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reporting discharged debts as "charged off" and "past due 180 days" on credit report
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Civil Action No. 03-1894.
July 12, 2004
REPORT AND RECOMMENDATION ON MOTION TO DISMISS
Pending before the undersigned for report and recommendation is the Motion to Dismiss Pursuant to Fed.R.Civ.P. 12(b)(6) filed by Proponent Federal Credit Union ("Proponent"). (Document No. 11). Plaintiff, Larry E. Carriere, II ("Carriere"), has filed opposition. For the following reasons, it is recommended that the motion be GRANTED IN PART AND DENIED IN PART.
Motion to Dismiss Standard
In ruling on a motion to dismiss for failure to state a claim under Rule 12(b)(6), the Court must liberally construe the complaint in favor of the plaintiff, assuming all factual allegations to be true. Oliver v. Scott, 276 F.3d 736, 740 (5th Cir. 2002); Leleux v. United States, 178 F.3d 750, 754 (5th Cir. 1999). A complaint may not be dismissed "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Id. (quoting Lowrey v. Texas A M Univ. Sys., 117 F.3d 242, 247 (5th Cir. 1997)).Background
In July, 1994, Carriere opened a revolving credit extension with Proponent under account number 443015148008. (Complaint, ¶ 7). Subsequently, he co-signed an installment credit extension for a car loan under account number 2906700L in December, 1994 (the "first car loan"). (Complaint, ¶ 8). In May, 1996, Carriere opened an installment credit extension for a second car loan under account number 2906700L (the "second car loan"). (Complaint, ¶ 9).
While the Complaint states the year as 1996, this date is inconsistent with the subsequent dates for Carriere's obtaining loans on that account. Based on the facts as stated, it appears that the actual date for opening this revolving credit extension is 1994, rather than 1996. This discrepancy does not affect defendant's prescription claim.
In November, 1996, Carriere became more than 30 days delinquent on account number 443015148008, and was 150 days delinquent by October, 1997. (Complaint, ¶¶ 10, 11). While Carriere was occasionally delinquent on the first car loan, he eventually paid it off in full in mid-1998. (Complaint, ¶¶ 12, 13). In March, 1997, he became more than 30 days delinquent on the second car loan, and was 150 days delinquent by October, 1997. (Complaint, ¶¶ 14, 15).
In October, 1997, Carrier filed for bankruptcy under Chapter 7. (Complaint, ¶ 16). The two unpaid Proponent accounts were included in the bankruptcy. (Complaint, ¶ 17). Because these two debts were scheduled, Proponent received notice of the bankruptcy. (Complaint, ¶ 18).
A discharge order was entered by the bankruptcy court in January, 1998. (Complaint, ¶ 19). After the discharge, Proponent continued to report account number 44301518008 as a "charged off" debt since January, 1998 to date, and the second car loan as a "charged off" debt since November, 1999 to date. (Complaint, ¶¶ 20, 21). Additionally, despite Carriere's payment in full for the first car loan, Proponent began reporting that it had not received two payments of $313.00 each, and that it had "charged off" $626.00 against him. (Complaint, ¶ 22).
On August 30, 2002, a credit reporting agency ("CRA"), Experian Information Solutions, Inc. ("Experian"), published a consumer credit report to Carriere which listed each of the three Proponent accounts as having a status of "charged off." (Complaint, ¶¶ 28, 29). The report listed inquiries which had been made by several creditors. (Complaint, ¶ 32). Carriere immediately contested and disputed the inaccurate loan reports to Experian. (Complaint, ¶ 30). Subsequently, Experian notified Proponent of the dispute. (Complaint, ¶ 33).
On November 23, 2002, Experian issued a post-investigation communication to Carriere which indicated that Proponent had partially corrected some of the inaccurate information contained in Carriere's credit report. (Complaint, ¶ 35). However, subsequent Experian credit reports showed that the account information had not been corrected, and that Proponent had "persisted" in reporting the accounts as originally shown. (Complaint, ¶ 36).
Subsequently, Carriere contacted Experian to re-dispute the Proponent reportings. (Complaint, ¶ 38). On December 11, 2002, Experian issued a post-reinvestigation communication and a copy of an updated consumer credit report to Carriere. (Complaint, ¶¶ 39, 40). The credit report still contained the same Proponent reportings, which were designated with a "pre-dispute status." (Complaint, ¶¶ 41, 42). Additionally, the credit report listed an inquiry by Iberia Bank, which had received a credit report containing the disputed Proponent reportings. (Complaint, ¶ 43).
