Summary
holding that plaintiff failed to state a claim against Experian where he speculated that Experian had behavioral data on him simply because Experian generally "stores data on more than 300 million individuals" (citations and internal quotes omitted).
Summary of this case from Henry v. MortgageOpinion
Case No. 2:19-CV-20 JCM (VCF)
2019-06-21
Mario DIAZ, Plaintiff(s), v. CHASE, et al., Defendant(s).
David H. Krieger, Haines & Krieger, LLC, Henderson, NV, Shaina R Plaksin, Matthew I. Knepper, Miles N. Clark, Knepper & Clark LLC, Las Vegas, NV, for Plaintiff. Andrew J Sharples, Jennifer L Braster, Naylor & Braster Attorneys at Law, PLLC, Las Vegas, NV, Cheryl L. O'Connor, Irvine, CA, for Defendant(s).
David H. Krieger, Haines & Krieger, LLC, Henderson, NV, Shaina R Plaksin, Matthew I. Knepper, Miles N. Clark, Knepper & Clark LLC, Las Vegas, NV, for Plaintiff.
Andrew J Sharples, Jennifer L Braster, Naylor & Braster Attorneys at Law, PLLC, Las Vegas, NV, Cheryl L. O'Connor, Irvine, CA, for Defendant(s).
ORDER
James C. Mahan, UNITED STATES DISTRICT JUDGE
Presently before the court is defendant Experian Information Solutions, Inc.'s ("Experian") motion to dismiss. (ECF No. 29). Plaintiff Mario Diaz ("Diaz") filed a response (ECF No. 36), to which Experian replied (ECF No. 42).
I. Facts
This action arises from alleged violations of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. §§ 1681 – 1681x, and Nevada Revised Statute ("NRS") 598C.130. (ECF Nos. 1, 25). Experian is a consumer reporting agency ("CRA") as defined by 15 U.S.C. §§ 1681 et seq. , and NRS 598C.100. (ECF No. 1 at 2–3). Diaz is a "consumer" pursuant to 15 U.S.C. § 1681a(c) and NRS 598C.040. Id. at 2. On September 12, 2017, Experian provided Diaz with a FCRA Section 1681g consumer disclosure. Id. at 14. On June 21, 2018, Experian provided Diaz with a second FCRA Section 1681g consumer disclosure. Id. Diaz alleges Experian violated the FCRA by failing to disclose (1) all permissible purposes for which soft inquiries were made, (2) when Experian permits third parties to access credit, (3) "behavioral data" Experian stores about Diaz, and (4) the sources for Diaz's addresses and names. Id. at 15–20.
Diaz filed his complaint on January 3, 2019. (ECF No. 1). Diaz then filed his first amended complaint ("FAC") on March 13, 2019. (ECF No. 25). Diaz alleges that Experian violated multiple sections of the FCRA and NRS by failing to include required information on Diaz's consumer disclosures. Id. Subsequently, on March 27, 2019, Experian filed a motion to dismiss. (ECF No. 29).
II. Legal Standard
A court may dismiss a plaintiff's complaint for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). A properly pled complaint must provide "[a] short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2) ; Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). While Rule 8 does not require detailed factual allegations, it demands "more than labels and conclusions" or a "formulaic recitation of the elements of a cause of action." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citation omitted).
"Factual allegations must be enough to rise above the speculative level." Twombly , 550 U.S. at 555, 127 S.Ct. 1955. Thus, to survive a motion to dismiss, a complaint must contain sufficient factual matter to "state a claim to relief that is plausible on its face." Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 (citation omitted).
In Iqbal , the Supreme Court clarified the two-step approach district courts are to apply when considering motions to dismiss. First, the court must accept as true all well-pled factual allegations in the complaint; however, legal conclusions are not entitled to the assumptions of truth. Id. at 678–79, 129 S.Ct. 1937. Mere recitals of the elements of a cause of action, supported only by conclusory statements, do not suffice. Id.
Second, the court must consider whether the factual allegations in the complaint allege a plausible claim for relief. Id. at 679, 129 S.Ct. 1937. A claim is facially plausible when the plaintiff's complaint alleges facts that allow the court to draw a reasonable inference that the defendant is liable for the alleged misconduct. Id. at 678, 129 S.Ct. 1937.
