Opinion
For Gabriel Felix Moran, Plaintiff: Devin H Fok, Law Offices of Devin H Fok, Alhambra, CA; Joshua Eunsuk Kim, A New Way of Life Reentry Project, Los Angeles, CA.
For The Screening Pros, LLC, a California Corporation, Defendant: Colby Petersen, Michael J Saltz, Jacobson Russell Saltz & Fingerman LLP, Los Angeles, CA.
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS [11]
STEPHEN V. WILSON, UNITED STATES DISTRICT JUDGE.
I. INTRODUCTION
Plaintiff Gabriel Felix Moran ("Plaintiff") filed this lawsuit in California Superior Court against Defendant The Screening Pros, LLC ("Defendant"), a credit reporting agency. Plaintiff's First Amended Complaint ("FAC") primarily alleges that Defendant issued a background check report about Plaintiff that contained certain criminal history information in violation of the the Fair Credit Reporting Act, 15 U.S.C. §§ 1681 et seq. ("FCRA"), and California's Investigative Consumer Reporting Agencies Act, Cal. Civ. Code §§ 1786 et seq. ("ICRAA"). Defendant removed to this Court on the basis of federal question jurisdiction, and has filed a Motion to Dismiss the FAC. For the reasons below, the Court GRANTS the Motion in part, and DENIES in part.
At this stage, the Court must accept all well-pled allegations as true. Daniel v. County of Santa Barbara, 288 F.3d 375, 380 (9th Cir. 2002).
Defendant is a background check company that provides tenant screening services to landlords in connection with the leasing of residential properties. (FAC ¶ 5). On or about February 5, 2010, Plaintiff applied for housing with an affordable housing development project named Maple Square. At Maple Square's request, Defendant furnished a background check report ("Report") on Plaintiff containing information about his criminal history, eviction history, and credit history. (FAC ¶¶ 34-35). This litigation centers on the allegedly unlawful disclosure of certain events in Plaintiff's criminal history. (Compl., Ex. 1).
Plaintiff attached a copy of the Report as Exhibit 1 to the original complaint, but failed to re-attach the Report to the FAC. However, because the FAC refers extensively to the Report, and the Report forms the basis of the case, the Report is incorporated by reference. United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003) (explaining that a document "may be incorporated by reference into a complaint if the plaintiff refers extensively to the document or the document forms the basis of the plaintiff's claim").
The Report discloses two discrete episodes in Plaintiff's criminal history. First, the Report shows that on May 16, 2000, Plaintiff was charged with a misdemeanor for being "under the influence of a controlled substance." (FAC ¶ 36). Plaintiff was never convicted and the charge was dismissed on March 2, 2004. (Compl., Ex. 1 at 1). Second, the Report notes that on June 4, 2006, Plaintiff was charged with one count of second-degree burglary, one count of forgery, and one count of embezzlement from an older or dependent adult. (FAC ¶ 46); (Compl., Ex 1 at 1-2). Three days later, the first two counts were dismissed, but Plaintiff was convicted of embezzlement and sentenced to 60 days in jail, 3 years of probation, and a fine. (Compl., Ex. 1 at 1-2).
Due to the unfavorable information in Defendant's report, Maple Square's owner denied Plaintiff's rental application. (FAC ¶ 48). Plaintiff disputed the background report in writing, but Defendant failed to investigate and respond to Plaintiff's concerns. (FAC ¶¶ 49-51). On June 7, 2012, Plaintiff then filed this action in Los Angeles County Superior Court. Defendant removed, and Plaintiff filed an amended complaint.
The FAC contains eleven causes of action. The first three arise under the FCRA, and the next six are based on California's ICRAA. As explained below, several of the federal and state causes of action proscribe the same alleged misconduct. Plaintiff alleges that Defendant committed the following violations: (1) disclosed the first charge from 2000, which predated the Report by more than 7 years, FCRA § 1681c; ICRAA § 1786.18; (2) disclosed two charges that did not result in conviction arising from the second incident from 2006, ICRAA § 1786.18; (3) failed to have reasonable procedures to avoid the foregoing violations, FCRA § 1681e(a), ICRAA § 1786.20(a); (4) failed to assure maximum possible accuracy of the information it was disclosing, FCRA § 1681e(b); ICRAA § 1786.20(b); (4) failed to reinvestigate in light of Plaintiff's written dispute, FCRA § 1681i(a); ICRAA § 1786.24; (5) failed to obtain proper certification from Maple Square before issuing Plaintiff's report, ICRAA § 1786.12(e); (6) failed to include in Plaintiff's report the source of its information and mandatory notices, ICRAA §§ 1786.28, 1786.29. Additionally, Plaintiff alleges that Defendant has engaged in unfair and unlawful business practices in violation of California Business & Practice Code §§ 17200 et seq. Plaintiff seeks damages, declaratory relief, costs, and attorneys' fees.
