Betz v. Jefferson Capital Sys., LLC
Citation | 68 F.Supp.3d 130 |
Decision Date | 22 September 2014 |
Docket Number | Civil Action No. 14–0254 ESH |
Parties | Na'eem O. Betz, Plaintiff, v. Jefferson Capital Systems, LLC, Defendant. |
Court | U.S. District Court — District of Columbia |
Na'Eem O. Betz, Washington, DC, pro se.
Phillip C. Chang, McGuireWoods LLP, Washington, DC, Christopher L. Harlow, McGuireWoods LLP, Tysons Corner, VA, for Defendant.
On January 24, 2014, plaintiff Na'eem Betz, proceeding pro se, sued defendant Jefferson Capital Systems, LLC, alleging claims under the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681 et seq., and common-law invasion of privacy. (Compl., Jan. 24, 2014 [Dkt. No. 1] at 3–4.) Before the Court is defendant's motion to dismiss plaintiff's complaint for failure to state a claim. (Mot., May 28, 2014 [Dkt. No. 5].) For the following reasons, the Court will grant defendant's motion in part.
On November 11, 2012, defendant—who plaintiff concedes is a “debt collector” (Compl. at 2–4)—initiated and reported a collection trade line on plaintiff's consumer credit report file with the three major credit reporting bureaus: Equifax, Experian, and Transunion. (Id. at 2.) The collection trade line at the center of this case states that plaintiff is delinquent with respect to over $4000 of debt originally owed to Heritage Education and that defendant, having purchased this debt from Heritage Education, is now plaintiff's creditor.
Plaintiff never applied for credit from defendant and thus considers the collection trade line as “fraudulent.” (Compl. at 2, 4.) Plaintiff filed disputes regarding the debt with the credit bureaus, which concluded the debt that defendant reported on plaintiff's consumer credit report was valid. (Id. at 2.) From these allegations, plaintiff concludes that defendant either “willfully” or “negligently” violated the FCRA “by obtaining [his] consumer report without a permissible purpose as defined by” the statute (id. at 3–4), and also invaded his privacy. (Id. at 4.)1
“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. I q bal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). “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. (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955 ). The “facial plausibility” standard “asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955 ). “[A] complaint [does not] suffice if it tenders ‘naked assertions' devoid of ‘further factual enhancement.’ ” Id. (some alterations omitted) (quoting Twombly, 550 U.S. at 557, 127 S.Ct. 1955 ).
“ ‘A document filed pro se is to be liberally construed ... and a pro se complaint, however inartfully pleaded, must be held to less stringent standards than formal pleadings drafted by lawyers.’ ” Brown v. Dist. of Columbia, 514 F.3d 1279, 1283 (D.C.Cir.2008) (quoting Erickson v. Pardus, 551 U.S. 89, 94, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007) ). “Nevertheless, ‘even a pro se complainant must plead factual matter that permits the court to infer more than the mere possibility of misconduct.’ ” Ananiev v. Wells Fargo Bank, N.A., 968 F.Supp.2d 123, 130 (D.D.C.2013) (quoting Atherton v. Dist. of Columbia Office of Mayor, 567 F.3d 672, 681–82 (D.C.Cir.2009) ).
In Counts I and II of his complaint, plaintiff alleges that defendant violated the FCRA by willfully (Count I) or negligently (Count II) “obtaining [his] consumer report without a permissible purpose.” (Compl. at 3–4.) The FCRA imposes civil liability on any person who willfully or negligently obtains a consumer credit report for a purpose that is not authorized under the Act. 15 U.S.C. §§ 1681b(f), 1681n(a), 1681m(a). The showing of a permissible purpose, however, is a complete defense to a claim under section 1681b. See, e.g., Kertesz v. TD Auto Fin. LLC, 2014 WL 1238549, at * 3 (N.D.Ohio Mar. 25, 2014).
The FCRA, inter alia, ” ’ Huertas v. Galaxy Asset Mgmt., 641 F.3d 28, 34 (3d Cir.2011) (emphasis in original) (quoting 15 U.S.C. § 1681b(a)(3)(A) ). Thus, it is established that debt collection is a permissible purpose to obtain a consumer credit report under the FCRA. See id. ; Pintos v. Pac. Creditors Ass'n, 504 F.3d 792, 796 (9th Cir.2007), opinion withdrawn and superseded on other grounds, 565 F.3d 1106 (9th Cir.2009) ; Phillips v. Grendahl, 312 F.3d 357, 366 (8th Cir.2002), abrogated on other grounds, Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 127 S.Ct. 2201, 167 L.Ed.2d 1045 (2007) ; Stergiopoulos v. First Midwest Bancorp, Inc., 427 F.3d 1043, 1046–47 (7th Cir.2005) ; Bowling v. Scott Lowery Law Office, 2014 WL 3942280, at *3 (W.D.Ky. Aug. 12, 2014) ; Obarski v. Associated Recovery Sys., 2014 WL 2119739, at *2 ; Russell v. RJM Acquisitions, 2014 WL 1600419, at *3–4 (S.D.Cal. Apr. 17, 2014).
