1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 TRAVIS DRISKILL, Case No. 24-cv-00583-AMO
8 Plaintiff, ORDER DENYING DEFENDANT 9 v. AFFIRM INC.’S MOTIONS TO DISMISS AND TO STAY DISCOVERY 10 EXPERIAN INFORMATION SOLUTIONS, INC., et al., Re: Dkt. Nos. 20, 32, 38 11 Defendants.
12 13 This is a Fair Credit Reporting Act (“FRCA”) case. Before the Court is Defendant Affirm, 14 Inc.’s (“Affirm”) motion to dismiss (ECF 20) and its motion to stay discovery pending resolution 15 of the motion to dismiss (ECF 32). The matters are fully briefed and suitable for decision without 16 oral argument. Accordingly, the hearing set for August 1, 2024, is VACATED. See Civil L.R. 7- 17 6. The Court DENIES as moot Driskill and Affirms’ joint motion for leave to appear virtually at 18 the hearing. ECF 38. Having read the parties’ papers and carefully considered their arguments 19 and the relevant legal authority, and good cause appearing, the Court hereby DENIES the 20 motions, for the following reasons. 21 I. BACKGROUND1 22 Plaintiff Travis Driskill is a consumer and resident of Arizona. Compl. ¶ 13. Defendant 23 Experian Information Solutions, Inc. – one of the three major consumer reporting agencies 24 (“CRAs”) in the United States. Compl. ¶ 2. Defendant Affirm, Inc. (erroneously sued as Affirm 25 Holdings, Inc.) is a financial technology company with a “buy now, pay later” service for online 26
27 1 Unless otherwise noted, the Court accepts Driskill’s allegations in the Complaint as true and 1 and in-store purchases, which regularly furnishes CRAs with customer account information. 2 Compl. ¶ 3. 3 In February 2022, Driskill discovered that he was the target of identity theft, and obtained 4 his credit file disclosure from Defendant Experian, which “contained eleven Affirm accounts that 5 Experian was wrongfully reporting as belonging” to Driskill. Compl. ¶¶ 33-35, 47. Driskill 6 disputed the reporting to Experian, and in response, Experian deleted all but two Affirm accounts 7 from his credit report. Compl. ¶¶ 38-39. 8 Driskill reported his claims of fraud and identity theft and filed an identity theft report with 9 the Federal Trade Commission and a report with the Mesa, Arizona Police Department. Compl. 10 ¶¶ 40-41. He provided both of these reports to Affirm and spoke to the lender on at least four 11 occasions in March 2022 to dispute the accounts and supplement his prior submissions. Compl. 12 ¶¶ 42-43. MRS, a debt collector for Affirm accounts, contacted Driskill in April 2022 in an 13 attempt to collect on the fraudulent accounts. Compl. ¶ 44. Driskill further disputed the accounts 14 as not belonging to him directly with MRS and again with Affirm, to no avail. Compl. ¶¶ 45-46. 15 In the summer of 2022, Driskill again disputed the Affirm accounts in writing to Experian, who 16 then sent the disputes to Affirm, but the reporting did not change. Compl. ¶¶ 47-49, 57-68. In 17 addition to the inaccurate reporting, Driskill learned that Affirm had accessed his credit reports 18 without his permission. Compl. ¶¶ 73-74. 19 Separately during 2022, Driskill and his now ex-wife entered divorce proceedings in 20 Maricopa County, Arizona. RJN (ECF 21), Ex. 4. The divorce culminated in the entry of a 21 consent decree, signed by the Arizona court on June 15, 2022. Id. ¶ 13. Within that consent 22 decree, the Arizona court “allocated” to Driskill “[a]ny and all debts held in [his] name alone.” Id. 23 ¶ 5.a. (referencing RJN, Ex. C). The consent decree does not identify or mention the Affirm debts 24 at issue here. See generally id. 25 Driskill initiated this suit on January 31, 2024. ECF 1. Defendant Experian answered on 26 March 27, 2024. ECF 17.2 Defendant Affirm filed the instant motion to dismiss on April 23, 27 1 2024. ECF 20. On June 21, 2024, Affirm filed its motion to stay discovery pending ruling on the 2 motion to dismiss. ECF 32. 