Zellerino v. Roosen, No. SACV16485JLSAJWX, 2016 WL 10988763, at *1–10 (C.D. Cal. Aug. 22, 2016)
PROCEEDINGS: (IN CHAMBERS) ORDER (1) DENYING ARMORED’S MOTION TO DISMISS (Doc. 56), (2) GRANTING DATAMYX’S MOTION TO DISMISS (Doc. 61), AND (3) GRANTING EQUIFAX’S MOTION TO DISMISS (Doc. 62)
JOSEPHINE L. STATON, UNITED STATES DISTRICT JUDGE
*1 Before the Court are three motions to dismiss: the first, filed by Defendants Andrew Roosen, Salem Shubash, and Armored Investment Group (collectively, the “Armored Defendants”); the second, filed by Defendant Datamyx LLC; and the third, filed by Defendant Equifax Information Services, LLC. (Armored MTD, Doc. 56; Datamyx MTD, Doc. 61; Equifax MTD, Doc. 62.) Plaintiff Janice Zellerino opposes each Motion. (Equifax Opp., Doc. 80; Datamyx Opp., Doc. 81; Armored Opp., Doc. 82.) Defendants each replied. (Equifax Reply, Doc. 86; Datamyx Reply, Doc. 87; Armored Reply, Doc. 89.) Having considered the parties’ briefing, heard oral argument, and taken the matter under submission, the Court (1) DENIES Armored Defendants’ Motion, (2) GRANTS Datamyx’s Motion, and (3) GRANTS Equifax’s Motion.
A. Alleged FCRA Violations
Zellerino’s First Amended Complaint sets forth the following allegations:
In the wake of financial difficulties, Zellerino, a Michigan citizen, declared Chapter 7 bankruptcy. (FAC ¶¶ 1, 25.) After her bankruptcy was discharged, Zellerino requested a copy of her credit report from Equifax. (Id. ¶ 26.) Upon receiving her report, Zellerino noticed that “Amored [sic] Investment Group”1 had obtained a consumer report “containing her personal information.” (Id.) In front of the entry relating to Armored, the credit report showed the notation “PRM.” (Id. ¶ 28.) According to the FAC, Zellerino had not “requested credit or services from, or otherwise authorized her personal information to be accessed by Armored[.]” (Id.) Moreover, “Armored did not ever tender a firm offer of credit” to Zellerino. (Id. ¶ 30.) As alleged in the FAC, “Armored obtained [Zellerino’s personal information] illegally for direct marketing purposes.” (Id. ¶ 31.)
Armored is a company “organized in California” that is engaged “in the ‘debt settlement’ business.” (Id. ¶¶ 12, 32.) In turn, Equifax2, a “Georgia limited liability company,” is alleged to be “one of the three largest [credit reporting agencies]” that “organizes, assimilates and analyzes data on more than 600 million consumers and more than 80 million businesses worldwide.” (Id. ¶¶ 6, 35.) Finally, Datamyx, “a Delaware limited liability company that maintains its principal place of business in Florida and does business in all 50 states,” is alleged to be “the leading provider of risk-based, data driven marketing solutions.” (Id. ¶¶ 5, 37.) According to the FAC, Datamyx provides its customers with “on-demand access” to a “nationwide database ... [of] targeted information on 220 million consumers[,]” including data drawn from Datamyx’s “Tri-Bureau Credit Platform.” (Id.) As part of this business, Datamyx engages “in continuous and systematic marketing of consumer reports in California, including the sale of [Zellerino’s] ... consumer reports.” (Id. ¶ 38.) On information and belief, the FAC asserts that “Datamyx sells this information to marketers, including debt-settlement companies like Armored[.]” (Id. ¶ 37.) Moreover, “[a]t its customers’ request, Datamyx can screen the lists to provide information on, for example, only customers with financial difficulties, making them attractive targets for debt settlement companies’ abusive marketing practices.” (Id. ¶ 40.)
*2 Zellerino alleges that, in 2015, she “discovered that Datamyx and Equifax operate under a sales agent agreement or master services agreement whereby Datamyx, acting as Equifax’s agent, generates lists of consumer information provided by Equifax and then sells those lists on Equifax’s behalf.” (Id. ¶ 39.) According to the FAC, “[t]his agency relationship was not disclosed to third parties” and “Equifax conceal[ed] its relationship with Datamyx by deliberately failing to disclose to consumers that Datamyx had procured copies of their reports[.]” (Id.)
Also in 2015, Zellerino “discovered that Datamyx, as Equifax’s agent and/or as a reseller, sold such lists to Roosen and Shubash, acting on behalf of Armored, pursuant to a subscriber agreement.” (Id. ¶ 42.) Zellerino alleges that the subscriber agreement was entered into in California. (Id. ¶ 43.) Separately, these “consumer reports were sold pursuant to an end-user or subscriber agreement between Equifax and Armored[,]” which, per its terms, was “to be performed in California.” (Id. ¶ 44.) Finally, Zellerino alleges that Equifax previously “settled with the FTC and agreed to pay the agency $382,803” in connection with its practice of selling “prescreened lists of consumers who were late on their mortgage payments – which were consumer reports – to another company that then sold this information to companies that used it to pitch fraudulent debt relief services to consumers in financial distress.” (Id. ¶¶ 50-51.)
