Court Opinion

ID: 806131
Source: CourtListenerOpinion
Date Created: 2012-08-07 17:08:40+00
Date Added: 2024-06-11T18:00:18.895881
License: Public Domain

FOR PUBLICATION
  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

ERIC ROBERT DREW,                       
                 Plaintiff-Appellant,
                 v.
EQUIFAX INFORMATION SERVICES,
LLC; EXPERIAN INFORMATION
SOLUTIONS, INC.; BANK OF AMERICA
HOME LOANS; FLEET CREDIT CARD                 No. 11-15008
SERVICES; CITIGROUP; BANK ONE
                                        
                                                D.C. No.
CARDMEMBER SERVICES; FIRST USA              3:07-cv-00726-SI
BANK, N.A.; AT&T UNIVERSAL
CARD SERVICES; CITIBANK (SOUTH                 OPINION
DAKOTA) N.A.,
                         Defendants,
                and
CHASE BANK USA; FIA CARD
SERVICES, N.A.,
             Defendants-Appellees.
                                        
        Appeal from the United States District Court
          for the Northern District of California
          Susan Illston, District Judge, Presiding

                   Argued and Submitted
         April 20, 2012—San Francisco, California

                    Filed August 7, 2012

                             8825
8826                      DREW v. EQUIFAX
    Before: M. Margaret McKeown and N. Randy Smith,
    Circuit Judges, and Roger T. Benitez, District Judge.*

                  Opinion by Judge McKeown

  *The Honorable Roger T. Benitez, United States District Judge for the
Southern District of California, sitting by designation.
8828                 DREW v. EQUIFAX

                      COUNSEL

John B. Keating, Woodside, California, for the plaintiff-
appellant.

George G. Weickhardt, Susan H. Handelman, ROPERS
MAJESKI KOHN & BENTLEY, San Francisco, California,
for defendant-appellee Chase Bank USA, N.A.
                           DREW v. EQUIFAX                         8829
Margaret M. Grignon, Felicia Y. Yu, Zareh Agob Jaltoros-
sian, Kasey J. Curtis, REED SMITH LLP, Los Angeles, Cali-
fornia, for defendant-appellee FIA Card Services.

                              OPINION

McKEOWN, Circuit Judge:

   This case lends credence to the old adage that bad things
come in threes. Eric Drew is a cancer survivor, who required
experimental leukemia treatment. During his treatment,
Drew’s identity was stolen by a hospital worker. Finally,
when Drew attempted to remedy the identity theft, the banks
and credit rating agencies were allegedly uncooperative, and
continued to report the fraudulently opened accounts, and in
the case of one bank, the thief’s address was tagged as
Drew’s.

   The district court granted summary judgment in favor of
Chase Bank on Drew’s false-reporting claims under the Fair
Credit Reporting Act, 15 U.S.C. § 1681s-2(b) (FCRA).
Because issues of material fact remain as to Chase’s alleged
violations of the FCRA, we reverse the judgment as to these
claims. We also reverse the district court’s dismissal of simi-
lar claims against FIA Card Services (“FIA”) on statute of
limitations grounds. We affirm the denial of Drew’s motion
to amend to reinstate his claims under California law.

                            BACKGROUND1

   Nearly a decade ago, in September 2003, Eric Drew began
receiving experimental treatment for leukemia in Seattle.
After this treatment was unsuccessful, Drew was hospitalized
in Minnesota from July 2004 to January 2005 for an experi-
  1
   A portion of the record is under seal. This Opinion does not reference
any of the sealed materials.
8830                       DREW v. EQUIFAX
mental program that proved effective.2 Soon after starting his
treatment in Seattle, Drew received letters and calls from
banks and other financial institutions, which initially thanked
him for recent credit application requests, but soon began
demanding payments on Seattle-based accounts he had never
opened. Drew filed a police report alleging identity theft with
the police department in Santa Clara, California, where he
resided. The identity thief, who was a phlebotomist at a Seat-
tle hospital, was arrested and convicted a few months later,
after news media publicized Drew’s predicament.

