Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_04-cv-02485/USCOURTS-cand-5_04-cv-02485-3/pdf.json

Nature of Suit Code: 371
Nature of Suit: Truth in Lending
Cause of Action: 15:1681 Fair Credit Reporting Act

---

United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

Sheryl Moulton,

Plaintiff,

 v.

Americredit Financial Services, Inc. et al.,

Defendants. /

NO. C 04-02485 JW 

ORDER GRANTING IN PART

PLAINTIFF'S MOTION TO AMEND

AND SUPPLEMENT COMPLAINT AND

TO MODIFY THE SCHEDULING

ORDER 

I. INTRODUCTION

Plaintiff Sheryl Moulton (“Plaintiff”) filed a complaint against Defendants AmeriCredit

Financial Services, Inc., Trans Union, LLC, Equifax Information Services, LLC, and Citibank

(collectively “Defendants”), alleging violations of the Fair Credit Reporting Act, 15 U.S.C. § 1681

et seq. (“FCRA”). Presently before the Court is Plaintiff’s Motion to Amend/Correct Amended

Complaint and for Extension of Discovery Deadline. Pursuant to Civil Local Rule 7-1(b), the Court

took these motions under submission based on the papers filed to date. For the reasons set forth

below, the Court GRANTS IN PART Plaintiff’s Motion.

II. BACKGROUND

On June 23, 2004, Plaintiff filed a complaint alleging that Defendants violated the Fair

Credit Reporting Act, 15 U.S.C. § 1681 et seq. The complaint alleges the following: Plaintiff sought

to purchase a vehicle with financing through AmeriCredit. She believes that her account with

AmeriCredit was closed with her final payment on April 2, 2003. However, in February 2004, she

Case 5:04-cv-02485-JW Document 157 Filed 02/07/06 Page 1 of 7
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 2

discovered that her AmeriCredit account was marked as delinquent on her credit reports with

Experian, TransAmerica and Equifax (“CRAs”). On February 16, 2004 and March 2, 2004, Plaintiff

wrote to the CRAs, notifying them of the mistake. The CRAs then reportedly notified AmeriCredit

of Plaintiff’s dispute. Thereafter, Plaintiff believes that AmeriCredit failed to review the

information provided by the CRAs and failed to conduct a reasonable investigation. Plaintiff

contends that even following an investigation, AmeriCredit continued to report inaccurate

information about the account to the CRAs. 

Plaintiff first made an Amended and Supplemental Complaint in April 2005, inserting

additional allegations and adding Defendant Citibank. Since filing the First Amended and

Supplemental Complaint (“FAC”), Plaintiff believes that Defendants have continued to violate the

Fair Credit Reporting Act by continuing to misreport her accounts. Since the filing of the FAC, she

claims to have corresponded five times with the CRAs to dispute an error that resurfaced on her

AmeriCredit account. She believes that the CRAs have repeated their previous mistakes. Plaintiff

contends two years of damages resulting from denial of credit, lost real estate appreciation,

emotional upset, humiliation, and lost time.

Plaintiff seeks to amend her complaint by removing Experian as a Defendant, and by

accounting for additional damages incurred since the First Amended and Supplemental Complaint. 

Plaintiff also requests a modification of the current scheduling order. 

III. STANDARDS

A. Motion to File an Amended and Supplemental Complaint 

Federal Rule of Civil Procedure 15 addresses both amended pleadings and supplemental

pleadings. The purpose of Rule 15 is to "facilitate decision on the merits, rather than on the

pleadings or technicalities." Nunes v. Ashcroft, 375 F.3d 805, 808 (9th Cir. 2003) (citations

omitted). Rule 15(a) provides that after a responsive pleading to a complaint has been served, "a

party may amend the party's pleading only by leave of court or by written consent of the adverse

party; and leave shall be freely given when justice so requires." Fed. R. Civ. P. 15(a). Rule 15(d)

Case 5:04-cv-02485-JW Document 157 Filed 02/07/06 Page 2 of 7
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 3

provides that "[u]pon motion of a party the court may, upon reasonable notice and upon such terms

as are just, permit the party to serve a supplemental pleading setting forth transactions or

occurrences or events which have happened since the date of the pleading sought to be

supplemented." Fed. R. Civ. P. 15(d). 

B. Motion to Modify the Scheduling Order

Rule 16(b) addresses pretrial conferences, scheduling and case management. This rule

provides, in relevant part, that:

The district judge. . .shall, . . . after consulting with the attorneys for the parties and any

unrepresented parties by a scheduling conference, . . . enter a scheduling order that

limits the time

(1) to join other parties and to amend the pleadings;

(2) to file motions; and

(3) to complete discovery.

. . . The order shall issue as soon as practicable but in any event. . .no more than 120 days

after the filing of the complaint. A schedule shall not be modified except upon a

showing of good cause and by leave of the district judge. . .

 The good cause standard in Rule 16(b) "primarily considers the diligence of the party seeking the

amendment." Johnson v. Mammoth Recreations Inc., 975 F.2d 604, 609 (9th Cir. 1992).

IV. DISCUSSION

A. Motion to Amend and Supplement Complaint

Plaintiff argues that the Court should allow Plaintiff to amend and to supplement the

complaint because of additional violations of the FCRA arising since the filing of the First Amended

and Supplemental Complaint. (Mot. to Amend at 3:24-26.) Plaintiff also argues that the new

allegations are substantially similar to the allegations in the current complaint, and that these new

alleged violations could not have been anticipated. (Mot. to Amend at 4:1-9.) Defendants argue that

Plaintiff's Motion should be denied because Plaintiff acted with undue delay, that an Amendment

would be futile, and that Defendants would be prejudiced.