The FAC alleges a close relationship between Armored, on one hand, and Roosen and Shubash, on the other. Specifically, Zellerino alleges that Roosen and Shubash “exercised pervasive and continual control over the day-to-day operations of Armored such that Armored operated at all relevant times as an agent of Roosen and Shubash.” (Id. ¶ 7.) As alleged in the FAC, “Armored operated at all relevant times as the alter ego of Roosen and Shubash because there existed a unity of interest between Roosen and Shubash and Armored” such that “the separate personalities of the corporation and the individuals no longer existed.” (Id. ¶ 8.) Specifically, Zellerino alleges that “Roosen and Shubash entered into an agreement with Equifax and Datamyx on behalf of Armored in their own names, holding themselves out as its principals.” (Id. ¶ 7.) Moreover, according to the FAC, Roosen and Shubash used the same office as Armored, “and used Armored as a mere shell, instrumentality, or conduit for their business operations.” (Id. ¶ 8.) Finally, “all of Armored’s stock was owned by Roosen and Shubash[.]” (Id.)
B. Prior Litigation and Procedural History
On July 11, 2014, Zellerino filed a putative class action in the Eastern District of Michigan. (Complaint, Zellerino v. Roosen et al., No. 2:14-cv-12715-DML-MJH, Dkt. No. 1 (E.D. Mich. July 11, 2014) (the “Michigan Action”).) That action, which arose out of the same factual basis as the instant case and was brought against Roosen, Shubash, and Armored, alleged two FRCA violations. (Id. ¶¶ 43-48.) In the Michigan Action, Zellerino alleged that she obtained a copy of her Equifax report on January 1, 2013. (Id. ¶ 14.) On July 29, 2015, the Michigan Action was dismissed on grounds that the court lacked personal jurisdiction. See Zellerino v. Roosen, 118 F. Supp. 3d 946, 953 (E.D. Mich. 2015).
On March 15, 2016, Zellerino filed a putative class action lawsuit on behalf of herself and three nationwide classes against Roosen, Shubash, Armored, Equifax, and Datamyx. (Complaint, Doc. 1.) On May 17, 2016, Zellerino filed the FAC.
The FAC contains the following causes of action: (1) violations of Sections 1681(b) and 1681e(a) of the Fair Credit Reporting Act (against Equifax and Datamyx); (2) violations of Section 1681e(e) of the FCRA (against Datamyx); (3) violations of Section 1681g of the FCRA (against Equifax); (4) violations of Section 1681b(f) of the FCRA (against the Armored Defendants); and 95) violations of Section 1681q of the FCRA (against the Armored Defendants). (FAC ¶¶ 74-107.) The instant Motions followed.
II. LEGAL STANDARD
A. Rule 12(b)(2)
*3 Rule 12(b)(2) allows a party to assert lack of personal jurisdiction as a defense by motion. Fed. R. Civ. P. (12)(b)(2). “Although the defendant is the moving party on a motion to dismiss [for lack of personal jurisdiction], the plaintiff bears the burden of establishing that jurisdiction exists.” Rio Props., Inc. v. Rio Int’l Interlink, 284 F.3d 1007, 1019 (9th Cir. 2002). “[I]n the absence of an evidentiary hearing, the plaintiff need only make ‘a prima facie showing of jurisdictional facts to withstand the motion to dismiss.’ ” Brayton Purcell LLP v. Recordon & Recordon, 606 F.3d 1124, 1127 (9th Cir. 2010) (quoting Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1154 (9th Cir. 2006)).
Generally, the court may consider the pleadings as well as any declarations submitted by the parties when deciding a motion to dismiss for lack of personal jurisdiction. See Data Disc. Inc. v. Systems Tech. Assocs., Inc., 557 F.2d 1280, 1285 (9th Cir. 1977). The “uncontroverted allegations in [the plaintiff’s] complaint must be taken as true, and conflicts between the facts contained in the parties’ affidavits must be resolved in [the plaintiff’s] favor.” Rio Props., 284 F.3d at 1019. In other words, “for the purpose of this [prima facie] demonstration, the court resolves all disputed facts in favor of the plaintiff.” Pebble Beach, 453 F.3d at 1154.
“In evaluating the appropriateness of personal jurisdiction over a nonresident defendant, [courts] ordinarily examine whether such jurisdiction satisfies the ‘requirements of the applicable state long-arm statute’ and ‘comport[s] with federal due process.’ ” Bauman v. DaimlerChrysler Corp., 644 F.3d 909, 919 (9th Cir. 2011) (alteration in original) (quoting Chan v. Soc’y Expeditions, Inc., 39 F.3d 1398, 1404-05 (9th Cir. 1994)). “Because California permits the exercise of personal jurisdiction to the full extent permitted by due process, [courts] need only determine whether jurisdiction over [a defendant] comports with due process.” Id. (internal citation and quotation marks omitted); see Cal. Civ. Proc. Code § 410.10 (“A court of this state may exercise jurisdiction on any basis not inconsistent with the Constitution of this state or of the United States.”). “For due process to be satisfied, a defendant, if not present in the forum, must have ‘minimum contacts’ with the forum state such that the assertion of jurisdiction ‘does not offend traditional notions of fair play and substantial justice.’ ” Pebble Beach, 453 F.3d at 1155 (quoting Int’l Shoe Co. v. State of Wash., Office of Unemp’t Comp. & Placement, 326 U.S. 310, 316 (1945)).