   Unfortunately for Drew, his saga was not at an end. Drew
had to close bank accounts, block credit reporting, and get
Automated Consumer Dispute Verification forms (ACDVs)
issued to various banks that furnished information regarding
the fraudulent accounts the thief had opened. Drew’s claims
relate to only two actors in this credit dispute: Chase Bank
and FIA Card Services.

I.       INTERACTIONS WITH CHASE

   Along with other banks, Chase sent a letter to Drew at his
California address thanking him for applying for the credit
card, and issued him a card on November 12, 2003. Drew cal-
led Chase to dispute the account in late November 2003. A
fraud department employee informed Drew that the account
had not yet been opened or reported, and that Chase would
contact other issuing banks and credit reporting agencies
(“CRAs”) so that Drew would not be associated with the
fraudulent Seattle address and the fraudulent accounts. Chase
immediately closed the account and reported it to the credit
agencies as lost or stolen. It is undisputed that as a result, no
charges could be added to the account. Chase also faxed a
copy of the fraudulent application to the police.
     2
    Ordinarily we would not need to recount each date with such precision.
We do so here because the timing matters both to the claims and FIA’s
statute of limitations defense.
                           DREW v. EQUIFAX                         8831
   In the meantime, Drew reviewed his credit report in mid-
January 2004. He discovered multiple fraudulent accounts had
been opened in his name. On January 20, 2004, he contacted
various CRAs to report the fraudulent accounts. The next day,
TransUnion, one of the credit agencies, deleted various
accounts, including the Chase account, from its credit file.
TransUnion also forwarded a block notice communication to
the various banks, including Bank One, Chase and Citibank,
advising them that the accounts were presumed to be fraudu-
lent and that the banks must contact the consumer and take
measures to block any future reporting of the accounts. Chase
did not take any action in response to the block notice from
TransUnion. The remaining banks blocked reporting of the
account.

   In early 2005, Drew returned to California, ordered and
obtained an Old Republic Credit Services credit report (“Old
Republic Report”), and discovered that Chase had continued
to report the account as lost or stolen in Fall 2004. He again
complained to the CRAs. The second time was the charm:
Chase deleted the account in February 2005, and sent a notice
to the CRAs to delete the account. However, in October 2005,
Chase also followed up with letters sent to the thief’s address
with the account number, and allegedly re-reported the iden-
tity thief’s Seattle address as Drew’s address.

II.   INTERACTIONS WITH FIA

  FIA first issued a card in Drew’s name on January 6, 2004,
and so did not receive the January 21, 2004 TransUnion block
notice.3 Drew wrote to TransUnion to dispute the FIA account
on March 4, 2004. TransUnion forwarded notice of the dis-
pute to FIA on March 8, 2004; FIA received the dispute on
March 11, and verified the account the very next day. Drew
  3
   The card was issued by Fleet prior to its merger with Bank of America,
FIA’s predecessor in interest. We refer to FIA’s predecessors in interest
as FIA for the sake of simplicity.
8832                   DREW v. EQUIFAX
claims he was not aware, until January 2005, of FIA’s investi-
gation and verification of the account, nor that the account
was still being reported to CRAs.

   In April and May 2004 Drew received several collection
calls and account statements from FIA concerning the fraudu-
lent account; he called FIA on April 21, May 6 and July 14,
2004, to dispute the account as fraudulent. In May, FIA
informed Drew that an investigation had begun, but that the
account could not be closed pending investigation. In a July
14 conversation with FIA, Drew alleges that he was promised
that collection efforts would stop, the fraudulent account
would be deleted, and all records corrected if he completed a
fraud affidavit form and sent it to the bank. FIA received the
fraud affidavit from Drew on July 19, 2004 and closed the
account on July 28, 2004, crediting the charges.

   From July 2004 to January 2005, Drew was hospitalized in
Minnesota. Upon reviewing the Old Republic Report, Drew
discovered that the FIA account was reported as a derogatory
item, and his credit score had been affected. Drew disputed
the account again. FIA discontinued reporting the account in
October 2005, but one CRA continued reporting the account.
Drew disputed it once more, but FIA again verified the
account as belonging to Drew with the thief’s address as
Drew’s former address. As of February 19, 2008, FIA’s com-
puter system continued to list the thief’s phone number as the
home phone number for Drew.

