Opinion
1:22-CV-00292-RAL
04-26-2023
LISA L. COWLEY DAVIS, JONATHAN H. DAVIS, Plaintiffs v. NATIONAL CREDIT ADJUSTERS, LLC, CBM SERVICE INC., STAFFORD GROUP ASSOCIATES, STARMARK FINANCIAL LLC, Defendants
SUSAN PARADISE BAXTER UNITED STATES DISTRICT JUDGE
REPORT AND RECOMMENDATION ON NATIONAL CREDIT ADJUSTERS' MOTION TO DISMISS ECFNO. 6
RICHARD A. LANZILLO CHIEF UNITED STATES MAGISTRATE JUDGE
I. Recommendation
It is respectfully recommended that Defendant National Credit Adjusters' motion to dismiss (ECF No. 6) be granted in part and denied in part. Specifically, the motion should be granted as to Plaintiffs' claim under the Fair Debt Collection Practices Act, 15 U.S.C. § 1692e, and state law defamation claim, and denied as to their claim under the Fair Credit Reporting Act, 15 U.S.C. § 1681s-2(b)(1).
II. Report
A. Introduction and Procedural History
Plaintiffs Lisa L. Cowley Davis (“Ms. Davis”) and Jonathan H. Davis (“Mr. Davis”) commenced this action in the Court of Common Pleas of Erie County, Pennsylvania, against National Credit Adjusters, LLC (“NCA”), CBM Services Inc., Stafford Group Associates, and Starmark Financial LLC. Thereafter, the action was removed to this Court pursuant to 28 U.S.C. § 1441 based on federal question subject matter jurisdiction conferred by 28 U.S.C. § 1331. ECF No. 1. CMB Services Inc. and Stafford Group Associates have since been terminated from this action, and Starmark Financial LLC has yet to be served.
Plaintiffs allege a state law defamation claim against NCA, as well as a violation of their rights under the “Fair Credit Reporting Act 15 U.S.C. 1681 h(e)” and the “Fair Debt Collection Act 15 U.S.C. 1692” based upon inaccurate or fraudulent credit information it allegedly reported to the three major credit reporting companies, TransUnion, Equifax, and Experian, concerning Ms. Davis. ECF No. 1-1, ¶ 16. Plaintiffs seek compensatory and punitive damages as well as declaratory and injunctive relief. ECF 1-2, ¶¶ 7-13.
Plaintiffs appended to their Complaint an August 11, 2022 letter from TransUnion to Ms. Davis and an Equifax credit report regarding Ms. Davis. ECF No. 1 -1, pp. 10-12. The TransUnion documents refer to “Lisa Lynn Holland” but based on the allegations of the Complaint, the undersigned infers for purposes of the pending motion that the reference to Lisa Lynn Holland is to Lisa Cowley Davis. In addition, Plaintiffs attached correspondence from AWA Collections stating that it has investigated the disputed balances and determined them to be accurate and correct. ECF No. 1-1, p. 12. When ruling upon a motion to dismiss pursuant to Rule 12(b)(6), the court must “generally consider only the allegations in the complaint, exhibits attached to the complaint, matters of public record, and documents that form the basis of a claim.” Lum v. Bank of Am., 361 F.3d 217, 222 n.3 (3d Cir. 2004) (citing In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997)). Although Plaintiffs included the letter from AWA Collections as an exhibit, they did not rely upon it as the basis for their claims. Instead, their allegations, as recounted below, demonstrate that they dispute AWA's conclusions.
Pending is NCA's motion to dismiss Plaintiffs' Complaint. Plaintiffs have responded to the motion with an opposition brief and copies of two emails they sent to NCA's counsel. ECF Nos. 12, 12-1.
B. Factual Background
The factual allegations of Plaintiffs' Complaint are sparse and, for purposes of the pending motion, accepted as true. According to the Complaint, NCA has reported that Ms. Davis owes $742.00 on account # 122P00XXXXXXX to credit reporting agencies (“CRAs”) TransUnion, Equifax, and Experian. “NCA is a collection agency who is attempting to recover a fraudulent account on behalf of the original creditor Speedy Cash.” ECF No. 1-1, ¶ 7. Plaintiffs have never done business with Speedy Cash or NCA, nor have they “signed a contract” with either company or “consented to anyone signing one on their behalf.” Id., ¶ 12. Ms. Davis asserts that she has filed an identity theft report with NCA (along with the other Defendants) and the police. According to Plaintiffs, NCA has responded by asserting that it has verified that the contested account is accurate.
