White v. Portfolio Recovery Associates LLC

Background

This was the second round of briefing on Capital One Bank (USA), N.A.’s motion to dismiss Todd Christopher White’s first amended complaint. White represented himself. The court had previously dismissed his initial complaint but allowed him to amend all claims.

The first amended complaint asserted three causes of action: violations of the Fair Credit Reporting Act, violations of the Fair Debt Collection Practices Act, and violations of California’s Unfair Competition Law. The order addressed Capital One’s alleged conduct. Portfolio Recovery Associates LLC was the remaining defendant.

Fair Credit Reporting Act claim

The court explained that a claim against a company that supplies information to a credit-reporting agency must plausibly allege inaccurate reporting, notice to the company of the dispute, and resulting damages.

White alleged that Equifax reports contained inaccurate information about a purported bankruptcy discharge and that he paid money to obtain copies of credit reports. The court found that the amended complaint did not connect the Capital One debt to the bankruptcy reporting, explain why the Capital One debt itself was inaccurately reported, or allege that Capital One received notice of a dispute about inaccurate reporting. The court granted Capital One’s motion to dismiss the Fair Credit Reporting Act claim and dismissed the claim without leave to amend because further amendment would be futile.

Fair Debt Collection Practices Act claim

The court found that the amended complaint improved on the initial complaint by alleging that Capital One was a debt collector and attaching correspondence and statements allegedly sent by Capital One. But White still did not allege facts showing that Capital One engaged in prohibited collection activity during an active Chapter 7 bankruptcy stay.

White alleged that he filed a voluntary bankruptcy petition but acknowledged that no action actually commenced because of defects in the paperwork. The court concluded that, without a bankruptcy proceeding, no automatic stay would have issued. It therefore granted Capital One’s motion to dismiss the Fair Debt Collection Practices Act claim without leave to amend.

California Unfair Competition Law claim

The court dismissed the Unfair Competition Law claim without leave to amend. To the extent the claim was based on the same conduct alleged under the Fair Credit Reporting Act or Fair Debt Collection Practices Act, it failed for the reasons stated for those claims. To the extent it relied on other conduct, White had not alleged sufficient facts showing that Capital One engaged in an unlawful, unfair, or fraudulent business practice or in unfair, deceptive, untrue, or misleading advertising.

Disposition and other orders

Judge Yvonne Gonzalez Rogers granted Capital One’s motion to dismiss the first amended complaint without leave to amend and dismissed Capital One from the case. The order did not resolve claims against Portfolio Recovery. Because Portfolio Recovery had answered the initial complaint but not the amended complaint, the court ordered it to respond to the amended complaint by February 28, 2020, without raising arguments that it could have raised earlier.

The court also set a case-management conference for March 23, 2020, and referred the action to the court’s Alternative Dispute Resolution Unit for a telephone conference about possible mediation, settlement, early neutral evaluation, or another court-sponsored process.