III.   PROCEDURAL HISTORY

   Drew’s First Amended Complaint alleged violations of the
FCRA as well as various California law claims with respect
to Chase and FIA. Upon challenge from the banks, Drew
dropped certain California law claims early in the litigation.
In 2009, the district court initially denied the banks’ motions
for summary judgment on the FCRA claims. Drew then
sought to revive his California law claims and Chase and FIA
                        DREW v. EQUIFAX                     8833
filed motions for reconsideration. In 2010, the court reversed
course and granted the banks’ motions for summary judg-
ment, but denied Drew’s motion for leave to amend. Drew
appeals both rulings.

   As evidenced by the district court’s change of heart, the
issues in this appeal are complex and present close questions
of first impression, primarily because of disputed factual
issues. “We review the district court’s grant of summary judg-
ment de novo,” and reverse. Vander v. United States Dep’t of
Justice, 268 F.3d 661, 663 (9th Cir. 2001) (citation omitted).
We affirm the court’s denial of leave to amend, which we
review for abuse of discretion. Jackson v. Bank of Hawaii,
902 F.2d 1385, 1387 (9th Cir. 1990).

                           ANALYSIS

I.   FCRA CLAIMS AGAINST CHASE

   Drew claims that Chase fell short of its FCRA duties by
reporting an account that was actually fraudulent as a “lost or
stolen account” that belonged to Drew. He argues that Chase
should have blocked reporting of the account altogether.
Drew also alleges that Chase reported the thief’s address as
his own.

   [1] The FCRA sets out a series of procedures that dictate
how a furnisher must investigate and correct erroneous infor-
mation. Upon being notified of a dispute by a CRA, a fur-
nisher must investigate and, if necessary, correct the
information it reports. Failure to do so renders it liable to the
consumer for damages. Here, Chase’s duties were triggered
by the January 2004 block notice from TransUnion. Although
Chase’s investigation was sufficient, factual issues remain as
to whether reporting the account as lost or stolen may have
violated the FCRA. An issue of fact also remains as to
whether Chase violated the FCRA by allegedly misreporting
the identity thief’s address as belonging to Drew.
8834                      DREW v. EQUIFAX
  A.     Triggering Notice from TransUnion

   For Chase to owe any duty to Drew, Chase must be notified
through the appropriate channels under the FCRA. Chase first
disputes whether its duties were triggered at all, because it
never received proper notification of Drew’s dispute as
required by subsection (b). 15 U.S.C. § 1681s-2(b). This ques-
tion is one of first impression.

   [2] Chase’s duties under subsection (b) are triggered only
after “receiving notice pursuant to” § 1681i(a)(2), under
which a CRA provides a “notification” to a furnisher which
includes “all relevant information” regarding the dispute.
Thus, Drew’s direct complaint to Chase in November 2003
would not have triggered any duty since it was unaccompa-
nied by CRA notification. See Gorman v. Wolpoff & Abram-
son, LLP, 584 F.3d 1147, 1154 (9th Cir. 2009) (“These duties
arise only after the furnisher receives notice of dispute from
a CRA; notice of a dispute received directly from the con-
sumer does not trigger furnishers’ duties under subsection
(b).”). Chase, however, received a notice from TransUnion, a
CRA, in January 2004 that would have triggered its statutory
duties. Chase disputes that this was a triggering notice, claim-
ing that it was simply a “fraud block notification” rather than
an “automated consumer dispute verification,” and Trans-
Union “did not expect” Chase to perform any action. Unlike
Chase, the statute appears more concerned with substance
than nomenclature. Section 1681i concerns the duty of a CRA
if a consumer disputes information in a report. In particular,
§ 1681i(a)(2)(A) provides:

       Before the expiration of the 5-business-day period
       beginning on the date on which a consumer reporting
       agency receives notice of a dispute from any con-
       sumer or a reseller . . . the agency shall provide noti-
       fication of the dispute to any person who provided
       any item of information in dispute [in this case,
       Chase], at the address and in the manner established
                         DREW v. EQUIFAX                        8835
       with the person. The notice shall include all relevant
       information regarding the dispute that the agency has
       received from the consumer or reseller.

