Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_19-cv-02795/USCOURTS-cand-3_19-cv-02795-0/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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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

MARYROSE LIMSON, et al.,

Plaintiffs,

v.

BRIDGE PROPERTY MANAGEMENT 

COMPANY,

Defendant.

Case No. 19-cv-02795-JCS 

ORDER GRANTING IN PART AND

DENYING IN PART DEFENDANT’S 

MOTION TO DISMISS AND DENYING 

DEFENDANT’S MOTION TO STRIKE

Re: Dkt. Nos. 10, 11

I. INTRODUCTION

Plaintiffs bring a putative class action against Defendant Bridge Property Management 

Company (“BPMC”), asserting claims under the federal Fair Credit Reporting Act (“FCRA”), 15 

U.S.C. § 1681 et seq., the California Investigative Consumer Reporting Agencies Act (“ICRAA”), 

Cal. Civ. Code § 1786, and California’s Unfair Competition Law (“UCL”), Cal. Bus. & Prof. 

Code § 17200 et seq. Plaintiffs’ claims are based on BPMC’s alleged failure to follow certain 

disclosure requirements with respect obtaining consumer background reports about Plaintiffs, who 

applied to be tenants and residents of a low-income apartment complex managed by BPMC. 

BPMC brings a Motion to Dismiss for Failure to State a Claim and Lack of Jurisdiction (“Motion 

to Dismiss”) and a Motion to Strike Complaint (“Motion to Strike”), which came on for hearing 

on September 6, 2019. For the reasons stated below, the Motion to Dismiss is GRANTED in part 

and DENIED in part. The Motion to Strike is DENIED.

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1 The parties have consented to the jurisdiction of the undersigned magistrate judge pursuant to 28 

U.S.C. § 636(c).

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II. BACKGROUND

A. The Complaint

The named plaintiffs are four adults who applied to be tenants or are residents at the Ivy II 

at College Park (“the Ivy II”), a low-income apartment complex in Chino, California, and their 

minor children. Complaint ¶¶ 2, 7. The Ivy II is “own[ed] and manage[d]” by BPMC, which is a 

corporation formed under the laws of the State of California that has its principal place of business 

in San Francisco, California. Id. ¶¶ 8, 15. Plaintiffs allege that “Defendants requested, procured, 

processed, used and/or assisted in acquiring investigative consumer reports on the Plaintiffs as part 

of their applications for residency at the Ivy II and as part of the annual re-certification of the 

Plaintiffs to be residents at the Ivy II, without providing proper disclosures in compliance with the 

FCRA and ICRAA, and without obtaining proper authorization in compliance with the ICRAA.” 

Id. ¶ 4; see also id. ¶ 16 (alleging that “Plaintiffs are informed and believe and thereon allege that, 

throughout the time period at issue, Defendants used investigative consumer reports as part of 

their applications for rentals and for continuing the residency of tenants”).

Specifically, Plaintiffs allege that they applied for housing at the Ivy II in June 2017 and 

paid a $25 application fee. Id. ¶ 17. They allege that as part of that process, they “completed a 

mandatory multi-page application form” that “included a release and purported authorization 

permitting the Defendants, at their request, to perform credit and background [checks] to obtain . . 

. certain private[ ] and personal information from third parties about Plaintiffs.” Id. ¶18. Plaintiffs 

allege the release and authorization did not comply with the requirements of the FCRA because it 

“failed to provide applicants . . . with written notice of their rights to request additional disclosures 

and the written summary of their rights under the FCRA.” Id. ¶ 19. Plaintiffs further allege that 

BPMC violated the ICRAA as follows:

In violation of the ICRAA, the release/application did not provide a 

means for Plaintiffs to indicate (i.e., by means of a box to check), 

allowing them to obtain any report prepared in relation to 

applications. Defendants obtained investigative consumer reports on 

Plaintiffs for the applications at the rental property, and never told 

Plaintiffs that investigative consumer reports would be prepared 

regarding their character, general reputation, personal characteristics, 

and mode of living. In addition, Defendants never told Plaintiffs the 

name or address of the investigative reporting agency that prepared 

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the reports, and neither did Defendants give or allow Plaintiffs to have 

a summary of the provisions of Civil Code § 1786.22 as required 

under the ICRAA, which defeated the purpose of the statute and 

discouraged and/or effectively eliminated the ability of tenants to 

know and thus obtain access to and copies of the investigative reports 

on them and their family members.

Id. ¶ 20.

In their Class Allegations, Plaintiffs seek to assert class claims on behalf of the following 

class:

All persons in the United States who applied to become tenants and/or

completed tenant recertifications, and/or were minors with 

permission to reside at any of Defendants’ properties within the 

applicable Class Period.

Id. ¶ 21. They allege the class meets the requirements of Rule 23 of the Federal Rules of Civil 

Procedure. Id. ¶ 23. Though they are uncertain about the exact number of Class Members, id. ¶ 

24, they allege that “[t]here are more than 1000 (one thousand) putative Class Members in many 

different apartment home complexes owned and/or managed by Defendants throughout the State 

of California.” Id. ¶ 11.

Plaintiffs assert claims under the ICRAA, the FCRA and the UCL. In their ICRAA claim, 

Plaintiffs allege that BPMC “willfully violated California Civil Code § 1786.16(b)(1) because

[it] failed to provide, by means of a box to check on a written form, the opportunity to

request and receive a copy of the consumer background report obtained for Plaintiff[s].” Id. ¶ 36. 

Plaintiffs further allege that BPMC violated the ICRAA, Cal. Civil Code § 1786.16(a)(3), “by not 

informing Plaintiffs that investigative consumer reports would be prepared regarding their 

character, general reputation, personal characteristics, and mode of living” and failing to provide 

Plaintiffs “with the names and addresses of the investigative consumer reporting agency or 

agencies that made the reports,” or “a summary of the provisions of Civil Code § 1786.22.” Id. ¶ 

38. Plaintiffs allege that “[a]s a direct and proximate result of the acts and omissions of 

Defendants as alleged [herein] Plaintiffs have suffered and incurred, and continues to suffer and 

incur, damages, including but not limited to attorneys’ fees and costs.” Id. ¶ 40. Plaintiffs further 

allege that “[a]s a direct and proximate result of Defendants’ illegal procurement of background 

reports through their inadequate disclosures, as alleged herein, Plaintiffs have been injured 

including, but not limited to, having their privacy and statutory rights invaded in violation of the 

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ICRAA.” Id. ¶ 44. Plaintiffs seek “damages in an amount according to proof at trial” or “statutory 

damages of $10,000 per person for each violation” as well as an injunction enjoining BPMC from 

violating the ICRAA. Id. ¶ 39. 

In their FCRA claim, Plaintiffs allege that BPMC willfully violated 15 U.S.C. § 

1681d(a)(1) by failing “to inform Plaintiffs and the putative class of their rights to request 

additional disclosures, and fail[ing] to provide them the written summary of their rights under the 

FCRA.” Id. ¶ 47. Plaintiffs allege that BPMC’s “failure to inform Plaintiffs and the putative 

Class of their rights under 15 U.S.C. § 1682d(b) deprived Plaintiffs and the putative Class of the 

benefit of information that they had been entitled by law to receive, and runs afoul of the FCRA’s

rationale.” Id. ¶ 50. They further allege that BPMC “required Plaintiffs to execute illegal 

contracts.” Id. ¶ 52. For these violations, the Complaint asserts that Plaintiffs are entitled to 

statutory damages of $100.00 to $1,000.00 pursuant to 15 U.S.C. § 1681n(a)(1)(A), punitive 

damages under 15 U.S.C. § 1681n(a)(2), and reasonable attorneys’ fees and costs pursuant to 15 

U.S.C. § 1681n(a)(3). Id. ¶ 53. In addition, Plaintiffs seek a declaration from the Court that

BPMC’s “residential contracts and applications are illegal contracts and are in violation of” the 

FCRA. Id. ¶ 55.

