In Galea v. Wells Fargo Bank, N.A., No. 2:19-cv-00386-JAM-AC, 2019 U.S. Dist. LEXIS 129028 (E.D. Cal. Aug. 1, 2019), Judge Mendez addressed the proper reporting of Chapter 13 bankrupt accounts.
Galea filed for Chapter 13 bankruptcy in September 2012. FAC ¶ 39. Over the next five years, she made all the payments required under her bankruptcy plan. FAC ¶¶ 42-49. In November 2017, the Bankruptcy Noticing Center notified her that she had completed her plan. FAC ¶ 49. In January 2018, her bankruptcy was discharged. FAC ¶ 50. Galea contends an Equifax credit report issued eight months later did not reflect this successful discharge of bankruptcy. FAC ¶¶ 110-11. Galea alleges the Consumer Data Industry Association’s Metro 2 format “is the credit industry’s standardized, objective reporting format used by furnishers to provide information about consumer accounts to consumer reporting agencies.” FAC ¶ 52. The Metro 2 format provides guidance on how furnishers of consumer information should report consumer accounts once the consumer has paid out the account through a successfully-discharged bankruptcy. See FAC ¶ 57. For unsecured accounts, the report should list the CII status as “Discharged/Completed through BK Chapter 13.” Id. The Current Balance, Scheduled Monthly Payment Amount, and Amount Past Due should all be listed as “Zero” or “$0”. Id. For secured accounts, the Metro 2 likewise requires furnishers to update the account’s Status, Payment History, Current Balance, Scheduled Monthly Payment Amount, and Amount Past Due. FAC ¶ 58. Yet, following Galea’s successful discharge of bankruptcy, Equifax issued a credit report in September 2018 that listed her Scheduled Payment Amount as $410. FAC ¶ 110. A month later, Plaintiff sent a letter to Equifax, disputing the September 2018 report. FAC ¶¶ 115-16. In December 2018, Equifax provided Galea with the results of its reinvestigation. FAC ¶ 119. It did not, however, change the Scheduled Payment Amount from $410 to $0. FAC ¶ 120.
The District Court held that the Plaintiff alleged an inaccuracy under FCRA.
Equifax argues that listing the Scheduled Payment Amount as $410 is neither patently incorrect nor materially misleading. Mot. at 4-5. The Equifax consumer report lists Galea’s Travis Credit Union Account as “Paid and Closed,” “Closed or Paid Account/Zero Balance.” Exh. 3, ECF No. 20-4. The “Date of Last Activity” and “Date Closed” are both listed as “04/2012.” Id. The “Balance Amount” and “Amount Past Due” are listed as “$0.” Id. Within this context, Equifax argues the Scheduled Payment Amount merely reflects a “historical payment term” or “historical scheduled payment amount.” Mot. at 1, 4-5. Galea does not dispute that, at one point, she made monthly payments of $410 on her Travis Credit Union account. Mot. at 4. Neither the Ninth Circuit nor this Court have ruled on the question of whether it is inaccurate to include a “scheduled monthly payment amount” on an account that is otherwise paid off and closed. Defendants argue other courts have “readily and consistently” found consumer reporting agencies may include accurate, historical information on consumer reports—even if that information is derogatory. Reply at 3; see also Mot. at 6-9 (citing Cahlin v. General Motors Acceptance Corp., 936 F.2d 1151, 1158-59 (11th Cir. 1991); Meeks v. Equifax Info. Servs., LLC, No. 1:18-cv-03666-TWT-WEJ, 2019 U.S. Dist. LEXIS 71774, 2019 WL 1856411, at *5 (N.D. Ga. Mar. 4, 2019); Harris v. Nissan-Infiniti LT, No. 2:17-cv-00191-JCM-VCF, 2018 U.S. Dist. LEXIS 95728, 2018 WL 2741040, at *1 (D. Nev. June 7, 2018); Blanch v. Trans Union, LLC, 333 F. Supp. 3d 789, 793 (M.D. Tenn. 2018)). The Court finds Equifax’s collection of authority is both overinclusive and incomplete, including some cases that are clearly distinct from the one at hand, and excluding others that undermine its claims of a judicial consensus. …The Court is not bound by any of these cases cited in Equifax’s motion. Nor is it persuaded that those cases require this Court to dismiss Galea’s Section 1681e(b) and Section 1681i(a) claims. Rather, the inconsistency among district courts on this issue—and the narrow grounds upon which they attempt to distinguish themselves—reaffirms the notion that determining whether credit information is misleading is often a task better suited for a jury. See, e.g., Drew v. Equifax Information Services, LLC, 690 F.3d 1100, 1108 (9th Cir. 2012); Gorman, 584 F.3d at 1163; Morgan v. Equifax Info. Servs., LLC, No. [*9] 15-cv-10640, 2017 U.S. Dist. LEXIS 44871, 2017 WL 1150848, at *3 (N.D. Ill. March 28, 2017). Furthermore, the Court rejects Equifax’s argument that Galea’s Section 1681e(b) and Section 1681i(a) claims rest on nothing more than her subjective belief of what is misleading. Independent of whether a jury would find the report misleading, Galea’s complaint plainly sets out an objective basis for her claim. Galea alleges that, under the Metro 2 format, “[o]nce the [bankruptcy] Plan is successfully completed, furnishers for unsecured accounts are instructed to report the . . . Scheduled Monthly Payment Amount . . . as Zero.” FAC ¶ 57 (internal quotations omitted). Secured accounts should, likewise, be updated. FAC ¶ 58. Galea’s credit report did not list her Scheduled Payment Amount as zero following the successful completion of her bankruptcy plan. FAC ¶¶ 50, 110. Assuming the truth of Galea’s allegations (as this Court must for purposes of this Motion), the Metro 2 provides an objective basis for her claim that the Equifax report was incorrect or misleading. See FAC ¶¶ 34-36. Equifax failed to show, as a matter of law, that Galea did not allege inaccuracies in her September 2018 credit report. The Court denies Equifax’s motion to dismiss Galea’s Section 1681e(b) and 1681i(a) claims on this ground.