   [3] What Chase disparagingly refers to as TransUnion’s
“fraud block notification” was just that—a “notification”
within the meaning of § 1681i(a)(2), sufficient to trigger
Chase’s FCRA duty. TransUnion’s letter to Chase stated that
Drew “has advised our office that a fraudulent application
was submitted to your company with the consumer’s identifi-
cation, but without, his/her knowledge and consent.” Even if
the statute required the notification to tell Chase what Trans-
Union “expect[ed]” Chase to do—which it does not—the let-
ter noted that TransUnion had blocked the account, and
suggested that Chase should do the same: “You . . . must
ensure that the account is unblocked only if . . . [i]t was
blocked due to fraud [or] [t]he consumer agrees that the
blocked information was blocked in error. Additionally,
please take all of the necessary steps to ensure that this
account is not reported by you . . . .” (emphasis added). Ulti-
mately, as we have noted in Gorman, an inadequate CRA
notification may limit the scope of a furnisher’s § 1681s-2(b)
duty, for example, by excusing a more limited investigation;
it does not, however, eliminate the duty altogether. Gorman,
584 F.3d at 1157 n.11. Accordingly, although Drew’s com-
munication with Chase had no statutory impact, TransUnion’s
notification was sufficient to trigger Chase’s duties under the
FCRA.

  B.     Statutory Duties

   [4] Chase’s statutory duties required it to engage in an
investigation. If the investigation found a problem with the
previously reported information, the FCRA then dictates that
Chase must rectify past misreporting by informing the CRAs
of the problem. The statute also obligates Chase to prevent
future misreporting by modifying, deleting, or blocking the
8836                    DREW v. EQUIFAX
inaccurate item, as appropriate. Each of these duties is laid out
in a separate subparagraph of § 1681s-2(b)(1):

    After receiving notice pursuant to section
    1681i(a)(2) of this title of a dispute with regard to
    the completeness or accuracy of any information
    provided by a person to a consumer reporting
    agency, the [furnisher] shall—

    (A) conduct an investigation with respect to the dis-
    puted information;

    ...

    (D) if the investigation finds that the information is
    incomplete or inaccurate, report those results to all
    other consumer reporting agencies to which the per-
    son furnished the information and that compile and
    maintain files on consumers on a nationwide basis;
    and

    (E) if an item of information disputed by a consumer
    is found to be inaccurate or incomplete or cannot be
    verified after any reinvestigation under paragraph
    (1), for purposes of reporting to a consumer report-
    ing agency only, as appropriate, based on the results
    of the reinvestigation promptly—

    (i) modify that item of information;

    (ii) delete that item of information; or

    (iii) permanently block the reporting of that item of
    information.

  Drew claims that Chase failed in its duties because: (1) its
investigation in response to the TransUnion notification was
deficient; (2) Chase continued to report the account as belong-
                        DREW v. EQUIFAX                       8837
ing to Drew, albeit as lost or stolen, instead of blocking it; and
(3) Chase reported the thief’s address as Drew’s. The first of
these claims fails as a matter of law but, as to the remaining
two allegations, Drew has sufficiently raised material factual
issues that permit his claim to survive summary judgment.

   [5] Chase’s investigation was legally sufficient under sub-
paragraph (A). Drew had already spoken directly to Chase
about the fraud in November 2003; Chase conducted an
investigation and was already one step ahead of TransUnion
by the time it received the fraud notification in January 2004.
Chase’s investigation had in fact yielded the correct result—
the bank concluded that the account was fraudulent and
reported the fraud to the police. TransUnion’s report did not
“indicat[e] . . . that the initial investigation lacked reliability
or that new information was available to discover,” and there-
fore, Chase was under no duty to repeat its investigation. Gor-
man, 584 F.3d at 1160. Thus, Chase complied with its
investigatory duties under subparagraph (A).

   The most thorough investigation means nothing, however,
if the results of the investigation are not put to good use. Sub-
paragraphs (D) and (E) of § 1681s-2(b)(1) required Chase to
rectify past misreporting and prevent future misreporting of
information that is “incomplete” and “inaccurate.” Drew
raises a material issue of fact as to whether reporting that the
fraudulent account was lost or stolen constituted “incomplete”
and “inaccurate” reporting in violation of subparagraphs (D)
and (E).

