FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

NOEMIA CARVALHO, on behalf of 

herself and other similarly situated No. 09-15030 people,

Plaintiff-Appellant, D.C. No.

5:08-cv-01317-JF

v. 

ORDER AND EQUIFAX INFORMATION SERVICES,

AMENDED LLC; EXPERIAN INFORMATION OPINION SOLUTIONS, INC.; TRANSUNION LLC,

Defendants-Appellees. 

Appeal from the United States District Court

for the Northern District of California

Jeremy D. Fogel, District Judge, Presiding

Argued and Submitted

February 11, 2010—San Francisco, California

Filed August 18, 2010

Amended December 16, 2010

Before: Diarmuid F. O’Scannlain, Stephen S. Trott and

Richard A. Paez, Circuit Judges.

Opinion by Judge O’Scannlain

20189
COUNSEL

Scott D. Kalkin, Roboostoff & Kalkin, San Francisco, California, argued the cause for the plaintiff-appellant. Ron Bochner, Law Offices of Ron Bochner, Santa Clara, California,

filed the briefs.

CARVALHO v. EQUIFAX INFORMATION SERVICES 20193
Stephen J. Newman, Stroock & Stroock & Lavan LLP, Los

Angeles, California; Barry Goheen, King & Spalding LLP,

Atlanta, Georgia; and Meir Feder, Jones Day, New York,

New York, argued the cause for the defendants-appellees and

filed a brief. With them on the brief were Lewis P. Perling,

King & Spalding LLP, Atlanta, Georgia; Brian C. Frontino

and Darius K. Zolnor, Stroock & Stroock & Lavan LLP, Los

Angeles, California; and Deanna L. Johnston and Nathaniel P.

Garrett, Jones Day, San Francisco, California.

ORDER

The opinion filed on August 18, 2010, is amended as follows:

At pages 12121-22 of the slip opinion, replace:

<Until the consumer has successfully resolved the

legal dispute in her favor—for example, by means of

a judgment, arbitration award, or settlement—we

cannot say that a CRA reporting factually correct

information about the disputed debt is misleading

potential creditors. Indeed, it would be misleading to

potential creditors to delete such information

because “the>

with

<A CRA is not required as part of its reinvestigation

duties to provide a legal opinion on the merits.

Indeed, determining whether the consumer has a

valid defense “is a question for a court to resolve in

a suit against the [creditor,] not a job imposed upon

consumer reporting agencies by the FCRA.” DeAndrade, 523 F.3d at 68. Nor is a CRA obligated not

to report any information about the disputed item

20194 CARVALHO v. EQUIFAX INFORMATION SERVICES
simply because the consumer asserts a legal defense.

“[T]he>

At page 12123 of the slip opinion, lines 16-17, replace

<show any inaccuracy as a matter of law> with <make a

prima facie case of inaccurate reporting>. 

With these amendments, the panel has unanimously voted

to deny the petition for rehearing. Judges O’Scannlain and

Paez have voted to deny the petition for rehearing en banc,

and Judge Trott has so recommended. The full court has been

advised of the petition for rehearing en banc, and no judge has

requested a vote on whether to rehear the matter en banc. Fed.

R. App. P. 35.

The petition for rehearing and the petition for hearing en

banc are DENIED. No further petitions for hearing or rehearing en banc may be filed.

The motion by the National Consumer Law Center and

National Association of Consumer Advocates to file a brief of

amici curiae in support of Carvalho’s petition for rehearing

and for rehearing en banc is DENIED as moot. 

OPINION

O’SCANNLAIN, Circuit Judge:

We must decide whether a credit reporting agency is liable

for a disputed credit report under California’s Consumer

Credit Reporting Agencies Act.

I

A

In October 2001, Noemia Carvalho received medical treatment from Bayside Medical Group, Inc. (“Bayside”), in

CARVALHO v. EQUIFAX INFORMATION SERVICES 20195
Pleasanton, California. Prior to receiving her treatment, Carvalho signed the following agreement (“Agreement”):

Bayside Medical Group, Inc., will bill your insurance as a courtesy to you. If your insurance does not

pay the claim within 90 days of the date of service,

the balance of your account will be your responsibility. . . . I hereby authorize my insurance company to

pay benefits directly to Bayside Medical Group, Inc.,

and I am financially responsible for non-covered services. 

As a result of her treatment, Carvalho incurred charges

amounting to $118.

For reasons that remain unclear,1 Bayside received no payment from her insurance company within the ninety days provided in the Agreement. Bayside sent Carvalho a bill for $118

in January 2002, as well as a “final notice” in March 2003.

Neither Carvalho nor any insurer paid the bill.

Thereafter, Bayside assigned the debt to Credit Consulting

Services (“CCS”), a collection agency. CCS sent Carvalho a

series of dunning letters threatening to report the debt to three

major credit reporting agencies—Equifax Information Services, LLC (“Equifax”), Experian Information Solutions, Inc.

(“Experian”), and TransUnion LLC (“TransUnion”) (collectively, “CRAs”)—if she did not pay the bill. Despite these

warnings, Carvalho still did not pay the bill or arrange for

payment by her insurer. Accordingly, CCS reported the debt

to the CRAs.