“Applying the ‘minimum contacts’ analysis, a court may obtain either general or specific jurisdiction over a defendant.” Doe v. Unocal Corp., 248 F.3d 915, 923 (9th Cir. 2001). “If the defendant’s activities in the forum are substantial, continuous and systematic, general jurisdiction is available; in other words, the foreign defendant is subject to suit even on matters unrelated to his or her contacts to the forum.” Id. On the other hand, “[a] court may exercise specific jurisdiction over a foreign defendant if his or her less substantial contacts with the forum give rise to the cause of action before the court.” Id. The Ninth Circuit applies a three-part test to determine whether a district court can exercise specific personal jurisdiction over a nonresident defendant:
(1) The non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws;
*4 (2) the claim must be one which arises out of or relates to the defendant’s forum-related activities; and
(3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e. it must be reasonable.
Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004) (quoting Lake v. Lake, 817 F.2d 1416, 1421 (9th Cir. 1987)). “The plaintiff bears the burden of satisfying the first two prongs of the test.” Id. “If the plaintiff succeeds in satisfying both of the first two prongs, the burden then shifts to the defendant to ‘present a compelling case’ that the exercise of jurisdiction would not be reasonable.” Id. (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477 (1985)). Where a Court is exercising specific jurisdiction over a defendant, “the fair warning that due process requires arises not at the time of the suit, but when the events that gave rise to the suit occurred.” Steel v. United States, 813 F.2d 1545, 1549 (9th Cir. 1987).
B. Rule 12(b)(6)
A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of the claims asserted in the complaint. See Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949-50 (2009). Rule 12(b)(6) is read in conjunction with Federal Rule of Civil Procedure Rule 8(a), which requires only “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). When evaluating a Rule 12(b)(6) motion, the district court must accept all material allegations in the complaint as true and construe them in the light most favorable to the non-moving party. Moyo v. Gomez, 32 F.3d 1382, 1384 (9th Cir. 1994).
To survive a motion to dismiss, a plaintiff must allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Iqbal, 129 S. Ct. at 1949 (quoting Twombly, 550 U.S. at 556). The issue on a motion to dismiss for failure to state a claim “is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims” asserted. Gilligan v. Jamco Dev. Corp., 108 F.3d 246, 249 (9th Cir. 1997) (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)). As the Ninth Circuit has clarified, a complaint must be (1) sufficiently detailed to give fair notice to the opposing party of the nature of the claim so that the party may effectively defend against it and (2) sufficiently plausible that it is not unfair to require the opposing party to be subjected to the expense of discovery. Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011).
C. Judicial Notice
The Armored Defendants and Datamyx each filed a request for the Court to take judicial notice of various documents. (Armored RJN, Doc. 58; Datamyx RJN, Doc. 61-2.) These requests relate to documents filed in the course of litigating Zellerino’s prior lawsuit against the Armored Defendants in the Eastern District of Michigan. (Armored RJN at 1-2 (concerning Zellerino’s initial complaint and two subsequent court orders); Datamyx RJN at 2-3 (concerning Zellerino’s initial complaint, an excerpt of her consumer report, and a subpoena served on Datamyx).) Pursuant to Federal Rule of Evidence 201, the Court may take judicial notice of matters of public record. See Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001). Moreover, “when a court takes judicial notice of another court’s opinion, it may do so ‘not for the truth of the facts recited therein, but for the existence of the opinion, which is not subject to reasonable dispute over its authenticity.” Id. at 690. Accordingly, the Court GRANTS these requests for the limited purpose of taking notice of the fact of these filings.
*5 The three Motions before the Court raise four arguments. First, Equifax and Datamyx contend this Court lacks personal jurisdiction over them. (Equifax MTD at 7; Datamyx MTD at 8.) Second, Datamyx and the Armored Defendants argue that Zellerino’s claims are time-barred under the FCRA. (Datamyx MTD at 11, Armored MTD at 6-7.) Third, the Armored Defendants contend that the allegations in the FAC are insufficient to establish individual liability as to Roosen and Shubash. (Armored MTD at 8-10.) Finally, the Armored Defendants assert that they are entitled to recover attorney’s fees because Zellerino’s action was brought in bad faith. (Id. at 10-12.) The Court considers each argument in turn.
A. Personal Jurisdiction Over Equifax and Datamyx
Equifax and Datamyx argue that the FAC must be dismissed because the Court cannot exercise personal jurisdiction over them. (Datamyx Mot. at 6-11; Equifax Mot. at 5-15.) As an initial matter, Zellerino fails to respond to the argument that the Court cannot exercise general personal jurisdiction over either Equifax or Datamyx, thereby conceding the point.3 Accordingly, the Court limits its analysis to the issue of specific personal jurisdiction.
In order to demonstrate specific personal jurisdiction, a plaintiff must make one of two showings: either (1) that the defendant “purposefully availed itself of the privilege of conducting activities in California,” or, in the alternative, (2) that the defendant “purposefully directed its activities toward California.” Schwarzenegger, 374 F.3d at 802. The Ninth Circuit has made clear that the latter of these standards – the so-called “purposeful direction” analysis – is “most often” used in actions sounding in tort. Id. Here, Zellerino alleges that Equifax and Datamyx violated the FCRA. (See generally FAC ¶¶ 74-107.) “When a consumer brings an action for violation of the disclosure provisions of the FCRA, the Act’s purpose of protecting consumer confidentiality is implicated.” Myers v. Bennett Law Offices, 238 F.3d 1068, 1074 (9th Cir. 2001). “In that respect, such cases are akin to invasion of privacy cases under state law[.]” Id. Under California law, invasion of privacy is a tort. See, e.g., Cort v. St. Paul Fire & Marine Is. Companies, Inc., 311 F.3d 979, 987 (9th Cir. 2002). Accordingly, consistent with the Ninth Circuit’s holding in Schwarzenegger and Myers, the Court applies the “purposeful direction” analysis to Zellerino’s FCRA claims. See also Taft v. Henley Enters., Inc., No. 15-cv-1658-JLS (JCGx), Dkt. No. 34 at 7 (C.D. Cal. Feb. 5, 2016) (applying the purposeful direction analysis to FCRA claims).4
*6 The Ninth Circuit “evaluate[s] purposeful direction under the three-part ‘effects’ test traceable to the Supreme Court’s decision in Calder v. Jones, 465 U.S. 783, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984).” Schwarzenegger, 374 F.3d at 803. Under this test, “the defendant allegedly [must] have (1) committed an intentional act, (2) expressly aimed at the forum state, (3) causing harm that the defendant knows is likely to be suffered in the forum state.” Id. (quoting Dole Food Co. v. Watts, 303 F.3d 1104, 1111 (9th Cir. 2002)).
