Kovacs v. Experian Information Solutions Incorporated, 2:22-cv-02110

In 2019 Kovacs took a $35,000 loan from USAA FSB; USAA later reported his payments as late to credit bureaus.
Kovacs originally sued USAA in March 2022 in a prior action alleging FCRA and FDCPA violations; he attempted to amend that complaint to add claims under 15 U.S.C. § 1681s-2(b), but the amendment was denied.
The prior case was later dismissed with prejudice following a stipulation.
Kovacs filed a new complaint on December 14, 2022 asserting § 1681s-2(b) claims based on a May 2022 dispute he sent to credit reporting agencies.
USAA moved to dismiss, arguing the new suit is barred by claim preclusion (res judicata) because of the prior dismissal with prejudice and Kovacs’ earlier attempt to amend.
The court considered whether § 1681s-2(b) duties (and thus accrual of the claim) arise only after a furnisher receives notice from a credit reporting agency, and applied Ninth Circuit timing rules about what claims could have been brought earlier.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Kovacs’ § 1681s-2(b) claims are barred by claim preclusion from the prior dismissal	Kovacs: claims accrued only after furnisher received CRA notice in May 2022, so they could not have been raised in the prior suit	USAA: the new claims arise from the same transaction and could/should have been raised earlier; prior dismissal with prejudice bars them	Denied. Court: § 1681s-2(b) duties arise only after CRA notice (per Gorman); Kovacs’ claims accrued after the prior complaint, so they could not have been brought earlier and are not precluded.
Whether Kovacs’ earlier motion to amend the prior complaint to add § 1681s-2(b) claims precludes the current claims	Kovacs: amendment effort is irrelevant because the claims had not yet accrued when the prior complaint was filed	USAA: attempted amendment shows claims could have been asserted earlier	Rejected. Court followed Howard’s bright-line accrual rule—post-filing accrual cannot be cured by earlier amendment attempts, so amendment effort is not dispositive.

Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147 (9th Cir. 2009) (furnisher’s § 1681s-2(b) duties arise only after CRA provides notice of a dispute)
Howard v. City of Coos Bay, 871 F.3d 1032 (9th Cir. 2017) (timing rule: claim preclusion does not bar claims that accrue after the operative complaint in the prior suit is filed)
Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d 708 (9th Cir. 2001) (elements and application of claim preclusion; transactional-nucleus analysis)
Stewart v. U.S. Bancorp, 297 F.3d 953 (9th Cir. 2002) (res judicata prohibits lawsuits on claims that were or could have been raised previously)
Frank v. United Airlines, Inc., 216 F.3d 845 (9th Cir. 2000) (transactional nucleus test for identity of claims)
Save the Bull Trout v. Williams, 51 F.4th 1101 (9th Cir. 2022) (party asserting claim preclusion bears the burden to prove it applies)