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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

KRISTEN MUEHLENBERG,

Plaintiff,

v.

EXPERIAN INFORMATION SOLUTIONS, 

INC., et al.,

Defendants.

Case No. 17-cv-00392-WHO 

ORDER GRANTING MOTION TO 

DISMISS SECOND AMENDED 

COMPLAINT

Re: Dkt. No. 41

INTRODUCTION

Plaintiff Kristen Muehlenberg alleges that Chase Bank USA, N.A. and JPMorgan Chase 

Bank, N.A. (the “Chase Defendants”)1failed to reinvestigate inaccurate information on her bank 

account reports and re-reported misleading and inaccurate account information in violation of both 

the Fair Credit Reporting Act (“FCRA”) and California’s Consumer Credit Reporting Agencies 

Act (“CCRAA”). The question I must answer on the Chase Defendants’ second motion to dismiss 

is whether Muehlenberg’s allegations in the Second Amended Complaint (“SAC”), when read in 

the context of her full credit report, may constitute an inaccuracy within the meaning of the FCRA 

and CCRAA. Because the credit report is not misleading when read in context and thus is not 

inaccurate, I GRANT the Chase Defendants’ motion.

BACKGROUND

Muehlenberg filed for Chapter 13 bankruptcy protection on March 31, 2011. See SAC ¶ 

62 [Dkt. No. 38]. Chapter 13 “affords individuals receiving regular income an opportunity to 

obtain some relief from their debts while retaining their property. To proceed under Chapter 13, a 

 

1 Muehlenberg refers only to “JPMorgan Chase Bank,” but the Chase Defendants have noted that 

this is erroneous.
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debtor must propose a plan to use future income to repay a portion (or in the rare case all) of his 

debts over the next three to five years.” Bullard v. Blue Hills Bank, 135 S. Ct. 1686, 1690, 191 L. 

Ed. 2d 621 (2015). Muehlenberg’s plan was confirmed on May 9, 2011. SAC ¶ 63.

On March 16, 2016, Muehlenberg ordered a “three bureau report” from defendant 

Experian Information Solutions, Inc. SAC ¶ 65. She noticed five trade lines “reporting 

inaccurate, misleading, or incomplete information that did not comport with credit reporting 

industry standards.” Id. ¶ 66. These trade lines “continued to report Muehlenberg’s accounts with 

past due balances, inaccurate balances, inaccurate monthly payments owed, in collections, and/or 

charged off.” Id. She received a discharge on July 18, 2016. Id. ¶ 64.

On September 13, 2016, Muehlenberg disputed the inaccurate trade lines in her March 

2016 report via certified mail with three credit reporting agencies (“CRAs”), Experian Information 

Solutions, Inc.; Equifax, Inc.; and TransUnion, LLC. SAC ¶ 69. She alleges that her dispute letter 

put each creditor “on notice that Plaintiff had filed for bankruptcy and to investigate how to report 

the accounts once a bankruptcy is filed. Plaintiff specifically requested each Creditor investigate 

the proper way to report Plaintiff’s bankruptcy.” Id. ¶ 70. 

On October 26, 2016, Muehlenberg ordered a second credit report from the same three 

CRAs. SAC ¶ 73. She alleges that the Chase Defendants reported Muehlenberg’s accounts “with 

a delinquency, post-discharge, in the 24 month payment history in October of 2016.” Id. ¶ 75. 

She contends that such reporting is inaccurate because she did not owe the Chase Defendants any 

funds in October of 2016, and that this delinquency is “misleading and would cause lenders to 

draw a more negative inference with respect to Muehlenberg’s credit worthiness because it 

appears Muehlenberg is derelict in making timely payments.” Id. ¶¶ 76, 80. She asserts that a 

similar inaccurate delinquency appears on a second account as well. Id. ¶ 81.

Muehlenberg makes two claims against the Chase Defendants for failure to reinvestigate 

and re-reporting misleading and inaccurate account information in violation of 15 U.S.C. § 1681s2(b) and California Civil Code § 1785.25(a). She also brings one claim against Experian 

Information Solutions, Inc. for failure to reinvestigate in violation of 15 U.S.C. § 1681i. The 

Chase Defendants move to dismiss both of Muehlenberg’s claims against them. See Dkt. No. 41.
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United States District Court

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LEGAL STANDARD

Under Federal Rule of Procedure 12(b)(6), a district court must dismiss a complaint if it 

fails to state a claim upon which relief can be granted. To survive a Rule 12(b)(6) motion to 

dismiss, the plaintiff must allege “enough facts to state a claim to relief that is plausible on its 

face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible when 

the plaintiff pleads facts that “allow[] the court to draw the reasonable inference that the defendant 

is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation 

omitted). There must be “more than a sheer possibility that a defendant has acted unlawfully.” Id. 

While courts do not require “heightened fact pleading of specifics,” a plaintiff must allege facts 

sufficient to “raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555, 570. 

In deciding whether the plaintiff has stated a claim upon which relief can be granted, the 

court accepts the plaintiff’s allegations as true and draws all reasonable inferences in favor of the 

plaintiff. See Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th Cir. 1987). However, the court 

is not required to accept as true “allegations that are merely conclusory, unwarranted deductions of 

fact, or unreasonable inferences.” In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 

2008).