Plaintiffs assert that NCA's “false and derogatory, inaccurate reporting practices led Plaintiff to be precieved [sic] as high risk and reliable (sic)” and “not worthy of credit.” Id., ¶ 14. They maintain that their daughter has been unable “to obtain certain college funding,” that they have been unable “to obtain favorable first time home owners (sic) qualifications,” denied for “adv. credit cards,” and experienced “[o]verall stagnation on the economic scale of growth.” Id. Plaintiffs further allege that Ms. Davis has had her “character questioned and her named defamed.” Id.
C. Standard of Review
A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of the complaint. See Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993). In deciding a Rule 12(b)(6) motion to dismiss, the court must accept as true all well-pled factual allegations in the complaint and views them in a light most favorable to the plaintiff. See U.S. Express Lines Ltd. v. Higgins, 281 F.3d 383, 388 (3d Cir. 2002). The “court[] generally consider[s] only the allegations in the complaint, exhibits attached to the complaint, matters of public record, and documents that form the basis of a claim” when considering the motion to dismiss. Lum v. Bank of Am., 361 F.3d 217, 222 n.3 (3d Cir. 2004) (citing In re Burlington Coat Factory Sec. Litig, 114 F.3d 1410, 1426 (3d Cir. 1997)).
In making its determination under Rule 12(b)(6), the court is not opining on whether the plaintiff is likely to prevail on the merits; rather, the plaintiff must only present factual allegations sufficient “to raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007) (citing 5 C. Wright & A. Miller, Federal Practice, and Procedure § 1216, pp. 235-36 (3d ed. 2004)). See also Iqbal, 556 U.S. 662. Furthermore, a complaint should only be dismissed pursuant to Rule 12(b)(6) if it fails to allege “enough facts to state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570 (rejecting the traditional Rule 12(b)(6) standard established in Conley v. Gibson, 355 U.S. 41, 78 (1957)).
While a complaint does not need detailed factual allegations to survive a motion to dismiss, a complaint must provide more than labels and conclusions. See Twombly, 550 U.S. at 555. A “formulaic recitation of the elements of a cause of action will not do.” Id. (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). Moreover, a court need not accept inferences drawn by a plaintiff if they are unsupported by the facts as explained in the complaint. See California Pub. Emp. Ret. Sys. v. The Chubb Corp., 394 F.3d 126, 143 (3d Cir. 2004) (citing Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997)). Nor must the court accept legal conclusions disguised as factual allegations. See Twombly, 550 U.S. at 555; McTernan v. City of York, Pennsylvania, 577 F.3d 521, 531 (3d Cir. 2009) (“The tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.”). Expounding on the Twombly!Iqbal line of cases, the Third Circuit has articulated the following three-step approach:
First, the court must ‘tak[e] note of the elements a plaintiff must plead to state a claim.' Second, the court should identify allegations that, ‘because they are no more than conclusions, are not entitled to the assumption of truth.' Finally, ‘where there are well-pleaded factual allegations, a court should assume their
veracity and then determine whether they plausibly give rise to an entitlement for relief.'Burtch v. Milberg Factors, Inc., 662 F.3d 212, 221 (3d Cir. 2011) (quoting Santiago v. Warminster Twp., 629 F.3d 121, 130 (3d Cir. 2010)). This determination is “a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Iqbal, 556 U.S. at 679.
Finally, because Plaintiff is proceeding pro se, the allegations in the complaint must be held to “less stringent standards than formal pleadings drafted by lawyers.” Haines v. Kerner, 404 U.S. 519, 520-521 (1972). If the court can reasonably read a pro se litigant's pleadings to state a valid claim upon which relief could be granted, it should do so despite the litigant's failure to cite proper legal authority, confusion of legal theories, poor syntax and sentence construction, or unfamiliarity with pleading requirements. See Boag v. MacDougall, 454 U.S. 364 (1982); United States ex rel. Montgomery v. Bierley, 141 F.2d 552, 555 (3d Cir. 1969).
