In Kang v. Credit Bureau Connection, No. 1:18-CV-01359-AWI-SKO, 2019 U.S. Dist. LEXIS 45352 (E.D. Cal. Mar. 19, 2019), Judge Ishii denied a data reseller’s motion to dismiss under the FCRA and CCRAA. The facts alleged were as follows:
Plaintiff went to a car dealership in Huntington Beach, California to buy a car. After he selected the car that he wanted to buy, Plaintiff applied for a car loan from the dealership. The dealership, [*2] in deciding whether to extend credit to Plaintiff, ordered from Defendant at least two consumer reports about Plaintiff. Defendant then prepared the consumer reports and sold them to the dealership. Defendant included false information on the consumer reports that suggested that Plaintiff was designated by the Office of Foreign Assets Control (“OFAC”) as a “Specially Designated National and Blocked Person” associated with North Korea. OFAC is an executive agency of the Department of Treasury that administers and enforces economic trade sanctions based on United States foreign policy and national security goals against threats to national security, foreign policy, and the national economy. See Office of Foreign Assets Control v. Voices in Wilderness, 329 F. Supp. 2d 71, 74 (D.D.C. 2004); see also Office of Foreign Assets Control — Sanctions Programs and Information, U.S. DEPARTMENT OF TREASURY, https://www.treasury.gov/resource-center/sanctions/Pages/default.aspx (last visited March 12, 2019) (describing OFAC’s responsibilities). OFAC’s sanctions are directed towards terrorists, international narcotics traffickers, and persons involved in the proliferation of weapons of mass destruction, amongst others. See id. OFAC designates some of these individuals as Specially Designated [*3] Nationals and Blocked Persons (“SDNs”), and OFAC periodically publishes and updates its list of SDNs on its “SDN List,” which is publicly available online. See 31 C.F.R. § Ch. V, App. A (describing OFAC’s online publication of the SDN List); Specially Designated Nationals And Blocked Persons List (SDN) Human Readable Lists, U.S. DEPARTMENT OF TREASURY, http://www.treasury.gov/sdn (last visited March 12, 2019) (OFAC’s public website that publishes the SDN List). The SDN List is important to financial institutions and lenders in the United States because, “[in most cases], it is unlawful to extend credit to a person whose name is on OFAC’s SDN List.” Cortez v. Trans Union, LLC, 617 F.3d 688, 701 (3d Cir. 2010). Because the consumer reports sold by Defendant to the dealership falsely suggested that Plaintiff was on the SDN List, the dealership refused to extend credit to Plaintiff absent a co-signer. Plaintiff was “horrified and embarrassed” to be identified as an SDN associated with North Korea. Doc. No. 1 at ¶ 51. Plaintiff then contacted Defendant about the false information on the consumer reports, asking Defendant to “completely remove any misleading OFAC information” from the reports, and also asking Defendant to provide Plaintiff with a [*4] complete copy of Defendant’s file about Plaintiff. Id. at ¶¶ 62-63. In response, a representative of Defendant called Plaintiff, telling Plaintiff that there was no OFAC information associated with Plaintiff. Plaintiff then received in the mail from Defendant a single sheet of paper that appeared to be a printout of Defendant’s “Free OFAC Search” from Defendant’s website. Id. at ¶ 65. The paper indicated that there was “no hit” for OFAC information associated with Plaintiff. Id. Plaintiff never received any other information from Defendant.
Judge Ishii denied the motion.
Based on these definitions, the Court concludes that the complaint’s factual allegations sufficiently plead that Defendant is a CRA under the FCRA and a CCRA under the CCRAA. The complaint clearly alleges that Defendant is a “person.” See Doc. No. 1 at ¶ 8 (“Defendant Credit Bureau Connections, Inc. is a corporation . . . .”). And the complaint sufficiently alleges that that Defendant regularly [*15] assembled consumer credit information for fees or dues for the purpose of furnishing “consumer reports” or “consumer credit reports” to third parties. See id. at ¶ 27 (“Defendant provides automobile and other vehicle dealers with credit and other information, selling consumer reports (commonly called ‘credit reports’) about thousands of consumers each year.”) (parenthetical in original); id. at ¶ 47 (“Defendant prepared a consumer report purportedly about Plaintiff on the same day and sold it to Reeves Honda for a fee.”); id. at ¶ 48 (“The consumer report Defendant prepared contained a section labelled ‘Red Flag Compliance’ and, underneath the words ‘HIT OFAC Check,’ included ‘OFAC Search results for SUNG KANG’ and a box containing . . . information purportedly pertaining to Plaintiff.”); id. at ¶ 53 (alleging that the dealership “requested information from [Defendant] about Plaintiff again”); id. at ¶ 56 (“The Reeves Honda representative told Plaintiff that the information in [Defendant’s consumer report] came from Experian Information Solutions, Inc., a prominent CRA.”); id. at ¶ 60 (“Defendant had prepared the consumer report provided to Reeves Honda.”). Thus, Plaintiff’s complaint [*16] sufficiently pleads that Defendant is a CRA under the FCRA and a CCRA under the CCRAA.