Where the complaint does not permit the court to infer more than the mere possibility of misconduct, the complaint has "alleged – but it has not shown – that the pleader is entitled to relief." Id. at 679, 129 S.Ct. 1937. When the allegations in a complaint have not crossed the line from conceivable to plausible, plaintiff's claim must be dismissed. Twombly , 550 U.S. at 570, 127 S.Ct. 1955.
The Ninth Circuit addressed post- Iqbal pleading standards in Starr v. Baca , 652 F.3d 1202, 1216 (9th Cir. 2011). The Starr court held,
First, to be entitled to the presumption of truth, allegations in a complaint or counterclaim may not simply recite the elements of a cause of action, but must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively.
Second, the factual allegations that are taken as true must plausibly suggest an entitlement to relief, such that it is not unfair to require the opposing party to be subject to the expense of discovery and continued litigation.
Id.
III. Discussion
Diaz raises two causes of action: (1) violation of the FCRA, and (2) violation of NRS 598C. (ECF No. 25). Experian argues that the court should dismiss these claims on three grounds. (ECF No. 29). First, Diaz has not alleged any inaccuracies in the Experian reports. Id. Second, Diaz has not sufficiently pleaded that Experian acted willfully or negligently. Id. Third, Diaz has not alleged any cognizable injury or damages. Id. As a preliminary matter, the court first addresses whether Diaz has Article III standing.
a. Standing
In FCRA cases, an injury-in-fact is "an invasion of a legally protected interest that is concrete and particularized and actual or imminent, not conjectural or hypothetical." Spokeo, Inc. v. Robins , ––– U.S. ––––, 136 S.Ct. 1540, 1548, 194 L.Ed.2d 635 (2016) (quoting Lujan v. Defenders of Wildlife , 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) ) (internal quotations omitted); see Bassett v. ABM Parking Servs., Inc. , 883 F.3d 776, 779 (9th Cir. 2018). A "concrete" injury must be de facto —it must actually exist but it need not be tangible. Spokeo , 136 S.Ct. at 1548–49 (citations omitted); see Dutta v. State Farm Mutual Automobile Ins. Co. , 895 F.3d 1166, 1173 (9th Cir. 2018). An injury must also be "particularized." Id. "For an injury to be ‘particularized,’ it ‘must affect the plaintiff in a personal and individual way.’ "
Diaz sufficiently alleges injury for purposes of Article III standing. See (ECF No. 25 at 23). Specifically, Diaz alleges actual damages including the denial of a credit card and diminution of his credit score. Id. Diaz's alleged injuries are concrete because they actually exist and are not merely abstract. See Johnson v. Pluralsight, LLC , 728 Fed.Appx. 674, 676 (9th Cir. 2018) (holding plaintiff's alleged economic injury was concrete because it actually existed). Moreover, Diaz's alleged injuries are also particularized because they personally and individually affected Diaz. DaimlerChrysler Corp. et al v. Cuno et al. , 547 U.S. 332, 342, 126 S.Ct. 1854, 164 L.Ed.2d 589 (2006) (" ‘plaintiff must allege personal injury’ "); Whitmore v. Arkansas , 495 U.S. 149, 155, 110 S.Ct. 1717, 109 L.Ed.2d 135 (1990) (" ‘distinct’ "); Allen v. Wright , 468 U.S. 737, 751, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984) ("personal"). Therefore, the court finds that Diaz has adequately alleged an injury-in-fact for Article III standing.
b. Inaccuracies
Diaz points to four purported inaccuracies in violation of 15 U.S.C. § 1681e(b), § 1681g(a)(1)–(3), and NRS 598C.130. (ECF Nos. 1, 25). First, Experian did not provide Diaz with all the permissible purposes for which soft inquiries were made. (ECF No. 25 at 15). Second, Experian misrepresented when it would permit third parties to access credit. Id. Third, Experian did not disclose all the "behavioral data" it stores about Diaz. Id. at 16. Fourth, Experian failed to disclose the sources for Diaz's addresses and names. Id. at 20.
i. FCRA § 1681e(b)
15 U.S.C. § 1681e(b) defines the FCRA's requisite compliance procedures and provides that "[w]henever a [CRA] prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates." To sustain a Section 1681e(b) claim, a plaintiff must plead that the CRA reported inaccurate information. See Shaw v. Experian Info. Sols., Inc. , 891 F.3d 749, 756 (9th Cir. 2018) ("To bring a § 1681e claim, the ‘consumer must present evidence tending to show that a [CRA] prepared a report containing inaccurate information.’ ") (quoting Guimond v. Trans Union Credit Information Co. , 45 F.3d 1329, 1333 (9th Cir. 1995) ).
