ORDER ON MOTIONS TO DISMISS

(Docket Nos. 70 & 74)

CLAUDIA WILKEN, District Judge.

Before the Court are two motions to dismiss filed by Defendant Experian Information Solutions, Inc.1 Having considered the parties' papers and oral argument and for the reasons set forth below, the Court GRANTS the motions.

BACKGROUND

The Court has discussed the factual background relevant to Marino's allegations in a previous order (Docket No. 62) and his factual allegations are substantially the same and in large part identical in Plaintiffs' combined First Amended Complaint (1AC). Marino adds detail to his allegations concerning his mortgage.

Heath previously filed a separate complaint and now joins Dahlen and Marino in the consolidated 1AC. The factual background that follows is taken from Heath's portion of the 1AC. On July 2, 2012, Heath filed for Chapter 13 bankruptcy. On August 10, 2012, he obtained a credit report from CIN Legal Data Services that was based on information that CIN gathered from the three major credit reporting agencies (CRAs), including Experian.2 Heath's plan was confirmed on November 8, 2012. On April 11, 2016, Heath ordered a "three bureau report" from Experian. Docket No. 65, 1AC ¶ 132. He found nine "trade lines" in the report that were reporting information he believed to be inaccurate, and on August 5, 2016 he disputed those trade lines by letter to Experian and the other two major CRAs, noting "that Plaintiff had filed for bankruptcy and the account was not reporting the bankruptcy accurately or worse not at all." Id. ¶ 135. Heath alleges that each CRA received his dispute letter and notified each furnisher,3 and later alleges in the alternative that each CRA did not do so.

On November 15, 2016, Heath obtained a second credit report from Experian and the other major CRAs. Heath alleges that the second report contained a number of inaccuracies, discussed below, related to his bankruptcy.

LEGAL STANDARD

A complaint must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a). On a motion under Rule 12(b)(6) for failure to state a claim, dismissal is appropriate only when the complaint does not give the defendant fair notice of a legally cognizable claim and the grounds on which it rests. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). In considering whether the complaint is sufficient to state a claim, the court will take all material allegations as true and construe them in the light most favorable to the plaintiff. NL Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986). However, this principle is inapplicable to legal conclusions; "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements," are not taken as true. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 555).

When granting a motion to dismiss, the court is generally required to grant the plaintiff leave to amend, even if no request to amend the pleading was made, unless amendment would be futile. Cook, Perkiss & Liehe, Inc. v. N. Cal. Collection Serv. Inc., 911 F.2d 242, 247 (9th Cir. 1990). In determining whether amendment would be futile, the court examines whether the complaint could be amended to cure the defect requiring dismissal "without contradicting any of the allegations of [the] original complaint." Reddy v. Litton Indus., Inc., 912 F.2d 291, 296 (9th Cir. 1990). The court may deny leave to amend for "repeated failure to cure deficiencies by amendments previously allowed." McGlinchy v. Shell Chem. Co., 845 F.2d 802, 809-10 (9th Cir. 1988).

DISCUSSION

In their 1AC, Plaintiffs bring two causes of action, one under the federal Fair Credit Reporting Act (FCRA), and one under California's Consumer Credit Reporting Agencies Act (CCRAA). They bring only the FCRA claim against Experian.

The FCRA creates a private right of action only for willful or negligent noncompliance with its requirements. 15 U.S.C. §§ 1681n4 (willful), o (negligent); Gorman, 584 F.3d at 1154. A plaintiff may recover actual or statutory damages, as well as punitive damages and attorneys' fees, for willful noncompliance, § 1681n, but only actual damages for negligent noncompliance, § 1681o.

In its Order dismissing Dahlen's and Marino's original complaints, the Court found that neither Plaintiff plead "sufficient facts to support an inference that Experian did fail to notify furnishers of Plaintiffs' disputes." Docket No. 62, Order on Mots. to Dismiss (March 29 Order) 10. It dismissed those Plaintiffs' willful noncompliance claims against Experian on that basis, with leave to amend. The 1AC does not remedy this deficiency as to any Plaintiff. Accordingly, Plaintiffs' claims of willful noncompliance must be dismissed.