After Carvalho noticed the debt on her credit report,2 her

1As the district court noted, the parties dispute whether Carvalho was

insured by Blue Cross or Blue Shield (if at all), and whether Bayside

billed the correct insurer. See Carvalho v. Equifax Info. Servs. LLC, 588

F. Supp. 2d 1089, 1091 (N.D. Cal. 2008). 

2The debt appeared on her consolidated credit report under the heading

“Collection Accounts,” with a listing of the creditor (CCS), opening date

20196 CARVALHO v. EQUIFAX INFORMATION SERVICES
attorney sent CCS a letter in September 2004 explaining that

the debt arose from a bill her insurance company “wrongfully

refused to pay” and requesting that CCS “immediately investigate and correct the information that is erroneously appearing on her credit report.” CCS responded that Bayside “bills

insurance as a courtesy only and the individual is responsible

for non covered services,” and that Carvalho’s “insurance was

billed and coverage denied.” CCS concluded that it “reported

this account correctly” and that any problem “should be

resolved between Ms. Carvalho and her insurance company.”

That same month, Carvalho also sent letters to the three

CRAs requesting that they investigate—or, in industry parlance, “reinvestigate”—the CCS debt on her credit report. The

letters stated: “I dispute the above item on my enclosed Credit

Report. These bills arose out of the medical treatment I was

covered for by Blue Cross of California. For some reason that

is unknown to me, they did not pay these medical bills.” The

letters requested that the above-quoted passage be added to

Carvalho’s credit report. 

Pursuant to their standard procedures, the CRAs each sent

an electronic Consumer Dispute Verification (“CDV”) form

to CCS with a cursory description of the dispute and a request

that CCS verify the account information. CCS responded by

reporting that the information was “accurate,” and the CRAs

each updated Carvalho’s credit report to indicate that the

information about the CCS debt had been verified but was

disputed by Carvalho. In addition, Equifax added Carvalho’s

statement to her report. The CRAs each sent Carvalho notices

explaining that they had verified the information as correct

and describing further steps she could take if unsatisfied with

the outcome of the reinvestigation.

(08/03), reported date (09/03), past due amount ($118), and present status

(“collection”). 

CARVALHO v. EQUIFAX INFORMATION SERVICES 20197
In April 2005, Carvalho sent the CRAs new letters requesting “a description of how [the CCS] item was verified.” In

addition, she requested that the CRAs include a statement on

her credit report similar to the one she had sent in her prior

letter. Equifax mailed Carvalho a boilerplate description of its

procedures for verifying disputed items. Experian and TransUnion construed Carvalho’s letter as a request for another

reinvestigation, which also resulted in CCS’s verification of

the item. Although Experian and TransUnion added Carvalho’s statement to her credit report, neither complied with her

request for a description of how they had verified the debt.

In June 2005, Carvalho submitted another round of letters

to the CRAs renewing her dispute over the CCS item.

According to the letters, she “learned that the [Bayside] bill

may have been paid if [Bayside] had timely and properly submitted my bill to Blue Shield.”

3

 Both Equifax and Experian

launched new reinvestigations, with the same outcome as

before. TransUnion informed Carvalho that it considered her

dispute “frivolous” and would not conduct any further reinvestigation absent “court papers or a recent, authentic letter

from the creditor(s) that explains what information should be

updated.” 

In February 2006, Carvalho’s attorney sent letters to the

CRAs explaining that there was “clear evidence” that the CCS

item was “wrong” because “Bayside failed to timely and

properly request payment from Blue Cross of California,

instead improperly seeking payment from Blue Shield.”

According to the letters, “Carvalho’s credit score has suffered

due to this entry and caused her home to be refinanced at a

rate higher than necessary due to its inclusion.” The letters

demanded that the entry be removed from Carvalho’s credit

report and that she be paid $25,000 plus attorney’s fees.

Moreover, the letters demanded yet another reinvestigation.

3Carvalho contends on appeal that Blue Cross was her insurer. There is

no explanation in the record why her letter referenced Blue Shield. 

20198 CARVALHO v. EQUIFAX INFORMATION SERVICES
The CRAs once again contacted CCS, which verified the

information as accurate, and updated Carvalho’s credit report

accordingly.

B

On July 24, 2006, Carvalho filed a class action complaint

against CCS and the three CRAs in the Monterey County

Superior Court. The complaint alleged various violations of

the California Consumer Credit Reporting Agencies Act

(“CCRAA”), Cal. Civ. Code § 1785.1 et seq., including the

CRAs’ failure to conduct a proper reinvestigation of Carvalho’s dispute; the CRAs’ failure to provide a sufficient

response to her request for a description of the procedures

they used to verify the CCS item; CCS’s failure to cooperate

in the reinvestigation; and CCS’s reporting of a debt it knew

or should have known to be illegitimate. The complaint

sought to certify two classes:

1. California consumers seeking injunctive relief

against consumer credit reporting agencies’ reinvestigation procedures which, as presently constituted, fail to comply with the [CCRAA] in

that they fail [to] meet the requirements of that

statute, including, but not limited to, the fact that

they fail to allow for review and consideration

of all relevant information provided by the Consumer in the reinvestigation process; [and]

2. California consumers seeking injunctive relief

against the consumer credit reporting agencies,

who pursuant to the [CCRAA] requested, but

did not receive, an adequate description of the

procedure used to determine the accuracy and

completeness of the disputed information.

