White v. Portfolio Recovery Associates LLC

Background

Todd Christopher White filed a Chapter 7 bankruptcy petition in 2015. The complaint alleged that Equifax’s consumer reports inaccurately described his bankruptcy as discharged, although the bankruptcy court’s docket attached to the complaint showed that the court later vacated an order dismissing the bankruptcy case. White alleged that he paid money to obtain multiple copies of his credit reports.

The credit report listed Capital One Bank, N.A. as the original creditor on a debt and Portfolio Recovery Associates LLC as the collection agency. White alleged that the debt was disputed. He asserted three claims against Capital One: a claim under the Fair Credit Reporting Act (FCRA) for inaccurate reporting or failure to reasonably investigate a disputed record; a claim under the Fair Debt Collection Practices Act (FDCPA) for false representations and failure to report that the debt was disputed; and a claim under California’s Unfair Competition Law (UCL).

Rule 12(b)(6) standard

Capital One moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint does not state a legally sufficient claim. The court generally accepts well-supported factual allegations as true at this stage, but does not have to accept conclusory allegations or unreasonable inferences. Because White was representing himself, the court construed his complaint liberally and allowed amendment unless the defects could not be cured.

FCRA claim

To state an FCRA claim against a furnisher of credit information, a plaintiff must allege inaccurate reporting, notice of the dispute, and damages caused by the inaccurate reporting. The court held that White’s complaint did not allege a connection between the bankruptcy reporting and the Capital One debt. It also did not allege why the Capital One debt itself was inaccurately reported—for example, that the debt was not his, that the amount or dates were wrong, or that the debt was too old to appear on the report.

The court further found that White alleged damages from the bankruptcy reporting, but not damages caused by Capital One’s conduct as a furnisher of information. The court therefore dismissed the FCRA claim, while allowing White to amend it by alleging the nature of any inaccurate Capital One reporting and the resulting harm.

FDCPA claim

The FDCPA generally prohibits debt collectors from making false or misleading statements and engaging in specified abusive or unfair practices. White alleged that Portfolio Recovery Associates was a debt collector but described Capital One as a creditor. The court found that the complaint did not include facts showing that Capital One and Portfolio Recovery Associates acted jointly as debt collectors, that Capital One used Portfolio Recovery Associates to collect an improper debt, or that Capital One itself engaged in debt collection.

The court dismissed the FDCPA claim because White had not alleged sufficient facts showing that Capital One was a debt collector. It allowed amendment, requiring any amended complaint to allege facts demonstrating that Capital One qualified as a debt collector under the FDCPA.

UCL claim

White based his UCL claim on alleged violations of the FCRA and FDCPA. Because the court found that the complaint did not adequately support those claims, and because it included no factual allegations beyond the statutory elements of a UCL claim, the court dismissed the UCL claim. The court also found that any fraud-based UCL allegations lacked the required specifics about who committed the misconduct, what occurred, when and where it occurred, and how it was carried out. The court allowed amendment.

Disposition

Judge Yvonne Gonzalez Rogers granted Capital One’s motion to dismiss with leave to amend as to White’s FCRA, FDCPA, and UCL claims. The court set December 16, 2019, as the deadline for an amended complaint if White chose to file one. The order did not address the claims against Portfolio Recovery Associates, and it noted that claims against Trans Union LLC and Equifax Inc. had previously been dismissed with prejudice by stipulation.