Brooks v. Bank of Am., N.A.

Decision Date19 April 2021
Docket NumberCase No. 20-cv-01348-BAS-LL
CourtU.S. District Court — Southern District of California
PartiesWILLIAM NORMAN BROOKS, III, on behalf of himself and all others similarly situated, Plaintiff, v. BANK OF AMERICA, N.A., Defendant.


Defendant moves to dismiss two counts alleged in Plaintiff's First Amended Complaint ("FAC") for failing to state claims upon which relief can be granted. (Mot. to Dismiss FAC ("Motion" or "Mot."), ECF No. 16.) Plaintiff opposes, and Defendant replies. (ECF Nos. 17, 18.) The Court finds the Motion suitable for determination on the papers submitted and without oral argument. See Fed. R. Civ. P. 78(b); CivLR 7.1(d)(1). For the reasons stated below, the Court DENIES Defendant's Motion.

A. Factual Background

This action arises from Defendant's decision to suspend Plaintiff's access to funds from his Bank of America line of credit due to its erroneous belief that Plaintiff had filed for bankruptcy. (ECF No. 15.) Specifically, Plaintiff claims that on January 8, 2020, Defendant sent a form letter to Plaintiff suspending his access because it had received notification of a bankruptcy filing by or against Plaintiff. (FAC ¶ 19.) Five days later, during a phone call with Defendant, Plaintiff learned that Defendant "had matched him to a bankruptcy filed in Mobile, Alabama by a William E. Brooks," whose Social Security number contained the same last four digits as Plaintiff's. (FAC ¶ 22.)

Plaintiff states he has never filed for bankruptcy and has never lived in Alabama. (FAC ¶¶ 21, 23.) Further, he states that his middle name is "Norman," and "he consistently uses the generational suffix 'III[,]'" both of which are not present in the public record of the Alabama bankruptcy filing, which uses the filer's full middle name "Eugene." (FAC ¶¶ 23-24.) In addition, Plaintiff alleges that the public bankruptcy record at issue also does not list any Bank of America accounts. (FAC ¶ 25.)

Plaintiff alleges that he "disputed the accuracy of [Defendant's] association of the Alabama bankruptcy with him and his credit accounts," but Defendant "nevertheless reported to the consumer credit reporting agencies that Plaintiff had filed for bankruptcy" and that the bankruptcy action included his Bank of America line of credit. (FAC ¶¶ 26-27.) Plaintiff states he contacted the agencies to inform them that he had not filed for bankruptcy, and each agency contacted Defendant as required by law. (FAC ¶ 30.) However, Plaintiff claims Defendant thereafter "failed to conduct a reasonable reinvestigation of the disputed bankruptcy information." (FAC ¶ 31.)

Defendant also sent a letter to Plaintiff on January 27, 2020 stating that it had accurately reported the bankruptcy. (FAC ¶ 35.) Plaintiff states that he spoke to Defendant many times after receiving this letter to resolve the issue and Defendant represented it would correct the misreporting. (FAC ¶¶ 36-37.)

As a result of Defendant's purported conduct, Plaintiff claims his credit score "dropped substantially," he was denied financing for a personal loan, and he suffered emotional distress. (FAC ¶¶ 28, 38-39.)

B. The FAC and Defendant's Partial Motion to Dismiss

In his FAC, Plaintiff brings allegations on behalf of himself under the Fair Credit Reporting Act ("FCRA"), the California Consumer Credit Reporting Agencies Act("CCRAA"), and the California Unfair Competition Law ("UCL"). In Count I, Plaintiff alleges that Defendant's inaccurate reporting and disclosures constituted unlawful, unfair, and fraudulent business practices under the UCL. (FAC ¶¶ 50-56.) In Count II, Plaintiff claims that Defendant violated the CCRAA by furnishing the erroneous information that Plaintiff's line of credit was involved in a bankruptcy to credit reporting agencies, "despite having reason to know that the alleged bankruptcy was filed by a person other the consumer account holder." (FAC ¶ 60.)1 Plaintiff's third count, which Defendant does not seek to dismiss, requests remedies under the FCRA for Defendant's failure to correct the error. (FAC ¶ 65.)