The prayer for relief sought class certification, an injunction,

damages (including punitive damages), attorney’s fees, and

CARVALHO v. EQUIFAX INFORMATION SERVICES 20199
costs. However, the complaint did not plead a specific amount

of damages. 

The superior court granted CCS’s demurrer to the complaint without leave to amend on grounds that the federal Fair

Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681t(b)(1)(F),

preempted Carvalho’s CCRAA claims against CCS.

On March 7, 2008, Equifax filed a notice of removal in the

District Court for the Northern District of California alleging

that the case met the $5 million amount-in-controversy

requirement under the Class Action Fairness Act of 2005

(“CAFA”), 28 U.S.C. § 1332(d). Equifax maintained that its

notice of removal was timely because it did not become aware

that the case met the requirement until Carvalho revealed in

her depositions on February 6 and March 4, 2008, that the

amount in controversy was at least $12.5 million (i.e.,

$25,000 times 500 potential plaintiffs). Carvalho moved to

remand, arguing that CAFA’s amount-in-controversy requirement was not met and that the notice of removal was

untimely. The district court denied the motion.

Carvalho moved for class certification as well as for leave

to amend her complaint to add causes of action for negligent

violation of the CCRAA’s reinvestigation provision and willful violation of the FCRA’s reinvestigation provision. The

three CRAs each filed a motion for summary judgment. The

district court granted the motions for summary judgment,

denied as moot Carvalho’s motion for class certification, and

denied as futile her motion to amend her complaint. See Carvalho v. Equifax Info. Servs., LLC, 588 F. Supp. 2d 1089

(N.D. Cal. 2008). This appeal timely followed.

II

Carvalho first urges that this case was untimely removed

20200 CARVALHO v. EQUIFAX INFORMATION SERVICES
from state court and claims that the district court erroneously

denied her motion to remand.4

A

[1] CAFA at 28 U.S.C. § 1332(d), “vests district courts

with original jurisdiction of any civil action in which, inter

alia, the amount in controversy exceeds the sum or value of

$5,000,000, exclusive of interest and costs, and in which the

aggregate number of proposed plaintiffs is 100 or greater, and

any member of the plaintiff class is a citizen of a state different from any defendant.” Lowdermilk v. U.S. Bank Nat’l

Ass’n, 479 F.3d 994, 997 (9th Cir. 2007) (internal quotation

marks omitted). Such actions may be removed from state

court pursuant to 28 U.S.C. § 1453(b). The timeliness of

removals pursuant to CAFA is governed by 28 U.S.C.

§ 1446(b), which provides:

The notice of removal of a civil action or proceeding shall be filed within thirty days after the receipt

by the defendant, through service or otherwise, of a

copy of the initial pleading setting forth the claim for

relief upon which such action or proceeding is based,

or within thirty days after the service of summons

upon the defendant if such initial pleading has then

been filed in court and is not required to be served

on the defendant, whichever period is shorter.

If the case stated by the initial pleading is not

removable, a notice of removal may be filed within

thirty days after receipt by the defendant, through

service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may

4Carvalho’s reply brief also contends that the CRAs “waived their right

to move by delay.” Because she did not raise this argument in her opening

brief, she has waived it. See United States v. Alcan Elec. & Eng’g, Inc.,

197 F.3d 1014, 1020 (9th Cir. 1999). 

CARVALHO v. EQUIFAX INFORMATION SERVICES 20201
first be ascertained that the case is one which is or

has become removable . . . . 

[2] To summarize, section 1446(b) identifies two thirtyday periods for removing a case. The first thirty-day removal

period is triggered “if the case stated by the initial pleading

is removable on its face.” Harris v. Bankers Life & Cas. Co.,

425 F.3d 689, 694 (9th Cir. 2005). The second thirty-day

removal period is triggered if the initial pleading does not

indicate that the case is removable, and the defendant receives

“a copy of an amended pleading, motion, order or other

paper” from which removability may first be ascertained. 28

U.S.C. § 1446(b).

If the notice of removal was untimely, a plaintiff may move

to remand the case back to state court. See id. §§ 1447(c),

1453(c)(1); Kelton Arms Condo. Owners Ass’n v. Homestead

Ins. Co., 346 F.3d 1190, 1191-92 (9th Cir. 2003).

B

Carvalho argues that by the time Equifax received her complaint in October 2006, it should have been aware that the

case was removable based on the $25,000 settlement demand

she made in February 2006, as well as a civil case cover sheet5

served with the complaint indicating “unlimited jurisdiction”—i.e., an amount demanded exceeding $25,000. See Cal.

Civ. Proc. §§ 85, 88. According to Carvalho, Equifax should

have been able do the math to determine that the aggregate

amount in controversy exceeded $5 million ($25,000 per

plaintiff x 500 potential plaintiffs = $12.5 million). Consequently, Carvalho contends that the March 2008 removal was

untimely under section 1446(b). 

5Under the California Rules of Court, “[t]he first paper filed in an action

or proceeding shall be accompanied by a case cover sheet,” and such

cover sheet must be served with a copy of the complaint where, as here,

the action is designated “complex.” Cal. R. Ct. 3.220(a). 

