Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_06-cv-00576/USCOURTS-caed-2_06-cv-00576-1/pdf.json

Parties Involved:
Citibank Card
Defendant
Citibank West
Defendant
Citicorp Credit Services, Inc
Defendant
Citigroup
Defendant
Ronald B. McNearney
Plaintiff

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IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

RONALD B. MCNEARNEY,

Plaintiff, No. CIV S-06-0576-WBS-PAN (GGH) PS

vs.

CITICORP CREDIT SERVICES, INC.,

dba CITIBANK WEST, CITIBANK CARD, FINDINGS AND RECOMMENDATIONS 

CITIGROUP and DOES 1-100, inclusive, 

Defendants.

 /

Defendants removed this action from the Solano County Superior Court on March

17, 2006 and now move to dismiss plaintiff’s complaint pursuant to Fed. R. Civ. P. 12(b)(6) on

the ground it fails to state a claim upon which relief may be granted. Defendants’ motion, filed

April 7, 2006 and amended April 26, 2006, came on regularly for hearing on July 20, 2006.

Plaintiff, who proceeds in pro se, did not appear; Andrew W. Moritz appeared on behalf of

defendants.

BACKGROUND

The complaint avers that plaintiff is a real estate investor whose livelihood

depends on a high credit rating in order to secure the best interest rates for his investments. On

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December 9, 2004, plaintiff requested that defendants accord plaintiff an “‘automatic’ credit limit

increase” and specifically advised defendants “that his credit rating was not to be accessed,

because an additional inquiry would lower his credit score.” Defendants nonetheless “accessed

plaintiff’s credit report” causing “an additional inquiry to be reported and as a direct result,

substantially lowered plaintiff’s credit score.”

On February 1, 2005, defendants declined payment on a charge to plaintiff’s

account for the services of Dr. David Dziachan, D.D.S. Plaintiff alleges the charge was “well

within his credit limit for approval” but defendants had “arbitrarily reduced plaintiff’s credit limit

without proper notification . . . because plaintiff’s credit score had lowered because of

[defendants’] unauthorized inquiry.” Defendants thereafter restored plaintiff’s original credit

limit.

Plaintiff asserts that as a result of defendants’ actions, he “suffered actual

economic damages through loss of credit, loss of income and credit at higher interest rates than

those he would have received absent the erroneous reporting,” and “suffered embarrassment,

mental anxiety, emotional suffering, worry, humiliation and mental distress.” The complaint

alleges causes of action for willful and negligent common law defamation, and violations of the

Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681 et seq., and California’s Consumer Credit

Reporting Agencies Act (“CCRAA”) FCRA, Cal. Civ. Code § 1785 et seq. Plaintiff seeks

compensatory and punitive damages, in addition to the fees and costs of suit.

LEGAL STANDARD FOR MOTION TO DISMISS 

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 his claims which would entitle

him 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, however, 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). 

 However, 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 Lopez v. Smith, 203 F.3d 1122, 1127-

28 (9th Cir.2000) (en banc); Noll v. Carlson, 809 F.2d 1446, 1448 (9th Cir. 1987).

/ / / /

/ / / /

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 “The CCRAA mirrors the provisions of the FCRA.” Guimond v. Trans Union Credit 1

Information Co., 45 F.3d 1329, 1335 (9th Cir. 1995).

 15 U.S.C. § 1681b (a)(3) (“Permissible purposes of consumer reports”) provides in 2

pertinent part:

(a) In general. Subject to subsection (c) of this section [“Furnishing reports in connection with

credit or insurance transactions that are not initiated by the consumer”], any consumer reporting

agency may furnish a consumer report under the following circumstances and no other:

. . . (3) To a person which it has reason to believe-

(A) intends to use the information in connection with a credit transaction

involving the consumer on whom the information is to be furnished and involving

the extension of credit to, or review or collection of an account of, the consumer. .

. . 

(F) otherwise has a legitimate business need for the information --

(i) in connection with a business transaction that is initiated by the

consumer; or

(ii) to review an account to determine whether the consumer

continues to meet the terms of the account.

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ANALYSIS

A. FCRA

Defendants contend plaintiff cannot state a claim under the FCRA (nor, implicitly,

the CCRAA ) because the parties’ business relationship renders defendants’ inquiry into

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plaintiff’s credit status a permissible purpose under 15 U.S.C. § 1681b (a)(3).

 The FCRA authorizes consumer reporting agencies to furnish a consumer’s

credit report to any person the agency reasonably believes intends to use the information in

connection with a credit transaction of the consumer, 15 U.S.C. § 1681b(a)(3)(A), or for another 

legitimate business purpose, including the review of an existing account, 15 U.S.C. § 1681b

(a)(3)(F). Permissible purposes include a lender’s periodic review of a credit card customer’s 2

credit report. See, e.g., Trikas v. Universal Card Services Corp., 351 F. Supp. 2d 37, 42

(E.D.N.Y. 2005) (bank’s periodic requests for credit card customer’s credit report is a

permissable purpose under 15 U.S.C. § 1681b(a)(3)(A)); Kennedy v. Victoria’s Secret Stores,

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 Plaintiff’s only “substantive” response to defendants’ motion provides in full 3

(Opposition, at p. 2):

The defendants’ Motion to Dismiss can only be described as a “shotgun”

approach in challenging the FCRA. Thus, defendants make a variety of arguments

in the apparent hope of stumbling upon a constitutionally problematic provision. 

