Opinion
Civil Action No. 2:10-cv-221-ID (WO).
June 29, 2010
MEMORANDUM OPINION AND ORDER
This cause is currently before the Court on Defendant Trans Union, LLC's Partial Motion to Dismiss (Doc. #9) filed on April 5, 2010, and Defendant G.E. Money Bank's joinder to that motion (Doc. #21) filed on April 29, 2010. The Plaintiffs, Julius and Annie Pugh, sued the Defendants for allegedly violating the Fair Credit Reporting Act (FCRA) 15 U.S.C. § 1681 et seq. The Partial Motion to Dismiss requires this Court to decide whether the FCRA empowers a district court to award equitable relief to private plaintiffs. Because the Court finds that the FCRA does not empower a district court to grant equitable relief to private plaintiffs, the Partial Motion to Dismiss is due to be GRANTED.
I. JURISDICTION
The Court properly exercises subject matter jurisdiction over this action pursuant to 28 U.S.C. § 1331 (federal question jurisdiction) and 28 U.S.C. § 1367 (supplemental jurisdiction).II. LEGAL STANDARD
Under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a defendant may move to dismiss a complaint or part of a complaint because the plaintiff has failed to state a claim upon which relief may be granted. A Rule 12(b)(6) motion tests the legal sufficiency of the complaint. "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, ___ U.S. ___, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)); see also Sinaltrainal v. Coca-Cola Co., 578 F.3d 1252, 1268 (11th Cir. 2009). Additionally, all factual allegations must be construed in the light most favorable to the plaintiff. See e.g., Brower v. County of Inyo, 489 U.S. 315, 327 (1991). Nevertheless, even accepting the alleged facts as true, a court may grant a motion to dismiss if, "on the basis of a dispositive issue of law, no construction of the factual allegations will support a cause of action." Marshall County Bd. Of Educ. v. Marshall County Gas Dist., 992 F.2d 1171, 1174 (11th Cir. 1993).
III. FACTUAL AND PROCEDURAL BACKGROUND
The Plaintiffs filed for bankruptcy under chapter 7 of title 11 of the United States Code and were granted a discharge of their debts on March 4, 2009. (Doc. #1, 2). One of the debts that was discharged was a $1,079 debt owed to Defendant G.E. Money Bank (GEMB), a company that regularly furnishes credit to consumers. The Plaintiffs state that GEMB knew the debt had been discharged because GEMB received notice of the meeting of creditors and the order of discharge. (Doc. #1, 3). According to the Plaintiffs, despite receiving this notice, GEMB continues to report a balance on the Plaintiffs' account to at least one credit reporting agency. The Plaintiffs allege that GEMB intentionally, maliciously and willfully failed to implement reasonable procedures to update the Plaintiffs' account to reflect a zero balance after the discharge. (Doc. #7-1, 3).
The other defendant, Trans Union, LLC, is a consumer credit reporting agency, or CRA, engaged in the business of assembling, evaluating, and dispersing consumer credit information. The Plaintiffs allege that Trans Union did not have reasonable procedures in place to assure the accuracy of the information it published in consumer credit reports as required by the FCRA. According to the Plaintiffs, this failure to comply with the FCRA was intentional, reckless and willful.
The Plaintiffs filed an amended ten-count complaint against GEMB and Trans Union alleging violations of federal as well as Alabama state law. (Doc. #7-1). The amended complaint seeks monetary damages and equitable relief. More specifically, Count Ten of the amended complaint seeks declaratory and injunctive relief from the Defendants' alleged violations of the FCRA. (Doc. #7-1, 13). On April 5, 2010, Trans Union filed a partial motion to dismiss the claims for equitable relief. (Doc. #9). On April 29, 2010, GEMB joined Trans Union's partial motion to dismiss. (Doc. #21). The Plaintiffs have not challenged the timeliness of GEMB's joinder of the partial motion to dismiss.
IV. DISCUSSION
One of the purposes of the FCRA is to require consumer credit reporting agencies to establish reasonable procedures regarding the accuracy of information that the agencies report. 15 U.S.C. § 1681(b). Whenever a credit reporting agency prepares a consumer report, it must follow "reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates." 15 U.S.C. § 1681e(b). If a consumer disputes the accuracy of the information contained in a report, the consumer may notify the agency and the agency must then "conduct a reasonable reinvestigation to determine whether the disputed information is inaccurate" or else delete the disputed item within 30 days of receiving notice of the dispute. 15 U.S.C. § 1681i(a)(1)(A). The agency must also "provide notification of the dispute to any person who provided any item of information in dispute. . . ." 15 U.S.C. § 1681i(a)(2)(A).Entities who provide information to credit reporting agencies are known as furnishers. The FCRA contains provisions for furnishers as well. One of these provisions states that a furnisher may not provide information to a reporting agency if the furnisher knows, or has reasonable cause to believe, that the information is inaccurate. 15 U.S.C. § 1681s-2(a)(1)(A). If a credit reporting agency notifies a furnisher of a dispute regarding the completeness or accuracy of any information, the furnisher must conduct an investigation of the disputed information. 15 U.S.C. § 1681s-2(b)(1).
