Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_05-cv-03851/USCOURTS-cand-4_05-cv-03851-2/pdf.json

Parties Involved:
Kay Cartwright
Plaintiff
William Cartwright
Plaintiff
David Hogan
Plaintiff
Michelle Hogan
Plaintiff
PMI Mortgage Insurance Company
Defendant

Document Text:

United States District Court

For the Northern District of California

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United States District Court

For the Northern District of California

NOT FOR CITATION

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

MICHELLE HOGAN, DAVID HOGAN, 

KAY CARTWRIGHT, and WILLIAM 

CARTWRIGHT, on Behalf of 

Themselves and Others Similarly 

Situated, 

Plaintiffs, No. C 05-3851 PJH

v. ORDER GRANTING IN PART AND

DENYING IN PART DEFENDANTS’

MOTION TO DISMISS

PMI MORTGAGE INSURANCE CO., 

Defendant.

_____________________________/

Defendants’ motion to dismiss claims one, three, five, six, seven and eight of the

amended complaint came on for hearing before this court on April 26, 2006. Plaintiffs

appeared by their counsel Tamra Cursten Givens, Stephen L. Meagher, and Kathleen

Clark Knight, and defendant appeared by its counsel Stuart C. Plunkett. Having read the

parties’ papers and carefully considered their arguments and the relevant legal authority,

and good cause appearing, the court hereby GRANTS the motion to dismiss claims five,

six, seven and eight, and DENIES the motion to dismiss claims one and three.

INTRODUCTION

This is a proposed class action alleging violations of the Fair Credit Reporting Act,

15 U.S.C. § 1681, et seq. (“FCRA”). Plaintiffs Michelle Hogan, David Hogan, Kay

Cartwright, and William Cartwright (collectively “plaintiffs”) filed this action on September

23, 2005, against defendant PMI Mortgage Insurance Company (“PMI”). Plaintiffs filed the

amended complaint (“AC”) on January 4, 2006. 

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In the AC, plaintiffs assert four causes of action alleging violations of three

provisions of the FCRA (claims one, two, three, and four); two causes of action for

declaratory relief, seeking declarations that PMI is obligated to provide notice of adverse

action to consumers and that PMI’s use of consumer report information violated the FCRA

(claims five and seven); two causes of action for injunctive relief, seeking orders prohibiting

PMI from violating the FCRA (claims six and eight); and one cause of action under state

law alleging violation of California’s Consumer Credit Reporting Agencies Act (“CCRAA”)

(claim nine). See California Civil Code §§ 1785.25(a)-(c). PMI now moves to dismiss

certain claims from the AC pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure

to state a claim, as follows: 1) claims one, three, five and six on the basis that the FCRA no

longer provides a private right of action for these claims; and, 2) claims five, six, seven and

eight because declaratory and injunctive relief is not available for private litigants under the

FCRA. 

BACKGROUND

Plaintiffs Michelle and David Hogan, and Kay and William Cartwright are two

couples who used residential loans to finance the purchase of their new homes in Texas

and Georgia, respectively. As part of their loan transactions, plaintiffs allege they were

required to pay premiums for mortgage insurance. Mortgage insurance covers the

mortgage lender against losses due to borrower default when the loan collateral is not

sufficient to make the lender whole. Plaintiffs’ mortgage lenders obtained mortgage

insurance on plaintiffs’ loans from defendant PMI. 

Plaintiffs assert violations of three sections of the FCRA – 15 U.S.C. § 1681b, §

1681m, and § 1681q – and one section of the CCRAA – Cal. Civ. Code § 1785

(subsections § 1785.19 and § 1785.31) – both in their individual capacities and as

proposed representatives of a putative class of similarly situated individuals against whom

PMI allegedly took adverse action, without providing notice, based on information contained

in consumer reports.

First, plaintiffs allege that PMI used information contained in plaintiffs’ consumer

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PMI does not move to dismiss the second cause of action.

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PMI does not move to dismiss the fourth cause of action.

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reports to determine the rate of their mortgage insurance premiums, that PMI took adverse

action against plaintiffs by charging them a rate that was higher than PMI’s best premium,

and that PMI failed to notify plaintiffs of this adverse action as required under § 1681m. 

Plaintiffs also allege that these actions reflect PMI’s corporate policy to use information

contained in consumer reports to determine insurance premiums and to charge higher

premiums if information contained in the report is derogatory for any reason. Furthermore,

plaintiffs allege that PMI has made a corporate decision to fail or refuse to provide

adequate notice of adverse action to consumers. Specifically, in the first cause of action,

plaintiffs assert that PMI willfully violated the FCRA by failing to notify consumers of

“adverse action” based on consumer reports as required by § 1681m. In the third cause of

action, plaintiffs assert defendant negligently violated FCRA in failing to notify consumers

when it used a consumer report to charge higher premiums for mortgage insurance

required by § 1681m. In the fifth cause of action, plaintiffs request a judicial declaration of

the rights of the parties regarding PMI’s obligation to provide adequate notice of adverse

action as required by the FCRA. In the sixth cause of action, plaintiffs seek an order

enjoining PMI from failing to provide notice of adverse action under the FCRA.