On April 2, 2003, Experian sent another post-reinvestigation communication to Carriere indicating that it had reinvestigated four Proponent accounts, and that it had verified the account reportings as shown and "updated" the fourth Proponent account. (Complaint, ¶ 44). This credit report reflected additional inquiries from creditors, who had received credit reports containing inaccurate information regarding the Proponent accounts. (Complaint, ¶ 45).
On April 30, 2002, Experian sent a credit report to Carriere which still listed the Proponent accounts. (Complaint, ¶ 46). After receiving the April 30, 2002 report, Carriere continued to contest the Proponent reportings to Experian in an attempt to have his credit reports corrected. (Complaint, ¶ 47, 50).
On May 16, 2003, Experian issued a credit report to Carriere which continued to show the Proponent reportings. (Complaint, ¶ 52). This report also showed additional inquiries by Experian subscribers who received credit reports containing the disputed Proponent information. (Complaint, ¶ 53).
After Carriere continued to protest the errors, Experian sent a post-reinvestigation communication on June 1, 2003, which indicated that Experian had verified the accuracy of the Proponent reportings. (Complaint, ¶¶ 54, 55). However, Proponent "insisted" that the accounts list a status of "charged off" and "past due" as to account number 44305148008. (Complaint, ¶ 56). Additionally, despite the fact that Carriere had not filed a Chapter 13 bankruptcy, Proponent "insisted" that the account for the second car loan show a status of "Petition for Chapter 13," "Filed Chapter 13 B.R. 12/24/97," and "past due 180 days." (Complaint, ¶ 57). Further, Proponent "insisted" that the account for the first car loan list a status of "Paid/Account Charged Off" and "Charged off as of 6-1999 to 9-1999." (Complaint, ¶ 58).
On May 13, 2003, Carriere wrote to Proponent regarding the disputed information on his credit reports. (Complaint, ¶ 59). Proponent's counsel, Edward McKenna, responded to the letter and denied any inaccuracies with the reportings. (Complaint, ¶ 60). Additionally, Keith Beith of Proponent threatened Carriere "repeatedly" to insure that his credit reports would contain the information "indefinitely." (Complaint, ¶ 61). Since then, Proponent has continued to re-insert the disputed data into his consumer reports. (Complaint, ¶¶ 64, 65).
Based on the inaccurate information regarding the Proponent accounts contained in his credit reports, Carriere contends that he has received "very low credit scores" from Experian, which has resulted in "adverse action," credit denials and "other damages" to him and his wife. (Complaint, ¶¶ 62, 63, 67, 68, 69). He also asserts that Proponent has violated the automatic stay and discharge order from the bankruptcy proceeding by continuing to publish this disputed information. (Complaint, ¶ 66). Further, he alleges that Proponent "recklessly, maliciously and/or intentionally" published this inaccurate information with "reckless disregard for the truth of the matter asserted." (Complaint, ¶ 71)
On October 13, 2003, Carriere filed suit in this Court asserting Louisiana state law claims for negligence, defamation, invasion of privacy, and violation of the Louisiana Unfair Trade Practices and Consumer Protection Law ("LUTPA"), La.R.So. 51:1401, et seq. He further alleged federal claims for violation of the bankruptcy discharge order, and violation of the Fair Credit Reporting Act ("FCRA") under 15 U.S.C. § 1681s-2(b).
On May 6, 2004, Proponent filed the instant motion to dismiss on the following grounds: (1) the state law claims are preempted by the FCRA; (2) Proponent is exempt from LUTPA; (3) plaintiff fails to state a claim for violation of the bankruptcy discharge order; and (4) the state law and FCRA claims have prescribed.
