Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_06-cv-00552/USCOURTS-caed-2_06-cv-00552-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 15:1681 Fair Credit Reporting Act

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IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

RONALD B. McNEARNEY,

Plaintiff, No. CIV S-06-0552 GEB GGH PS

vs.

U.S. BANKCORP, INC., ORDER AND FINDINGS AND

RECOMMENDATIONS

Defendant. 

 /

Previously pending on this court’s law and motion calendar for May 25, 2005,

was defendant’s motion to dismiss, filed March 22, 2006, and plaintiff’s motion to remand and

for sanctions, filed April 17, 2006. Plaintiff has also filed a status report. Both parties attempted

to appear by telephone; however, due to technical failures the appearances could not be made and

the court took the matter under submission without a hearing. Now having reviewed the filings,

the court issues the following order and findings and recommendations.

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 Plaintiff erroneously named defendant U.S. Bankcorp in the complaint.

1

 Plaintiff also notes that credit bureaus are regulated under the California Consumer 2

Credit Reporting Agencies Act, but does not allege a violation under state law. He does seek

damages under both federal and state law, however.

2

I. BACKGROUND

Plaintiff filed this suit against U.S. Bank on January 10, 2006 in state court. 1

Defendant removed the action to this court on March 15, 2006. The complaint alleges that

defendant did not accurately report plaintiff’s credit to TransUnion, Equifax and Experian credit

bureaus, which caused “libelous and erroneous” information to be placed in his credit file, in

violation of 15 U.S. C. § 1681c(b). (Compl., ¶¶ 3, 4.) As a result, plaintiff claims his name and

credit rating were tarnished. (Id.) The complaint additionally alleges that defendant failed to

properly investigate plaintiff’s dispute, in violation of 15 U.S.C. § 1681i. (Id. at ¶ 3.) Further,

plaintiff alleges that between December 1, 2004 and January 15, 2005, defendant accessed

plaintiff’s credit report without his authorization. (Id. at ¶ 5.) After being informed that the

information was erroneous, defendant failed to delete it, which caused a decrease in plaintiff’s

credit rating, forcing him to pay a higher interest rate on a mortgage because he was closing

escrow within days. (Id.) Plaintiff alleges violations of the Fair Credit Reporting Act

(“FCRA”). Plaintiff seeks money damages. 2

II. DISCUSSION

A. Plaintiff’ Motion to Remand

Plaintiff filed this motion, conceding that although his complaint is brought under

the FCRA, it sounds in breach of contract and negligence. He claims to have the option of

dismissing this complaint and filing a new one in state court which does not reference the FCRA

and which is based solely on California law. 

As a preliminary matter, plaintiff contends that defendant filed its notice of

removal more than 30 days after service of the complaint. 28 U.S.C. § 1446(b) requires that

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notice of removal be filed within thirty days after service of the complaint or initial pleading.

Plaintiff served his complaint on February 14, 2006. Notice of Removal, Exh. A. Defendant

filed its notice of removal on March 15, 2006. The notice of removal was therefore timely.

Removal jurisdiction statutes are strictly construed against removal. See Libhart

v. Santa Monica Dairy Co., 592 F.2d 1062, 1064 (9th Cir. 1979). “Federal jurisdiction must be

rejected if there is any doubt as to the right of removal in the first instance.” Gaus v. Miles, 980

F.2d 564, 566 (9th Cir. 1992). “The burden of establishing federal jurisdiction falls on the party

invoking removal.” Harris v. Provident Life and Accident Ins. Co., 26 F.3d 930 (9th Cir.1994)

(quoting Gould v. Mut. Life Ins. Co. of New York, 790 F.2d 769, 771 (9th Cir.1986)). 

Removal of a state court action is proper only if it originally could have been filed

in federal court. 28 U.S.C. § 1441. “[F]ederal courts have jurisdiction to hear, originally or by

removal, only those cases in which a well-pleaded complaint establishes either that federal law

creates the cause of action, or that the plaintiff’s right to relief necessarily depends on resolution

of a substantial question of federal law.” Franchise Tax Board v. Construction Laborers

Vacation Trust, 463 U.S. 1, 27-28, 103 S. Ct. 2841, 2855-56 (1983). Mere reference to federal

law is insufficient to permit removal. See Smith v. Industrial Valley Title Ins. Co., 957 F.2d 90,

93 (3d Cir. 1992). 

