Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-3_14-cv-08051/USCOURTS-azd-3_14-cv-08051-1/pdf.json

Nature of Suit Code: 430
Nature of Suit: Banks and Banking
Cause of Action: 28:1441 Petition for Removal - Fair Credit Reporting Act

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Patrick Renner, 

Plaintiff, 

v. 

Bank of America, N.A., 

Defendant.

No. CV-14-08051-PCT-JAT

ORDER 

Previously in this case, Defendant moved to dismiss Plaintiff’s first amended 

complaint. In response to that motion to dismiss, Plaintiff moved to file a second 

amended complaint. Defendant opposed the motion to amend on futility grounds. The 

Court’s analysis of Plaintiff’s motion to amend, including Defendant’s futility argument, 

is repeated below: 

III. MOTION TO AMEND WITH LEAVE OF COURT 

Plaintiff filed his Motion to Amend with the purpose of “correct[ing] 

deficiencies and add[ing] clarity” to his complaint. (Doc. 25 at 1). The 

Lodged SAC includes additional facts that the Court recounts below. 

 From July 1, 2011 until March 15, 2013, Defendant serviced 

Plaintiff’s mortgage, originally obtained from Countrywide Home Loans, 

Inc. in December 2006. (Doc. 26 at 1). In September 2012, Plaintiff became 

aware of alleged inaccuracies in his credit history when BBVA Compass 

Bank denied his application to refinance his mortgage due to “negative 

items” in Plaintiff’s credit history. (Id. at 2). In particular, Defendant 

reported that: (1) Plaintiff’s mortgage was “part of a Chapter 13 

bankruptcy”; (2) “the account was delinquent”; (3) “the account was 

closed”; and (4) the account had no payment history. (Id.). 

 Plaintiff filed complaints with multiple CRAs stating that the 

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reported information was inaccurate. (Id.). In October 2012, the CRAs 

notified Plaintiff that Defendant verified the information reported and 

determined it was correct. (Id.). Plaintiff wrote numerous letters to 

Defendant documenting why the information was allegedly inaccurate and 

incomplete. (Id.). Twice more Plaintiff filed complaints with the CRAs. (Id.

at 2–3). Both times the CRAs responded that Defendant had verified the 

information being reported as correct. (Id.). In September 2013, J.P. 

Morgan Chase Bank denied Plaintiff’s application to refinance his 

mortgage due to negative information in his credit history. (Id. at 3). 

 Plaintiff now seeks to amend the FAC pursuant to Fed. R. Civ. P. 

15(a)(2) by including the above-stated facts related to Plaintiff’s FCRA 

claim. (See Doc. 25). 

 A. Legal Standard 

 A party may amend a pleading once as a matter of course within 21 

days after serving it or within 21 days of service of, among others, a Rule 

12(b)(6) motion. Fed. R. Civ. P. 15(a)(1). In all other circumstances, a 

party must seek leave to amend from the court. Fed. R. Civ. P. 15(a)(2). 

“The court should freely give leave when justice so requires.” Id. 

Additionally, there is a “longstanding rule that ‘[l]eave to amend should be 

granted if it appears at all possible that the plaintiff can correct the defect.’ 

” Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (quoting Balistreri, 

901 F.2d at 701). In determining whether to grant a motion to amend, a 

court should consider five factors: “(1) bad faith; (2) undue delay; (3) 

prejudice to the opposing party; (4) futility of amendment; and (5) whether 

the plaintiff has previously amended his complaint.” Nunes v. Ashcroft, 375 

F.3d 805, 808 (9th Cir. 2004). “Significantly, ‘[t]he party opposing 

amendments bears the burden of showing prejudice,’ futility, or one of the 

other permissible reasons for denying a motion to amend.” Farina v. 

Compuware Corp., 256 F. Supp. 2d 1033, 1060 (D. Ariz. 2003) (quoting 

DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 187 (9th Cir. 1987)). 