1. Amending the Complaint

In addressing the propriety of a motion for leave to amend under Rule 15(a), the Court

Case 5:04-cv-02485-JW Document 157 Filed 02/07/06 Page 3 of 7
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 4

weighs the following factors: bad faith, undue delay, prejudice to the opposing party, and futility of

amendment. Foman v. Davis, 371 U.S. 178, 182 (1962). In doing so, the Court bears in mind the

Ninth Circuit's instruction that these factors are to be applied with "extreme liberality." See

Morongo Band of Mission Indians v. Rose, 893 F.2d 1074, 1079 (9th Cir. 1990). This Court finds

that the factors enumerated in Foman weigh in Plaintiff’s favor. First, there does not appear to be

any evidence of bad faith on the part of Plaintiffs. Second, Plaintiff has not unnecessarily delayed

this action in filing this Amendment. The most recent alleged violation of the FRCA occurred in

late December 2005. Plaintiff promptly motioned to file a Second Amended Complaint only a few

weeks later. Third, as a rule, substantial prejudice is the most important factor when determining

whether to grant leave to amend. See Morongo, 893 F.2d at 1079. In this case, Defendants will not

experience substantial prejudice because there was minimal delay between the offenses and the

motion to file. Furthermore, this court intends to grant an extension of the discovery deadline to

address the parties' discovery concerns. Fourth, the Court has not reached the merits of Plaintiffs'

new claim at this time. Presently, the Court does not find the amendment sufficiently futile to bar

Plaintiff's Motion. Accordingly, this Court grants Plaintiff’s request to amend the Complaint.

2. Plaintiff 's Motion to Supplement the Complaint

Plaintiff seeks to supplement her complaint with allegations that Defendants continue to

violate the Fair Credit Reporting Act by failing to take appropriate action following receipt of five

dispute letters Plaintiff sent in the past eight months. As the events underlying these claims occurred

after Plaintiff filed her complaint in April 2005, this Court looks to the standards provided by Rule

15(d), which govern supplemental pleadings. Federal Rule of Civil Procedure 15(d) requires a party

to obtain leave of the court to "serve a supplemental pleading setting forth transactions or

occurrences or events which have happened since the date of the pleading sought to be

supplemented." Fed. R. Civ. P. 15(d). The district court may grant a motion to supplement a

pleading, in the exercise of its discretion, "upon reasonable notice and upon such terms as may be

just." Id. Moreover, "while some relationship must exist between the newly alleged matters and the

Case 5:04-cv-02485-JW Document 157 Filed 02/07/06 Page 4 of 7
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 5

subject of the original action, they need not all arise out of the same transaction." Keith v. Volpe,

858 F.2d 467, 474 (9th Cir. 1988). A district court typically allows a supplemental pleading that

promotes the just disposition of the case, absent a showing of prejudice to the defendant. Keith, 858

F.2d at 475. 

Defendants argue that Plaintiff unduly delayed in seeking to amend and that Defendants will

be prejudiced if the new claims are allowed. They contend that further discovery is required under

unfavorable time conditions. This Court disagrees. Plaintiff’s desired supplements relate to the

underlying complaint and implicate the same FRCA sections. Furthermore, an extension for

discovery will be granted thereby minimizing prejudice to Defendants. Hence, allowing Plaintiff to

supplement her pleading would further the interests of judicial economy. For these reasons, Plaintiff

is granted leave to supplement the Complaint.

B. Modification of the Scheduling Order

Based on the Court's decision to permit Plaintiff to amend and supplement her Complaint,

good cause exists for modifying the scheduling order pursuant to Fed. R. Civ. P. 16(b). 

Accordingly, the Court vacates the current scheduling order pending a case management conference

following the filing of Plaintiff's amended and supplemented Complaint.

C. Schedule for Responsive Pleadings

Based on the amendment of previously alleged claims, and the addition of new claims to her

Complaint, Plaintiff’s request to have Defendants file amended responsive pleadings within an

expedited time frame is DENIED.

V. CONCLUSION

For the reasons stated above, this Court grants Plaintiff leave to file an amended and

supplemented Complaint but denies Plaintiff's request to have Defendants file amended responsive

pleadings within an expedited time frame. Plaintiff shall file their Complaint on or before April 3,

2006. The Court also vacates the current scheduling order, and sets a case management conference

for April 17, 2006 at 10:00 a.m. Pursuant to the Local Rules, the parties shall file an updated Joint

Case 5:04-cv-02485-JW Document 157 Filed 02/07/06 Page 5 of 7
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 6

case management statement on or before April 7, 2006.

Dated: February 7, 2006

04cv2485amend

 /s/ James Ware 

JAMES WARE

United States District Judge

Case 5:04-cv-02485-JW Document 157 Filed 02/07/06 Page 6 of 7
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

THIS IS TO CERTIFY THAT COPIES OF THIS ORDER HAVE BEEN DELIVERED TO:

Amy Greenstein agreenstein@kilpatrickstockton.com

Andrea Hackett Henningsen ahh@severson.com

Andrew W. Moritz Amoritz@Stroock.com

Donald E. Bradley dbradley@crowell.com

Jeremy A. Rhyne jrhyne@crowell.com

Julia B. Strickland jstrickland@stroock.com

Mark Robert Reedy Mreedy4684@aol.com

Scott J. Hyman sjh@severson.com

Steve W. Dollar nritz@eakdl.com

Dated: February 7, 2006 Richard W. Wieking, Clerk

By:_/s/ JW Chambers__________

Melissa Peralta

Courtroom Deputy

Case 5:04-cv-02485-JW Document 157 Filed 02/07/06 Page 7 of 7