In this case, the pro se complaint is clearly based on federal law. Plaintiff has

made clear, however, that he would go so far as to dismiss this complaint, so he could bring a

different complaint in state court which has no basis in federal law. Although a plaintiff may not

compel remand by eliminating the federal question upon which removal was based, Sparta

Surgical Corp. v National Ass’n of Securities Dealers, Inc., 159 F.3d 1209, 1213 (9th Cir. 1998),

the district court retains discretion to remand the matter to state court once federal claims have

dropped out of the lawsuit. See Carnegie-Melon Univ. v. Cohill, 484 U.S. 343, 349, 108 S. Ct.

614, 618-19 (1988). Especially when the federal claims have dropped out at the early stages of

the litigation, it may be an abuse of discretion for the district court to entertain the claims. Id. 

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Therefore, plaintiff could file an amended complaint which does not arise under federal law, and

which raises only state law claims. At that point, judicial economy, fairness to plaintiff, and

comity would dictate that the court exercise its discretion to decline at this early stage to exercise

supplemental jurisdiction over the state claims remaining in this action. Without such a

complaint before the court at the present time, however, and based on the current complaint,

plaintiff’s motion to remand must be denied.

B. Defendant’s Motion to Dismiss

Legal Standards for Motions to Dismiss

a. Preliminary Matters. As a preliminary matter, plaintiff failed to cite

other than the most general and unhelpful legal authority to support his opposition to defendant’s

motion to dismiss. Bare contentions, unsupported by explanation or authority, are deemed

waived. See FDIC v. Garner, 126 F.3d 1138, 1145 (9th Cir. 1997) (claim waived when no case

law or argument in support is presented); Seattle School Dist., No. 1 v. B.S., 82 F.3d 1493, 1502

(9th Cir. 1996) (party who presents no explanation in support of claim of error waives issue); see

also Pelfresne v. Village of Williams Bay, 917 F.2d 1017, 1023 (7th Cir.1990); (“A litigant who

fails to press a point by supporting it with pertinent authority, or by showing why it is sound

despite a lack of supporting authority . . . forfeits the point. We will not do his research for

him.”); Johnson v. Indopco, 887 F. Supp. 1092, 1096 (N.D. Ill. 1995) (finding argument

unsupported by relevant authority, or by demonstration of why it is a good argument despite lack

of authority, constitutes mere assertion not meriting court’s attention). By presenting bare

contentions without appropriate supporting authority, plaintiff in essence has waived opposition

to the motion. 

Mindful of plaintiff’s pro se status, however, the court has liberally construed the

complaint and opposition to the instant motion to dismiss. The court, however, cannot act as

legal advisor or lawyer for plaintiff. It has never been the court’s function “to supervise laymen

in the practice of law.” Springer v. Best, 264 F.2d 24, 25 (9th Cir. 1959.) The Ninth Circuit

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explicitly has warned against “becoming a player in the adversary process rather than remaining

its referee.” Jacobsen v. Filler, 790 F.2d 1362, 1365 (9th Cir.1986) (“[I]t is not for the trial court

to inject itself into the adversary process on behalf of one class of litigant”). Pro se litigants

undoubtedly are entitled to have pleadings liberally construed. See, e.g., Haines v. Kerner, 404

U.S. 519, 520-21, 92 S. Ct. 594, 595-96 (1972). Moreover, they may be granted leeway in

certain cases when they run afoul of merely technical procedural requirements. The Ninth

Circuit recently reiterated that “a pro se litigant is not excused from knowing the most basic

pleading requirements.” American Ass’n of Naturopathic Physicians v. Hayhurst, 227 F.3d

1104, 1108 (9th Cir. 2000) (citing Briones v. Riviera Hotel & Casino, 116 F.3d 379, 382 (9th

Cir. 1997)); see also McNeil v. United States, 508 U.S. 106, 113, 113 S.Ct. 1980, 1984 (1993)

(“[W]e have never suggested that procedural rules in ordinary civil litigation should be

interpreted so as to excuse mistakes by those who proceed without counsel”). In sum, “pro se

litigants in the ordinary civil case should not be treated more favorably than parties with

attorneys of record.” Jacobsen, 790 F.2d at 1364. Although courts are required to provide a pro

se litigant with notice of the deficiencies in the complaint, Noll v. Carlson, 809 F.2d 1446, 1448

(9th Cir.1987), “[a] statement of deficiencies need not provide great detail or require district

courts to act as legal advisors to pro se plaintiffs.” Id. at 1448-49; see also Lopez v. Smith, 203

