Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_12-cv-02764/USCOURTS-casd-3_12-cv-02764-0/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

TONI RUSSELL,

Plaintiff,

CASE NO. 12cv2764-LAB (WVG)

ORDER GRANTING MOTION TO

PROCEED IN FORMA

PAUPERIS; AND

ORDER SCREENING AND

DISMISSING COMPLAINT

vs.

COLLECTION COMPANY OF

AMERICA,

Defendant.

On November 15, 2012, Plaintiff Toni Russell filed her complaint for an alleged

violation of the Fair Credit Reporting Act (FCRA). Along with her complaint, she filed a

motion to proceed in forma pauperis (IFP).

The Court has reviewed the IFP motion, finds Russell is without funds to pay the filing

fee, and GRANTS the motion.

The Court is required to screen the complaint of a plaintiff proceeding IFP, and to

dismiss it to the extent it is frivolous or malicious, fails to state a claim, or seeks monetary

relief from an immune defendant. See § 1915(e)(2)(B); Lopez v. Smith, 203 F.3d 1122,

1127 (9th Cir. 2000) (en banc).

Russell alleges Defendant Collection Company of America (“CCA”) obtained her

credit report on April 22, 2009 with no legitimate purpose. She seeks $1000 in statutory

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damages for what she alleges was a willful violation of the FCRA. The numerous legitimate 1

purposes for obtaining credit reports are set forth in 15 U.S.C. § 1681b.

Although the complaint states some elements of a claim, several defects require that

it be dismissed. First, it contains an important factual contradiction. In an effort to show her

claim was within the statute of limitations, Russell alleged that she first discovered the

violation in November of 2012. (Compl., ¶ 9.) She also, however, alleged that she sent

notices to CCA of their violation on October 20, 2012 and again on October 31, 2012.

Obviously, it cannot be that Russell sent CCA notices of a violation she herself had not yet

discovered. 

Secondly, Russell’s allegations are insufficient to state a claim, under the standard

set forth in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556

U.S. 662 (2009). Under this standard, she must ““plead[ ] factual content that allows the

court to draw the reasonable inference that the defendant is liable for the misconduct

alleged.” Iqbal at 678 (quoting Twombly at 570.) The Complaint refers to CCA’s reasons for

obtaining the report, by stating that CCA has never “provided any valid justification they may

have had” for obtaining her report, and also that CCA “had a duty to properly ascertain if

there was any legitimate permissible purpose” before obtaining her report. (Compl., ¶ 21,

emphasis in original.) While the complaint does not say so directly, it implies that CCA

provided some kind of reason for obtaining her report, but that Russell does not think it was

a legitimate one. Russell’s opinions about whether a reason was legally valid or legitimate,

however, are merely legal conclusions, not factual allegations.2

While Russell has attempted to show CCA had no permissible reasons for obtaining

her report, such as by alleging she never had any business dealings with CCA or gave CCA

 A plaintiff can obtain either actual damages or $1000 statutory damages, whichever 1

is greater, for willful violations of the FCRA, but only actual damages for negligent

noncompliance. See 15 U.S.C. §§ 1681n, 1681o.

 It may also be that CCA didn’t send a reply because it hadn’t yet had time to reply 2

to Russell’s requests. It is important that, whatever factual allegations the complaint makes

should be to the best of Russell’s knowledge, information, and belief, formed after an inquiry

that was reasonable under the circumstances. See Fed. R. Civ. P. 11(b)(3). This could

mean allowing CCA more than just a few weeks to look into its records and make a reply.

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permission to obtain her credit report (Compl., ¶ 16), the Complaint’s allegations do not

address all reasonably possible purposes CCA may plausibly have had in obtaining the

report. For example, even accepting all the allegations as true, the distinct possibility remains

that CCA was acting as an agent for a person or company who was entitled to obtain a copy

of the report, such as an insurer, someone Russell had authorized to obtain her report, or

a creditor attempting to collect a debt based on a transaction Russell had initiated with some

other company. See Thao Pham v. Solace Financial, LLC, 2012 WL 5471160, slip op. at *2

(N.D.Cal., Nov. 9, 2012) (holding that FCRA claimant bore the burden of showing that

defendant was not acting as agent for a bank the claimant authorized to obtain a credit

report, and was not acting to collect a debt arising from a transaction the plaintiff had

initiated). 3

In short, the Complaint leaves open too many plausible reasons CCA might have

legitimately obtained Russell’s credit report. There are enough omissions in the allegations

that, even accepting them all as true, it is less than plausible Russell is entitled to relief. The

Complaint does not meet the Twombly-Iqbal standard, and is therefore DISMISSED

WITHOUT PREJUDICE. 

If Russell believes she can amend the Complaint to cure these defects, she may do

so. The amended complaint should resolve the contradictions in the timeline, as identified

in this order. It should also allege whether CCA responded to her inquiries. If CCA did so,

the amended complaint should allege what reasons CCA gave for obtaining her report, and

whether those reasons were true. The amended complaint should not merely allege CCA

didn’t request the report for a few of the more common reasons—it must allege that none

of the permissible reasons applied. For example, it must allege that CCA was not acting on

behalf of some other person or entity that was entitled to obtain the report, and was not

 In Thao Pham, the plaintiff applied to Bank of America for an extension of credit and 3

signed an agreement to allow the Bank to obtain the plaintiff’s credit report from time to time.

The defendant, Solace Financial, claimed that it was acting as a debt collector for the Bank.

If it turned out that the defendant was collecting a debt the plaintiff initiated with the Bank,

the court noted, it acted with a permissible purpose. Also, if the defendant acted as the

Bank’s agent, it was protected by the plaintiff’s consent.

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attempting to collect a debt initiated by Russell. The amended complaint should show this

by factual allegations, rather than legal conclusions. The amended complaint should comply

with the pleading standard given in Fed. R. Civ. P. 8. 

An amended complaint must be filed no later than January 7, 2013. If an amended

complaint is not filed within the time permitted, this action will be dismissed without prejudice

but without leave to amend.

IT IS SO ORDERED.

DATED: November 27, 2012

HONORABLE LARRY ALAN BURNS

United States District Judge

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