Assuming, without deciding, that Zellerino can satisfy the first and second prongs of Calder’s three-part test, the Court finds that she cannot carry her burden as to the third prong. To satisfy Calder’s third requirement, Zellerino must demonstrate that Equifax and Datamyx’s “intentional acts” resulted in “harm that the defendant[s] [knew] [was] likely to be suffered in the forum state.” Yahoo! Inc. v. La Ligue Contre Le Racisme Et L’Antisemitisme, 433 F.3d 1199, 1206 (9th Cir. 2006.) To be clear, although “the ‘brunt’ of the harm need not be suffered in the forum state[,]” at a minimum, “a jurisdictionally sufficient amount of harm [is required.]” Id. at 1207. This requirement is met when the intentional acts at issue produce “foreseeable effects” in the forum state. See Brayton Purcell, 606 F.3d at 1130 (citing Bancroft, 223 F.3d 1082, 1087 (9th Cir. 2000)).
As discussed, the Ninth Circuit treats FCRA claims, like those at issue here, as analogous to common law invasion of privacy claims. Myers, 238 F.3d at 1068. In the context of invasion of privacy claims, the Ninth Circuit has found that “the primary damage [at issue] is the mental distress from having been exposed to public view[.]” Id. at 1074 (rejecting district court’s conclusion that “the injury occurred wherever one would access plaintiffs’ credit reports”). That is, the harm resulting from such invasion of privacy torts – specifically, the resulting mental distress – “can only be felt where plaintiff’s ‘sensibilities’ reside.” Id. (emphasis added) (citing Bils v. Nixon, Hargrave, Devans & Doyle, 880 P.2d 743, 746 (1994) (“[T]he only place an ‘event’ can occur constituting a violation of [an Arizona’s resident’s] right to privacy is [Arizona].”) ).5
*7 Here, it is undisputed that Zellerino is a resident of Wayne County, Michigan. (FAC ¶ 1.) Moreover, there is no evidence or argument to suggest that Zellerino has any connection to California, and, in fact, Zellerino concedes that the harm purportedly suffered occurred outside of California. (See generally FAC; Equifax Opp. at 2 (“It should be noted that Ms. Zellerino did originally file her claims in the forum where she lives and felt the effects of Equifax’s conduct – Michigan[.]”).) As a result, Zellerino has not alleged that “a jurisdictionally sufficient amount of harm” – or, in fact, any harm at all – occurred in California. Yahoo! Inc., 433 F.3d at 1206. Accordingly, Zellerino has failed to demonstrate that Equifax’s and Datamyx’s purported “intentional acts” had the effect of “causing harm that the [Defendants knew was] likely to be suffered in the forum state.” Schwarzenegger, 374 F.3d at 803. Therefore, Zellerino cannot demonstrate personal jurisdiction and the Court GRANTS both Equifax’s and Datamyx’s Motions.
B. FCRA Statute of Limitations
Next, the Armored Defendants and Datamyx contend that Zellerino’s claims are time-barred by the FRCA’s statute of limitations. (Datamyx MTD at 11, 14-15; Armored MTD at 6-8.) An action brought under the FCRA must be filed:
not later than the earlier of (1) 2 years after the date of discovery by the plaintiff of the violation that is the basis for such liability; or (2) 5 years after the date on which the violation that is the basis for such liability occurs.
15 U.S.C. § 1681p. In the Ninth Circuit, the FCRA’s two-year limitations period begins to run at the time of actual or constructive discovery. See Drew v. Equifax Information Services, LLC, 690 F.3d 1100, 1009 (9th Cir. 2012) (stating that constructive discovery requirement is generally read into discovery statutes). Constructive discovery in the context of an FCRA violation places “[t]he ultimate burden ... on the defendant to demonstrate that a reasonably diligent plaintiff would have discovered the facts constituting the violation[.]” Id. at 1110 (emphasis in original) (citation omitted). Additionally, the defendant must also show “how a reasonably diligent plaintiff would have discovered the violations.” Id.
The Armored Defendants argue that Zellerino discovered the “alleged improper access” of her credit report on January 1, 2013. (Armored MTD at 6-7.) According to the Armored Defendants, “[s]ince [Zellerino] has made a judicial admission that she was on actual notice of the alleged wrongful promotional inquiry on January 1, 2013 ... the applicable statute of limitations required [Zellerino] to initiate this litigation within two years of that date.” (Id. at 7.) Because Zellerino’s initial complaint in this action was filed on March 17, 2016, the Armored Defendants assert that her claims are time-barred under the FCRA. (Id.) For its part, Datamyx’s Motion raises similar arguments. (Datamyx Mot. at 13-15.)