Second, plaintiffs allege that the transactions to acquire mortgage insurance were

initiated by the lenders, not the consumers, and that consumers are not the insured parties

on the mortgage insurance policies issued by PMI. In the second cause of action,1

 plaintiffs

assert that PMI has no permissible purpose for using consumer report information for

plaintiffs and for class members to set mortgage insurance premium rates pursuant to §

1681b. Furthermore, to the extent that PMI led the provider of the consumer report to

believe that the report would be used for a transaction initiated by the consumer, or with the

permission of the consumer, PMI obtained the report under false pretenses thereby willfully

violating § 1681q. In the fourth cause of action,2

 plaintiffs allege that PMI failed to institute

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PMI does not move to dismiss the ninth cause of action.

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reasonable procedures to ensure compliance with the FCRA and that PMI’s conduct

constitutes negligent violation of § 1681b and § 1681q. In the seventh cause of action,

plaintiffs request a judicial declaration of the rights of the parties regarding PMI’s alleged

illegal use of plaintiffs’ consumer report information. In the eighth cause of action, plaintiffs

seek an order enjoining PMI from violating the rights of consumers by using their consumer

report information without a permissible purpose. 

Third, plaintiffs allege violations under California state law. Plaintiffs repeat their

allegations that PMI uses consumer reports to set mortgage insurance premiums, that

these reports are used in transactions not initiated by the consumer, and that the consumer

is not the insured party under the mortgage insurance policies, and further that if PMI led

the provider of the consumer reports to believe that the transactions were initiated by

consumers or with the permission of the consumers, then PMI obtained the reports under

false pretenses. Finally, plaintiffs allege that all of PMI’s conduct occurred within the State

of California. In the ninth cause of action,3

 plaintiffs assert that PMI has no permissible

purpose for using the report information, violating Cal. Civ. Code § 1785.11. Plaintiffs

further assert that the actions of PMI constitute willful noncompliance with the requirements

of CCRAA, Cal. Civ. Code § 1785.19 and § 1785.31. 

DISCUSSION 

PMI argues that plaintiffs’ claims fail to state a claim under the FCRA, and should be

dismissed pursuant to Rule 12(b)(6). PMI asserts that an amendment to the FCRA has

eliminated any private right of action for violations of section 1681m. PMI, therefore,

argues that counts one, three, five, and six of the complaint which seek relief under §

1681m fail as a matter of law and must be dismissed. Furthermore, PMI asserts that

counts five through eight, which seek injunctive and declaratory relief, fail because

declaratory and injunctive relief are not available to private litigants under the FCRA. 

Finally, PMI argues that to the extent plaintiffs rely on state law for equitable relief, those

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claims are preempted by the FCRA.

A. Legal Standard

A court should dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to

state a claim only where it appears beyond doubt that plaintiff can prove no set of facts in

support of the claim which would entitle the plaintiff to relief. Conley v. Gibson, 355 U.S.

41, 45-46 (1957); Pillsbury, Madison & Sutro v. Lerner, 31 F.3d 924, 928 (9th Cir. 1994). 

Review is limited to the contents of the complaint. Allarcom Pay Television, Ltd. v. Gen.

Instrument Corp., 69 F.3d 381, 385 (9th Cir. 1995). All allegations of material fact are

taken as true and construed in the light most favorable to the nonmoving party. Smith v.

Jackson, 84 F.3d 1213, 1217 (9th Cir. 1996). 

Motions to dismiss for failure to state a claim are disfavored, see Gilligan v. Jamco

Dev. Corp., 108 F.3d 246, 249 (9th Cir. 1997), and 12(b)(6) dismissals are proper only in

“extraordinary” cases. See United States v. City of Redwood City, 640 F.2d 963, 966 (9th

Cir. 1981). In dismissing for failure to state a claim, “a district court should grant leave to

amend even if no request to amend the pleadings was made, unless it determines that the

pleading could not possibly be cured by the allegation of other facts.” Doe v. United States,

58 F.3d 494, 497 (9th Cir. 1995) (citations omitted).

B. Defendant’s Motion

1. Claims for Failure to Notify of Adverse Action

PMI asserts that counts one, three, five, and six are barred as a matter of law,

because the 2003 amendment to the FCRA eliminated any private right of action under §

1681m. In 2003, Congress amended the FCRA with the enactment of the Fair and

Accurate Transactions Act (“FACTA”). Among other things, FACTA § 311 amended private

enforcement rights available under the FCRA. Thus, while § 1681n and § 1681o of the

FCRA generally establish a private right of action for certain violations of the FCRA, §

1681m(h)(8) (added by FACTA) now expressly provides that there is no private right of

action for alleged violations of § 1681m:

(8) Enforcement

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(A) No civil actions. Sections 1681n and 1681o shall not apply to any failure

by any person to comply with this section.