20202 CARVALHO v. EQUIFAX INFORMATION SERVICES
[3] Because the face of the initial pleading—Carvalho’s

superior court complaint—lacked any indication of the

amount in controversy, it did not trigger this first thirty-day

removal period. Hence, we consider only whether the demand

letter or civil cover sheet triggered the second thirty-day

removal period.

1

[4] Carvalho argues that the settlement demand she made

in February 2006 put Equifax on notice of the amount in controversy. We have held that a demand letter sent during the

course of the state court action can constitute “other paper”

within the meaning of section 1446(b) if it reflects a reasonable estimate of the plaintiff’s claim. See Babasa v. LensCrafters, Inc., 498 F.3d 972, 975 (9th Cir. 2007). Here, however, the demand letter was sent to Equifax several months

before Carvalho even filed her complaint. 

[5] It is axiomatic that a case cannot be removed before its

inception. If the second paragraph of section 1446(b) were

meant to include as “other paper” a document received by the

defendant months before receipt of the initial pleading, the

requirement that the notice of removal “be filed within thirty

days after receipt by the defendant” of the “other paper”

would be nonsensical. Moreover, that the second paragraph

lists “an amended pleading, motion, order”—all documents

which logically cannot predate the initial pleading—before

“or other paper” leads us to conclude that “other paper” does

not include any document received prior to receipt of the initial pleading. See United States v. Williams, 553 U.S. 285, 294

(2008) (noting that “the commonsense canon of noscitur a

sociis . . . counsels that a word is given more precise content

by the neighboring words with which it is associated”).

Accordingly, we conclude that any document received prior

to receipt of the initial pleading cannot trigger the second

thirty-day removal period.

CARVALHO v. EQUIFAX INFORMATION SERVICES 20203
We also reject Carvalho’s suggestion that a pre-complaint

document containing a jurisdictional clue can operate in tandem with an indeterminate initial pleading to trigger some

kind of hybrid of the first and second removal periods. In

Harris, we held that the first thirty-day removal period comes

into play only if removability is ascertainable from “examination of the four corners of the applicable pleadings, not

through subjective knowledge or a duty to make further inquiry.” 425 F.3d at 694. We adopted this “bright-line approach”

to “avoid[ ] the spectre of inevitable collateral litigation over

. . . whether defendant had subjective knowledge, or whether

defendant conducted sufficient inquiry.” Id. at 697. We would

eviscerate our holding in Harris if we required defendants to

rely on pre-complaint documents to ascertain whether a case

stated by an indeterminate initial pleading is actually removable. 

[6] Consequently, the February 2006 demand letter did not

trigger a thirty-day removal period under section 1446(b).

2

[7] Carvalho also argues that Equifax could have ascertained the aggregate amount in controversy from the civil

cover sheet’s invocation of “unlimited” jurisdiction. Assuming without deciding that a civil cover sheet can constitute

“other paper” within the meaning of section 1446(b), we are

unpersuaded that this particular cover sheet affirmatively

revealed that the aggregate amount in controversy exceeds $5

million. The checked “Unlimited” box on the cover sheet

merely indicates that the “[a]mount demanded exceeds

$25,000.” Nothing in the cover sheet indicates that the

amount demanded by each putative class member exceeds

$25,000. Cf. Abrego Abrego v. Dow Chem. Co., 443 F.3d 676,

689 (9th Cir. 2006).

[8] Had Equifax removed the case based on this indeterminate cover sheet alone, “it may well have subjected itself to

20204 CARVALHO v. EQUIFAX INFORMATION SERVICES
fees and costs, and potentially Rule 11 sanctions, for filing a

baseless notice of removal.” Durham v. Lockheed Martin

Corp., 445 F.3d 1247, 1251 (9th Cir. 2006). Because we neither require nor encourage defendants to remove prematurely

based on such indeterminate papers, see Harris, 425 F.3d at

697-98, we conclude that the civil cover sheet did not trigger

the second thirty-day removal period.

C

The CRAs note that removal was timely because it was

Carvalho’s deposition testimony which provided the first indication in this case that the amount in controversy exceeds $5

million, and Equifax removed within thirty days of the deposition. In her opening brief, Carvalho did not contest that the

deposition revealed that her case satisfies CAFA’s amount-incontroversy requirement. Therefore, she has waived any argument to the contrary. See Miller v. Fairchild Indus., Inc., 797

F.2d 727, 738 (9th Cir. 1986). 

[9] In any event, we agree with the district court that Carvalho’s deposition testimony triggered the second thirty-day

removal period. Like a response to interrogatories, see Durham, 445 F.3d at 1251, a plaintiff’s response to deposition

questions can constitute “other paper” within the meaning of

section 1446(b), see, e.g., Peters v. Lincoln Elec. Co., 285

F.3d 456, 466 (6th Cir. 2002) (collecting cases). In her deposition, when asked whether “$25,000 apiece” would be insufficient “to resolve the damages on behalf of the persons that

are similarly situated,” Carvalho answered, “That’s correct.”

From this testimony, Equifax could reasonably determine for

the first time that the amount in controversy was at least

$25,000 per class member, or $12.5 million total. 

