Bornstein v. Trans Union LLC

          ORDER

          Honorable John J. Tuchi United States District Judge.

         At issue is Defendant Trans Union, LLC's (“Trans Union”) Motion to Dismiss (Doc. 19, MTD), to which Plaintiff Alexis Bornstein filed a Response (Doc. 23, Resp.) and Defendant filed a Reply (Doc. 24, Reply). The Court has reviewed the parties' briefs and finds this matter appropriate for decision without oral argument. See LRCiv 7.2(f). For the reasons set forth below, the Court grants Defendant's Motion to Dismiss under Federal Rule of Civil Procedure 12(b)(6).

         I. BACKGROUND

         In the First Amended Complaint, ^[1] Plaintiff alleges the following facts. On August 14, 2018, Plaintiff obtained her Trans Union, Equifax, and Experian credit disclosures and noticed a tradeline was reported for a debt incurred for medical services at AZ Radiology. (FAC ¶ 10, 13.) Plaintiff and her father believed that her father's insurance should have satisfied the amount owed. (FAC ¶ 9.) Instead, the medical bill remained unpaid, Healthcare Collections assumed the debt, and later reported it on Plaintiff's credit disclosures. (FAC ¶ 7.) All Defendants, including Trans Union, reported Healthcare Collections' tradeline on Plaintiff's credit reports.^[2] (FAC ¶ 13.)

         On September 21, 2018, Plaintiff submitted letters to Defendants disputing the tradeline. (FAC ¶ 14.) Plaintiff's letter claimed that her father's insurance was responsible for paying the tradeline and requested that Defendants delete the tradeline from her credit file. (FAC ¶ 15.) Trans Union then sent Plaintiff's consumer dispute to Healthcare Collections. (FAC ¶ 16.) On October 3, 2018, Plaintiff received Trans Union's investigation results, which showed that Trans Union did not delete the tradeline from Plaintiff's credit file. (FAC ¶ 17.)

         In the First Amended Complaint, Plaintiff asserts various violations of the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq. (“FCRA”). Plaintiff alleges that Defendants negligently failed to follow reasonable procedures in preparing an accurate credit report in violation of 15 U.S.C. § 1681e(b) and that Defendants violated § 1681i by negligently failing to conduct reasonable reinvestigations to determine the accuracy of Plaintiff's disputed debt information (Count One). Also, Plaintiff alleges that Defendants willfully failed to follow reasonable procedures in preparing an accurate credit report in violation of § 1681e(b) and they violated § 1681i by willfully failing to conduct reasonable reinvestigations to determine the accuracy of Plaintiff's disputed debt information (Count Two).

         Defendant Trans Union now moves to dismiss all of Plaintiff's claims. Because Plaintiff's FCRA claims against all Defendants are identical, the Court will analyze Trans Union's argument as applicable to the FCRA counts against Healthcare Collections, Equifax, and Experian. See Silverton v. Dep't of Treasury, 644 F.2d 1341, 1345 (9th Cir.1981) (“A [d]istrict [c]ourt may properly on its own motion dismiss an action as to defendants who have not moved to dismiss where such defendants are in a position similar to that of moving defendants.”).

         II. LEGAL STANDARD

         When analyzing a complaint for failure to state a claim for relief under Federal Rule of Civil Procedure 12(b)(6), the well-pled factual allegations are taken as true and construed in the light most favorable to the nonmoving party. Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009). Legal conclusions couched as factual allegations are not entitled to the assumption of truth, Ashcroft v. Iqbal, 556 U.S. 662, 680 (2009), and therefore are insufficient to defeat a motion to dismiss for failure to state a claim. In re Cutera Sec. Litig., 610 F.3d 1103, 1108 (9th Cir. 2010).

         A dismissal under Rule 12(b)(6) for failure to state a claim can be based on either (1) the lack of a cognizable legal theory or (2) insufficient facts to support a cognizable legal claim. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). “While a complaint attacked by a Rule 12(b)(6) motion does not need detailed factual allegations, a plaintiff's obligation to provide the ‘grounds' of his ‘entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555 (citations omitted). The complaint must thus 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 Twombly, 550 U.S. at 570). “[A] well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and that ‘recovery is very remote and unlikely.'” Twombly, 550 U.S. at 556 (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)).

         III. ANALYSIS

         Congress enacted the FCRA to ensure fair and accurate credit reporting, to promote efficiency in the banking system, and to protect consumer privacy. Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147, 1153 (9th Cir. 2009).

         A prerequisite for bringing a claim against a credit reporting agency under either § 1681e or § 1681i is evidence of an inaccuracy in the credit report. Guimond v. Trans Union Credit Info. Co., 45 F.3d 1329, 1333 (9th Cir. 1995); see also Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876, 890 (9th Cir. 2010) (“Although the FCRA's reinvestigation provision, 15 U.S.C. § 1681i, 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.”)

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