   [6] “[A]n item on a credit report can be ‘incomplete or
inaccurate’ . . . ‘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.’ ” Carvalho
v. Equifax Info. Svcs., LLC, 629 F.3d 876, 890 (9th Cir. 2010)
(quoting Gorman, 584 F.3d at 1163) (emphasis added).
Although we have never squarely addressed the issue, our
precedent suggests that, at the very least, information that is
8838                        DREW v. EQUIFAX
inaccurate “on its face,” is “patently incorrect.” Id. at 891
(noting that there was no “patent error” because the informa-
tion reported was “correct on its face”); see also Koropoulos
v. The Credit Bureau, Inc., 734 F.2d 37, 40 (D.C. Cir. 1984)
(suggesting that under § 1681e, a CRA is liable for reporting
information that is “technically untrue,” as well as in various
other circumstances). A jury may well find that reporting the
fraudulently opened account as a lost or stolen account
belonging to Drew was untrue or facially inaccurate.

   The district court’s dismissal of Drew’s claim appears to
flow largely from its exclusion as hearsay of a key piece of
evidence, the Old Republic Report, which shows that Chase
reported the item as Drew’s lost or stolen account. Without
this report, there was scant evidence that Chase had engaged
in misreporting. However, the court’s ruling was in error.

   In Gorman, MBNA Bank asserted that a credit report
offered in support of plaintiff Gorman’s claim regarding the
bank’s failure to report a dispute was hearsay. As we
explained:

     Gorman does not rely on the credit reports for the
     truth of the matter asserted therein; in fact, as he
     notes, he disputes the truth of their contents. Instead,
     Gorman offers them to prove that no statement notic-
     ing the dispute was made. ‘If the significance of an
     offered statement lies solely in the fact that it was
     made . . . the statement is not hearsay.’

584 F.3d at 1164 (quoting United States v. Dorsey, 418 F.3d
1038, 1044 (9th Cir. 2005) (ellipsis in original)). Similarly
here, Drew offers the report only to show that the “statement
. . . was made” rather than for its truth. Like Gorman, Drew
claims the report is inaccurate.4 Finally, even if the report
  4
    Chase asks us to ignore the error in the district court’s ruling because
Drew failed to make his hearsay argument below and on appeal. Chase is
mistaken. The argument was made both before the district court and in
Drew’s opening brief to this court.
                            DREW v. EQUIFAX                           8839
were inadmissible, like the plaintiff in Gorman, Drew repre-
sents that “he had reviewed [the] . . . report[ ]” and discovered
the disputed information; under Gorman, Drew’s “statement
[itself] is admissible evidence” of the misreporting. Id.

   [7] A jury may also conclude that reporting the identity
thief’s address as Drew’s violated Chase’s duty under the stat-
ute to correct inaccurate reporting. Subparagraph (E) requires
Chase to modify, block or delete any inaccurate “informa-
tion.” Nothing in the statute suggests that an incorrect address
falls outside the purview of the “information” that must be
verified and corrected. Indeed, the statute elsewhere recog-
nizes the sensitivity of a consumer’s address. In 15 U.S.C.
§ 1681c(h), Congress provides that if a CRA receives a “re-
quest [that] includes an address for the consumer that substan-
tially differs from the addresses in the file of the consumer . . .
the consumer reporting agency shall notify the requester of
the existence of the discrepancy,” and goes on to prescribe
regulation requirements so that the user of the report can con-
firm the identity of the consumer.5

