.Supp.2d 492, 508 (D. Md. 2004) (noting “considerable nationwide authority in support of the proposition that a debt collector . . . is covered by the FCRA if it furnishes information to credit reporting agencies”). Defendant Goldman’s other arguments fare no bet- ter. To the extent the provision of the New Jersey Ad- ministrative Code cited by defendant Goldman (N.J.A.C. §§ 9A:10-6.16(b) [see Goldman Br. 9]) authorizes HESAA to make the reports, defendant Goldman has cited no au- Case 3:16-cv-05339-PGS-LHG Document 31 Filed 02/07/17 Page 15 of 35 PageID: 355 plaintiff’s brief in opposition to goldman motion to dismiss thority that prohibits HESAA from delegating that re- sponsibility to its authorized representative.3 Again, determination of who made which reports on what occa- sions is a matter for discovery and trial; the lack of evidence as of this early date in the litigation is not a basis for dismissal of well-pleaded claims that are facially plausible. Because defendant Goldman, is a “person” within the meaning of the FCRA, who reported false information to the CRAs concerning Lt. Yurkovic’s liability for the subject account, he is liable as an information fur- nisher for the harm caused by his knowingly and will- fully false representations. Defendant’s motion to dis- miss on these grounds should therefore be denied. 1.2. The Motion to Dismiss Should Be Denied Because Lt. Yurkovic’s Claim Under 15 U.S.C. § 1681s-2(b) Is Adequately Pleaded. Defendant Goldman’s assertion that Counts Two and Three “cannot survive a motion to dismiss” because 3 And in the alternative, to the extent Goldman could have been acting as an employee of defendant HESAA, and willfully reported false information to the CRAs in that capacity, such public employee status would not exonerate him from liability “if it is estab- lished that his conduct was outside the scope of his employment or constituted . . . actual malice . . .” N.J.S.A. § 59:3-14(a). Case 3:16-cv-05339-PGS-LHG Document 31 Filed 02/07/17 Page 16 of 35 PageID: 356 plaintiff’s brief in opposition to goldman motion to dismiss “Plaintiff has not alleged that either TransUnion or Experian ever notified Goldman that Yurkovic disputed his obligation on his [ex-]wife’s student loan” (Gold- man Br. 11) is likewise fatally flawed. Under § 1681s–2(b), a furnisher's duties to inves- tigate disputes and correct erroneous information are triggered “[a]fter receiving notice pursuant to section 1681i(a)(2) of this title.” Id. (emphasis added). Sec- tion 1681i(a)(2) requires that a CRA that receives no- tice from a consumer of a disputed debt “shall provide notification of the dispute to any [furnisher] ... [in- cluding] all relevant information regarding the dis- pute” within “the 5–business–day period beginning” when the consumer reporting agency receives such notice. 15 U.S.C. § 1681i(a)(2) (emphasis added). Courts around the country have held that a com- plaint is sufficiently pled to survive a 12(b)(6) mo- tion to dismiss if it alleges that the plaintiff “mere- ly notif[ied] their credit reporting agency of a dis- pute.” White v. Green Tree Servicing, LLC, 118 F. Supp. 3d 867, 874 (D. Md. 2015). As the White court explains: This is for two reasons: 1) the reporting agency has an obligation to notify the fur- nisher of the dispute, and 2) the reporting agency has no duty to inform the consumer once they have notified the furnisher. Id. Case 3:16-cv-05339-PGS-LHG Document 31 Filed 02/07/17 Page 17 of 35 PageID: 357 plaintiff’s brief in opposition to goldman motion to dismiss As the Supreme Court has instructed, “The law ... presumes that every man, in his private and official character, does his duty, until the contrary is proved; [and] it will presume that all things are rightly done, unless the circumstances of the case overturn this pre- sumption....” Bank of United States v. Dandridge, 25 U.S. 64, 69–70 (1827). Plaintiff is entitled to the benefit of this presumption. See Himmelstein v. Comcast