In her Opposition brief, Zellerino argues that her FCRA claims against the Armored Defendants are premised on their accessing and using her credit report “without a Permissible Purpose.” (Armored Opp. at 4.)6 As a result, Zellerino contends, “[t]he Armored Defendants must show that [Zellerino] knew or should have known not just that they accessed her consumer report, but that they did so without a Permissible Purpose and under false pretenses.” (Armored Opp. at 6.) According to Zellerino, then, at the time she “received her consumer report listing, under ‘promotional inquiries,’ ‘Amored [sic] Investment Group,’ she had no way of knowing who ‘Amored [sic] Investment Group’ was, much less whether it had a Permissible Purpose for requesting her private credit information.” (Id. at 6-7.) Zellerino alleges she did not learn these relevant facts until the completion of her investigation on June 27, 2014. (Id. at 7.) Therefore, Zellerino contends, the instant action – initiated on March 15, 2016 – is timely. (Id.)
*8 Several factors support the conclusion that Defendants cannot carry their burden at the motion to dismiss stage. As an initial matter, the express language of the FCRA’s statute of limitations provision emphasizes the “date of discovery ... of the violation that is the basis for such liability[.]” 18 U.S.C. § 1681p(1) (emphasis added). Therefore, unless the Armored Defendants can show that the violation itself was evident from the face of Zellerino’s credit report, their argument must fail. See also Drew v. Equifax Information Services, LLC, 690 F.3d at 1110-1111 (9th Cir. 2012) (holding that tolling period began not when plaintiff first discovered that defendant incorrectly reported a fraudulent account on plaintiff’s credit report as lost or stolen, but when plaintiff, through various inquiries, learned that Defendant had failed to conduct an investigation verifying the account, which constituted an FRCA violation.).
Consistent with § 1681p(1)’s emphasis on the discovery of the violation, Datamyx argues Zellerino discovered – or should have discovered – “the facts constituting the violation” when she received her credit report on January 1, 2013. (Datamyx Mot. at 14.) Specifically, Datamyx contends that, under the Ninth Circuit’s unpublished decision in Banga v. Equifax Info. Servs., LLC, 473 F. App’x 712, 713 (9th Cir. 2012), “the facts constituting the violation are that a consumer report was ‘disclosed ... to third parties for promotional or other improper purposes.’ ” (Datamyx Mot. at 14.) Thus, according to Datamyx, Zellerino’s receipt of her credit report on January 1, 2013 – which “reveal[ed] the disclosure [of the report] to Armored” – caused the limitations period to begin to run because she was on “ ‘actual notice of the underlying promotional inquiry,’ i.e., a copy of the report showing the disclosure for a firm-offer purpose.” (Id. at 14-15.)
Datamyx’s reliance on Banga, however, is unpersuasive. Datamyx cites Banga for the proposition that the FCRA statute of limitations period begins to run when Zellerino “knew or should have known that defendant disclosed her credit report to third parties for promotional or other improper purposes.” Banga, 473 F. App’x at 713. However, the underlying facts in Banga are far afield from those at issue in the instant case. In Banga, the plaintiff had sought to “exclude her name from all pre-approved credit offer mailing lists.” (MSJ Order, Banga v. Equifax Information Servs., LLC, No. C 09-4807 JSW, Dkt. No. 108, at 1 (N.D. Cal. Jan. 25, 2011).) In doing so, the plaintiff “attempted to have her information permanently blocked from distribution” such that any subsequent sale of her consumer report to a third party for a promotional purpose would amount to a FCRA violation. (Id. at 2.) On these facts, the court concluded that “[t]he undisputed evidence demonstrates that [p]laintiff had received, at a minimum, consumer disclosures dated July 20, 2004 and August 14, 2007 which should have put her on notice of allegedly improper promotional inquiries.” (Id. at 4.) Essential to this holding, of course, was the fact that the plaintiff had sought to bar Equifax from distributing her consumer report at all. Therefore, as soon as plaintiff learned that Equifax had, in fact, distributed the reports, the court found that she had effectively discovered the violation, thereby triggering the limitations period. (Id.)7
*9 Here, Zellerino’s FCRA claims against the Armored Defendants required her, at a minimum, to determine whether the Armored Defendants obtained the report for a purpose permitted by the FCRA. Although it was evident on the face of Zellerino’s credit report that the report had been provided to Armored Defendants on March 21, 2012 in order for them to “provide [Zellerino] a firm offer of credit or insurance,” (Datamyx RJN, Ex. B, Doc. 54-2), this fact alone does not amount to a FCRA violation. Rather, something more is needed: for example, knowledge that Armored Defendants had obtained the report for promotion purposes, but never, in fact, intended to extend an offer of credit to Zellerino. In their Reply brief, Datamyx concedes this point when they assert that “[t]he two facts that constitute [Zellerino’s] alleged FCRA violation are that (i) her consumer report had been provided to Armored so that it could provide her a firm offer of credit and (ii) she did not receive a firm offer of credit from Armored.” (Datamyx Reply at 11 (emphasis added).) Datamyx is correct in its statement of the law, but fails in its argument because it has not shown that, as of January 1, 2013, Zellerino knew that she would never receive a firm offer of credit from Armored. The mere fact that Zellerino now alleges that “Armored did not ever tender a firm offer of credit to [her]” (FAC ¶ 30) does not support that she knew the same as of January 1, 2013.
