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MCGUIREWOODS LLP 

Michael D. Mandel (SBN 216934) 

1800 Century Park East 

8th Floor 

Los Angeles, CA 90067-1501 

Telephone: 310.315.8200 

Facsimile: 310.315.8210 

Bryan A. Fratkin (admitted pro hac vice) 

Gateway Plaza 

800 E. Canal Street 

Richmond, Virginia 23219 

Telephone: 804.775.1000 

Facsimile: 804.775.1061 

Attorneys for Defendant 

Bank of America, N.A. 

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

OAKLAND DIVISION 

SERGIO MARQUEZ, an individual, on behalf 

of himself and all others similarly situated, 

Plaintiff, 

vs. 

BANK OF AMERICA, N.A., 

Defendant. 

 CASE NO. 4:17-cv-00555-CW 

The Hon. Claudia Wilken 

DEFENDANT BANK OF AMERICA, 

N.A.’S NOTICE OF MOTION AND 

MOTION TO DISMISS COMPLAINT; 

MEMORANDUM OF POINTS AND 

AUTHORITIES 

Date: October 3, 2017 

Time: 2:30 p.m. 

Crtrm.: 2 – 4th Floor

Case 4:17-cv-00555-CW Document 28 Filed 09/01/17 Page 1 of 19
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NOTICE OF MOTION AND MOTION TO DISMISS 

 PLEASE TAKE NOTICE THAT on October 3, 2017 at 2:30 p.m., or as soon thereafter as 

the matter may be heard by the United States District Court at 1301 Clay Street, Oakland, CA, 

94612, in Courtroom 2 before the Honorable Claudia Wilken, Bank of America, N.A. will and 

hereby does move to dismiss all claims for relief asserted against it in Plaintiff’s Complaint 

pursuant to Federal Rule of Civil Procedure 12(b)(6). This motion is made on the grounds that 

each of the causes of action in the Complaint fails to state a claim for relief against Bank of 

America, N.A. as a matter of law. 

 This motion is based on this Notice of Motion and Motion, the Memorandum of Points and 

Authorities below, the oral argument of counsel, and any other matters that may be presented to 

the Court before or at the hearing on the Motion. 

DATED: September 1, 2017 MCGUIREWOODS LLP 

 By: /s/ Michael D. Mandel 

 Michael D. Mandel 

Attorneys for Defendant 

Bank of America, N.A. 

Case 4:17-cv-00555-CW Document 28 Filed 09/01/17 Page 2 of 19
TABLE OF CONTENTS 

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I. INTRODUCTION ................................................................................................................ 1 

II. FACTUAL ALLEGATIONS ............................................................................................... 2 

III. ARGUMENT ....................................................................................................................... 3 

A. Legal Standard .......................................................................................................... 3 

B. Plaintiff Has Not Stated A Claim For Relief – And Cannot State A Claim 

For Relief – Against the Bank Under The FCRA Or ICRAA Because The 

Bank Is Not A Consumer Reporting Agency. .......................................................... 3 

C. Plaintiff Has Not Stated A Claim For Relief – And Cannot State A Claim 

For Relief – Under The FCRA Or ICRAA Because The Rule Prohibiting 

Reporting of Arrest Records Older Than Seven Years Does Not Apply 

Here. ......................................................................................................................... 7 

D. Plaintiff Has Failed to State a Claim for Relief under the UCL. ............................. 8 

E. The Complaint Should Be Dismissed With Prejudice Because Amendment 

Is Futile. .................................................................................................................. 11 

IV. CONCLUSION .................................................................................................................. 12 

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TABLE OF AUTHORITIES 

 Page(s) 

Federal Cases 

Arnold v. Capital One Servs., Inc., 

No. 3:10-CV-244, 2011 WL 864332 (E.D. Va. Mar. 10, 2011) ..................................................8 

Ashcroft v. Iqbal, 

556 U.S. 662 (2009) .................................................................................................................3, 9 

Bank of Am. v. City and Cnty. of San Francisco, 

309 F.3d 551 (9th Cir. 2002) ..................................................................................................9, 10 

Bell Atl. Corp. v. Twombly, 

550 U.S. 544 (2007) .....................................................................................................................3 

Dunford v. Am. DataBank, LLC, 

64 F. Supp. 3d 1378 (N.D. Cal. 2014) (Alsup, J.) ........................................................................7 

Echols v. Morpho Detection, Inc. 

