Aragon v. Experian Data Corporation

Opinion

1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 SOUTHERN DISTRICT OF CALIFORNIA 9 10 DANIEL ARAGON, Case No. 25-cv-0814-BAS-SBC 11 Plaintiff, ORDER: 12 v. 1. GRANTING MOTION FOR LEAVE TO PROCEED IN 13 EXPERIAN DATA CORPORATION, FORMA PAUPERIS 14 Defendant. (ECF No. 2), 15 2. SCREENING COMPLAINT 16 (ECF No. 1), 17 3. GRANTING MOTION FOR LEAVE TO FILE 18 ELECTRONICALLY 19 (ECF No. 3), 20 4. SEALING EXHIBITS TO THE 21 COMPLAINT 22 23 Plaintiff Daniel Aragon files this action in federal court claiming numerous 24 violations of the Fair Credit Reporting Act, California’s Unfair Competition Law, and 25 negligent infliction of emotional distress against Defendant Experian Information 26 27 28 1 Solutions, Inc. Aragon requests in forma pauperis (“IFP”) status (ECF No. 2) and asks for 2 permission to file documents electronically (ECF No. 3). 3 I. ANALYSIS 4 A. Request to Proceed IFP 5 All parties instituting any civil action, suit, or proceeding in a district court of the 6 United States, except an application for writ of habeas corpus, must pay a filing fee. See 7 28 U.S.C. § 1914(a). A complaint filed by a plaintiff proceeding IFP is subject to screening 8 under 28 U.S.C. § 1915(e)(2). Calhoun v. Stahl, 254 F.3d 845, 845 (9th Cir. 2001) (per 9 curiam). This provision requires the court to review the complaint and dismiss the action 10 if it: “(i) is frivolous or malicious; (ii) fails to state a claim on which relief may be granted; 11 or (iii) seeks monetary relief against a defendant who is immune from such relief.” 28 12 U.S.C. § 1915(e)(2). 13 Under 28 U.S.C. § 1915, indigency is the benchmark for whether a plaintiff may 14 proceed IFP. The determination of indigency falls within the district court’s sound 15 discretion. See Cal. Men’s Colony v. Rowland, 939 F.2d 854, 858 (9th Cir. 1991) (holding 16 that “[s]ection 1915 typically requires the reviewing court to exercise its sound discretion 17 in determining whether the affiant has satisfied the statute’s requirement of indigency”), 18 rev’d on other grounds, 506 U.S. 194 (1993). A party need not be completely destitute to 19 satisfy the IFP indigency threshold. See Adkins v. E.I. DuPont de Nemours & Co., 335 20 U.S. 331, 339–40 (1948). To qualify for IFP status, “an affidavit is sufficient which states 21 that one cannot because of his poverty pay or give security for the costs . . . and still be 22 able to provide himself and dependents with the necessities of life.” Id. at 339. However, 23 “care must be employed to assure that federal funds are not squandered to underwrite, at 24 public expense, . . . the remonstrances of a suitor who is financially able, in whole or in 25 26 1 Aragon names “Experian Data Corporation” as the defendant in the Complaint (ECF No. 1), but 27 Experian has since informed the Court that it is appropriately identified as “Experian Information Solutions, Inc.” (ECF No. 6). Plaintiff may correct this mistake by using the appropriate name if and when 28 1 material part, to pull his own oar.” Temple v. Ellerthorpe, 586 F. Supp. 848, 850 (D.R.I. 2 1984). District courts, therefore, tend to reject IFP applications where the applicant can 3 pay the filing fee with acceptable sacrifice to other expenses. See Skylar v. Saul, No. 19- 4 CV-1581-NLS, 2019 WL 4039650, at *3 (S.D. Cal. Aug. 27, 2019). 5 Aragon lists income of $3,007–$4,150 a month. He lists monthly expenses of 6 $5,038. (ECF No. 2.) Thus, this Court GRANTS his request to proceed IFP. 7 B. Sua Sponte Screening 8 Under 28 U.S.C. § 1915(e)(2)(B), courts must sua sponte dismiss IFP complaints, 9 or any portions thereof, which are frivolous, malicious, fail to state a claim, or which seek 10 damages from defendants who are immune. 28 U.S.C. § 1915(e)(2)(B); see Lopez v. Smith, 11 203 F.3d 1122, 1126–27 (9th Cir. 2000) (en banc) (“[S]ection 1915(e) not only permits but 12 requires a district court to dismiss an [IFP] complaint that fails to state a claim.”); Chavez 13 v. Robinson, 817 F.3d 1162, 1167–68 (9th Cir. 2016) (noting that § 1915(e)(2)(B) 14 “mandates dismissal—even if dismissal comes before the defendants are served”), as 15 amended on reh’g (Apr. 15, 2016). “[T]he provisions of 28 U.S.C. § 1915(e)(2)(B) are not 16 limited to [complaints filed by] prisoners,” but extend to all IFP pleadings. Calhoun v. 17 Stahl, 254 F.3d 845, 845 (9th Cir. 2001) (per curiam). 