[10] Because the notice of removal was filed within thirty

days of Carvalho’s deposition testimony, which was “other

paper from which it may first be ascertained that the case is

CARVALHO v. EQUIFAX INFORMATION SERVICES 20205
. . . removable,” 28 U.S.C. § 1446(b), we conclude that the

denial of Carvalho’s motion to remand was proper.6

III

Carvalho next contends that the state superior court erred

in granting CCS’s general demurrer without leave to amend.

A

Although CCS was served with the notice of appeal as well

as Carvalho’s briefs in this appeal, CCS did not file an

answering brief or join the CRAs’ answering brief.7 Nevertheless, the CRAs argue on CCS’s behalf that we lack jurisdiction over this part of the appeal because “Carvalho’s

opportunity to appeal the Superior Court’s dismissal has long

since expired” under the California Rules of Court. 

[11] “After removal, the federal court takes the case up

where the State court left it off.” Granny Goose Foods, Inc.

v. Teamsters, 415 U.S. 423, 436 (1974) (internal quotation

marks omitted). “The federal court . . . treats everything that

occurred in the state court as if it had taken place in federal

court.” Butner v. Neustadter, 324 F.2d 783, 785 (9th Cir.

1963). Consequently, an order entered by a state court

“should be treated as though it had been validly rendered in

the federal proceeding.” Id. at 786. “[F]ederal rather than state

law governs the future course of proceedings.” Granny Goose

Foods, 415 U.S. at 437.

6Because we conclude that Equifax timely removed the case, we need

not consider its argument that Carvalho waived any procedural defects by

failing to make a timely objection. 

7CCS’s failure to file a brief does not compel a ruling in Carvalho’s

favor, given that the only sanction for failure to file an answering brief is

forfeiture of oral argument. See Fed. R. App. P. 31(c); see also Brown Bag

Software v. Symantec Corp., 960 F.2d 1465, 1478 (9th Cir. 1992). 

20206 CARVALHO v. EQUIFAX INFORMATION SERVICES
[12] We treat the superior court’s order sustaining the

demurrer as a validly rendered dismissal pursuant to Federal

Rule of Civil Procedure 12(b). See Gardner v. UICI, 508 F.3d

559, 563 n.5 (9th Cir. 2007) (“Under California practice, a

general demurrer to a complaint is the equivalent of a motion

to dismiss under Fed. R. Civ. P. 12(b) in federal practice.”).

Under federal law, such a dismissal as to only one of several

defendants is appealable when, as here, it has merged into the

final judgment. See Fed. R. Civ. P. 54(b); Am. Ironworks &

Erectors, Inc. v. N. Am. Constr. Corp., 248 F.3d 892, 897-98

(9th Cir. 2001). Therefore, we reject the contention that we

lack jurisdiction over this part of the appeal. See Reilly v.

Waukesha Cnty., 993 F.2d 1284, 1287 (7th Cir. 1993) (“Now

that the case is before us, we may examine all of the antecedent interlocutory rulings, including those rendered by the state

judge and absorbed into the district court’s final judgment.”).

B

On the merits, Carvalho contends that the superior court

erred in concluding that the FCRA “preempts all state law

causes of action against furnisher[s] of information such as

CCS.”

1

The FCRA provides that “[n]o requirement or prohibition

may be imposed under the laws of any State . . . relating to

the responsibilities of persons who furnish information to consumer reporting agencies.” 15 U.S.C. § 1681t(b)(1)(F). Nevertheless, it expressly saves from preemption “section

1785.25(a) of the California Civil Code.” Id.

§ 1681t(b)(1)(F)(ii). Section 1785.25(a), in turn, provides that

“[a] person shall not furnish information on a specific transaction or experience to any consumer credit reporting agency if

the person knows or should know the information is incomplete or inaccurate.” 

CARVALHO v. EQUIFAX INFORMATION SERVICES 20207
Because the private right of action to enforce section

1785.25(a) is found in sections 1785.25(g) and 1785.31,

which are not expressly saved from preemption under the

FCRA, some courts have held that FCRA preempts private

consumer actions against furnishers under California law. See,

e.g., Lin v. Universal Card Servs. Corp., 238 F. Supp. 2d

1147, 1152-53 (N.D. Cal. 2002)). However, we recently

rejected this view in Gorman v. Wolpoff & Abramson, LLP,

584 F.3d 1147 (9th Cir. 2009). There, we concluded that the

provisions creating a private right of action do not constitute

a “requirement or prohibition” within the meaning of 15

U.S.C. § 1681t(b)(1)(F) because they merely provide a vehicle for enforcing actual requirements or prohibitions. Id. at

1170-71. Moreover, we concluded that it was highly unlikely

that Congress “explicitly retained the portions of the California statutory scheme that create obligations, without leaving

in place any enforcement mechanism.” Id. at 1170. Therefore,

we held that “the private right of action to enforce California

Civil Code section 1785.25(a) is not preempted by the

FCRA.” Id. at 1173.

2

Relying primarily on Gorman, Carvalho argues that her

CCRAA claims against CCS should be reinstated. Her complaint made two allegations against CCS: first, that CCS

failed to cooperate with and complete an investigation in

response to a reinvestigation inquiry from a consumer credit

reporting agency, and second, that CCS willfully violated the

CCRAA by reporting a debt it knew to be illegitimate. 

