Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-3_14-cv-08051/USCOURTS-azd-3_14-cv-08051-0/pdf.json

Nature of Suit Code: 430
Nature of Suit: Banks and Banking
Cause of Action: 28:1441 Petition for Removal - Fair Credit Reporting Act

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Patrick Renner, 

Plaintiff, 

v. 

Bank of America, N.A., 

Defendant.

No. CV-14-08051-PCT-JAT

ORDER 

 Pending before the Court are: (1) Defendant’s Motion to Dismiss Plaintiff’s First 

Amended Complaint (“Motion to Dismiss”) (Doc. 23); (2) Plaintiff’s Objection to 

Defendant’s Motion to Dismiss the First Amended Complaint (“Response”) (Doc. 24); 

(3) Plaintiff’s Motion Requesting the Court’s Leave to Amend Complaint pursuant to 

Fed. R. Civ. P. 15(a)(2) (“Motion to Amend”) (Doc. 25); (4) Plaintiff’s Lodged Second 

Amended Complaint pursuant to LRCiv. 15.1(b) (the “Lodged SAC”) (Doc. 26); and (5) 

Defendant’s Reply in Support of Motion to Dismiss Amended Complaint (“Reply”) 

(Doc. 27). Defendant’s Reply also serves as a Response to Plaintiff’s Motion to Amend. 

(Id.). 

I. Background 

 The Court assumes the facts alleged in the First Amended Complaint (the “FAC”) 

(Doc. 17) are true for purposes of deciding the pending Motion to Dismiss. See Shwarz v. 

United States, 234 F.3d 428, 435 (9th Cir. 2000). For an unspecified amount of time, 

Defendant Bank of America, N.A. owned, held, and serviced a mortgage on Plaintiff 

Patrick Renner’s Flagstaff property. (Doc. 17 at 2; see Doc. 23-1). In 2012, after noticing 

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inaccuracies in his credit history, Plaintiff lodged complaints with Defendant and the 

Credit Reporting Agencies (the “CRAs”). (Doc. 17 at 1). Defendant refused to verify or 

correct the inaccurate and incomplete information reported to the CRAs. (Id. at 2). As a 

result, Plaintiff has suffered damages from his inability to obtain a mortgage at a low 

interest rate. (Id. at 2). 

On March 4, 2014, Plaintiff filed a complaint in state court alleging that Defendant 

violated “the Fair Credit Reporting Act [(the “FCRA”)], 15 U.S.C. § 1681 et seq,” by 

failing to completely and “accurately report information known [by Defendant] to the 

[CRAs].” (Doc. 17 at 1; see also Doc. 1-1; Doc. 1-5 at 1). On March 31, 2014, Defendant 

removed the action to this Court. (See Doc. 1). 

II. Motion to Dismiss First Amended Complaint 

Defendant moves to dismiss Plaintiff’s FAC because Plaintiff fails to “plead 

allegations sufficient to establish a claim against” Defendant and “the FCRA does not 

provide Plaintiff with a private cause of action.” (Doc. 23 at 3). 

 A. Legal Standard 

The Court may dismiss a complaint for failure to state a claim under Fed. R. Civ. 

P. 12(b)(6) for two reasons: (1) lack of cognizable legal theory; or (2) insufficient facts 

alleged under a cognizable legal theory. Balistreri v. Pacifica Police Dep’t, 

901 F.2d 696, 699 (9th Cir. 1990). To survive a 12(b)(6) motion for failure to state a 

claim, a complaint must meet the requirements of Fed. R. Civ. P. 8(a)(2), which requires 

a “short and plain statement of the claim showing that the pleader is entitled to relief,” so 

that the defendant has “fair notice of what the . . . claim is and the grounds upon which it 

rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 

355 U.S. 41, 47 (1957)). 

 Although a complaint attacked for failure to state a claim does not need detailed 

factual allegations, the pleader’s obligation to provide the grounds for relief requires 

“more than labels and conclusions, and a formulaic recitation of the elements of a cause 

of action will not do.” Twombly, 550 U.S. at 555 (internal citations omitted). Rule 8(a)(2) 