of the Dist., LLC, 931 F.Supp.2d 48, 55 (D.D.C.2013) (citation omitted) (denying motion to dismiss the com- plaint and finding that, “[A]t this stage the Court is bound to grant Plaintiff the presumption that the cred- it bureaus complied with the FCRA and in fact notified CPA of the disputed debt. This is particularly appro- priate where Plaintiff could not independently know of such notification.”). Thus, “the general trend in the caselaw is that a 1681s–2(b) claim survives a motion to dismiss despite the absence of an express allegation that a credit re- porting agency provided notice to a furnisher of credit information of a dispute.” White, 118 F. Supp.3d at 874. accord cases cited in White, ibid.,4 and Himmel- stein, supra, 931 F.Supp.2d at 55.5 4 Lang v. TCF Nat. Bank, 249 F. App’x 464, 466 (7th Cir.2007) (unpublished) (because the FCRA does not Case 3:16-cv-05339-PGS-LHG Document 31 Filed 02/07/17 Page 18 of 35 PageID: 358 plaintiff’s brief in opposition to goldman motion to dismiss Here, Lt. Yurkovic’s amended complaint adequately alleges that his counsel sent written demands to the CRAs by certified mail, and that receipt was confirmed. (Am.Compl. ¶ 27.) Although Lt. Yurkovic does not know at this stage whether the investigation was conducted, his lack of that knowledge (which, of course, defend- ants are in a better position to know) is not fatal to require a credit reporting agency to inform a con- sumer once it notifies a furnisher of the dispute, the consumer may not be in a position to allege no- tification at the time they file a complaint); see also Pace v. Bank of Am. Corp., 537 F. App’x 735, 736 (9th Cir.2013) (unpublished) (at the 12(b)(6) stage, it is reasonable to infer that the credit re- porting agencies obeyed the law, and that the fur- nisher received notice of Pace’s dispute from the credit reporting agencies); Sheffer v. Experian In- fo. Solutions, Inc., 249 F.Supp.2d 560, 563 (E.D.Pa.2003) (the issue of whether the CRA notified the furnisher after receiving notice from a consumer is an issue appropriately resolved after discovery). 5 DiMezza v. First USA Bank, Inc., 103 F.Supp.2d 1296, 1301 (D.N.M.2000); Watson v. Trans Union, No. 04– 205, 2005 WL 995687, at *5 (D.Me. April 28, 2005) (permitting inference “that the credit reporting agency was complying with the clear and rather sim- ple mandate of the law” and refusing to dismiss ac- tion “for want of a straw allegation [of communica- tion between the CRA and the furnisher]”). Case 3:16-cv-05339-PGS-LHG Document 31 Filed 02/07/17 Page 19 of 35 PageID: 359 plaintiff’s brief in opposition to goldman motion to dismiss the adequacy of his pleading, and defendant Goldman’s motion to dismiss Counts Two and Three on that basis should be denied. 2. Defamation is Not Preempted by the FCRA, and Count Four Should Therefore Stand Against Defendant Goldman. Counts Two and Three of the amended complaint are sufficiently pleaded, and defendant Goldman’s argument that he is not an information furnisher is not only in- credulous, but is unsupported by law or fact. Especial- ly since, in arguing for dismissal of Count Four, de- fendant Goldman seeks to invoke the benefit of 15 U.S.C. § 1681t(b)(1)(F), which is inapplicable, for the reasons illustrated below, but nevertheless, the stat- ute is only applicable as to information furnishers. See, e.g., Edwards v. Equable Ascent, FNCL, LLC, No. 11-2638-CCC, 2012 WL 1340123, at *6–7 (D.N.J. Apr. 16, 2012) (holding that Congress intended to preempt both state statutory and state common law claims against in- formation furnishers). So because it suits his argument for dismissal of Counts Two and Three, defendant Gold- man says he is not an information furnisher, but in support of his argument to dismiss Count Four, he ad- mits to being a furnisher, because otherwise there would be no basis for dismissal/preemption. Defendant Goldman cannot have it both ways. Case 3:16-cv-05339-PGS-LHG Document 31 Filed 02/07/17 Page 20 of 35 PageID: 360 plaintiff’s brief in opposition to goldman motion to dismiss Defendant Goldman’s role fits squarely within the statutory definition of information furnisher that is supplied in the FCRA, and this Court should therefore deny his motion. 