United States District Court, D. Colorado
ORDER
RAYMOND P. MOORE, UNITED STATES DISTRICT JUDGE
This
matter is before the Court on the October 9, 2018,
Recommendation of United States Magistrate Judge Kristen L.
Mix (ECF No. 41) to grant Defendants' motion to dismiss
(ECF No. 10). Plaintiff objected to the recommendation (ECF
No. 46), and Defendants responded (ECF No. 49). The
magistrate judge's recommendation is incorporated herein
by reference. See 28 U.S.C. § 636(b)(1)(B);
Fed.R.Civ.P. 72(b).
I.
LEGAL STANDARDS
The
Court reviews de novo any part of a magistrate judge's
recommendation that has been properly objected to.
Fed.R.Civ.P. 72(b)(3). An objection is proper if it is timely
and specific enough to enable the “district judge to
focus attention on those issues-factual and legal-that are at
the heart of the parties' dispute.” United
States v. One Parcel of Real Property, 73 F.3d 1057,
1059 (10th Cir. 1996). In the absence of a timely and
specific objection, “the district court may review a
magistrate's report under any standard it deems
appropriate.” Summers v. Utah, 927 F.2d 1165,
1167 (10th Cir. 1991); see also Fed. R. Civ. P. 72
Advisory Committee's Note (“When no timely
objection is filed, the court need only satisfy itself that
there is no clear error on the face of the record in order to
accept the recommendation.”).
In
evaluating a motion to dismiss under Fed.R.Civ.P. 12(b)(6), a
court must accept as true all well-pleaded factual
allegations in the complaint, view those allegations in the
light most favorable to the plaintiff, and draw all
reasonable inferences in the plaintiff's favor.
Brokers' Choice of Am., Inc. v. NBC Universal,
Inc., 757 F.3d 1125, 1136 (10th Cir. 2014); Mink v.
Knox, 613 F.3d 995, 1000 (10th Cir. 2010). However,
conclusory allegations are insufficient. Cory v. Allstate
Ins., 583 F.3d 1240, 1244 (10th Cir. 2009). The
complaint must allege a “plausible” right to
relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544,
569 n.14 (2007); see also Id. at 555 (“Factual
allegations must be enough to raise a right to relief above
the speculative level.”). To determine whether a claim
is plausible, a court considers “the elements of the
particular cause of action, keeping in mind that the Rule
12(b)(6) standard doesn't require a plaintiff to set
forth a prima facie case for each element.” George
v. Urban Settlement Servs., 833 F.3d 1242, 1247 (10th
Cir. 2016) (quotation omitted).
II.
BACKGROUND
According
to the complaint, Plaintiff leased a vehicle under a contract
that was assigned to Hyundai Motor Finance
(“HMF”). (ECF No. 1 at ¶¶ 9, 14.)
Plaintiff did not miss any lease payments. (Id. at
¶ 16.) When Plaintiff returned the vehicle, HMF assessed
an additional $623.42 for excess wear and use, a $400
“disposition fee, ” and $81.87 in taxes.
(Id. at ¶ 20.) Plaintiff paid the $623.42 but
not the other amounts. (Id. at ¶¶ 29, 35.)
Plaintiff was later notified that the consumer report
maintained by Defendants reported an overdue balance of $481.
(Id. at ¶ 38.) This lowered Plaintiff's
credit score and resulted in the closure of his business
credit card account. (Id. at ¶¶ 42, 43.)
Plaintiff
asserts that Defendants violated two provisions of the Fair
Credit Report Act (“FCRA”). First, he contends
that Defendants violated 15 U.S.C. § 1681i(a)(1)(A),
which requires a consumer reporting agency to “conduct
a reasonable reinvestigation to determine whether the
disputed information is inaccurate” when a consumer
notifies it of a dispute. Second, he contends that Defendants
violated 15 U.S.C. § 1681i(a)(7), which requires a
consumer reporting agency to provide, at the consumer's
request, a description of the procedure used to determine the
accuracy and completeness of the information in the
consumer's file.
The
magistrate judge determined that Plaintiff's first claim
fails because he does not allege that Defendants reported
inaccurate information, and even though he contends he is not
obligated to pay the additional amount assessed by HMF,
Defendants were not required to resolve that underlying legal
dispute. The magistrate judge further determined that
Plaintiff's second claim fails because he does not allege
that Defendants reported inaccurate information and
“Defendants are not required to provide descriptions of
procedures involving accurate information.” (ECF No. 41
at 11.)
Plaintiff
does not object to the factual background as recited by the
magistrate judge. He argues that the magistrate judge erred
by (1) not applying the correct definition of inaccurate; (2)
misapplying case law defining the reasonableness of
reinvestigations; (3) requiring Plaintiff to allege that
Defendants found the information to be inaccurate; (4)
concluding that he alleged Defendants had found the
information to be accurate; (5) ruling that amendment of the
complaint would be futile; and (6) imposing a requirement
that the information being reinvestigated be inaccurate to
trigger Defendants' obligation to provide a description
of its reinvestigation procedure.
III.
DISCUSSION
“[C]redit
reporting agencies are not tribunals. They simply collect and
report information furnished by others. Because [credit
reporting agencies] are ill equipped to adjudicate contract
disputes, courts have been loath to allow consumers to mount
collateral attacks on the legal validity of their debts in
the guise of FCRA reinvestigation claims.” Carvalho
v. Equifax Info. Servs., LLC, 629 F.3d 876, 891 (9th
Cir. 2010). Under the FCRA, “[a] reasonable
investigation . . . does not require [credit reporting
agencies] to resolve legal disputes about the validity of the
underlying debts they report.” Wright v. Experian
Info. Sols., Inc., 805 F.3d 1232, 1242 (10th Cir. 2015).
Thus, although Plaintiff undoubtedly has a dispute with HMF,
he cannot collaterally attack its assessment of a disposition
fee and taxes by bringing a FCRA claim against Defendants.
With
this principle in mind, Plaintiff's objections are easily
disposed of. First, the fact that Plaintiff disagrees with
HMF's assessment does not render it
“inaccurate.” Instead, whether HMF's
assessment is valid turns of questions that can only be
resolved by a court of law. That means the dispute does
not turn on a factual inaccuracy that could have
been uncovered by a reasonable reinvestigation. See
DeAndrade v. Trans Union LLC, 523 F.3d 61, 68 (1st Cir.
2008) (stating that had a court ruled the underlying mortgage
invalid, then plaintiff would have grounds for a
potential FCRA claim). Second, a reasonable investigation
does not entail resolving an underlying legal dispute.
“[R]einvestigation claims are not the proper vehicle
for collaterally attacking the legal validity of consumer
debts.” Carvalho, 629 F.3d at 892. Third, in
the absence of inaccurate information, a claim under §
1681i is not cognizable. See DeAndrade, 523 F.3d at
67 (“[W]ithout a showing that the reported information
was in fact inaccurate, a claim brought under § 1681i
must fail.”). Fourth, in the absence of inaccurate
information being reported, it is immaterial whether
Defendants found the information to be accurate. See
Id. (“The FCRA is intended to protect consumers
against the compilation and dissemination of
inaccurate credit information.”). Fifth,
Plaintiff has identified no additional facts that would be
sufficient to state a FCRA claim. Sixth, in the absence of
inaccurate information, a description of the reinvestigation
serves no purpose. See id.
Plaintiffs
objections are overruled. The Court further concludes that
the magistrate judge's analysis was thorough and sound
with respect to the determinations Plaintiff did not object
to. And the Court discerns no clear error on the face of the
record. ...