2d Circuit Holds that FCRA Pre-empts Common Law Defamation Claims

In MacPherson v. JPMorgan Chase Bank, N.A., — F.3d —-, 2011 WL 6450777 (2d Cir. 2011), the Court of Appeals for the Second Circuit held that FCRA pre-empts common law defamation claims arising from false or inaccurate information furnished to a consumer reporting agency.  Macpherson alleged that Chase willfully and maliciously provided false information about his finances to Equifax, a consumer credit reporting agency. Based on these reports, Equifax reduced his credit score, to his detriment. Macpherson sued Chase in state court in Connecticut for this alleged conduct, asserting state common law claims against Chase for defamation and intentional infliction of emotional distress.  Chase removed the suit to federal court and moved for dismissal under Federal Rule of Civil Procedure 12(b)(6), arguing that Macpherson’s claims are preempted by FCRA.   The district court granted the Motion, and the Court of Appeals affirmed, explaining:

In Premium Mortgage Corp. v. Equifax, Inc., 583 F.3d 103 (2d Cir.2009), we expressly rejected the argument that § 1681t(b) preempts only state statutory law. Id. at 106. We adopted instead a more literal reading of the phrase “[n]o requirement or prohibition”—a reading that was endorsed by a plurality of the Supreme Court in Cipollone v. Liggett Group, Inc., 505 U.S. 504, 112 S.Ct. 2608, 120 L.Ed.2d 407 (1992), in its discussion of a similar preemption argument: “The phrase ‘[n]o requirement or prohibition’ sweeps broadly and suggests no distinction between positive enactments and common law; to the contrary, those words easily encompass obligations that take the form of common-law rules.” Id. at 521. The same section and introductory language—“[n]o requirement or prohibition may be imposed under the laws of any State”—applies here, and our holding in Premium Mortgage forecloses Macpherson’s limited reading of the 1996 amendment. ¶  Moreover, and more importantly, Macpherson’s basic premise is false: the 1996 provision, § 1681t(b)(1)(F), is not in conflict with § 1681h(e), and § 1681h(e) does not insulate state tort actions from preemption. As the Seventh Circuit recently explained in Purcell v. Bank of America, 659 F.3d 622 (7th Cir.2011), “[s]ection 1681h(e) preempts some state claims that could arise out of reports to credit agencies; § 1681t(b)(1)(F) [simply] preempts more of these claims.” Id. at 625 (emphasis supplied). Put differently, the operative language in § 1681h(e) provides only that the provision does not preempt a certain narrow class of state law claims; it does not prevent the later-enacted § 1681t(b)(1)(F) from accomplishing a more broadly-sweeping preemption. As the Purcell court persuasively reasoned: ¶  “Section 1681h(e) does not create a right to recover for wilfully false reports; it just says that a particular paragraph does not preempt claims of that stripe. Section 1681h(e) was enacted in 1970. Twenty-six years later, in 1996, Congress added § 1681t(b)(1)(F) to the United States Code. The same legislation also added § 1681 s–2. The extra federal remedy in § 1681 s–2 was accompanied by extra preemption in § 1681t(b)(1)(F), in order to implement the new plan under which reporting to credit agencies would be supervised by state and federal administrative agencies rather than judges. Reading the earlier statute, § 1681h(e), to defeat the later-enacted system in § 1681s–2 and § 1681t(b)(1)(F), would contradict fundamental norms of statutory interpretation.”  Id. ¶  We agree.  Having determined that § 1681h(e) is compatible with § 1681t(b)(1)(F), and that Macpherson’s state law claims are preempted by the plain language of § 1681t(b)(1)(F), we need not address Macpherson’s remaining statutory interpretation arguments.