Finally, Plaintiffs assert a claim under the UCL, which prohibits “any unlawful, unfair or 

fraudulent business act or practice.” Id. ¶ 57. Plaintiffs allege that BPMC engaged in “unlawful 

conduct” by violating the FCRA and the ICRAA. Id. ¶ 58. They further allege that BPMC 

engaged in “fraudulent conduct” by “willfully concealing investigative consumer reports from the 

tenants it was investigating in violation of the FCRA and the ICRAA.” Id. ¶ 60. Plaintiffs allege 

that “[a]s a direct result of Defendants’ unlawful, unfair, and fraudulent business

acts and/or practices, Plaintiffs and Class members suffered injury in fact and lost money

or property. Among other things, Plaintiffs were deprived of the benefit of information

that they had been entitled by law to receive.” Id. ¶ 64. On their UCL claim, Plaintiffs seek 

“restitution and injunctive relief against Defendants in the form of an order prohibiting

Defendants from engaging in the alleged misconduct described herein [and] monetary damages

for what Plaintiffs and Class members paid to apply for tenancy and/or residency at

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Defendants’ properties.” Id. ¶ 65.

In addition to the remedies described above, Plaintiffs “request declaratory relief

to quiet title to Plaintiffs’ leasehold interests in Defendants’ properties so that Plaintiffs

may hold and continue to occupy their residential apartment homes without fear of

unlawful eviction.” Id. ¶ 1.

Plaintiffs assert that the Court has jurisdiction over the FCRA claim under 28 U.S.C. § 

1331 (federal question). Id. ¶ 10. They assert that the Court has jurisdiction over the California 

State law claims under the Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d)(2), and on 

the basis of supplemental jurisdiction under 28 U.S.C. § 1367. Id. ¶¶ 11-12. 

B. The Motions

1. The Motion to Dismiss

In the Motion to Dismiss, BPMC argues that Plaintiffs’ FCRA and ICRAA claims fail for 

lack of standing under Article III of the U.S. Constitution, citing the Supreme Court’s decision in 

Spokeo v. Robins, 136 S. Ct. 1540 (2016). Motion to Dismiss at 15-18. According to BPMC, 

Plaintiffs allege only two forms of harm: invasion of privacy and informational. Id. at 17. As to 

the former, BPMC argues that because Plaintiffs authorized it to access their information they 

have no claim for invasion of privacy. Id. (citing Larroque v. First Advantage LNS Screening 

Solutions, Inc., No. 15-4684 JSC, 2016 WL 4577257, at *4 (N.D. Cal. Sept. 2, 2016)). Likewise, 

BPMC asserts, to state a claim based on informational injury Plaintiffs must allege that they were 

not aware that they were authorizing BPMC to access their information, which they do not allege. 

Id. (citing Marc Marchioli v. Pre-employ.com, Inc., Eisenhower Med. Ctr., et al., No. EDCV 16-

cv-2305 JGB (DTBx), 2017 WL 7049527 (C.D. Cal. June 30, 2017)). Because Plaintiffs allege 

only a “bare procedural violation,” BPMC argues, they do not have standing to assert their claims

under the FCRA and ICRAA. Id. at18.

BPMC also argues that Plaintiffs fail to state a claim under Rule 12(b)(6) as to their FCRA 

claim because they have alleged no facts showing that the consumer reports obtained by BPMC 

fall under the FCRA’s definition of an “investigative consumer report.” Id. at 18-21. In contrast 

to the definition of the same term under the ICRAA, an “investigative consumer report” under 

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federal law must be “obtained through personal interviews.” Id. (quoting 15 U.S.C. § 1681a(e)). 

According to BPMC, Plaintiffs have not alleged any facts showing that this requirement is 

satisfied. Id. Rather, BPMC contends, Plaintiffs have glossed over this difference, suggesting that 

under both state and federal law, a report constitutes an “investigative consumer report” so long as 

it meets the requirement (applicable under both the FCRA and the ICRAA) that it contain 

“information on a consumer’s character, general reputation, personal characteristics, or mode of 

living.” Id. (citing Complaint ¶ 5). Because Plaintiffs have included only conclusory allegations 

that BPMC obtained “investigative consumer reports” about them, their FCRA should be 

dismissed under Rule 12(b)(6), BPMC argues. Id. at 21. 

Next, BPMC argues that in the absence of a viable federal claim the remaining state law 

claims should be dismissed for lack of federal jurisdiction. Id. at 21-23. First, to the extent that 

Plaintiffs rely on jurisdiction under CAFA, they have not demonstrated that CAFA’s $5 million 

amount-in-controversy requirement has been met. Id. at 22. BPMC notes that to the extent that 

Plaintiffs rely on the statutory damages that they seek under the ICRAA to establish that the 

amount-in-controversy requirement is met, Plaintiffs fail to meet their burden because the statute 

does not provide for statutory damages in the case of class actions and Plaintiffs have not alleged 

any actual damages resulted from BPMC’s alleged violations. Id. (citing Cal. Civ. Code § 

1786.50(a)). BPMC further asserts that the Court should not exercise supplemental jurisdiction 

under 28 U.S.C. § 1367(c)(3) over Plaintiffs’ state law claims if it dismisses Plaintiffs’ federal 

claim. Id. at 23.

Finally, BPMC challenges Plaintiffs’ UCL claim on the grounds that: 1) Plaintiffs have not 

alleged economic injury, which is required to establish standing under the UCL; and 2) the claim 

fails because it is “tethered” to the FCRA and ICRAA claims and therefore fails for the same 

reasons those claims fail. 

BPMC asks the Court to award attorneys’ fees in connection with the instant motion under 

the FCRA, arguing that the law is clear that Plaintiffs must allege a concrete injury and Plaintiffs’ 

filing of the Complaint therefore was in bad faith or for the purposes of harassment. Id. at 24.

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2. The Motion to Strike

In the Motion to Strike, BPMC argues that Plaintiffs’ allegations in Paragraph 1 of the 

Complaint, seeking “declaratory relief to quiet title in Plaintiffs’ leasehold interest” should be 

stricken because no quiet title claim has been asserted and there are no allegations suggesting such 

relief is appropriate. Motion to Strike at 3-4. Consequently, BPMC contends, these allegations are 

immaterial and redundant. Id. BPMC also asks the Court to strike allegation in the Complaint 

referring to an “illegal contract” and asking the Court for a “declaration . . . that Defendants’ 

residential contracts and applications are illegal contracts.” Id. at 4-5. According to BPMC, these 

allegations should be stricken because violation of the FCRA and/or the ICRAA does not 

invalidate lease agreements or other contracts. Id. 

III. ANALYSIS

A. Legal Standards

1. Rule 12(b)(1)

Federal courts are courts of limited jurisdiction. Kokkonen v. Guardian Life Ins. Co. of 

Am., 511 U.S. 375, 377 (1994). Accordingly, “federal courts have a continuing independent 

obligation to determine whether subject-matter jurisdiction exists” over a given claim. Leeson v. 