Section 1681e(b) applies to consumer reports which are "CRA-prepared reports that a CRA issues to third parties ..." Shaw , 891 F.3d at 755 n.3. Diaz objects to the purported inaccuracies specific to his consumer disclosures, not to consumer reports that Experian provided to third parties. See (ECF No. 25). Because a consumer disclosure is not a consumer report pursuant to the FCRA, Diaz's Section 1681e(b) claim fails. 15 U.S.C. § 1681a(d)(1)(A)–(C) ; U.S. v. One Sentinel Arms Striker-12 Shotgun Serial No. 001725 , 416 F.3d 977, 979 (9th Cir. 2005) (" ‘In determining the scope of a statute, a court must look first to the statute's language and structure. If the statute's language is unambiguous, its plain language controls") (citation omitted). The court therefore dismisses Diaz's Section 1681e(b) claim without prejudice.
ii. FCRA § 1681g(a)(1)
Section 1681g provides, in relevant part, that "[e]very [CRA] shall, upon request, ... clearly and accurately disclose to the consumer ... [a]ll information in the consumer's file at the time of the request ..." 15 U.S.C. § 1681g(a)(1). Diaz interprets this to mean the FCRA requires Experian to disclose all the information it has ever stored on the consumer, including the permissible purposes of third parties. (ECF No. 25 at 14–16). However, binding caselaw says otherwise.
In Shaw , the Ninth Circuit held that "[a] consumer's file includes all information ... that might be furnished, or has been furnished, in a consumer report on that consumer." Shaw , 891 F.3d at 759 (citations omitted). Section 1681g only requires CRAs to disclose information that has previously been, or might be, included in a consumer report, as distinct from a consumer disclosure. See Foskaris v. Experian Information Solutions, Inc. , No. 17-cv-506-KJD-PAL, 2018 WL 3381394 at *3 (D. Nev. Mar. 21, 2018) (holding Section 1681g only applies to information that has been, or might be, included in a consumer report, not a consumer disclosure).
Diaz argues that Experian violated the FCRA by failing to include permissible purposes from a "Bullseye" report in its consumer disclosures. However, a "Bullseye" report is not a consumer report because it provides credit information only to consumers. Hanks v. Talbots Classics Nat. Bank , No. 12-cv-2612, 2012 WL 3236323 at *7 (N.D. Cal. Aug. 6, 2012) (the FCRA "contains no [ ] limitations with respect to a creditor accessing its own trade line information, which on its own does not constitute a consumer credit report."). Thus, Experian is not obligated under Section 1681g(a)(1) to include information from the "Bullseye" report in a consumer disclosure.
Diaz also alleges, on information and belief, that "Experian amasses and maintains an enormous amount of ‘behavioral’ data on ... ‘more than 300 million consumers,’ " including Diaz. (ECF No. 25 at 16–17). Specifically, Diaz contends that Experian: (1) provided behavioral data to third parties who sell it to third party credit decision-makers; (2) withheld Diaz's behavioral data from him; and (3) has more information relating to Diaz in its databases. Id. at 18–19.
"The Twombly plausibility standard ... does not prevent a plaintiff from pleading facts alleged upon information and belief where the facts are peculiarly within the possession and control of the defendant or where the belief is based on factual information that makes the inference of culpability plausible." Soo Park v. Thompson , 851 F.3d 910, 928 (9th Cir. 2017) (citing Arista Records, LLC v. Doe 3 , 604 F.3d 110, 120 (2nd Cir. 2010) ).