2.1. Defendant Goldman is a “Person” Within the Meaning of 15 U.S.C. § 1681a(b), so Lt. Yurkovic’s Defamation Claim Cannot be Preempted Here. To the extent defendant Goldman is considered a “person” within the meaning of § 1681a(b), Lt. Yurkovic’s claim for defamation is not preempted be- cause Lt. Yurkovic has alleged that defendant Goldman acted “willfully and maliciously.” (Am.Compl. ¶ 70.) The FCRA, in 15 U.S.C. § 1681h(e) carves out an excep- tion to preemption when the actions complained of were performed maliciously.6 “Malice ... may be alleged gen- erally.” (Fed. R. Civ. P. 9(b)). Because Lt. Yurkovic’s amended complaint satisfies this standard, it adequately alleges a claim for defa- mation against defendant Goldman. Lt. Yurkovic has al- leged that defendant Goldman was aware that his signa- 6 “[N]o consumer may bring any action or proceeding in the nature of defamation, invasion of privacy, or negligence with respect to the reporting of [credit] information ... except as to false information fur- nished with malice or willful intent to injure such consumer” 15 U.S.C. § 1681h(e)(emphasis added). Case 3:16-cv-05339-PGS-LHG Document 31 Filed 02/07/17 Page 21 of 35 PageID: 361 plaintiff’s brief in opposition to goldman motion to dismiss ture had been forged, yet defendant Goldman continued to contest Lt. Yurkovic’s efforts to correct his credit report by pursuing a lawsuit defendant Goldman knew to be meritless against him, inserting himself into the bankruptcy proceedings with false assertions of Lt. Yurkovic’s liability, and continuing to report the sub- ject account as delinquent to the credit reporting agencies. (See, e.g., Am.Compl. ¶¶ 20, 33, 40.) Under similar circumstances, courts in the Third Circuit have found tort claims arising under the FCRA adequately pleaded. See, e.g., Oates v. Wells Fargo Bank, N.A., 880 F.Supp.2d 620, 627 (E.D.Pa.2012) (finding claim for libel adequately pleaded where plaintiff alleged that defendant intentionally reported inaccurate information despite its knowledge that the information was false). See also Ausherman v. Bank of America Corp., 352 F.3d 896, 899 (4th Cir.2003) (quoting 15 U.S.C. §§ 1681n, 1681o) (“The [FCRA] imposes civil liability on any ‘person’ . . . who willfully, § 1681n, or negligently, § 1681o, fails to ‘comply with any requirement imposed’ under the Act.”). Thus, a challenge to the adequacy of Lt. Yurkovic’s pleading of Count Four fails. Case 3:16-cv-05339-PGS-LHG Document 31 Filed 02/07/17 Page 22 of 35 PageID: 362 plaintiff’s brief in opposition to goldman motion to dismiss 2.2. Lt. Yurkovic’s Defamation Claim Against Defendant Goldman as an “Information Furnisher” Is Not Preempted Because the Amended Complaint Alleges that Defendant Goldman’s Conduct was Willful and Malicious, and Outside the Purview of what is Regulated by the FCRA. To the extent that defendant Goldman is an infor- mation furnisher within the plain meaning of the FCRA, the question of preemption under § 1681t(1)(b)(F)7 is not as simple as defendant Goldman suggests. Courts across the country have found that reading § 1681t(b)(1)(F) to preempt all state law claims effec- tively eviscerates § 1681h(e) which, as discussed infra at note 6, carves out an exception for defamation claims based on “false information furnished with mal- ice or willful intent to injure” the plaintiff. 15 U.S.C. § 1681h(e) (emphasis added). See, e.g., Himmel- stein, supra, 931 F.Supp.2d at 56-60; Gorman v. Wolpoff & Abramson, LLP, 552 F.3d 1008, 1026–27 (9th Cir.2009) (“Attempting to reconcile [§§ 1681t and 1681h(e)] has left district courts in disarray.”); Saint Torrance v. Firstar, 529 F.Supp.2d 836, 841 (S.D.Ohio 2007) (refus- ing to give § 1681t full preclusive effect because do- 7 “No requirement or prohibition may be imposed under the laws of any State with respect to any subject matter regulated under section 1681s-2 of this ti- tle, relating to the responsibilities of persons who furnish information to consumer reporting agencies.” 