Transamerica Disability Income Plan, 671 F.3d 969, 975 (9th Cir. 2012) (internal quotation marks 

and citations omitted). Rule 12(b)(1) allows defendants to move to dismiss a claim for lack of 

subject-matter jurisdiction. Fed. R. Civ. P. 12(b)(1). On a motion to dismiss for lack of subject 

matter jurisdiction under Rule 12(b)(1), it is the plaintiff’s burden to establish the existence of 

subject matter jurisdiction. Kingman Reef Atoll Invs., LLC v. United States, 541 F.3d 1189, 1197 

(9th Cir. 2008). 

A party challenging the court’s subject matter jurisdiction under Rule 12(b)(1) may bring a 

facial challenge or a factual challenge. See White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000). “If 

the defendant brings a facial attack, arguing that the allegations in the complaint are insufficient to 

demonstrate the existence of jurisdiction, the court’s inquiry is much the same as when ruling on a 

motion to dismiss brought under Rule 12(b)(6).” Org. for Advancement of Minorities with 

Disabilities v. Brick Oven Rest., 406 F. Supp. 2d 1120, 1124 (S.D. Cal. 2005) (citing Moore’s 

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Federal Practice § 12.30). This means the court accepts the factual allegations in the complaint as 

true. Miranda v. Reno, 238 F.3d 1156, 1157 (9th Cir. 2001). Where a defendant brings a factual 

challenge, on the other hand, “a court may look beyond the complaint to matters of public record 

without having to convert the motion into one for summary judgment.” White, 227 F.3d at 1242 

(citation omitted). Once the moving party has made a factual challenge by offering affidavits or 

other evidence to dispute the allegations in the complaint, the party opposing the motion must 

“present affidavits or any other evidence necessary to satisfy its burden of establishing that the 

court, in fact, possesses subject matter jurisdiction.” Colwell v. Dep’t of Health & Human Servs., 

558 F.3d 1112, 1121 (9th Cir. 2009) (quoting St. Clair v. City of Chico, 880 F.2d 199, 201 (9th 

Cir. 1989)).

2. Rule 12(b)(6)

A complaint may be dismissed under Rule 12(b)(6) of the Federal Rules of Civil Procedure

for failure to state a claim on which relief can be granted. “The purpose of a motion to dismiss 

under Rule 12(b)(6) is to test the legal sufficiency of the complaint.” N. Star Int’l v. Ariz. Corp. 

Comm’n, 720 F.2d 578, 581 (9th Cir. 1983). Generally, a plaintiff’s burden at the pleading stage 

is relatively light. Rule 8(a) of the Federal Rules of Civil Procedure states that a “pleading which 

sets forth a claim for relief . . . shall contain . . . a short and plain statement of the claim showing 

that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a).

In ruling on a motion to dismiss under Rule 12(b)(6), the court analyzes the complaint and 

takes “all allegations of material fact as true and construe[s] them in the light most favorable to the 

non-moving party.” Parks Sch. of Bus. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995).

Dismissal may be based on a lack of a cognizable legal theory or on the absence of facts that 

would support a valid theory. Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 

1990). A complaint must “contain either direct or inferential allegations respecting all the material 

elements necessary to sustain recovery under some viable legal theory.” Bell Atl. Corp. v. 

Twombly, 550 U.S. 544, 562 (2007) (citing Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101, 

1106 (7th Cir. 1984)). “A pleading that offers ‘labels and conclusions’ or ‘a formulaic recitation 

of the elements of a cause of action will not do.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) 

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(quoting Twombly, 550 U.S. at 555). “[C]ourts ‘are not bound to accept as true a legal conclusion 

couched as a factual allegation.’” Twombly, 550 U.S. at 555 (quoting Papasan v. Allain, 478 U.S. 

265, 286 (1986)). “Nor does a complaint suffice if it tenders ‘naked assertion[s]’ devoid of 

‘further factual enhancement.’” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 557)

(alteration in original). Rather, the claim must be “‘plausible on its face,’” meaning that the 

plaintiff must plead sufficient factual allegations to “allow[] the court to draw the reasonable 

inference that the defendant is liable for the misconduct alleged.” Id. (quoting Twombly, 550 U.S. 

at 570).

3. Rule 12(f)

Rule 12(f) of the Federal Rules of Civil Procedure provides that a district court “may strike 

from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous 

matter.” “The function of a 12(f) motion to strike is to avoid the expenditure of time and money 

that must arise from litigating spurious issues by dispensing with those issues prior to trial. . . .” 

Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1527 (9th Cir.1993) (quotation marks, citation, and first 

alteration omitted), rev’d on other grounds by Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994).

“Rule 12(f) motions are generally disfavored because they are often used as delaying tactics and 

because of the limited importance of pleadings in federal practice.” Rosales v. Citibank, Fed. Sav. 

Bank, 133 F. Supp. 2d 1177, 1180 (N.D. Cal. 2001) (citation omitted). Consequently, such 

motions generally are not granted unless it is clear that the matter sought to be stricken could have 

no possible bearing on the subject matter of the litigation. Id. (citing LeDuc v. Kentucky Cent. Life 

Ins. Co., 814 F. Supp. 820, 830 (N.D. Cal.1992)). “Rule 12(f) does not authorize district courts to 

strike claims for damages on the ground that such claims are precluded as a matter of law.” 

Whittlestone, Inc. v. Handi-Craft Co., 618 F.3d 970, 974–75 (9th Cir. 2010). Rather, such claims 

should be addressed under Rule 12(b)(6) or on summary judgment. Id.

4. Overview of Relevant FCRA Provisions

The FCRA provides that “[a] person may not procure or cause to be prepared an 

investigative consumer report on any consumer unless . . . it is clearly and accurately disclosed to 

the consumer that an investigative consumer report . . . may be made, and such disclosure . . . 

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(A) is made in a writing mailed, or otherwise delivered, to the consumer, not later than three days 

after the date on which the report was first requested, and (B) includes a statement informing the 

consumer of his right to request the additional disclosures provided for under subsection (b) of this 

section and the written summary of the rights of the consumer prepared pursuant to section 

1681g(c) of this title.” 15 U.S.C.A. § 1681d(a). Section 1681g(c), in turn, sets forth the 

information that must be provided to consumers in the summary of rights, including the right to 

obtain a copy of any consumer credit report and dispute the content of such a report, as well as the 

method by which the report can be obtained. 

An “investigative consumer report” is a type of consumer report and is defined as “a 

consumer report or portion thereof in which information on a consumer’s character, general 

reputation, personal characteristics, or mode of living is obtained through personal interviews with 

neighbors, friends, or associates of the consumer reported on or with others with whom he is 

acquainted or who may have knowledge concerning any such items of information.” 15 U.S.C. § 

1681a(e); see also 15 U.S.C. § 1681a(d)(1) (defining a “consumer report” as “any written, oral, or 

other communication of any information by a consumer reporting agency bearing on a consumer's 

credit worthiness, credit standing, credit capacity, character, general reputation, personal 

characteristics, or mode of living” obtained for certain enumerated purposes). 

Where a violation of the FCRA is willful, the individual who did not comply with its 

requirements is liable to the consumer “for any actual damages sustained by the consumer as a 

result of the failure or damages of not less than $100 and not more than $1,000.” 15 U.S.C. § 

1681n(A)(1)(a). The FCRA further provides for award of “such amount of punitive damages as 

the court may allow.” 15 U.S.C. § 1681n(a)(2). Finally, a party that prevails on an FCRA claim is 

entitled to reasonable attorneys’ fees and costs. 15 U.S.C. § 1681n(a)(3).

