PROCEEDING (IN CHAMBERS): DENYING DEFENDANT’S MOTION TO DISMISS PLAINTIFFS’ SECOND AMENDED CONSOLIDATED CLASS ACTION COMPLAINT
Before the Court is Defendant TransUn-ion, LLC (“TransUnion”) Motion to Dismiss Plaintiffs’ Second Amended Consolidated Class Action Complaint (“SACC”) for Failure to State a Claim (“Motion”). The Court finds this matter appropriate for decision without oral argument. Fed. R.Civ.P. 78; Local R. 7-15. Accordingly, the hеaring set for October 16, 2006 was removed from the Court’s calendar. After reviewing the moving, opposing, and replying papers, for the reasons set forth below the Court DENIES Defendant’s Motion.
I. BACKGROUND
Plaintiffs Terri N. White, Jose Hernandez, Robert Radcliffe, Chester Carter, Maria Fаlcon, and Alex Gidi are six individuals who filed for bankruptcy pursuant to Chapter 7 of the U.S. Bankruptcy Code and were granted orders of discharge by a U.S. Bankruptcy Court. SACC ¶ 11. TransUnion is a national repository for consumer credit information and is engaged in the business of Credit Reporting. Id. ¶ 12. For each of the six named plaintiffs, TransUnion has furnished reports to third parties (“Credit Reports”) in which it has erroneously reported their discharged debts as due and owing. Id. ¶¶ 1, 27, 32, 36, 39, 43, 48.
Plaintiffs brought this class action lawsuit on behalf of themselves, and others similarly situated, tо restrain TransUnion from employing credit reporting practices that they allege falsely declare their discharged debts to be “due and owing” and thereby inappropriately taint Plaintiffs’ credit reports. Specifically, Plaintiffs allege that TransUnion employs procedures regarding its reporting of such debts that produce twice as many erroneous reports than it does accurate ones, and that Tran-sUnion does so willfully and in conscious disregard of Plaintiffs’ statutory right to protection from the transmission of inaccurate information. Id. ¶¶ 17, 19. To vindicate these rights, Plaintiffs now seek statutory and punitive damages, injunctive relief, and attorneys’ fees and costs.
The First and Second Causes of Action allege negligent and willful failure to employ reasonable procedures to ensure maximum accuracy of Credit Reports in violation of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. §§ 1681e(b) and the California Consumer Credit Reporting Agency Act (“CCRAA”), Cal. Civ. Code section 1785.14(b). TransUnion current relies solely on consumers’ creditors to voluntarily update the status of accounts belonging to consumers that receive Chapter 7 discharge orders. Plaintiffs complain that TransUnion knows, or should know, that the information these creditors furnish regarding the status of pre-bankrupt-cy debts is highly unreliable and that its procеdures for reporting such debts therefore fail to assure “maximum possible accuracy.” SACC ¶ 18.
*1081 The Third and Fourth Causes of Action allege negligent and willful failure to reasonably reinvestigate erroneous Credit Reports in violation of the FCRA, 15 U.S.C. § 1681i(a) and the CCRAA, Cal. Civ.Code section 1785.16. Upon learning that Tran-sUnion had issued erroneous Credit Reports concerning their discharged debts, Plaintiffs Falcon and Gidi sent dispute letters to TransUnion requesting that it correct those reports. SACC ¶¶ 44, 49. TransUnion responded by issuing new Credit Reports that persisted in fаlsely recording the status of Falcon’s and Gidi’s debts. Id. ¶¶ 45, 50.
The Fifth Cause of Action alleges violation of California’s Unfair Competition Law (“UCL”), Cal. Bus. & Prof.Code sections 17200, et seq. The SACC pleads that “Plaintiffs and the Class have suffered ... loss of money or property” as a result of TransUnion’s wrongful practices. SACC ¶ 95. Under the UCL, Plaintiffs seek in-junctive relief, but do not request monetary damages.
II. LEGAL STANDARD
Under Federal Rule of Civil Procedure 12(b)(6), a complaint must be dismissed when a plaintiffs allegations fail to state a claim upon which relief can be granted. Dismissal should not be granted unless “it аppears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.”
Conley v. Gibson,
The Court must construe the complaint liberally by viewing it in the light most favorable to the plaintiff.
Chang v. Chen,
Dismissal without leave to amend is appropriate only when the Court is satisfied that the deficiencies in the complaint could not possibly be cured by amendment.
Chang,
III. DISCUSSION
A. The First and Second Causes of Action
TransUnion moves to dismiss Plaintiffs’ First and Second Causes of Action on the grounds that a crеdit reporting agency cannot be held liable for inaccurate reporting if the procedures used to prepare that reporting were reasonable.