15 U.S.C. § 1681t(b)(1)(F). Case 3:16-cv-05339-PGS-LHG Document 31 Filed 02/07/17 Page 23 of 35 PageID: 363 plaintiff’s brief in opposition to goldman motion to dismiss ing so would render § 1681h(e) meaningless); but see Edwards, supra, 2012 WL 1340123, at *6–7 (holding that Congress intended to preempt both state statutory and state common law claims against information furnish- ers); Campbell v. Chase Manhattan Bank, USA, N.A., No. 02-3489-JWB, 2005 WL 1514221, at *15 (D.N.J. June 27, 2005), order amended on reconsideration sub nom. No. 02-3489-JWB, 2005 WL 1924669 (D.N.J. Aug. 10, 2005) (concluding that “[b]y enacting Section 1681t(b)(1)(F), Congress wanted to eliminate all state causes of action relating to the responsibilities of persons who furnish information to consumer reporting agencies”) (citation omitted). Yet, even where courts have adopted the total preemption approach, claims that are not premised “solely upon conduct that § 1681s-2 directly regulates” are not preempted. See, e.g., Himmelstein, supra, 931 F.Supp.2d at 60; 15 U.S.C. § 1681t(b)(1)(F) (“No re- quirement or prohibition may be imposed under the laws of any State with respect to any subject matter [ ] re- lating to the responsibilities of persons who furnish information to consumer reporting agencies.”) (emphasis added). In the cases cited in defendant Goldman’s motion to dismiss, those plaintiffs’ tort claims arose entire- ly out of matters that are in fact regulated by the Case 3:16-cv-05339-PGS-LHG Document 31 Filed 02/07/17 Page 24 of 35 PageID: 364 plaintiff’s brief in opposition to goldman motion to dismiss FCRA § 1681s-2. (See Goldman Br. 12-13); cf. Campbell, supra, 2005 WL 1514221, at *15 (finding state law claims were preempted where plaintiffs alleged only that the furnisher failed to allege facts outside the boundaries of § 1681s-2); Dimedio v. HSBC Bank, No. 08- 5521-JBS-KMW, 2009 WL 1796072, at *3 (D.N.J. June 22, 2009) (dismissing claims “for malicious and purposeful actions to harm the Plaintiff's credit report,” and “for purposefully tarnishing the financial character of the Plaintiff” that arose directly from Defendant's al- leged responsibilities as a data furnisher to consumer reporting agencies). Even in Himmelstein, the plain- tiff’s negligence claim arose entirely from the defend- ant’s failure to adequately correct its account records and inaccurately reported an account as delinquent to the collection agency. See Himmelstein, supra, 931 F.Supp.2d at 50-51. But in this case Lt. Yurkovic has alleged defama- tion based not only on defendant Goldman’s continued reporting of inaccurate information to the credit re- porting agencies, and failure to adequately investigate the information (Am.Compl. ¶¶ 59, 70), but also based on defendant Goldman’s pursuit of a baseless lawsuit against Lt. Yurkovic, his intervention in the bankrupt- cy court proceedings, and his public assertions that Lt. Yurkovic is liable for a debt that he does not owe. Case 3:16-cv-05339-PGS-LHG Document 31 Filed 02/07/17 Page 25 of 35 PageID: 365 plaintiff’s brief in opposition to goldman motion to dismiss (Am.Compl. ¶¶ 20, 33.) Lt. Yurkovic’s claims against Goldman, thus, cover conduct that is not regulated by the FCRA, and therefore could not be, and are not preempted by § 1681s-2. Because Lt. Yurkovic’s tort claims against defendant Goldman are for conduct not regulated by the FCRA, the defamation claim is not preempted, and the motion to dismiss should be denied. 