Madden v. Experian Info. Solutions, Inc.
| Decision Date | 23 September 2014 |
| Docket Number | CIVIL ACTION NO. 5:12-CV-00162 |
| Court | U.S. District Court — Western District of North Carolina |
| Parties | DIANA L. MADDEN, Plaintiff, v. EXPERIAN INFORMATION SOLUTIONS, INC., EQUIFAX INFORMATION SERVICES, LLC, COUNTRYWIDE HOME LOANS, INC., REAL TIME RESOLUTIONS, INC., & GMAC MORTGAGE, LLC. Defendants. |
Pro se Plaintiff Diana Madden ("Madden") instituted the instant action against Experian Information Solutions, Inc. ("Experian"), Equifax Information Services, LCC ("Equifax"), Countrywide Home Loan, Inc. (n/k/a BAC Home Loans Servicing, LP) ("Countrywide"); Real Time Resolutions, Inc. ("Real Time"), and GMAC Mortgage, LLC ("GMAC").
Madden has alleged violations of the Fair Credit Reporting Act ("FCRA") against Experian and Equifax. (Doc. 1, at ¶ 56). Madden alleges that Countrywide, Real Time, and GMAC Mortgage, LLC have violated the North Carolina Debt Collection Act ("NCDCA"). (Doc. 1, ¶ 66).
Before the Court is GMAC's Motion to Dismiss (Doc. 10), Real Time's Motion to Dismiss (Doc. 31), and Countrywide's Motion for Judgment on the Pleadings (Doc. 45). GMAC, Real Time, and Countrywide all claim that Madden's NCDCA claims are preempted by the FCRA. Plaintiff has responded to all motions. (Docs. 33, 35, 47). GMAC and Countrywide filed replies. (Docs. 34, 50).
Madden's allegations involving GMAC, Real Time, and Countrywide involve data furnished about her to Experian and Equifax. (Doc. 1, at ¶¶ 28-31, 33-34, 41, 43, 46, 50-51, 69). Madden claims she disputed the debts with GMAC, Real Time, and Countrywide and that their responses conflicted with information they had furnished to Experian and Equifax. (Doc. 1, at ¶¶ 30-31). Madden claims that GMAC, Real Time, and Countrywide repeatedly furnished inaccurate information to Experian and Equifax. (Doc. 1, passim). However, Madden also claims that "Experian permitted Real Time to pull Plaintiff's consumer report without a permissible purpose" several times. (Doc. 44, at ¶ 44).
A court applies the same standards as set forth in the case law surrounding a motion to dismiss under 12(b)(6) when reviewing a Rule 12(c) motion for judgment on the pleadings. Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999).
Under a motion to dismiss under 12(b)(6), the court must accept as true all factual allegations in the pleading, Erickson v. Pardus, 551 U.S. 89, 94 (2007) (per curiam), and all reasonable inferences must be drawn in the non-movants favor, Ibarra v. United States, 120 F.3d 472, 474 (4th Cir. 1997). This requirement applies only to facts, not legal conclusions, however. Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009).
Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Although the complaint need only "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests," this obligation "requires more than labels and conclusions, and a formulaic recitation ofthe elements of a cause of action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citations omitted).
Rule 12(b)(6) protects against meritless litigation by requiring sufficient factual allegations "to raise a right to relief above the speculative level" so as to "nudge[ ] the[ ] claims across the line from conceivable to plausible." Twombly, 500 U.S. at 555, 570; see Iqbal, 556 U.S. at 662. Under Iqbal, the court performs a two-step analysis. First, it separates factual allegations from allegations not entitled to the assumption of truth (i.e., conclusory allegations, bare assertions amounting to nothing more than a "formulaic recitation of the elements"). Second, it determines whether the factual allegations, which are accepted as true, "plausibly suggest an entitlement to relief." 556 U.S. at 681.
"A document filed pro se is 'to be liberally construed' . . . [and] 'must be held to less stringent standards than formal pleadings drafted by lawyers.'" Erickson, 551 U.S. at 94 (quoting Estelle v. Gamble, 429 U.S. 97, 106 (1976)). However, Erickson does not "undermine Twombly's requirement that a pleading contain 'more than labels and conclusions.'" Giarratano v. Johnson, 521 F.3d 298, 304 n.5 (4th Cir. 2008) (quoting Twombly, 550 U.S. at 555)).