D. Analysis
Plaintiffs' claims are based on their allegations that NCA falsely reported to the three major CRAs that Ms. Davis has a balance of $742.00 on an NCA account and failed to correct this false report after they notified NCA that this debt is not one for which Ms. Davis is responsible. Plaintiffs assert that NCA's false report defamed Ms. Davis and violated Plaintiffs' rights under “the Fair Credit Reporting ACT 15 USC 1681 h(e)” and “Fair Debt Collection Act 15 USC 1692.” ECF No. 1-1, ¶ 16. NCA argues that Plaintiffs have not alleged facts to support the elements necessary to state a claim under the Fair Credit Reporting Act (“FCRA”) or the Fair and Fair Debt Collection Practices Act (“FDCPA”). NCA also argues that Plaintiffs' defamation claim should be dismissed because it is preempted by the FCRA. The Court will address these arguments in turn.
i. Plaintiffs' Complaint states a claim under the FCRA.
Congress passed the FCRA “to ensure fair and accurate credit reporting, promote efficiency in the banking system, and protect consumer privacy.” Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 52 (2007). See 15 U.S. Code § 1681(b). “[T]o satisfy the ‘consumer oriented objectives'” of the FCRA, the Third Circuit construes the Act liberally. Lewis v. Cap. One Bank, 2022 WL 17364641, at *4 (E.D. Pa. Dec. 1, 2022) (quoting Harris v. Pa. Higher Educ. Assistance Agency/Am. Educ. Servs., 2016 WL 3473347, at *4 (E.D. Pa. June 24, 2016), affd by Harris v. Pa. Higher Educ. Assistance Agency/Am. Educ. Servs., 696 Fed.Appx. 87, 90 (3d Cir. 2017) (citing S.Rep. No. 91-517, at 3 (1969))). The FRCA places varying obligations on three types of entities: “(1) consumer reporting agencies, (2) users of consumer reports, and (3) furnishers of information to consumer reporting agencies.” Id. (citing 15 U.S.C. § 1681, et seq.). Plaintiffs' claims against NCA concern its alleged inaccurate reporting of information to a consumer reporting agency. Plaintiffs are therefore alleging that NCA acted as a “furnisher.” See id. (citing Donohue v. C. Blosenski Disposal Co., 2006 WL 3423888, at *3 (E.D. Pa. Nov. 28, 2006)) (“A ‘furnisher' is an entity which transmits information about a particular debt owed by a particular consumer to a consumer reporting agency.”).
“Among other things, the FCRA requires consumer reporting agencies to ‘follow reasonable procedures to assure maximum possible accuracy of consumer reports, § 1681 e(b); to notify providers and users of consumer information of their responsibilities under the FCRA, § 1681 e(d); and to limit the circumstances in which such agencies provide consumer reports ‘for employment purposes, § 1681 b(b)(1).”' Ebrahimzadeh v. Sharestates tnvs., LLC, 2018 WL 6065419, at *8 (E.D. Pa. Nov. 20, 2018).
Section 1681 s-2 of the FRCA imposes two categories of legal obligations on furnishers: (1) liability under § 1681 s-2(a) arises following a consumer's notice directly to the furnisher of inaccurate information, see 15 U.S.C. §§ 1681 s-2(a)(1), and (2) liability under § 1681 s-2(b) arises upon a consumer's notice to the CRA of inaccurate information, and the CRA's subsequent notice to the furnisher of the inaccurate information. See 15 U.S.C. §§ 1681s- (b)(1). But a private individual cannot “assert a claim for a violation of § 1681s-2(a), as such claims are available only to the Government.” SimmsParris v. Countrywide Fin. Corp., 652 F.3d 355, 358 (3d Cir. 2011) (citing 15 U.S.C. § 1681s-2(c)). Accordingly, 15 U.S.C. § 1681 s-2(b) is “the only section that can be enforced by a private citizen seeking to recover damages caused by a furnisher of information.” Id. (citing Chiang v. Verizon New England Inc., 595 F.3d 26, 35 (1st Cir. 2010); Harris v. Pa. Higher Educ. Assistance Agency/Am. Educ. Servs., 696 Fed.Appx. 87, 90 (3d Cir. 2017); Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147, 1154 (9th Cir. 2009); Saunders v. Branch Banking & Tr. Co. of Va., 526 F.3d 142, 149 (4th Cir. 2008)).