3 II. DISCUSSION 4 A. Motion to Dismiss 5 Defendant Affirm contends that Driskill’s contested debt was assigned to him in the course 6 of his divorce proceedings. Because the Arizona Superior Court made the assignment as part of a 7 consent decree, Affirm argues, this Court cannot find that the debt was improperly assigned 8 without essentially overturning the state court ruling. On this basis, and pursuant to Federal Rule 9 of Civil Procedure 12(b)(6), Affirm moves to dismiss the case under the Rooker-Feldman 10 Doctrine. 11 Rule 12(b)(6) tests for the legal sufficiency of the claims alleged in the complaint. Ileto v. 12 Glock, 349 F.3d 1191, 1199-1200 (9th Cir. 2003). Under Federal Rule of Civil Procedure 8, 13 which requires that a complaint include a “short and plain statement of the claim showing that the 14 pleader is entitled to relief,” Fed. R. Civ. P. 8(a)(2), a complaint may be dismissed under Rule 15 12(b)(6) if the plaintiff fails to state a cognizable legal theory, or has not alleged sufficient facts to 16 support a cognizable legal theory. Somers v. Apple, Inc., 729 F.3d 953, 959 (9th Cir. 2013). 17 While the court is to accept as true all the factual allegations in the complaint, legally 18 conclusory statements, not supported by actual factual allegations, need not be accepted. Ashcroft 19 v. Iqbal, 556 U.S. 662, 678-79 (2009). The complaint must proffer sufficient facts to state a claim 20 for relief that is plausible on its face. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 558-59 21 (2007) (citations and quotations omitted). 22 “A claim has facial plausibility when the plaintiff pleads factual content that allows the 23 court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” 24 Iqbal, 556 U.S. at 678 (citation omitted). “[W]here the well-pleaded facts do not permit the court 25 to infer more than the mere possibility of misconduct, the complaint has alleged – but it has not 26 ‘show[n]’ – that the pleader is entitled to relief.” Id. at 679. Where dismissal is warranted, it is 27 generally without prejudice, unless it is clear the complaint cannot be saved by any amendment. 1 Under the Rooker-Feldman doctrine, federal district courts do not have appellate 2 jurisdiction to hear cases that are, in effect, appeals from state court judgments. See, e.g., 3 Carmona v. Carmona, 603 F.3d 1041, 1050 (9th Cir. 2010). This is because, “[a]bsent express 4 statutory authorization, only the Supreme Court has jurisdiction to reverse or modify a state court 5 judgment.” Henrichs v. Valley View Dev., 474 F.3d 609, 613 (9th Cir. 2007). The Supreme Court 6 has noted that this doctrine bars “cases brought by state-court losers complaining of injuries 7 caused by state-court judgments rendered before the district court proceedings commenced and 8 inviting district court review and rejection of those judgments.” Exxon Mobil Corp. v. Saudi Basic 9 Indus. Corp., 544 U.S. 280, 284 (2005). Courts in the Ninth Circuit consider whether plaintiff 10 (1) “asserts as a legal wrong an allegedly erroneous decision by a state court,” and (2) “seeks relief 11 from a state court judgment based on that decision.” Carmona, 603 F.3d at 1041 (quoting Noel v. 12 Hall, 341 F.3d 1148, 1164 (9th Cir. 2003)).
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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 TRAVIS DRISKILL, Case No. 24-cv-00583-AMO
8 Plaintiff, ORDER DENYING DEFENDANT 9 v. AFFIRM INC.’S MOTIONS TO DISMISS AND TO STAY DISCOVERY 10 EXPERIAN INFORMATION SOLUTIONS, INC., et al., Re: Dkt. Nos. 20, 32, 38 11 Defendants.