According to 15 U.S.C. § 1681s-2(D), "reasonable cause to believe that the information is inaccurate" means that the entity has "specific knowledge, other than solely allegations by the consumer, that would cause a reasonable person to have substantial doubts about the accuracy of the information."
The FCRA empowers individuals to sue any person who willfully or negligently fails to comply with the requirements of the FCRA with respect to any consumer. 15 U.S.C. §§ 1681n(a) , 1681o(a). United States district courts have jurisdiction over these actions. 15 U.S.C. § 1681p. Individuals may seek actual damages, costs, reasonable attorney's fees and punitive damages, if applicable. 15 U.S.C. §§ 1681n, 1681o.
While GEMB did not raise the issue in its joinder to the partial motion to dismiss, the Court notes that furnishers like GEMB may be subject to suit by private parties under 15 U.S.C. § 1681s-2. See Ransom v. Equifax Inc., No. 09-80280-CIV, 2010 WL 1258084, * 4, n. 2 (S.D. Fla. Mar. 30, 2010) ("The Court also notes that whether or not there is a private right of action under the FCRA against a furnisher of information is an open question. To the extent it exists, the furnisher's duty under 15 U.S.C. § 1681s-2(b) is a duty to reinvestigate credit information when notice is received from a CRA. . . .") (citations omitted); Abbett v. Bank of America, No. 3:04-CV-01102-WKW-VPM, 2006 WL 581193, * 5 (M.D. Ala. 2006) (Watkins, J.) ("To prevail on a § 1681s-2(b) claim, [the plaintiff] must show that a CRA notified the furnisher of information about the consumer's dispute pursuant to § 1681 i(a)(2).").
In this case, the Plaintiffs seek monetary damages and "injunctive relief, a declaratory judgment, and a determination that Defendants violated the . . . FCRA. . . ." (Doc. #7-1, 13). Specifically, the Plaintiffs seek a declaratory judgment that Defendants violated 15 U.S.C. §§ 1681e(b), 1681i and 1681s-2 and also an injunction against further violations of those sections.
In their Rule 12(b)(6) motion to dismiss, the Defendants argue that the Plaintiffs' equitable claims should be dismissed because the FCRA does not empower a federal court to grant equitable relief. The Plaintiffs counter by arguing that federal courts have inherent authority to award equitable relief absent a clear command from Congress to the contrary. (Doc. #24, 1-3). The Plaintiffs also argue that other federal courts have granted equitable relief under the FCRA and urge this Court to follow the lead of those courts. The Court is unpersuaded by the Plaintiffs' arguments.
While the Eleventh Circuit Court of Appeals has not addressed this issue, "[d]istrict courts in the Eleventh Circuit have consistently held that equitable relief is not available to private citizens under the FCRA." Hamilton v. DirecTV, Inc., 642 F. Supp. 2d 1304, 1305 (M.D. Ala. 2009) (Albritton, J.) (citing Jones v. Sonic Automotive, Inc., 391 F. Supp. 2d 1064, 1065 (M.D. Ala. 2005) (Fuller, C.J.)). This Court agrees with the well-reasoned opinions of these other courts and concludes that the FCRA does not empower a federal court to grant equitable relief to private parties.
Generally, "[a]bsent the clearest command to the contrary from Congress, federal courts retain their equitable power to issue injunctions in suits over which they have jurisdiction." Califano v. Yamasaki, 442 U.S. 682, 705 (1979). The Plaintiffs argue that the FCRA does not contain a clear command from Congress prohibiting equitable relief and therefore this Court is authorized to grant it in this case. (Doc. #24, 2). However, the sections of the FCRA that grant individuals a right of action contain a list of available remedies, and that "list does not include equitable relief." Hamilton, 642 F. Supp. 2d at 130506; see also Jones, 391 F. Supp. 2d at 1065; 15 U.S.C. §§ 1681n, 1681o. That omission is significant because § 1681s(a) of the FCRA expressly empowers the Federal Trade Commission to obtain injunctions for violations of the FCRA. See Hamilton, 642 F. Supp. 2d at 1306; Washington v. CSC Credit Svcs. Inc., 199 F.3d 263, 269 (5th Cir. 2000) (holding that "the affirmative grant of power to the FTC to pursue injunctive relief, coupled with the absence of a similar grant to private litigants . . . demonstrates that Congress vested the power to obtain injunctive relief solely with the FTC."). Courts in this Circuit have determined that the exclusion of equitable relief from the list of remedies available to private individuals was intended by Congress to vest injunctive relief solely with the FTC. See Hamilton, 642 F. Supp. 2d at 1306; see also Baggett v. First Premier Bank, No. 09-0364-KD-N, 2009 WL 2588890, * 2 (S.D. Ala. Aug. 19, 2009) (applying the Hamilton rationale in the context of declaratory relief as well). This Court agrees.