Plaintiff admits, in both his complaint and his opposition, that defendant is a “debt collector.” Plaintiff nonetheless alleges that defendant obtained his credit report “without a permissible purpose.” (Compl. at 3–4.) Plaintiff's conclusory allegations are mere “ ‘formulaic recitation[s] of the elements of [his] cause[s] of action,’ ” that, without more, fail to state claim. See Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (quoting Twombly, 550 U.S. at 555, 127 S.Ct. 1955 ); see also Obarski, 2014 WL 2119739 at *2 ; Braun v. Client Services Inc., 14 F.Supp.3d 391, 397–98, 2014 WL 1613006 at *6 (S.D.N.Y.2014) ; Betz v. Matte, 2013 WL 5603846, at *2 (E.D.N.Y. Oct. 10, 2013). Although plaintiff may subjectively believe that defendant obtained his credit report for some impermissible purpose, “he must support that belief with some factual allegations.”
Jacques v. Solomon & Solomon P.C., 886 F.Supp.2d 429, 435 (D.Del.2012) (citing Iqbal, 556 U.S. at 662, 129 S.Ct. 1937 ).
For instance, where—as here—defendant is a debt collector, plaintiff must allege “ ‘that defendant willfully [or negligently] obtained the plaintiff's credit report without having a purpose to review or collect a debt. ’ ” Jacques, 886 F.Supp.2d at 435 (emphasis added) (quoting Huertas v. U.S. Dep't. of Educ., 2009 WL 3165442, at *9 (D.N.J. Sept. 28, 2009) ).2 Plaintiff's complaint fails to allege facts supporting a reasonable inference that defendant obtained his credit report for any purpose other than to collect on a delinquent account.See Kermani v. Law Office of Joe Pezzuto, LLC, 993 F.Supp.2d 1187, 1190 (C.D.Cal.2014) (); Obarski, 2014 WL 2119739 at *2 (); Jacques, 886 F.Supp.2d at 435 (). Because defendant is a debt collector and debt collection is a permissible purpose for obtaining a consumer credit report under the FCRA, plaintiff's FCRA claims fail to state a claim under section 1681b.
Plaintiff's allegation that the debt defendant seeks to collect upon is not “valid” or, alternatively, that defendant has “fail[ed] to verify and or validate” the debt to plaintiff (Compl. at 2) does not save his claims. “It is well settled that a debt collector need not verify a debt prior to collection,” Fritz v. Capital Mgmt. Servs., LP, 2013 WL 4648370, at *6 (W.D.Pa. Aug. 29, 2013) (internal quotation marks omitted), or seeking a credit report. See Eaton v. Plaza Recovery, Inc., 2014 WL 29561, at * 3 (S.D.Tex. Jan. 3, 2014) (); see also Knox v. Weltman, Weinberg & Reis Co., L.P.A., 2014 WL 3899372, at *6 (N.D.Ind. Aug. 11, 2014) ; Robinson v. Greystone Alliance, LLC, 2011 WL 2601573, at *3 (D. Md. June 29, 2011). Indeed, while the FCRA prohibits debt collectors like defendant from “furnish[ing] any information relating to a consumer to any consumer reporting agency if [it] knows or has reasonable cause to believe that the information is inaccurate,” 15 U.S.C. § 1681s–2(a)(1)(A), the Act does not provide a private cause of action to enforce this provision. See Ihebereme v. Capital One, N.A., 933 F.Supp.2d 86, 111 (D.D.C.2013) ; see also Seamans v. Temple Univ., 744 F.3d 853, 864 (3d Cir.2014). Instead, enforcement of Section 1681–2(a)(1)(A) is left to designated federal and state agencies and officials. See Seamans, 744 F.3d at 864 ; Mazza v. Verizon Washington DC, Inc., 852 F.Supp.2d 28, 34 (D.D.C.2012).
Although plaintiff's complaint fails to state a claim under 15 U.S.C. § 1681b, the Court notes that the complaint can arguably be read to state a claim against defendant under 15 U.S.C. § 1681s–2(b). Section 1681s–2(b) requires a furnisher of information—like defendant—to conduct a reasonable investigation into the accuracy of disputed information on consumer credit reports. See Ihebereme, 933 F.Supp.2d at 111 ; Haynes v. Navy Fed. Credit Union, 825 F.Supp.2d 285,...
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