5. Overview of Relevant ICRAA Provisions

The ICRAA, like the FCRA, imposes notification and disclosure requirements on a person 

or entity that performs a background check on a consumer. Cal. Civ. Code §1786 et seq. Among 

other things, the ICRAA provides that “[i]f an investigative consumer report is sought in 

connection with the hiring of a dwelling unit . . . the person procuring or causing the request to be 

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made shall, not later than three days after the date on which the report was first requested, notify 

the consumer in writing that an investigative consumer report will be made regarding the 

consumer’s character, general reputation, personal characteristics, and mode of living.” Cal. Civ. 

Code §1786.16(a)(3). In addition, the person or entity that requests an investigative consumer 

report is required to “[p]rovide the consumer a means by which the consumer may indicate on a 

written form, by means of a box to check, that the consumer wishes to receive a copy of any report 

that is prepared.” Cal. Civ. Code §1786.16(b)(1). The definition of an “investigative consumer 

report” under the ICRAA is broader than under the FCRA; under the ICRAA, it is defined as is “a 

consumer report in which information on a consumer’s character, general reputation, personal 

characteristics, or mode of living is obtained through any means.” Cal. Civ. Code §1786.2(c)

(emphasis added). 

“An investigative consumer reporting agency or user of information that fails to comply 

with any requirement” of the ICRAA is liable to the consumer for “[a]ny actual damages 

sustained by the consumer as a result of the failure or, except in the case of class actions, ten 

thousand dollars ($10,000), whichever sum is greater.” Cal. Civ. Code §1786.50(a). In addition, 

“[i]f the Court determines that the violation was grossly negligent or willful, the court may . . . 

assess, and the consumer may recover, punitive damages.” Cal. Civ. Code §1786(b). Finally, a 

prevailing party is entitled to the costs of the action and reasonable attorneys’ fees. Cal. Civ. Code 

§1786(a)(2). 

6. Legal Standards Governing Standing Under Spokeo

“[T]he irreducible constitutional minimum of [Article III] standing” contains three 

elements, namely, “[t]he plaintiff must have (1) suffered an injury in fact, (2) that is fairly 

traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a 

favorable judicial decision.” Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016) (citing Lujan v. 

Defs. of Wildlife, 504 U.S. 555, 560 (1992)). The Supreme Court has described the “injury in 

fact” requirement as the “‘[f]irst and foremost’ of standing’s three elements.” Id. (quoting Steel 

Co. v. Citizens for Better Environment, 523 U.S. 83, 103 (1998)). “To establish injury in fact, a 

plaintiff must show that he or she suffered ‘an invasion of a legally protected interest’ that is 

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‘concrete and particularized’ and ‘actual or imminent, not conjectural or hypothetical.’” Id. at 

1548 (quoting Lujan, 504 U.S. at 560).

In Spokeo, the Court emphasized that concreteness and particularization are separate 

requirements. “For an injury to be ‘particularized,’ it ‘must affect the plaintiff in a personal and 

individual way.’” Id. at 1548 (quoting Lujan, 504 U.S. at 560 n. 1). Even where this requirement 

is met, however, the injury-in-fact requirement will not be satisfied unless the injury is also 

concrete. Id. “A ‘concrete’ injury must be ‘de facto’; that is, it must actually exist.” Id. (citing 

Black’s Law Dictionary 479 (9th ed. 2009)). An injury may be “concrete” even if it is intangible, 

the Spokeo Court explained, and “in determining whether an intangible harm constitutes injury in 

fact, both history and the judgment of Congress play important roles.” Id. at 1549. With respect 

to history, the Court said, “it is instructive to consider whether an alleged intangible harm has a 

close relationship to a harm that has traditionally been regarded as providing a basis for a lawsuit 

in English or American courts.” Id. (citing Vermont Agency of Natural Resources v. United States 

ex rel. Stevens, 529 U.S. 765, 775-777 (2000)). The judgment of Congress is also “instructive and 

important” because “Congress is well positioned to identify intangible harms that meet minimum 

Article III requirements.” Id. Thus, “Congress has the power to define injuries and articulate 

chains of causation that will give rise to a case or controversy where none existed before.” Id. 

(quoting Lujan, 504 U.S. at 580 (Kennedy, J., concurring)).

Nonetheless, “Congress’ role in identifying and elevating intangible harms does not mean 

that a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute grants a 

person a statutory right and purports to authorize that person to sue to vindicate that right.” Id. at 

1549. Thus, while a procedural violation “can be sufficient in some circumstances to constitute 

injury in fact,” for example, where there is a “risk of real harm,” a “bare procedural violation, 

divorced from any concrete harm” does not “satisfy the injury-in-fact requirement of Article III.” 

Id. (emphasis added).

The Court in Spokeo addressed the injury-in-fact requirement in the context of an alleged 

FCRA violation. The plaintiff, Robins, alleged that Spokeo, a “people search engine,” had 

violated Section 1681 of the FCRA by providing inaccurate information about him in a generated 

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report. Id. at 1544. Specifically, it was alleged that “[a]t some point in time, someone (Robins’ 

complaint does not specify who) made a Spokeo search request for information about Robins, and 

Spokeo trawled its sources and generated a profile. By some means not detailed in Robins’ 

complaint, he became aware of the contents of that profile and discovered that it contained 

inaccurate information.” Id. at 1546. 

The Ninth Circuit held that Robins had adequately alleged an injury in fact because he had 

alleged a “particularized” injury, namely, violation of his statutory rights under the FCRA, but the 

Court found that the Ninth Circuit’s analysis was incomplete because it had failed to consider 

whether that injury satisfied the “concreteness” requirement. Id. at 1545, 1548. The Court 

remanded the case for consideration of whether Robins had met that requirement, taking “no 

position as to whether the Ninth Circuit’s ultimate conclusion—that Robins adequately alleged an 

injury in fact—was correct.” Id. at 1550. While the Court did not reach the question of whether 

the plaintiff’s allegations were sufficient to demonstrate a concrete injury, it offered examples of 

FCRA violations that likely would not satisfy the concreteness requirement, opining as follows:

On the one hand, Congress plainly sought to curb the dissemination 

of false information by adopting procedures designed to decrease that 

risk. On the other hand, Robins cannot satisfy the demands of Article 

III by alleging a bare procedural violation. A violation of one of the 

FCRA’s procedural requirements may result in no harm. For example, 

even if a consumer reporting agency fails to provide the required

notice to a user of the agency’s consumer information, that 

information regardless may be entirely accurate. In addition, not all 

inaccuracies cause harm or present any material risk of harm. An 

example that comes readily to mind is an incorrect zip code. It is 

difficult to imagine how the dissemination of an incorrect zip code, 

without more, could work any concrete harm.

Id. at 1550.2

7. Legal Standards Governing CAFA Jurisdiction

CAFA provides that district courts have original jurisdiction over any class action in 

 

2

In her dissent, Justice Ginsburg, joined by Justice Sotomayor, agreed with the general principals 

articulated by the majority but found “no utility in returning [the] case to the Ninth Circuit” 

because she believed Robins’ allegations “carr[ied] him across the threshold.” Id. at 15555. In 

particular, “[f]ar from the incorrect zip code, Robins complain[ed] of misinformation about his 

education, family situation, and economic status, inaccurate representations that could affect his 

fortune in the job market.” Id. at 1556.

