Anderson v. Experian Information Solutions, Inc., 2017 WL 914394, at *3–6 (N.D.Cal., 2017), Judge Freeman dismissed an FCRA claim grounded in a furnisher’s and CRA’s Ch. 13 credit reporting.
Experian argues that even if Plaintiff had alleged his FCRA claim under § 1681i, the claim would fail because Plaintiff has not alleged facts showing that Experian’s credit reporting was inaccurate. . . . Plaintiff argues that he has alleged inaccuracies in his credit reports under the above standards. The Court disagrees based upon the following pleading deficiencies. . . .2. Reporting After Confirmation of Chapter 13 Plan Next, the Court takes up Plaintiff’s allegations that after his Chapter 13 plan was confirmed, he ordered the October 2015 Credit Report and discovered that “multiple trade lines continued to report Plaintiff delinquent on payments, past due balances, inaccurate balances, in collections, and some accounts even failed to register that Plaintiff was making payments on the account through his Chapter 13 plan.” FAC ¶¶ 92-95, ECF 51. . . More fundamentally, to the extent that Plaintiff claims that it was inaccurate for Experian to report delinquencies or past due balances after plan confirmation, that theory of liability has been rejected by courts in this district and other districts within the Ninth Circuit. See, e.g., Artus v. Experian Info. Sols., Inc., No. 5:16-CV-03322-EJD, 2017 WL 346022, at *5 (N.D. Cal. Jan. 24, 2017) (collecting cases); Doster, 2017 WL 264401, at *6 (“[A]s a matter of law it is not misleading or inaccurate to report a delinquent debt during the pendency of a bankruptcy.”); Polvorosa v. Allied Collection Serv., Inc., No. Case No. 2:16–CV–1508 JCM (CWH), 2017 WL 29331, at *3 (D. Nev. Jan. 3, 2017) (“[R]eporting delinquencies during the pendency of a bankruptcy or during a bankruptcy’s automatic stay is not itself a violation of the FCRA.”). Plaintiff argues that these decisions are based upon a misunderstanding of bankruptcy law because they fail to recognize that a bankruptcy court’s order confirming a Chapter 13 plan constitutes a binding final judgment regarding the rights and obligations of the debtor and his or her creditors. According to Plaintiff, because a confirmed plan modifies the original debts, any post-confirmation reporting of pre-confirmation delinquencies or balances is inaccurate. It is true that “[t]he provisions of a confirmed plan bind the debtor and each creditor.” 11 U.S.C. § 1327(a). Thus a creditor seeking payment on a debt is entitled only to those payments provided for under the plan, and “any issue decided under a plan is entitled to res judicata effect.” In re Blendheim, 803 F.3d 477, 486 (9th Cir. 2015). However, the Court declines to make the logical leap urged by Plaintiff that these authorities, governing the relationships between parties to a bankruptcy action, make it a violation of the FCRA to report a historically accurate pre-confirmation debt or delinquency. Regardless of how the rights and obligations of the parties to a bankruptcy are modified by a Chapter 13 plan, the original debt did exist prior to confirmation and Plaintiff has cited no authority suggesting that bankruptcy proceedings “erase” that historical fact for purposes of the FCRA. Moreover, with respect to the many debtors who fail to make all required plan payments, the original debt terms ultimately are reinstated. See Blendheim, 803 F.3d at 487. Indeed, historically accurate debts may be reported even after discharge, so long as the credit report indicates that the debts were discharged in bankruptcy. See Mortimer v. Bank of Am., N.A., No. C-12-01959 JCS, 2013 WL 1501452, *9-11 (N.D. Cal. Apr. 10, 2013) (furnisher’s reporting that the debt had been delinquent during the pendency of the bankruptcy was historically accurate and thus not actionable under the FCRA where report also indicated that the debt had been discharged in bankruptcy). Plaintiff’s counsel argued at the hearing that allowing reporting of pre-confirmation delinquencies or balances after a Chapter 13 plan has been confirmed will deprive debtors of significant benefits that they expect to obtain through Chapter 13 bankruptcy. That issue is one for Congress to resolve, not this Court. The Court’s task in evaluating