Bruce v. Rev Fed. Credit Union ("REVFCU")
| Decision Date | 12 September 2022 |
| Docket Number | Civil Action 2:22-cv-01292-BHH-MGB |
| Parties | Nelson L. Bruce, Plaintiff, v. REV Federal Credit Union (“REVFCU”); Trans Union LLC TransUnion; and Unknown Does 1-100, Defendants. |
| Court | U.S. District Court — District of South Carolina |
Nelson L. Bruce, proceeding pro se and in forma pauperis, brings this civil action asserting claims pursuant to the Fair Credit Reporting Act (“FCRA”) and Fair Debt Collection Practices Act (“FDCPA”), among others.0F[1] (Dkt. Nos. 1; 30.) On June 30, 2022, Defendant REV Federal Credit Union (“REV”) filed a Partial Motion to Dismiss seeking to dismiss Plaintiff's Third, Fourth, Fifth Sixth, Seventh, and Ninth Causes of Action.1F[2] (Dkt. No. 30.) For the reasons discussed below, the undersigned recommends REV's Partial Motion to Dismiss be granted in part and denied in part. Specifically, Plaintiff's Third and Fourth Causes of Action should remain pending only as to the FCRA related claims, Plaintiff's Sixth Cause of Action should remain pending, and Plaintiff's Seventh and Ninth Causes of Action should be dismissed in their entirety.
While difficult to parse, the Amended Complaint contains the following allegations. REV issued an account to Plaintiff which was “routinely reported on Plaintiff's consumer credit report.”
(Dkt. No. 29 at 5.) On an unspecified date, Defendant Trans Union, LLC (“TransUnion”) issued a credit report “to third parties concerning the Plaintiff that included inaccurate and materially misleading information relating to an alleged REV[] account and Bankruptcy.” (Id.) Plaintiff alleges that the information provided by REV to TransUnion is “inaccurate and misleading because the Plaintiff disputes the balance owed on this alleged debt and disputes the bankruptcy being reported.” (Id.)
According to Plaintiff, on or about April 20, 2021, he notified both REV and TransUnion that he disputed the accuracy of the information at issue and requested an investigation. (Id. at 6.) Plaintiff alleges he again disputed his alleged debt with REV on or about April 4, 2022. (Id. at 8.) Plaintiff alleges that his account was written off by REV as a loss, and REV “has already been paid by receiving a payment from the IRS in the form of tax credits.” (Id.) According to Plaintiff, REV was “supposed to credit the account to zero out the account [and] therefore they violated the FCRA by falsely and inaccurately reporting this unverified account balance.” (Id.) Plaintiff alleges that as a result of Defendants' actions, he has suffered, inter alia, “a diminished credit score, loss of credit, loss of ability to purchase and benefit from credit, a chilling effect on credit applications, and the mental and emotional distress and pain.” (Id. at 11.)
The Amended Complaint states that it is brought under the FCRA, the FDCPA, the Federal Trade Commission Act (“FTC Act”), the Uniform Commercial Code (“UCC”), the South Carolina Unfair Trade Practices Act (“SCUTPA”), and the South Carolina Consumer Protection Code (“SCCPC”). (Dkt. No. 29.) Plaintiff seeks injunctive relief, declaratory judgment, and monetary damages including punitive, compensatory, and statutory damages. (Id. at 25.)
On June 30, 2022, REV filed a Partial Motion to Dismiss, seeking to dismiss Plaintiff's Third, Fourth, Fifth, Sixth, Seventh, and Ninth Causes of Action. (Dkt. No. 30.) On August 3, 2022, Plaintiff filed a response in opposition, which he amended on August 8, 2022. (Dkt. Nos. 36; 37.) REV filed a reply on August 15, 2022. (Dkt. No. 38.) The Motion has been fully briefed and is ripe for review.
REV seeks dismissal of this action under Rule 12(b)(6) of the Federal Rules of Civil Procedure. On a motion to dismiss pursuant to Rule 12(b)(6), a “complaint must be dismissed if it does not allege ‘enough facts to state a claim to relief that is plausible on its face.'” Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “In reviewing a motion to dismiss an action pursuant to Rule 12(b)(6) . . . [a court] must determine whether it is plausible that the factual allegations in the complaint are ‘enough to raise a right to relief above the speculative level.'” Andrew v. Clark, 561 F.3d 261, 266 (4th Cir. 2009) (quoting Twombly, 550 U.S. at 555). “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. 555 (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)). “In considering a motion to dismiss, [the court] accept[s] the complainant's well-pleaded allegations as true and view[s] the complaint in the light most favorable to the non-moving party.” Stansbury v. McDonald's Corp., 36 Fed.Appx. 98, 98-99 (4th Cir. 2002) (citing Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993)).