Preemption Under the FCRA
Carriere has asserted a claim under § 1681s-2(b) of the FCRA, which section explains the responsibilities of furnishers of credit information after they have been notified by a credit reporting agency that the consumer disputes the credit information provided by the furnisher. Thomasson v. Bank One, Louisiana, N.A., 137 F. Supp.2d 721, 723 (E.D. La. 2001). Upon receiving notice of a dispute, the furnisher is to conduct an investigation and report the results to the appropriate consumer reporting agencies. Id. While the Fifth Circuit has declined to reach the issue of whether a private cause of action exists against a furnisher of information if it does not comply with § 1681s-2(b), numerous courts, including the Ninth Circuit and this Court, have concluded that it does. Young v. Equifax Credit Information Services, Inc., 294 F.3d 631, 638-39 (5th Cir. 2002) (stating in dicta that the FCRA appears to impose civil liability on "any person" violating a FCRA duty under § 1681s2-(b)); Nelson v. Chase Manhattan Mortgage Corp., 282 F.3d 1057 (9th Cir. 2002); Whitesides v. Equifax Credit Information Services, Inc., 125 F. Supp.2d 807, 812 (W.D. La. 2000) (Walter, J.); McMillan v. Experian Info. Serv., Inc., 119 F. Supp.2d 84, 88 (D. Conn. 2000); Olexy v. Interstate Assurance Co., 113 F. Supp.2d 1045, 1047-48 (S.D. Miss. 2000); DiMezza v. First USA Bank, Inc., 103 F. Supp.2d 1296, 1300 (D.N.M. 2000);Dornhecker v. Ameritech Corp., 99 F. Supp.2d 918, 927 (N.D. Ill. 2000); Campbell v. Baldwin, 90 F. Supp.2d 754, 756 (E.D. Tex. 2000); Vazquez-Garcia v. Trans Union de Puerto Rico, 222 F. Supp.2d 150, 155 (D. Puerto Rico 2002); Mendoza v. Experian Info. Solutions, Inc., 2003 WL 2005832 (S.D. Tex. Mar. 25, 2003). But see Carney v. Experian Info. Solutions, Inc., 57 F. Supp.2d 496, 502 (W.D. Tenn. 1999) (finding statutorily created obligation imposed on furnisher is owed only to consumer reporting agency and not to consumer).
The enforcement of violations of § 1681s-2(a), which is not at issue here, is limited to certain federal and state officers.Banks v. Stoneybrook Apartment, 2000 WL 1682979 (M.D.N.C. June 1, 2000).
Proponent agrees that a consumer has a private right of action for the enforcement of § 1681s-2(b). However, it argues that Carriere's claims for negligence, defamation, invasion of privacy and deceptive trade practices are preempted by the FCRA.
The FCRA has two preemption provisions: § 1681t(b)(1)(F) and § 1681h(e). Section 1681t(b)(1)(F) provides that "[n]o 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 title, relating to the responsibilities of persons who furnish information to consumer reporting agencies." (emphasis added). This section provides exceptions for portions of the Massachusetts and California codes. 1681t(b)(1)(F)(i) and (ii).
Section 1681h(e), which also addresses a plaintiff's ability to bring state-law claims, provides that:
"no consumer may bring any action or proceeding in the nature of defamation, invasion of privacy, or negligence with respect to the reporting of information against . . . any person who furnishes information to a consumer credit reporting agency, based on information disclosed pursuant to section 1681g, 1681h, or 1681m of this title . . . based in whole or in part on the report except as to false information furnished with malice or willful intent to injure such consumer." (emphasis added)
The question of preemption of state-law tort claims under the FCRA has not yet been addressed by a Circuit Court. McCloud v. Homeside Lending, 309 F. Supp.2d 1335, 1340 (N.D. Ala. 2004);Bank One, N.A. v. Colley, 294 F. Supp.2d 864, 868 (M.D. La. 2003); Carlson v. Trans Union, L.L.C., 259 F. Supp.2d 517, 520 (N.D. Tex. 2003). However, several district courts have considered how to apply the preemption provisions to pendent state law claims, and have taken three different paths.
The first approach regards § 1681t(b)(1)(F), which was added to the FCRA after § 1681h, as completely subsuming § 1681h(e). See, e.g., Hasvold v. First USA Bank, N.A., 194 F. Supp.2d 1228, 1239 (D. Wyo. 2002); Jaramillo v. Experian Information Solutions, Inc., 155 F. Supp.2d 356, 363 (E.D. Pa. 2001), reconsideration granted in part, 2001 WL 1762626 (E.D. Pa. June 20, 2001). This approach, which would call for preemption of all pendant state law claims, has been rejected by several courts on the ground that Congress left § 1681h(e) in place when it added § 1681t(b)(1)(F). McCloud, 309 F. Supp.2d at 1340;Vazquez-Garcia, 222 F. Supp.2d at Jeffrey v. Trans Union, LLC, 273 F. Supp.2d 725, 727 (E.D. Va. 2003); Stafford v. Cross Country Bank, 262 F. Supp.2d 776, 786 (W.D. Ky. 2003).