12 13 This is a Fair Credit Reporting Act (“FRCA”) case. Before the Court is Defendant Affirm, 14 Inc.’s (“Affirm”) motion to dismiss (ECF 20) and its motion to stay discovery pending resolution 15 of the motion to dismiss (ECF 32). The matters are fully briefed and suitable for decision without 16 oral argument. Accordingly, the hearing set for August 1, 2024, is VACATED. See Civil L.R. 7- 17 6. The Court DENIES as moot Driskill and Affirms’ joint motion for leave to appear virtually at 18 the hearing. ECF 38. Having read the parties’ papers and carefully considered their arguments 19 and the relevant legal authority, and good cause appearing, the Court hereby DENIES the 20 motions, for the following reasons. 21 I. BACKGROUND1 22 Plaintiff Travis Driskill is a consumer and resident of Arizona. Compl. ¶ 13. Defendant 23 Experian Information Solutions, Inc. – one of the three major consumer reporting agencies 24 (“CRAs”) in the United States. Compl. ¶ 2. Defendant Affirm, Inc. (erroneously sued as Affirm 25 Holdings, Inc.) is a financial technology company with a “buy now, pay later” service for online 26
27 1 Unless otherwise noted, the Court accepts Driskill’s allegations in the Complaint as true and 1 and in-store purchases, which regularly furnishes CRAs with customer account information. 2 Compl. ¶ 3. 3 In February 2022, Driskill discovered that he was the target of identity theft, and obtained 4 his credit file disclosure from Defendant Experian, which “contained eleven Affirm accounts that 5 Experian was wrongfully reporting as belonging” to Driskill. Compl. ¶¶ 33-35, 47. Driskill 6 disputed the reporting to Experian, and in response, Experian deleted all but two Affirm accounts 7 from his credit report. Compl. ¶¶ 38-39. 8 Driskill reported his claims of fraud and identity theft and filed an identity theft report with 9 the Federal Trade Commission and a report with the Mesa, Arizona Police Department. Compl. 10 ¶¶ 40-41. He provided both of these reports to Affirm and spoke to the lender on at least four 11 occasions in March 2022 to dispute the accounts and supplement his prior submissions. Compl. 12 ¶¶ 42-43. MRS, a debt collector for Affirm accounts, contacted Driskill in April 2022 in an 13 attempt to collect on the fraudulent accounts. Compl. ¶ 44. Driskill further disputed the accounts 14 as not belonging to him directly with MRS and again with Affirm, to no avail. Compl. ¶¶ 45-46. 15 In the summer of 2022, Driskill again disputed the Affirm accounts in writing to Experian, who 16 then sent the disputes to Affirm, but the reporting did not change. Compl. ¶¶ 47-49, 57-68. In 17 addition to the inaccurate reporting, Driskill learned that Affirm had accessed his credit reports 18 without his permission. Compl. ¶¶ 73-74. 19 Separately during 2022, Driskill and his now ex-wife entered divorce proceedings in 20 Maricopa County, Arizona. RJN (ECF 21), Ex. 4. The divorce culminated in the entry of a 21 consent decree, signed by the Arizona court on June 15, 2022. Id. ¶ 13. Within that consent 22 decree, the Arizona court “allocated” to Driskill “[a]ny and all debts held in [his] name alone.” Id. 23 ¶ 5.a. (referencing RJN, Ex. C). The consent decree does not identify or mention the Affirm debts 24 at issue here. See generally id. 25 Driskill initiated this suit on January 31, 2024. ECF 1. Defendant Experian answered on 26 March 27, 2024. ECF 17.2 Defendant Affirm filed the instant motion to dismiss on April 23, 27 1 2024. ECF 20. On June 21, 2024, Affirm filed its motion to stay discovery pending ruling on the 2 motion to dismiss. ECF 32. 