Purcell v. Bank of America
2011 U.S. App. LEXIS 20035
| 7th Cir. | 2011Background
- Purcell alleged Bank of America reported delinquency to credit agencies though not due, violating FCRA §1681s-2(a).
- Bank removed the case and sought judgment because §1681s-2(a) does not create a private right of action.
- §1681t(b)(1) purportedly preempts state law claims related to information furnished to credit agencies.
- District court dismissed federal claims and then dismissed, without prejudice, Purcell’s state-law claims after deciding not to remand.
- Bank appeals, arguing the district court should have remanded or entered judgment for Bank under preemption and that §1681t(b)(1) preempts state common law as well.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Meaning of 'laws' in §1681t(b)(1) | Purcell argues 'laws' includes state common law. | Bank argues 'laws' means state statutes only. | §1681t(b)(1) preempts more than statutes; includes common law. |
| Scope of preemption vs. compatibility with §1681h(e) | State-law claims fall outside preemption due to §1681h(e). | §1681t(b)(1) preempts broader state regulation. | Statutes are compatible; later statute narrows without repealing earlier one. |
| Remand vs. dismissal posture after federal portion resolved | Remand appropriate after federal issues resolved. | Common-law claims should be stayed or dismissed due to preemption. | Remand proper; district court should enter judgment for Bank on all claims. |
| Effect of Premium Mortgage on §1681t(b)(1) | Premium Mortgage controls only subparagraphs; supports state-law claims. | Premium Mortgage applies broadly to §1681t(b)(1). | Premium Mortgage governs interpretation of §1681t(b)(1) for all subparagraphs. |
| Relation of §1681h(e) to §1681s-2 and preemption scheme | §1681h(e) preserves some state claims related to malice. | §1681t(b)(1) and §1681s-2 preempt more broadly. | Statutes are harmonized; §1681h(e) remains with exceptions. |
Key Cases Cited
- Swift v. Tyson, 41 U.S. 1 (1842) (origin of Rules of Decision Act interpretation of 'laws' vs 'law' (state sources))
- Erie R.R. v. Tompkins, 304 U.S. 64 (1938) (overruled Swift; state law includes judicial decisions and other sources)
- Premium Mortgage Corp. v. Equifax, Inc., 583 F.3d 103 (2d Cir. 2009) (holds 'laws' in §1681t(b)(1) refers to all sources of law)
- Radzanower v. Touche Ross & Co., 426 U.S. 148 (1976) (specific-over-general canon discussed in preemption context)
- PLIVA, Inc. v. Mensing, 131 S. Ct. 2567 (2011) (illustrates preemption and statutory interpretation in modern context)