In Blakeney v. Experian Information Solutions, Inc., 2016 WL 4270244, at *4–6 (N.D.Cal., 2016), Judge Koh dismissed a FCRA claim grounded in debt collectors’ reporting of an account passing through Chapter 13 bankruptcy.
As to Plaintiff’s first theory of liability, the FCRA requires a furnisher to “conduct an investigation with respect to the disputed information” after the furnisher receives notice of a dispute from a consumer reporting agency. 15 U.S.C. § 1681s-2(b)(1). The Ninth Circuit has held that such an investigation must be “reasonable.” Gorman, 584 F.3d at 1157. “[W]hether a reinvestigation conducted by a furnisher in response to a consumer’s notice of dispute is reasonable depends in large part on the allegations provided to the furnisher by the credit reporting agency.” Id. at 1160 (ellipses omitted). The only allegations in the First Amended Complaint regarding the allegations provided to the furnishers by the credit reporting agencies is that “Plaintiff disputed the inaccurate tradelines via certified mail” and that “each credit agency sent each Defendant notification that Plaintiff was disputing the accuracy of what it was reporting to them.” FAC ¶¶ 11, 12. Plaintiff then alleges that Credit Recovery Associates and Regional Finance failed to conduct a reasonable investigation because they did not review the terms of Plaintiff’s bankruptcy plan and did not investigate the impact of the bankruptcy plan. Id. ¶ 15. However, Plaintiff does not allege that Plaintiff’s dispute to the credit reporting agencies of the allegedly inaccurate tradelines mentioned Plaintiff’s bankruptcy plan, nor does Plaintiff allege that the credit reporting agencies notified Credit Recovery Associates and Regional Finance that Plaintiff’s dispute centered on Plaintiff’s bankruptcy plan. Thus, because “whether a reinvestigation conducted by a furnisher in response to a consumer’s notice of dispute is reasonable depends in large part on the allegations provided to the furnisher by the credit reporting agency,” Gorman, 584 F.3d at 1157, Plaintiff has not sufficiently alleged that Credit Recovery Associates and Regional Finance reasonably should have reviewed Plaintiff’s bankruptcy plan. As to Plaintiff’s second theory of liability, the FCRA requires a furnisher, upon receiving notice of a dispute, to report the results of the investigation and “if the investigation finds that the information is incomplete or inaccurate, report” and correct those results. 15 U.S.C. § 1681s-2(b)(1)(C)–(E); see also Drew v. Equifax Info. Servs., LLC, 690 F.3d 1100, 1106 (9th Cir. 2012) (“Upon being notified of a dispute by a [credit reporting agency], a furnisher must investigate and, if necessary, correct the information it reports.”). Information can be “incomplete or inaccurate” within the meaning of the FCRA “because it is patently incorrect, or because it 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. Accordingly, omitting the disputed nature of a debt, if the dispute could materially alter how the reported debt is understood, may be “incomplete or inaccurate” reporting. See id. at 1163–64. In the instant case, Plaintiff alleges that Credit Recovery Associates “supplied inaccurate and misleading information to the Credit Reporting Agencies by reporting, after Plaintiff’s [C]hapter 13 filing and confirmation of the repayment plan, that the account was in collections, charged off, and that both a balance and past due balance were owed to Defendant Credit Recovery Associates, despite the treatment of its claims under the terms of Plaintiff’s confirmed [C]hapter 13 repayment plan.” Id. ¶ 23. Plaintiff does not assert that the account was not in collection or charged off, that the balance on the account was not past due, or that no balance was owed. As to Regional Finance, Plaintiff alleges that Regional Finance “supplied inaccurate and misleading information to the Credit Reporting Agencies by reporting, after Plaintiff’s [C]hapter 13 filing and confirmation of the repayment plan, that the account was in collections and charged off with no mention of Plaintiff’s [C]hapter 13 filing, despite the treatment of the claim under the terms of Plaintiff’s confirmed [C]hapter 13 repayment plan.” Id. ¶ 24. As with Credit Recovery Associates, Plaintiff does not assert that the Regional Finance account was not in collection or charged off. Credit Recovery Associates and Regional Finance argue that, as a matter of law, it is neither misleading nor inaccurate to report delinquent debts during the pendency of a bankruptcy proceeding prior to the discharge of the debts. Courts in this district have found that reporting delinquent payments during bankruptcy may be misleading if the furnisher omits to report that the debts were discharged. See Mortimer v. Bank of Am., N.A., No. C-12-01959 JCS, 2013 WL 1501452, at *4 (N.D. Cal. Apr. 10, 2013) (finding that reporting delinquencies during the pendency of bankruptcy is not misleading so long as the creditor reports that the account was discharged through bankruptcy and the outstanding balance is zero); Venugopal v. Digital Fed. Credit Union, No. 12-CV-06067 EJD, 2013 WL 1283436, at *3 (N.D. Cal. Mar. 27, 2013) (holding that reporting of historically accurate debt may violate the FCRA when the reporting did not include that the debt was discharged in bankruptcy or that the debt was in dispute). However, courts in this district have consistently held that it is not misleading or inaccurate to report delinquent debts that have not been discharged. See Mortimer v. JP Morgan Chase Bank, N.A., No. C 12-1936 CW, 2012 WL 3155563, at *3 (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 Am., N.A., No. C-12-01959 JCS, 2013 WL 1501452, at *4 (N.D. Cal. Apr. 10, 2013) (finding that reporting delinquencies during the pendency of bankruptcy is not misleading so long as the creditor reports that the account was discharged through bankruptcy and the outstanding balance is zero); Giovanni v. Bank of America, N.A., No. C 12-02530 LB, 2013 WL 1663335, at *6 (N.D. Cal. April 17, 2013) (holding that it was not misleading or inaccurate for a furnisher to report overdue payments on debtor’s account during pendency of Chapter 7 bankruptcy petition but prior to discharge);Giovanni v. Bank of America, N.A., No. C 12-02530 LB, 2012 WL 6599681, at *6 (N.D. Cal. Dec. 18, 2012) (same). In the instant case, Plaintiff’s bankruptcy plan has been confirmed but Plaintiff’s debts have not yet been discharged. Confirmation of Plaintiff’s Chapter 13 bankruptcy plan is not equivalent to discharge of Plaintiff’s debts, and Plaintiff is not entitled to receive a discharge of debts covered under Plaintiff’s Chapter 13 bankruptcy plan until Plaintiff has completed all payments provided for under the Chapter 13 bankruptcy plan. 11 U.S.C. § 1328 (providing that “the court shall grant the debtor a discharge of all debts provided for by the plan…after completion by the debtor of all payments under the plan” subject to certain conditions). Thus, it was not misleading or inaccurate for Credit Recovery Associates and Regional Finance to report Plaintiff’s delinquent debts. Because Plaintiff’s debts have not been discharged, Credit Recovery Associates and Regional Finance had no obligation to reference Plaintiff’s bankruptcy proceeding. See Mortimer v. JP Morgan Chase Bank, N.A., 2012 WL 3155563, at *3 (“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.”).