No. 3:12-cv-01581-CW, 2013 WL 752629, at *5 (N.D. Cal. Feb. 27, 2013) ..............................5 

Hawkins v. S2Verify, 

No. C 15-03502 WHA, 2016 WL 3999458 (N.D. Cal. July 26, 2016) ........................................7 

Martin v. First Advantage Background Servs. Corp., 

877 F. Supp. 2d 754 (D. Minn. 2012) ..........................................................................................8

Mirfasihi v. Fleet Mortg. Corp., 

551 F.3d 682 (7th Cir. 2008) ........................................................................................................6 

Mix v. JPMorgan Chase Bank, N.A., 

No. CV-15-01102, 2016 WL 5850362 (D. Ariz. Oct. 6, 2016) ...................................................8 

Moran v. Screening Pros, LLC, 

No. 2:12-CV-05808-SVW-AG, 2012 WL 10655744 (C.D. Cal. Sept. 28, 2012) .....................10 

Moss v. U.S. Secret Serv., 

572 F.3d 962 (9th Cir. 2009) ........................................................................................................3 

Multi-Denominational Ministry of Cannabis & Rastafari, Inc. v. Holder, 

365 Fed. App’x 817 (9th Cir. 2010) ...........................................................................................11 

Newton v. Bank of America, N.A., 

No. 2:14-cv-03714-CBM, 2015 WL 10435907 (C.D. Cal. May 12, 2015) .................................9 

Quadrant Info. Servs., LLC v. LexisNexis Risk Solutions, Inc., 

No. C 11-6648 SBA, 2012 WL 3155559, at *3 (N.D. Cal. July 31, 2012) ...............................10 

Case 4:17-cv-00555-CW Document 28 Filed 09/01/17 Page 4 of 19
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Roe v. LexisNexis Risk Sols. Inc, 

No. CV 12-6284, 2013 WL 11246904 (C.D. Cal. Mar. 19, 2013) ............................................10 

Serfess v. Equifax Credit Info. Servs., LLC, 

No. 13-406, 2015 WL 12818830 (D.N.J. Aug. 27, 2015) ............................................................6 

Starr v. Baca, 

652 F.3d. 202 (9th Cir. 2011) .......................................................................................................3 

Wang v. Asset Acceptance LLC, 

No. C 09-04797 SI, 2010 WL 2985503 (N.D. Cal. July 27, 2010) ..............................................3 

Washington v. CSC Credit Servs., 

199 F.3d 263 (5th Cir. 2000) ......................................................................................................10 

White v. Soc. Sec. Admin., 

111 F. Supp. 3d 1041 (N.D. Cal. 2015) .......................................................................................3 

Wiggins v. Philip Morris, Inc., 

853 F. Supp. 470 (D.D.C. 1994) ..................................................................................................3 

Wilson v. Hewlett-Packard Co., 

668 F.3d 1136 (9th Cir. 2012) ......................................................................................................8 

State Cases 

Cel-Tech Commc’ns, Inc. v. Los Angeles Cellular Tel. Co., 

20 Cal.4th 163 (1999) ...................................................................................................................8 

Federal Statutes 

12 U.S.C. 

§ 1829(a)(1)(A) ............................................................................................................................8 

15 U.S.C. 

§ 1681a(d) ................................................................................................................................2, 5 

§ 1681a(e) .....................................................................................................................................2 

§ 1681a(f) .................................................................................................................................4, 6 

§ 1681b(b) ....................................................................................................................................3 

§ 1681b(b)(2) ............................................................................................................................4, 9 

§ 1681b(b)(2)(B) ..........................................................................................................................4 

§ 1681c .....................................................................................................................................5, 6 

§ 1681c(a) .........................................................................................................................4, 5, 6, 7 

§ 1681c(b) ....................................................................................................................................7 

§ 1681c(f) .....................................................................................................................................5 

§ 1681e(b) ....................................................................................................................................5 

§ 1681k(a) ....................................................................................................................................5 

§ 1681m ....................................................................................................................................3, 4 

§ 1681m(a) .................................................................................................................................10 

Case 4:17-cv-00555-CW Document 28 Filed 09/01/17 Page 5 of 19
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§ 1681t(b) ...................................................................................................................................10 

§ 1681t(b)(1)(C) .........................................................................................................................10 

State Statutes 

Cal. Bus. & Prof. Code 

§ 17200 .........................................................................................................................................8 

Cal. Civ. Code 

§ 1781. ..........................................................................................................................................1 

§ 1786.2(c) ...................................................................................................................................2 

§ 1786.2(d) ...............................................................................................................................4, 6 

§ 1786.16 ..................................................................................................................................4, 9 

§ 1786.18(a) .........................................................................................................................4, 5, 8 

§ 1786.18(b)(2) .............................................................................................................................7 

§ 1786.40 ......................................................................................................................................4 

Cal. Pen. Code 

§ 1203.4(a) ...................................................................................................................................2 

Rules 

Fed. R. Civ. Proc. 