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which: (1) the amount in controversy exceeds five million dollars, (2) any plaintiff class member 

is a citizen of a state different from any defendant, (3) the primary defendants are not states, state 

officials, or other government entities against whom the district court may be foreclosed from 

ordering relief, and (4) the number of plaintiffs in the class is at least 100. 28 U.S.C. §§ 

1332(d)(2), (d)(5). “To ‘determine whether the matter in controversy’ exceeds that sum, ‘the 

claims of the individual class members shall be aggregated.’” Standard Fire Ins. Co. v. Knowles, 

568 U.S. 588, 592 (2013) (quoting 28 U.S.C. § 1332(d)(6)). Under CAFA, the burden of 

establishing jurisdiction is on the proponent of federal jurisdiction. See Abrego Abrego v. The 

Dow Chem. Co., 443 F.3d 676, 685 (9th Cir. 2006). 

“In determining the amount in controversy, courts first look to the complaint.” Ibarra v. 

Manheim Investments, Inc., 775 F.3d 1193, 1197 (9th Cir. 2015). “Generally, ‘the sum claimed by 

the plaintiff controls if the claim is apparently made in good faith.’” Id. (quoting St. Paul Mercury 

Indem. Co. v. Red Cab Co., 303 U.S. 283, 289 (1938) (footnote omitted)). Where the amount in 

controversy is unclear from the complaint or disputed by the parties, the court may consider 

“summary-judgment-type evidence” to determine whether the requirements of CAFA jurisdiction 

are established by a preponderance of the evidence. Id. (citing Singer v. State Farm Mut. Auto. 

Ins. Co., 116 F.3d 373, 377 (9th Cir. 1997)).

B. Sufficiency of Allegations Regarding Consumer Investigative Report under 

FCRA

As discussed above, under the FCRA an “investigative consumer report” is a consumer 

report that is “obtained through personal interviews with neighbors, friends, or associates of the 

consumer reported on or with others with whom he is acquainted or who may have knowledge 

concerning any such items of information.” 15 U.S.C. § 1681a(e). Plaintiffs do not dispute that 

they have alleged no specific facts showing that this requirement is met. Rather, they point to the 

fact that they have used the term “investigative consumer reports” in the Complaint, which under 

the definition of that term in the FCRA necessarily means that Plaintiffs are alleging that BPMC 

obtain information about them “through personal interviews.” Opposition at 12 (citing Complaint 

¶¶ 4-5). This is the essence of conclusory pleading, simply reciting the legal standard without 

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alleging any supporting facts, and is not sufficient to meet the standards set forth above, in Section 

III(A)(2). See Coleman v. Kohl’s Dep't Stores, Inc., No. 15-CV-02588-JCS, 2015 WL 5782352, at 

*7 (N.D. Cal. Oct. 5, 2015). Therefore, the FCRA claim fails to state a claim and must be 

dismissed. Plaintiffs will be given leave to amend to allege facts showing that the reports 

allegedly obtained by BPMC fall within the definition of investigative consumer reports. 

C. Whether Plaintiffs Have Article III Standing 

Assuming Plaintiffs are able to amend their FCRA claim to state a viable claim, the Court 

will have to address whether Plaintiffs have standing to assert their claims under Spokeo and 

Article III.

3 The Court concludes that they do.

Spokeo requires that Plaintiffs allege some concrete injury and not merely a bare 

procedural violation of the FCRA. Spokeo, 136 S. Ct. at 1549. As discussed above, a concrete 

injury may be intangible and yet still confer Article III standing. Id. In recent cases applying the 

principles articulated in Spokeo to FCRA claims, courts have focused on two forms of intangible 

injury, both of which are alleged here: violation of privacy and informational injury. 

In Syed v. M-I, LLC, the Ninth Circuit addressed the FCRA requirements that apply to 

consumer reports obtained for employment purposes, governed by 15 U.S.C. § 1681b(b). 853 F.3d 

492, 499 (9th Cir.), cert. denied, 138 S. Ct. 447 (2017). That section contains a disclosure 

requirement, which “creates a right to information by requiring prospective employers to inform 

job applicants that they intend to procure their consumer reports as part of the employment 

application process.” Id. at 499 (citing 15 U.S.C. § 1681b(b)(2)(A)(i)). It also contains an 

authorization requirement, which “creates a right to privacy by enabling applicants to withhold 

permission to obtain the report from the prospective employer, and a concrete injury when 

applicants are deprived of their ability to meaningfully authorize the credit check.” Id. (citing 15 

U.S.C. § 1681b(b)(2)(A)(ii)). The Ninth Circuit explained that § 1681b(b)(2)(A) “furthers

 

3 Although BPMC seems to suggest in the Motion to Dismiss that the standing cases upon which it 

relies apply equally to the claims asserted under the FCRA and the ICRAA, see Motion to Dismiss 

at 15, none of the cited cases addresses whether the plaintiff has standing under the ICRAA. 

Rather, all are limited to the question of whether the plaintiffs have standing to assert claims under 

the FCRA. Therefore, the Court here rules only on the Article III standing question as it relates to 

Plaintiffs’ FCRA claim.

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Congress’s overarching purposes of ensuring accurate credit reporting, promoting efficient error 

correction, and protecting privacy.” Id. at 496-497 (citation omitted). It continued, “in addition to 

securing job applicants’ privacy rights by enabling them to withhold authorization to obtain their 

consumer reports, the provision promotes error correction by providing applicants with an 

opportunity to warn a prospective employer of errors in the report before the employer decides 

against hiring the applicant on the basis of information contained in the report.” Id. Thus, it 

concluded that “[b]y providing a private cause of action for violations of Section 1681b(b)(2)(A), 

Congress has recognized the harm such violations cause, thereby articulating a ‘chain[ ] of 

causation that will give rise to a case or controversy.’” Id. at 499 (citing Spokeo, 136 S.Ct. at 1549 

(quoting Lujan v. Defs. of Wildlife, 504 U.S. 555, 580 (1992) (Kennedy, J., concurring))).

In Syed, the plaintiff alleged that the authorization he had signed when he commenced 

employment, which authorized his employer to obtain consumer reports about him for 

employment purposes, violated the FCRA because it also included a liability waiver, in violation 

of a requirement under the FCRA that a disclosure statement should only include the required 

disclosures. Id. at 497-498 (citing 15 U.S.C. § 1681b(b)(2)(A)). He further alleged that he

“discovered [the employer’s] violation(s) within the last two years when he obtained and reviewed 

his personnel file from [his employer ] and discovered that [the employer]had procured and/or 

caused to be procured a ‘consumer report’ regarding him for employment purposes based on the 

illegal disclosure and authorization form.” Id. at 500. The court found that for pleading purposes:

This allegation is sufficient to infer that Syed was deprived of the right 

to information and the right to privacy guaranteed by Section 

1681b(b)(2)(A)(I)–(ii) because it indicates that Syed was not aware 

that he was signing a waiver authorizing the credit check when he 

signed it. Drawing all reasonable inferences in favor of the 

nonmoving party, we can fairly infer that Syed was confused by the 

inclusion of the liability waiver with the disclosure and would not 

have signed it had it contained a sufficiently clear disclosure, as 

required in the statute.

Id. at 500-501. For this reason, the court held, the plaintiff had adequately alleged standing under 

Article III. Id. at 501 (citing Thomas v. FTS USA, LLC, 193 F.Supp.3d 623, 628–638 (E.D. Va. 

2016)). The court noted in a footnote, however, that “what suffices at the Rule 12(b)(6) stage 

may not suffice at later stages of the proceedings when the facts are tested.” Id. at 499 n. 4.