3 II. DISCUSSION 4 A. Motion to Dismiss 5 Defendant Affirm contends that Driskill’s contested debt was assigned to him in the course 6 of his divorce proceedings. Because the Arizona Superior Court made the assignment as part of a 7 consent decree, Affirm argues, this Court cannot find that the debt was improperly assigned 8 without essentially overturning the state court ruling. On this basis, and pursuant to Federal Rule 9 of Civil Procedure 12(b)(6), Affirm moves to dismiss the case under the Rooker-Feldman 10 Doctrine. 11 Rule 12(b)(6) tests for the legal sufficiency of the claims alleged in the complaint. Ileto v. 12 Glock, 349 F.3d 1191, 1199-1200 (9th Cir. 2003). Under Federal Rule of Civil Procedure 8, 13 which requires that a complaint include a “short and plain statement of the claim showing that the 14 pleader is entitled to relief,” Fed. R. Civ. P. 8(a)(2), a complaint may be dismissed under Rule 15 12(b)(6) if the plaintiff fails to state a cognizable legal theory, or has not alleged sufficient facts to 16 support a cognizable legal theory. Somers v. Apple, Inc., 729 F.3d 953, 959 (9th Cir. 2013). 17 While the court is to accept as true all the factual allegations in the complaint, legally 18 conclusory statements, not supported by actual factual allegations, need not be accepted. Ashcroft 19 v. Iqbal, 556 U.S. 662, 678-79 (2009). The complaint must proffer sufficient facts to state a claim 20 for relief that is plausible on its face. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 558-59 21 (2007) (citations and quotations omitted). 22 “A claim has facial plausibility when the plaintiff pleads factual content that allows the 23 court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” 24 Iqbal, 556 U.S. at 678 (citation omitted). “[W]here the well-pleaded facts do not permit the court 25 to infer more than the mere possibility of misconduct, the complaint has alleged – but it has not 26 ‘show[n]’ – that the pleader is entitled to relief.” Id. at 679. Where dismissal is warranted, it is 27 generally without prejudice, unless it is clear the complaint cannot be saved by any amendment. 1 Under the Rooker-Feldman doctrine, federal district courts do not have appellate 2 jurisdiction to hear cases that are, in effect, appeals from state court judgments. See, e.g., 3 Carmona v. Carmona, 603 F.3d 1041, 1050 (9th Cir. 2010). This is because, “[a]bsent express 4 statutory authorization, only the Supreme Court has jurisdiction to reverse or modify a state court 5 judgment.” Henrichs v. Valley View Dev., 474 F.3d 609, 613 (9th Cir. 2007). The Supreme Court 6 has noted that this doctrine bars “cases brought by state-court losers complaining of injuries 7 caused by state-court judgments rendered before the district court proceedings commenced and 8 inviting district court review and rejection of those judgments.” Exxon Mobil Corp. v. Saudi Basic 9 Indus. Corp., 544 U.S. 280, 284 (2005). Courts in the Ninth Circuit consider whether plaintiff 10 (1) “asserts as a legal wrong an allegedly erroneous decision by a state court,” and (2) “seeks relief 11 from a state court judgment based on that decision.” Carmona, 603 F.3d at 1041 (quoting Noel v. 12 Hall, 341 F.3d 1148, 1164 (9th Cir. 2003)). Given its limited scope, Rooker-Feldman “does not 13 preclude a plaintiff from bringing an ‘independent claim’ that, though similar or even identical to 14 issues aired in state court, was not the subject of a previous judgment by the state court.” Cooper 15 v. Ramos, 704 F.3d 772, 778 (9th Cir. 2012) (quoting Skinner v. Switzer, 562 U.S. 521, 532 16 (2011)). District courts are to “‘pay close attention to the relief sought by the federal-court 17 plaintiff’” in analyzing whether a case presents a de facto appeal. Hooper v. Brnovich, 56 F. 4th 18 619, 624 (9th Cir. 2022) (quoting Cooper, 704 F.3d at 777-78). 