District Court (Nev.) Says No FDCPA Claim Will Lie For Post-Discharge Consumer Reporting Because Consumer Reporting Was Not “Debt Collection”

In Carter v. Richland Holdings, No. 2:16-cv-02967-RFB-VCF, 2019 U.S. Dist. LEXIS 168010, at *12-15 (D. Nev. Sep. 30, 2019), the District Court granted summary judgment against an FDCPA Plaintiff.

AcctCorp argues that it was not reporting the debt in connection to an attempt to collect the debt pursuant to 15 U.S.C. § 1692e, but to comply with the Fair Credit Reporting Act. While neither the FDCPA nor the Ninth Circuit have defined the phrase, “in connection with the collection of any debt,” a generally accepted definition derived from other Circuit Court of Appeals is that “for communication to be in connection with the collection of a debt, an animating purpose of the communication must be to induce payment by the debtor.” Grden v. Leikin Ingber & Winters PC, 643 F.3d 169, 173 (6th Cir. 2011); see also Gburek v. Litton Loan Servicing LP, 614 F.3d 380, 385-86 (7th Cir. 2010). The Court agrees with AcctCorp that Plaintiffs have not shown that any reporting made after December 23, 2015 was made in connection with the collection of a debt. To support their claim that AcctCorp’s reporting was made in connection with the collection of a debt, Plaintiffs point to a declaration that they did not attach to their briefing in opposition to the instant motion for summary judgment. In this declaration, submitted in opposition to a prior motion for summary judgment, a former AcctCorp paralegal named Jamie Clark states that AcctCorp did not update its records to show that the balance on the account was adjusted to zero until November 1, 2016, and that on November 2, 2016 the bureau report changed from T to F, which would indicate that since April 2015 the account had been reported to credit bureaus. ECF No. -5 at 2 – 3. Plaintiffs extrapolate from this declaration the idea that “[d]efendant continued collection efforts as though it were collecting on a judgment.” ECF No. 84 at 14. But the Court does not find that this declaration supports Plaintiffs’ assertion. All the declaration does is confirm that AcctCorp may not have sufficiently updated its internal records. It does not support the assertion, nor does Plaintiff offer any other evidence showing, that AcctCorp made any communications to the credit reporting bureaus in an attempt to induce payment from Plaintiffs. Additionally, the consumer reports that are in the record also provide no evidence with which to infer that AcctCorp was making communications to credit reporting bureaus in connection with attempts to collect on the debt. Plaintiffs attach to their opposition papers two consumer reports received by JP Morgan Chase Bank in 2016 and 2017 respectively. Each document lists the Acctcorp tradeline as having a code “38,” which, according to the glossary of terms that begins each report, means “serious delinquency, and public record or collection item filed.” ECF Nos. 84-6, 84-7. Plaintiffs make much ado of this code, however the same tradelines for each account show a zero balance. Potentially incorrect codes are insufficient to find that AcctCorp was reporting the debt in an attempt to induce payment from Plaintiffs. It is undisputed that the tradelines showed that no amount was currently owing. Plaintiffs may potentially have a FCRA claim to the extent that the tradelines represented that the debt was delinquent when in fact nothing was owed, but that is not the claim they alleged in their complaint. It is undisputed that days after receiving notice of the pending bankruptcy, AcctCorp submitted a notice of release of garnishment to Plaintiffs’ respective employers and the City Constable. There is no evidence that AcctCorp made any attempt to reinstate the garnishments after learning of the bankruptcy discharge, made any attempt to contact Plaintiffs regarding the debt after the discharge, or represented to creditors or consumer reporting agencies that any balance was owed on the debt after the discharge. Even construing all inferences in favor of Plaintiffs as the law requires, the Plaintiffs’ evidence does not support a finding that AcctCorp made any misrepresentations regarding the debt in connection with an attempt to collect on said debt. For these reasons, the Court finds in favor of AcctCorp as a matter of law.