Some of these arguments constitute facial challenges to the regulations, while

other are objections to those portions of the regulations applied to them. [¶ ]

Under Federal Rule 12(b)(6), the Court must deny the Defendants’ motion to

dismiss unless the defendants demonstrate ‘beyond doubt that they can prove no

set of facts in support of [its] claim that would entitled [it] to relief.” Flood v.

New Hanover County, 125 F. 3d 249, 251 (4th Cir. 1997). In making this

determination, the Court must also accept the factual allegations in Plaintiff’s

complaint and must construe those facts in the light more favorable to Plaintiff. 

In sum, the defendants’ motion cannot survive those standards. 

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Inc., 2004 WL 2186613 (E.D.La. 2004) (defendants permissibly obtained plaintiff’s credit report

for the purpose of using the information to extend credit or to review or collect on an account,

pursuant to 15 U.S.C. § 1681b(a)(3)(A)); Baker v. American Express Travel Related, 2002 WL

1205065 (W.D. Ky. 2002) (defendant’s extension of credit to plaintiff authorized defendant’s

access to plaintiff’s credit report under 15 U.S.C. § 1681b(a)(3)(A)).

These authorities support defendants’ assertion they possessed the right to access

plaintiff’s credit status regardless whether plaintiff requested a credit limit increase or advised

defendants not to make such an inquiry. Plaintiff has failed to provide more than the most

general argument in opposition. I find, therefore, that the complaint fails to state a claim under 3

the FCRA and CCRAA.

B. Defamation

Defendants contend that plaintiff cannot state a claim for defamation because he

has failed to allege a defamatory statement or action.

“Defamation is an invasion of the interest in reputation. The tort involves the

intentional publication of a statement of fact that is false, unprivileged, and has a natural

tendency to injure or which causes special damage. (Civ. Code, §§ 45, 46; 5 Witkin, Summary

of Cal. Law (9th ed. 1988) Torts § 471, pp. 557-558.) Publication means communication to

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some third person who understands the defamatory meaning of the statement and its application

to the person to whom reference is made. Publication need not be to the ‘public’ at large;

communication to a single individual is sufficient. (Cunningham v. Simpson (1969) 1 Cal.3d

301, 306 [81 Cal.Rptr. 855, 461 P.2d 39]; 5 Witkin, Summary of Cal. Law, supra, Torts, §§ 471,

476, pp. 557- 558, 560-561.) Reprinting or recirculating a libelous writing has the same effect as

an original publication. (Gilman v. McClatchy (1896) 111 Cal. 606, 612 [44 P. 241]; Rest.2d

Torts, §§ 576, 578; 5 Witkin, Summary of Cal. Law, supra, Torts, § 478, pp. 562-563.).” Smith

v. Maldonado, 72 Cal. App. 4th 637, 645, 85 Cal. Rptr. 397 (1st Dist. 1999) (fn. omitted).

Due to the generalities of plaintiff’s complaint, defendants base their argument on

the assumption that their allegedly defamatory statement must be “the listing of [defendants’]

credit report inquiry on [plaintiff’s] credit report.” Defendants argue persuasively that this

cannot form the basis of a defamation claim because the listing is accurate – there is no falsity. 

The same is true if the alleged defamation was defendants’ denial of payment to Dr. Dziachan,

wherein defendants conceded the error, made the payment and restored plaintiff’s higher credit

limit. Cf., Stern v. Credit Bureau of Milwaukee, 105 Wis.2d 647, 654, 315 N.W.2d 511, 515

(Wis.App.1981) (erroneous statement by credit bureau that civil judgment had been awarded

against plaintiff, resulting in temporary denial of credit card to plaintiff, was “not libelous on its

face and not reasonably capable of a defamatory meaning as a matter of law”).

Neither the complaint nor plaintiff’s opposition to the instant motion clarify

plaintiff’s defamation claim. 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

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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). 

CONCLUSION

The complaint fails to state a claim upon which relief may be granted. Fed. R.

Civ. P. 12(b)(6). Moreover, plaintiff has failed to set forth any substantive rationale for granting

leave to file an amended complaint. Fed. R. Civ. P. 15(a). To do so would be both futile and

unduly prejudicial to defendants. Foman v. Davis, 371 U.S. 178, 182, 83 S. Ct. 227, 230 (1962).

RECOMMENDATION

Accordingly, for the foregoing reasons, IT IS HEREBY RECOMMENDED that:

1. Defendants’ motion to dismiss, filed April 7, 2006 and amended April 26,

2006, should be granted and plaintiff’s complaint dismissed with prejudice; and

2. Defendants’ May 26, 2006 motion to strike plaintiff’s May 16, 2006 “First

Joint Status Report” should be denied as moot.

These findings and recommendations are submitted to the Honorable William B.

Shubb, the United States District Judge assigned to this case. 28 U.S.C. § 636(b)(l). Written

objections may be filed within ten days after being served with these findings and

recommendations. The document should be captioned “Objections to Magistrate Judge’s

Findings and Recommendations.” The 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).

DATED: 7/25/06

/s/ Gregory G. Hollows

_________________________

GREGORY G. HOLLOWS

 U. S. MAGISTRATE JUDGE

NOW6: McNEARNEY. Mtn Dism

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