Under the second approach, § 1681h(e) is read as applying only to torts, while § 1681t(b)(1)(F) is read as applying only to state statutory regulation. McCloud, 309 F. Supp.2d 1335;Carlson, 259 F. Supp.2d at 521; Yutesler v. Sears Roebuck and Co., 263 F. Supp.2d 1209 (D.Minn. 2003). This has been referred to as the "minority view." McCloud, 309 F. Supp.2d at 1341-42.
The third approach, called the temporal approach, has been applied by the majority of courts. Bank One, 294 F. Supp.2d at 869; Vasquez-Garcia, 222 F. Supp.2d at 162; Aklagi v. Nationscredit Financial, 196 F. Supp.2d 1186 (D. Kan. 2002); see also Jeffrey, 273 F. Supp.2d at 726-27. Under the temporal analysis, preemption of state law claims arising before the furnisher of information receives notice of the dispute is governed by § 1681h(e), and preemption of state law claims arising after such a time is governed by § 1681t(b)(1)(F). (emphasis added). Bank One, 294 F. Supp.2d at 869.
Proponent argues that this Court should adopt a fourth approach, which combines the elements of approaches two and three. Defendant, citing Stafford v. Cross Country Bank, 262 F. Supp.2d 776, 786-88 (W.D. Ky. 2003), urges that § 1681t(b)(1)(F) preempts all state law claims, both statutory and tort, arising after a furnisher receives notice of a dispute from a credit reporting agency. (emphasis added). For state tort law claims arising before a furnisher receives notice of a dispute, § 1681h(e) applies. Id. at 788.
While the Fifth Circuit has not addressed the question of preemption of state common law claims under the FCRA, district courts within this Circuit, including this Court, have. InWhitesides, supra, Judge Walter found that plaintiff's claims for negligence, defamation, intentional infliction of emotional distress, unfair trade practices and violation of § 1681s-2(b) of the FCRA were not precluded by § 1681h(e) because defendant's acts did not fall within the disclosures set forth under the statute.
The Court did not address preemption under § 1681t(b)(1)(F).
To reiterate, § 1681h(e) provides that "no consumer may bring any action or proceeding in the nature of defamation, invasion of privacy, or negligence with respect to the reporting of information against . . . any person who furnishes information to a consumer credit reporting agency, based on information disclosed pursuant to section 1681g, 1681h, or 1681m of this title . . . based in whole or in part on the report except as to false information furnished with malice or willful intent to injure such consumer." (emphasis added). Judge Walter analyzed these disclosure provisions, and noted that §§ 1681g and 1681h refer to disclosures made by a consumer reporting agency, which defendant, Bank of Louisiana ("BOL"), was not. Additionally, he observed that while § 1681m applies to information users, it imposes no duty to disclose absent "adverse action" by the user against the consumer. Since there was no adverse action taken by BOL against Whitesides based on her consumer report, he found that § 1681m was also inapplicable.
Adverse action is defined under 15 U.S.C.A. § 1681a(k) as follows:
(1) Actions included. — The term "adverse action" —
(A) has the same meaning as in section 1691(d)(6) of this title; and(B) means —
(i) a denial or cancellation of, an increase in any charge for, or a reduction or other adverse or unfavorable change in the terms of coverage or amount of, any insurance, existing or applied for, in connection with the underwriting of insurance;
(ii) a denial of employment or any other decision for employment purposes that adversely affects any current or prospective employee;
(iii) a denial or cancellation of, an increase in any charge for, or any other adverse or unfavorable change in the terms of, any license or benefit described in section 1681b(a)(3)(D) of this title; and(iv) an action taken or determination that is —
(I) made in connection with an application that was made by, or a transaction that was initiated by, any consumer, or in connection with a review of an account under section 1681b(a)(3)(F)(ii) of this title; and(II) adverse to the interests of the consumer.
Section 1691(d)(6) of Title 15 defines "adverse action" as follows: "[f]or purposes of this subsection, the term 'adverse action' means a denial or revocation of credit, a change in the terms of an existing credit arrangement, or a refusal to grant credit in substantially the amount or on substantially the terms requested. Such term does not include a refusal to extend additional credit under an existing credit arrangement where the applicant is delinquent or otherwise in default, or where such additional credit would exceed a previously established credit limit."