Rule 8(a) .......................................................................................................................................3 

Rule 12(b)(6) ............................................................................................................................3, 9 

Regulations 

12 C.F.R. 

§ 34.101 ........................................................................................................................................8 

§ 34.104(h) ...................................................................................................................................8 

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MEMORANDUM OF POINTS AND AUTHORITIES

I. INTRODUCTION 

 Plaintiff asserts claims against Bank of America, N.A. (the “Bank”) based on the Bank 

allegedly not hiring him for a position as a mortgage loan officer because a misdemeanor 

conviction from 1993 appeared on an “investigative consumer report.” But Plaintiff’s Complaint 

fails to state a claim for relief for three separate and independent reasons. 

First, Plaintiff confuses the obligations of “consumer reporting agencies” that prepare and 

furnish consumer reports and the users of those reports. Plaintiff’s claims are based entirely on 

alleged violation of the rules governing the content of consumer reports, i.e., the inclusion of 

criminal history that is more than seven years old. But those restrictions regulate the consumer 

reporting agencies that create consumer reports, not employers who use such consumer reports. 

Plaintiff does not allege that the Bank is a consumer reporting agency or prepared the consumer 

report, nor could he. Rather, as Plaintiff alleges, the Bank uses consumer reports that it obtains 

from third-party consumer reporting agencies to evaluate applicants for employment. Neither the 

Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq. (“FCRA”), nor California’s Investigative 

Consumer Reporting Agencies Act, Cal. Civ. Code § 1781, et seq. (“ICRAA”), impose any 

liability on the users of consumer reports that contain stale arrest information. Plaintiff therefore 

does not, and cannot, state a claim against the Bank under the FCRA or ICRAA. 

Second, both the FCRA and the ICRAA contain exceptions to the general prohibition 

against including arrest information that is more than seven years old that bar Plaintiff’s claims. 

Specifically, consumer reports may contain such information when they pertain to individuals 

applying for a position that pays at least $75,000 a year, or when used by an employer who is 

required by federal or state law to check for older criminal history records. Plaintiff’s allegations 

make clear that his position with the Bank meets both criteria. 

Third, Plaintiff’s claim under the California Unfair Competition Law, Cal. Bus. & Prof. 

Code § 17200, et seq. (“UCL”), fails because (1) he provides no factual support for an underlying 

wrongful act, and (2) the FCRA preempts claims for injunctive relief under the UCL. 

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For the foregoing reasons, and as discussed further below, the Bank requests that the Court 

dismiss the Complaint in its entirety. Moreover, because Plaintiff cannot remedy the defects of 

the Complaint through any amendment, the Court should dismiss the Complaint without leave to 

amend and with prejudice. 

II. FACTUAL ALLEGATIONS 

 Plaintiff alleges that he applied for a position as a mortgage loan originator at the Bank in 

October 2016. (Compl. ¶ 4.) The Bank offered him a position paying approximately $120,000 a 

year, contingent on the successful completion of a background check. (Compl. ¶ 5.) The Bank 

routinely requires applicants to complete various background checks before starting employment, 

and the background check the Bank obtained on Plaintiff is a “consumer report” and an 

“investigative consumer report” under the FCRA and the ICRAA.1

 (Compl. ¶¶ 8 & 24.) Plaintiff 

makes clear in several allegations that the Bank “obtains” and “receives” consumer reports from 

third-parties that it uses to evaluate applicants. (Compl. ¶¶ 1, 6, 7, 15, 26, 27.) 

Plaintiff alleges that, after the Bank obtained the results of his consumer report, it sent him 

a letter informing him that information included in the report may make him ineligible for his 

position. (Compl. ¶ 26.) Plaintiff contends that the consumer report that the Bank received 

included a report from the Federal Bureau of Investigation that contained several misdemeanor 

charges dating from 1993. (Id.) He alleges that the report noted that those charges had been 

expunged from his record pursuant to Cal. Pen. Code § 1203.4(a). (Id.) Plaintiff contends that the 

Bank rescinded its offer of employment because of the criminal history information in the report. 

(Compl. ¶¶ 26-27.) 

In addition to his individual claims, Plaintiff seeks to represent two putative classes, one 

that is nationwide and one that is limited to California residents. Both purport to consist of 

 

1

 The definitions of a “consumer report” under the FCRA and an “investigative consumer 

report” under the ICRAA are substantively identical. Compare 15 U.S.C. § 1681a(d) with Cal. 

