Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_16-cv-02150/USCOURTS-cand-5_16-cv-02150-3/pdf.json

Nature of Suit Code: 480
Nature of Suit: Consumer Credit
Cause of Action: 15:1681 Fair Credit Reporting Act

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Case No.: 5:16-cv-02150-EJD

ORDER GRANTING DEFENDANT’S MOTION TO DISMISS

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

NADINE ADKINS,

Plaintiff,

v.

EXPERIAN INFORMATION SOLUTIONS, 

INC., et al.,

Defendants.

Case No. 5:16-cv-02150-EJD 

ORDER GRANTING DEFENDANT’S 

MOTION TO DISMISS

Re: Dkt. No. 22

In one of several nearly identical cases filed in this district, Plaintiff Nadine Adkins 

(“Plaintiff”) brings this action for alleged violations of the Fair Credit Reporting Act (“FCRA”), 

15 U.S.C. § 1681s-2(b), and the California Consumer Credit Reporting Agencies Act, California 

Civil Code § 1785.25(a) against several defendants, including Seventh Avenue, Inc. According to 

the Complaint, federal jurisdiction arises pursuant to 28 U.S.C. § 1331. Presently before the court 

is Seventh Avenue’s motion to dismiss Plaintiff’s Complaint pursuant to Federal Rule of Civil 

Procedure 12(b)(6). Dkt. No. 22. Plaintiff opposes the motion.

This matter is suitable for decision without oral argument pursuant to Civil Local Rule 7-

1(b), and the hearing scheduled for October 13, 2016, is VACATED. Having carefully considered 

the pleadings filed by the parties, the court finds, concludes and orders as follows:

1. On a Rule 12(b)(6) motion to dismiss for failure to state a claim, the complaint is 

construed in the light most favorable to the non-moving party, and all material allegations in the 

complaint are taken to be true. Sanders v. Kennedy, 794 F.2d 478, 481 (9th Cir. 1986). The 

alleged facts “must be enough to raise a right to relief above the speculative level” such that the 

claim “is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556-57 (2007). 

“Threadbare recitals of the elements of a cause of action, supported by mere conclusory 

statements, do not suffice” to state a claim. Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009). Instead, 

the requisite threshold is reached when the complaint contains sufficient facts to allow the court to 

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Case No.: 5:16-cv-02150-EJD

ORDER GRANTING DEFENDANT’S MOTION TO DISMISS

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draw a reasonable inference that the defendant is liable for the alleged misconduct. Id. at 678.

2. Although the FCRA generally prohibits “[a] person” from furnishing information 

“relating to a consumer” to any consumer reporting agency (“CRA”) “if the person knows or 

consciously avoids knowing that the information is inaccurate,” a consumer cannot sue a furnisher 

based simply on the communication of inaccurate information. 15 U.S.C. § 1681s-2(a); see

Nelson v. Chase Manhattan Mortg. Corp., 282 F.3d 1057, 1059 (9th Cir. 2002). Instead, a 

consumer has a private right of action against a furnisher if, after receiving notice that information 

is disputed, the furnisher fails to reasonably undertake one of the following duties: “conduct an 

investigation with respect to the disputed information,” “review all relevant information provided 

by the consumer reporting agency,” “report the results of the investigation to the consumer 

reporting agency,” and “if the investigation finds that the information is incomplete or inaccurate, 

report those results to all other consumer reporting agencies to which the person furnished the 

information and that compile and maintain files on consumers on a nationwide basis.” 15 U.S.C. 

§ 1681s-2(b).

3. Consequently, “[t]o state a claim under the FCRA, a plaintiff must show that: (1) 

he found an inaccuracy in his credit report; (2) he notified a credit reporting agency; (3) the credit 

reporting agency notified the furnisher of the information about the dispute; and (4) the furnisher 

failed to investigate the inaccuracies or otherwise failed to comply with the requirements of 15

U.S.C. § 1681s-2(b)(1)(A)-(E).” Corns v. Residential Credit Solutions, Inc., No.: 2:15-cv-1233-

GMN-VCF, 2016 U.S. Dist. LEXIS 27864, at *4 (D. Nev. Mar. 3, 2016).