Plaintiff’s FAC is to determine whether the facts alleged therein make out a plausible claim that Defendants’ credit reporting was inaccurate. The Court simply is not persuaded that the reporting of a delinquency or past due balance after plan confirmation is per se inaccurate under the FCRA. However, there appears to be an open question whether such reporting could satisfy the inaccuracy requirement if unaccompanied by any indication that the consumer is in bankruptcy. See Devincenzi v. Experian Info. Sols., Inc., No. 16-CV-04628-LHK, 2017 WL 86131, at *7 (N.D. Cal. Jan. 10, 2017) (declining to decide whether allegations that the “credit report contained no indication at all that the debts were the subject of a pending bankruptcy…would be sufficient to state a claim” but granting plaintiff leave to attempt to assert FCRA claim based on that theory). It is this Court’s view that it may well be possible for a plaintiff to allege facts showing that the reporting of a pre-confirmation delinquency is materially misleading absent any reference to a pending Chapter 13 bankruptcy, at least where a confirmed plan governs the timing and amounts of post-confirmation payments on the debt. Plaintiff, however, has not alleged whether or not the reports in question contained information regarding his bankruptcy. 3. Metro 2 Format In addition to his theory of FCRA liability based on the effect of plan confirmation, Plaintiff asserts a related theory based on industry standards regarding credit reporting. He devotes 45 of the FAC’s 139 paragraphs to a tutorial on industry standards and in particular the “Metro 2 format” adopted by the Consumer Data Industry Association (“CDIA”). See FAC ¶¶ 36-80. According to Plaintiff, “Metro 2 provides instruction on what updates must be made when a bankruptcy is filed,” and deviation from the Metro 2 format is inaccurate or misleading. See Pl.’s Opp. at 3, ECF 72. The Ninth Circuit has not spoken on the effect of the Metro 2 format, if any, on the obligations of CRAs and furnishers under the FCRA. However, district courts within the Ninth Circuit overwhelmingly have held that a violation of industry standards is insufficient, without more, to state a claim for violation of the FCRA. See, e.g., Doster, 2017 WL 264401, at *5 (collecting cases); Mestayer v. Experian Info. Sols., Inc., No. 15-CV-03645-EMC, 2016 WL 7188015, at *3 (N.D. Cal. Dec. 12, 2016). The out-of-district cases cited by Plaintiff do not persuade this Court to take a contrary view. In Dreher v. Experian Info. Sols., Inc., No. 3:11-CV-00624-JAG, 2013 WL 2389878, at *7 (E.D. Va. May 30, 2013), the district court held that industry standards could be considered at the summary judgment stage as part of the totality of evidence regarding the reasonableness of Experian’s failure to identify the main source of disputed information. That ruling does not advance Plaintiff’s argument that deviation from Metro 2 constitutes a per se inaccuracy under the FCRA. In Nissou-Rabban v. Capital One Bank (USA), N.A., No. 15CV1675 JLS (DHB), 2016 WL 4508241, at *5 (S.D. Cal. June 6, 2016), the district court held that the plaintiff had alleged a claim under the FCRA where she alleged that Metro 2 was Synchrony’s chosen method of reporting and that Synchrony’s deviation from Metro 2 might be misleading to such an extent as to affect credit decisions. Courts in this district have found such allegations to be insufficient. See, e.g., Mestayer, 2016 WL 7188015, at *3 (credit report that deviated from Metro 2 was not misleading where report disclosed bankruptcy); see also Doster, 2017 WL 264401, at *5 (collecting cases). This Court finds the latter decisions to be better reasoned and therefore concludes that allegations that a credit report deviated from the Metro 2 format is insufficient, without more, to state a claim under the FCRA. The Court does not mean to suggest that Metro 2 is wholly irrelevant to the evaluation of a claim asserted under the FCRA. It may be that allegations of deviations from the Metro 2 format could bolster other allegations of inaccuracy or be relevant to allegations of negligence on the part of the reporting entity. However, Plaintiff’s reliance on Metro 2 as an independent source of liability under the FCRA is unavailing.