Plaintiffs' pro se Complaint asserts a FCRA claim against NCA under section 1681 h(e). Section 168h(e), however, is inapplicable to a furnisher such as NCA. Nevertheless, the Court will look beyond this erroneous citation and assess whether Plaintiffs have pled facts sufficient to state a claim under, 15 U.S.C. § 1681 s-2(b), the only FCRA provision potentially available to them. See Haines, 404 U.S. 519, 520; Lewis, 2022 WL 17364641, at *5.
To state a viable claim under § 1681 s-2(b)(1), a plaintiff must allege facts to support that they: “[1] filed a notice of dispute with a consumer reporting agency; [2] the consumer reporting agency notified the furnisher of information of the dispute; and [3] the furnisher of information failed to investigate and modify the inaccurate information.” Lewis, 2022 WL 17364641, at *5 (alteration in original) (quoting Harris, 2016 WL 3473347, at *6) (citing 15 U.S.C. §§ 1681s-2(b), 168In & § 1681o). Noting that the Complaint does not allege that Plaintiffs notified a CRA of Ms. Davis's dispute or that the CRA then notified NCA, NCA argues that the Complaint fails to support the first and second elements of a § 1681 s-2(b)(1) claim. Indeed, the Complaint indicates that Ms. Davis contacted NCA directly about the account and is silent regarding any contact with TransUnion or any other CRA. ECF No. 1-1, ¶ 11. At least one letter appended to the Complaint, however, evidences that Ms. Davis did, in fact, contact TransUnion about the dispute and that TransUnion in turn contacted NCA for verification. Specifically, a letter from TransUnion to Ms. Davis dated August 11, 2022 states in pertinent part:
We appreciate the time taken to contact us at TransUnion. Our goal is to maintain complete and accurate credit information. Re: Dispute Status
Recently you submitted a dispute to TransUnion for an item(s) on the above-referenced consumer credit report. Our records show that we previously completed an investigation of the below item(s) and the data furnishers verified the information on their credit file.ECF No. 1-1, p. 10 (emphasis supplied). The Court properly considers this exhibit to the Complaint in determining whether it states a claim and survives NCA's motion to dismiss. Lum, 361 F.3d at 222 n.3.
Under the liberal standard of review applicable to pro se complaints, the Court finds that the facts alleged in Plaintiffs' Complaint, examined in the context of the exhibits appended to the Complaint, state a § 1681 s-2(b)(1) claim against NCA. Plaintiffs allege that NCA reported inaccurate and fraudulent debt information regarding Ms. Davis to CRAs TransUnion, Equifax, and Experian and that they filed an identity theft report with the police and NCA. As noted, correspondence from TransUnion evidences that Ms. Davis notified it of the inaccuracy and that TransUnion in turn notified NCA. These facts, if proven, are sufficient to support the first and second elements of a claim under § 1681s-2(b)(1).
The statute requires a CRA which “receives notice of a dispute from any consumer” to “provide notification of the dispute to any person who provided any item of information in dispute” within five business days. 15 U.S.C. § 1681 l i.