In her opposition to CCS’s demurrer, Carvalho defended

only her claim that CCS had failed to assist in the reinvestigation. Nowhere did she mention her claim that CCS had knowingly reported inaccurate information, which is a violation of

section 1785.25(a). “A plaintiff who makes a claim . . . in his

complaint, but fails to raise the issue in response to a defendant’s motion to dismiss . . . , has effectively abandoned his

20208 CARVALHO v. EQUIFAX INFORMATION SERVICES
claim, and cannot raise it on appeal.” Walsh v. Nev. Dep’t of

Human Res., 471 F.3d 1033, 1037 (9th Cir. 2006). Because

Carvalho failed to raise her section 1785.25(a) inaccuracy

claim in response to the demurrer, we conclude that she has

abandoned it.

[13] We are left with Carvalho’s claim of inadequate

investigation. California Civil Code § 1785.25(f) requires furnishers who receive notice of a dispute to complete an investigation and to review relevant information.8

 Section

1785.25(f), however, is not expressly saved from preemption

by the FCRA. Gorman holds only that the FCRA does not

preempt section 1785.25(a) claims against furnishers. See 584

F.3d at 1173. Because section 1785.25(a) is the only substantive CCRAA furnisher provision specifically saved by the

FCRA, Carvalho’s section 1785.25(f) claim is preempted.

Therefore, we discern no reason to disturb the order sustaining the demurrer without leave to amend.

IV

Carvalho next claims that the CRAs violated the CCRAA’s

reinvestigation provision, Cal. Civ. Code § 1785.16, which

provides in relevant part:

If the completeness or accuracy of any item of information contained in his or her file is disputed by a

consumer, and the dispute is conveyed directly to the

consumer credit reporting agency by the consumer

or user on behalf of the consumer, the consumer

credit reporting agency shall within a reasonable

period of time and without charge, reinvestigate and

record the current status of the disputed information

before the end of the 30-business-day period beginning on the date the agency receives notice of the

8Carvalho’s complaint erroneously cites section 1785.25(d), which

requires furnishers to report the closure of open-end credit accounts. 

CARVALHO v. EQUIFAX INFORMATION SERVICES 20209
dispute from the consumer or user, unless the consumer credit reporting agency has reasonable

grounds to believe and determines that the dispute by

the consumer is frivolous or irrelevant, including by

reason of a failure of the consumer to provide sufficient information, as requested by the consumer

credit reporting agency, to investigate the dispute.

Id. § 1785.16(a). After completing a reinvestigation, the CRA

must provide the consumer with written notice of any results,

including “a notice that, if requested by the consumer, a

description of the procedure used to determine the accuracy

and completeness of the information shall be provided.” Id.

§ 1785.16(d). The CRA must send such description “not later

than 15 days after receiving a request from the consumer.” Id.

A

The district court held that “[b]ecause there is no genuine

dispute that Plaintiff’s credit report was factually accurate,

Defendants are entitled to judgment as a matter of law.” Carvalho, 588 F. Supp. 2d at 1100. Carvalho contends that inaccuracy is not a required element of a reinvestigation claim

under the CCRAA. She also argues that the item on her credit

reports referencing the CCS collection account was inaccurate.

“Our duty as a federal court in this case is to ascertain and

apply the existing California law.” Munson v. Del Taco, Inc.,

522 F.3d 997, 1002 (9th Cir. 2008) (per curiam) (internal quotation marks omitted). We are bound by pronouncements of

the California Supreme Court on applicable state law, but in

the absence of such pronouncements, we follow decisions of

the California Court of Appeal unless there is convincing evidence that the California Supreme Court would hold otherwise. Id. 

20210 CARVALHO v. EQUIFAX INFORMATION SERVICES
[14] The California courts have yet to consider whether a

plaintiff must demonstrate that a disputed item is inaccurate

to obtain relief for a violation of the CCRAA’s reinvestigation

provisions. However, because the CCRAA “is substantially

based on the Federal Fair Credit Reporting Act, judicial interpretation of the federal provisions is persuasive authority and

entitled to substantial weight when interpreting the California

provisions.” Olson v. Six Rivers Nat’l Bank, 3 Cal. Rptr. 3d

301, 309 (Ct. App. 2003) (internal citations omitted).9

[15] Although the FCRA’s reinvestigation provision, 15

U.S.C. § 1681i, does not on its face require that an actual

inaccuracy exist for a plaintiff to state a claim, many courts,

including our own, have imposed such a requirement. See

DeAndrade v. Trans Union LLC, 523 F.3d 61, 67 (1st Cir.

2008) (collecting cases). In Dennis v. BEH-1, LLC, 520 F.3d

1066 (9th Cir. 2008), we held that a plaintiff filing suit under

section 1681i must make a “prima facie showing of inaccurate

reporting.” Id. at 1069. The inaccuracy requirement comports

with the purpose of the FCRA, which is “to protect consumers

from the transmission of inaccurate information about them.”

Gorman, 584 F.3d at 1157 (internal quotation marks omitted).

9The FCRA provides in relevant part: 

[I]f the completeness or accuracy of any item of information contained in a consumer’s file at a consumer reporting agency is disputed by the consumer and the consumer notifies the agency

directly, or indirectly through a reseller, of such dispute, the

agency shall, free of charge, conduct a reasonable reinvestigation

to determine whether the disputed information is inaccurate and

record the current status of the disputed information, or delete the

item from the file . . . before the end of the 30-day period beginning on the date on which the agency receives the notice of the

dispute from the consumer or reseller. 