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The case on which the Ninth Circuit relied, in Syed, Thomas v. FTS USA, LLC, addressed 

the implications of Spokeo for FCRA claims in some depth. Like Syed, Thomas addressed the 

disclosure and authorization requirements that apply in the employment context, under § 

1681b(b)(2). There, the plaintiff alleged that the employer and its parent company violated the 

FCRA because “[d]efendants did not provide [him] with a written disclosure that they intended to 

obtain a copy of his consumer report for employment purposes,” and the plaintiff did not provide 

the “[d]efendants with his written authorization for them to obtain his consumer report for 

employment purposes.” 193 F. Supp. 3d at 634. In particular, the plaintiff alleged that when his 

employer was acquired by another company all employees were required to undergo a background 

check as a condition of continued employment; in his case, the background check included 

information about felony convictions that was incorrect, as well as information about his driving 

record that was correct. Id. at 627-628. Based on his driving record, the plaintiff was told that he 

was not eligible for a position for which he had applied. Id. Although the employer apparently 

took no action based on the incorrect information contained in the report about past felony 

convictions, the plaintiff’s supervisor showed the plaintiff a redacted copy of the report, at which 

point the plaintiff told the employer the information was wrong and a new report was obtained 

(this time not including the felony convictions). Id. 

It was undisputed in Thomas that none of the defendants’ employees had received the 

disclosures required under the FCRA or a copy of their reports. Id. The defendants said they 

thought a third-party background check vendor was providing the required disclosures. Id.

Therefore, the plaintiff asserted his claims on behalf of a putative class of fellow employees who 

also had been subject to the same violations. Id. at 625. Before Spokeo was decided, the court 

certified a class (the “Impermissible Use Class”) of individuals who had applied for employment 

with the defendants and had signed authorizations without having been given the required FCRA 

disclosures. Id. at 626. The Court also certified a subclass of individuals who had not been given 

the required disclosures and had been subjected to an adverse employment action based on 

information contained in their background reports (“the Adverse Action Sub-Class”). Id. On 

summary judgment, the defendants argued that there was no Article III standing as to the two 

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classes that the Court had certified, pointing to the Supreme Court’s recent decision in Spokeo. Id. 

The court disagreed. Id. at 627. 

In addressing Article III standing as to the Impermissible Use Class, the Thomas court first 

looked to the interests Congress sought to protect in the statutory provisions at issue. As to the 

disclosure requirement invoked by the plaintiffs, the court found that this provision protected the 

plaintiffs’ right to information, and that deprivation of that right gave rise to a concrete injury. Id. 

at 634-635. In reaching that conclusion, the court relied, in part, on the fact that in Spokeo, “the

Supreme Court . . . confirmed its previous holdings in Federal Election Comm’n v. Akins[, 524 

U.S. 11, 20–25 (1998)] and Public Citizen v. Department of Justice, [491 U.S. 440, 449(1989),]

both of which teach that Congress may create a legally cognizable right to specific information, 

the deprivation of which constitutes a concrete injury sufficient to satisfy Article III.” Id. at 634 

(citing Spokeo, 136 S.Ct. at 1549–50). The court also pointed to the Supreme Court’s decision in 

Havens Realty Corp. v. Coleman, 455 U.S. 363, 373 (1982), in which the Court “held that the 

plaintiffs (individuals ‘who, without an intent to rent or purchase a home or apartment, pose as 

renters or purchasers for the purpose of collecting evidence of unlawful steering practices,’) had 

suffered a concrete injury under the Fair Housing Act when they received untruthful housing 

information, even though they did not seek to use the information for any purpose other than 

litigation.” Id. (quoting Havens, 455 U.S. at 373). Based on these cases, the Thomas court 

concluded that “it is well-settled that Congress may create a legally cognizable right to 

information, the deprivation of which will constitute a concrete injury” and that “it is well within 

Congress’ power to specify the form in which that information must be presented.” Id. at 635.

The other right that the claims of the Impermissible Use Class turned upon was the 

plaintiffs’ “statutorily created right to privacy and confidentiality of their personal information.” 

Id. at 635. The Thomas court recognized that “it has long been the case that an unauthorized 

dissemination of one’s personal information, even without a showing of actual damages, is an 

invasion of one’s privacy that constitutes a concrete injury sufficient to confer standing to sue.” 

Id. (citation omitted). The court further found that “it is well-settled that Congress may create a 

statutory right to privacy in certain information that strengthens or replaces the common law, and 

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citizens whose statutory right to informational privacy has been invaded may bring suit under the 

statute to vindicate that right.” Id. The court rejected the defendants’ argument that because the 

plaintiffs did not seek actual damages their claims were based on “bare procedural violations” 

under Spokeo. Id. The court rejected defendants’ argument because: 1) “the rights created by § 

1681b(b)(2) are substantive rights”; 2) the Supreme Court in Spokeo expressly recognized that 

violation of a procedural right may be sufficient to establish standing even without any additional 

“actual” harm; 3) the argument “runs contrary to firmly-rooted principles of Anglo–American law, 

which has long allowed nominal damages where actual damages are too small or difficult to 

quantify”; and 4) accepting the defendants’ argument “would require the Court to override clear 

Congressional intent” as expressed in the FCRA provision allowing for an award of actual or 

statutory damages for willful violation of the FCRA’s requirements. Id. (citing 5 U.S.C. § 

1681n(a)). For these reasons, the court in Thomas concluded that the Impermissible Use Class 

had standing under Article III. Id.

The Thomas court went on to find that there was standing as to the Adverse Action 

Subclass. Id. at 637-638. First, the subclass had alleged an informational injury sufficient to 

demonstrate a concrete injury because “by alleging that Defendants took adverse employment 

action without providing the information guaranteed by the statute, Thomas, on behalf of the 

Adverse Action Sub–Class, has alleged an informational injury. Every sub-class member had a 

statutory right to receive a copy of his or her consumer report and an FCRA summary of rights 

prior to Defendants’ adverse action. No sub-class member received the required information.” Id. 

at 638. The court also found that a second concrete injury had been shown as to the subclass:

they were deprived of the opportunity to “be confronted with the 

charges against [them] and tell [their] side of the story.” . . . Even if 

all of the subclass members’ consumer reports were entirely correct 

(an unlikely scenario, given the errors that commonly pepper 

consumer reports despite the FCRA’s protections), the sub-class 

members were deprived of the opportunity to explain any negative 

records in their consumer reports and discuss the issues raised in their 

reports with Defendants before suffering adverse employment action.

Id. (citing S. Rep. No. 517, 91st Cong., 1st Sess. 2 (“Senate Report”) at 3). According to the 

Thomas court, the legislative history reflects that Congress intended to protect against such injury 

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when it enacted the FCRA:

Congress also specifically recognized that “[o]ne problem which the 

hearings [concerning the bill that later became the FCRA]. . . 

identified is the inability at times of the consumer to know he is being 

damaged by an adverse credit report.” . . . “Unless a person knows 

he is being rejected for credit or insurance or employment because of 

a credit report, he has no opportunity to be confronted with the 

charges against him and tell his side of the story.” 

Id. (citing Senate Report at 3). Therefore, the court found that there was Article III standing as to 

the Adverse Action Subclass as well. Id. at 638.

District courts that have applied Spokeo to FCRA claims based on disclosures that are 

alleged to be unclear or otherwise out of compliance with the FCRA as to the form of the 

disclosure have generally held that in order to have standing the consumer must “allege some 

actual harm, such as being confused or misled by the improperly formatted disclosure.” Williams 

v. Vitas Healthcare Corp. of California, No. 18-CV-02096-JSW, 2018 WL 7253633, at *4 (N.D. 

