Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_17-cv-01675/USCOURTS-casd-3_17-cv-01675-0/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

SOUTHERN DISTRICT OF CALIFORNIA

HORDELICIA SANCHEZ,

Plaintiff,

Case No. 17-cv-1675 DMS (MDD)

ORDER DENYING MOTION TO 

DISMISS

v.

DEPARTMENT STORES 

NATIONAL BANK and EQUIFAX 

INFORMATION SERVICES, LLC,

Defendants.

Pending before the Court is Defendant Equifax Information Services, LLC’s 

(“Equifax”) motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6).

Plaintiff Hordelicia Sanchez filed an opposition, and Defendant filed a reply. For 

the reasons set forth below, the motion is denied.

I.

BACKGROUND

Plaintiff alleges she had an outstanding balance on her Chase credit card 

account, which has been discharged when Department Stores National Bank 

(“DSNB”) issued a Form 1099-C, “Cancellation of Debt,” on October 7, 2013. 

(Compl. ¶ 13.) Nevertheless, when Plaintiff obtained a consumer report from 

Equifax on September 25, 2016, she discovered that DSNB had been inaccurately 

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reporting a balance due on her credit card account. (Id. ¶ 21.) On January 5, 2017, 

Plaintiff sent a letter to Equifax, disputing the accuracy of the outstanding debt. (Id.

¶ 22.) Equifax, however, failed to conduct a reasonable reinvestigation regarding 

the disputed information and continued to report false information on her consumer 

report. (Id. ¶ 24.) On July 18, 2017, Plaintiff brought suit against Equifax and 

DSNB, alleging violations of the Fair Credit Reporting Act (“FCRA”) and the 

California Consumer Credit Reporting Agencies Act (“CCCRAA”). Equifax filed 

the present motion in response to the Complaint.

II.

DISCUSSION

A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) tests 

the legal sufficiency of the claims asserted in the complaint. Fed. R. Civ. P. 12(b)(6); 

Navarro v. Block, 250 F.3d 729, 731 (9th Cir. 2001). In deciding a motion to 

dismiss, all material factual allegations of the complaint are accepted as true, as well 

as all reasonable inferences to be drawn from them. Cahill v. Liberty Mut. Ins. Co., 

80 F.3d 336, 338 (9th Cir. 1996). However, a court need not accept all conclusory 

allegations as true. Rather, it must “examine whether conclusory allegations follow 

from the description of facts as alleged by the plaintiff.” Holden v. Hagopian, 978 

F.2d 1115, 1121 (9th Cir. 1992) (citation omitted); see Benson v. Ariz. St. Bd. of 

Dental Exam’rs, 673 F.2d 272, 275–76 (9th Cir. 1982) (court need not accept 

conclusory legal assertions). A motion to dismiss should be granted if a plaintiff’s 

complaint fails to contain “enough facts to state a claim to relief that is plausible on 

its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial 

plausibility when the plaintiff pleads factual content that allows the court to draw 

the reasonable inference that the defendant is liable for the misconduct alleged.”

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556).

Defendant moves to dismiss Plaintiff’s FCRA claim under 15 U.S.C. § 1681e, 

arguing Plaintiff has failed to allege Defendant prepared a consumer report to a third 

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party, which is a requisite element of the claim. Specifically, Defendant contends 

the consumer credit disclosure Plaintiff obtained from Defendant solely for her own 

review was not a “consumer report” within the meaning of the statute, which requires 

delivery to a third party. However, Plaintiff has alleged Defendant communicated 

inaccurate information in her consumer report to third parties. Specifically, Plaintiff 

has stated “Defendant Equifax willfully failed to maintain and/or follow reasonable 

procedures to assure maximum accuracy of the information it reported to one or 

more third parties pertaining to the Account, in violation of 15 U.S.C. § 1681e.” 

(Compl. ¶ 34.) 

In any event, under Ninth Circuit case law, transmission of a consumer report 

to a third party is not a prerequisite to establishing liability under § 1681e(b). 

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

Ottiano v. Credit Data Sw., Inc., 54 F. App’x 640 (9th Cir. 2003) (“neither the 

transmission of the report to third parties, nor a denial of credit, is a prerequisite to 

recovery under the FCRA”) (citing Guimond, 45 F.3d at 1333); see also Neill v. 

Experian Info. Sols., Inc., No. CV-16-04326-PHX-JJT, 2017 WL 3838671, at *3 (D. 

Ariz. Sept. 1, 2017) (“the statute does not explicitly require delivery to a third party 

in order to be a ‘consumer report.’”); Larson v. Trans Union, LLC, No. 12-CV05726-WHO, 2013 WL 5665629, at *4 n.7 (N.D. Cal. Oct. 15, 2013) (“transmission 

of a credit report to a third party is not a prerequisite to recovery under the FCRA.”); 

Baker v. Trans Union LLC, No. CV-10-8038-PCT-NVW, 2010 WL 2104622, at *4 

(D. Ariz. May 25, 2010) (“transmission of the report to third parties is not a 

prerequisite to establishing liability under § 1681e(b).”).

“Liability under § 1681e(b) is predicated on the reasonableness of the credit 

reporting agency’s procedures in obtaining credit information.” Guimond, 45 F.3d 

at 1333 (citing Cahlin v. Gen. Motors Acceptance Corp., 936 F.2d 1151, 1156 (11th 

Cir. 1991)). Therefore, to state a claim under § 1681e(b), a plaintiff must allege “a 

credit reporting agency prepared a report containing inaccurate information.” Id. 

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(citing Cahlin, 936 F.2d at 1156). Here, Plaintiff’s allegation that Equifax prepared 

a consumer report that included incorrect information regarding the balance due on 

her credit card account is sufficient to state a prima facie claim under § 1681e(b) at 

this stage of the proceeding. Defendant’s motion is therefore denied. 

III.

CONCLUSION

For the foregoing reasons, Defendant’s motion to dismiss is denied.

IT IS SO ORDERED.

Dated: November 6, 2017

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