4. For the first element, a complaint’s allegations must dispute facts underlying a 

purported inaccuracy; the presentation of legal defenses to payment will not suffice. See Chiang 

v. Verizon New Eng. Inc., 595 F.3d 26, 38 (1st Cir. 2010) (“[J]ust as in suits against CRAs [under 

§ 1681i], a plaintiff's required showing [under §1681s-2(b)] is factual inaccuracy, rather than the 

existence of disputed legal questions” because “[l]ike CRAs, furnishers are ‘neither qualified nor 

obligated to resolve’ matters that ‘turn[] on questions that can only be resolved by a court of 

law.’”); see also Carvalho v. Equifax Info. Servs., LLC, 615 F.3d 1217, 1230 (9th Cir. 2010) 

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ORDER GRANTING DEFENDANT’S MOTION TO DISMISS

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(“Although the FCRA’s reinvestigation provision, 15 U.S.C. § 1681i, does not on its face require 

that an actual inaccuracy exist for a plaintiff to state a claim, many courts, including our own, have 

imposed such a requirement.”). “The inaccuracy requirement comports with the purpose of the 

FCRA, which is ‘to protect consumers from the transmission of inaccurate information about 

them.’” Carvalho, 615 F.3d at 1230 (quoting Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 

1147, 1157 (9th Cir. 2009)). Notably, however, “a credit entry can be ‘incomplete or inaccurate’

within the meaning of the FCRA ‘because it is patently incorrect, or because it is misleading in 

such a way and to such an extent that it can be expected to adversely affect credit decisions.’” 

Gorman, 584 F.3d at 1163 (quoting Sepulvado v. CSC Credit Servs., Inc., 158 F.3d 890, 895 (5th 

Cir. 1998)).

5. Here, Plaintiff alleges she filed for Chapter 13 bankruptcy protection on June 28, 

2013, and that a plan was confirmed on October 8, 2013. Compl., Dkt. No. 1, at ¶ 5. Plaintiff 

then ordered a “three bureau” credit report on October 2, 2015, and “noticed several tradelines all 

reporting misleading and inaccurate account information,” which she disputed with each of the 

CRAs. Id. at ¶¶ 7, 13. She believes the CRAs communicated her dispute to the furnishers of the 

purportedly inaccurate information. Id. at ¶ 14. As to Seventh Avenue, Plaintiff alleges it was 

reporting her account as “owing a balance of $308.00 and a past due balance of $194.00 and 

monthly payments listed in the amount of $25.00, despite a Bankruptcy Court Order stating that 

$0.00 is owed.” Id. at ¶ 10.

6. Seventh Avenue argues that Plaintiff’s FCRA claim is deficient because it is not 

inaccurate for furnishers of credit information to report an owning balance or delinquencies during 

the pendency of a bankruptcy. As applied to the facts alleged by Plaintiff, the court finds that 

Seventh Avenue is correct. Courts in this district, including most recently the undersigned, have 

held that the FCRA does not prohibit the accurate reporting of debts that were delinquent during 

the pendency of a bankruptcy action, even after those debts have been discharged, so long as the 

bankruptcy discharge is also reported if and when it occurs. See Biggs v. Experian Info. 

Solutions, Inc., No. 5:16-cv-01507-EJD, 2016 U.S. Dist. LEXIS 130742, at *5-9, 2016 WL 

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5235043 (N.D. Cal. Sept. 22, 2016); see also Mortimer v. Bank of America, N.A., No. C-12-

01959 JCS, 2013 U.S. Dist. LEXIS 2993, at *16-18, 2013 WL 1501452 (N.D. Cal. Jan. 3, 2013); 

see also Mortimer v. JP Morgan Chase Bank, N.A., No. C 12-1936 CW, 2012 U.S. Dist. LEXIS 

108576, at *9, 2012 WL 3155563 (N.D. Cal. Aug. 2, 2012) (“While it might be good policy in 

light of the goals of bankruptcy protection to bar reporting of late payments while a bankruptcy 

petition is pending, neither the bankruptcy code nor the FCRA does so.”); see also Giovanni v. 