The Hamilton decision cites favorably to the Fifth Circuit's decision in Washington v. CSC Credit Svcs. Inc., 199 F.3d 263 (5th Cir. 2000), which begins its analysis by considering Califano and then draws the same conclusion as this Court about the remedies available to private plaintiffs.
The Plaintiffs point out that some courts have indicated that the FCRA does create a private right of action for equitable relief. See Crabill v. Trans Union, LLC, 259 F.3d 662, 664 (7th Cir. 2001) (stating in dicta that a plaintiff suing under the FCRA who had failed to show causation was not entitled to actual damages but could still pursue other remedies, such as an injunction); Greenway v. Info. Dynamics, Ltd., 399 F. Supp. 1092, 1097-97 (D. Ariz. 1974) (certifying a class action and granting a preliminary injunction under the FCRA prohibiting the defendant from further distribution of consumer credit reports). But to this Court's knowledge no other court has followed the example of Crabill or Greenway. In fact, the Fifth Circuit's decision in Washington, cited favorable in this district, considered Greenway and still refused to find a private right to injunctive relief. See Washington v. CSC Credit Svcs. Inc., 199 F.3d at 268.
Plaintiffs' may have overstated the proposition for which Crabill stands. A later case from a district court within the Seventh Circuit "agree[d] with [ Washington v. CSC Svcs. Inc., 199 F.3d 263, 266 (5th Cir. 2000)] that Congress vested the power to obtain injunctive relief solely with the FTC." In re Trans Union Corp. Privacy Litigation, 211 F.R.D. 328, 339-40 (N.D. Ill. 2002).
See Hamilton, 642 F. Supp. 2d at 1306.
And there is at least one more reason to deny equitable relief in this case. The FCRA states that "compliance with the requirements imposed under [the FCRA] shall be enforced under the Federal Trade Commission Act . . . by the Federal Trade Commission." 15 U.S.C. § 1681s(a). Under § 5(b) of the Federal Trade Commission Act, the FTC is authorized to issue cease and desist orders. 15 U.S.C. § 45(b); see also Jones, 391 F. Supp. 2d at 1066; Mangio, 887 F. Supp. 285 (S.D. Fla. 1995). Allowing individuals to bring private actions to enforce compliance with the FCRA would effectively undermine the discretion vested solely in the FTC by the Federal Trade Commission Act. See Jones, 391 F. Supp. 2d at 1066 (citing Mangio, 887 F. Supp. at 285). The Court refuses to interfere with the FTC's enforcement abilities.
V. CONCLUSION
For the reasons stated, it is hereby CONSIDERED and ORDERED that the Defendants' partial motion to dismiss (Doc. #9; Doc. #21) be and the same is hereby GRANTED. Accordingly, it is CONSIDERED and ORDERED that Count Ten of the complaint be and the same is hereby DISMISSED.