18 “The standard for determining whether a plaintiff has failed to state a claim upon 19 which relief can be granted under § 1915(e)(2)(B)(ii) is the same as the Federal Rule of 20 Civil Procedure 12(b)(6) standard for failure to state a claim.” Watison v. Carter, 668 F.3d 21 1108, 1112 (9th Cir. 2012). Rule 12(b)(6) requires a complaint to “contain sufficient factual 22 matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft 23 v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 24 570 (2007)). “Determining whether a complaint states a plausible claim for relief [is] . . . 25 a context-specific task that requires the reviewing court to draw on its judicial experience 26 and common sense.” Id. 27 First, this Court has subject-matter jurisdiction over this action pursuant to federal 28 question jurisdiction and supplemental jurisdiction. 28 U.S.C. §§ 1331, 1367(a). Venue is 1 also proper pursuant to 28 U.S.C. § 1391. The Court now turns to the substance of 2 Plaintiff’s claims. 3 In his Complaint, Plaintiff alleges that, from December 2022 until December 2023, 4 Defendant negligently and willfully violated the Fair Credit Reporting Act (“FCRA”). 5 Inaccuracies in his credit report have negatively affected his credit score, which has led to 6 him being denied credit opportunities. Accordingly, Plaintiff requests injunctive relief, 7 compensatory damages, and punitive damages under the FCRA, the California Unfair 8 Competition Law (“UCL”), and negligent infliction of emotional distress. 9 1. Fair Credit Reporting Act (Claims I – VI) 10 Aragon brings claims under two sections of the FCRA and therefore the Court 11 analyzes Plaintiff’s claims as they relate to violations of these two sections of the FCRA. 12 The FCRA was enacted “to ensure fair and accurate credit reporting, promote 13 efficiency in the banking system, and protect consumer privacy.” Gorman v. Wolpoff & 14 Abramson, LLP, 584 F.3d 1147, 1153 (9th Cir. 2009) (quoting Safeco Ins. Co. of Am. v. 15 Burr, 551 U.S. 47, 52 (2007)). The statute prohibits the inclusion of certain information in 16 consumer credit reports and mandates procedural safeguards. 15 U.S.C. §§ 1681c-1(a)(1), 17 1681i(a). For instance, “[u]nder § 1681i of the FCRA, a [credit reporting agency] must 18 conduct a reasonable reinvestigation when a consumer disputes the accuracy of her credit 19 report and she contacts the [credit reporting agency] directly with her dispute.” Hamm v. 20 Equifax Info. Servs. LLC, No. CV-17-03821-PHX-JJT, 2018 WL 3548759, at *4 (D. Ariz. 21 July 24, 2018). 22 The FCRA provides for private causes of action for negligent and willful 23 noncompliance with these requirements. 15 U.S.C. §§ 1681n, 1681o. “For the purpose of 24 a motion to dismiss, courts have held that a plaintiff states a claim under § 1681i when she 25 alleges: (1) that her credit report contained an inaccuracy; (2) that she notified the [credit 26 reporting agency] of her dispute and requested a reinvestigation; and (3) that the [credit 27 reporting agency] did not remove the inaccuracy.” Hamm, 2018 WL 3548759, at *4. To 28 successfully allege a claim under Section 1681e a plaintiff must allege that (1) an 1 inaccuracy existed on his credit report (2) as the result of unreasonable procedures on the 2 defendant’s part (3) that caused him cognizable harm. Guimond v. Trans Union Credit Info. 3 Co., 45 F.3d 1329, 1333 (9th Cir. 1995). Courts have concluded that “general allegations 4 are sufficient to maintain a claim for willful violations of the FCRA.” Barrios v. Equifax 5 Information Services, LLC, No. CV 19-5009 PSG (JEMx), 2019 WL 7905897, at *5–6 6 (C.D. Cal. Oct. 28, 2019) (collecting cases). 7 Here, Plaintiff adequately pleads the elements of his two FCRA claims under 8 Sections 1681e and 1681i as well as Defendant’s willfulness. He alleges Defendant listed 9 incorrect information in his credit report that detrimentally affected his credit score. (ECF 10 No. 1 ¶¶ 6, 12, 17, 18, 28, 30, 32, 34; ECF No. 1-5, Ex. M.) Namely, in his credit report, 11 he noticed trade lines and credit accounts that do not belong to him. (ECF No. 1 ¶¶ 6, 10– 12 13, 15, 18, 31, 33.) Plaintiff then attempted to communicate with Defendant to dispute 13 these inaccuracies. (ECF No. 1 ¶¶ 10, 11.) While Experian responded to some of Plaintiff’s 14 disputes, it did not respond to all of them (id.), and it did not always resolve disputes within 15 the time period mandated by statute, 15 U.S.C. § 1681i(a)(1)(A). Further, it improperly 16 removed at least one item from Aragon’s credit report that should have remained. (ECF 17 No. 1 ¶¶ 17, 31.) Despite disputing these issues, many of the inaccuracies in Aragon’s 18 credit report persisted. (ECF No. 1-3, Ex. F; ECF No. 1-4, Exs. G, L.) These allegations 19 satisfy the elements of Section 1681i and 1681e claims. In addition, Plaintiff’s general 20 allegations of willfulness are sufficient at the pleading stage. See Hamm, 2018 WL 21 3548759, at *5 (“Because Plaintiff may allege conditions of the mind generally, Plaintiff's 22 allegations are sufficient to survive Defendant's [motion to dismiss].”). Thus, the 23 Complaint plausibly alleges these FCRA claims sufficient to meet the “low threshold” for 24 proceeding past screening. See Wilhelm v. Rotman, 680 F.3d 1113, 1123 (9th Cir. 2012). 