Bank of America, N.A., No. C 12-02530 LB, 2012 U.S. Dist. LEXIS 178914, at *14-16, 2012 WL 

6599681 (N.D. Cal. Dec. 18, 2012). As this court previously explained in reference to prior 

district court decisions on this topic:

[T]he import of these decisions is recognition that the mere filing of 

a voluntary bankruptcy petition does not erase or invalidate debts, 

nor does that act excuse the debtor from making timely payments on 

his or her outstanding accounts. If anything, the filing of a 

bankruptcy petition only imposes a limit on a creditor’s ability to 

collect on a debt. But the debt and its delinquent status still exist, 

and it is not inaccurate or misleading to report that information to a 

CRA.

Biggs, 2016 U.S. Dist. LEXIS 130742, at *6 (internal citations omitted). 

7. This remains true even after a reorganization plan is confirmed under 11 U.S.C. § 

1327. While the court acknowledges that “[t]he provisions of a confirmed plan bind the debtor 

and each creditor, whether or not the claim of such creditor is provided for by the plan, and 

whether or not such creditor has objected to, has accepted, or has rejected the plan” (11 U.S.C. § 

1327(a)), and preclude “a creditor from asserting, after confirmation, any other interest than that 

provided for it in the confirmed plan” (In re Pardee, 218 B.R. 916, 925 n.9 (9th Cir. B.A.P. 1998)), 

confirmation of a reorganization plan cannot be equated with a bankruptcy discharge, mainly 

because not every confirmation ultimately results in a discharge. The bankruptcy court may 

discharge the trustee only after the debtor “complies with his obligations under the confirmed plan 

and makes all of the required payments;” if that occurs, the debtor obtains an injunction against 

creditors’ ability to proceed against him or her personally. In re Blendheim, 803 F.3d 477, 487, 

493 (9th Cir. 2015) (citing 11 U.S.C. § 350(a)). “Many debtors, however, fail to complete a 

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ORDER GRANTING DEFENDANT’S MOTION TO DISMISS

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Chapter 13 plan successfully, often because they cannot make payments on time.” Id. 

“Recognizing this, the Bankruptcy Code permits debtors who fail to complete their plans to 

convert their Chapter 13 case to a case under a different chapter, or dismiss their case entirely . . . . 

But importantly, upon dismissal or conversion of a case, a debtor loses any benefits promised in 

exchange for the successful completion of the plan,” such as a discharge injunction. Id. 

8. In sum, Plaintiff has not convincingly shown that the mere approval of a 

reorganization plan by the bankruptcy court has the legal consequence of erasing any pre-petition 

debts, such that it is either “patently incorrect” or misleading for furnishers to report those debts as 

having a balance owed, past due or otherwise, during the pendency of the bankruptcy. See

Gorman, 584 F.3d at 1163. This is so because Plaintiff did not allege that the bankruptcy court 

has granted her a discharge, and the success of her reorganization plan is still uncertain.

Consequently, this court finds that Seventh Avenue cannot be held liable under § 1681s-2(b) based

solely on what is contained in the Complaint. Specifically, the first element of a FCRA claim is 

unsatisfied because Plaintiff has not plausibly alleged that Seventh Avenue furnished an inaccurate

or misleading account balance, or that the balance-owed or past-due designation is inaccurate or 

misleading because it somehow fails to account for her confirmed reorganization plan.

9. Plaintiff’s arguments in opposition - which were raised nearly verbatim in another 

case involving Plaintiff’s counsel - have been rejected as unpersuasive. Biggs, 2016 U.S. Dist. 

LEXIS 130742, at *9-11. First, Plaintiff argues without citation to authority that approval of a 

reorganization plan in bankruptcy “absolv[es] Plaintiff from any legal requirement to pay on the 

debts separate from the treatment under the terms of the chapter 13 plan.” Though this statement 

may be in reference to the binding provision of §1327(a), speaking in terms of absolution is an 

unfitting accentuation of the statute’s effect. Again, while §1327(a) imparts a restraint on 

creditors’ ability to collect outside of the plan’s terms, it does not “absolve” or erase either the 

debt or the fact that payments are owing or past due. The debt may still live on in its prebankruptcy status if the debtor fails to perform under the plan and causes the bankruptcy to be 

dismissed.

