In Robinson v. TransUnion, LLC, 2016 WL 5339807, at *3–4 (N.D.Cal., 2016), Judge Davila found that a FCRA Plaintiff stated a claim for how a debt was reported as it passed through bankruptcy.
Looking at the Complaint, the same allegations underlie both the FCRA claim and the CCRAA claim. Plaintiff alleges he filed for Chapter 13 bankruptcy protection on March 31, 2014, and that a financial reorganization plan was confirmed pursuant to 11 U.S.C. § 1327 on November 10, 2014. Compl., Dkt. No. 1, at ¶ 5. Plaintiff then ordered a “three bureau” credit report on July 15, 2015, and “noticed several tradelines all reporting misleading and inaccurate account information.” Id. at ¶ 7. Specific to Best, Plaintiff alleges it was reporting his account “beginning in 1154, as in collections, despite a Bankruptcy Court Order stating the $0.00 is owed and that the Chapter 13 Bankruptcy Trustee’s accounting indicates that $0.00 is owed.” Id. at ¶ 8. Plaintiff disputed the purported inaccuracy with the CRAs and “is informed and believes” that notification was sent to furnishers. Id. at ¶¶ 9, 10. He contends that Best failed to conduct a reasonable investigation of the inaccuracy and continued to report the information falsely to TransUnion, or that TransUnion failed to perform its own reasonable investigation. Id. at ¶¶ 11, 12. Best argues these allegations are “nothing more than a recitation of the elements” and fail to establish that it was reporting inaccurate information about Plaintiff’s account, even after Plaintiff obtained confirmation of a reorganization plan in his bankruptcy case. The court disagrees. Though they are certainly minimal, Plaintiff has included just enough factual information to state a claim under the FCRA and, by virtue of doing that, has also stated a CCRAA claim. Best’s arguments to the contrary are unpersuasive. Best contends the information it furnished was not inaccurate or misleading because reporting a debt during the pendency of a bankruptcy is not actionable under the FCRA or CCRAA. It is true that courts in this district have held that it is not misleading or inaccurate to report delinquent debts not yet discharged in bankruptcy. See Mortimer v. JP Morgan Chase Bank, N.A., No. C 12-1936 CW, 2012 U.S. Dist. LEXIS 108576, at *9, 2012 WL 3155563 (N.D. Cal. Aug. 2, 2012) (“While it might be good policy in light of the goals of bankruptcy protection to bar reporting of late payments while a bankruptcy petition is pending, neither the bankruptcy code nor the FCRA does so.”); see also Mortimer v. Bank of America, N.A., No. C-12-01959 JCS, 2013 U.S. Dist. LEXIS 51877, at *16-18, 2013 WL 1501452 (N.D. Cal. Apr. 10, 2013) (finding that the FCRA does not prohibit the accurate reporting of debts that were delinquent during the pendency of a bankruptcy action, even after those debts have been discharged, so long as the bankruptcy discharge is also reported); see also Giovanni v. Bank of America, N.A., No. C 12-02530 LB, 2012 U.S. Dist. LEXIS 178914, at *14-16, 2012 WL 6599681 (N.D. Cal. Dec. 18, 2012). Indeed, relying on this exact authority, the undersigned recently dismissed an arguably comparable FCRA claim because the plaintiff did not plausibly allege why reporting an account as past due was inaccurate, even though a reorganization plan was confirmed the plaintiff’s pending bankruptcy case. Biggs v. Experian Info. Solutions, Inc., No. 5:16-cv-01507-EJD, slip. op. at 5 (N.D. Cal. Sept. 22, 2016). But Plaintiff’s allegations are different. Here, the information Best allegedly furnished to the CRAs – that Plaintiff’s account was in collections – suggests something more than just an account status. Indeed, it suggests that Best or a designee can actively collect on the debt despite Plaintiff’s reorganization plan, under which Plaintiff contends Best is entitled to nothing. Such collection activity would be barred by § 1327(a), which provides that “[t]he provisions of a confirmed plan bind the debtor and each creditor, whether or not the claim of such creditor is provided for by the plan, and whether or not such creditor has objected to, has accepted, or has rejected the plan.” In essence, that statute prohibits “a creditor from asserting, after confirmation, any other interest than that provided for it in the confirmed plan.” In re Pardee, 218 B.R. 916, 925 n.9 (9th Cir. B.A.P. 1998). Thus, because the information Best furnished implies some interest that conflicts with Plaintiff’s § 1327 plan, the court finds the information Best furnished is “misleading in such a way and to such an extent that it can be expected to adversely affect credit decisions.” Gorman, 584 F.3d at 1163. Best also challenges the Complaint’s allegations as inconsistent because, on the one hand, Plaintiff states Best failed to investigate the information it was reporting after being notified of the dispute, and on the other, states that TransUnion did not “send all relevant information to the furnishers.” To the extent these allegations are contradictory, the characterization is not fatal to Plaintiff’s claims at this point because Rule 8(d)(3) expressly permits the pleading of inconsistent claims. The rule advocated by Best, which is to “permit[ ] one claim to be invoked as an admission against an alternative or inconsistent claim would significantly restrict, if not eliminate, the freedom to plead inconsistent claims provided by Rule 8[ ].” Molsbergen v. United States, 757 F.2d 1016, 1019 (9th Cir. 1985). Best’s argument is rejected on that basis. In sum, the Complaint alleges facts that satisfy the requirements of the FCRA and the CCRAA. Plaintiff identifies the “in collections” inaccuracy, states that he disputed the designation with the CRAs, alleges that to his knowledge the CRAs communicated the dispute to furnishers likes Best, and claims that Best failed to then undertake a reasonable investigation of the information it was reporting. Since these allegations are enough to render Plaintiff’s claims plausible, the motion to dismiss will be denied.