Cal. Aug. 6, 2018) (citing Bercut v. Michaels Stores Inc., No. 17-CV-01830-PJH, 2017 WL 

2807515, at*5 (N.D. Cal. June 29, 2017) (“[Syed] confirms . . .that Article III requires some 

allegation of actual harm, e.g., that plaintiff was “confused” by the disclosure or that she would 

not have signed the authorization had it been presented in a FCRA-compliant format.”). Thus, for 

example, in Larroque v. First Advantage LNS Screening Sols., Inc., the court found that the 

plaintiff did not have standing to assert a claim based on §1681b(b)(1), which requires that a credit 

reporting agency must obtain a certification from a potential employer that it has complied with 

the requirements of § 1681b(b)(2) before supplying a consumer’s credit report, because the 

plaintiff had, in fact, signed an authorization for the employer to obtain a credit report and she did 

not allege that the employer’s disclosures or authorization form violated § 1681b(b)(2). No. 15-

CV-04684-JSC, 2016 WL 4577257, at *5 (N.D. Cal. Sept. 2, 2016). Under these circumstances, 

the court found, there could be no injury based on the plaintiff’s privacy or informational rights 

because she had been informed of and had consented to the release of the background report. Id. 

The court in Larroque distinguished Thomas on the basis that in that case, the court had found that 

§ 1681b(b)(2) created substantive rights that were implicated by the plaintiffs’ claims but in 

Larroque no violation of § 1681b(b)(2) was alleged. Id.

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Similarly, this Court found in Nokchan v. Lyft, Inc. that a plaintiff who alleged that his 

employer did not provided clear and unambiguous disclosures in a stand-alone document, in 

violation of § 1681b(b)(2), and did not provide a proper summary of rights notice, in violation of 

§§1681d(a)(1) and 1681g(c), did not have standing under Article III. The Court reasoned that 

because the plaintiff did not “allege[ ] that as a result of [his employer’s] failure to provide the 

disclosures in a separate document or to notify him of his right to receive a summary of his legal 

rights he was confused about his rights or that he would not have consented to the background 

checks had he understood his rights.” Id. at *9. The Court further noted that the plaintiff did not 

“allege that he was harmed by the background check in any way.” Id. 

Here, Plaintiffs’ claims are not based on consumer reports obtained in connection with 

employment, unlike the cases discussed above. Rather, they assert their claims based on § 

1681d(a)(1). Unlike § 1681b(b)(2)(A), which requires that the disclosures be set forth in a standalone document, § 1681d(a)(1) does not contain such a requirement. Nonetheless, it requires that 

the FCRA disclosures must be made “clearly and accurately,” provided to the consumer within 

three days of the date on which the report is requested, and “include a statement informing the 

consumer of his right to request the additional disclosures . . . and the written summary of the 

rights of the consumer prepared pursuant to section 1681g(c) . . . .” As discussed above, § 1681g 

governs the disclosure of consumers’ rights to obtain and dispute information in consumer reports 

and to obtain credit scores. Plaintiffs here do not allege that they misunderstood the authorization 

that they signed, or that they agreed to the release of their information only because they were 

confused by the disclosures. Therefore, under the cases discussed above, the injury in this case 

cannot be based on a violation of Plaintiffs’ right to privacy because Plaintiffs consented to the 

release of their information. 

However, Plaintiffs also allege that BPMC violated the last requirement of § 1681d(a)(1) 

by simply not telling them they could obtain a copy of their credit reports or how they could do it. 

This is an independent informational injury that implicates the substantive rights that Congress 

created to allow individuals to verify the contents of credit reports and/or explain their contents, 

discussed in Thomas. Violation of this right to information is not a “bare procedural violation” 

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because the legislative history reflects that it was one of the primary mechanisms by which 

Congress sought to address the abuses in the credit reporting industry, namely, by giving 

consumers the tools necessary to uncover mistakes and abuses. 4 Therefore, the Court concludes 

that Plaintiffs have alleged an informational injury sufficient to establish Article III standing under 

Spokeo.

5

 

4

In Rotor v. Signature Consultants, LLC, which was decided after Plaintiffs filed their opposition 

brief and was cited in BPMC’s Reply brief, the court found that the plaintiff in that case, who 

alleged that the defendant had failed to provide the summary of rights required under § 

1681d(a)(1) and § 1681g (the provisions at issue in this case), had not demonstrated informational 

injury, stating: “Without any discussion of the ‘Congressional judgment’ underlying the 

requirement to provide a summary of consumer rights or analogous ‘[h]istorical practice’ in the 

common law, Eichenberger, 876 F.3d at 983, the Court has no basis to recognize an informational 

injury that is actionable without additional concrete harm.” No. 18-CV-07526-JST, 2019 WL 

3246535, at *5 (N.D. Cal. July 19, 2019). The undersigned respectfully disagrees with the 

conclusion of the court in Rotor, and finds that the legislative history discussed in Thomas, which 

was cited with approval by the Ninth Circuit in Syed, provides a sufficient basis for finding that 

Congress intended to create a substantive right that can give rise to Article III standing when it 

enacted the provision in the FCRA at issue here, requiring that consumers be given information 

not just of their right to obtain a copy of reports obtained about them but also telling them how to 

do so.

5

In their Opposition, Plaintiffs argue that they suffered concrete harm because they had to pay a 

$25 application fee. They contend they are entitled to recover this fee under § 1681n, which 

provides for, inter alia, an award of “actual damages” but does not specifically address whether 

fees paid for credit reports constitute “actual damages” or are recoverable under the FCRA. 

Plaintiffs cite Guimond v. Trans Union Credit Info. Co., 45 F.3d 1329, 1333 (9th Cir. 1995) in 

support of their assertion that the $25 application fee constitutes “actual damages” but that case 

does not support this assertion. There, the plaintiff alleged that she became aware of incorrect 

information in her credit report and that it took several requests to get the reporting agency to 

correct the information, causing her emotional distress. She asserted a claim for violation of the 

FCRA and sought actual damages for the violation under § 1681o, including emotional distress 

damages and the fee that was charged to obtain the credit reports. The district court found she 

hadn’t alleged any actual damages because she was never denied credit based on the inaccuracies 

in her credit report and therefore she couldn’t have suffered any cognizable emotional distress; it 

ignored the fees she paid for the credit reports, suggesting it did not consider them to constitute 

damages. The Ninth Circuit reversed, saying the emotional distress was enough to show actual 

damages but also didn’t discuss the fees of the credit reporting agency. What it did not say was 

that the district court’s ruling on the emotional distress damages was immaterial because the 

plaintiff had alleged another type of actual damages, namely, the fee charged for the credit reports. 

If anything, this case supports the conclusion that these fees are not actual damages. Plaintiffs 

also cite Kwikset Corp. v. Superior Court, 51 Cal. 4th 310, 336 (2011) in support of the assertion 

that to the extent they are entitled to restitution of the application fees under the UCL, they have 

also demonstrated an economic injury sufficient to establish standing. As discussed further 

below, the Court concludes that the application fee is not sufficient to establish standing (either 

under the UCL or the FCRA) because it was not caused by the alleged violation. See Lexmark 

Int’l, Inc. v. Static Control Components, Inc., 572 U.S. 118, 132 (2014) (“we generally presume 

that a statutory cause of action is limited to plaintiffs whose injuries are proximately caused by 

violations of the statute.”). 