Guimond v. Trans Union Credit Info.,
The FCRA and the CCRAA both obligate credit reporting agencies to “follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the re *1082 port relates.” 15 U.S.C. § 1681e(b); Cal. Civ.Code section 1785.14(b). Each of these statutes impose additional obligations on credit reporting agencies relating to consumers who have filed petitions for bankruptcy that require such agencies to report the particular chaрter of Title 11 under which the petition was filed and that limit the amount of time they may report bankruptcy information to a maximum of ten years. 15 U.S.C. §§ 1681c; Cal. Civ. Code section 1785.13(c). But nothing in these statutory provisions suggests that there is an exception to an agency’s standаrd obligation to employ reasonable procedures to ensure maximum possible accuracy for bankruptcy-related information. See also 16 C.F.R. 600 app. § 607(3)(A)(6); id. § 607(3)(F)(2) (“[A] consumer reporting agency may include delinquencies on debts discharged in bankruptcy in consumer repоrts, but must accurately note the status of the debt (e.g., discharged, voluntarily repaid).”); id. § 607(3)(F)(1) (“A consumer reporting agency must employ reasonable procedures to keep its file current on past due accounts (e.g., by requiring its creditors to notify the credit bureau when a previously past due account has been paid or discharged in bankruptcy)!)]”).
There is no basis here upon which the Court could find that TransUnion’s procedures are reasonable to ensure maximum possible accuracy as a mattеr of law. The SACC references a survey of 960 Credit Reports issued by TransUnion showing that in sixty-four per cent of the cases involving no-asset Chapter 7 bankruptcy proceedings, TransUnion erroneously listed one or more of the consumer’s discharged debts as due and owing. SACC ¶ 17. The average number of falsely listed debts in this sample was between three and four per report, and some reports contained as many as ten or more such errors.
Id.
This allegation by itself is capable of demonstrating the type of repеtitive and systematic errors in TransUn-ion’s procedures that could render those procedures unreasonable.
See Smith v. Auto Mashers, Inc.,
The Plaintiffs’ allegations go further still, however, and outline specific alternative procedures that TransUnion could follow to dramatically enhance the accuracy of the Credit Reports it issues for consumers with discharged debts. Specifically, thеy explain that TransUnion already obtains every discharge order issues in Chapter 7 proceedings through the electronic PACER court reporting service and that information as to whether a debt has been reaffirmed or successfully challenged is eаsily retrievable through this PACER service. By commanding its computers to utilize this resource in an effort to determine which debts have been discharged and which remain, Plaintiffs allege that TransUnion “could achieve close to 100 percent accuracy in the rеporting of the status of pre-bankruptcy debts.” SACC ¶ 15. TransUnion never even mentions the PACER system in its filings on this Motion.
The fact that TransUnion has elected to ignore Plaintiffs’ allegations supporting its claim of unreasonableness does not change the fact that these аllegations nevertheless exist and make out a cognizable legal theory. Accordingly, Plaintiffs’ First and Second Causes of Action cannot be dismissed on this theory.
*1083 B. The Third and Fourth Causes of Action
TransUnion next seeks to dismiss Plaintiffs’ Third and Fourth Causes of Action on similar grounds. Here, again, it maintains that the FCRA and CCRAA dо not explicitly require credit reporting agencies to investigate the details regarding the effect of the bankruptcy on each pre-petition debt a consumer incurred.
These arguments, again, fail to confront the statutory obligation of a сredit reporting agency in such a situation: to “conduct a reasonable reinvestigation to determine whether the disputed information is inaccurate and record the current status of the disputed information, or delete the item from the file.” 15 U.S.C. § 16811(a)(1)(A); see also Cal. Civ.Code § 1785.16. Plaintiffs allege that, even when it is furnished with court records showing that debts have been discharged, TransUnion continue to inaccurate report the status of such debts after reinvestigation in approximately 17 per cent of all cases. SACC ¶ 22. Tran-sUnion, agаin, fails to even mention this error rate in its argument.
Instead, TransUnion seeks to deflect responsibility for this inaccuracy to the creditors upon whom it relies for information and falls back on its assertion that “a creditor is in a better position than a consumer reporting agency with regard to the ability to detect and correct errors in the reporting of a consumer’s account.” Def.’s Mot. to Dismiss Pis.’ Second Am. Consolidated Class Comp. 13:12-14. This hardly suffices to establish, as a matter of law, that a “reasonable reinvestigation” amounts to an inquiry that goes only to confirmation of the accuracy of information from its original source.
Cushman v. Trans Union Corp.,
Plaintiffs’ allegations are sufficient to establish a cognizable claim for relief, and therefore are not dismissed.
C. The Fifth Cause of Action
TransUnion finally moves to dismiss Plaintiffs’ Fifth Cause of Action, contending that Plaintiffs cannot be entitled to monetary relief and lack standing to sue under the UCL. These contentions are also without merit.
First, Plaintiffs do not seek monetary relief under the UCL, but rather they sеek only injunctive relief on this Claim.
1
Although TransUnion is correct that Plaintiffs would be required to show that TransUnion took money directly from them in order to obtain money damages under the UCL,
see Cortez v. Purolator Air Filtration Prods. Co.,
IV. DISPOSITION
For the reasons set forth above, the Court hereby DENIES TransUnion’s Motion to Dismiss.
The Clerk shall serve this minute order on all parties to the action.
Notes
. In its reply brief, TransUnion argues, for the first time, that Plaintiffs also are not entitled to injunctive relief under the UCL. There is no reason that TransUnion could not have properly raised this argument in its Motion where the Plaintiffs' desired remedy is apparent on the face of the SACC. The Court will not hear these new arguments in deciding this Motion. To do so would be patently unfair to Plaintiffs who lack a proper opportunity to oppose such arguments, and would not further the interests of justice.