Additionally, the Ninth Circuit Court of Appeals recognizes that the 

complaint of a pro se plaintiff may be dismissed “only where ‘it appears 

beyond doubt that the plaintiff can prove no set of facts in support of his 

claim which would entitle him to relief.’ ” Franklin v. Murphy, 745 F.2d 

1221, 1228 (9th Cir. 1984) (quoting Haines v. Kerner, 404 U.S. 519, 521 

(1972)); see also Weilburg v. Shapiro, 488 F.3d 1202, 1205 (9th Cir. 2007) 

(“Dismissal of a pro se complaint without leave to amend is proper only if 

it is absolutely clear that the deficiencies of the complaint could not be 

cured by amendment.”) (quoting Schucker v. Rockwood, 846 F.2d 1202, 

1203–04 (9th Cir. 1988)). 

B. Analysis 

 Here, Plaintiff has already amended the Complaint as a matter of 

right pursuant to Rule 15(a)(1) and seeks the Court’s leave to amend his 

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complaint pursuant to Rule 15(a)(2). (Doc. 25 at 1). Defendant argues that 

the Court should not grant Plaintiff’s Motion to Amend because of 

Plaintiff’s prior amendment (Doc. 23 at 5) and futility of amendment (Doc. 

27 at 1–2). 

 1. Prior Amendments 

Defendant first argues that the Court should deny Plaintiff’s Motion 

to Amend because “Plaintiff has already had one opportunity to amend his 

Complaint.” (Doc. 23 at 5). 

 The Court’s discretion to deny an amendment is “particularly broad” 

where a plaintiff has previously amended his complaint. Allen v. City of 

Beverly Hills, 911 F.2d 367, 373 (9th Cir. 1990). The presence of prior 

amendments may persuade a court to deny leave, even in absence of the 

four other factors “when the movant present[s] no new facts but only new 

theories and provide[s] no satisfactory explanation for his failure to fully 

develop his contentions originally.” Id. at 374. 

 The Lodged SAC provides nearly two pages of additional facts. (See 

Doc. 26 at 1–3). Moreover, the Lodged SAC provides no additional legal 

theories. (See id. at 1–5). Because Plaintiff’s overwhelming purpose in 

seeking leave of court to amend is to add clarity to his existing claim, the 

presence of a prior amendment does not weigh against granting Plaintiff’s 

Motion to Amend. 

 2. Futility 

Defendant next argues that the Court should deny Plaintiff’s Motion 

to Amend because the Lodged SAC is futile. (Doc. 27 at 1–2). 

 Futility alone is enough to deny a motion for leave to amend. Nunes, 

375 F.3d at 808. A proposed amendment is futile only if “no set of facts can 

be proved under the amendment to the pleadings that would constitute a 

valid and sufficient claim.” Miller v. Rykoff-Sexton, Inc., 845 F.2d 209, 214 

(9th Cir. 1988). Additionally, futility may be found where proposed 

amendments are “either duplicative of existing claims or patently frivolous, 

or both.” Bonin v. Calderon, 59 F.3d 815, 846 (9th Cir. 1995). The party 

opposing amendment bears the burden of proving futility. Rodriguez v. City 

of Phoenix, No. CV-11-01992-PHX-JAT, 2014 WL 1053602, at *3 (D. 

Ariz. Mar. 19, 2014). 

 Once a plaintiff alleges that a CRA sent notice of a plaintiff’s 

consumer dispute to the furnisher, the FCRA creates a private right of 

action, enabling consumer suits for willful (§ 1681(n)) and/or negligent (§ 

1681(o)) noncompliance with the duties enumerated in § 1681s-2(b). 

Gorman, 584 F.3d at 1154. “The purpose of § 1681s-2(b) is to require 

furnishers to investigate and verify that they are in fact reporting complete 

and accurate information to the CRAs after a consumer has objected to the 

information in his file.” Id. at 1164. As a result, after receiving a notice of a 

consumer dispute from a CRA, a furnisher must pursue a “reasonable” 

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investigation to determine whether the information is incomplete or 

inaccurate. Id. at 1157. 

 Defendant alleges that Plaintiff’s SAC is futile because: (1) Plaintiff 

“provide[s] nothing to suggest [Defendant] was negligent in its 

investigation—except for the fact that [Defendant] disagreed with 

[Plaintiff’s] dispute after conducting its own investigation”; (2) Plaintiff 

suggests that Defendant “investigated the dispute and determined it was not 

reporting inaccurate information”; and (3) Plaintiff “fails to allege how the 

information [provided by Defendant] is inaccurate.” (Doc. 27 at 3). 

 i. Plaintiff’s Failure to Allege a Negligent 

 Investigation 

Defendant’s first argument is that the Lodged SAC is futile because 

Plaintiff fails to provide support that Defendant conducted a negligent 

investigation. This argument misstates Plaintiff’s burden under the FCRA. 