With respect to the third element of the claim, the letter from TransUnion states that NCA advised TransUnion that it had investigated the dispute and verified the accuracy of the account data. Plaintiffs dispute that NCA properly investigated the account as reflected by their allegation that they have never done business with NCA or the original creditor, Speedy Cash. To satisfy the requirements of the statute, “a furnisher's post-dispute investigation into a consumer's complaint must be ‘reasonable.'” Seamans v. Temple Univ., 744 F.3d 853, 864 (3d Cir. 2014) (citing SimmsParris v. Countrywide Fin. Corp., 652 F.3d 355, 358 (3d Cir.2011)). In Seamans, the Court of Appeals for the Third Circuit held that a court's assessment of the reasonableness of the furnisher's investigatory procedures should follow the standards set forth in Cortez v. Trans Union, LLC, 617 F.3d 688 (3d Cir. 2010) for assessing a CRA's investigatory duties. Seamans, 744 F.3d at 865. The Court in Cortez explained that “reasonable procedures are those that a reasonably prudent person would undertake under the circumstances,” and the court's assessment of “the reasonableness of a credit reporting agency's procedures involves weighing the potential harm from inaccuracy against the burden of safeguarding against such inaccuracy.” Cortez, LLC, 617 F.3d at 709. See also Seamans, 744 F.3d at 865 (quoting id.). Here, the record is not sufficiently developed to determine whether NCA's investigatory procedures were reasonable. As such, Plaintiffs' allegations support a FCRA claim against NCA at this stage in the proceedings.
The Court notes, however, that the allegedly inaccurate debt information reported by NCA appears to relate only to Ms. Davis. Nothing in the complaint supports that NCA reported any debt information concerning Mr. Davis to a CRA. Given this, it is questionable that he has any standing or basis to assert a claim under § 1681 s-2(b)(1) against NCA. See Pub. Interest Research Grp. Of N.J., Inc. v. Magnesium Elektron, Inc., 123 F.3d 111, 117 (3d Cir. 1997) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992)) (“Standing is a threshold jurisdictional requirement,” and to have standing in federal court, “plaintiffs must show injury or at least an imminent threat of injury.”). Because NCA's motion does not challenge Mr. Davis's claim on this basis, the Court will not reach the issue at this time. If it wishes, NCA may raise the issue at a later point in this case.
ii. The Complaint fails to allege facts sufficient to state a FDCPA claim against NCA.
Plaintiffs also claim that NCA's actions violated their rights under the FDCPA, 15 U.S.C. § 1692e. The FDCPA was established to target abusive practices used by debt collectors and, consistent with that purpose, imposes liability on “any debt collector who fails to comply with” the FDCPA. 15 U.S.C. §§ 1692(e),(k). To state a cause of action under the FDCPA, a plaintiff must plausibly demonstrate “that (1) she is a consumer, (2) the defendant is a debt collector, (3) the defendant's challenged practice involves an attempt to collect a ‘debt' as the Act defines it, and (4) the defendant has violated a provision of the FDCPA in attempting to collect the debt.” Douglass v. Convergent Outsourcing, 765 F.3d 299, 303 (3d Cir. 2014) (citing Piper v. Portnoff Law Assocs., Ltd., 396 F.3d 227, 232 (3d Cir.2005)). NCA argues that Plaintiffs' FDCPA claim against it must be dismissed because “Plaintiffs have not pled these required elements.” ECF No. 6, p. 7.
Plaintiffs describe their claim as one under the “Fair Debt Collection Act.” It is clear from their citations, however, that their claim is under the FDCPA.
The Act defines a “consumer” as “any natural person obligated or allegedly obligated to pay any debt.” 15 U.S.C. § 1692a(3). A “debt collector” means, inter alia, “any person ... in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.” 15 U.S.C. § 1692a(6). And a “debt” is defined as “any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance or services which are the subject of the transaction are primarily for personal, family, or household purposes.” 15 U.S.C. § 1692a(5). The FDCPA also places constraints on when and where a debt collector may “communicate with a consumer in connection with the collection of any debt.” 15 U.S.C. § 1692(c). Further, the Act prohibits a debt collector from “engaging] in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt”; “us[ing] any false, deceptive, or misleading representation or means in connection with the collection of any debt.”; and “us[ing] unfair or unconscionable means to collect or attempt to collect any debt.” 15 U.S.C. §§ 1692(d),(e),(f).