15 U.S.C. § 1681i(a)(1)(A). In addition, the FCRA contains provisions

similar to those of the CCRAA with respect to consideration of all relevant

materials submitted by the consumer, id. § 1681i(a)(4), and provision of

a description of the procedure used to determine the accuracy and completeness of the disputed information, id. § 1681i(a)(6)-(7).

CARVALHO v. EQUIFAX INFORMATION SERVICES 20211
Because we believe California courts would find Dennis persuasive, we conclude that unless Carvalho has raised a genuine issue as to whether the disputed item was inaccurate, her

CCRAA section 1785.16 claims fail as a matter of law.

In Dennis, we did not define what constitutes an inaccurate

report. Later, in Gorman, we explained that an item on a

credit report can be “incomplete or inaccurate” within the

meaning of the FCRA’s furnisher investigation provision, 15

U.S.C. § 1681s-2(b)(1)(D),10 “because it is patently incorrect,

or because it is misleading in such a way and to such an

extent that it can be expected to adversely affect credit decisions.” 584 F.3d at 1163 (internal quotation marks omitted).

The California Court of Appeal has expounded a very similar

concept of inaccuracy in the context of FCRA and CCRAA

provisions requiring that credit reporting agencies adopt procedures to assure the “maximum possible accuracy” of credit

reports. See 15 U.S.C. § 1681e(b); Cal. Civ. Code

§ 1785.14(b). For example, in Cisneros v. U.D. Registry, Inc.,

46 Cal. Rptr. 2d 233 (Ct. App. 1995), the court concluded that

“a report violates the[se] statutes when it is misleading or

incomplete, even if it is technically accurate.” Id. at 254. 

[16] “We generally adhere to the maxim of statutory construction that similar terms appearing in different sections of

a statute should receive the same interpretation.” United

States v. Nordbrock, 38 F.3d 440, 444 (9th Cir. 1994); see

also Chiang v. Verizon New Eng. Inc., 595 F.3d 26, 37 (1st

Cir. 2010) (deeming the term “inaccurate” in section 1681i(a)

to be “essentially the same” as the term “incomplete or inaccurate” in section 1681s-2(b)). Moreover, we operate under

the assumption that California courts would interpret the

FCRA and CCRAA consistently. See Olson, 3 Cal. Rptr. 3d

10This provision requires a furnisher who receives notice of a dispute to

report the results of its investigation to consumer reporting agencies “if the

investigation finds that the information is incomplete or inaccurate.” 15

U.S.C. § 1681s-2(b)(1)(D) (emphasis added). 

20212 CARVALHO v. EQUIFAX INFORMATION SERVICES
at 309. Accordingly, in considering whether Carvalho’s credit

report was inaccurate within the meaning of the CCRAA, we

are guided by Gorman’s “patently incorrect or materially misleading” standard.

B

[17] Carvalho’s credit reports reflected a CCS collection

account with $118 past due. Carvalho does not contend that

the CCS collection account does not pertain to her, that the

amount past due is too high or low, or that any of the listed

dates are wrong. Indeed, she concedes that “[a]ll the data that

shows in my credit report is correct” on its face. Because all

of the relevant facts were correctly reported, there was no

patent error in Carvalho’s credit report. 

[18] Carvalho’s claimed inaccuracy, however, is latent.

She contends that even if technically accurate, the CCS item

was misleading because she was not legally obligated to pay

the Bayside bill until Bayside had properly billed her insurer,

as allegedly required by the Agreement,11 and potential creditors would mistakenly assume from the derogatory item that

she is uncreditworthy. 

Black’s Law Dictionary defines “creditworthy” as “financially sound enough that a lender will extend credit in the

belief default is unlikely.” Black’s Law Dictionary 426 (9th

ed. 2009) (emphasis added)). Under this definition, a consumer who avails herself of a good or service but defaults on

payment would be considered less creditworthy than one who

does not, regardless of how legally sound her reasons for

11Carvalho’s reading of the Agreement is dubious at best, given that

conditions precedent “are not favored by the law, and are to be strictly

construed against one seeking to avail himself of them,” Antonelle v. Kennedy & Shaw Lumber Co., 73 P. 966, 968 (Cal. 1903), and, in any event,

the Agreement merely states that her insurer would be billed “as a courtesy.” 

CARVALHO v. EQUIFAX INFORMATION SERVICES 20213
default are. That she defaulted is certainly relevant to potential creditors and is precisely the type of information that a

credit report is meant to supply. See Cal. Civ. Code

§ 1785.3(c) (defining “consumer credit report” as “any . . .

communication of any information by a consumer credit

reporting agency bearing on a consumer’s credit worthiness,

credit standing, or credit capacity”).