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D. Whether there is CAFA Jurisdiction Over State Law Claims if FCRA Claim 

Fails

If Plaintiffs are unable to cure the defect in the FCRA claim discussed above, in Section 

III(B), the Court will be required to decide whether their State law claims should be remanded to 

State court. Where a federal court dismisses all pending federal claims, State law claims over 

which the court exercised supplemental jurisdiction are typically remanded to State court. Sanford 

v. MemberWorks, Inc., 625 F.3d 550, 561 (9th Cir. 2010) (“‘[I]n the usual case in which all 

federal-law claims are eliminated before trial, the balance of factors to be considered under the 

pendent jurisdiction doctrine—judicial economy, convenience, fairness, and comity—will point 

toward declining to exercise jurisdiction over the remaining state-law claims.’”) (quoting 

Carnegie–Mellon Univ. v. Cohill, 484 U.S. 343, 350 n. 7 (1988), superseded on other grounds by 

statute as recognized in Fent v. Okla. Water Res. Bd., 235 F.3d 553, 557 (10th Cir. 2000)). Here, 

however, Plaintiffs assert that there is an independent basis for exercising jurisdiction over their 

ICRAA claim, namely, CAFA. If Plaintiffs were to establish that the Court has jurisdiction over 

that claim under CAFA, it would be in the interests of judicial economy to exercise supplemental 

jurisdiction over Plaintiffs’ UCL Claim. The Court finds, however, that Plaintiffs have failed to 

allege that CAFA’s amount-in-controversy requirement is met.6

Plaintiffs allege in the Complaint that they have suffered actual damages. See, e.g., 

Complaint ¶ 39. Yet the only specific type of damages they identify is the $25 application fee that 

they paid when they submitted their applications to reside at the Ivy II. See id. ¶ 65. Assuming 

that this fee can be considered a form of actual damages (which it likely cannot), it is a long way 

from meeting the amount-in-controversy requirement. Plaintiffs allege that there are more than 

1,000 class members in California. Complaint ¶ 11. No affidavits have been submitted 

suggesting that the class contains significantly more members and Plaintiffs have not suggested 

that it does. Consequently, the $25 application places in controversy no more than $25,000. 

To the extent that Plaintiffs rely on the $1,000 per violation they seek in statutory damages 

under the FCRA, see Opposition at 14, that reliance is misplaced as the Court will only reach the 

 

6 BPMC does not dispute that the minimal diversity requirement is met and that there are more 

than 100 class members, as is required to establish CAFA jurisdiction.

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question of CAFA jurisdiction if it concludes that the FCRA claim must be dismissed. Further, 

Plaintiffs concede that the statutory damages they seek under the ICRAA are not available in class 

actions.

Because Plaintiffs have not demonstrated that CAFA’s amount-in-controversy requirement 

is met, there is no jurisdiction over Plaintiffs’ ICRAA claim under CAFA.

E. Whether the UCL Claim Fails

BPMC asserts that Plaintiffs have not established standing to assert their UCL claim. 

Standing under the UCL “is limited to any ‘person who has suffered injury in fact and has lost 

money or property’ as a result of unfair competition.” Kwikset Corp. v. Superior Court, 51 Cal. 

4th 310, 320–21 (2011) (citing Cal. Bus. & Prof. Code § 17204). In Kwikset, the California 

Supreme Court explained that because a “party who has lost money or property generally has 

suffered injury in fact,” there is a “simple test” for determining whether the UCL’s standing 

requirement is met. Id. at 322 (emphasis in original). Under that test, a UCL plaintiff must show 

(1) “a loss or deprivation of money or property sufficient to qualify as injury in fact, i.e., economic 

injury, and (2) show that that economic injury was the result of, i.e. caused by, the unfair business 

practice or false advertising that is the gravamen of the claim.” Id. The causal connection required 

under this test “is broken when a complaining party would suffer the same harm whether or not a 

defendant complied with the law.” Daro v. Superior Court, 151 Cal. App. 4th 1079, 1099 (2007), 

as modified on denial of reh’g (July 3, 2007).

Plaintiffs point to their allegation that they paid a $25 application fee to establish standing 

under the UCL, but that allegation is insufficient because no facts are alleged suggesting that this 

fee was caused by BPMC’s alleged violations of the FCRA. Even drawing all reasonable 

inferences in favor of the non-moving party, Plaintiffs’ allegations indicate that this was a fee that 

was charged for applying to reside at the Ivy II and that it would have been charged regardless of 

whether BPMC’s disclosures were in compliance with the FCRA. Therefore, the Court concludes 

that Plaintiffs have failed to establish standing under the UCL. Plaintiffs may amend the 

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complaint to attempt to cure this deficiency.7 

F. Whether BPMC is Entitled to Attorneys’ Fees and Costs

BPMC asks the Court to award attorneys’ fees and costs in connection with the Motion 

under 15 U.S.C. § 16810, which allows courts to award attorneys’ fees and costs incurred in 

responding to papers that were filed “in bad faith or for purposes of harassment” in an FCRA case. 

“[B]ad faith may be established based on a showing that the plaintiff’s action was unfounded from 

the outset, frivolous, or brought for the purpose of harassment.” Arutyunyan v. Cavalry Portfolio 

Servs., No. CV 12-4122 PSG AJWX, 2013 WL 500452, at *2 (C.D. Cal. Feb. 11, 2013). The 

Court does not find that Plaintiffs’ complaint was filed in bad faith or for the purposes of 

harassment. Accordingly, BPMC’s request is DENIED. 

G. The Motion to Strike

BPMC asks the Court to strike certain allegations in the complaint asking the Court for 

declaratory relief to quiet title to Plaintiff’s leasehold interests in BPMC’s properties. BPMC 

asserts that Plaintiffs have not asserted a quiet title claim or adequately alleged the elements of 

such a claim, while Plaintiffs assert in their opposition that Defendants have taken actions against 

some of the Plaintiffs (in the form of eviction proceedings for one and a rent increase for another) 

that may be in retaliation for Plaintiffs’ participation in this lawsuit. BPMC further asks the Court 

to strike Plaintiffs’ references in the complaint to “illegal contracts,” arguing that violations of the 

FCRA and the ICRAA do not invalidate residential contracts or any other contracts that were 

entered into after a consumer report was obtained. To the extent these arguments turn on the 

substantive merits of a possible quiet title claim and the remedies requested by Plaintiffs in their 

complaint, the Court declines to strike these allegations.

IV. CONCLUSION

For the reasons stated above, the Motion to Dismiss is GRANTED in part and DENIED in 

 

7 BPMC also argues that the UCL claim fails because it “tethered” to the ICRAA and FCRA 

claims and therefore fails for the same reasons those claims fail. The Court has not, however, 

addressed wheher the ICRAA claim is sufficiently pled and therefore declines to rule on whether 

Plaintiffs could establish unlawful conduct based on that statute for the purposes of their UCL 

claim. The Court also notes that the Complaint alleges that BPMC violated the “fraudulent” prong 

of the UCL, which BPMC did not address in the Motion to Dismiss.

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part. The Court dismisses Plaintiffs’ FCRA claim on the basis that it fails to state a claim under 

Rule 12(b)(6). The Court dismisses Plaintiffs’ UCL claims on the basis that Plaintiffs have not 

alleged an economic injury that establishes standing as to that claim. Plaintiffs may file an 

amended complaint to address these deficiencies no later than November 15, 2019. In addition, 

targeted discovery will be permitted to address the question of whether Defendant obtained 

“investigative reports” about Plaintiffs within the meaning of the FCRA, as set forth in the Court’s 

minute order. See Docket No. 28. The Motion to Strike is DENIED.

IT IS SO ORDERED.

Dated: September 24, 2019

______________________________________

JOSEPH C. SPERO

Chief Magistrate Judge

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