Civ. Code § 1786.2(c). The definitions differ from an “investigative consumer report” under the 

FCRA, which is a consumer report that includes information obtained through personal 

interviews. See 15 U.S.C. § 1681a(e). For purposes of this motion, the Bank uses the term 

“consumer report” to refer to all three types of reports. 

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applicants for jobs with the Bank who were allegedly the subject of consumer reports containing 

criminal history information more than seven years old and who suffered an adverse employment 

action by the Bank. (Compl. ¶ 11.) 

III. ARGUMENT 

A. Legal Standard 

A motion under Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of the 

claims asserted in the complaint under the pleading standards of Rule 8(a). See White v. Soc. Sec. 

Admin., 111 F. Supp. 3d 1041, 1049 (N.D. Cal. 2015) (Tigar, J.). A court must dismiss a 

complaint if it does not plead “enough facts to state a claim to relief that is plausible on its face.” 

Ashcroft v. Iqbal, 556 U.S. 662, 697 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 

570 (2007)). The “plausibility standard” requires “more than a sheer possibility that a defendant 

has acted unlawfully.” Id. In determining whether a complaint meets this standard, the court must 

take the complaint’s well-pleaded factual allegations as true and must draw all reasonable 

inferences in favor of the plaintiff. See Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. 

2009). The court need not, however, accept as true allegations that are conclusory, unwarranted 

deductions of fact, or unreasonable inferences. See id. Further, so as to not unfairly subject the 

defendant to the expenses associated with discovery and continued litigation, the factual 

allegations of the complaint must plausibly suggest an entitlement to relief. See Starr v. Baca, 652 

F.3d. 202, 1216 (9th Cir. 2011). 

B. Plaintiff Has Not Stated A Claim For Relief – And Cannot State A Claim For 

Relief – Against the Bank Under The FCRA Or ICRAA Because The Bank Is 

Not A Consumer Reporting Agency. 

The FCRA and the ICRAA impose different obligations on different types of entities. See 

Wang v. Asset Acceptance LLC, No. C 09-04797 SI, 2010 WL 2985503, at *2 (N.D. Cal. July 27, 

2010) ( Illston, J.) (“The FCRA imposes obligations on three types of entities: CRAs [consumer 

reporting agencies], users of consumer reports, and furnishers of information to CRAs.”); Wiggins 

v. Philip Morris, Inc., 853 F. Supp. 470, 482 (D.D.C. 1994) (“[T]he Act imposes different 

obligations upon consumer reporting agencies that provide consumer credit information and users 

of consumer reports.”). Under the FCRA, 15 U.S.C. §§ 1681b(b) and 1681m set forth the 

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requirements on the use of consumer reports for employment purposes. Among other things, these 

sections address notices and disclosures that a user of a consumer report, such as an employer, 

must make before it obtains a consumer report or takes an adverse action based on a consumer 

report. See, e.g., 15 U.S.C. § 1681b(b)(2) (employers must disclose in a document consisting 

solely of the disclosure that they will obtain a consumer report); id. § 1681m (employers must 

provide written notice when taking an adverse action based on information in a consumer report 

and must provide a copy of the report). The ICRAA contains similar requirements in Cal. Civ. 

Code §§ 1786.16 and 1786.40. 

Different sections of the FCRA and the ICRAA govern consumer reporting agencies, and 

the contents of the reports that they generate. A consumer reporting agency is defined as any 

person, who, for money, “regularly engages in whole or in part in the practice of assembling or 

evaluating consumer credit information or other information on consumers for the purpose of 

furnishing consumer reports to third parties.” 15 U.S.C. § 1681a(f); see also Cal. Civ. Code 

§ 1786.2(d) (defining investigative consumer reporting agencies similarly). Many of the sections 

that regulate consumer reporting agencies address the information that may appear in a consumer 

report. For example, as relevant to this matter, 15 U.S.C. § 1681c(a) and Cal. Civ. Code 

§ 1786.18(a) prohibit consumer reporting agencies from preparing reports that include records of 

arrest that predate the report by more than seven years. 

Here, Plaintiff claims that the Bank acted unlawfully when, while evaluating him for 

possible employment, it obtained a consumer report containing Plaintiff’s 1993 arrest records. 