Only "in the relatively rare circumstances where facts sufficient to rule on an affirmative defense are alleged in the complaint" may a court grant a motion to dismiss based on an affirmative defense. Goodman v. Praxair, Inc., 494 F.3d 458, 464 (4th Cir. 2007). However, it is appropriate to dismiss when "all facts necessary to the affirmative defense 'clearly appear on the face of the complaint.'" Id. (emphasis and alteration omitted) (quoting Richmond, Fredericksburg & Potomac R.R. v. Forst, 4 F.3d 244, 250 (4th Cir.1993)).
The parties dispute which preemption provision of the FCRA governs. GMAC, Real Time, and Countrywide argue that 15 U.S.C. § 1681t(b)(1)(F) governs Madden's claims.1 Madden argues that her claims are excepted from preemption under 15 U.S.C. § 1681h(e).
"The FCRA is a comprehensive statutory scheme designed to regulate the consumer reporting industry." Ross, 625 F.3d at 812 (citing 15 U.S.C. § 1681(a)). "CRAs provide a critical economic service by collecting and transmitting consumer credit information." Id. However, CRA's also make mistakes by reporting inaccurate information. Id. Congress enacted the FCRA to respond, in part, to this issue. Id. "The FCRA 'has been drawn with extreme care, reflecting the tug of the competing interests,' and courts must respect the balance struck by Congress when interpreting its provisions.'" Id. (quoting Nelson v. Chase Manhattan Mortg. Corp., 282 F.3d 1057, 1060 (9th Cir. 2002)).
Originally, the FCRA "preempted state laws only 'to the extent that those laws are inconsistent with any provision of the [FCRA]." Id. (quoting 15 U.S.C. § 1681t(a)). However, as originally enacted, the FCRA contained § 1681h(e), which provided that:
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 reporting 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, except as to false information furnished with malice or willful intent to injure such consumer.
15 U.S.C.A. § 1681h(e) (1976).
However, Congress amended the FCRA in 1996, adding 15 U.S.C. § 1681t(b) and amending § 1681(e). Ross, 625 F.3d at 813; Barnhill v. Bank of America, N.A., 378 F.Supp.2d 696, 703 fn.2 (D.S.C. 2005).
15 U.S.C. § 1681t(b)(1)(F) provides that "No requirement or prohibition may be imposed under the laws of any State (1) with respect to any subject matter regulated under . . . section 1681s-2 of this title, relating to the responsibilities of persons who furnish information to consumer reporting agencies."
Section 1682s-2 details the responsibilities of furnishers of information to consumer reporting agencies ("CRAs"). Id. at 813. Section 1681s-2(a)(1) provides that "[a] person shall not furnish any information relating to a consumer to any [CRA] if the person knows or has reasonable cause to believe the information is inaccurate." Section 1681s-2(a)(1)(B) mandates that a furnisher not supply information regarding a consumer to a CRA if the consumer notifies the furnisher that the information is inaccurate and the information is actually inaccurate. Section 1681s-2(b) details the duties of furnishers "[a]fter receiving notice . . . of a dispute with regard to the completeness or accuracy of any information provided by a person to a" CRA. "These duties include conducting an investigation into the dispute and correcting any errors discovered with the CRAs." Ross, 625 F.3d at 813.
The Fourth Circuit addressed the issue of preemption of state-law claims in Ross v. FDIC, 625 F.3d 808 (4th Cir. 2010). The Court in Ross analyzed both preemption statutes at issue in the instant case. The Court proposed that a two-step inquiry is necessary to determinewhether § 1681h(e) excepts preemption pursuant to the last clause. First, the Court must "ask whether the claim falls within the scope of § 1681h(e)." Id. at 814. Second, the Court must determine whether the complaint adequately alleges malice or willful intent to injure. Id.
First, § 1681(n) and 1681(o) are inapplicable to the instant case because Madden is seeking to recover under the NCDCA.
Otherwise, to be within the scope of § 1681(b) Madden's claims must be "based on information disclosed pursuant to section 1681g, 1681h, or 1681m . . . or based on information disclosed to or for a consumer against whom the user has taken adverse action, based in whole or in part on the report." Ross, 625 F.3d at 814. The Court will...
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