Because Plaintiff is representing himself, these standards must be applied while liberally construing his filings in this case. See Erickson v. Pardus, 551 U.S. 89, 94 (2007).
Plaintiff brings several claims against REV either partially or entirely under the SCCPC; specifically, Plaintiff's Third Cause of Action is for “willful violation of the FCRA and SCCPC”; his Fourth Cause of Action is for “negligent violation of the FCRA and SCCPC”; and his Seventh Cause of Action is for “knowing, willful and negligent violations of the SCCPC § 37-20-170 et. seq. and 37-20-200 et. seq.'” (Dkt. No. 29 at 16-19, 21-23.) Additionally, Plaintiff's Sixth Cause of Action is a defamation claim under South Carolina common law. (Id. at 20-21.) In its Motion, REV argues, inter alia, the FCRA preempts Plaintiff's defamation claim and his claims brought pursuant to the SCCPC. (Dkt. No. 30-2 at 2-4.) In response, Plaintiff argues that because he has claimed that “REV acted with malice, ill will, [and] willful intent to injure the Plaintiff,” his claims are exempted from preemption under 15 U.S.C. § 1681h(e). (Dkt. No. 37 at 2.)
The FCRA contains two preemption provisions applicable to the duties of information furnishers enumerated in 15 U.S.C. § 1681s-2. See 15 U.S.C. §§ 1681t(b), 1681h(e). Section 1681t(b) provides the following:
No requirement or prohibition may be imposed under the laws of any State (1) with respect to any subject matter regulated under . . . (F) section 1681s-2 of this title, relating to the responsibilities of persons who furnish information to consumer reporting agencies ....
15 U.S.C. § 1681t(b)(1)(F). Section 1681h(e), on the other hand, states as follows:
Except as provided in sections 1681n and 1681o of this title, no consumer may bring any action or proceeding in the nature of defamation, invasion of privacy, or negligence with respect to the reporting of information against any consumer reportin g agency, any user of information, or any person who furnishes information to a consumer reporting agency, based on information disclosed pursuant to section 1681g, 1681h, or 1681m of this title, or based on information disclosed by a user of a consumer report to or for a consumer against whom the user has taken adverse action, based in whole or in part on the report except as to false information furnished with malice or willful intent to injure such consumer.
15 U.S.C. § 1681h(e). “The Fourth Circuit has not directly ruled on how the FCRA's preemption provisions should be read together, but district courts in our circuit have generally agreed on the ‘statutory' approach rather than the ‘total preemption' or ‘temporal' approaches.” Potter v. FIA Card Servs., N.A., No. 2:12-CV-1722-RMG, 2012 WL 13005806, at *2 (D.S.C. Sept. 28, 2012) (citing Barnhill v. Bank of Am., N.A., 378 F.Supp.2d 696 (D.S.C. 2005); see Ross v. F.D.I.C., 625 F.3d 808, 814 n.* (4th Cir. 2010) (declining to rule on how the provisions should interact and noting variety of approaches). The statutory approach “interprets § 1681t to preempt only state statutory laws and have no effect on state common law tort causes of action.” Muntean v. Discover Fin. Servs., No. 6:13-CV-1151-HMH, 2013 WL 2636003, at *3 (D.S.C. June 12, 2013).
In light of the foregoing, Plaintiff's reliance on allegations of malice do not exempt his SCCPC related claims from preemption. Rather, such allegations potentially aid his defamation claim under South Carolina common law. More specifically, Plaintiff's Third, Fourth, and Seventh causes of action are based on his allegations that REV inaccurately reported on his credit and failed to investigate an inaccuracy on his credit report. These allegations are directly regulated by specific provisions of the FCRA, and the FCRA therefore preempts these claims. See, e.g., Bruce v. Bank of Am., N.A., No. 2:19-CV-03456-BHH-KDW, 2020 WL 7249876, at *4 (D.S.C. Oct. 22, 2020) (), adopted by, 2020 WL 6737647 (D.S.C. Nov. 17, 2020), appeal dismissed, 841 Fed.Appx. 578 (4th Cir. 2021); Muntean, 2013 WL 2636003, at *4 .
However because Plaintiff's defamation claim is a claim under South Carolina common law, it implicates the preemption...
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