(B) Administrative enforcement. This section shall be enforced exclusively

under section 1681s by Federal agencies and officials identified in that

section. 

15 U.S.C. § 1681m(h)(8) (“Enforcement Language”). PMI asserts that every court to have

considered the issue has held that the Enforcement Language, effective December 1,

2004, bars private actions under section 1681m. Plaintiffs do not dispute that the effect of

the Enforcement Language is to bar private rights of action under § 1681m. Instead they

argue that the FACTA amendment does not apply because defendant’s conduct took place

in September and October 2003, before the effective date of the amendment. 

PMI acknowledges that the courts have split on the issue of whether the FACTA

amendment bars a claim brought after the effective date of the amendment where, as here,

the complaint alleges that defendant’s conduct occurred prior to the amendment’s effective

date. PMI argues that dismissal of plaintiffs’ § 1681m claims does not require retroactive

application of the FACTA amendment for two reasons: a) there is no retroactive application

because the relevant activity affected by FACTA is the filing of lawsuits under § 1681m, not

the underlying compliance obligations under that section; and, b) even if applying the

Enforcement Language to this action would be retroactive, it is not impermissibly

retroactive under the Landgraf test. See Landgraf v. USI Film Prods., 511 U.S. 244, 280

(1994). 

In its first argument, PMI asserts that the court need not reach the Landgraf test,

because PMI is not asking the court to apply the Enforcement Language retroactively. PMI

argues that since plaintiffs brought suit after the effective date of the amendment, no

retroactive application is required. PMI argues that the relevant activity to consider, when

evaluating whether the Enforcement Language is retroactively applied, is the act of filing

suit, rather than the conduct of the defendant. If the relevant conduct is the act of filing suit,

then the Enforcement Language would be applied prospectively rather than retroactively. 

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PMI asserts that “[a] court is to apply the law in effect at the time it renders its

decision, unless doing so would result in manifest injustice or there is a statutory direction

or legislative history to the contrary.” Bradley v. Sch. Bd. of City of Richmond, 416 U.S.

696, 711 (1974). According to PMI, since the Enforcement Language was the law in effect

at the time plaintiffs filed suit, it eliminates the plaintiffs’ private right of action. PMI cites

Killingsworth v. Household Bank (SB) N.A., from the Northern District of Illinois, in which

the court looked to the date of filing as the relevant act being regulated by the Enforcement

Language. 2006 WL 250704 (N.D. Ill. Jan. 31, 2006). In that case, because the suit was

filed after the effective date of the amendment, the court dismissed the section 1681m

claims. Id. at *13. 

PMI also cites Landgraf for the proposition that “a statute does not operate

retrospectively merely because it is applied in a case arising from conduct antedating the

statute’s enactment.” 511 U.S. at 269. In fact, PMI notes that the concurrence in Landgraf

explains that the “critical issue” for application of the retroactivity analysis “is not whether

the rule affects ‘vested rights,’ or governs substance or procedure, but rather what is the

relevant activity that the rule regulates.” Id. at 291 (Scalia, J., concurring). Thus, PMI

argues that the “relevant activity” is the conduct that must precede the statute’s effective

date, which PMI asserts is the act of filing. 

In its second argument, PMI asserts that even if the court were to agree with the

plaintiffs that applying the Enforcement Language to this action would amount to retroactive

application, such application would not be impermissibly retroactive under Landgraf. PMI

relies on Southwest Center for Biological Diversity v. United States Department of

Agriculture, 314 F.3d 1060 (9th Cir. 2002). In Southwest, the Ninth Circuit applied a law

retroactively to eliminate the right of a plaintiff to access information under the Freedom of

Information Act, and thus dismissed the plaintiff’s case. Id. at 1061. The Ninth Circuit

observed that the plaintiff had not relied upon existing law, and suffered prejudice when

that law changed. Id. The plaintiff had merely requested and sued for information. PMI

asserts that similarly in this case, there is no allegation that plaintiffs took any action in

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reliance on the continued availability of a private right of action under the FCRA. In fact,

plaintiffs’ first action was to file suit on September 23, 2005, after the Enforcement

Language had already become effective.