3. Lt. Yurkovic’s Claim for Invasion of Privacy Claim is Pleaded Properly in Count Five of the Amended Complaint. Defendant Goldman asserts that Lt. Yurkovic’s in- vasion of privacy claim should be dismissed because Lt. Yurkovic “makes no claim that Goldman did anything but engage in ordinary collection procedures and does not allege any extreme and outrageous conduct.” (Goldman Br. 16.) But defendant Goldman’s analysis of this claim is also flawed. Lt. Yurkovic has alleged that defendant Goldman harassed him by conversion of his personal property, erroneous reporting of the account as delinquent, and filing a frivolous lawsuit, and other legal papers that lacked a legal or evidentiary basis. (Am.Compl. ¶¶ 80- 81.) New Jersey courts have held that attorneys can and are held to a higher standard, and have an absolute du- ty “to act fairly, and in good faith.” Davin, LLC v. Daham, 329 N.J.Super. 54, 76 (App.Div.2000). As the Davin court summarized, “The practice of law is a pro- Case 3:16-cv-05339-PGS-LHG Document 31 Filed 02/07/17 Page 26 of 35 PageID: 366 plaintiff’s brief in opposition to goldman motion to dismiss fession, not a business. An attorney is not merely a hired gun, but, rather, a professional required to act with candor and honesty.” Id. As alleged in the amended complaint, throughout his interactions with Lt. Yurkovic, defendant Goldman failed to meet those mini- mum standards of “candor and honesty.” To the contrary, defendant Goldman wielded baseless threats and other misrepresentations toward Lt. Yurkovic, and engaged in meritless litigation. As Lt. Yurkovic discussed in some detail in his response to defendant Goldman’s first motion to dis- miss, the invasion of privacy claim in the original complaint, “[a] claim for invasion of privacy under New Jersey law will succeed if a plaintiff brings forth ev- idence showing that (1) there was an intentional intru- sion ‘upon the solitude or seclusion of another or his private affairs,’ and that (2) this intrusion would highly offend the reasonable person.” Ehling v. Mon- mouth-Ocean Hosp. Serv. Corp., 961 F.Supp.2d 659, 674 (D.N.J.2013) (citing Bisbee v. John C. Conover Agency, Inc., 186 N.J.Super. 335, 339 (App.Div.1982)). “[A]n actor commits an intentional intrusion only if he be- lieves, or is substantially certain, that he lacks the necessary legal or personal permission to commit the intrusive act.” O’Donnell v. United States, 891 F.2d 1079, 1083 (3d Cir.1989) (emphasis in original). The Case 3:16-cv-05339-PGS-LHG Document 31 Filed 02/07/17 Page 27 of 35 PageID: 367 plaintiff’s brief in opposition to goldman motion to dismiss standard for whether conduct is “highly offensive” is objective. See Rush v. Portfolio Recovery Assocs. LLC, 977 F.Supp.2d 414, 433 (D.N.J.2013) (citing White v. White, 344 N.J.Super. 211, 222 (App.Div.2001)) (whether conduct is “highly offensive” “turns on an objective and reasonable expectation of privacy with respect to the item or area searched or intruded upon”); see also State v. Hempele, 120 N.J. 182, 200 (1990) (“[E]xpectations of privacy are established by general social norms.”). Lt. Yurkovic alleged — and defendant Goldman does not deny — that he was the attorney acting on behalf of HESAA in litigation concerning the subject account. (Am.Compl. ¶ 6.) Defendant Goldman has also not denied that he initiated the legal proceedings against Lt. Yurkovic based on information he knew to be false. (Am.Compl. ¶¶ 19, 20.) Lt. Yurkovic notified defendant Goldman that his signature had been forged, and that he was not liable for the subject account. (Am.Compl. ¶¶ 16, 22.) Further, defendant Goldman actively opposed Lt. Yurkovic’s motion to lift the automatic stay in the bankruptcy proceedings, mailing a letter to the clerk that falsely insinuated that Lt. Yurkovic’s forgery de- fense – of which defendant Goldman had been aware for at least three years – was false. (Am.Compl. ¶ 33.) Case 3:16-cv-05339-PGS-LHG Document 31 Filed 02/07/17 Page 28 of 35 PageID: 368 plaintiff’s brief in opposition to goldman motion to dismiss Irrespective of the case law, as an attorney of this state, defendant Goldman is bound by the New Jer- sey Rules of Professional Conduct (RPC), including