Neabors v. Equifax Information Services, LLC
3:18-cv-00454
S.D. Cal.Jul 16, 2019Background
- Plaintiff Don Neabors sued Equifax under the Fair Credit Reporting Act (FCRA), alleging negligent and willful violations of 15 U.S.C. §§ 1681i and 1681e(b) based on a Navy Federal tradeline that had been discharged in bankruptcy (Chapter 7, discharged Jan. 8, 2013).
- Neabors obtained Equifax credit reports in October 2017 and February 2018 that listed the tradeline as "Closed" with a payment status "Included in Bankruptcy" and blank $0/past-due fields; he alleges these reports failed to state the account was "discharged in bankruptcy."
- Neabors sent a dispute letter to Equifax on November 28, 2017 asserting the account was discharged; the February 2018 report still did not use the phrase "discharged in bankruptcy."
- Equifax moved for judgment on the pleadings under Fed. R. Civ. P. 12(c), arguing Neabors failed to plead a factual inaccuracy required to state claims under §§ 1681e(b) and 1681i.
- The court took judicial notice of the credit reports, applied the Rule 12(b)(6)/12(c) standard, and held that "Included in Bankruptcy" plus "Closed" and blank $0 fields conveyed an accurate status and was not misleading in a way that could be expected to affect credit decisions.
- The court dismissed Neabors's claims with prejudice, finding amendment futile because the essential element of factual inaccuracy could not be pled.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Equifax's credit report was factually inaccurate under the FCRA | Neabors: Equifax's failure to use the phrase "discharged in bankruptcy" rendered the report misleading; "Included in Bankruptcy" could be read as bankruptcy still pending | Equifax: The report accurately reflected bankruptcy status; "Included in Bankruptcy," "Closed," and blank/$0 balance fields sufficiently indicate a discharge | Held for Equifax: Court found no inaccuracy or misleading statement; notation was accurate in context and insufficient to state an FCRA claim |
| Whether leave to amend should be granted | Neabors: Could potentially plead additional facts to show inaccuracy | Equifax: Amendment would be futile because the report's notation is not legally inaccurate | Held for Equifax: Denied leave to amend; dismissal with prejudice because inability to plead inaccuracy is fatal and amendment would be futile |
Key Cases Cited
- Cafasso v. U.S. ex rel. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047 (9th Cir.) (Rule 12(c) standard same as Rule 12(b)(6))
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard; factual allegations must be plausible)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading standard; plausibility requirement)
- Guimond v. Trans Union Credit Info. Co., 45 F.3d 1329 (9th Cir.) (FCRA § 1681e(b) requires showing of inaccurate information)
- Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876 (9th Cir.) (plaintiff must allege actual inaccuracy to state § 1681i claim)
- Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147 (9th Cir.) (definition of "inaccurate" under FCRA includes "patently incorrect" or "misleading" to an extent that affects credit decisions)
- Harris v. County of Orange, 682 F.3d 1126 (9th Cir.) (judicial notice of documents referenced in complaint when authenticity not disputed)