 Plaintiffs assert that the relevant activity for the court to consider is PMI’s conduct in

September and October 2003, which occurred before the Enforcement Language took

effect. Plaintiffs cite Fisher v. Finance America, LLC, holding that application of the FACTA

amendment retroactively, to conduct that occurred before the amendment took effect, is

improper. SACV 05-0888 CJC (N.D. Cal. Jan. 23, 2006), Def. Request for Judicial Notice

(“RJN”), Exh. 1, at 15. Plaintiffs also argue that Scott v. Boos, 215 F.3d 940 (9th Cir.

2000), is more analogous to this case than Southwest. In Scott, the court considered the

congressional amendment to the civil RICO statute which provided that securities fraud

could no longer serve as a predicate act for a civil RICO claim. Scott, 215 F.3d at 941-42. 

The Ninth Circuit held that “[i]t appears that the [Private Securities Litigation Reform Act of

1995] has retroactive effect because prior to the PSLRA a plaintiff had a RICO claim based

on a defendant’s alleged securities fraud, while afterwards a plaintiff does not.” Id. at 944-

45. The Scott court also found that “the date of the filing of the claim does not appear

relevant.” Id. at 949. 

The court finds that application of the Enforcement Language to this case would be

impermissibly retroactive. Consideration of whether a statute applies retroactively is

controlled by Landgraf. In Landgraf, the Supreme Court held that there is a presumption

against the retroactive application of legislation. Landgraf, 511 U.S. at 265. When a case

implicates a federal statute enacted after the events that gave rise to the suit, the district

court must first examine the language of the statute to determine whether Congress has

expressly provided the statute’s proper reach. Id. at 280. If the statutory language

expressly provides for either prospective or retroactive application, then the court is

required to “give effect to the congressional will, subject only to constitutional restraints.” 

Id. However, it the statute does not specify its temporal reach, the court must proceed to

the second step, under which the court determines whether the new statute would have

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any retroactive effect – that is, “whether it would impair rights a party had when he acted,

increase a party’s liability for past conduct, or impose new duties with respect to

transactions already completed.” Id. 

Because the statute here does not specify whether it is retroactive, the court must

proceed to the second step of the analysis and determine whether FACTA would have any

retroactive effect. In three recent decisions, district judges in the Central District of

California have applied Landgraf and determined that retroactive application of §

1681m(h)(8) has impermissible retroactive effects. See Fisher, Def. RJN, Exh. 1; Phillips v.

New Century Fin. Corp., 2006 WL 517653 (C.D. Cal., Mar. 1, 2006); Parthiban v. GMAC

Mortgage Corp., Pl. RJN, Exh. C, SA CV 05-768 DOC (C.D. Cal. 2006).

As noted, PMI cites Killingsworth for its argument that the statute does not apply

retroactively because the relevant activity effected by the amendment is the act of filing

suit. 2006 WL 250704. However, both Fisher and Parthiban, which the court finds are

more persuasive, explicitly reject this argument. See Fisher, Def. RJN, Exh. 1, at 10

(relying on Scott, 215 F.3d at 949); Parthiban, Pl. RJN, Exh. C at 7. 

In Parthiban, the plaintiff alleged that defendant obtained plaintiff’s consumer report

without plaintiff’s knowledge or consent, and then mailed plaintiff a written solicitation for a

home mortgage, which did not contain a firm offer of credit or provide, in a clear and

conspicuous manner, mandated consumer rights disclosures. Id. The defendant’s

conduct – sending the allegedly illegal letter – occurred before the effective date of FACTA. 

Pl. RJN, Exh. C, at 7. However, the plaintiff did not file suit until after the amendment took

effect. Id. 

For purposes of analyzing retroactivity, the Parthiban court held that the focus

should be on the date the conduct at issue took place, not the date that the plaintiff brought

suit. Id. (citing Hughes Aircraft Co. v. United States, 520 U.S. 939, 947 (1997)). The court

reasoned that the fact that the plaintiff waited until after the amendment took effect to file

suit did not vitiate the illegality of the defendant’s conduct. Id.

Moreover, the Parthiban court held that the FACTA amendment did not bar plaintiff’s

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claim because to hold otherwise would have impermissible retroactive effect, where

defendant’s conduct at issue occurred before the effective date of the amendment. Pl.

RJN, Exh. C, at 7. The court acknowledged the Seventh Circuit’s decision in Murray v.

GMAC Mortgage Corp., 434 F.3d 948, 951 (7th Cir. 2006), holding that the amendment

does not apply retroactively to credit offers made before FACTA’s effective date. Pl. RJN,

Exh. C, at 5. The court, however, noted that the question was not settled in the Ninth

Circuit.

