In Mann v. Wells Fargo Bank, 2012 WL 3727369 (N.D.Cal. 2012), Judge Ryu found defamations completely preempted by FCRA. The facts, arising out of a mortgage loan, were as follows:
In July 2005, Plaintiffs obtained first and second home mortgages in the amounts of $484,000 and $121,000, respectively, on their home and real property located in El Dorado Hills. (Compl.¶ 11.) Wells Fargo serviced the mortgages. In or around June 2007, Wells Fargo issued a Notice of Default to Plaintiffs and subsequently obtained a non-judicial foreclosure. (Compl.¶ 12.) In February 2008, Wells Fargo issued IRS Cancellation of Debt and Acquisition or Abandonment of Secured Property forms to Plaintiffs. (Compl. ¶ 13 .) Plaintiffs allege that since 2011, Defendants have reported inaccurate and incomplete information regarding the home loans to credit reporting agencies, and that as a result, they have been denied consumer credit and have had credit cards cancelled by the issuers based on the information on their credit report. (Compl.¶¶ 26–28, 14.) Since December 2011, Plaintiffs have repeatedly contacted Defendants to request that they correct the credit reporting to reflect “the accurate information that ‘0’ monies were owed by Plaintiffs, that the account had not been submitted for ‘collection,’ that the account is not ‘delinquent,’ and that there are not any ‘late payments,’ as being reported” (Compl.¶ 18) by Defendants. (Compl.¶¶ 16, 18–25.) In January 2012, Defendants responded to Plaintiffs, stating that the “lien has been extinguished due to the first lien foreclosure,” that its records indicate that the loan has a zero balance due, and that it would not be attempting to collect additional funds for the loan. (Compl.¶ 20, Ex. 5.) Although Defendants indicated twice to Plaintiffs that it had submitted updated information and instructed the credit reporting agencies “to update their records to remove the negative reporting from February 2008 through the current date” (Compl.¶¶ 20, 22, Exs.5, 7), Plaintiffs’ credit reports continue to contain the “inaccurate and damaging information.” (Compl. ¶ 32 .)
On these facts, the District Court found Plaintiff’s libel claim completely pre-empted, allegation of malice or not.
The court acknowledges that there is an apparent tension between sections 1681t(b)(1)(F) and 1681h(e) and that there is some dispute among district courts as to how to reconcile the two sections. See El–Aheidab v. Citibank (South Dakota), N.A., No. C–11–5359 EMC, 2012 WL 506473, at *6 (N.D.Cal. Feb.15, 2012); Ali v. Capital One, No. 1:11–cv– 02115–LJO, 2012 WL 260023, at *5 (E.D.Cal. Jan.27, 2012). The tension between the two provisions arises “because a majority of district courts interpret section 1681t(b)(1) (F) as expressly preempting all state common law and statutory claims against furnishers of information, while section 1681h(e) suggests certain state claims might not be preempted if the plaintiff pleads malice or willful intent to injure.” Miller v. Bank of America, N.A., ––– F.Supp.2d. ––––, No. 3:11–cv–02588–MMA, 2012 WL 871321, at *6 (S.D.Cal. March 14, 2012) (citing Gorman, 584 F.3d at 1165); see also Davis v. Md. Bank, No. 00–04191, 2002 WL 32713429, at *12 (N.D.Cal. June 19, 2002) (finding a majority of district courts have held that the FCRA preempts state statutory and common law causes of action). In El– Aheidab, Judge Chen considered how to reconcile the two provisions and concluded section 1681t(b)(1)(F) completely preempts all state law causes of action, despite the exceptions noted in section 1681h(e). El–Aheidab, 2012 WL 506473, at *7–9. The court held that “a plaintiff cannot sustain a state common law or statutory claim related to the duties set forth in section 1681 s–2, even if a plaintiff alleges a defendant reported false information with malice or willful intent to injure.” Miller, 2012 WL 871321, at *7 (citing El–Aheidab, 2012 WL 506473, at 8–9). The court finds the rationale in El–Aheidab persuasive. Plaintiffs’ common law tort claims, causes of action one through four, are preempted by section 1681t(b)(1)(F). The claim that forms the core of Plaintiffs’ complaint is that Defendants reported inaccurate information to CRAs and failed to remedy Plaintiffs’ request for corrections. Plaintiffs’ allegations put their negligence, defamation, and invasion of privacy claims within the purview of section 1681 s– 2, because they clearly involve duties and responsibilities required of furnishers of credit information. See, e.g., 15 U.S.C. § 1681s–2(a) (furnishers must accurately report credit information). Because the wrongful conduct is regulated under section 1681s–2, section 1681t(b)(1)(F) applies to preempt Plaintiffs’ negligence, defamation, and invasion of privacy claims despite their allegations that Defendants acted with malice and/or the willful intent to injure. See Buraye v. Equifax, 625 F.Supp.2d 894, 900 (C.D.Cal.2008) (holding that the plain language of “section 1681t(b)(1)(F) clearly eliminated all state cause of action against furnishers of information”) (quoting Davis, 2002 WL 32713429, at *13); Roybal v. Equifax, 405 F.Supp.2d 1177, 1181 (E.D.Cal.2005) (“On its face, the FCRA precludes all state statutory or common law causes of action that would impose any requirement or prohibition on the furnishers of credit information.”) Accordingly, because these claims are preempted, amendment would be futile and causes of action one through four are dismissed with prejudice.