The FCRA requires CRAs, in response to a dispute by a consumer, 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" within thirty days of receiving notice of the consumer's dispute. § 1681i(a)(1)(A). Section 1681i also requires that, within five days of receiving notice of the consumer's dispute, CRAs must "provide notification of the dispute to any person who provided any item of information in dispute." § 1681i(a)(2). Thus, in order to state a claim for negligent violation of section 1681i, a plaintiff must establish that: 1) his credit files contained inaccurate or incomplete information; 2) he directly notified the defendant of the inaccuracy; 3) the defendant failed to respond to the dispute; and 4) the defendant's failure to reinvestigate caused the plaintiff to suffer actual damages. See Taylor v. First Advantage Background Servs. Corp., 2016 WL 4762268, at *5 (N.D. Cal.); see also Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876, 891 (9th Cir. 2010); Gorman, 584 F.3d at 1156. The Ninth Circuit has held that, in order to state a claim against a CRA under § 1681i, a plaintiff must identify an actual inaccuracy in the credit report. Carvalho, 629 F.3d at 890; Dennis v. BEH-1, LLC, 520 F.3d 1066, 1069 (9th Cir. 2008).

Plaintiffs' 1AC does not allege sufficiently that Experian failed to respond to their dispute letters. In their original complaints, Dahlen and Marino alleged that "the most basic investigation required each CRA to send all relevant information via an ACDV to the furnishers which they did not do." Docket No. 62, March 29 Order 17 (quoting complaints). In its March 29 Order, the Court found this alternative pleading conclusory and noted that neither Plaintiff plead "any facts from which to infer that Experian failed to notify furnishers" nor identified "what relevant information from their dispute letters Experian allegedly failed to transmit." Id. In the 1AC, Plaintiffs jointly allege again, "The most basic investigation required each CRA to send all relevant information via an ACDV to the furnishers which they did not do." Docket No. 65, 1AC ¶ 169. Nor do Plaintiffs remedy the other defects. Accordingly, Plaintiffs' FCRA claims must be dismissed as to Experian.

The allegations in the 1AC are insufficient for reasons specific to Marino and Heath as well.

1. Marino

Marino alleges that his second credit report contained one inaccuracy, namely, that Defendant RoundPoint was reporting his account "with failure to pay listed in the 24 month payment history. Specifically in July of 2016." Id. ¶ 108. He alleges that since he filed for bankruptcy in June 2014 he "has made all of his regularly scheduled monthly payments to Roundpoint on time." Id. ¶ 100.

But Marino again has not alleged that his dispute letter put Experian on notice of this alleged inaccuracy. In the March 29 Order, the Court dismissed Marino's claim regarding this inaccuracy because he did "not allege that his dispute letter stated that he was current on his debt to RoundPoint." Docket 62, March 29 Order 16-17. In the 1AC, Marino alleges that his dispute letter "specifically put each Creditor on notice that Plaintiff had filed for bankruptcy and there should not be any late payments reported in the payment history," Docket No. 65, 1AC ¶ 104, but no more. Thus, he still has not alleged that his dispute letter put Experian on notice of the inaccuracy he alleges and his FCRA claim against Experian must fail.

2. Heath

Heath alleges that his second credit report contained four inaccuracies, which he alleges create an "entirely misleading picture" of his creditworthiness. Docket No. 65, 1AC ¶ 148. First, Defendant "USCB was reporting Plaintiff's account . . . as seriously past due and in active collection status." Docket No. 65, 1AC ¶ 139. This Court, in keeping with the overwhelming majority of the decisions issued by judges in this district, has rejected the theory that it constitutes an actionable inaccuracy under the FCRA to report a debtor's pre-bankruptcy delinquencies during the pendency of a bankruptcy proceeding prior to discharge. Docket No. 62, March 29 Order 6-7; Mortimer v. JP Morgan Chase Bank, Nat. Ass'n, No. C 12-1936 CW, 2012 WL 3155563, at *3 (N.D. Cal. Aug. 2, 2012).