Additionally, Judge Walter noted that § 1681h(e) was not actually a preemption provision, but rather, a "quid pro quo grant of protection for statutorily required disclosures." Id. at 811 (quoting McAnly v. Middleton Reutlinger, P.S.C., 77 F. Supp.2d 810, 814 (W.D. Ky. 1999)); see also Yeager v. TRW, 984 F. Supp.2d 517 (E.D. Tex. 1997)). As explained in McAnly:
"Since various parts of the federal statute require consumer reporting agencies and information users to disclose information to consumers under certain circumstances, this section guarantees that the agencies or users cannot be sued for those required disclosures under state tort law. It makes sense that acts required to be done by the FCRA are immunized from state tort liability."Id. at 814-15.
Judge Walter found that BOL's actions, particularly the reporting of the Whitesides' account, did not fall within the scope of the disclosures considered by § 1681h(e). Thus, § 1681h(e) did not preclude any of Whiteside's claims. See also 16 C.F.R. Pt. 600, Appendix — Commentary on the Fair Credit Reporting Act, § 610 — Conditions of Disclosure, ¶ 6 ("The privilege extended by [§ 1681h(e)] does not apply to an action brought by a consumer if the action is based on information not disclosed pursuant to sections [1681g, 1681h, or 1681m])."
As in Whitesides, the disclosure provisions referenced in § 1681h(e) do not apply in this case. Because Proponent is not a consumer reporting agency, it does not fall within the scope of §§ 1681g and 1681h. Further, § 1681m is inapplicable, as Proponent took no "adverse action," i.e., denying or revoking credit, to Carriere. Accordingly, under Whitesides, § 1681h(e) does not preclude Carriere's claims.
In any event, were the Court to adopt this fourth approach, as recommended by Proponent, the undersigned cannot discern, based on the current state of the pleadings, whether the actions complained of by Carriere arose before or after Proponent received notice from a credit reporting agency of a dispute. As Proponent concedes (regarding the defamation and invasion of privacy claims), whether Proponent is entitled to qualified immunity under § 1681h(e) "must be addressed with evidence in a motion for summary judgment — not in this Rule 12(b)(6) motion." (Document No. 11, pp. 18, 19). Thus, regardless of the approach ultimately taken by this Court, the undersigned cannot recommend dismissal of plaintiff's tort claims before discovery has been conducted. See Mendoza, supra, at *4; Woltersdorf v. Pentagon Federal Credit Union, 2004 WL 1252689 at *4 (N.D. Ala. April 2, 2004) (suggesting that defendant move forward with a motion for summary judgment once it was able to produce evidence supporting its preemption argument).
Accordingly, the undersigned recommends that the motion to dismiss for preemption be DENIED.
Deceptive Trade Practices
Proponent argues that, as a federal credit union chartered by the United States, it is exempt from LUPTA, by operation of LSA-R.S. 51:1401, et seq. Section 1406 of LUTPA contains an exemption provision, which states as follows:The provisions of this Chapter shall not apply to:
(1) Actions or transactions subject to the jurisdiction of the Louisiana Public Service Commission or other public utility regulatory body, the commissioner of financial institutions, the insurance commissioner, the financial institutions and insurance regulators of other states, or federal banking regulators who possess authority to regulate unfair or deceptive trade practices. (emphasis added).
Credit Unions are regulated under Title 12, "Banks and Banking," and Title 15, "Commerce and Trade," of the United States Code. Under 15 U.S.C. § 57a(f)(1), credit unions are specifically regulated to prevent unfair or deceptive trade practices. This section provides that the National Credit Union Administration Board "shall prescribe regulations to carry out the purposes of this section [preventing unfair or deceptive acts or practices in or affecting commerce], including regulations defining with specificity such unfair or deceptive acts or practices, and containing requirements prescribed for the purpose of preventing such acts or practices." Thus, as a credit union which is regulated by a federal agency regarding unfair or deceptive trade practices claims, Proponent falls within LUTPA's exemption.