RPC 3.3(a), which provides that “A lawyer shall not know- ingly . . . make a false statement of material fact . . . to a tribunal,” “offer evidence that the lawyer knows to be false,” or “fail to disclose to the tribunal a material fact knowing that the omission is reasonably certain to mislead the tribunal . . .” N.J. Rules Prof’l Conduct r. 3.3(a)(1), (4), and (5). Likewise, “A lawyer shall not counsel or assist a client in conduct that the lawyer knows is . . . fraudulent . . .” N.J. Rules Prof’l Conduct r. 1.2(d). It is not a stretch to allege that an attorney, as an officer of the court, who knowingly acts on false information by initiating litigation against an innocent party, commits an action that is highly offensive to a reasonable person. Misuse of a position of power, through willful disregard for the truth, is much more offensive than the harassing phone calls at issue in Rush. If Lt. Yurkovic’s allegations are true — which the Court must assume for the purposes of this motion — Lt. Yurkovic’s assertion that defendant Goldman pursued debt collection activities against him despite being aware that his signature had been forged constitutes a highly offensive intrusion that “plausibly gives rise Case 3:16-cv-05339-PGS-LHG Document 31 Filed 02/07/17 Page 29 of 35 PageID: 369 plaintiff’s brief in opposition to goldman motion to dismiss to an entitlement to relief.” See Iqbal, supra, 556 U.S. at 679; accord In re Nickelodeon Consumer Privacy Litigation, 827 F.3d 262, 295 (3d Cir.2016) (recogniz- ing that, “a company may commit intrusion upon seclu- sion by collecting information using duplicitous tac- tics”); but see Iqbal, at 678 (explaining that a claim is plausible on its face “when the plaintiff pleads factual content that allows the court to draw the rea- sonable inference that the defendant is liable for the misconduct alleged.”). Lt. Yurkovic’s factual asser- tions meet that standard, and defendant Goldman’s mo- tion to dismiss Count Five should therefore be denied. 4. Lt. Yurkovic is Entitled to a Declaratory Judgment. Finally, defendant Goldman argues that if the Court grants his motion dismiss Counts Two through Five, the Court should then decline to exercise supple- mental jurisdiction over Count One, in which Lt. Yurkovic seeks a declaratory judgment. For the reasons discussed infra, the Court should deny the relief re- quested as to Counts Two through Five, but regardless of the outcome of Lt. Yurkovic’s other claims, there is no equitable reason that this Court should decline to exercise jurisdiction over Count One. This Court should therefore deny defendant Goldman’s motion in its en- tirety, and allow Lt. Yurkovic to get the justice he’s been patiently waiting since 2012 to get. Case 3:16-cv-05339-PGS-LHG Document 31 Filed 02/07/17 Page 30 of 35 PageID: 370 plaintiff’s brief in opposition to goldman motion to dismiss Lt. Yurkovic acknowledges that exercise of supple- mental jurisdiction is left to the discretion of the district court pursuant to 28 U.S.C. § 1367(c) (“The district courts may decline to exercise supplemental jurisdiction over a [state law claim] if ... the dis- trict court has dismissed all claims over which it has original jurisdiction....”). The analysis of the pro- priety of supplemental jurisdiction over Count One is not necessary here, because this Court could issue the sought declaratory judgment under the Declaratory Judg- ment Act, 28 U.S.C. § 22018 and/or Fed. R. Civ. P. 57.9 This Court has long held that the Declaratory Judgment Act “is to be given a broad, liberal construc- tion.” Japan Gas Lighter Ass’n v. Ronson Corp., 257 F.Supp. 219, 243 (D.N.J.1966) (denying motion for sum- mary judgment and denial of declaratory relief). This is further supported by the Advisory Committee to Rule 8 In a case of actual controversy within its jurisdic- tion . . . any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not fur- ther relief is or could be sought. . . .” 28 U.S.C. § 2201(a). 