Opinion
No. 04 C 4165.
September 30, 2004
MEMORANDUM ORDER
Remaining defendant Household Finance Corporation III ("Household," mistakenly sued in the name of a now-dissolved predecessor corporation, Household Mortgage Services, Inc.) has filed a motion to dismiss Counts II and IV of the Complaint brought against it by Pamela Morris ("Morris") and Lloyd Brooks ("Brooks"). Because the just-filed Morris-Brooks response to that motion has chosen to dismiss Count II, thus mooting Household's motion in that respect, this memorandum order will address only Count IV.
That count asserts a common-law claim that sounds in defamation. Although Household calls upon Section 624(b)(1)(F) of the Fair Credit Reporting Act ("Act"), for their part Morris and Brooks respond by pointing to the more particularized provision of Section 610(e), which prohibits any consumer action "in the nature of defamation" but contains an express exception "as to false information furnished with malice or wilful intent to injure such consumer."
This order follows the parties' lead in citing to the internal section numbering of the Act, rather than to the Title 15 numbering. If the latter form of citation were employed instead, the just-cited provision would be cited as "Section 1681t(b) (1) (F)."
As between those competing contentions, this Court finds the Morris-Brooks position more persuasive, if for no other reason than the general principle of statutory construction under which a more particularized statutory provision prevails over a more general provision in the same statute that looks the other way. But with that said, the problem for Morris and Brooks here is that Count IV does not conform to the terms of the just-quoted exception to the Section 610(e) prohibition. Here is Count IV ¶ 37, its only allegation that speaks to the issue:
Household's publication of the false information was intentional or done with a reckless disregard for the truth of the matter. Household knew or should have known that the erroneous information would be used by the credit bureaus in the calculation of certain credit scores and that the credit bureaus would disseminate the erroneous information to prospective lenders.
Simply put, an allegation that Household's publication of the assertedly false information "was intentional or done with a reckless disregard for the truth," and a further allegation as to what Household "knew or should have known," simply do not equate to assertions of Household's having furnished the information at issue "with malice or wilful intent to injure."
Accordingly Household's motion to dismiss Complaint Count IV is granted. And as is always true with respect to any Fed.R.Civ.P. ("Rule") 12(b)(6) motion, if Morris and Brooks were to choose to reshape their allegations to conform to what the law requires, effectively changing the alleged facts to fit the law, they and their counsel would have to be heedful of the objective good faith that Rule 11(b) demands of every litigant and lawyer.
In that respect, it will be interesting to see whether the House of Representatives' current effort to restore the fangs to Rule 11 by reinstating its provisions that antedated the 1993 amendment to that Rule (and, indeed, to add more fangs to the Rule) will prove successful.