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“requires a ‘showing,’ rather than a blanket assertion, of entitlement to relief. Without 

some factual allegations in the complaint, it is hard to see how a claimant could satisfy 

the requirement of providing not only ‘fair notice’ of the nature of the claim, but also 

‘grounds’ on which the claim rests.” Id. (citing 5 C. Wright & A. Miller, Federal Practice 

and Procedure § 1202, pp. 94, 95 (3d ed. 2004)). Thus, Rule 8’s pleading standard 

demands more than “an unadorned, the-defendant-unlawfully-harmed-me accusation.” 

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 555). 

 In deciding a motion to dismiss under Rule 12(b)(6), the Court must construe the 

facts alleged in the complaint in the light most favorable to the drafter of the complaint 

and the Court must accept all well-pleaded factual allegations as true. See Shwarz, 234 

F.3d at 435. Nonetheless, the Court does not have to accept as true a legal conclusion 

couched as a factual allegation. Papasan v. Allain, 478 U.S. 265, 286 (1986). 

B. Analysis 

Defendant argues that the Court should dismiss Plaintiff’s FAC because “Plaintiff 

fail[s] to plead any facts that would entitle him to” relief under the FCRA and the FAC 

“fails to plausibly allege any claim against [Defendant].” (Doc. 23 at 1). 

 Congress enacted the FCRA to ensure fair and accurate credit reporting, to 

promote efficiency in the banking system, and to protect consumer privacy. Gorman v. 

Wolpoff & Abramson, LLP, 584 F.3d 1147, 1153 (9th Cir. 2009). To ensure accurate 

credit reporting, the FCRA imposes some duties on the sources that provide information 

to CRAs or “furnishers,” as they are called in the statute. Id.

 Section 1681s-2 of Title 15 of the U.S. Code prescribes two categories of 

responsibilities for furnishers. Subsection (a) outlines a furnisher’s duty to provide 

accurate information to CRAs. 15 U.S.C. § 1681s-2(a). Subsection (b) outlines a 

furnisher’s duty to investigate after receiving notice of a dispute regarding credit-related 

information from a CRA. 15 U.S.C. § 1681s-2(b). “The FCRA expressly creates a private 

right of action for willful or negligent noncompliance with its requirements.” Gorman, 

584 F.3d at 1154 (citing 15 U.S.C. § 1681(n)-(o); Nelson v. Chase Manhattan Mortgage 

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Corp., 282 F.3d 1057, 1059 (9th Cir. 2002)). “However, § 1681s-2 limits this private 

right of action to claims arising under subsection (b).” Id. (citing 15 U.S.C. § 1681s-2(c)). 

 Plaintiff alleges that Defendant, who is a furnisher under the FCRA, “inaccurately 

and incompletely reported information to the [CRAs] regarding the Plaintiff’s credit 

history.” (Doc. 17 at 1). Plaintiff further alleges that he has “lodged complaints with 

[Defendant]” and has “filed complaints with the [CRAs]” to no avail. (Id.). Plaintiff fails, 

however, to allege that Defendant improperly investigated the dispute after receiving 

notice from the CRAs. Furthermore, Plaintiff fails to allege that the CRAs even notified 

Defendant of Plaintiff’s dispute. 

 Under the FCRA, individual consumers have a private right of action against a 

furnisher only for violations of § 1681s-2(b). A furnisher’s § 1681s-2(b) duties are 

triggered only when the furnisher receives notice of a consumer dispute from a CRA. 

Because Plaintiff fails to allege that the CRAs sent notice of his consumer dispute to 

Defendant, thereby triggering Defendant’s duty to investigate, Plaintiff’s claim under the 

FCRA necessarily fails. Accordingly, the Court grants Defendant’s Motion to Dismiss 

the FAC. See Ewing v. Wells Fargo Bank, No. CV-11-8194-PCT-JAT, 

2012 WL 4514055, at *4 (D. Ariz. Oct. 2, 2012) (dismissing a plaintiff’s FCRA claim for 

failure to allege that the CRA sent notice of plaintiff’s consumer dispute to the 

defendant). 