For the reasons stated above, the purported illegality of this conduct was not, contrary to the Armored Defendants’ arguments, evident on the face of the credit report. In short, at least some subsequent investigation into the basis for disclosure of the consumer report was necessary. Specifically, Defendants identify no allegations or judicial admissions by Zellerino tending to show that, more than two years prior to initiating the instant action, she actually knew – or should have known – that Armored Defendants would not be extending her a firm offer of credit. And, while it is difficult to ascertain the exact date on which Zellerino completed her investigation and learned this salient fact, the “ultimate burden” on this issue rests with Roosen, Shubash, and Armored – and not with Zellerino. See Drew, 690 F.3d at 1009. Thus, absent a clear showing that “a reasonably diligent plaintiff would have discovered the facts constituting the violation” prior to March 14, 2014 (two years prior to Zellerino initiating this action), the Court will not dismiss Zellerino’s claims on this basis.
C. Individual Liability for Roosen and Shubash
In their Motion, the Armored Defendants argue that Zellerino “makes no assertion of fact which would support [her] claims of individual liability[.]” (Armored MTD at 9.) Specifically, the Armored Defendants assert that Zellerino, at most, “pleads non-specific factual assertions ‘on information and belief’ and comes to the conclusion that [she] is entitled to avoid the corporate entity and hold Mr. Roosen and Mr. Shubash personally liable.” (Id.) As the Ninth Circuit has made clear, however, “both California corporate law and federal common law hold that corporate officers are personally liable for their torts even if the torts were committed on behalf of the corporation.” Mone v. Dranow, 945 F.2d 306, 308 (9th Cir. 1991) (holding that CEO of a corporation could be individually liable for alleged FCRA violations).
Here, Zellerino alleges that “[a]ll of Armored’s stock was owned by Roosen and Shubash[.]” (FAC ¶ 8.) Additionally, Zellerino alleges that “Roosen and Shubash exercised pervasive and continual control over the day-to-day operations of Armored such that Armored operated at all relevant times as an agent of Roosen and Shubash.” (Id. ¶ 7.) Moreover, according to the FAC, “Roosen and Shubash ... used Armored as a mere shell, instrumentality, or conduit for their business operations.” (Id.) Zellerino further asserts that “Roosen and Shubash entered into an agreement with Equifax and Datamyx on behalf of Armored in their own names, holding themselves out as principals.” (Id.) Separately, Zellerino alleges that “Datamyx, as Equifax’s agent and/or as a reseller, sold [lists of consumer information] to Roosen and Shubash, acting on behalf of Armored, pursuant to a subscriber agreement.” (Id. ¶ 42.) Moreover, as alleged in the FAC, “Roosen and Shubash falsely certified to Datamyx that they would use the reports for a Permissible Purpose.” (Id. ¶ 45.)
*10 Based on these specific allegations as to Roosen and Shubash’s involvement in the alleged FCRA torts, the Court DENIES Armored Defendants’ Motion in so far as it seeks to have Zellerino’s individual claims against Roosen and Shubash dismissed.
D. Attorney’s Fees
Finally, the Armored Defendants contend that the Court should permit them to recover attorney’s fees on grounds that Zellerino had actual knowledge that her claim was time barred, but nevertheless initiated this action. (Armored MTD at 10-12.) According to Armored, § 1681n(c) permits recovery of such fees where “it [is] shown that the party who did not prevail commenced and continued the litigation in bad faith or for purposes of harassment.” (Id. at 11 (citation omitted).) For the reasons stated above, however, the Court finds the Armored Defendants’ statute of limitations argument unpersuasive. As a result, the Court finds no evidence of bad faith and no basis for awarding fees. Accordingly, the Court DENIES Defendants’ request for attorney’s fees.
For the reasons stated above, the Court GRANTS in part and DENIES in part Defendants’ three Motions. The Court GRANTS Equifax and Datamyx’s Motions on grounds that the Court lacks personal jurisdiction as to those two defendants. Zellerino’s claims against Equifax and Datamyx are DISMISSED, without prejudice. Additionally, the Court DENIES the Armored Defendants’ Motion in its entirety.
Slip Copy, 2016 WL 10988763
The FAC asserts that the credit report includes a typographical error that misspells “Armored” as “Amored.”. (FAC ¶ 26, n.2.) According to the FAC, however, “the address given matches Armored’s address[.]” (Id.)
Based on evidence submitted by Equifax, the company is organized under Georgia law and maintains its principal place of business in Atlanta, Georgia. (Equifax Mot. at 2; Baldwin Decl. ¶ 2-3.) Equifax’s sole member is Equifax, Inc., which is both incorporated and has its principal place of business in Georgia. (Equifax Mot. at 2.) Equifax does not own real property in California (Id. at 2; Baldwin Decl. ¶7), and 15 of its 1,292 employees are located in California. (Baldwin Decl. ¶8).
In its Motion, Datamyx asserts that it reached agreement with Zellerino, during the parties’ meet-and-confer efforts, not to dispute this court’s lack of general jurisdiction over Datamyx. (Mem. at 6-7.) Separately, in her Opposition brief, Zellerino’s arguments as to personal jurisdiction focus entirely on the issue of specific jurisdiction. (See generally Datamyx Opp. at 4-19; Equifax Opp. at 3-22.)
In her Equifax Opposition brief, Zellerino argues that “[b]y entering into this contract with Armored ... Equifax purposefully availed itself of California law and thereby subjected itself to personal jurisdiction in the [state].” (Equifax Opp. at 6-7.) However, the mere fact that the allegations in this case, in a tangential way, relate to a contract – specifically, a contract amongst the Defendants to which Zellerino was not a party – does not trigger application of the purposeful availment analysis. See, e.g., Picot v. Weston, 780 F.3d 1206, 1214 (9th Cir. 2015) (applying purposeful direction analysis to claim alleging tortious interference with a contract). Relatedly, at the hearing on this Motion, Zellerino’s counsel hinted at a broader argument raising issues of fairness: namely, that Zellerino would be left without a forum if the Court declined to exercise personal jurisdiction. This too is unpersuasive. At a minimum, Zellerino could pursue an action against either Equifax or Datamyx in any state that has general jurisdiction over them.
