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Uehara v. TD Bank, National Association

United States District Court, D. Nevada

March 26, 2018

RUSSELL K. UEHARA, Plaintiff,
v.
TD BANK, NATIONAL ASSOCIATION A/K/A TD BANK USA/ TARGET CREDIT; EQUIFAX INFORMATION SERVICES, LLC; EXPERIAN INFORMATION SOLUTIONS, INC.; SPECIALIZED LOAN SERVICING, LLC, Defendants.

          ORDER

          Gloria M. Navarro, Chief Judge

         Pending before the Court is the Motion to Dismiss, (ECF No. 23), filed by Defendant Specialized Loan Servicing (“Defendant”). Plaintiff Russel Uehara (“Plaintiff”) filed a Response, (ECF No. 26), and Defendant filed a Reply, (ECF No. 27). For the reasons set forth herein, Defendant's Motion to Dismiss is GRANTED.

         I. BACKGROUND

         The instant action arises from a dispute regarding the accuracy of information reported on Plaintiff's credit report. (Am. Compl. ¶ 3, ECF No. 4). On March 29, 2010, Plaintiff filed for Chapter 13 bankruptcy. (Id. ¶ 16). Subsequently, Plaintiff made all payments required under the finalized bankruptcy terms. (Id. ¶ 18). On July 28, 2015, the bankruptcy discharged any debt owed to applicable defendants. (Id. ¶ 20). Plaintiff alleges that following the discharge of his debts, creditors and credit reporting agencies reported inaccurate information on Plaintiff's credit report in violation of the Federal Credit Reporting Act (“FCRA”) and the Metro 2 industry reporting guidelines. (Id. ¶¶ 6, 25). Specifically, Plaintiff alleges that on October 26, 2015, Defendant inaccurately reported to Experian, a credit reporting agency, that Plaintiff owed a balloon payment of $38, 964 due on April 24, 2036. (Id. ¶ 59). Additionally, Plaintiff alleges that Defendant, a furnisher of consumer information under the FCRA, misleadingly reported that Plaintiff's account was “transferred to recovery.” (Id. ¶ 60, 71). On January 19, 2016, Plaintiff disputed Defendant's reports by notifying Experian in writing. (Id. ¶ 61). On February 1, 2016, Plaintiff received notice that Experian and Defendant were notified of the dispute. (Id. ¶ 65). The notice went on to verify that the account had been updated. (Id.). The updated report stated that Plaintiff had a “recent balance” of zero dollars “as of Dec. 2015.” (Id. ¶ 70). However, Plaintiff's Experian credit report reflected no changes to the disputed information. (Id. ¶ 69).

         Plaintiff alleges that (1) Defendant failed to conduct a reasonable investigation into the disputed information as required by the FCRA; (2) that Defendant willfully furnished false information in violation of the FCRA; and (3) Defendant failed to update the furnished information to reflect that Plaintiff's debt was discharged through bankruptcy. (Id. ¶¶ 67, 72, 77). Consequently, Plaintiff claims he “suffered actual damages, including without limitation credit denials, fear of credit denials, out-of-pocket expenses in challenging the Defendants' wrongful representations, damage to his creditworthiness, and emotional distress.” (Id. ¶ 78). Based on these allegations Plaintiff asserts a single cause of action for a violation of the FCRA under 15 U.S.C. § 1681. (Id. ¶¶ 96-99). In the instant Motion, Defendant seeks to dismiss Plaintiff's Amended Complaint with prejudice. (Mot. to Dismiss 9:5, ECF No. 23).

         II. LEGAL STANDARD

         Dismissal is appropriate under Rule 12(b)(6) where a pleader fails to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). A pleading must give fair notice of a legally cognizable claim and the grounds on which it rests, and although a court must take all factual allegations as true, legal conclusions couched as a factual allegations are insufficient. Twombly, 550 U.S. at 555. Accordingly, Rule 12(b)(6) requires “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id. “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, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. This standard “asks for more than a sheer possibility that a defendant has acted unlawfully.” Id.

         If the court grants a motion to dismiss for failure to state a claim, leave to amend should be granted unless it is clear that the deficiencies of the complaint cannot be cured by amendment. DeSoto v. Yellow Freight Sys. Inc., 957 F.2d 655, 658 (9th Cir. 1992). Pursuant to Rule 15(a), the court should “freely” give leave to amend “when justice so requires, ” and in the absence of a reason such as “undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of the amendment, etc.” Foman v. Davis, 371 U.S. 178, 182 (1962).

         III. DISCUSSION

         In the instant Motion, Defendant argues that dismissal is proper because Plaintiff lacks Article III standing. (Mot. to Dismiss 8:11-14, ECF No. 23). Additionally, Defendant avers that Plaintiff's Amended Complaint “fails to allege sufficient plausible facts to state an FCRA claim.” (Id. 4:14). Conversely, Plaintiff asserts that he alleged an injury-in-fact sufficient for Article III standing and alleged a cognizable FCRA claim. (Resp. 2:21-25, ECF No. 26). The Court will evaluate each argument in turn.

         A. Article III Standing

         “The irreducible constitutional minimum of standing” is comprised of three elements: (1) The Plaintiff must have suffered an “injury-in-fact, ” which is a “concrete and particularized” invasion of a legally protected interest; (2) there must be a “causal connection” between the plaintiff's injury and the defendant's action; and (3) it must be “likely” that the plaintiff's injury will be “redressed by a favorable decision.” Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992) (quoting Simon v. Eastern Ky. Welfare Rights Organization, 426 U.S. 26, 38-43 (1976)). “The party invoking federal jurisdiction bears the burden of establishing these elements.” Id. at 561.

         In the instant motion, Defendant argues that under Supreme Court precedent, Plaintiff lacks Article III standing for failure to establish a “concrete injury.” (Mot. to Dismiss 7:25-27, 8:1-13). To bolster this assertion, Defendant primarily relies on the Supreme Court's ruling in Spokeo, Inc. v. Robins, 136 S.Ct. 1540 (2016). (Id.). Plaintiff rebukes Defendant's interpretation of the Supreme Court's holding and argues that he plead a sufficiently “concrete” injury under Spokeo. (Resp. 15:10-23). For the following reasons, the Court finds that Plaintiff pleads a “concrete” injury sufficient to satisfy Article III standing requirements.

         The Supreme Court's reasoning in Spokeo evaluated the “injury-in-fact” requirement pursuant to an alleged violation of the FCRA. Spokeo 136 S.Ct. at 1543. In Spokeo, the plaintiff alleged that the defendant incorrectly reported the plaintiff's marital status, age, employment status, education, and wealth level. Spokeo, 136 S.Ct. at 1546. The Supreme Court determined that a mere violation of an individual's statutory rights under the FCRA without valuation of the injury caused by the infraction is insufficient analysis into the concreteness of Plaintiff's injury. Id. at 1548. “[N]ot all inaccuracies cause harm or present any material risk of harm. An example that comes readily to mind is an incorrect zip code. It is difficult to imagine how the dissemination of an incorrect zip ...


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