Nevertheless, Carvalho contends that credit reporting agencies unfairly malign the creditworthiness of innocent consumers by reporting disputed debts without undertaking a

searching inquiry into the consumer’s legal defenses to payment. In other words, she believes consumers should be

deemed innocent until proven guilty by a proper reinvestigation under the FCRA and CCRAA. The fundamental flaw in

Carvalho’s conception of the reinvestigation duty is that credit

reporting agencies are not tribunals. They simply collect and

report information furnished by others. Because CRAs are ill

equipped to adjudicate contract disputes, courts have been

loath to allow consumers to mount collateral attacks on the

legal validity of their debts in the guise of FCRA reinvestigation claims. See Saunders v. Branch Banking & Trust Co. of

Va., 526 F.3d 142, 150 (4th Cir. 2008).

For example, in DeAndrade, the dispute centered on

whether the consumer had ratified an allegedly fraudulent

mortgage. 523 F.3d at 68. The First Circuit concluded that

“[w]hether the mortgage is valid turns on questions that can

only be resolved by a court of law” and is “a legal issue that

a credit agency such as Trans Union is neither qualified nor

obligated to resolve under the FCRA.” Id. The proper

recourse for the consumer, therefore, was to resolve the issue

in a suit against the creditor; “[i]f a court had ruled the mortgage invalid and Trans Union had continued to report it as a

valid debt, then [the consumer] would have grounds for a

potential FCRA claim.” Id.

[19] We agree that reinvestigation claims are not the

proper vehicle for collaterally attacking the legal validity of

20214 CARVALHO v. EQUIFAX INFORMATION SERVICES
consumer debts. “With respect to the accuracy of disputed

information, the CRA is a third party, lacking any direct relationship with the consumer, and its responsibility is to ‘re

investigate’ a matter once already investigated in the first

place.” Gorman, 584 F.3d at 1156-57 (quoting 15 U.S.C.

§ 1681i(a)(1)). Hence, a consumer disputing the legal validity

of a debt that appears on her credit report should first attempt

to resolve the matter directly with the creditor or furnisher,

which “stands in a far better position to make a thorough

investigation of a disputed debt than the CRA does on reinvestigation.” Id. at 1156. A CRA is not required as part of its

reinvestigation duties to provide a legal opinion on the merits.

Indeed, determining whether the consumer has a valid defense

“is a question for a court to resolve in a suit against the [creditor,] not a job imposed upon consumer reporting agencies by

the FCRA.” DeAndrade, 523 F.3d at 68. Nor is a CRA obligated not to report any information about the disputed item

simply because the consumer asserts a legal defense. “[T]he

very economic purpose for credit reporting companies would

be significantly vitiated if they shaded every credit history in

their files in the best possible light for the consumer.” Cahlin

v. Gen. Motors Acceptance Corp., 936 F.2d 1151, 1158 (11th

Cir. 1991).

Both the FCRA and CCRAA allow consumers who are dissatisfied by a reinvestigation to file a brief explanatory statement to be reported along with the disputed item. See 15

U.S.C. § 1681i(b)-(c); Cal. Civ. Code § 1785.16(f)-(g). “In

this way, potential creditors have both sides of the story and

can reach an independent determination of how to treat a specific, disputed account.” Cahlin, 936 F.2d at 1160 n.23. Carvalho complains that such an explanatory statement cannot

obliterate the stain of a derogatory item on her credit report.

While this may be true, it merely reinforces our view that a

consumer who disputes the legal validity of an obligation

should do so directly at the furnisher level. If successful, the

consumer can clear her credit report without the need for any

CARVALHO v. EQUIFAX INFORMATION SERVICES 20215
explanatory statements. That Carvalho failed to do so is no

fault of the CRAs.

[20] Because Carvalho has failed to establish an element of

a prima facie reinvestigation claim—inaccuracy—we conclude that the district court properly granted summary judgment to the CRAs.12

V

Finally, Carvalho appeals the district court’s denial of her

motion for leave to amend her complaint. The district court

held that amendment would be futile because Carvalho’s

claims “clearly are foreclosed by the inaccuracy requirement

of § 1681i and § 1785.16.” Carvalho, 588 F. Supp. 2d at 1100

n.11. 

[21] Under Federal Rule of Civil Procedure 15(a), leave to

amend shall be freely given when justice so requires. However, the district court may exercise its discretion to deny

leave to amend due to “undue delay, bad faith or dilatory

motive on part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice

to the opposing party . . . , [and] futility of amendment.”

Foman v. Davis, 371 U.S. 178, 182 (1962). When the district

court denies leave to amend because of futility of amendment,

we will uphold such denial if “it is clear, upon de novo

review, that the complaint would not be saved by any amendment.” Leadsinger, Inc. v. BMG Music Publ’g, 512 F.3d 522,

532 (9th Cir. 2008) (internal quotation marks omitted). 

[22] Because we hold that Carvalho cannot make a prima

facie case of inaccurate reporting, we conclude that amendment to include other claims requiring inaccuracy would be

12Given that we affirm the summary judgment, we need not address the

propriety of the denial of class certification. See Skokomish Indian Tribe

v. United States, 332 F.3d 551, 564 (9th Cir. 2003). 

20216 CARVALHO v. EQUIFAX INFORMATION SERVICES
futile. Therefore, the district court properly concluded that

“there was no need to prolong the litigation by permitting further amendment.” Lipton v. Pathogenesis Corp., 284 F.3d

1027, 1039 (9th Cir. 2002).

VI

For the foregoing reasons, the judgment of the district court

is

AFFIRMED.

CARVALHO v. EQUIFAX INFORMATION SERVICES 20217