Khankin v. JLR San Jose, LLC

Background

Darya Khankin and Eliyahu Khankin sued JLR San Jose, LLC and JPMorgan Chase, Inc. over alleged false credit reporting connected to the plaintiffs’ lease of a Land Rover. JLR and Chase each moved to dismiss the amended complaint. The plaintiffs did not respond to either motion. The court ruled without oral argument.

Fair Credit Reporting Act claims

The plaintiffs alleged that both defendants violated 15 U.S.C. § 1681s-2(a) and (b). The court dismissed the subsection (a) claims as a matter of law because that provision’s duty to provide accurate information is enforceable only by federal or state agencies, not through a private lawsuit.

The court also dismissed the subsection (b) claims against both defendants. That provision requires a furnisher of credit information to investigate after receiving notice from a credit-reporting agency that a consumer disputes the information. The plaintiffs alleged that they notified Chase through its designated counsel, but did not allege that a credit-reporting agency notified Chase. They also did not allege that they complained to a credit-reporting agency, that Chase failed to investigate, or that its investigation was unreasonable. As to JLR, the plaintiffs likewise did not allege that a credit-reporting agency notified JLR of a dispute or that JLR failed to conduct a reasonable investigation.

Other claims against JLR

The court dismissed the defamation claim. To the extent the claim concerned JLR’s role as a credit-information furnisher, the court held that the Fair Credit Reporting Act preempted it. To the extent it concerned conduct outside that statute, the plaintiffs had not identified the allegedly defamatory statement with sufficient specificity.

The court dismissed the California Unfair Competition Law claim because the plaintiffs based it on alleged violations that the court had previously determined were preempted by the Fair Credit Reporting Act.

The court dismissed the independent declaratory-relief claim. The requested declaration—that the lease was rescinded and that the plaintiffs owed no obligations—was not an independent cause of action and was duplicative or unnecessary when tied to other claims.

The court also dismissed the claim under California Civil Code § 1785.25(a), which prohibits furnishing information to a consumer-reporting agency when the furnisher knows or should know the information is incomplete or inaccurate. The credit reports attached to the amended complaint identified JPMCB–Auto Finance as the source of the disputed information and did not mention JLR. The plaintiffs pleaded no other facts showing that JLR furnished information to a credit-reporting agency.

Leave to amend and disposition

Although leave to amend is generally granted generously, the court found that any amendment would be futile. The plaintiffs had already amended once; their amended complaint admitted they did not know what information the credit-reporting agencies provided to Chase or JLR; the defamation and Unfair Competition Law claims were preempted; the declaratory-relief claim failed as a matter of law; and the exhibits contradicted the allegation that JLR furnished the reported information. The court also noted that the plaintiffs failed to respond to the motions.

The court granted JLR’s motion to dismiss and granted Chase’s motion to dismiss without leave to amend. Because all named defendants had been dismissed, the court stated that a separate judgment would follow.