Second, Heath alleges that "USCB has never updated the CII to D to illustrate to lenders that this account is in fact not collectable and Plaintiff's wages cannot be garnished by USCB for any amount whatsoever."5 Docket No. 65, 1AC ¶ 140. He alleges that had this indicator been updated his account would reflect a Chapter 13 Wage Earner Plan (WEP), which "alerts any potential lender that the account is no longer in a collectable status but is being handled by a Chapter 13 trustee." Id. ¶ 60. This Court and others in this district have found that it is not "inherently inaccurate under the FCRA" to violate credit reporting industry standards. Docket No. 62, March 29 Order 7; see also Mensah v. Experian Info. Sols., Inc., No. 16-CV-05689-WHO, 2017 WL 1246892, at *8 (N.D. Cal. Apr. 5, 2017); Mamisay v. Experian Info. Sols., Inc., 2017 WL 1065170, No. 16-CV-05684-YGR, at *6 (N.D. Cal. Mar. 21, 2017); Basconcello v. Experian Info. Sols., Inc., No. 16-CV-06307-PJH, 2017 WL 1046969, at *7 (N.D. Cal. Mar. 20, 2017); Mestayer v. Experian Info. Sols., Inc, 2016 WL 3383961, No. 15-CV-03645-EMC, at *2 (N.D. Cal. June 20, 2016).

An item in a credit report "can be `incomplete or inaccurate' within the meaning of the FCRA `because it is patently incorrect, or because it is misleading in such a way and to such an extent that it can be expected to adversely affect credit decisions.'" Gorman, 584 F.3d at 1163 (citation omitted). "This requires something more than the mere fact of noncompliance with an industry standard, although noncompliance may be relevant to whether reporting is `misleading.'" Basconcello, 2017 WL 1046969, at *7. For example, if a plaintiff's credit report includes notice of the bankruptcy filing in other places then it is less likely that the absence of an indicator on one account would be misleading. Id. Heath does not allege that his second credit report did not include any notice of his bankruptcy filing. Nor does he explain how the absence of the CII "D" code in and of itself renders his credit report meaningfully misleading, apart from the effect he alleges it would have on how his past delinquencies would be reported. Accordingly, Heath has not alleged sufficient facts to show that USCB's alleged failure to report the CII "D" indicator for his account rendered it materially misleading.

Third, "Defendant also continues to report failures to pay in the 24 month payment history despite Plaintiff being prohibited by law from making direct payments to Defendant. Specifically starting in July 2013 through May of 2014 Defendant reported a failure to pay each month," as well as from July 2014 through October 2016. Docket No. 65, 1AC ¶¶ 143-44. Heath filed for bankruptcy in July 2012 and his plan was confirmed in November of that year. A confirmed Chapter 13 bankruptcy plan may modify creditors' rights to collect on their claims. See 11 U.S.C. § 1322(b)(2); Jaras v. Experian Info. Sols., Inc., 2016 WL 7337540, at *4 (N.D. Cal.). Thus, it may be materially inaccurate to report failures to pay on pre-filing debts after a debtor's bankruptcy plan has been confirmed and payments are being made by the trustee, at least so long as the debtor makes payments to the trustee according to the plan. However, Heath does not allege that he has made all payments under his Chapter 13 plan nor that the trustee made all scheduled payments to USCB.

Fourth, Heath alleges, "Defendant has also failed to mark the account as disputed." Docket No. 65, 1AC ¶ 147. However, the simple "failure to report that a debt is disputed" is insufficient to establish liability; rather, "[t]he consumer must still convince the finder of fact that the omission of the dispute was" patently incorrect or materially misleading. Gorman, 584 F.3d at 1163. Heath has not established this because he has not sufficiently plead the three alleged inaccuracies discussed in the preceding paragraphs. Id.

Accordingly, Heath has not adequately plead that his second credit report contained an actual inaccuracy.

Heath pleads the following concerning the notification he provided to Experian:

Docket 65, 1AC ¶ 135. At the hearing, Heath's attorney represented that Heath's dispute letter identified each creditor's account that he alleged was reporting inaccurately. See Docket No. 62, March 29 Order 16; see also Mensah, 2017 WL 1246892, at *8. However, Heath does not clearly allege that Experian reported the alleged inaccuracies discussed above. See Docket No. 62, March 29 Order 16. Furthermore, as discussed, Heath has not sufficiently alleged facts to substantiate those inaccuracies in his complaint, nor has he alleged that his dispute letter did so.

CONCLUSION

For the foregoing reasons, Experian's Motions to Dismiss are GRANTED (Docket Nos. 70 & 74). Dismissal as to Marino is with prejudice because he has had a previous opportunity to amend his complaint and the Court concludes that further amendment would be futile. Dismissal as to Heath is with leave to amend consistently with this Order within twenty-one days. Any motion to dismiss that follows will be decided on the papers.

IT IS SO ORDERED.