Buraye v. Equifax (625 F. Supp. 2d 894, 2008)

ORDER GRANTING DEFENDANT’S MOTION FOR JUDGMENT ON THE PLEADINGS

MARGARET M. MORROW, District Judge.

I. FACTUAL AND PROCEDURAL BACKGROUND

A. Facts

Plaintiff Fredy Buraye is a consumer who resides in California. Defendants Equifax and Transunion are credit reporting agencies. Defendant Nationwide Credit, Inc. is allegedly “a collection agency and/or a credit reporting agency.” Buraye asserts that in early 2007, Nationwide reported “wildly untrue, unverified and grossly negligent erroneous information” to defendants Equifax and Transunion. Buraye alleges that Nationwide falsely reported to Equifax and Transunion that (1) he owed DirectTV $237.00; (2) he used the alias “Fredy Perez”; and (3) he lived at 3961 Hillcrest Ave., # 6 in Los Angeles. Buraye contends that these false statements had a “detrimental effect [on his] character,” in that they portrayed him “as a deadbeat who didn’t pay his bills”; he also asserts they damaged his credit score and his ability to borrow at lower rates.

On May 6, 2007, Buraye notified both Equifax and Transunion of the mistakes in his credit report. On May 12, 2007, Transunion responded that the allegedly false information did “not currently appear on his or her credit report.” On May 18, 2007, Equifax responded that it had deleted the information. In September 2007, Buraye allegedly discovered that Equifax and Transunion were once again including the purportedly false information in their credit reports.

B. Procedural History

On October 11, 2007, Buraye commenced an action against the named defendants and certain fictitious defendants in Los Angeles Superior Court. Buraye’s complaint asserted claims for (1) negligent violation of the California Consumer Credit Reporting Agencies Act (“CCCRAA”) against all defendants; (2) willful violation of the CCCRAA against Transunion and Equifax; (3) common law negligence against all defendants; and (4) common law defamation against all defendants. Buraye sought actual damages according to proof; statutory damages of $5,000.00; damages for pain and suffering; costs; attorney’s fees; punitive damages; and interest as allowed by law.

On January 23, 2008, defendants removed the case to this court based on diversity of citizenship. They alleged that they did not become aware that the amount in controversy exceeded the jurisdictional minimum set forth in 28 U.S.C. § 1332 until Buraye served answers to requests for admission in which he denied that he was not seeking more than $74,999.99 in damages.

II. DISCUSSION

A. Standard Governing Motions for Judgment on the Pleadings

Judgment on the pleadings is appropriate “when the moving party clearly establishes on the face of the pleadings that no material issue of fact remains to be resolved and that it is entitled to judgment as a matter of law.” Enron Oil Trading & Transp. Co. v. Walbrook Ins. Co., Ltd., 132 F.3d 526, 529 (9th Cir.1997); Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1550 (9th Cir.1990). In deciding the motion, the court may consider only the pleadings, that is, “the complaint, the answer, and any written instruments attached as exhibits.” Northern Indiana Gun & Outdoor Shows, Inc. v. City of South Bend, 163 F.3d 449, 452 (7th Cir. 1998); see also See Fed.R.Civ.Proc. 12(c) (providing that a Rule 12(c) motion for judgment on the pleadings should be converted into a Rule 56 motion for summary judgment if matters outside the pleadings are considered by the court).

The court must accept as true all factual allegations made by the non-moving party. See Enron, 132 F.3d at 528 (a motion for judgment on the pleadings is properly granted “when, taking all allegations in the pleading as true, the moving party is entitled to judgment as a matter of law”); McGann v. Ernst & Young, 102 F.3d 390, 392 (9th Cir.1996) (same); General Conference Corp. of Seventh-Day Adventists v. Seventh-Day Adventist Congregational Church, 887 F.2d 228, 230 (9th Cir.1989) (in reviewing a Rule 12(c) motion, the court must assume the facts alleged by the non-moving party are true, and must draw all inferences in favor of that party). The court need not, however, assume the truth of legal conclusions in the pleadings simply because they take the form of factual allegations. See Western Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir.1981).

B. Buraye’s Claims Against Nationwide

As noted, Buraye has alleged claims against Nationwide for negligent violation of the CCCRAA, common law negligence, and defamation. Nationwide argues that these claims must be dismissed because they are barred by the preemption provisions of the Fair Credit Reporting Act (“FCRA”).

1. The FCRA’s Preemption Provisions

“The FCRA contains two preemption sections restricting state law claims that apply to persons who furnish information under the FCRA.” Woods v. Protection One Alarm Monitoring, Inc., CV 06-398 SMS, 2007 WL 2391075, *7 (E.D.Cal. Aug.22, 2007). “When first enacted in 1968, the FCRA had one section dealing with preemption of state law claims.” Weseman v. Wells Fargo Home Mortg., Inc., CV 06-1338 ST, 2008 WL 542961, *2 (D.Or. Feb.22, 2008). 15 U.S.C. § 1681h(e), which is more specific than the FCRA’s second preemption provision, provides:

“Except as provided in section 1681n and 1681o of this title, no consumer may bring any action or proceeding in the nature of defamation, invasion of privacy, or negligence with respect to the reporting of information against any consumer reporting agency, any user of information, or any person who furnishes information to a consumer reporting agency, based on information disclosed pursuant to section 1681g, 1681h, or 1681m of this title, or based on information disclosed by a user of a consumer report to or for a consumer against whom the user has taken adverse action based in whole or part on the report except as to false information furnished with malice or willful intent to injure such consumer.” 15 U.S.C. § 1681h(e).

As can be seen, this provision “only preempts state claims for defamation, invasion of privacy and negligence and only to the extent such claims are based on the disclosure of certain types of information and are not based on malice or willful intent to injure.” Weseman, 2008 WL 542961 at *2.

In 1996, Congress amended the FCRA to add another, more general preemption provision. See Weseman, 2008 WL 542961 at *2. Section 1681t(b)(l)(F) provides that

“[n]o requirement or prohibition may be imposed under the laws of any State (1) with respect to any subject matter regulated under ... section 1681s-2 of this title, relating to the responsibilities of persons who furnish information to consumer reporting agencies, except that this paragraph shall not apply —