The Parthiban court followed the two-step analysis of Landgraf. Id. First, the court

found that the language of the amendment did not expressly prescribe its own temporal

reach, requiring the court to address the second prong of the Landgraf test. Id. at 6. 

Second, the court analyzed whether the amendment would have retroactive effect. Id.

Relying on Scott, the court stated that under Ninth Circuit law, a statute eliminating a

private right of action under a given law has retroactive effect. Id. The court borrowed the

reasoning from Scott, because, similar to Scott, defendant’s actions in Parthiban gave rise

to different legal consequences before and after the effective date of FACTA. Id. After

FACTA, defendants faced a significantly lesser chance of being held liable, since “an entire

class of plaintiffs” was eliminated by the amendment. Id. (noting that after FACTA, group of

plaintiffs comprising “consumers who received illegal credit solicitations” could no longer

sue defendants privately). According to the court, this was an impermissible retroactive

effect. Id.

Finally, the Parthiban court rejected the defendant’s argument that Southwest

governed the retroactivity issue. Id. First, the court noted that the facts of Parthiban were

more closely analogous to Scott than Southwest, since, like Scott, the case concerned the

elimination of a private right of action by statutory amendment. Id. The court

acknowledged that it was unclear whether the Ninth Circuit intended to add an additional

requirement to the retroactivity analysis by its holding in Southwest. Id. However, the

court noted that no court had ever cited Southwest for the proposition that there can be no

retroactive effect without proof that a plaintiff affirmatively acted in reliance on prior law. Id.

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Similarly, in Fisher, the district court held that the abrogation of a private right of

action had an impermissible retroactive effect, because it impaired the rights plaintiff

possessed at the time that the defendant failed to make the required disclosures, and

attached new legal consequences to pre-enactment conduct. Specifically, the court found

that before FACTA was passed, a consumer receiving an unsolicited credit solicitation

could sue for failure to include a “clear and conspicuous” statement, whereas after FACTA,

she could not. Fisher, Def. RJN, Exh. 1, at 7-9. 

In reaching this conclusion, the court relied on Scott, discussed above. The

Fisher court also relied on Hughes Aircraft, where the Supreme Court held that the

enactment of an amendment to the False Claims Act (“FCA”) had an impermissible

retroactive effect because it eliminated a previously-available defense to qui tam suits, and

significantly increased the likelihood that defendants would be held liable by expanding the

universe of potential plaintiffs to include private persons “motivated by prospects of

monetary reward rather than the public good.” Fisher, Def. RJN, Exh. 1, at 8-9 (citing

Hughes Aircraft, 520 U.S. at 949). The Court held that the change in the identity of the

potential plaintiffs, and the consequent change in the incentive to sue, essentially created a

new cause of action, not just an increased likelihood that an existing cause of action would

be pursued. Hughes Aircraft, 520 U.S. at 950. Similarly, the Fisher court held that the

change created by the FACTA amendment – removal of a profit incentive for suit by

eliminating the private right of action – would affect the substantive rights of the parties by

essentially eliminating an entire cause of action and subjecting defendants to a much

decreased likelihood of liability. Fisher, Def. RJN, Exh. 1, at 9.

In Phillips, the court held that the FACTA amendment eliminating the private right of

action did not bar plaintiff’s claim, where before the Enforcement Language became

effective, the defendant allegedly accessed the plaintiff’s credit report and sent a solicitation

that did not constitute a firm offer of credit. 2006 WL 517653 at *6. Plaintiff did not file suit

until after the Enforcement Language took effect. Id. The court rejected the argument that

the focus should be on the date plaintiff brought suit, rather than the date of the conduct at

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issue. Id. (citing Hughes Aircraft, 520 U.S. at 947). 

The Phillips court’s reasoning was in line with the Parthiban and Fisher courts. Like

both of those courts, in Phillips, the district court relied on the Ninth Circuit’s decision in

Scott, as opposed to that in Southwest. Similarly, the court also held that applying the

FACTA amendment to eliminate the private right of action arising out of defendant’s

conduct that occurred before the amendment took effect would have impermissible

retroactive effects under Landgraf and Scott. Id. at * 7.

Phillips and Parthiban are similar factually to the case here, and both courts relied

on Scott rather than Southwest. Scott is also more analogous to the facts here, since 

Scott dealt with whether the elimination of a private right of action had impermissible effect,

and in Southwest the Ninth Circuit applied a law retroactively to eliminate the right of a

plaintiff to access information under the Freedom of Information Act. Here, as in Scott, 

PMI’s actions give rise to different legal consequences before and after the effective date of

FACTA. After FACTA, PMI faces a significantly lesser chance of being held liable, since an

entire category of plaintiffs was eliminated by the amendment. Id. Under the reasoning of

Scott, this is impermissible retroactive effect. 