Carriere argues that LUPTA's exemption "is not broad enough for violations of the bankruptcy court orders." (Document No. 13, p. 16). However, the history and intent behind the exemption in R.S. 51:1406 is "to avoid duplication and exclude financial institutions which are regulated by other authorities as to unfair or deceptive trade practices." First Financial Bank, FSB v. Butler, 492 So.2d 503, 505 (La.App. 5th Cir. 1986); see also Scott v. Bank of Coushatta, 512 So.2d 356, 364 (La. 1987). As a credit union which is regulated with respect to unfair trade practices under titles 12 and 15 of the United States Code, Proponent falls squarely within the coverage of this exemption. Thus, the fact that Carriere is also asserting a claim for violation of the bankruptcy discharge order is irrelevant to this claim.
Accordingly, the undersigned recommends that Carriere's LUTPA claim be DISMISSED.
Violation of Bankruptcy Discharge Order
Proponent asserts that Carriere has failed to plead a violation of a discharge injunction under 11 U.S.C. § 524. Section 524(a)(2) provides that a discharge
"operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset any such debt as a personal liability of the debtor, whether or not discharge of such debt is waived."
Section 524(a)(2) protects the debtor from any formal or informal attempts to collect a personal liability. Walker v. M M Dodge, Inc., 180 B.R. 834, 842 (W.D. La. 1995). These attempts include: "(1) commencing an action on such debt; (2) continuing such an action already initiated; or (3) employing process to collect on such debt, e.g., through the use of garnishment or attachment writs." Walker, 180 B.R. at 842 (quoting 3 Collier on Bankruptcy, ¶ 524.01). All informal actions to collect, including "telephone calls, letters, threats to collect or initiate legal action, intimidation intended to enforce payment, and personal contacts to collect or recover," are barred as well. Id. at 842-43. "Even a mere threat to enforce a surviving lien will violate the injunction if the evidence demonstrates that the threat is truly an effort to coerce payment." Id.
In the complaint, Carriere alleged that Proponent "failed to comply with the bankruptcy discharge order," and that such acts and omissions in violating the discharge order were "willful, intentional and designed to cause harm to plaintiff." (Complaint, ¶¶ 89, 90). Alternatively, Carriere asserts that Proponent's acts in violating the order were "negligent." (Complaint, ¶ 91).
Proponent argues that Carriere failed to allege that it intended to "collect a debt" when it reported to credit reporting agencies that Carriere's loans had been "charged off." However, there is no requirement that plaintiff plead that the credit furnisher intended to collect a debt when it filed an adverse report. As noted by the court in Singley v. American General Finance, 233 B.R. 170 (S.D. Ga. 1999), reconsideration denied, 236 B.R. 105 (Bankr. S.D. Ga. June 21, 1999), which was relied upon by Proponent, "[t]he Court is unable to conclude, based on the facts presented by Movant [for summary judgment] . . . that Movant did not act with the intent to collect the debt from [plaintiff] when it made the report to the credit bureau." Id. at 173. In other words, until the parties have had an opportunity to conduct discovery, the Court cannot determine what Proponent's intent might have been when it reported that Carriere's debts had been "charged off." See also, In re Weinhoeft, 2000 WL 33963628, *2 (Bkrtcy.C.D.Ill. 2000) ("even if it is shown that the Bank's reports to the credit-reporting agencies contain truthful information, such a report, if made with the intent to harass or coerce a debtor into paying a pre-petition debt, could be deemed a violation of the automatic stay. [citations omitted]. On this point alone, Debtors have clearly pleaded facts which, if proven true, would entitle Debtors to relief.").
Rule 8(e) of the Federal Rules of Civil Procedure provides that "[e]ach averment of a pleading shall be simple, concise, and direct. No technical forms of pleading or motions are required." Subsection (f) provides that "[a]ll pleadings shall be so construed as to do substantial justice." Proponent cites no authority to support its argument that plaintiff is required to plead that its adverse reporting was made "with the intent to collect" a debt.
For example, fraud or mistake is required to be pled with particularity under Rule 9(b), as is a reply to an Order under Rule 7(a). Schultea v. Wood, 47 F.3d 1427, 1433 (5th Cir. 1995).
Accordingly, the undersigned recommends that the motion to dismiss this claim be DENIED.