If the court dismisses a complaint, it “should grant leave to amend even if no request to 

amend the pleading was made, unless it determines that the pleading could not possibly be cured 

by the allegation of other facts.” Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000). In making 

this determination, the court should consider factors such as “the presence or absence of undue 

delay, bad faith, dilatory motive, repeated failure to cure deficiencies by previous amendments, 

undue prejudice to the opposing party and futility of the proposed amendment.” See Moore v. 

Kayport Package Express, 885 F.2d 531, 538 (9th Cir. 1989).

DISCUSSION

Congress enacted the FCRA, 15 U.S.C. §§ 1681–1681x, “to ensure fair and accurate credit 

reporting, promote efficiency in the banking system, and protect consumer privacy.” Safeco Ins. 

Co. of Am. v. Burr, 551 U.S. 47, 52 (2007). The FCRA imposes certain duties on credit reporting 

agencies (“CRAs”) as well as “furnishers,” or the sources that provide credit information to CRAs, 
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such as credit card issuers. Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147, 1153 (9th Cir. 

2009). Section 1681s-2(a) states that furnishers “shall not furnish any information relating to a 

consumer to any consumer reporting agency if the person knows or has reasonable cause to 

believe that the information is inaccurate.” 15 U.S.C. § 1681s-2(a). “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, [the Ninth Circuit] ha[s] imposed such a requirement.” 

Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876, 890 (9th Cir. 2010). Information is 

inaccurate when “it is patently incorrect” or “it is misleading in such a way and to such an extent 

that it can be expected to adversely affect credit decisions.” Gorman, 584 F.3d at 1163. 

The CCRAA similarly 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 that the information is incomplete or inaccurate.” Cal. Civ. Code § 1785.25(a). “[B]ecause 

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.” Carvalho, 629 F.3d at 889 (internal citations and 

quotations omitted). Accordingly, a plaintiff must demonstrate “that an actual inaccuracy exist[s]” 

in order to state a claim for violation of the CCRAA, just as with the FCRA. Carvalho, 629 F.3d 

876, 890. 

I granted the Chase Defendants’ Motion to Dismiss the First Amended Complaint for 

failure to properly plead a factual inaccuracy because Muehlenberg’s allegations were 

“insufficient to establish that the inaccuracies listed on her post-discharge account reports were 

misleading such that they could be expected to adversely affect credit decisions.” See Order 

Granting Chase Defendants’ Motion to Dismiss at 7 [Dkt. No. 36]. In particular, I noted that 

Muehlenberg’s “general allegations about the calculation and importance of a FICO credit score” 

did “not establish how th[e] particular inconsistency [alleged] could be expected to adversely 

affect credit decisions, nor does she allege that the failure to pay listed was incorrect.” Id. 

In her Second Amended Complaint, Muehlenberg alleges that her second Experian credit 

report was inaccurate because the Chase Defendants reported two of her accounts “with a 
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delinquency” for “failure to pay,” but she “did not owe [the Chase Defendants] any funds in 

October of 2016.” SAC ¶¶ 75–77, 81–83. Muehlenberg alleges that “[g]iven that 35% of a 

consumer’s credit worthiness is attributable to a consumer’s payment history and the more recent a 

delinquency exists on a credit report the more negative impact it has on a consumer’s credit 

worthiness, [the Chase Defendants’] reporting makes it appear that Plaintiff should have paid [the 

Chase Defendants] in October of 2016 but failed to do so. This is not true.” Id. ¶ 78. “Such 

reporting in [sic] entirely inaccurate and misleading and would cause lenders to draw a more 

negative inference with respect to Plaintiff’s credit worthiness because it appears Plaintiff is 

derelict in making timely payments. This is not true.” Id. ¶ 80. Muehlenberg alleges that her 

credit score “was well below what accurate credit reporting industry standards would project.” Id.

¶ 74.

The Chase Defendants argue that these allegations are still insufficient to establish an 

inaccuracy within the meaning of the FCRA. They read Muehlenberg’s complaint to allege that 

the alleged delinquency is inaccurate “only because it is ‘not in compliance’ with ‘well established 

industry standards for credit reporting.’” Mot. at 7. This ignores the new allegations in 

Muehlenberg’s Second Amended Complaint, discussed above, which provide Muehlenberg’s 

theory why the alleged inaccuracies were misleading or inaccurate beyond mere noncompliance 

with industry standards. 

The Chase Defendants next contend that a review of the entire challenged report “in 

context” shows that Muehlenberg has not plausibly alleged any inaccuracy because the report 

“prominently discloses that the Chase Accounts are included in or discharged through bankruptcy 

chapter 13.” Mot. at 7–8 (internal quotation marks omitted).2 They point to the decisions from 

 

2 While the credit reports themselves were not submitted with the pleadings, the Chase Defendants 

have moved to file them under seal, attached to their motion. See Chase Defs.’ Admin. 