NCA first challenges the sufficiency of Plaintiffs' allegations to support either Mr. Davis or Ms. Davis's status as a “consumer” within the meaning of the FDCPA. As to Mr. Davis, NCA is correct. The Complaint alleges no facts to support that NCA ever attributed the debt to Mr. Davis or attempted to collect the debt from him. He appears to base his claim against NCA solely on the fact that he is married to Mrs. Davis. This relationship does not make him a “consumer” within the FDCPA or confer standing upon him to piggyback on Ms. Davis's claim. See Itiowe v. Trentonian, 620 Fed.Appx. 65, 68 (3d Cir. 2015) (quoting Powers v. Ohio, 499 U.S. 400 (1991)) (“litigants ‘cannot rest a claim to relief on the legal rights or interests of third parties.'”). Thus, Mr. Davis' FDCPA claim against NCA must be dismissed.
The allegations of the Complaint do, however, support an inference that Ms. Davis is a “consumer” within the meaning of the statute. And Plaintiffs' allegation that “NCA is a collection agency who is attempting to recovery [sic] a fraudulent account on behalf of the original creditor speedy cash,” ECF No. 1-1, ¶ 7, is also sufficient at this stage of the proceeding to infer that NCA is a “debt collector” within the meaning of the statute. But Ms. Davis's claim nevertheless fails because the facts alleged do not support that the debt at issue was primarily for personal, family, or household purposes as required by the statute or that NCA violated her rights under the FDCPA. Specifically, the Complaint alleges no facts concerning the methods NCA utilized to collect the debt against Ms. Davis. Absent such allegations, no basis exists to infer that NCA's methods violated any provision of the FDCPA. Thus, Ms. Davis' FDCPA claim must be dismissed.
iii. Plaintiffs' defamation claim is preempted by the FCRA.
Lastly, NCA argues that Plaintiffs' “defamation claims [sic], to the extent it is premised on allegedly inaccurate credit reporting, is preempted by the FCRA, specifically section 1681t(b)(1)F).” ECF No. 6, p. 7. The Court agrees.
Section 16811 of the FCRA requires persons subject to the statute to comply with state laws pertaining “to the collection, distribution, or use of any information on consumers, or for the prevention or mitigation of identity theft,” unless “those laws are inconsistent with any provision of this subchapter, and then only to the extent of the inconsistency,” or an exception enumerated in this section applies. 15 U.S.C. § 1681 t(a). Relevant here is the exception stated in § 1681 t(b)(1)(F), which generally exempts “any subject matter regulated under . . . section 1681 s-2 of this title, relating to the responsibilities of persons who furnish information to consumer reporting agencies.” “[C]ourts that have interpreted this provision have held that it preempts statutory and common-law claims that are based on the furnishing of information to CRAs.” Becker v. Verizon Pennsylvania, Inc., 2017 WL 2418312, at *4 (W.D. Pa. June 2, 2017) (citing Macpherson v. JP Morgan Chase Bank, N.A., 665 F.3d 45, 48 (2d Cir. 2011); Purcell v. Bank of Am., 659 F.3d 622, 625 (7th Cir. 2011); Lalonde v. Bank of Am., N.A., 2016 WL 7734690, at *2 (W.D. Pa. Dec. 15, 2016), report and recommendation adopted, 2017 WL 104965 (W.D. Pa. Jan. 11, 2017) (citing Prukala v. TD Bank USA, 2016 WL 6191912, at *3 (M.D. Pa. Oct. 24, 2016)); Vullings v. Trans Union, LLC, 115 F.Supp.3d 538, 543 (E.D. Pa. 2015); Burrell v. DFS Servs. LLC, 753 F.Supp.2d 438, 448-51 (D.N.J. 2010)). As such, Pennsylvania common law “defamation claims are preempted by the FCRA.” Story v. Citizens Bank, 2017 WL 3173034, at *4 (W.D. Pa. June 28, 2017), report and recommendation adopted, 2017 WL 3158029 (W.D. Pa. July 25, 2017).
Plaintiffs' defamation claim rests on allegations that NCA falsely reported and continues to report to CRAs that Ms. Davis has an outstanding balance on an NCA account despite Plaintiffs' notification that they dispute this balance. Plaintiffs aver that this false reporting has prevented Ms. Davis from obtaining credit cards, loans, and other economic benefits, and has generally “caused [her] to have her character questioned and her named defamed.” ECF No. 11, ¶ 14. Plaintiffs' allegations therefore cast NCA as a “furnisher” under the FCRA and are based on subject matter regulated under § 1681s-2. See also Part II.D.i, supra. Accordingly, Plaintiffs' defamation claim is preempted and precluded by the FCRA.
