In Wang v. Asset Acceptance, L.L.C., 2010 WL 40984 (N.D.Cal. 2010), Judge Conti rejected Plaintiff’s assertion that the duty to report accurate information information under Civil Code 1785.25(a) also includes the obligation to note an account as disputed, since such obligation is required by section 1785.25(c). Judge Conti explained
Here, in his second cause of action, Wang alleges that despite being notified by consumers that the debts were disputed, Asset reported those debts to CRAs, without also notifying the CRAs that the debts were disputed. Compl. ¶¶ 42-43. This obligation to notify CRAs of disputed debts is clearly and unambiguously addressed by the California legislature in section 1785.25(c) of the CCRAA. Hence, the general obligation in section 1785.25(a) not to furnish CRAs with incomplete or inaccurate information cannot have been intended to include the obligation to notify CRAs of disputed debts. Otherwise, section 1785.25(c) would be superfluous and unnecessary. The Court rejects Wang’s contention that section 1785.25(a) includes a duty to notify CRAs when consumers dispute debts. See Van Horn v. Watson, 45 Cal.4th 322, 333 (2008) (rejecting broad reading of statute that would render other statutes unnecessary surplusage).
Judge Conti further found that section 1785.25(a) does not include an obligation to report that enforcement of an obligation potentially is barred by the statute of limitations, explaining:
Consideration of the nature of a statute-of-limitations defense convinces the Court that section 1785.25(a) does not include this duty. The statute of limitations is an affirmative defense. Norgart v. Upjohn Co., 21 Cal.4th 383, 396 (1999). A statute of limitations does not operate to extinguish a debt, but merely bars recovery on a debt when properly asserted. Dep’t of Indus. Relations v. Seaboard Surety Co., 50 Cal.App. 4th 1501, 1511 (Ct.App.1996). As an affirmative defense, the statute of limitations is waived if not raised by the defendant. See Minton v. Cavaney, 56 Cal.2d 576, 581 (1961); see also County of Los Angeles v. Comm’n on State Mandates, 150 Cal.App. 4th 898, 912 (Ct.App.1997) (“Forfeiture of a time-bar defense transpires by the failure to raise the applicable statute of limitations in the answer”); Gailing v. Rose, Klein & Marias, 43 Cal.App. 4th 1570, 1577 (Ct.App.1996) (“The defendant must raise … [the statute-of-limitations defense] or the plaintiff has every right to collect a full judgment.”). Since it is possible that a debtor may waive this defense by failing to raise it if sued in California, and since the statutory provision contains no mention of an affirmative duty to report that a statute of limitations has expired, the Court finds that section 1785.25(a) of the CCRAA does not impose upon Asset a duty to report information related to any applicable statute of limitations to CRAs.
Finally, Judge Conti held that the Ninth Circuit’s Gorman holding did not change the rules on FCRA preemption — FCRA still preempted Plaintiff’s claim under Bus. & Prof. Code section 17200.
The Court agrees that Wang’s UCL claims are preempted. While the FCRA exempts section 1785.25(a) of the CCRAA from preemption, it also provides that “[n]o requirement or prohibition may be imposed under the laws of any State … with respect to any subject matter regulated under … section 1681s-2 of this title, relating to the responsibilities of persons who furnish information to consumer reporting agencies….” 15 U.S.C. § 1681t(b)(1)(F). Recently, the Ninth Circuit clarified that the FCRA does not preempt section 1785.25(g) and section 1785.31 of the CCRAA because those sections do not impose a requirement or prohibition. Gorman, 584 F.3d at 1170-71. Instead, those sections provide a vehicle for private parties to enforce section 1785.25(a) of the CCRAA. Id. Here, however, California’s UCL does impose a requirement or prohibition. This statutory scheme prohibits “any unlawful, unfair or fraudulent business act or practice.” Cal. Bus. & Prof.Code § 17200. The UCL provides plaintiffs with an independent cause of action. See Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co., 20 Cal.4th 163, 179-80 (1999)(describing UCL as independent of other laws, and noting that UCL makes violations of other laws “independently actionable”). Since the UCL would impose an independent requirement or prohibition on furnishers of information to CRAs, it is preempted by the FCRA. See Howard v. Blue Ridge Bank, 371 F.Supp.2d 1139, 1143-44 (N.D.Cal.2005) (granting motion to dismiss section 17200 claim because preempted by FCRA); Roybal v. Equifax, 405 F.Supp.2d 1177, 1181 (E.D.Cal.2005) (finding state claims, including UCL claim, preempted); Riley v. General Motors Acceptance Corp., 226 F.Supp.2d 1316, 1322 (S.D.Ala.2002) (“there is no question that the statutory prohibition precludes suits under state consumer protection laws”). According, the Court dismisses Wang’s UCL claims. Because alleging other facts will not cure the deficiency, the Court dismisses Wang’s third and fifth causes of action without leave to amend.
On November 1, 2010, Judge Illston denied Plaintiff’s Motion for Reconsideration in a written opinion. Wang v. Asset Acceptance, LLC, 2010 WL 4321565 (N.D.Cal.2010).