III. LEGAL STANDARD
To survive a motion to dismiss, a complaint "must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id . By contrast, a complaint that offers mere "labels and conclusions" or "a formulaic recitation of the elements of a cause of action will not do." Id . In reviewing a Rule 12(b)(6) motion, the court must accept all allegations of material fact as true and construe the allegations in the light most favorable to the nonmoving party. Daniel v. County of Santa Barbara, 288 F.3d 375, 380 (9th Cir. 2002).
IV. DISCUSSION
Defendant seeks to dismiss every cause of action except for the Third Cause of Action. The Court first addresses the federal claims under the FCRA.
A. First Cause of Action Under FCRA § 1681c
Plaintiff alleges that Defendant violated FCRA § 1681c(a) by including outdated criminal history information in the Report. To decide whether Plaintiff states a claim, the Court begins with the statute.
1. Background of the FCRA
Congress enacted the FCRA in 1970 with the express purpose of ensuring that consumer reporting agencies perform their function "in a manner which is fair and equitable to the consumer." 15 U.S.C. § 1681(b). To this end, "[t]he FCRA limits the length of time that a [consumer reporting agency] is permitted to report an adverse item of information." F.T.C. v. Gill, 265 F.3d 944, 948 (9th Cir. 2001). Older items that predate this seven-year retrospective window are referred to as 'obsolete.'" Gill , 265 F.3d at 948. Prior to 1998, section 1681c(a) read as follows:
[N]o consumer reporting agency may make any consumer report containing any of the following items of information: ... (2) Suits and judgments which, from date of entry, antedate the report by more than seven years or until the governing statute of limitations has expired, whichever is the longer period. ... (5) Records of arrest, indictment, or conviction of crime which, from date of disposition, release, or parole, antedate the report by more than seven years. (6) Any other adverse item of information which antedates the report by more than seven years.
15 U.S.C. § 1681c(a) (West 1997).
In 1990, the Federal Trade Commission ("FTC"), the agency charged with administering the FCRA, issued commentary on how to construe provisions throughout the statute. In the agency's comment to section 1681c(a)(5), the agency explained that "[t]he seven year reporting period runs from the date of disposition, release or parole, as applicable. For example, if charges are dismissed at or before trial, or the consumer is acquitted, the date of such dismissal or acquittal is the date of disposition." 16 C.F.R. Pt. 600, App. 605(a)(5) (2010).
In 1998, Congress amended the FCRA through the Consumer Reporting Employment Clarification Act, Pub. L. No. 105-347, §5, 112 Stat. 3208. Three pertinent revisions were enacted. First, section 1681c(a)(2) was expanded to include records of arrest, specifying that the seven-year period commences on the "date of entry" of the records of arrest. Second, Congress struck section 1681c(a)(5) in its entirety, thereby excising the "date of disposition" language. Third, former section 1681c(a)(6) was redesignated as section 1681c(a)(5), and was rolled back to exclude criminal convictions, such that they may now be reported beyond seven years. Accordingly, section 1681c(a) now provides:
[N]o consumer reporting agency may make any consumer report containing any of the following items of information: . . . (2) Civil suits, civil judgments, and records of arrest that, from date of entry, antedate the report by more than seven years or until the governing statute of limitations has expired, whichever is the longer period. . . . (5) Any other adverse item of information, other than records of convictions of crimes which antedates the report by more than seven years.
15 U.S.C. § 1681c(a) (West 2010) (emphasis added).
The contemporaneous House and Senate floor debates praised the removal of convictions from statutory protection because it would enable employers in areas of child or elderly care, education, and household services to discover convictions in employee background checks. 144 Cong. Rec. S11638-04 (daily ed. Oct. 6, 1998) (statement of Sen. Nickles); 144 Cong. Rec. H10218-02 (daily ed. Oct. 8, 1998) (statement of Rep. Leach). No attention was paid, however, to the fact that the seven-year period for arrest records, which once began at the date of disposition, now begins on the date of entry.