This Court’s reliance on Myers is neither inconsistent with the Supreme Court’s decision in Walden v. Fiore, 134 S. Ct. 1115 (2014), nor with the personal jurisdiction analysis that led to dismissal of the Michigan Action. At issue in Walden was whether a Nevada court could exercise personal jurisdiction over a Georgia defendant where “no part of [the defendant’s] course of conduct occurred in Nevada[,]” where the harm at issue – namely, seizure of plaintiff’s funds – occurred in Georgia, and where such jurisdiction was premised on the defendant’s “knowledge of [the plaintiff’s] ‘strong forum connections’ ” to Nevada. See Walden, 134 S. Ct. at 1124. The Supreme Court concluded that under these facts, the Nevada court lacked personal jurisdiction because “an injury is jurisdictionally relevant only in so far as it shows that the defendant has formed a contact with the forum State.” Id. at 1125. In the Michigan Action, the court concluded that Myers, to the extent it is inconsistent with Walden, was implicitly overruled. See Zellerino, 118 F. Supp. 3d at 951. Here, in contrast, the issue is not whether Zellerino’s injury – without more – creates a basis for personal jurisdiction. Rather, it is whether the Court can exercise personal jurisdiction where the harm purportedly suffered occurs entirely outside of California. The Court concludes that it cannot because, as the Ninth Circuit has made clear, “a jurisdictionally sufficient amount of harm [must be] suffered in the forum state.” Yahoo!, 433 F.3d at 1207. What Myers contributes to this analysis is merely the proposition that where the tort at issue is invasion of privacy, the harm is suffered in the injured party’s state of residence – which, in this case, is Michigan.
Zellerino’s reference to “Permissible Purposes” concerns FCRA § 1681b(a)(3). In relevant part, § 1681b(a)(3) sets forth several purposes for which a consumer reporting agency may furnish a consumer report to a third party, including, for example, in connection with “the extension of credit to ... the consumer” or in relation to “employment.” See 15 U.S.C. § 1681b(a)(3)(A)-(B).
Datamyx’s reliance on Mack v. Equable Ascent Financial, L.L.C., 748 F.3d 663 (5th Cir. 2014), is similarly inapposite. There, the Fifth Circuit found that the FCRA violation alleged was that the defendant “obtained his credit report without his consent” – a fact that plaintiff indisputably discovered at the moment he obtained the credit report reflecting the fact that defendant had obtained a copy thereof. Mack, 748 F.3d at 665.
Who can pull a credit report and when can they pull it.
David A. Szwak
Bodenheimer, Jones & Szwak, LLC
416 Travis Street, Suite 1404, Mid South Tower
Shreveport, Louisiana 71101
318-424-1400 / Fax 221-6555
President, Bossier Little League
Chairman, Consumer Protection Section, Louisiana State Bar Association
Bodenheimer, Jones & Szwak, LLC
416 Travis Street, Suite 1404, Mid South Tower
Shreveport, Louisiana 71101
318-424-1400 / Fax 221-6555
President, Bossier Little League
Chairman, Consumer Protection Section, Louisiana State Bar Association
- General Discussions, Forum Registration, and ID Theft and Credit-Related News Stories
- General Discussion
- News Stories on Identity Theft, Personal Data Thefts and Credit Reporting Abuses
- Current Cases
- Lawyer Jokes
- FCRA Statute and Defined Terms Under the FCRA
- FCRA Statute And Amendments: 15 U.S.C. 1681, et. seq.
- What is a Consumer [Credit] Reporting Agency?
- What is a Consumer [Credit] Report?
- Resellers: Who are They? What Do They Do? Are They Liable Under the FCRA?
- Investigative Consumer [Credit] Reports
- Who is a Furnisher?
- How to Get Your Credit Reports and How and Who to Write Your Dispute Letters to
- How To Get Your Credit Reports
- Dispute Letters
- Do You Have To Pay For Your Credit Report?
- FCRA Private Rights of Action and Duties Imposed by the FCRA
- Impermissible Access: 15 U.S.C. 1681b[f] and 1681q
- Front End Duties of the Credit Reporting Agencies: 15 U.S.C. 1681e(b)
- Back End Duties of the CRAs: 1681i[a]:
- Credit Bureau's Duty to Provide Consumer Documentation to Furnisher: 1681i[a][B]
- Duty to Add a Consumer's Dispute Statement in Association with a Specific Account and In Connection with the Credit File/Report: 15 U.S.C. 1681i[c]
- Furnisher FCRA Liability: 15 U.S.C. 1681s-2
- Failing to Mark Contested Accounts As Disputed: 15 U.S.C. 1681s-2[a]
- Obsolescence: When Must the Credit Reportings Come Off of the Credit Report: 15 U.S.C. 1681c
- Duty to Notate Disputed Accounts As Such: 15 U.S.C. 1681c[f]
- Adverse Action Notice Rules: 15 U.S.C. 1681m and ECOA
- Credit Solicitations Are Required to be Clear and Conspicuous: 1681m[d]
- Potential Exposure For Sanctions Due to Filing Bad Faith FCRA Cases: 15 U.S.C. 1681n[c], 28 U.S.C. 1927, and Fed.R.Civ.Proc. 11
- Credit Repair Organizations Act [CROA]
- 1681g: Credit Bureaus' Duties to Provide Reports/Disclosures and to Add 100 Word Statements of the Consumer
- Affiliate Sharing Problems and Violations, 15 U.S.C. 1681s-3
- Common Credit Report Errors and Agency Misconduct
- Credit Errors
- Theft of Identity
- Mixed File Cases
- Re-Aging: Debt Collector's Efforts to Revive Obsolete Reportings
- Reinsertion of Previously Deleted Data: How and When Can It Happen?