Unopposed Mot. to File Under Seal [Dkt. No. 40]. Muehlenberg does not oppose the under seal 

filing or the incorporation of the credit reports by reference. See Pl.’s Statement Regarding 

Consideration of Credit Reports [Dkt. No. 53]. Compelling reasons exist to seal these documents 

because the contents of the credit reports relates to Muehlenberg’s private financial information 

and could expose her to identity theft. See Nursing Home Pension Fund v. Oracle Corp., No. 

C01-00988 MJJ, 2007 WL 3232267, at *2 (N.D. Cal. Nov. 1, 2007) (“The Ninth Circuit has found 

that compelling reasons exist to keep personal information confidential to protect an individual’s 

privacy interest and to prevent exposure to harm or identity theft.” (citing Foltz v. State Farm Mut. 
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the Northern District of California in Torion v. JPMorgan Chase Bank, N.A., No. 17-cv-00422-

PJH, 2017 WL 2986250 (N.D. Cal. July 13, 2017), and Mestayer v. Experian Info. Sols., Inc., No. 

15-cv-03645-EMC, 2016 WL 7188015 (N.D. Cal. May 4, 2017), in support of their position.

In Torion, the Hon. Phyllis Hamilton considered a similar case in which the plaintiff

alleged that her credit report was misleading, but Chase disputed that it was because the “credit 

reports prominently disclose[d] the existence of [plaintiff’s] bankruptcy filing in the ‘Public 

Records’ section” and “further indicate[d] that there [was] ‘[n]o collection accounts’ in the 

‘Collections’ section.” 2017 WL 2986250, at *5. The reports also “indicate[d] on the ‘Account 

Summary’ page that [plaintiff] ha[d] ‘$0’ in credit debt.” Id. The judge concluded that “in light of 

the full context of the actual reporting in the credit reports . . . this reporting is not misleading 

because bankruptcy is clearly disclosed elsewhere in the credit report. This eliminates the 

possibility that a lender would be misled by the reporting.” Id. at *5–6. Similarly, in Mestayer, 

the Hon. Edward Chen reasoned that because “[t]he disclosure of the bankruptcy substantially 

diminishes the risk that the report was misleading even if it otherwise did not fully comply with 

Metro 2,” the plaintiff had failed sufficiently to plead an inaccuracy. 2016 WL 7188015, at *3.

Here, Muehlenberg’s credit report from the Chase Defendants includes reporting on her 

account beginning in 4246xxxx that contains a section on “Payment History” in which it lists 

“FP,” or a failure to pay, for the month of October 2016. See Ex. A to Chase Defs.’ Mot. to 

Dismiss at 9. Muehlenberg alleges that this is an inaccuracy within the meaning of the FCRA. 

Placing that notation in context, above the “Payment History,” on the same page, the report lists a 

0% credit usage and no account balance, and immediately adjacent to the “Payment History,” 

under “Payment Status,” it states, “Debt included in or discharged through bankruptcy chapter 

13.” Id. For Muehlenberg’s account beginning in 4194xxxx, the report contains the “FP” notation 

for the month of July of 2016. Id. at 13. Again this report displays a 0% credit usage and no 

 

Auto. Ins. Co., 331 F.3d 1122, 1134 (9th Cir. 2003))). I therefore GRANT the Chase Defendants’ 

motion to file them under seal. Because Muehlenberg both “refers extensively to the 

document[s]” and they “form[] the basis of the Muehlenberg’s claim[s],” I will consider these 

documents incorporated by reference in Muehlenberg’s Second Amended Complaint. United 

States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003).
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account balance, as well as the “Payment Status” of “Debt included in or discharged through 

bankruptcy chapter 13.” Id. Muehlenberg’s discharge from bankruptcy is also reported separately 

in the credit report under the “Public Records” section. Id. at 23. 

While Muehlenberg argues that the “FP” notation alone would immediately result in a 

lower credit rating, and contends that expert testimony is required in order to properly interpret her 

credit report, the same would have been true in Torion and Mestayer. Those cases concluded that 

the credit reports at issue were not inaccurate. As in those cases, Muehlenberg’s credit report 

accurately reported elsewhere her bankruptcy and discharge in the “Public Records” section. And 

here, Muehlenberg’s discharge from bankruptcy is not only included in a separate section of the 

credit report but also on the same page and indeed immediately adjacent to the alleged inaccuracy. 

The prominent display of her bankruptcy discharge in multiple locations of her credit report 

“substantially diminishes the risk that the report was misleading.” Mestayer, 2016 WL 7188015, 

at *3. 

I conclude that because Muehlenberg’s credit report is not misleading in context, it is not 

inaccurate within the meaning of either the FCRA or CCRAA. I therefore GRANT the Chase 

Defendants’ Motion to Dismiss the Second Amended Complaint. As the credit reports on their 

face demonstrate that Muehlenberg has no claim, and she has already tried three times to state one, 

the dismissal is with prejudice.

CONCLUSION

For the foregoing reasons, I GRANT the Chase Defendants’ Motion to Dismiss the Second 

Amended Complaint with prejudice. The Clerk shall prepare a judgment in accordance with this 

ruling.

IT IS SO ORDERED.

Dated: December 28, 2017

William H. Orrick

United States District Judge