Defendant argues that Count I and Count II should be dismissed because Plaintiff has failed to allege facts sufficient to state a violation of either the CCRAA or the UCL. As to the CCRAA claim, Defendant contends that the matching first and last names and last four digits of the Social Security number defeats Plaintiff's argument that Bank of America "knew or had reason to know" its attribution of the bankruptcy to Plaintiff and subsequent reporting was inaccurate. (Mem. of P. & A. in supp. of Mot. ("Mem. of P. & A.") at 4-5, ECF No. 16-1.) Relatedly, Defendant contends Plaintiff's unlawful practices claim under the UCL cannot be maintained without a predicate CCRAA claim, again arguing that Defendant "relied on ample criteria" to match the bankruptcy filer to Plaintiff and characterizing the resulting misidentification as "an extraordinary coincidence." (Id. at 6.) Defendant also states that because its bankruptcy monitoring procedures reasonably rely on common indicators and benchmarks, they outweigh any alleged harm to Plaintiff under the "unfair" prong of the UCL. (Id. at 7.) In opposition, Plaintiff maintains that Defendant's "failure to use all of the publicly available personal identifying information" available in the bankruptcy records was unreasonable under the CCRAA and suffices to state an unlawful and/or unfair practice under the UCL. (See Opp'n to Def.'s Mot. to Dismiss ("Opp'n") at 1, 3, 9-10, ECF No. 17.)


A motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure tests the legal sufficiency of the claims asserted in the complaint. Fed. R. Civ. P. 12(b)(6); Navarro v. Block, 250 F.3d 729, 731 (9th Cir. 2001). The court must accept all factual allegations pleaded in the complaint as true and must construe them and draw all reasonable inferences from them in favor of the nonmoving party. Cahill v. Liberty Mutual Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). To avoid a Rule 12(b)(6) dismissal, a complaint need not contain detailed factual allegations, rather, it must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (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." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556). "Where a complaint pleads facts that are 'merely consistent with' a defendant's liability, it stops short of the line between possibility and plausibility of 'entitlement to relief.'" Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 557).

"[A] plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555 (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986) (alteration in original)). A court need not accept "legal conclusions" as true. Iqbal, 556 U.S. at 678. Despite the deference the court must pay to the plaintiff's allegations, it is not proper for the court to assume that "the [plaintiff] can prove facts that [he or she] has not alleged or that defendant[] ha[s] violated the...laws in ways that have not been alleged." Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983).

A. CCRAA Claim

The provision of the CCRAA at issue is Cal. Civ. Code § 1785.25(a), which prohibits the furnishing of information "on a specific transaction or experience to anyconsumer credit reporting agency if the person knows or should know the information is incomplete or inaccurate." "The statutory term 'should have known' imparts a test of reasonableness." Holmes v. NCO Fin. Services, Inc., 538 F. App'x 765, 766 (9th Cir. 2013) (citing Shultz v. Dep't of Army, 886 F.2d 1157, 1160 (9th Cir. 1989)). "The critical question . . . is thus whether a reasonable [furnisher] . . . would have known" that the furnished information was incomplete or inaccurate. Id.

Here, Plaintiff alleges that publicly available information about the bankruptcy revealed that the filer was a different person than Plaintiff and, as such, Defendant's failure to review this information raises a colorable claim that it should have known Plaintiff was not the subject of the bankruptcy. Defendant argues that these factual allegations do not, as a matter of law, suffice to state a violation of the CCRAA. (Mot. at 3-4.)

The Court disagrees. Plaintiff's allegation that Defendant's failure to cross-check identities in bankruptcy using all available information states, at minimum, a claim that Defendant negligently violated the CCRAA. See Pastrano v. Ditech Fin., LLC, No. EDCV 18-00659-ABM (RWx), 2018 WL 3343606, at *5 (C.D. Cal. July 3, 2018) (finding sufficient to state a claim the allegation that defendant should have known plaintiff was not a joint obligor on a loan "because it had the relevant documents in its possession"); see also Cortez v. Trans Union, LLC, 617 F.3d 688, 723 (3d Cir. 2010) (finding violation of FCRA where TransUnion did not exercise sufficient care to match information in its records with information on federal list of "Specially Designated Nationals & Blocked Persons List")2; Williams v. First Advantage LNS Screening Sols, Inc., 238 F. Supp. 3d 1333, 1343-44 (N.D. Fla. 2017) (finding FCRA violation where defendant failed to implement procedures using all available personal identifying information, including middle names, "woefully insufficient" and warranting punitive damages) aff'd in relevant part, 947 F.3d 735, 745-46 (11th Cir. 2020). Accepting as true Plaintiff's allegation thatDefendant failed to properly consider all...

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