III. MOTION TO AMEND WITH LEAVE OF COURT 

Plaintiff filed his Motion to Amend with the purpose of “correct[ing] deficiencies 

and add[ing] clarity” to his complaint. (Doc. 25 at 1). The Lodged SAC includes 

additional facts that the Court recounts below. 

 From July 1, 2011 until March 15, 2013, Defendant serviced Plaintiff’s mortgage, 

originally obtained from Countrywide Home Loans, Inc. in December 2006. (Doc. 26 at 

1). In September 2012, Plaintiff became aware of alleged inaccuracies in his credit 

history when BBVA Compass Bank denied his application to refinance his mortgage due 

to “negative items” in Plaintiff’s credit history. (Id. at 2). In particular, Defendant 

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reported that: (1) Plaintiff’s mortgage was “part of a Chapter 13 bankruptcy”; (2) “the 

account was delinquent”; (3) “the account was closed”; and (4) the account had no 

payment history. (Id.). 

 Plaintiff filed complaints with multiple CRAs stating that the reported information 

was inaccurate. (Id.). In October 2012, the CRAs notified Plaintiff that Defendant 

verified the information reported and determined it was correct. (Id.). Plaintiff wrote 

numerous letters to Defendant documenting why the information was allegedly 

inaccurate and incomplete. (Id.). Twice more Plaintiff filed complaints with the CRAs. 

(Id. at 2–3). Both times the CRAs responded that Defendant had verified the information 

being reported as correct. (Id.). In September 2013, J.P. Morgan Chase Bank denied 

Plaintiff’s application to refinance his mortgage due to negative information in his credit 

history. (Id. at 3). 

 Plaintiff now seeks to amend the FAC pursuant to Fed. R. Civ. P. 15(a)(2) by 

including the above-stated facts related to Plaintiff’s FCRA claim. (See Doc. 25). 

 A. Legal Standard 

 A party may amend a pleading once as a matter of course within 21 days after 

serving it or within 21 days of service of, among others, a Rule 12(b)(6) motion. Fed. R. 

Civ. P. 15(a)(1). In all other circumstances, a party must seek leave to amend from the 

court. Fed. R. Civ. P. 15(a)(2). “The court should freely give leave when justice so 

requires.” Id. Additionally, there is a “longstanding rule that ‘[l]eave to amend should be 

granted if it appears at all possible that the plaintiff can correct the defect.’ ” Lopez v. 

Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (quoting Balistreri, 901 F.2d at 701). In 

determining whether to grant a motion to amend, a court should consider five factors: 

“(1) bad faith; (2) undue delay; (3) prejudice to the opposing party; (4) futility of 

amendment; and (5) whether the plaintiff has previously amended his complaint.” Nunes 

v. Ashcroft, 375 F.3d 805, 808 (9th Cir. 2004). “Significantly, ‘[t]he party opposing 

amendments bears the burden of showing prejudice,’ futility, or one of the other 

permissible reasons for denying a motion to amend.” Farina v. Compuware Corp., 

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256 F. Supp. 2d 1033, 1060 (D. Ariz. 2003) (quoting DCD Programs, Ltd. v. Leighton, 

833 F.2d 183, 187 (9th Cir. 1987)). Additionally, the Ninth Circuit Court of Appeals 

recognizes that the complaint of a pro se plaintiff may be dismissed “only where ‘it 

appears beyond doubt that the plaintiff can prove no set of facts in support of his claim 

which would entitle him to relief.’ ” Franklin v. Murphy, 745 F.2d 1221, 1228 (9th Cir. 

1984) (quoting Haines v. Kerner, 404 U.S. 519, 521 (1972)); see also Weilburg v. 

Shapiro, 488 F.3d 1202, 1205 (9th Cir. 2007) (“Dismissal of a pro se complaint without 

leave to amend is proper only if it is absolutely clear that the deficiencies of the 

complaint could not be cured by amendment.”) (quoting Schucker v. Rockwood, 846 F.2d 

1202, 1203–04 (9th Cir. 1988)). 

