Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_23-cv-01451/USCOURTS-caed-1_23-cv-01451-3/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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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

TERRANCE MARSH, et al.,

Plaintiffs,

v.

FREEDOM MORTGAGE CORPORATION,

Defendant.

Case No. 1:23-cv-01451-JLT-EPG

SCREENING ORDER ALLOWING 

PLAINTIFFS’ FIRST AMENDED 

COMPLAINT TO PROCEED ON FCRA 

CLAIM

(ECF No. 9)

Plaintiffs Terrance Marsh and Gesele Marsh proceed pro se and in forma pauperis in this 

civil action. (ECF Nos. 1, 7, 9). On November 27, 2023, the Court screened, but found no 

cognizable claims in, Plaintiff’s initial complaint, which generally alleged that Defendant

Freedom Mortgage Corporation violated the Fair Credit Reporting Act (FCRA) by providing 

false information to consumer reporting agencies. (ECF No. 8). The Court granted Plaintiffs leave 

to amend, and they timely filed a first amended complaint, which is now before the Court for 

screening. (ECF Nos. 8, 9). 

Upon review, the Court concludes that Plaintiffs have stated a claim under the FCRA. 

Accordingly, the Court will allow Plaintiffs to proceed on their FCRA claim in their first 

amended complaint. In due course, the Court will issue an order providing service documents to 

Plaintiffs that they must complete and return so that Defendant may be served.

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I. SCREENING REQUIREMENT

As Plaintiffs are proceeding in forma pauperis, the Court screens the complaint under 28 

U.S.C. § 1915. (ECF No. 7). “Notwithstanding any filing fee, or any portion thereof, that may 

have been paid, the court shall dismiss the case at any time if the court determines that the action 

or appeal fails to state a claim upon which relief may be granted.” 28 U.S.C. § 1915(e)(2)(B)(ii).

A complaint is required to contain “a short and plain statement of the claim showing that 

the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). Detailed factual allegations are not 

required, but “[t]hreadbare recitals of the elements of a cause of action, supported by mere 

conclusory statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell 

Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)). A plaintiff must set forth “sufficient 

factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Id.

(quoting Twombly, 550 U.S. at 570). The mere possibility of misconduct falls short of meeting 

this plausibility standard. Id. at 679. While a plaintiff’s allegations are taken as true, courts “are 

not required to indulge unwarranted inferences.” Doe I v. Wal-Mart Stores, Inc., 572 F.3d 677, 

681 (9th Cir. 2009) (citation and internal quotation marks omitted). Additionally, a plaintiff’s 

legal conclusions are not accepted as true. Iqbal, 556 U.S. at 678. 

Pleadings of pro se plaintiffs “must be held to less stringent standards than formal 

pleadings drafted by lawyers.” Hebbe v. Pliler, 627 F.3d 338, 342 (9th Cir. 2010).

II. SUMMARY OF PLAINTIFF’S FIRST AMENDED COMPLAINT

Plaintiffs identify Freedom Mortgage Corporation as the sole Defendant in this case. (ECF 

No. 9, p. 2). As for the basis for federal jurisdiction, Plaintiffs list the FCRA. (Id. at 3). As for the 

facts supporting their claim, they state as follows:

The plaintiffs contend that the defendant inaccurately reported information to 

major credit bureaus, causing a significant credit score drop, denial of credit from 

other agencies, and hindering their ability to sell or refinance their home. 

Numerous credit inquiries were made by defendants and affiliates. Despite 

plaintiffs’ complaints and the provision of receipts for disputed accounts, Freedom 

Mortgage Corporation failed to rectify the reported inaccuracies. Consequently, 

the plaintiffs seek damages, the relief sought also includes the correction of 

inaccurate information on credit reports. See attachments page 1.

(Id. at 4). 

