District Court (Cal.) Says No Inaccuracy in Reporting of Account as Passes through Ch. 13 Proceedings

The Chase Defendants next contend that a review of the entire challenged report “in context” shows that Muehlenberg has not plausibly alleged any inaccuracy because the report “prominently discloses that the Chase Accounts are included in or discharged through bankruptcy chapter 13.” Mot. at 7–8 (internal quotation marks omitted).² They point to the decisions from the Northern District of California in Torion v. JPMorgan Chase Bank, N.A., No. 17-cv-00422-PJH, 2017 WL 2986250 (N.D. Cal. July 13, 2017), and Mestayer v. Experian Info. Sols., Inc., No. 15-cv-03645-EMC, 2016 WL 7188015 (N.D. Cal. May 4, 2017), in support of their position.  In Torion, the Hon. Phyllis Hamilton considered a similar case in which the plaintiff alleged that her credit report was misleading, but Chase disputed that it was because the “credit reports prominently disclose[d] the existence of [plaintiff’s] bankruptcy filing in the ‘Public Records’ section” and “further indicate[d] that there [was] ‘[n]o collection accounts’ in the ‘Collections’ section.” 2017 WL 2986250, at *5. The reports also “indicate [d] on the ‘Account Summary’ page that [plaintiff] ha[d] ‘$0’ in credit debt.” Id. The judge concluded that “in light of the full context of the actual reporting in the credit reports…this reporting is not misleading because bankruptcy is clearly disclosed elsewhere in the credit report. This eliminates the possibility that a lender would be misled by the reporting.” Id. at *5–6. Similarly, in Mestayer, the Hon. Edward Chen reasoned that because “[t]he disclosure of the bankruptcy substantially diminishes the risk that the report was misleading even if it otherwise did not fully comply with Metro 2,” the plaintiff had failed sufficiently to plead an inaccuracy. 2016 WL 7188015, at *3.  Here, Muehlenberg’s credit report from the Chase Defendants includes reporting on her account beginning in 4246xxxx that contains a section on “Payment History” in which it lists “FP,” or a failure to pay, for the month of October 2016. See Ex. A to Chase Defs.’ Mot. to Dismiss at 9. Muehlenberg alleges that this is an inaccuracy within the meaning of the FCRA. Placing that notation in context, above the “Payment History,” on the same page, the report lists a 0% credit usage and no account balance, and immediately adjacent to the “Payment History,” under “Payment Status,” it states, “Debt included in or discharged through bankruptcy chapter 13.” Id. For Muehlenberg’s account beginning in 4194xxxx, the report contains the “FP” notation for the month of July of 2016. Id. at 13. Again this report displays a 0% credit usage and no account balance, as well as the “Payment Status” of “Debt included in or discharged through bankruptcy chapter 13.” Id. Muehlenberg’s discharge from bankruptcy is also reported separately in the credit report under the “Public Records” section. Id. at 23.  While Muehlenberg argues that the “FP” notation alone would immediately result in a lower credit rating, and contends that expert testimony is required in order to properly interpret her credit report, the same would have been true in Torion and Mestayer. Those cases concluded that the credit reports at issue were not inaccurate. As in those cases, Muehlenberg’s credit report accurately reported elsewhere her bankruptcy and discharge in the “Public Records” section. And here, Muehlenberg’s discharge from bankruptcy is not only included in a separate section of the credit report but also on the same page and indeed immediately adjacent to the alleged inaccuracy. The prominent display of her bankruptcy discharge in multiple locations of her credit report “substantially diminishes the risk that the report was misleading.” Mestayer, 2016 WL 7188015, at *3.  I conclude that because Muehlenberg’s credit report is not misleading in context, it is not inaccurate within the meaning of either the FCRA or CCRAA.