To state a claim under the FCRA, Plaintiff must allege that Defendant 

negligently and/or willfully violated the duties enumerated in § 1681s-2(b). 

15 U.S.C. § 1681(n)-(o). Plaintiff alleges that he wrote “numerous letters” 

to Defendant both before and after he filed complaints with the CRAs. 

(Doc. 26 at 2–3). These letters contained “documented evidence that the 

[reported] information was inaccurate and incomplete.” (Id. at 2). Even 

after receiving this “documented evidence,” Defendant “continued to refuse 

to make corrections.” (Id.). Pursuant to the FCRA, Plaintiff alleges that 

Defendant willfully violated its duty to conduct a reasonable investigation, 

as enumerated in § 1681s-2(b), by ignoring evidence showing that the 

reported information was inaccurate and incomplete. As a result, Plaintiff’s 

failure to allege that Defendant’s conducted a negligent investigation does 

not make the claim futile. 

 ii. Plaintiff’s Suggestion that Defendant 

 Conducted an Investigation 

 Defendant’s second argument is that the Lodged SAC is futile 

because Plaintiff concedes that Defendant fulfilled its duties under the 

FCRA by suggesting that Defendant performed an investigation. (Doc. 27 

at 3). The FCRA requires furnishers “to conduct at least a reasonable, noncursory investigation.” Gorman, 584 F.3d at 1157. As a result, Defendant 

could conduct an unreasonable investigation and still be in violation of the 

FCRA. As a result, Plaintiff’s suggestion that Defendant conducted an 

investigation does not necessarily render the Lodged SAC futile. 

 iii. Plaintiff’s Failure to Allege How the 

 Reported Information was Inaccurate 

 Defendant’s third argument is that the Lodged SAC is futile because 

Plaintiff “fails to allege how the information [reported by Defendant] was 

inaccurate.” (Doc. 27 at 3). In the Lodged SAC, Plaintiff alleges that 

Defendant’s information was inaccurate because Defendant reported that 

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Plaintiff’s “mortgage was part of a Chapter 13 bankruptcy, [that the 

account] was delinquent, that the account was closed, and [Defendant was] 

not reporting any payment history.” (Doc. 26 at 2). These allegations 

provide Defendant with sufficient notice of the information Plaintiff claims 

to be inaccurate and incomplete. By specifying what reported information 

was allegedly inaccurate or incomplete, Plaintiff pleads a set of facts that 

constitutes a valid and sufficient claim under § 1681s-2(b). See Moulton v. 

AmeriCredit Fin. Servs., 2005 WL 1522237, *3 (N.D. Cal. June 28, 2005) 

(finding that a plaintiff pleaded sufficient facts to state a § 1681s-2(b) claim 

despite failing to allege with specificity how an identified inaccuracy was 

incorrect). As a result, the lack of specificity in how identified information 

was inaccurate does not necessarily render the Lodged SAC futile. 

 Accordingly, the Court finds that the Lodged SAC is not futile. 

Because Defendant argues no basis other than Plaintiff’s prior amendment 

and futility of amendment for denying Plaintiff’s Motion to Amend, 

Defendant has not met its burden. 

Doc. 35 at 4-9. In the conclusion of this Order, the Court ordered the Clerk of the Court 

to file the lodged second amended complaint (because it was not futile), and ordered the 

Defendant to answer. 

 Instead of answering, Defendant move to dismiss the second amended complaint, 

re-urging all of its futility arguments in terms of failure to state a claim under Federal 

Rule of Civil Procedure 12(b)(6). For the reasons detailed by the analysis above, the 

Court finds the second amended complaint states a claim. Accordingly, 

IT IS ORDERED that the motion to dismiss (Doc. 40) is denied. Defendant shall 

answer the second amended complaint within 10 days. 

 Dated this 26th day of August, 2014. 

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