Furthermore, given the dearth of authority to the contrary, the court is simply not

persuaded by PMI’s argument that the Ninth Circuit intended in Southwest to add an third

requirement to the long-established Landgraf test. Thus, defendant’s motion to dismiss

claims one, three, five, and six is DENIED, because retroactive application of FACTA to bar

plaintiffs’ claims would have impermissible effect. 

2. Claims for Declaratory and Injunctive Relief

Plaintiffs’ claims for declaratory and injunctive relief under the FCRA are found in

counts five through eight of the plaintiffs’ AC. A claim for injunctive relief under state law

may be included in count eight of plaintiffs’ AC, though count eight does not expressly state

whether plaintiffs are seeking relief under federal or state law. 

a. Availability of equitable relief to private litigants under FCRA

PMI argues that the claims for declaratory relief (fifth and seventh causes of

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action) and the claims for injunctive relief (sixth and eighth causes of action) must be

dismissed because declaratory and injunctive relief are not available as remedies to private

litigants under the FCRA. Private rights of action to enforce alleged violations of the FCRA,

to the extent they exist, are based solely on 15 U.S.C. § 1681n and § 1681o. PMI notes

that § 1681n and § 1681o list only actual and statutory damages, punitive damages, and

attorney’s fees as possible remedies available to private litigants, and do not list either

declaratory or injunctive relief. By contrast, where Congress intended to make declaratory

or injunctive relief available under the FCRA, it did so explicitly. See 15 U.S.C. §

1681s(a)(1) and § 1681u(m). 

PMI asserts that courts have almost unanimously found that equitable relief is

unavailable to private litigants in FCRA suits. See Howard v. Blue Ridge Bank, 371 F.

Supp. 2d 1139, 1145 (N.D. Cal. 2005) (“the express inclusion of injunctive relief in certain

provisions of the FCRA and its omission from the provisions creating plaintiff’s cause of

action to be a sufficiently ‘clear command’ from Congress that injunctive relief is not

available to plaintiff”); White v. E-Loan, Inc., 409 F. Supp. 2d 1183, 1187 n. 6 (N.D. Cal. 

2006) (granting judgment on the pleadings sua sponte on claims for injunctive and

declaratory relief under the FCRA); Yeagley v. Wells Fargo & Co., 2006 WL 193257, at *2

(N.D. Cal. 2006) (“By limiting the remedies for private rights of action to damages and

attorneys’ fees Congress demonstrated that it did not intend for private litigants to obtain

injunctive or declarative relief.”). PMI further contends that since the Fifth Circuit’s decision

in Washington v. CSC Credit Services, Inc., 199 F.3d 263 (5th Cir. 2000), not a single

district court has permitted a private litigant to recover injunctive relief under FCRA. 

Plaintiffs assert that courts are split on the availability of injunctive and declaratory

relief under consumer protection statutes. Furthermore, in the cases most often mentioned

in an analysis of equitable relief under the FCRA – Washington and Howard v. Blue Ridge

Bank, 371 F. Supp. at 1139 (which relies in large part on Washington) – the courts did not

address their “independent authority” to award injunctive and declaratory relief under 28

U.S.C. § 2201 and § 2202. Plaintiffs contend that declaratory and injunctive relief are

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consistent with the grant of enforcement authority to the FTC under § 1681s, disputing the

finding in the Washington and Howard decisions that in enacting § 1681s(a) (enforcement

by the Federal Trade Commission of requirements imposed under §§ 1681, et seq.),

Congress intended to grant the FTC the exclusive right to seek injunctive relief. To the

contrary, plaintiffs argue, § 1681s(a) is not a limitation on individual enforcement authority,

but rather simply an expansion of the FTC’s enforcement powers. 

Plaintiffs also argue that declaratory and injunctive relief are consistent with the right

of individuals to seek to enjoin the FBI under § 1681u. Plaintiffs claim that without the

addition of this section, consumers could not sue the U.S. government, as the government

enjoys immunity from suit. Plaintiffs contend, therefore, that the finding by the Washington

and Howard courts – that Congress, by granting private litigants the authority to seek

injunctive relief from the federal government, implicitly precluded such litigants from

seeking injunctive relief elsewhere – is not persuasive. They argue that neither court

addressed the fact that, without this grant of authority, private litigants would be foreclosed

from suing the United States or any of its agencies for violations of the FCRA. 