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10. Second, Plaintiff compares her allegations to other cases involving a furnisher’s 

failure to report certain information as disputed, such as Wang v. Asset Acceptance LLC, No. C 

09-04797 SI, 2010 U.S. Dist. LEXIS 91946, 2010 WL 2985503 (N.D. Cal. July 27, 2010), a 

furnisher’s failure to report a debt as discharged, such as Venugopal v. Digital Federal Credit 

Union, No. 5:12-CV-06067 EJD, 2013 U.S. Dist. LEXIS 43829, 2013 WL 1283436 (N.D. Cal. 

Mar. 27, 2013), and a furnisher’s reporting of inconsistent information some of which is negative 

to the debtor, such as Grantham v. Bank of America, N.A., No. CV12-1960 MEJ, 2012 U.S. Dist. 

LEXIS 167439, 2012 WL 5904729 (N.D. Cal. Nov. 26, 2012). These cases are inapposite 

because Plaintiff does not allege that Seventh Avenue failed to report the debt as disputed or 

discharged in a manner similar to Wang and Venugopal, and does not identify inconsistent 

account information as was done in Grantham. Consequently, these cases do not assist Plaintiff 

here.

11. Third, Plaintiff suggests that neglecting to furnish the payment terms of a 

confirmed plan may lead a reviewer of Plaintiff’s credit report to conclude “that separate 

collection activity can occur” and that Plaintiff still owes $308.00 to Seventh Avenue and is 

behind in payments in the amount of $195.00. But if such conclusions are drawn, they would not 

be inaccurate. Unless Plaintiff complies with the terms of her reorganization plan, separate 

collection efforts may in fact occur and Plaintiff’s account with Seventh Avenue remains

outstanding.

12. Also, and in any event, it is worth noting that Plaintiff did not allege facts sufficient 

to support her theory that Seventh Avenue reported misleading or inaccurate information to the 

CRAs. Although Plaintiff contends that her plan contains a term “indicating that 0.00% of her 

general unsecured debt was to be paid,” the court is unable to locate such an explicit term in her 

plan documents.1 And the nuanced clarification that the trustee supervising Plaintiff’s bankruptcy 

 

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Seventh Avenue’s request for judicial notice (Dkt. No. 23) is GRANTED. Fed. R. Evid. 201(b); 

Reyn’s Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 n.6 (9th Cir. 2006) (holding the 

court “may take judicial notice of court filings and other matters of public record”).

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estate has “disbursed $0.00” does not necessarily mean that none of Plaintiff’s unsecured debt will 

be paid or that the bankruptcy court has ordered that nothing be paid. Addressing similar 

allegations, another member of this court found the plaintiff’s FCRA claim implausibly pled in 

Abbot v. Experian Information Solutions, Inc., No. 15-CV-05541-LHK, 2016 U.S. Dist. LEXIS 

47397, at *13-14, 2016 WL 1365950 (N.D. Cal. Apr. 6, 2016). The Abbot court’s reasoning is 

equally applicable here. 

Based on the foregoing, Seventh Avenue’s Motion to Dismiss (Dkt. No. 22) is 

GRANTED. The FCRA claim is DISMISSED WITH LEAVE TO AMEND. See Miller v. 

Rykoff-Sexton, Inc., 845 F.2d 209, 214 (9th Cir. 1988) (holding that courts should generally 

permit leave to amend unless “no set of facts can be proved under the amendment to the pleadings 

that would constitute a valid and sufficient claim or defense.”).

With the dismissal of the only federal claim asserted in the Complaint, the court declines to 

exercise supplemental jurisdiction over Plaintiff’s related state law claim. It will be dismissed 

without prejudice at this time for lack of jurisdiction. See 28 U.S.C. § 1367(c)(3); CarnegieMellon Univ. v. Cohill, 484 U.S. 343, 350 n.7 (1988); Acri v. Varian Assocs., Inc., 114 F.3d 999, 

1000 (9th Cir.1997) (en banc).

Any amended complaint must be filed on or before October 25, 2016. Plaintiff is advised 

that, although leave to amend has been permitted, she may not add new claims or new parties to 

this action without first obtaining the defendants’ consent or leave of court pursuant to Federal 

Rule of Civil Procedure 15.

The motion to appear by telephone (Dkt. No. 68) is TERMINATED AS MOOT.

IT IS SO ORDERED.

Dated: October 7, 2016

______________________________________

EDWARD J. DAVILA

United States District Judge

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