On July 26, 2011, the FTC rescinded the agency's 1990 commentary and issued a new staff report interpreting the modern FCRA. Statement of General Policy or Interpretation, 76 Fed. Reg. 44462, 44463 (July 26, 2011); Federal Trade Commission, 40 Years of Experience with the Fair Credit Reporting Act: An FTC Staff Report with Summary of Interpretations (July 2011) ("2011 Report"), available at: http://www.ftc.gov/os/2011/07/110720fcrareport.pdf. In particular, the new comment to section 1681c(a)(5) clarifies that "[t]he seven year reporting period for criminal record information 'other than convictions of crimes' runs from the date of the reported event." 2011 Report at 57 (emphasis added).
2. Analysis
Plaintiff alleges that Defendant violated §§ 1681c(a)(2) and (5) because the Report discloses a criminal charge filed on May 16, 2000, which is more than seven years before the Report was issued on February 5, 2010. Defendant argues, however, that the event was not obsolete because the seven-year period commenced on the date the charge was dismissed, March 2, 2004, which was less than seven years before the Report was furnished. The Court therefore must decide, as a matter of first impression, what operative date in the criminal course of events marks the beginning of the seven-year disclosure period.
Defendant contends that the seven-year window commences with the "date of disposition" of the criminal charge, citing FTC commentary issued in 1990. 16 C.F.R. Pt. 600, App. 605(a)(5) (explaining that "the date of such dismissal or acquittal is the date of disposition"). However, the Court need not defer to an informal agency interpretation where it lacks "the power to persuade." United States v. Mead Corp., 533 U.S. 218, 227, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001). Rather, "[t]he weight accorded to an administrative judgment 'will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, '" id. at 219 (quoting Skidmore v. Swift & Co., 323 U.S. 134, 140, 65 S.Ct. 161, 89 L.Ed. 124 (1944), as well as the degree of logic, expertness, care, and formality exercised in reaching the decision, Sacora v. Thomas, 628 F.3d 1059, 1067 (9th Cir. 2010).
Here, the 1990 commentary construed the pre-1998 version of the FCRA. The statute, however, looked markedly different then. Section 1681c(a)(2) did not mention records of arrest. Instead, section 1681c(a)(5) provided that reporting agencies could not disclose "[r]ecords of arrest, indictment, or conviction of crime which, from date of disposition, release, or parole, antedate the report by more than seven years." 15 U.S.C. § 1681c(a)(5) (West 1997) (emphasis added). This explains why the FTC's 1990 commentary focused on the date of disposition.
Following the 1998 amendment, however, the 1990 commentary to section 1681c(a) lost its force. Nowhere is this more evident than in the stark inconsistency between the commentary and the plain text of the modern FCRA: whereas the commentary opines that the seven-year period for records of arrest begins at the date of disposition, the amended statute expressly provides that the seven-year period for records of arrest begins at the date of entry. In short, because the 1990 commentary was based on the pre-1998 version of the FCRA, it offers little insight into the current meaning of §§ 1681c(a)(2), (5). Accordingly, the Court declines to rely on the 1990 commentary.
This conclusion is strengthened by the new FTC commentary, which rescinded the old commentary and clarifies that under section 1681c(a)(5), "[t]he seven year reporting period for criminal record information 'other than convictions of crimes' runs from the date of the reported event." 2011 Report at 57. Although this comment is neither binding nor retroactive, it nonetheless sheds light on the FTC's view of the proper reading of the post-1998 statute. Moreover, unlike the 1990 commentary, the agency's current reading of section 1681c(a)(5) is consistent with the plain text requirement in section 1681c(a)(2) that the seven-year period for arrest records begin on the "date of entry." In other words, the agency's recent commentary harmonizes the sections to the principle that the seven-year period should commence at the start, not the end of the criminal process.
For the foregoing reasons, the Court concludes that section 1681c(a)(2) of the FCRA prohibits consumer reporting agencies from disclosing records of arrest for more than seven years after the date of entry, and section 1681c(a)(5) prohibits reporting agencies from disclosing other criminal record information, except convictions, for more than seven years after the date of the reported criminal event. Having clarified the applicable law, the Court now turns to the factual allegations of this case. The Report does not mention Plaintiff's arrest per se. Rather, the Report allegedly discloses that on May 16, 2000, Plaintiff was charged with one count of being under the influence of a controlled substance. This constitutes an "adverse item of information" under section 1681c(a)(5), and thus the seven-year window began on May 16, 2000. Because Defendant delivered the Report on February 5, 2010, the seven-year reporting period for this criminal event had long expired. Therefore, Plaintiff has stated a claim that Defendant violated section 1681c(a)(5). Accordingly, the Court DENIES the motion to dismiss the First Cause of Action.