This charge, however, fails to state a claim because the requirements governing the content of 

consumer reports fall on the consumer reporting agencies that create and furnish the reports, not 

the users of the reports.2 The statutes could not be clearer on this. The FCRA provides that “no 

 

2

 Plaintiff styled Count I as a violation of §§ 1681b(b)(2)(B) and 1681(m)—as opposed to 

§ 1681c(a)—but all of the substantive allegations in Count I, and indeed throughout the 

Complaint, address the seven-year requirement in § 1681c(a). In Count III—Plaintiff’s UCL 

claim—Plaintiff makes a brief and conclusory assertion that the Bank violated various disclosure 

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consumer reporting agency may make any consumer report containing” the prohibited 

information. 15 U.S.C. § 1681c(a) (emphasis added). And the ICRAA similarly states that “an 

investigative consumer reporting agency may not make or furnish any investigative consumer 

report containing any of the following items of information . . . .” Cal. Civ. Code § 1786.18(a) 

(emphasis added). 

This Court previously has recognized this distinction. In Echols v. Morpho Detection, Inc., 

the plaintiff alleged that a potential employer violated various sections of the FCRA, including 15 

U.S.C. § 1681c, when using a consumer report to evaluate him for employment. No. 3:12-cv01581-CW, 2013 WL 752629, at *5 (N.D. Cal. Feb. 27, 2013) (Wilken, J.). This Court granted 

the employer’s motion to dismiss on the ground that the challenged sections apply only to 

consumer reporting agencies and not employers who use the reports. See id. at *6. In doing so, 

the Court cited numerous sections of the FCRA that create obligations unique to consumer 

reporting agencies. Id. (“[T]hese code sections impose obligations on ‘consumer reporting 

agencies’ and not on ‘users of the information.’”) (citing 15 U.S.C. § 1681k(a) (“A consumer 

reporting agency which furnishes a consumer report for employment purposes . . . shall . . . 

maintain strict procedures designed to insure that whenever public record information which is 

likely to have an adverse effect on a consumer's ability to obtain employment is reported it is 

complete and up to date.”) (emphasis added); 15 U.S.C. § 1681e (b) (“Whenever a consumer 

reporting agency prepares a consumer report it shall follow reasonable procedures to assure 

maximum possible accuracy . . . .”) (emphasis added); 15 U.S.C. § 1681c(f) (“If a consumer 

reporting agency is notified pursuant to section 623(a)(3) that information regarding a consumer 

who was furnished to the agency is disputed by the consumer, the agency shall indicate that fact in 

each consumer report that includes the disputed information.”) (emphasis added). As with the 

sections at issue in Echols, the text of 15 U.S.C. § 1681c(a) is clear that it addresses only 

“consumer reporting agencies.” 

 

and notice provisions found in 15 U.S.C. §§ 1681b(b)(2) and 1681m. The reasons why these 

allegations fail to state a claim are addressed in Section III.B, infra. 

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Plaintiff does not allege that the Bank is a consumer reporting agency.3 Plaintiff alleges 

that the Bank “furnished” and “issued” consumer reports, but the Complaint contains no factual 

allegation to support a claim that the Bank meets any of the elements in the definition of a 

consumer reporting agency. That is, there are no allegations that the Bank “regularly assembles or 

evaluates consumer information,” “for a fee,” “for the purpose of furnishing consumer reports to 

third-parties.” 15 U.S.C. § 1681a(f). Plaintiff’s conclusory allegations that the Bank “furnished” 

consumer reports also contradict his other statements that the Bank “obtained” and “received” the 

consumer reports. Should Plaintiff seek leave to amend the Complaint to include allegations that 

the Bank is a consumer reporting agency because it also prepares the reports it uses (which is not 

correct), such amendment would be futile. By definition, a consumer reporting agency must 

prepare consumer reports for third-parties. See 15 U.S.C. § 1681a(f); Cal. Civ. Code § 1786.2(d). 

Indeed, numerous courts have held that banks are not consumer reporting agencies as a matter of 

law. See Serfess v. Equifax Credit Info. Servs., LLC, No. 13-406, 2015 WL 12818830, at *1 

(D.N.J. Aug. 27, 2015) (Bank of America not a consumer reporting agency); Mirfasihi v. Fleet 

Mortg. Corp., 551 F.3d 682, 686 (7th Cir. 2008) (“[Defendant] is not a consumer reporting 

agency—it is a bank.”). 

To the extent Plaintiff argues that the Bank violated the FCRA or the ICRAA by using a 

report that contained information more than seven years old, the statutes simply do not contain any 

such prohibition. See FTC, 40 Years of Experience with the Fair Credit Reporting Act, at 55 (July 

2011) (“[Section 1681c(a)] applies only to reporting by CRAs [consumer reporting agencies] and 

does not limit creditors or others from using adverse obsolete information.”). Not surprisingly, 

there does not appear to be a single case in which a court applied § 1681c to a user of consumer 

reports.4

 

 

3

 Plaintiff confusingly states that the Bank is a “person” as defined by the FCRA, before 

reciting the definition of a consumer report. See Compl. ¶ 31; 15 U.S.C. § 1681a(d). 