- VIP Databases and Offline Status
- Deceased Reporting Cases
- Causation: The Crucial Link Between Breach of a Duty and Damages
- Causation to Damage [Proving Your Damages Are Related to and Caused by the Defendants
- Types of Damages, Remedies, and Awards Under the FCRA and Related State Law Claims
- Damages Under FCRA
- Punitive Damages: 15 U.S.C. 1681n
- Injunctive Relief: FCRA and State Law
- Attorneys' Fees, Litigation Expenses and Costs:
- Declaratory Relief Under the FCRA
- What is Your Potential Case Worth? Other Case Verdicts, etc.
- FCRA Jury and Bench Trial Verdicts
- Other Federal Laws Related to Credit Reporting, Data Privacy, Billing Errors and ID Theft
- FDCPA Statute And Amendments: 15 U.S.C. 1692, et. seq.
- Fair Credit Billing Act, 15 U.S.C. 1666, et. seq.
- Identity Theft and Assumption Deterrence Act of 1998, 18 U.S.C. §1028
- Home Affordable Modification Program (“HAMP”) and Home Affordable Foreclosure Alternatives Program (“HAFA”)
- State Law Claims Related to Credit Reporting, Billing Errors, Privacy Breaches and ID Theft
- Invasion of Privacy: State Law
- Defamation: State Law
- Interference With Prospective Credit: State Law
- Interference With Marital/Family Relations: State Law
- Infliction of Emotional Distress/Mental Anguish: State Law
- Data Breach Claims and Issues
- Unfair and Deceptive Trade Practices Claims: State Law
- Jurisdiction, Venue, Removal to Federal Court, Remand to State Court, and Other Pre-Trial Jurisdicti
- Removal of FCRA Cases From State Court To Federal Court
- Personal Jurisdiction and Venue in Credit Reporting Cases
- FCRA Litigation Strategies and Procedural Issues and Law
- Settlements, Releases, Prevailing Party Status, and Other Things You Need to Know If You Resolve Your Case Before Judgment
- Offers of Judgment In FCRA Litigation
- Secret Documents, Product Information and Testimony
- Choicepoint Secret Documents:
- Equifax/CSC and Affiliates Secret Documents:
- Experian Secret Documents
- Innovis Secret Documents:
- Trans Union Secret Documents
- Furnisher and Public Records Suppliers Secret Documents
- Respondeat Superior, Vicarious Liability, and Whether Others Are Liable
- Liability For Employee's FCRA Violations? Liability For FCRA Violations by Third Parties?
- FCRA Preemption, Immunity, and Qualified Immunity
- FCRA Preemption: 15 U.S.C. 1681t[b][F] and Related Discussions
- FCRA Qualified Immunity: 15 U.S.C. 1681h[e] and Related Discussions
- States/Govermental Immunity From FCRA Claims?
- Jury Voir Dire, Instructions, Verdict Forms, etc.
- Jury Instructions and Jury Verdict Forms
- Jury Questionnaires, Voir Dire, Jury Selection and Jury Bias
- Credit Card Issues
- Credit Card Liabilities
- Do You Have a Right to Bring Claims and How Long Do You Have?
- Statute Of Limitation: 15 U.S.C. 1681p
- Standing to Sue
- Credit Scores, Adverse Action Codes, and Other Report Codes
- Credit Scores, Adverse Action Codes, Risk Factors, Denial Codes and Other Scores and Codes Supplied by the Credit Reporting Agencies
- The Mechanics of Credit Reporting
- Public Records Reportings [Non-Bankruptcy]
- Bankruptcy Reporting
- Student Loan Credit Reporting
- Metro Tape [I and II]: Standardized Credit Reporting Formats Used by the Credit Industry
- Defenses Asserted by Credit Reporting Defendants
- What Law Applies? Problems Barring Use of the Court and Law
- Arbitration, Forum Selection, Choice of Law, Choice of Venue and Other Adhesionary Clauses
- Conflicts of Laws Issues in FCRA and Related State Law Issues
- Standing and Statutes of Limitations
- Statute Of Limitation: 15 U.S.C. 1681p
- FCRA Legal Forms [Suits, Discovery, etc.]
- Discovery: Interrogatories, Requests For Production of Documents, Requests to Inspect, Requests For Admissions, Deposition Notices, Subpoenas, Deposit
- FCRA Sample Pleadings: Complaints, Motions, Oppositions and Other Standard Lawsuit Filings
- Defenses Frequently Asserted by Defendants to Consumer's Actions
- FCRA Class Actions and Class Issues
- FCRA Class Actions
- Special Evidentiary Issues: What is Evidence?
- Evidentiary Issues in FCRA Cases
- Expert Witnesses, Special Issues and Daubert and Related Challenges
- Appellate Issues, Rules, Law, Etc.
- Defenses Asserted by Industry and Abuse Stories
- Defense Counsel Abuses and War Stories
- Law Outlines: Various Topics
Who is online
Users browsing this forum: No registered users and 13 guests