However, Diaz only concludes that because Experian stores "data on ‘more than 300 million individuals,’ on information and belief" Experian also stores information regarding Diaz in its databases. (ECF No. 25 at 16–17). This is nothing more than speculation based on Diaz's "information and belief." See Frazier v. Experian Info. Sols., Inc. , No. JKB-18-0067, 2018 WL 3785131 at *7 (D. Md. Aug. 9, 2018) (pleading on "information and belief" must be met with specific factual allegations); Gavin v. Trans Union LLC , No. 7:18-00523-DCC-JDA, 2018 WL 7824443 at *4 (D. S.C. Sept. 24, 2018) (pleading on "information and belief" must be met with specific factual allegations).
Indeed, the allegations in the FAC are conclusory. Diaz does not identify any specific information that was wrongfully withheld, nor does he provide any basis for his belief that Experian failed to provide him with all the information in his file. Id. at 18–19; see Johnson v. Experian Info. Sols., Inc. , No 2:18-cv-114-JAM-EFB PS, 2019 WL 951425 at *2 (E.D. Cal. Feb. 27, 2019) ("Plaintiff's complaint, rather than providing any specific factual allegations, rest entirely on conclusory allegations based upon plaintiff's ‘information and belief,’ which are insufficient to state a claim for relief."). This speculative guesswork is insufficient to plausibly plead a cause of action.
Accordingly, the court dismisses Diaz's 15 U.S.C. § 1681g(a)(1) claim without prejudice.
iii. FCRA § 1681g(a)(2)–(3) and NRS 598C.130
All three statutes require Experian to disclose the relevant information upon request. 15 U.S.C. § 1681g(a)(2) ("Every [CRA] shall, upon request, ... clearly and accurately disclose to the consumer ... [t]he sources of the information ..."); 15 U.S.C. § 1681g(a)(3) ("Every [CRA] shall, upon request, ... clearly and accurately disclose to the consumer ... [i]dentification of each person ... that procured a consumer report ..."); NRS 598C.130 ("Upon request ... a [CRA] shall ... [d]isclose the name of each person who has received from the reporting agency information concerning him ...").
Here, Diaz does not allege that he requested Experian to include the sources or the name of each person that procured a consumer report. See (ECF Nos. 1, 25). Thus, the court will dismiss without prejudice the 15 U.S.C. § 1681g(a)(2)–(3) and NRS 598C.130 claims.
c. Willful or negligent conduct
The FCRA and NRS provide for remedies when a defendant willfully, recklessly, or negligently violates provisions of these respective statutes. 15 U.S.C. § 1681n – 1681o and NRS 598C.190 – 598C.200. Because Diaz fails to allege that Experian meets any of these three mens rea requirements, his allegations must be dismissed.
To recover for statutory damages for a violation of the FCRA or NRS, Diaz must allege that Experian willfully or negligently failed to comply with the respective statutes. See 15 U.S.C. § 1681n – 1681o ; NRS 598C.190 – 598C.200 ; Safeco Ins. Co. of America v. Burr , 551 U.S. 47, 56–57, 127 S.Ct. 2201, 167 L.Ed.2d 1045 (2007). A willful statutory violation includes both knowing and reckless conduct. Safeco , 551 U.S. at 57, 127 S.Ct. 2201 ; Shaw , 891 F.3d at 760 (holding the reckless standard objectively analyzes whether the company reasonably read the statute and whether the risk of violating the law substantially outweighed the risk associated with a careless reading) (citation omitted).
Diaz only makes the conclusory allegation that all of Experian's violations were either willful, reckless, or negligent without producing any facts alluding to Experian's required mens rea. (ECF No. 25 at 23). Based on the bare allegations in the FAC, Diaz has failed to sufficiently plead willfulness, recklessness, and negligence. See Jenkins v. AmeriCredit Fin. Svcs., Inc. , 2017 WL 1325369 at *7 (E.D.N.Y. Feb. 14, 2017) (finding that "the mere failure to correct a plaintiff's inaccurate credit information, even after notification of the inaccuracy does not constitute a willful failure to comply with the FCRA"). Therefore, the court dismisses all of Diaz's claims without prejudice.
IV. Conclusion
Accordingly,
IT IS HEREBY ORDERED, ADJUDGED, and DECREED that Experian's motion to dismiss (ECF No. 29) be, and the same hereby is, GRANTED with leave to amend.