  C.    Damages

   Finally, Chase paradoxically faults Drew for failing to
allege sufficient damages under the statute, while at the same
time admitting that Drew provides evidence of his emotional
distress due to the alleged misreporting. The FCRA permits
“recovery for emotional distress and humiliation.” Guimond
v. Trans Union Credit Info. Co., 45 F.3d 1329, 1333 (9th Cir.
1995). As Drew and his psychological expert explained, the
identity theft caused Drew grave post-traumatic stress due to
  5
   Although Chase challenges the evidence Drew offers, it does not chal-
lenge two letters Chase sent to the identity thief’s address in October
2005, which discuss the credit inquiries into the account, and note that
Chase “sent a request to each Credit Reporting Agency that we report
information to,” regarding the inquiry. This evidence is sufficient to raise
a material issue of fact as to Chase’s liability under § 1601s-2(b)(1)(E).
8840                    DREW v. EQUIFAX
his weakened condition and his continued association with the
fraudulent accounts exacerbated his condition. Because Drew
supplies evidence of emotional distress experienced as a result
of the misreporting, we therefore decline to dismiss on this
ground. Chase also disputes Drew’s claim that repeated inqui-
ries about his account may have affected his credit score.
Because we conclude that Drew has alleged sufficient cogni-
zable damages to survive summary judgment, we leave this
issue for the district court to resolve.

  [8] We conclude that TransUnion’s notification triggered
Chase’s duties under the FCRA, that material issues of fact
remain as to whether Chase violated those duties, and that
Drew’s claim of emotional damages is cognizable under the
FCRA.

II.    CLAIMS AGAINST FIA     AND THE   STATUTE OF LIMITATIONS

   [9] Instead of arguing, like Chase, that it satisfied its statu-
tory duties, FIA raises a statute of limitations defense. Section
1681p(1) of the FCRA, a deceptively simple provision, sets
the statute of limitations at “2 years after the date of discovery
[or constructive discovery] by the plaintiff of the violation
that is the basis for such liability.” 15 U.S.C. § 1681p; see
Merck & Co., Inc. v. Reynolds, 130 S. Ct. 1784, 1794 (2010)
(constructive discovery generally read into discovery stat-
utes). The statute also provides that all claims arising from the
alleged violation will repose “5 years after the date on which
the violation that is the basis for such liability occurs.” 15
U.S.C. § 1681p(2).

   There is no dispute about the date of filing or the length of
the limitations period after tolling. Drew filed his action on
December 18, 2006. He was hospitalized from July 2004 to
January 2005. Accordingly, “drawing all reasonable infer-
ences” in his favor, the district court tolled the statute of limi-
tations for 5.5 months, a ruling that FIA does not challenge.
                       DREW v. EQUIFAX                    8841
   The harder question centers around when Drew’s cause of
action arose. For Drew’s action to have been timely, his cause
of action could not have arisen more than 2 years and 5.5
months before December 18, 2006, that is, before June 3,
2004. Drew offers two routes to support the timeliness of his
action. First, he argues that he did not discover the alleged
violation before June 3, 2004. Alternatively, he suggests that
the statute of limitations was restarted by independent viola-
tions FIA committed in 2005. Because we hold that Drew
could not have discovered the violations before June 3, 2004,
we do not consider Drew’s alternate argument or FIA’s claim
that Drew waived this second argument.

   [10] “[T]he ultimate burden is on the defendant to demon-
strate that a reasonably diligent plaintiff would have discov-
ered the facts constituting the violation . . . . [FIA must]
demonstrate how a reasonably diligent plaintiff . . . would
have discovered the violations.” Strategic Diversity, Inc. v.
Alchemix Corp., 666 F.3d 1197, 1206 (9th Cir. 2012). Sum-
mary judgment is defeated if FIA fails to meet this burden and
material issues of fact remain as to “whether plaintiffs knew
or had reason to know of the specific” violation. Norman-
Bloodsaw v. Lawrence Berkeley Lab., 135 F.3d 1260, 1266
(9th Cir. 1998).

   In March 2004, after Drew disputed the FIA account,
TransUnion contacted FIA to inform it of the fraud, and FIA
incorrectly verified the account in response. FIA must show
that Drew knew before June 2004 that FIA had failed to com-
ply with its duties under the FCRA, in particular, its duty to
investigate.