Elsewhere, in the complaint, Plaintiffs state: (1) “On December 1, 2023, the Plaintiffs 

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received a notice from USAA stating Freedom Mortgage reported a foreclosure, triggering a 

policy cancellation by USAA. This notification demonstrates the immediate and severe 

consequences of Freedom Mortgage’s inaccurate reporting”; (2) “On May 19, 2023, the Plaintiffs, 

to rectify the inaccuracies, sent a letter to all major credit bureaus, including supporting 

documentation such as receipts and bank statements for the months Freedom Mortgage claimed 

non-payment”; and (3) “Despite ongoing communication with Freedom Mortgage, including [a] 

dispute initiated on June 15, 2023, Freedom Mortgage failed to correct the inaccuracies it its 

reporting.” (Id. at 8). 

As for relief, Plaintiff’s seek “compensatory damages, including $245,000 for the value of 

their home, $100,000 in equity, and any additional damages as deemed appropriate; punitive 

damages for $60,000, justified by the alleged willful and negligent noncompliance with the Fair 

Credit Reporting Act (FCRA) and ongoing adverse credit effects.” (Id. at 4). Additionally, they 

request “a cease and desist order to halt the defendant’s purported wrongful reporting practices, 

preventing further harm.” (Id.). 

Plaintiffs have attached various documents to the complaint, including communications 

with consumer reporting agencies and financial account statements.

III. ANALYSIS OF PLAINTIFF’S COMPLAINT

Plaintiffs list the FCRA in their complaint as the statute that Defendant violated. (ECF No. 

9, p. 3). In relevant part, the Ninth Circuit has described the FCRA as follows:

Congress enacted the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. §§ 1681–

1681x, in 1970 “to ensure fair and accurate credit reporting, promote efficiency in 

the banking system, and protect consumer privacy.” Safeco Ins. Co. of Am. v. Burr, 

551 U.S. 47, 127 S.Ct. 2201, 2205, 167 L.Ed.2d 1045 (2007). As an important 

means to this end, the Act sought to make “consumer reporting agencies exercise 

their grave responsibilities [in assembling and evaluating consumers’ credit, and 

disseminating information about consumers’ credit] with fairness, impartiality, and 

a respect for the consumer’s right to privacy.” 15 U.S.C. § 1681(a)(4). In addition, 

to ensure that credit reports are accurate, the FCRA imposes some duties on the 

sources that provide credit information to CRAs, called “furnishers” in the statute. 

Section 1681s–2 sets forth “[r]esponsibilities of furnishers of information to 

consumer reporting agencies,” delineating two categories of responsibilities. 

Subsection (a) details the duty “to provide accurate information,” and includes the 

following duty:

(3) Duty to provide notice of dispute

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If the completeness or accuracy of any information furnished by any person 

to any consumer reporting agency is disputed to such person by a 

consumer, the person may not furnish the information to any consumer 

reporting agency without notice that such information is disputed by the 

consumer.

§ 1681s–2(a)(3).

Section 1681s–2(b) imposes a second category of duties on furnishers of 

information. These obligations are triggered “upon notice of dispute”—that is, 

when a person who furnished information to a CRA receives notice from the CRA 

that the consumer disputes the information. See § 1681i(a)(2) (requiring CRAs 

promptly to provide such notification containing all relevant information about the 

consumer’s dispute). Subsection 1681s–2(b) provides that, after receiving a notice 

of dispute, the furnisher shall:

(A) conduct an investigation with respect to the disputed information;

(B) review all relevant information provided by the [CRA] pursuant to 

section 1681i(a)(2) . . . ;

(C) report the results of the investigation to the [CRA];

(D) if the investigation finds that the information is incomplete or 

inaccurate, report those results to all other [CRAs] to which the person 

furnished the information . . . ; and

(E) if an item of information disputed by a consumer is found to be 

inaccurate or incomplete or cannot be verified after any reinvestigation 

under paragraph (1) . . . (i) modify . . . (ii) delete[or] (iii) permanently 

block the reporting of that item of information [to the CRAs].