4

 In fact, and as further explained below, financial institutions such as the Bank are 

required to conduct background checks on mortgage loan originators that examine the individual’s 

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In sum, Plaintiff’s Complaint fails to account for the different roles and obligations of 

consumer reporting agencies and the users of consumer reports. Accordingly, Counts I and II fail 

to state a claim for relief and should be dismissed, without leave to amend and with prejudice. 

C. Plaintiff Has Not Stated A Claim For Relief – And Cannot State A Claim For 

Relief – Under The FCRA Or ICRAA Because The Rule Prohibiting 

Reporting of Arrest Records Older Than Seven Years Does Not Apply Here. 

 Even if Plaintiff could establish that the Bank is somehow a “consumer reporting agency,” 

Plaintiff has not stated a claim for relief and cannot state a claim for relief under the FCRA or 

ICRAA against the Bank because the rule prohibiting the reporting of arrest records older than 

seven years does not apply here. Rather, Plaintiff falls under exceptions to the general rule. 

Under the FCRA, the rule prohibiting consumer reporting agencies from including arrest 

records that are more than seven years old does not apply when the consumer reporting agency 

generates the report for use in connection with “the employment of any individual at an annual 

salary which equals, or which may reasonably be expected to equal $75,000, or more.” 15 U.S.C. 

§ 1681c(a).5

 See also Hawkins, 2016 WL 3999458, at *1; Dunford v. Am. DataBank, LLC, 64 F. 

Supp. 3d 1378, 1392 (N.D. Cal. 2014) (Alsup, J.). Because Plaintiff alleges that he expected to 

make $120,000 a year with the Bank, he cannot assert a claim under § 1681c(a). 

Similarly, the ICRAA provides an exception to the seven-year rule when a consumer 

report is to be used by an employer who is required “by a governmental regulatory agency to 

check for records that are prohibited by subdivision (a) . . . .” Cal. Civ. Code § 1786.18(b)(2). 

 

entire criminal history, without any seven-year limitation. 

5

 Although § 1681c(b) uses the term “consumer credit report” instead of “consumer 

report,” the FTC and interpreting courts have made clear that the exception addresses all consumer 

reports. See FTC, 40 Years of Experience with the Fair Credit Reporting Act, at 58 

(“Notwithstanding the words ‘consumer credit report’ in Section [1681c(b)], the exemptions apply 

to any ‘consumer report’ . . . obtained in connection with insurance and employment transactions 

meeting the dollar limits specified in subsections (2) and (3).”); Hawkins v. S2Verify, No. C 15-

03502 WHA, 2016 WL 3999458, at *1 (N.D. Cal. July 26, 2016) (Alsup, J.) (“The FCRA 

provides certain exceptions to this prohibition, however, including where a consumer report is 

prepared in connection with the employment of any individual at an annual salary which equals, or 

which may reasonably be expected to equal $75,000, or more.”) (emphasis added). 

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Various federal requirements prohibit financial institutions from employing as mortgage loan 

originators individuals with certain criminal histories, regardless of the year of offense. The 

Federal Institutions Reform, Recovery, and Enforcement act of 1989 (“FIRREA”) prohibits “any 

person who has been convicted of any criminal offense involving dishonesty or a breach of trust or 

money laundering, or has agreed to enter into a pretrial diversion or similar program in connection 

with a prosecution for such offense” from “participat[ing], directly or indirectly, in the conduct of 

the affairs of any insured depository institution.” 12 U.S.C. § 1829(a)(1)(A). Additionally, 

regulations implementing the SAFE Act require that mortgage loan originators be licensed and 

registered in a national registry, a process that involves submitting detailed criminal record 

history. See 12 C.F.R. §§ 34.101, 34.104(h); see also Martin v. First Advantage Background 

Servs. Corp., 877 F. Supp. 2d 754, 759 (D. Minn. 2012) (discussing requirements for mortgage 

loan originators). These federally-imposed limitations on who may work as a mortgage loan 

originator do not contain any exceptions based upon the date of the applicant’s criminal history 

information.6

 As such, any background check in connection with Plaintiff’s application for 

employment as a mortgage loan originator with the Bank was exempt from the provision 

governing older arrest record information in § 1786.18(a). Accordingly, Plaintiff has failed to 

state a claim for relief under the ICRAA, and cannot do so as a matter of law. The Court should 

dismiss this claim without leave to amend and with prejudice. 