B. Analysis 

 Here, Plaintiff has already amended the Complaint as a matter of right pursuant to 

Rule 15(a)(1) and seeks the Court’s leave to amend his complaint pursuant to Rule 

15(a)(2). (Doc. 25 at 1). Defendant argues that the Court should not grant Plaintiff’s 

Motion to Amend because of Plaintiff’s prior amendment (Doc. 23 at 5) and futility of 

amendment (Doc. 27 at 1–2). 

 1. Prior Amendments 

Defendant first argues that the Court should deny Plaintiff’s Motion to Amend 

because “Plaintiff has already had one opportunity to amend his Complaint.” (Doc. 23 at 

5). 

 The Court’s discretion to deny an amendment is “particularly broad” where a 

plaintiff has previously amended his complaint. Allen v. City of Beverly Hills, 

911 F.2d 367, 373 (9th Cir. 1990). The presence of prior amendments may persuade a 

court to deny leave, even in absence of the four other factors “when the movant present[s] 

no new facts but only new theories and provide[s] no satisfactory explanation for his 

failure to fully develop his contentions originally.” Id. at 374. 

 The Lodged SAC provides nearly two pages of additional facts. (See Doc. 26 at 1–

3). Moreover, the Lodged SAC provides no additional legal theories. (See id. at 1–5). 

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Because Plaintiff’s overwhelming purpose in seeking leave of court to amend is to add 

clarity to his existing claim, the presence of a prior amendment does not weigh against 

granting Plaintiff’s Motion to Amend. 

 2. Futility 

Defendant next argues that the Court should deny Plaintiff’s Motion to Amend 

because the Lodged SAC is futile. (Doc. 27 at 1–2). 

 Futility alone is enough to deny a motion for leave to amend. Nunes, 

375 F.3d at 808. A proposed amendment is futile only if “no set of facts can be proved 

under the amendment to the pleadings that would constitute a valid and sufficient claim.” 

Miller v. Rykoff-Sexton, Inc., 845 F.2d 209, 214 (9th Cir. 1988). Additionally, futility 

may be found where proposed amendments are “either duplicative of existing claims or 

patently frivolous, or both.” Bonin v. Calderon, 59 F.3d 815, 846 (9th Cir. 1995). The 

party opposing amendment bears the burden of proving futility. Rodriguez v. City of 

Phoenix, No. CV-11-01992-PHX-JAT, 2014 WL 1053602, at *3 (D. Ariz. Mar. 19, 

2014). 

 Once a plaintiff alleges that a CRA sent notice of a plaintiff’s consumer dispute to 

the furnisher, the FCRA creates a private right of action, enabling consumer suits for 

willful (§ 1681(n)) and/or negligent (§ 1681(o)) noncompliance with the duties 

enumerated in § 1681s-2(b). Gorman, 584 F.3d at 1154. “The purpose of § 1681s-2(b) is 

to require furnishers to investigate and verify that they are in fact reporting complete and 

accurate information to the CRAs after a consumer has objected to the information in his 

file.” Id. at 1164. As a result, after receiving a notice of a consumer dispute from a CRA, 

a furnisher must pursue a “reasonable” investigation to determine whether the 

information is incomplete or inaccurate. Id. at 1157. 

 Defendant alleges that Plaintiff’s SAC is futile because: (1) Plaintiff “provide[s] 

nothing to suggest [Defendant] was negligent in its investigation—except for the fact that 

[Defendant] disagreed with [Plaintiff’s] dispute after conducting its own investigation”; 

(2) Plaintiff suggests that Defendant “investigated the dispute and determined it was not 

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reporting inaccurate information”; and (3) Plaintiff “fails to allege how the information 

[provided by Defendant] is inaccurate.” (Doc. 27 at 3). 

 i. Plaintiff’s Failure to Allege a Negligent Investigation 

Defendant’s first argument is that the Lodged SAC is futile because Plaintiff fails 

to provide support that Defendant conducted a negligent investigation. This argument 

misstates Plaintiff’s burden under the FCRA. To state a claim under the FCRA, Plaintiff 

must allege that Defendant negligently and/or willfully violated the duties enumerated in 

§ 1681s-2(b). 15 U.S.C. § 1681(n)-(o). Plaintiff alleges that he wrote “numerous letters” 

to Defendant both before and after he filed complaints with the CRAs. (Doc. 26 at 2–3). 