   As Gorman explains, an FCRA violation is tied to the rea-
sonableness of an investigation rather than the accuracy of its
results. In Gorman, over a furnisher’s objection, we held that
upon receiving notice of a dispute from a CRA, a furnisher’s
investigation must be “reasonable.” 584 F.3d at 1155-57. In
so concluding, we did not hold the furnisher to an impossible
8842                    DREW v. EQUIFAX
standard that rendered it liable anytime its investigation did
not reach the correct result. We recognized that factors
beyond a furnisher’s control may doom the most conscien-
tious investigation to an erroneous result: for example, we
noted that in Gorman, a CRA had provided the furnisher with
“scant information,” to carry out the investigation. Id. We
therefore concluded that the furnisher’s inaccurate reporting
after an investigation was not dispositive proof that its investi-
gation was unreasonable, as despite reasonable efforts, it may
not have been given sufficient information to reach the correct
conclusion despite reasonable efforts. Id. at 1157. In short,
“[a]n investigation is not necessarily unreasonable because it
results in a substantive conclusion unfavorable to the con-
sumer, even if that conclusion turns out to be inaccurate.” Id.
at 1161. Thus, Gorman imposes fault, not for an investigation
that produces incorrect results, but for an unreasonable inves-
tigation.

   Gorman’s approach, which favored the furnisher in that
case, cuts against FIA here. Drew notes that he had no knowl-
edge of what TransUnion relayed to FIA, or “even if the
credit agency passed on the relevant information.” Even if the
CRA had “passed on the relevant information,” Drew did not
know what information was available to the bank for its
investigation, and had no basis in June 2004 to judge whether
the investigation was reasonable. In fact, the record falls short
of showing even that Drew knew that FIA’s investigation had
concluded.

   [11] According to FIA’s chronology, Drew must have dis-
covered the violations between April 21 and June 3, 2004,
because on April 21, and again in May, Drew received collec-
tion calls from FIA, and in those calls, Drew disputed the
accounts on which FIA sought collection. FIA argues that
these calls should have made Drew aware both that an investi-
gation was completed, and that the investigation was faulty.
Yet, the record does not show how Drew could have known
either fact. In April, Drew received his first collection call; in
                           DREW v. EQUIFAX                          8843
May, Drew was informed only that the charges could not be
removed from his account “until [the] investigation [was]
ov[e]r.”6 There is no indication that Drew could have divined
from these calls that a previous investigation had already
occurred and been completed when he was told there was an
ongoing investigation. Drew says as much, noting that he
“was unaware of the prior investigation.” Indeed, Drew could
have reasonably concluded that the May investigation was an
ongoing response to TransUnion’s March correspondence as
the record suggests that three months would not have been an
unreasonable time for an investigation: the May investigation
itself only concluded in July.

   Thus, FIA does not show how Drew should have guessed
that its previous, undisclosed investigation failed to meet Gor-
man’s reasonableness standard. This is not to say that a plain-
tiff may never become aware of facts allowing him to
conclude that an investigation was insufficient. As Drew
noted, by 2005, Drew had provided FIA with relevant infor-
mation himself; since he knew that FIA had this information,
he also knew by that time that incorrect results could only be
attributable to an unreasonable investigation.

   [12] FIA fails to meet its burden to conclusively show that
Drew knew or should have known of the deficiencies in FIA’s
investigation before June 3, 2004. Because material factual
disputes remain, the district court erred in barring Drew’s
claim under the statute of limitations.

III.   LEAVE TO AMEND

   [13] In his initial complaint, Drew made a false start and
alleged a violation under a non-existent California law sub-
  6
    FIA takes this argument as an equitable estoppel argument. However,
this is not Drew’s argument: his point is simply that, because he believed
that an investigation was ongoing, his claim did not accrue at least until
he had reason to believe the investigation was over.
8844                   DREW v. EQUIFAX
section, Cal. Civ. Code § 1785.25 (5). He then dropped this
claim in June 2007, because he incorrectly believed that it
was precluded by district court precedent that held that the
FCRA preempted state law. In 2009, Drew advised the district
court of our holding in Gorman in which we held that the
FCRA did not preempt certain state claims, but he did not
seek to amend his complaint to reinstate the claim. In fact, he
made no effort to amend until the eve of the then-trial date.
The district court’s denial of Drew’s motion to amend was not
an abuse of discretion.

  AFFIRMED in part; REVERSED in part. Each party shall
bear its own costs on appeal.