9 “The existence of another adequate remedy does not preclude a declaratory judgment that is otherwise appropriate. . . .” Fed. R. Civ. P. 57. Case 3:16-cv-05339-PGS-LHG Document 31 Filed 02/07/17 Page 31 of 35 PageID: 371 plaintiff’s brief in opposition to goldman motion to dismiss 57, which noted that “declaratory relief is alternative or cumulative and not exclusive or extraordinary.” Ad- visory Comm. Notes to Fed. R. Civ. P. 57 (1937). Defendant Goldman premises his motion for denial of supplemental jurisdiction on the absence of a feder- ally cognizable case or controversy within this Court’s jurisdiction. But defendant Goldman presumes too much. Defendants Trans Union and Experian have filed Answers to Lt. Yurkovic’s amended complaint, joining issue, and signaling their submission to this Court’s jurisdiction (see ECF 25, 26), and defendant HESAA has not contested that this Court has jurisdiction to grant Lt. Yurkovic the declaratory relief sought in Count One (see HESAA Motion to Dismiss, ECF 27). Defendant Goldman has not asserted that he was improperly joined in this action. Not to mention that defendant Goldman hasn’t ever de- nied that he committed the harassing actions of which Lt. Yurkovic complains and which form the basis of these claims against him. Under the circumstances, to dismiss Count One against defendant Goldman or, as would be more proper, to remand that single count to state court,10 while 10 See, e.g., City of Pittsburgh Comm’n on Human Rela- tions v. Key Bank USA, 163 F. App’x 163, 166 (3d Cir.2006) (approving remand of state law claims to Case 3:16-cv-05339-PGS-LHG Document 31 Filed 02/07/17 Page 32 of 35 PageID: 372 plaintiff’s brief in opposition to goldman motion to dismiss hearing the case against the remaining defendants in this Court would be a needless waste of judicial re- sources and a miscarriage of justice. Lastly, insofar as defendant Goldman challenges the adequacy of Lt. Yurkovic’s pleadings against him as mere allegations that defendant Goldman violated the New Jersey Rules of Professional Conduct (see Goldman Br. 18), defendant Goldman errs. Although the conduct of which Lt. Yurkovic complains certainly violated the tenets of the RPCs, his allegations against defendant Goldman are based on much more, from defendant Gold- man’s willful and malicious reporting of false infor- mation to the CRAs, his instigation of meritless legal proceedings against Lt. Yurkovic, and his continued and unjustified attempts to collect a debt that he knows Lt. Yurkovic does not owe. Dismissal of these meritori- ous and well-pleaded claims against defendant Goldman at this motion to dismiss stage would therefore be im- proper. CONCLUSION Because Lt. Yurkovic’s well-pleaded amended com- plaint satisfies the plausibility standard under state court after all federal claims were dis- missed). Case 3:16-cv-05339-PGS-LHG Document 31 Filed 02/07/17 Page 33 of 35 PageID: 373 plaintiff’s brief in opposition to goldman motion to dismiss Twombly and Iqbal, this Court should deny defendant Goldman’s motion to dismiss. In the event that the Court could deem one or more of Lt. Yurkovic’s claims insufficiently pleaded, in the interests of justice, and under Fed. R. Civ. P. 15(a)(2), the Court should grant leave to amend. Respectfully submitted, BAHGAT + BAHGAT LLC Counsel for Plaintiff By: /s/ Clara Kalhous Dated: 7-Feb-17 Clara Kalhous (001892009) Case 3:16-cv-05339-PGS-LHG Document 31 Filed 02/07/17 Page 34 of 35 PageID: 374 plaintiff’s brief in opposition to goldman motion to dismiss CERTIFICATE OF SERVICE I certify that on the date stamped above, a true and correct copy of the foregoing brief was filed with the court electronically, and that all counsel of rec- ord have been or will be served with notice of this filing at the email address they have registered with the court’s CM/ECF system. /s/ Joseph A. Bahgat JOSEPH A. BAHGAT (006502008) Case 3:16-cv-05339-PGS-LHG Document 31 Filed 02/07/17 Page 35 of 35 PageID: 375