D. Plaintiff Has Failed to State a Claim for Relief under the UCL. 

In Count III, Plaintiff seeks injunctive relief under the UCL. The UCL makes actionable 

any “unlawful, unfair or fraudulent business act or practice.” Cal. Bus. & Prof. Code § 17200. 

“The UCL borrows violations of other laws and treats them as unlawful practices that the unfair 

 

6

 The FBI prepares reports that include comprehensive criminal history information to 

facilitate these required searches. Background checks prepared by the FBI are not consumer 

reports. See Mix v. JPMorgan Chase Bank, N.A., No. CV-15-01102, 2016 WL 5850362 (D. Ariz. 

Oct. 6, 2016) (granting summary judgment on issue that FBI criminal history information 

provided to employer is not a consumer report); Arnold v. Capital One Servs., Inc., No. 3:10-CV244, 2011 WL 864332, at *4 (E.D. Va. Mar. 10, 2011) (granting motion to dismiss on issue that 

FBI report is not a consumer report). 

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competition law makes independently actionable.” Wilson v. Hewlett-Packard Co., 668 F.3d 

1136, 1140 (9th Cir. 2012) (internal quotations and citation omitted). Claims under the UCL are 

limited to injunctive or other equitable relief. Cel-Tech Commc’ns, Inc. v. Los Angeles Cellular 

Tel. Co., 20 Cal.4th 163, 179, 83 Cal. Rptr. 2d 548, 973 P.2d 527 (1999) (“Prevailing plaintiffs are 

generally limited to injunctive relief and restitution,” and “may not receive damages . . . or 

attorney fees.”). 

In Count III, Plaintiff alleges that the Bank failed to provide him 

with a clear and conspicuous disclosure in a document consisting solely of the 

disclosure, a statement that the Plaintiff and class members may request additional 

disclosures concerning the nature and scope of the investigation for the consumer 

report, a summary of the rights of Plaintiff and Class members, a statement that 

Plaintiff and Class II members may dispute the accuracy of the consumer report, 

and a copy of the consumer report following an adverse action or request for a 

copy as part of the application process. 

(Compl. § 46.) Although the statutes are not referenced, these allegations apparently refer to 

provisions in the FCRA and ICRAA concerning required disclosures and notices. See 15 U.S.C. 

§§ 1681b(b)(2); 1681m(a); Cal. Civ. Code § 1786.16. Thus, Plaintiff appears to base his UCL 

claim on violations of these provisions. However, Plaintiff’s UCL claim is subject to dismissal for 

two independent reasons.

First, Plaintiff provides no facts regarding the required disclosure or notices. Plaintiff does 

not so much as identify the disclosure form or notices the Bank used, much less provide facts that 

in any way suggest that they are unlawful.7

 Instead, Plaintiff simply notes in serial fashion the 

various statutory requirements. (Compl. ¶ 46.) Such bare recitations of the elements of a claim 

are insufficient to survive a challenge under Rule 12(b)(6). See Ashcroft v. Iqbal, 556 U.S. 662, 

679 (2009) (“While legal conclusions can provide the framework of a complaint, they must be 

supported by factual allegations.”). Accordingly, Plaintiff’s UCL claim should be dismissed. 

 

7

 The Bank’s disclosure form has previously been upheld as lawful under the FCRA. See 

Newton v. Bank of America, N.A., No. 2:14-cv-03714-CBM, 2015 WL 10435907 (C.D. Cal. May 

12, 2015). 

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Second, the FCRA preempts state law claims by private litigants for injunctive relief. 

“Preemption may be implied when state law actually conflicts with federal law.” Bank of Am. v. 

City and Cnty. of San Francisco, 309 F.3d 551, 558 (9th Cir. 2002). A conflict arises “when state 

law stands as an obstacle to the accomplishment and execution of the full purposes and objectives 

of Congress.” Id. Here, Congress has made clear its intent to vest in the FTC the exclusive power 

to seek injunctive relief for FCRA violations. As stated by the Fifth Circuit: 

the affirmative grant of power to the FTC to pursue injunctive relief, coupled with 

the absence of a similar grant to private litigants when they are expressly granted 

the right to obtain damages and other relief, persuasively demonstrates that 

Congress vested the power to obtain injunctive relief solely with the FTC. 

Washington v. CSC Credit Servs., 199 F.3d 263, 268 (5th Cir. 2000). 