PMI responds that courts have rejected plaintiffs’ argument that Congress expressly

provided for the FTC’s authority to seek injunctive relief under § 1681s(a), because

Congress wanted to expand the FTC’s enforcement powers. See White, 378 F. Supp. 2d

at 424 (“The absence of any express provision for injunctive relief in Sections 1681n and

1681o [providing for suit by private plaintiffs], coupled with the express authorization of

such relief on behalf of federal and state agencies, leads to the unmistakable conclusion

that Congress intended to limit injunctive relief to those instances in which it expressly

authorized it.”).

PMI also argues that courts have rejected the argument regarding authorization for

consumers to sue the government for improperly obtaining information under § 1681u: 

“Congress added an additional subsection, see 1681u(m), that expressly

authorized injunctive relief in addition to the remedies at law permitted in

subsection (i). By contrast Congress did not include any provision providing

for equitable relief in either section 1681o or 1681n. The only way to give

meaning to Congress’s different treatment of these sections is to conclude

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that Congress intended to limit injunctive relief to state and federal agencies

except where otherwise expressly provided.” 

Parthiban, Pl. RJN, Ex. C, at 9. 

 The court finds the Fifth Circuit’s reasoning in Washington, as well as the decisions

in Howard, Yeagley, and White, to be persuasive. See Washington, 199 F.3d at 268-70;

Howard, 371 F. Supp. 2d at 1145; Yeagley, 2006 WL 193257 at *2; White, 378 F. Supp. 2d

at 424. Moreover, the fact that Congress specifically enumerated the types of remedies

available to consumers (in § 1681n and § 1681o), and did not include injunctive or

declaratory relief, and the fact that Congress expressly authorized such relief on behalf of

federal and state agencies, suggests that Congress intended to limit such equitable relief to

those instances in which it expressly authorized it. Therefore, defendant’s motion to

dismiss the claims for injunctive and declaratory relief (counts five, six, seven, and eight) is

GRANTED.

b. FCRA preemption of state law claims

PMI, relying on Howard, where the court rejected plaintiffs’ attempt to circumvent the

FCRA’s limitations by seeking injunctive relief under the CCRAA, argues that injunctive and

declaratory relief is also unavailable under the CCRAA. See 371 F. Supp. 2d at 1146

(“[T]he provision of [the CCRAA] providing for injunctive relief is preempted by the FCRA.”). 

PMI argues that allowing injunctive and declaratory relief under the CCRAA would subvert

Congress’ intent to limit equitable relief in this area to actions brought by the FTC. See Lin

v. Universal Card Servs. Corp., 238 F. Supp. 2d 1147, 1152 (N.D. Cal. 2002) (finding

preemption of the CCRAA where “Congress intended to have exclusive authority to enforce

such claims through the Federal agencies and officials” that were identified in the

corresponding section of the FCRA).

Plaintiffs respond that state-based requests for equitable relief are not preempted by

the FCRA. First plaintiffs assert that Howard and Lin are not binding, and that a complete

analysis of the FCRA and CCRAA reveals that injunctive relief is available to consumers. 

Furthermore, plaintiffs argue that the Lin holding is not applicable here, because the court

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only held that the CCRAA § 1785.31 was inconsistent with FCRA § 1681s-2(d). Therefore,

because the FCRA provision at issue in the immediate case is not the same provision that

was at issue in Lin, plaintiffs maintain that the case before this court requires a different

result.

Plaintiffs argue that Congress only intended that the FCRA preempt a state statute

regulating subsections 1681b(c) or 1681b(e) of the FCRA. Section 1681t of the FCRA

governs the relationship between the FCRA and state laws, including the issue of

preemption. Section 1681t(b)(1)(A) states that “[n]o requirement or prohibition may be

imposed under the laws of any State . . . with respect to any subject matter regulated under

. . . subsection (c) or (e) of section 1681b of this title, relating to the prescreening of

consumer reports.” Plaintiffs argue that reference to subsections (c) and (e) implies the

exclusion of subsection (a) – regulating permissible use of consumer report information – 

from the list of preempted provisions. See Dodd v. U.S., 545 U.S. 353, 356-57 (2005). 

Therefore, plaintiffs conclude that California’s regulation of § 1681b(a) under CCRAA §

1785.31, providing injunctive relief, is not preempted. 

PMI responds that plaintiffs argument that the FCRA does not preempt all claims

under section 1681b(a) is irrelevant, because §1681b(a) regulates prescreened offers of

credit, not injunctive relief. PMI argues that Congress intended to limit injunctive and

declaratory relief regarding all fair credit reporting violations to actions brought by the FTC,

whether or not they are related to section 1681b(a). 