B. Second Cause of Action Under FCRA § 1681e
Plaintiff next alleges that Defendant violated section 1681e in two ways: (1) Defendant failed to maintain reasonable procedures to avoid violations of section 1681c, in violation of section 1681e(a); and (2) Defendant failed to follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the Report relates, in violation of section 1681e(b). (FAC ¶¶ 63-64).
With respect to the first assertion, the preceding discussion establishes that Plaintiff has stated a claim that Defendant violated § 1681c. The fact that such a violation occurred, taken as true, also supports a plausible inference that Defendant failed to maintain procedures to avoid violations of § 1681c. Accordingly, the Court DENIES the motion to dismiss the section 1681e(a) claim.
The FAC does not, however, adequately plead a violation of section 1681e(b). "[T]o make out a prima facie violation under § 1681e(b), a consumer must present evidence tending to show that a credit reporting agency prepared a report containing inaccurate information." Guimond v. Trans Union Credit Info. Co., 45 F.3d 1329, 1333 (9th Cir. 1995). Although Plaintiff admits that the Report was not factually inaccurate, he argues that it was inaccurate within the meaning of FCRA "because it is misleading in such a way and to such an extent that it can be expected to adversely affect credit decisions." Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147, 1163 (9th Cir. 2009). In particular, Plaintiff contends that because the Report separately itemizes the three criminal counts arising from a single incident on June 4, 2006, it could mislead a reader to believe that Plaintiff committed more criminal acts than was actually the case.
This argument is unavailing. The Report clearly annotates that the three counts were part of the same case number and occurred on the same day. In addition, the Report labels the three counts in seriatim (count 1, count 2, count 3), which implies that they arise from the same event. Accordingly, the FAC fails to allege that the Report was factually inaccurate. The Court therefore GRANTS the motion to dismiss as to the section 1681e(b) claim.
C. Fourth through Ninth Causes of Action Under ICRAA
Defendant argues that the ICRAA claims must be dismissed because the statute is unconstitutionally vague as it applies to tenant screening reports containing criminal history information. Specifically, Defendant posits that persons of reasonable intelligence cannot discern whether criminal information is "character" information governed by the ICRAA, or "creditworthiness" information governed by the Consumer Credit Reporting Agencies Act ("CCRAA"), Cal. Civ. Code §§ 1785 et seq. The Court agrees.
The difference is important in part because a plaintiff bringing suit under the ICRAA may seek statutory damages of $10,000 in lieu of proving actual damages, whereas a plaintiff under CCRAA cannot. Compare Cal. Civ. Code § 1786.50(a)(1) with Cal. Civ. Code § 1785.31.
The Court's duty "is to ascertain and apply the existing California law." Munson v. Del Taco, Inc., 522 F.3d 997, 1002 (9th Cir. 2008) (internal quotation marks omitted). The Court is bound by pronouncements of the California Supreme Court on applicable state law, but in the absence of such pronouncements, we follow decisions of the California appellate courts unless there is convincing evidence that the California Supreme Court would decide otherwise. Id .
In California, "[a] statute which either forbids or requires the doing of an act in terms so vague that men of common intelligence must necessarily guess at its meaning and differ as to its application, violates the first essential of due process of law." Ortiz v. Lyon Mgmt. Group, Inc., 157 Cal.App.4th 604, 69 Cal.Rptr.3d 66, 70 (Ct. App. 2007).
To determine whether a statute is unconstitutionally vague, it must be applied in a specific context. Thus, in judging the constitutionality of a statute we must determine not whether it is vague in the abstract but, rather, whether it is vague as applied to this appellant's conduct in light of the specific facts of this particular case. Also, the challenged statute need only be reasonably certain or specific. It cannot be held void for uncertainty if any reasonable and practical construction can be given to its language. Finally, all presumptions and intendments favor the validity of a statute.
Id . (internal citations and quotation marks omitted).