F.3d 1122, 1127-28 (9th Cir.2000) (en banc). 

b. Fed. R. Civ. P. 12(b)(6)

A complaint should not be dismissed under Rule 12(b)(6) unless it appears

beyond doubt that plaintiff can prove no set of facts in support of its claims which would entitle

plaintiff to relief. NOW, Inc. v. Schiedler, 510 U.S. 249, 256, 114 S. Ct. 798, 803 (1994);

Cervantes v. City of San Diego, 5 F.3d 1273, 1274-75 (9th Cir. 1993). Dismissal may be based

either on the lack of cognizable legal theories or the lack of pleading sufficient facts to support

cognizable legal theories. Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990).

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The complaint’s factual allegations are accepted as true. Church of Scientology of

California v. Flynn, 744 F.2d 694 (9th Cir.1984). The court construes the pleading in the light

most favorable to plaintiff and resolves all doubts in plaintiff’s favor. Parks School of Business,

Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir.1995). General allegations are presumed to

include specific facts necessary to support the claim. NOW, 510 U.S. at 256, 114 S. Ct. at 803,

quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S. Ct. 2130, 2137 (1992). 

The court may disregard allegations contradicted by the complaint’s attached

exhibits. Durning v. First Boston Corp., 815 F.2d 1265, 1267 (9th Cir. 1987); Steckman v. Hart

Brewing, Inc., 143 F.3d 1293, 1295 (9th Cir.1998). Furthermore, the court is not required to

accept as true allegations contradicted by judicially noticed facts. Mullis v. United States

Bankruptcy Ct., 828 F.2d 1385, 1388 (9th Cir. 1987). The court may consider matters of public

record, including pleadings, orders, and other papers filed with the court. Mack v. South Bay

Beer Distributors, 798 F.2d 1279, 1282 (9th Cir. 1986), abrogated on other grounds by Astoria

Federal Savings and Loan Ass’n v. Solimino, 501 U.S. 104, 111 S. Ct. 2166 (1991). “The court

is not required to accept legal conclusions cast in the form of factual allegations if those

conclusions cannot reasonably be drawn from the facts alleged.” Clegg v. Cult Awareness

Network, 18 F.3d 752 (9th Cir. 1994). Neither need the court accept unreasonable inferences, or

unwarranted deductions of fact. See Western Mining Council v. Watt, 643 F.2d 618, 624 (9th

Cir. 1981). 

Analysis

The Complaint contains allegations of three violations of the FCRA, through

defendant’s inaccurate reporting of plaintiff’s credit to various credit bureaus (15 U.S.C. §

1681c(b)), through defendant’s unauthorized inquiries into plaintiff’s credit report, and by

defendant’s failure to investigate plaintiff’s dispute (15 U.S.C. § 1681i). 

Defendant’s motion argues in favor of dismissing the action because plaintiff’s

basis for suit, the FCRA, does not provide for a private right of action for violation of § 1681sCase 2:06-cv-00552-GEB-GGH Document 19 Filed 06/05/06 Page 6 of 9
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2(a), that defendant had no duty under § 1681s-2(b), and that defendant obtained plaintiff’s credit

report for a proper purpose under § 1681b(f). 

Federal courts have jurisdiction to hear claims under the FCRA; however, a

complaint must allege that credit reporting agencies or users of information willfully or

negligently violated the Act. 15 U.S.C. §§ 1681n, 1681o, 1681p; Griffin v. Hooper-Holmes

Bureau, 413 F. Supp. 107, 108 (M.D. Fla. 1976); Rush v. Macy’s New York, Inc., 775 F.2d

1554, 1557 (11th Cir. 1985).

First, it is true that § 1681s-2 (a) precludes private causes of action. Nelson v.

Chase Manhattan Mortgage Corp., 282 F.3d 1057, 1059 (9th Cir.2002) (stating “private

enforcement under §§ n & o is excluded”). Defendant’s motion ignores § 1681s-2 (b) in regard

to this issue, which does permit private causes of action. Thomasson v. Bank One, Louisiana,

N.A., 137 F. Supp. 2d 721, 722 (E.D. La. 2001) (“The consumer may bring a cause of action

against the furnisher if it does not comply with the provisions of § 1681s-2(b).”) 