To the extent that claim eight seeks injunctive relief under the CCRAA, the court

finds that PMI’s motion to dismiss must be GRANTED. Lin, and four district court cases

citing Lin, are instructive on the issue of state law preemption by the FCRA. See Lin, 238

F. Supp. 2d at 1151-53; Howard, 371 F. Supp. 2d at 1146; Gorman v. Wolpoff &

Abramson, LLP, 370 F. Supp. 2d 1005, 1011 (N.D. Cal. 2005); Ornelas v. Fid. Nat’l Title

Co. of Washington, Inc., 2005 WL 3359112, at *4 (W.D. Wash. 2005); Roybal v. Equifax,

405 F. Supp. 2d 1177, 1178-79 (E.D. Cal. 2005). 

Lin involved a consumer action against a credit card issuer, alleging that it violated

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California’s CCRAA by inaccurately supplying consumer credit information about him to a

credit reporting agency. 238 F. Supp. 2d at 1148. In response to the defendant’s motion to

dismiss, the court held that CCRAA provisions providing consumers with a private right of

action to sue furnishers of consumer credit information were not excepted from preemption. 

Id. at 1152-53. The court noted that § 1681t makes it clear that Congress did not enact a

blanket preemption of state law in the area of consumer credit reporting. Id. at 1151. 

Congress only intended to preempt state laws that are inconsistent with federal law. Id.

Section 1681t(a) provides: 

Except as otherwise provided in subsection (b) and (c) of this section, this

subchapter does not annul, alter, affect, or exempt any person subject to the

provisions of this title from complying with the laws of any States with respect

to the collection, distribution, or use of any information on consumers, except

to the extent that those laws are inconsistent with any provisions of this title,

and then only to the extent of the inconsistency. 

The court determined that “[i]n enacting the provision regarding furnishers of

consumer credit information, Congress found that the specific language contained in CCRA

§ 1785.25(a) is not inconsistent with its FCRA counterpart, § 1681s-2(a), and thus did not

preempt the California provision.” Id. at 1152 (citing 15 U.S.C. § 1681t(b)(1)(F)(ii). The Lin

court, however, determined that FCRA § 1681s-2(d) did, on the other hand, preempt

CCRAA §§ 1785.25(g) and 1785.31, which provide consumers with a private right of action

under California law, because the California provisions “are inconsistent with the

enforcement scheme of Congress . . . in matters relating to furnishers of consumer credit

information.” Id.

Howard, and three other cases, cite Lin and find that CCRAA § 1785.31 is

preempted by the FCRA. Howard found that the plaintiff was not entitled to injunctive relief

under the CCRAA, as the provision of that statute providing for injunctive relief was

preempted by the FCRA. 371 F. Supp. 2d at 1146. 

In Gorman, the court found that because the FCRA preempts CCRAA § 1785.25(g)

and § 1785.31, the plaintiff had no private right of action to bring suit against furnishers of

consumer credit information for a violation of CCRAA § 1785.25(a) (prohibiting furnishers of

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consumer credit information from knowingly reporting inaccurate information). 370 F.

Supp. 2d at 1011. 

In Ornelas, defendants moved for summary judgment of plaintiff’s claims under the

Washington Consumer Protection Act on the basis that such claims were preempted by the

FCRA. 2005 WL 3359112 at *4. The court cited Lin for the proposition that “federal law

preempts the area of private consumer action against furnishers of credit information.” Id.

(quoting Lin, 238 F. Supp. 2d at 1153). 

In Roybal, consumers who claimed that their credit report contained inaccurate

information brought suit under federal and state law against credit reporting agencies and

furnishers of credit information. 405 F. Supp. 2d at 1178-79. In analyzing whether state

law was preempted by the FCRA, the court found that no private right of action existed

under CCRAA § 1785.25(a), since § 1785.25(g) and § 1785.31 were preempted by the

FCRA. Id. at 1182 n. 5 (citing Lin, 238 F. Supp. 2d at 1152). Thus, in line with the holdings

of Lin and Howard, this court also finds that CCRAA § 1785.31, which provides for

injunctive relief, is preempted by the FCRA. 

CONCLUSION

In accordance with the foregoing, the court DENIES the motion to dismiss claims

one, three, five, and six because applying FACTA would have an impermissible retroactive

effect. However, the court GRANTS the motion to dismiss claims five, six, seven and eight,

WITH PREJUDICE, because declaratory and injunctive relief are not available to private

litigants under FCRA. Furthermore, because CCRAA § 1785.31 is preempted by the

FCRA, any claim for injunctive relief under state law in count eight is also dismissed with

prejudice. The claims that survive PMI’s motion to dismiss are one, two, three, four, and

nine. 

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Additionally, the court declines to consider the supplemental authorities and

arguments improperly filed by plaintiffs on May 5, 2006 under Local Rule 7-3(d).

IT IS SO ORDERED.

Dated: May 12, 2006 ______________________________

PHYLLIS J. HAMILTON

United States District Judge

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