To see why the ICRAA is vague, it is necessary first to understand the underlying statutory framework. When California enacted its own version of the FCRA in 1975, it drew a line between consumer credit reports and investigative consumer reports. Cisneros v. U.D. Registry, Inc., 39 Cal.App.4th 548, 46 Cal.Rptr.2d 233, 241 (Ct. App. 1995). On one side, the CCRAA governs "consumer credit reports, " which means "any written, oral or other communication of any information by a consumer credit reporting agency bearing on a consumer's credit worthiness, credit standing, or credit capacity, " when that information is collected or used to establish the consumer's eligibility for personal credit, employment, rental housing, or other specified purposes." Cal. Civ. Code § 1785.3(c). On the other side, the ICRAA governs "investigative consumer reports, " which are reports "in which information on a consumer's character, general reputation, personal characteristics, or mode of living is obtained through any means." Cal. Civ. Code § 1786.2(c). In general, the ICRAA imposes stricter duties and more severe penalties than the CCRAA, and consumers have different rights under each statute. Ortiz , 69 Cal.Rptr.3d at 71.
As California courts have recognized, this statutory framework reveals two threads of legislative intent. First, the statutory scheme "indicates a legislative intent to distinguish between creditworthiness information and character information." Id .
Nothing in the statutes suggests any one item of information may constitute both creditworthiness and character information such that it alone subjects a tenant screening report to both statutes. Rather, any one item of information may be classified as either creditworthiness or character information, but not both. Construing the two statutes to govern discrete items of information harmonizes the statutes, rather than collapsing them into one.
Id .
Second, the statutes themselves reflect the Legislature's awareness of "the inherent overlap between creditworthiness information and character information." Ortiz , 69 Cal.Rptr.3d at 72. As the Ortiz court observed, the CCRAA expressly excludes any report containing "information solely on a consumer's character . . . which is obtained through personal interviews, " Cal. Civ. Code § 1785.39(c)(3), while the ICRAA expressly excludes any report "that is limited to specific factual information relating to the consumer's credit record or manner of obtaining credit obtained directly from a creditor of the consumer, " Cal. Civ. Code § 1786.2(c). These exclusions imply that the CCRAA's scope over creditworthiness information could otherwise include character information, and the ICRAA's scope over character information would otherwise embrace creditworthiness information. Ortiz, 69 Cal.Rptr.3d at 72. In sum, "the [California] Legislature recognized the inherent overlap between creditworthiness information and character information. Yet it simultaneously demanded that the two types of information be distinguished when classifying tenant screening reports as subject either to the CCRAA or the ICRAA." Id .
This incongruity became problematic in Ortiz, where the plaintiff sued a credit reporting agency under the ICRAA for producing a report containing unlawful detainer information. The court observed that the unlawful detainer information related to both the plaintiff's creditworthiness and character. On one hand, unlawful detainer could reflect an inability to timely pay obligations, which is probative of creditworthiness. Id . at 74. On the other hand, unlawful detainer could also stem from "holding over after the lease expires, a breach of a lease covenant, the commission of waste, or the maintenance of a nuisance, " which speak to the consumer's "obstinacy, carelessness, untrustworthiness, or selfishness." Id . Consequently, the court could find "no rational basis" to decide which statute should govern the reporting of such information. As such, the information impermissibly subjected the report to both the ICRAA and the CCRAA. The court therefore concluded that the ICRAA "fails to provide adequate notice to persons who compile or request tenant screening reports that may contain unlawful detainer information." Id .
The reasoning in Ortiz applies with equal force to the present facts. As a preliminary matter, the parties agree that criminal information clearly pertains to a person's character and therefore subjects the Report to the ICRAA. Plaintiff disputes, however, that criminal information has any bearing on a consumer's creditworthiness. This argument is meritless. First, the text of the CCRAA implies that criminal information may be relevant to creditworthiness. Section 1785.13(a)(6) of the California Civil Code prohibits credit reporting agencies from reporting "[r]ecords of arrest, indictment, information, misdemeanor complaint, or conviction of a crime that, from the date of disposition, release, or parole, antedate the report by more than seven years." This limitation implies that criminal information that occurs within seven years of the report may be included in a consumer credit report, revealing the lawmakers' contemplation that such information could be relevant to creditworthiness.
Further, common sense dictates that a consumer's criminal record can provide insight into their creditworthiness and credit capacity. For example, records of incarceration may reasonably be expected to negatively impact one's ability to obtain long-term employment, which in turn affects one's capacity to pay debts or bills. Similarly, records of repeat offenses could suggest that a consumer is likely to return to jail and thus would be an unreliable debtor or tenant. Records of stolen property crimes, such as the embezzlement conviction in this case, reasonably undermine a creditor or landlord's confidence that the consumer has a stable source of income, and that even if he did, he would be inclined to pay his debts or rent. Accordingly, the Court concludes that the criminal information in the instant Report clearly subjects it to the CCRAA as well as the ICRAA. As in Ortiz, the Court perceives no rational basis to decide that the Report should be governed by one statute versus the other. Thus, as applied here, the ICRAA is unconstitutionally vague because it failed to provide adequate notice to Defendant as to whether the statute covered its Report containing criminal information. Therefore, the Fourth through Ninth Causes of Action fail to state a claim upon which relief may be granted.