§ 1681s–2(b)(1). These duties arise only after the furnisher receives notice of 

dispute from a CRA; notice of a dispute received directly from the consumer does 

not trigger furnishers’ duties under subsection (b). See id.; Nelson v. Chase 

Manhattan Mortgage Corp., 282 F.3d 1057, 1059–60 (9th Cir.2002).

The FCRA expressly creates a private right of action for willful or negligent 

noncompliance with its requirements. §§ 1681n & o; see also Nelson, 282 F.3d at 

1059. However, § 1681s–2 limits this private right of action to claims arising 

under subsection (b), the duties triggered upon notice of a dispute from a CRA. § 

1681s–2(c) (“Except[for circumstances not relevant here], sections 1681n and 

1681o of this title do not apply to any violation of ... subsection (a) of this section, 

including any regulations issued thereunder.”). Duties imposed on furnishers under 

subsection (a) are enforceable only by federal or state agencies. See § 1681s–2(d).

Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147, 1153–54 (9th Cir. 2009) (footnotes 

omitted).

Plaintiffs state that Defendant violated § 1681s-2(b), which permits a private right of 

action for failing to complete certain obligations—like conducting an investigation into disputed 

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information and reporting the results of the investigation to a consumer reporting agency. (ECF 

No. 9, p. 3). “To succeed on such a claim, plaintiffs must allege that they had a dispute with a 

credit reporting agency regarding the accuracy of an account, that the credit reporting agency 

notified the furnisher of the information, and that the furnisher failed to take the remedial 

measures outlined in the statute.” See Matracia v. JP Morgan Chase Bank, N.A., No. 2:11–190 

WBS JFM, 2011 WL 5374776, at *3 (E.D. Cal. Nov. 4, 2011) (citing 15 U.S.C. § 1681s–2(b)). 

Turning to the complaint, Plaintiffs first allege that Defendant inaccurately reported 

information to the consumer reporting agencies, and that Plaintiffs then sent a letter to the 

consumer report agencies disputing this information. (See ECF No. 9, p. 15 - May 19, 2023 letter 

to consumer report agencies, stating in part, “This letter is being written to inform you of the 

inaccurate reporting in my credit report from Freedom Mortgage. They have reported that I am 

120 days fate from November 2022 to present. This information is incorrect.”). 

Second, Plaintiffs’ complaint generally indicates that Defendant was informed of these 

inaccuracies; but more noteworthy, it attaches, among other things, a letter from Equifax stating 

as follows: “We are pleased to let you know that the results of the dispute you recently filed with 

Equifax are complete;” and “If we were able to make changes to your credit report based on the 

information you provided, we have done so. Otherwise, we contacted the company reporting the 

information to Equifax for them to investigate your dispute.” (Id. at 29). The letter continues, by 

stating,

In this situation, we request that the reporting company verify the accuracy of the 

information you disputed; we provide them with any relevant information and 

supporting documentation you provided us with the dispute to consider as part of 

the investigation; and we request that they send Equifax a response to your dispute 

and update their records and systems, as necessary.

(Id.) (alterations to capitalization and punctuation). The letter thereafter specifically references 

account information with Defendant. (Id. at 36). Based on this information, the Court concludes 

that Plaintiffs have sufficiently alleged that a consumer reporting agency notified Defendant of 

the disputed information.

Third, Plaintiffs allege that, despite being notified of disputes regarding credit 

information, Defendant failed to take the remedial measures outlined in the statute, e.g., it “failed 

to rectify the reported inaccuracies.” (Id. at 4). 

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Based on this information, the Court concludes that Plaintiffs have stated a FCRA claim in 

their first amended complaint. Accordingly, the Court will allow this action to proceed.

IV. ORDER

Based on the foregoing, IT IS ORDERED that this case shall proceed on Plaintiffs’ claim 

in their first amended complaint that Defendant violated Section 1681s-2(b) of the Fair Credit 

Reporting Act. The Court will issue an order in due course providing service documents to 

Plaintiffs that they must complete and return so that Defendant may be served.

IT IS SO ORDERED.

Dated: January 25, 2024 /s/

UNITED STATES MAGISTRATE JUDGE

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