A copy of this checklist is available at the website for the USCA, 11th Circuit at www.ca11.uscourts.gov Effective on April 9, 2006, the new fee to file an appeal will increase from $255.00 to $455.00. CIVIL APPEALS JURISDICTION CHECKLIST1. Appealable Orders : Appeals from final orders pursuant to 28 U.S.C. § 1291: 28 U.S.C. § 158Pitney Bowes, Inc. v. Mestre 701 F.2d 1365 1368 28 U.S.C. § 636 In cases involving multiple parties or multiple claims, 54Williams v. Bishop 732 F.2d 885 885-86 Budinich v. Becton Dickinson Co. 108 S.Ct. 1717 1721-22 100 L.Ed.2d 178LaChance v. Duffy's Draft House, Inc. 146 F.3d 832 837 Appeals pursuant to 28 U.S.C. § 1292(a): Appeals pursuant to 28 U.S.C. § 1292(b) and Fed.R.App.P. 5: 28 U.S.C. § 1292 Appeals pursuant to judicially created exceptions to the finality rule: Cohen v. Beneficial Indus. Loan Corp. 337 U.S. 541 546 69 S.Ct. 1221 1225-26 93 L.Ed. 1528Atlantic Fed. Sav. Loan Ass'n v. Blythe Eastman Paine Webber, Inc. Gillespie v. United States Steel Corp. 379 U.S. 148 157 85 S.Ct. 308 312 13 L.Ed.2d 199 2. Time for Filing Rinaldo v. Corbett 256 F.3d 1276 1278 4 Fed.R.App.P. 4(a)(1): 3 THE NOTICE MUST BE RECEIVED AND FILED IN THE DISTRICT COURT NO LATER THAN THE LAST DAY OF THE APPEAL PERIOD — no additional days are provided for mailing. Fed.R.App.P. 4(a)(3): Fed.R.App.P. 4(a)(4): Fed.R.App.P. 4(a)(5) and 4(a)(6): Fed.R.App.P. 4(c): 28 U.S.C. § 1746 3. Format of the notice of appeal : See also 3pro se 4. Effect of a notice of appeal : 4
Courts of Appeals have jurisdiction conferred and strictly limited by statute: (a) Only final orders and judgments of district courts, or final orders of bankruptcy courts which have been appealed to and fully resolved by a district court under , generally are appealable. A final decision is one that "ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." , , (11th Cir. 1983). A magistrate judge's report and recommendation is not final and appealable until judgment thereon is entered by a district court judge. (c). (b) a judgment as to fewer than all parties or all claims is not a final, appealable decision unless the district court has certified the judgment for immediate review under Fed.R.Civ.P. (b). , , (11th Cir. 1984). A judgment which resolves all issues except matters, such as attorneys' fees and costs, that are collateral to the merits, is immediately appealable. , 486 U.S. 196, 201, , , (1988); , , (11th Cir. 1998). (c) Appeals are permitted from orders "granting, continuing, modifying, refusing or dissolving injunctions or refusing to dissolve or modify injunctions . . ." and from "[i]nterlocutory decrees . . . determining the rights and liabilities of parties to admiralty cases in which appeals from final decrees are allowed." Interlocutory appeals from orders denying temporary restraining orders are not permitted. (d) The certification specified in (b) must be obtained before a petition for permission to appeal is filed in the Court of Appeals. The district court's denial of a motion for certification is not itself appealable. (e) Limited exceptions are discussed in cases including, but not limited to: , , , , , (1949); , 890 F.2d 371, 376 (11th Cir. 1989); , , , , , (1964). Rev.: 4/04 : The timely filing of a notice of appeal is mandatory and jurisdictional. , , (11th Cir. 2001). In civil cases, Fed.R.App.P. (a) and (c) set the following time limits: (a) A notice of appeal in compliance with the requirements set forth in Fed.R.App.P. must be filed in the district court within 30 days after the entry of the order or judgment appealed from. However, if the United States or an officer or agency thereof is a party, the notice of appeal must be filed in the district court within 60 days after such entry. Special filing provisions for inmates are discussed below. (b) "If one party timely files a notice of appeal, any other party may file a notice of appeal within 14 days after the date when the first notice was filed, or within the time otherwise prescribed by this Rule 4(a), whichever period ends later." (c) If any party makes a timely motion in the district court under the Federal Rules of Civil Procedure of a type specified in this rule, the time for appeal for all parties runs from the date of entry of the order disposing of the last such timely filed motion. (d) Under certain limited circumstances, the district court may extend the time to file a notice of appeal. Under Rule 4(a)(5), the time may be extended if a motion for an extension is filed within 30 days after expiration of the time otherwise provided to file a notice of appeal, upon a showing of excusable neglect or good cause. Under Rule 4(a)(6), the time may be extended if the district court finds upon motion that a party did not timely receive notice of the entry of the judgment or order, and that no party would be prejudiced by an extension. (e) If an inmate confined to an institution files a notice of appeal in either a civil case or a criminal case, the notice of appeal is timely if it is deposited in the institution's internal mail system on or before the last day for filing. Timely filing may be shown by a declaration in compliance with or a notarized statement, either of which must set forth the date of deposit and state that first-class postage has been prepaid. Form 1, Appendix of Forms to the Federal Rules of Appellate Procedure, is a suitable format. Fed.R.App.P. (c). A notice of appeal must be signed by the appellant. A district court loses jurisdiction (authority) to act after the filing of a timely notice of appeal, except for actions in aid of appellate jurisdiction or to rule on a timely motion of the type specified in Fed.R.App.P. (a)(4).