D. Tenth and Eleventh Causes of Action Under the UCL
The UCL prohibits unfair competition by means of any "unlawful, unfair or fraudulent business act or practice." Cal. Bus. & Prof. Code § 17200. "Each prong of the UCL is a separate and distinct theory of liability." Birdsong v. Apple, Inc., 590 F.3d 955, 959 (9th Cir. 2009). "While the scope of conduct covered by the UCL is broad, the remedies are limited." Theme Promotions, Inc. v. News Am. Marketing FSI, 546 F.3d 991, 1008 (9th Cir. 2008). "Prevailing plaintiffs are generally limited to injunctive relief and restitution, " and "may not receive damages . . . or attorney fees." Cel-Tech Commc'ns, Inc. v. Los Angeles Cellular Tel. Co., 20 Cal.4th 163, 83 Cal.Rptr.2d 548, 973 P.2d 527, 539 (1999).
As an initial matter, Plaintiff's claims for injunctive relief are preempted by the FTC. (FAC ¶¶ 103, 109). "Preemption may be implied when state law actually conflicts with federal law." Bank of Am. v. City and County of San Francisco, 309 F.3d 551, 558 (9th Cir. 2002). A conflict arises "when state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." Id . Here, Congress has made clear its intent to vest in the FTC the exclusive power to seek injunctive relief against FCRA violations. The Fifth Circuit reasoned that
the affirmative grant of power to the FTC to pursue injunctive relief, coupled with the absence of a similar grant to private litigants when they are expressly granted the right to obtain damages and other relief, persuasively demonstrates that Congress vested the power to obtain injunctive relief solely with the FTC.
Washington v. CSC Credit Servs., 199 F.3d 263, 268 (5th Cir. 2000). At least one court in this Circuit has applied this ruling and held that the FCRA preempts a UCL claim for injunctive relief predicated on FCRA § 1681e. Quadrant Info. Servs., LLC v. LexisNexis Risk Solutions, No. 11-5548, 2012 U.S. Dist. LEXIS 108597, 2012 WL 3155559, at *2-3 (N.D. Cal. Aug. 2, 2012). The Court finds these authorities persuasive. Allowing private litigants to enforce provisions of the FCRA by injunction through a state law vehicle would constitute an end-run around Congress's clear intent that the power to enforce the FCRA must rest with the FTC alone. Accordingly, the UCL claims for injunctive relief are preempted.
Plaintiff also seeks restitution under the UCL on the ground that Defendant was unjustly enriched as a result of its misconduct. However, the California Supreme Court has explained that disgorgement of profits obtained by means of an unfair business practice is not "an authorized remedy under the UCL where these profits are neither money taken from a plaintiff nor funds in which the plaintiff has an ownership interest." Korea Supply Co. v. Lockheed Martin Corp., 29 Cal.4th 1134, 131 Cal.Rptr.2d 29, 63 P.3d 937, 941 (Cal. 2003). Here, the FAC alleges only that Plaintiff spent money in an effort to "clean up" Defendant's misbegotten Report; it does not allege that Plaintiff gave Defendant any money or property. Thus, "[a]ny award that plaintiff would recover from defendant[] would not be restitutionary as it would not replace any money or property that defendant[] took directly from plaintiff." Id . Accordingly, a claim for restitution under the UCL cannot lie.
Because injunctive and restitutionary relief are foreclosed to Plaintiff, the Court GRANTS the Motion to Dismiss the UCL claims.
V. CONCLUSION
For the reasons above, the Court DISMISSES WITHOUT PREJUDICE the Fourth, Fifth, Sixth, Seventh, Eighth, Ninth, Tenth and Eleventh Causes of Action. The Court also DISMISSES WITHOUT PREJUDICE the portion of the Second Cause of Action alleging the failure to follow reasonable procedures to assure maximum accuracy in violation of FCRA § 1681e(b). The Court DENIES the Motion to Dismiss as to the First Cause of Action and the portion of the Second Cause of Action alleging a violation of FCRA § 1681e(a).
IT IS SO ORDERED.