E. Leave to Amend
The Third Circuit has instructed that if a complaint is vulnerable to dismissal for failure to state a claim, the Court should permit a curative amendment unless an amendment would be inequitable or futile. Grayson v. Mayview State Hosp., 293 F.3d 103, 108 (3d Cir. 2002). The Court may deny leave to amend where there is “undue delay, bad faith[,] or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, [or] futility of the amendment.” Foman v. Davis, 371 U.S. 178, 182 (1962). And though “the grant or denial of an opportunity to amend is within the discretion of the District Court,” it may not “outright refus[e] to grant the leave without any justifying reason appearing for the denial.” Id. These instructions are equally applicable to pro se litigants and those represented by counsel. Alston v. Parker, 363 F.3d 229, 235 (3d Cir. 2004). In this case, it would be futile to allow Plaintiffs to amend their defamation claim against NCA. However, Plaintiffs may be able to cure the Complaint's deficiencies with respect to Ms. Davis's FDCPA claim.
The Court notes that the Complaint does not appear to support Mr. Davis's standing as to the Plaintiffs' FCRA or FDCPA claim. To have standing, Mr. Davis must show that he: (1) “suffered an invasion of a legally protected interest”; (2) “that the injury is both concrete and particularized”; and (3) “that his injury is actual or imminent, not conjectural or hypothetical.” Mielo v. Steak ‘n Shake Ops. Inc., 897 F.3d 467, 478 (3d Cir. 2018) (internal quotation marks and citation omitted). The allegations of the Complaint do not support that Mr. Davis has been injured by NCA's conduct. In this context, he cannot claim an economic injury or damages derivative of those of his wife. See Itiowe v. Trentonian, 620 Fed.Appx. 65, 68 (3d Cir. 2015) (quoting Powers v. Ohio, 499 U.S. 400 (1991)).
Accordingly, it is recommended that the Court dismiss Plaintiffs' defamation claim with prejudice and their FDCPA claim without prejudice and with leave to file an amended complaint within twenty days. If Plaintiffs fail to file an amended complaint within this time, the Court should enter an order dismissing their FDCPA claim against NCA with prejudice.
Plaintiffs are advised that an amended complaint must be complete in all respects and takes the place of the original complaint. As such, the amended complaint must again identify each party and allege the “claims in short, concise, and plain statements.” Fed R. Civ. P. 8. Further, Plaintiffs must re-assert in the amended complaint every cause of action from the complaint deemed adequately pled or dismissed without prejudiced. Palakovic v. Wetzel, 854 F.3d 209, 220 (3d Cir. 2017) (“an amended pleading .. . supersedes the earlier pleading and renders the original pleading a nullity”). Plaintiffs must also re-submit any exhibits they attached to their complaint that they wish to be considered in conjunction with their amended complaint.
III. Conclusion
For the foregoing reasons, it is respectfully recommended that NCA's motion to dismiss (ECF No. 6) be DENIED in part and GRANTED in part. Specifically, it is recommended that the motion be DENIED as to the FCRA claim and GRANTED as to the FDCPA and defamation claims. It is further recommended that the FDCPA claim be DISMISSED without prejudice and the defamation claim be DISMISSED with prejudice.
IV. Notice
In accordance with 28 U.S.C. § 636(b)(1) and Fed.R.Civ.P. 72, the parties may seek review by the district court by filing Objections to the Report and Recommendation within fourteen (14) days of the filing of this Report and Recommendation. Any party opposing the objections shall have fourteen (14) days from the date of service of objections to respond thereto. See Fed.R.Civ.P. 72(b)(2). Failure to file timely objections may waive appellate rights. See Brightwell v. Lehman, 637 F.3d 187, 194 n.7 (3d Cir. 2011); Nara v. Frank, 488 F.3d 187 (3d Cir. 2007).