These letters contained “documented evidence that the [reported] information was 

inaccurate and incomplete.” (Id. at 2). Even after receiving this “documented evidence,” 

Defendant “continued to refuse to make corrections.” (Id.). Pursuant to the FCRA, 

Plaintiff alleges that Defendant willfully violated its duty to conduct a reasonable 

investigation, as enumerated in § 1681s-2(b), by ignoring evidence showing that the 

reported information was inaccurate and incomplete. As a result, Plaintiff’s failure to 

allege that Defendant’s conducted a negligent investigation does not make the claim 

futile. 

 ii. Plaintiff’s Suggestion that Defendant Conducted an 

 Investigation 

 Defendant’s second argument is that the Lodged SAC is futile because Plaintiff 

concedes that Defendant fulfilled its duties under the FCRA by suggesting that Defendant 

performed an investigation. (Doc. 27 at 3). The FCRA requires furnishers “to conduct at 

least a reasonable, non-cursory investigation.” Gorman, 584 F.3d at 1157. As a result, 

Defendant could conduct an unreasonable investigation and still be in violation of the 

FCRA. As a result, Plaintiff’s suggestion that Defendant conducted an investigation does 

not necessarily render the Lodged SAC futile. 

 iii. Plaintiff’s Failure to Allege How the Reported 

 Information was Inaccurate 

 Defendant’s third argument is that the Lodged SAC is futile because Plaintiff 

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“fails to allege how the information [reported by Defendant] was inaccurate.” (Doc. 27 at 

3). In the Lodged SAC, Plaintiff alleges that Defendant’s information was inaccurate 

because Defendant reported that Plaintiff’s “mortgage was part of a Chapter 13 

bankruptcy, [that the account] was delinquent, that the account was closed, and 

[Defendant was] not reporting any payment history.” (Doc. 26 at 2). These allegations 

provide Defendant with sufficient notice of the information Plaintiff claims to be 

inaccurate and incomplete. By specifying what reported information was allegedly 

inaccurate or incomplete, Plaintiff pleads a set of facts that constitutes a valid and 

sufficient claim under § 1681s-2(b). See Moulton v. AmeriCredit Fin. Servs., 

2005 WL 1522237, *3 (N.D. Cal. June 28, 2005) (finding that a plaintiff pleaded 

sufficient facts to state a § 1681s-2(b) claim despite failing to allege with specificity how 

an identified inaccuracy was incorrect). As a result, the lack of specificity in how

identified information was inaccurate does not necessarily render the Lodged SAC futile. 

 Accordingly, the Court finds that the Lodged SAC is not futile. Because 

Defendant argues no basis other than Plaintiff’s prior amendment and futility of 

amendment for denying Plaintiff’s Motion to Amend, Defendant has not met its burden. 

IV. CONCLUSION 

 Based on the foregoing, 

IT IS ORDERED that Defendant’s Motion to Dismiss the First Amended 

Complaint (Doc. 23) is granted. 

IT IS FURTHER ORDERED that Plaintiff’s Motion to Amend the First 

Amended Complaint and file a Second Amended Complaint (Doc. 25) is granted. 

IT IS FURTHER ORDERED that the Clerk of the Court shall file the Second 

Amended Complaint currently lodged at Doc. 26. 

/ / / 

/ / / 

/ / / 

/ / / 

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IT I

Complaint 

Dated

S FINALLY

within 20 da

d this 28th d

Y ORDER

ays. 

day of July,

- 1

RED that 

 2014. 

0 - 

Defendant shall answer the Second Amended

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