Prescription
In its initial brief, Proponent argued that all of Carriere's state law claims and FCRA claims have prescribed. However, in the reply brief, defendant limited its prescription argument to all state law tort claims for negligence, defamation and invasion of privacy arising before October 14, 1992, and FCRA claims arising prior to October 14, 2001.Under Louisiana law, tort claims are subject to a one-year prescriptive period, which commences to run for the day injury or damage is sustained. LSA-C.C. Art. 3492. FCRA's prescription period is found in Section 1681p, which provides as follows:
An action to enforce any liability created under this subchapter may be brought in any appropriate United States district court without regard to the amount in controversy, or in any other court of competent jurisdiction, within two years from the date on which the liability arises, except that where a defendant has materially and willfully misrepresented any information required under this subchapter to be disclosed to an individual and the information so misrepresented is material to the establishment of the defendant's liability to that individual under this subchapter, the action may be brought at any time within two years after discovery by the individual of the misrepresentation.
Carriere argues that the statute of limitations for a violation of § 1682s-2(b) begins to run each time a credit agency issues an inaccurate consumer report, citing Hyde v. Hibernia Nat. Bank in Jefferson Parish, 861 F.2d 446 (5th Cir. 1988). In Hyde, the court held that "the limitations period for a suit asserting negligence [under the FCRA] commences when a report issued to a user causes injury to the consumer for whose protection the Act was adopted and that the limitations period for a suit asserting intentional violation of the Act begins at the same time or, if the consumer is not aware of the issuance of the report, when the consumer later discovers it." Id. at 446.
In the reply brief, Proponent argues that the discovery rule expressed in Hyde was rejected by the Supreme Court in TRW, Inc. v. Andrews, 534 U.S. 19, 122 S.Ct. 441, 151 L.Ed.2d 339 (2001). There, the plaintiff, citing Hyde, argued that liability under the FRCA arises only when actual damages materialize. However, the Supreme Court did not reach this issue "because it was not raised or briefed below." Id., 534 U.S. at 34, 122 S.Ct. at 451.
Since TRW, the Fifth Circuit has reaffirmed its holding inHyde that "the republication of credit information resulting in a new denial of credit constitutes a distinct harm and thus gives rise to a cause of action that is separate from that arising from the original publication." Young, 294 F.3d at 636. In so holding, Young referenced the similar rule of Louisiana law regarding defamation, which states that "each subsequent publication of a defamatory statement is a new and separate delictual cause of action." Id.
In Whitesides, this Court, following Hyde, determined that each time that a potential creditor requested a plaintiff's credit report and each time credit was denied based on erroneous information contained in the report, "the statute of limitations began to run anew for each potential harm." 125 F. Supp.2d at 807. Here, however, the Complaint does not specifically indicate the dates on which Carriere was denied credit. (Complaint, ¶ 62). Thus, until discovery has taken place, the Court is unable to determine when the statute of limitations began to run for each alleged adverse action.
Accordingly, the undersigned recommends that the motion to dismiss on the basis of prescription be DENIED.
CONCLUSION
Based on the foregoing reasons, the undersigned recommends that the Motion to Dismiss be GRANTED IN PART AND DENIED IN PART, and that all claims asserted by plaintiff under the Louisiana Unfair Trade Practices and Consumer Protection Law ("LUTPA"), La.R. S. 51:1401, et seq. be DISMISSED.Under the provisions of 28 U.S.C. § 636(b)(1)(C) and F.R.Civ.Proc. 72(b), parties aggrieved by this recommendation have ten (10) business days from service of this Report and Recommendation to file specific, written objections with the Clerk of Court. A party may respond to another party's objections within ten (10) days after being served with a copy thereof. Counsel are directed to furnish a courtesy copy of any objections or responses to the District Judge at the time of filing.
FAILURE TO FILE WRITTEN OBJECTIONS TO THE PROPOSED FACTUAL FINDINGS AND/OR THE PROPOSED LEGAL CONCLUSIONS REFLECTED IN THIS REPORT AND RECOMMENDATION WITHIN TEN (10) DAYS FOLLOWING THE DATE OF ITS SERVICE, OR WITHIN THE TIME FRAME AUTHORIZED BY FED.R.CIV.P. 6(b), SHALL BAR AN AGGRIEVED PARTY FROM ATTACKING THE FACTUAL FINDINGS OR THE LEGAL CONCLUSIONS ACCEPTED BY THE DISTRICT COURT, EXCEPT UPON GROUNDS OF PLAIN ERROR. DOUGLASS V. UNITED SERVICES AUTOMOBILE ASSOCIATION, 79 F.3d 1415 (5TH CIR. 1996).