25 2. California’s Unfair Competition Law (Claim VII) 26 To state a UCL claim, “a plaintiff must show either an (1) unlawful, unfair, or 27 fraudulent business act or practice, or (2) unfair, deceptive, untrue or misleading 28 advertising.” Lippitt v. Raymond James Fin. Servs. Inc., 340 F.3d 1033, 1043 (9th Cir. 1 2003), as amended (Sept. 22, 2003). “Because the UCL is written in the disjunctive, it 2 establishes three varieties of unfair competition—acts or practices which are unlawful, or 3 unfair, or fraudulent.” Letizia v. Facebook Inc., 267 F. Supp. 3d 1235, 1243 (N.D. Cal. 4 2017) (citation modified). 5 Because Plaintiff already states claims that Defendant has violated the FCRA, 6 Plaintiff has successfully pled at least the unlawfulness prong of the UCL, and this claim 7 thus survives screening. 8 3. Negligent Infliction of Emotional Distress (Claim VIII) 9 Plaintiff has not alleged facts to meet the elements of a negligent infliction of 10 emotional distress claim. A claim for negligent infliction of emotional distress is “not an 11 independent tort but is the tort of negligence.” Marlene F. v. Affiliated Psychiatric Med. 12 Clinic, Inc., 48 Cal. 3d 583, 588 (1989) (citation omitted). Thus, a claim for negligent 13 infliction of emotional distress requires the plaintiff to establish the traditional elements of 14 duty, breach of duty, causation, and damages, as well as show that he or she has suffered 15 “serious” emotional distress. Wong v. Jing, 117 Cal. Rptr. 3d 747, 767–68 (Cal. Ct. App. 16 2010). Plaintiff does not allege these elements in his Complaint and therefore this claim is 17 DISMISSED without prejudice. 18 C. Motion for Leave to File Electronically 19 Since Aragon represents that he has the proper equipment to file electronically, and 20 he agrees to follow all rules and policies in the CM/ECF Administrative Policies and 21 Procedures Manual (see ECF No. 3), the Motion for Leave to File Electronically is 22 GRANTED. 23 D. Sua Sponte Sealing 24 Plaintiff attached a number of exhibits containing personally identifiable 25 information to his Complaint. (ECF Nos. 1-3, 1-4.) The Southern District of California 26 Electronic Case Filing Administrative Policies and Procedures Manual requires parties 27 redact “social security numbers, the names of minor children, dates of birth, [and] financial 28 account numbers.” Section 1.h. Plaintiff subsequently filed redacted versions of these 1 exhibits on the docket. (ECF No. 5.) Because the exhibits as attached to the Complaint 2 ||contain financial account numbers and other sensitive information, the Court sua sponte 3 ||SEALS them. Should Plaintiff seek to redact such sensitive information in the future, he 4 should file the required Motion to Seal as discussed in this Court’s Standing Order for Civil 5 || Cases, Section 5.A. 6 CONCLUSION 7 In light of the foregoing, the Court: 8 1) GRANTS Plaintiff's application to proceed IFP. (ECF No. 2.) 9 2) DISMISSES with leave to amend Aragon’s claim for negligent 10 infliction of emotional distress. All other claims survive screening. Any 11 amended complaint must be filed no later than July 2, 2025. The Court 12 notes that this amended complaint will “supersede the original.” Hal 13 Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1546 (9th 14 Cir. 1989) (citation modified). So, any amended complaint “must be 15 complete in itself without reference to the superseded pleading.” CivLR 16 15.1 (a). 17 3) GRANTS Plaintiff's Motion for Leave to File Electronically (ECF No. 18 3). Plaintiff must register as a user with the Clerk’s Office and as a 19 subscriber to PACER within ten days of this Order. 20 4) SEALS the exhibits to Plaintiff's Complaint at ECF numbers 1-3 and 21 1-4. 22 IT IS SO ORDERED. 23 24 || DATED: June 4, 2025 ( yillaa (Diyphan A 5 H n. Cynthia Bashant, Chief Judge United States District Court 26 27 28