Nissou-Rabban v. Capital One Bank (USA), N.A.
285 F. Supp. 3d 1136
| S.D. Cal. | 2018Background
- Plaintiff Sandy Nissou‑Rabban filed Chapter 7 bankruptcy (filed Nov. 24, 2014; discharged Feb. 24, 2015) and alleges Capital One continued to report two accounts as "Charged Off" after discharge.
- Plaintiff disputed the reporting to Equifax in May 2015; Equifax notified Capital One, and Plaintiff alleges Capital One failed to reasonably investigate and correct the reports.
- Plaintiff's Second Amended Complaint (SAC) asserts claims under the Fair Credit Reporting Act (FCRA) and California Consumer Credit Reporting Agencies Act (CCRAA), and seeks class allegations based on an alleged company policy of not updating reports post‑bankruptcy.
- Capital One moved to strike portions of the SAC and to dismiss under Rule 12(b)(6); Plaintiff moved for leave to amend to add class allegations after a PMK deposition revealed facts supporting the class theory.
- The court denied the motion to strike, granted leave to amend, and denied Capital One’s motion to dismiss the FCRA and CCRAA claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Motion to strike new class allegations | Amendment based on PMK deposition; good cause for delay | Amendment violated scheduling order and was untimely | Denied — court found good cause and no basis to strike under Rule 12(f) |
| Motion for leave to amend (class allegations) | PMK deposition occurred after deadline and revealed class basis; no bad faith; no undue prejudice | No good cause under Rule 16; undue prejudice, futility, bad faith | Granted — Rule 15(a) favors amendment; delay excused; no undue prejudice or bad faith shown |
| FCRA — whether reporting was inaccurate/incomplete | Reporting became inaccurate/incomplete after bankruptcy discharge; Metro 2 deviation shows inaccuracy/ misleading reporting | Reporting was historically accurate when made; Metro 2 does not impose perpetual duty for sold/transferred accounts; Metro 2 alone insufficient | Denied dismissal — court held SAC alleges sufficient facts that post‑discharge reporting was incomplete/misleading and Metro 2 deviation can support an FCRA claim at pleading stage |
| FCRA — whether Capital One reasonably investigated dispute | Company policy of not updating post‑bankruptcy makes reasonable investigation impossible; pleadings allege inadequate reinvestigation | Plaintiff didn’t plead contents of dispute or facts showing investigation was unreasonable | Denied dismissal — factual allegations (including alleged policy) permit reasonable inference that investigation was inadequate; specifics can be developed in discovery |
| CCRAA — preemption and sufficiency | CCRAA §1785.25(a) mirrors FCRA and governs furnishers; Capital One knew or should have known information was incomplete | FCRA preempts state claims regarding furnisher responsibilities | Denied dismissal — court found §1785.25(a) is not preempted here and pleadings sufficiently parallel FCRA allegations |
Key Cases Cited
- Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47 (2007) (FCRA statutory purpose and context)
- Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147 (9th Cir. 2009) (furnisher duties under §1681s‑2(b) and reasonableness of investigations)
- Nelson v. Chase Manhattan Mortg. Corp., 282 F.3d 1057 (9th Cir. 2002) (no private right under §1681s‑2(a); FCRA protects against incomplete and inaccurate reporting)
- Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876 (9th Cir. 2010) (an item can be "incomplete or inaccurate" under FCRA)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (plausibility standard for pleading)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (Twombly pleading standard)
- William Inglis & Sons Baking Co. v. ITT Continental Baking Co., 668 F.2d 1014 (9th Cir. 1981) (prejudice as the key factor in amendment analysis)