Nissou-Rabban v. Capital One Bank (USA), N.A.
3:15-cv-01673
| S.D. Cal. | Jan 23, 2018Background
- Plaintiff Sandy Nissou‑Rabban filed Chapter 7 bankruptcy in November 2014; her bankruptcy was discharged February 24, 2015. Capital One was listed as a creditor and received notice of the discharge.
- Equifax credit reports in April/May 2015 continued to show Capital One accounts as "Charge Off" rather than "Discharged in Bankruptcy." Plaintiff disputed the reporting to Equifax in May 2015.
- Plaintiff alleges Equifax notified Capital One, but Capital One failed to reasonably investigate and update reporting; Plaintiff also alleges a company policy of not updating post‑bankruptcy reporting for sold/transferred accounts.
- Plaintiff sued under the FCRA (15 U.S.C. §§ 1681 et seq.) and California’s CCRAA (Cal. Civ. Code § 1785.25(a)), seeking class relief based on alleged industry‑standard (Metro 2) violations and incomplete/inaccurate reporting.
- District court previously dismissed the FAC for lacking key dates; Plaintiff filed a Second Amended Complaint (SAC) and sought leave to amend with class allegations; Capital One moved to strike and to dismiss the SAC.
- Court granted leave to amend, denied the motion to strike, and denied Capital One’s motion to dismiss as to both the FCRA and CCRAA claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Motion to Strike new class allegations | Amendment was timely due to new PMK deposition evidence; good cause for delay | Amendment violated scheduling order and exceeded scope of prior dismissal order; prejudicial | Denied — court found good cause and no Rule 12(f) basis to strike |
| Leave to Amend to add class claims | Leave should be freely granted; PMK deposition after deadline produced necessary facts | Amendment is prejudicial, futile, and in bad faith; violates Rule 16 | Granted — no undue prejudice, good cause shown, not futile at pleading stage |
| FCRA § 1681s‑2(b) — whether reporting was inaccurate/incomplete | Reporting became inaccurate/incomplete after discharge because Metro 2 requires "Discharged in Bankruptcy" notation; failure to update can mislead creditors | Pre‑discharge reporting was accurate; Metro 2 doesn’t impose a continuing duty for sold/transferred accounts; Metro 2 deviation insufficient alone | Denied dismissal — court found SAC sufficiently alleges inaccuracy/incompleteness and Metro 2 deviation may support an FCRA claim at pleading stage |
| FCRA § 1681s‑2(b) — adequacy of furnisher investigation | Capital One’s investigation was unreasonable and hampered by alleged policy refusing updates absent payment | Plaintiff failed to plead contents of dispute/CRA notice; cannot show investigation was unreasonable | Denied dismissal — plausible factual allegations that a company policy made reasonable investigation impossible survive pleading |
| CCRAA (Cal. Civ. Code § 1785.25) | State claim mirrors FCRA; Defendant knew or should have known reporting was incomplete/inaccurate | Preempted by FCRA or insufficiently pleaded | Denied dismissal — CCRAA claim not preempted and adequately pleaded when construed with FCRA standards |
Key Cases Cited
- Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47 (2007) (purpose of FCRA to ensure fair and accurate credit reporting)
- Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147 (9th Cir.) (furnisher duties under § 1681s‑2(b) triggered only by CRA notice; investigation judged by what furnisher learned from CRA notice)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (plausibility standard for pleadings)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must give fair notice and state a plausible claim)
- Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876 (9th Cir.) (an item can be "incomplete or inaccurate" under the FCRA)
- Nelson v. Chase Manhattan Mortg. Corp., 282 F.3d 1057 (9th Cir.) (no private right to enforce § 1681s‑2(a); protects against inaccurate and incomplete reporting)