At least three courts within this Circuit have followed Washington and found that the 

FCRA preempts claims by private litigants for injunctive relief under the UCL. See Quadrant 

Info. Servs., LLC v. LexisNexis Risk Solutions, Inc., No. C 11-6648 SBA, 2012 WL 3155559, at *3 

(N.D. Cal. July 31, 2012) (Armstrong, J.) (dismissing UCL claim and stating that “although 

private litigants may maintain a claim for damages under the FCRA, only the Federal Trade 

Commission is empowered by statute to seek equitable relief”); Roe v. LexisNexis Risk Sols. Inc, 

No. CV 12-6284, 2013 WL 11246904, at *6 (C.D. Cal. Mar. 19, 2013) (dismissing UCL claim as 

preempted); Moran v. Screening Pros, LLC, No. 2:12-CV-05808-SVW-AG, 2012 WL 10655744, 

at *8 (C.D. Cal. Sept. 28, 2012) (“[A]llowing private litigants to enforce provisions of the FCRA 

by injunction through a state law vehicle would constitute an end-run around Congress’s clear 

intent that the power to enforce the FCRA must rest with the FTC alone.”). Accordingly, the 

FCRA impliedly preempts Plaintiff’s UCL claim in Count III, and the Court should dismiss the 

UCL claim. 

Additionally, to the extent Plaintiff bases his UCL claim on a failure to send adverse action 

notices as required under 15 U.S.C. § 1681m(a), the FCRA expressly preempts any such claim. 

Section 1681t(b) prevents state laws from imposing requirements or prohibitions relating to 

specific subject matter, including the adverse action notice provisions that Plaintiff appears to 

include in his UCL claim. See 15 U.S.C. § 1681t(b)(1)(C) (preempting adverse action notice 

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provision requirements contained in § 1681m(a)). For this additional reason, a UCL claim based 

on adverse action notices is preempted. 

Finally, to the extent that Plaintiff intended to premise his UCL claim on the violations 

alleged in Counts I and II, the UCL claim must be dismissed for the same reasons as discussed in 

Sections A and B, supra. 

E. The Complaint Should Be Dismissed With Prejudice Because Amendment Is 

Futile. 

 Plaintiff’s claims should be dismissed with prejudice because he cannot state a claim for 

relief against the Bank, and Plaintiff cannot amend the Complaint to do so. See MultiDenominational Ministry of Cannabis & Rastafari, Inc. v. Holder, 365 Fed. App’x 817, 819 (9th 

Cir. 2010). The Complaint’s shortcomings are not mere pleading deficiencies. Instead, they 

represent a fundamental misapplication of the legal obligations under the FCRA and ICRAA. The 

FCRA and ICRAA simply do not create any possible liability for the Bank based upon Plaintiff’s 

allegations. The rule that prohibits the inclusion of criminal history dating back more than seven 

years in consumer reports does not create any liability for the Bank as a user of such reports. And, 

exceptions applicable to the job for which Plaintiff was applying would bar his claims even if the 

rule could apply to the Bank. Additionally, the FCRA preempts Plaintiff’s UCL claim as a matter 

of law. These are legal obstacles to Plaintiff’s claims that no amendment could cure. Moreover, 

the Bank’s counsel met and conferred with Plaintiff’s counsel prior to the Bank filing this Motion 

to give Plaintiff the opportunity to dismiss the Complaint or, at a minimum, re-plead different 

claims, but Plaintiff’s counsel declined to do so. Accordingly, the Bank respectfully requests that 

the Court grant its Motion and dismiss Plaintiff’s claims with prejudice and without leave to 

amend. 

/// 

/// 

/// 

/// 

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IV. CONCLUSION 

 For the foregoing reasons, the Bank respectfully requests that the Court grant its Motion 

and dismiss Plaintiff’s claims with prejudice and without leave to amend. 

DATED: September 1, 2017 MCGUIREWOODS LLP 

 By: /s/ Michael D. Mandel 

 Michael D. Mandel 

Attorneys for Defendant 

Bank of America, N.A. 

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CERTIFICATE OF SERVICE 

I hereby certify that on September 1, 2017, I electronically transmitted the foregoing 

document to the Clerk’s Office using the CM/ECF System for filing and service via transmittal of 

a Notice of Electronic Filing.

I declare under penalty of perjury under the laws of the United States of America that the 

foregoing is true and correct. 

Executed on September 1, 2017 at Los Angeles, California. 

/s/ Michael D. Mandel 

MICHAEL D. MANDEL 

Case 4:17-cv-00555-CW Document 28 Filed 09/01/17 Page 19 of 19