United States District Court, D. Nevada
IN RE OCWEN LOAN SERVICING LLC LITIGATION This Document Relates to: ALL ACTIONS
Cases: 3:16-cv-00483-MMD-WGC 3:16-cv-00498-MMD-WGC
MIRANDA M. DU UNITED STATES DISTRICT JUDGE
four consolidated cases before the Court assert similar
claims under the Fair Credit Reporting Act
(“FCRA”) to challenge a loan servicer's
alleged practice of obtaining consumer credit information
without authorization after the loans had been discharged in
bankruptcy. (ECF No. 47.) In each case, the loan
servicer, Defendant Ocwen Loan Servicing, LLC's
(“Ocwen”), has moved to dismiss
(“Motions”) based on lack of subject matter
jurisdiction (Marino, ECF No. 23; Horton,
ECF No. 18; Farrin, ECF No. 25; Hardin, ECF
No. 27.) The Motions all raise the same issue - whether
impermissibly obtaining a consumer's credit information
under the FCRA results in a concrete harm for purposes of
Article III standing. Plaintiffs each filed responses to the
Motions (Marino, ECF No. 25; Horton, ECF
No. 26; Farrin, ECF No. 37; Hardin, ECF No.
31) and Ocwen filed replies in three of the cases
(Marino, ECF No. 32; Horton, ECF No. 28;
Hardin, ECF No. 34).
Court issued a minute order on February 10, 2017,
(Marino, ECF No. 61) requesting supplemental
briefing in light of a recently decided Ninth Circuit
opinion, Syed v. M-I, LLC, 846 F.3d 1024(9th Cir.
2017), that addressed procedural standing and statutory
damages under the FCRA. The Court has reviewed the
parties' supplemental briefs (Marino, ECF Nos.
addition, the parties have filed several motions to
supplement. (Marino, ECF Nos. 54, 60, 63.) The Court
has reviewed these motions as well as responses thereto
(Marino, ECF Nos. 56, 64, 67). All three motions are
granted pursuant to Local Rule LR 7-2(g).
reasons discussed below, the Motion in Horton is
granted only with regards to the claim for negligent
noncompliance with the FCRA. The Court will give Horton leave
to amend to allege facts demonstrating a concrete injury
and/or actual damages. The Motions in Marino,
Hardin, and Farrin are denied.
each bring a class action lawsuit against Ocwen based on
almost identical factual allegations: each Plaintiff
discharged in bankruptcy a prior loan that had been serviced
by Ocwen, yet Ocwen continued, and possibly still continues,
to obtain Plaintiffs' credit information from credit
reporting agencies (“CRAs”) without a legally
permissible purpose and without Plaintiffs' authorization
as required under the FCRA. See 15 U.S.C §
1681b. All Plaintiffs allege that Ocwen obtained their credit
reports under false pretenses or knowingly without a
permissible purpose, each willful violations under the
statute. See §§ 1681n & 1681q.
alleges that he discharged a mortgage loan that had been
serviced by Defendant in Chapter 7 bankruptcy.
(Marino, ECF No. 1 at 3.) After his relationship
with Defendant ended, Marino did not seek credit of any type
from Defendant, Defendant knew of the discharge of the loan,
and Defendant obtained information from a CRA twice about
Marino without his authorization. (Id.) Farrin's
allegations are practically the same: Defendant knowingly
accessed Farrin's credit report after his loan had been
discharged and did so without Farrin's authorization or a
permissible reason as required under the FCRA.
(Farrin, ECF No. 1 at 3.)
Horton asserts that his relationship with Ocwen was
terminated after his mortgage loan was discharged in
bankruptcy. Horton also includes allegations that Ocwen makes
“batch” pulls of credit reports on a quarterly
basis for “account review” purposes, regardless
of whether the consumer still maintains a relationship with
them. (Horton, ECF No. 13 at 4, 5.) Unique to
Horton's complaint is a claim for negligent noncompliance
with the FCRA.
complaint in Hardin presents similar but
distinguishable factual circumstances. While they similarly
discharged a loan to secure a mortgage that Defendant had
serviced, the Hardins also allege that Defendant harassed
them, invaded their privacy, falsely reported their credit
status, and violated their consumer protection rights.
(Hardin, ECF No. 2 at 2.) Defendant, however, is
moving only to dismiss Count I of their complaint -willful
violation of the FCRA - which relates to the alleged
impermissible credit pulls conducted after discharge of the
loan and after termination of the Hardins' relationship
with Ocwen. (Hardin, ECF No. 27-1 at 1.)
Motions assert that the Court lacks subject matter
jurisdiction because a legally impermissible pull of an
individual's credit report does not give rise to a
concrete injury or actual damages that would give rise to
Article III standing.
12(b)(1) of the Federal Rules of Civil Procedure allows
defendants to seek dismissal of a claim or action for a lack
of subject matter jurisdiction. Dismissal under Rule 12(b)(1)
is appropriate if the complaint, considered in its entirety,
fails to allege facts on its face that are sufficient to
establish subject matter jurisdiction. In re Dynamic
Random Access Memory (DRAM) Antitrust Litigation, 546
F.3d 981, 984-85 (9th Cir. 2008). Because Plaintiffs are
invoking the court's jurisdiction, they bear the burden
of proving that the case is properly in federal court.
See In re Ford Motor Co./Citibank (South Dakota),
N.A.,264 F.3d 952, 957 (9th Cir. 2001) (citing
McNutt v. General Motors Acceptance Corp., 298 U.S.