In 1996, Congress passed the Consumer Credit Reporting Reform

Act, which amended the FCRA and imposed duties on furnishers

of information. Pub.L. No. 90-321, Title VI, § 623, as added

Pub.L. No. 104-208, Div. A., Title II, § 2413(a)(2), 110

Stat.2009-447. As amended, the FCRA requires furnishers of credit

information to provide accurate information about consumers to

consumer credit reporting agencies. 15 U.S.C. § 1681s-2(a). It also

requires that furnishers correct any erroneous information

previously reported. Id. Furthermore, furnishers of credit

information must conduct an investigation upon receiving notice

from a consumer credit reporting agency regarding a dispute about

the accuracy or completeness of information previously provided to

the consumer reporting agency. 15 U.S.C. § 1681s-2(b). If, after

such investigation, the furnisher of information finds that the

information is inaccurate, the furnisher must report those results to

the consumer reporting agencies to which the information was

furnished. Id.

Pirouzian v. SLM Corp., 396 F. Supp. 2d 1124, 1127 (S.D. Cal. 2005) (emphasis added).

Defendant claims it had no duty under § 1681s-2(b) because that subdivision of

the statute requires that the furnisher must receive a report from the credit reporting agency. 

Defendant cites Elmore v. N. Fork Bancorporation, Inc., 325 F. Supp. 2d 336, 340 (S.D.N.Y.

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2004), where, although the bank had actual notice of the dispute, it was notice from another

source and not the credit reporting agency. The court rationalized that if Congress had intended

for furnishers to have a duty based on notice from any source, it would have so stated. Id. Other

cases in this circuit agree. See Peasley v. Verizon Wireless (VAW) LLC, 364 F. Supp. 2d 1198,

1200 (S.D. Cal. 2005) (citing other circuits for the consistently held position that furnisher must

receive notice from a consumer reporting agency, not from the consumer); Hasvold v. First USA

Bank, N.A., 194 F. Supp. 2d 1228 (D. Wyo. 2002) (same). Plaintiff has offered no argument to

the contrary. Although plaintiff has not specifically alleged a violation of § 1681s-2(b), he may

be able to amend his claim to show that defendant received notice from a credit reporting agency. 

In his status report, filed May 17, 2006, plaintiff indicated his wish to file an amended complaint

by July 1, 2006, to include three credit bureaus as defendants.

In regard to plaintiff’s claim that defendant twice obtained his credit report for an

improper purpose, defendant argues that it obtained the report for a proper purpose, plaintiff’s

proposed mortgage loan, as conceded by plaintiff. Section 1681b(a)(3)(A) provides that a

consumer report may be obtained by a person who “intends to use the information in connection

with a credit transaction involving the consumer on whom the information is to be furnishedAAAA”

Defendant prevails on this argument, and plaintiff has provided nothing to contradict it. 

Defendant’s motion to dismiss will therefore be granted; however, plaintiff will be given the

opportunity to amend his complaint in light of his pro se status. Pro se pleadings are held to a

less stringent standard than those drafted by lawyers. Haines v. Kerner, 404 U.S. 519, 520-21, 92

S. Ct. 594, 595-96 (1972). Unless it is clear that no amendment can cure its defects, a pro se

litigant is entitled to notice and an opportunity to amend the complaint before dismissal. See

Noll v. Carlson, 809 F.2d 1446, 1448 (9th Cir. 1987). 

III. CONCLUSION

For the above stated reasons, IT IS HEREBY RECOMMENDED THAT

plaintiff’s motion to remand, filed April 17, 2006, be denied.

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These findings and recommendations are submitted to the United States District

Judge assigned to the case, pursuant to the provisions of Title 28 U.S.C. § 636(b)(l). Within ten

(10) days after being served with these findings and recommendations, any party may file written

objections with the court and serve a copy on all parties. Such a document should be captioned

“Objections to Magistrate Judge’s Findings and Recommendations.” Any reply to the objections

shall be served and filed within ten (10) days after service of the objections. The parties are

advised that failure to file objections within the specified time may waive the right to appeal the

District Court’s order. Martinez v. Ylst, 951 F.2d 1153 (9th Cir. 1991).

Good cause appearing, IT IS ORDERED that:

1. Defendant’s motion to dismiss, filed March 22, 2006, is granted.

2. Plaintiff is granted thirty days from the date of this order to file an amended

complaint. Failure to file an amended complaint will result in a recommendation of dismissal of

this action.

DATED: 6/2/06

/s/ Gregory G. Hollows

 

GREGORY G. HOLLOWS

 U. S. MAGISTRATE JUDGE

GGH/076

McNearney0552.mtd.wpd

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