19 Here, Driskill seeks redress for Affirm’s failure to reasonably investigate his disputes and 20 correct reports of improper debts. Compl. ¶ 101-35. Driskill does not seek any relief from the 21 Arizona court’s consent decree. He does not request for this Court to set the decree aside, alter it, 22 strike it, or to reassign legal responsibility for any debts to his ex-wife. Driskill does not assert 23 that the consent decree was erroneous or that he suffered a legal wrong at the hands of the Arizona 24 court. Indeed, since the Arizona court entered the consent decree, Driskill did not “lose” anything 25 there – he agreed to the entry of the decree. See RJN, Ex. 4 ¶ 12 (“Both parties agree to proceed in 26 this matter by Consent Decree for Dissolution of Marriage.”). Moreover, the Arizona court did 27 not consider Driskill’s disputes of the inaccurate credit reporting because those issues were not 1 Guerin, 899 F.3d 1112, 1119 (9th Cir. 2018) (finding Rooker-Feldman did not bar claims because 2 “[n]o state-court judgment resolved the precise issues presented in this case, and the [plaintiffs] do 3 not complain of any error by the state court or seek relief from the state court’s judgments”). 4 Focusing, as the Court must on “the relief sought by the federal-court plaintiff” – damages for 5 Affirm’s failures to appropriately investigate Plaintiff’s disputes – Driskill does not assert a de 6 facto appeal of the division of marital debts by the Arizona court. Hooper, 56 F. 4th at 624. 7 Even if Driskill did seek appeal of the Arizona court’s consent decree, the Rooker-Feldman 8 doctrine would not limit the Court’s authority unless Driscol’s claims are “inexorably intertwined” 9 with the Arizona court’s ruling. Cooper, 704 F.3d at 778 (“Our circuit has emphasized that 10 ‘[o]nly when there is already a forbidden de facto appeal in federal court does the ‘inextricably 11 intertwined’ test come into play.’”) (alteration in original). This requirement is met “if the federal 12 claim succeeds only to the extent that the state court wrongly decided the issues before it.” Id. at 13 779. Or, as the Ninth Circuit has explained, “claims [are] inextricably intertwined where ‘the 14 relief requested in the federal action would effectively reverse the state court decision or void its 15 ruling.’” Id. (quotation marks omitted). 16 Here, Driskill disputes the Affirm accounts appearing on his credit record and Affirm’s 17 failure to investigate his disputes, but none of that is a result of any action by the Arizona court. 18 Any conclusion regarding Affirm’s failure to reasonably investigate Driskill’s disputes will not 19 impact the Arizona court’s decision at all. Affirm argues that Driskill’s claims are “inextricably 20 intertwined” with the Consent Decree (ECF 20 at 8), but it does not point to any connection 21 between the subject debt and the Consent Decree beyond this mere conclusion. More importantly, 22 Affirm fails to identify how Driskill’s claims would require reconsideration of the Consent Decree 23 or somehow void its ruling. Affirm’s bare assertions are insufficient to satisfy the second part of 24 this Circuit’s Rooker-Feldman test. The Rooker-Feldman doctrine therefore does not foreclose 25 Driskill’s FCRA claims in this Court. 26 // 27 // 1 B. Motion to Stay Discovery 2 As noted above, Affirm moved for a stay of discovery pending a ruling on the motion to 3 dismiss. ECF 32. The Court has resolved Affirm’s jurisdictional challenge for the reasons stated 4 || above. Therefore, the Court DENIES Affirm’s motion to stay discovery as moot. 5 || I. CONCLUSION 6 For the foregoing reasons, the Court hereby DENIES Affirm’s motions to dismiss and to 7 stay discovery. The Court ORDERS Affirm to file an answer to the Complaint within 21 days 8 || from the date of this Order. 9 IT IS SO ORDERED. 10 || Dated: July 17, 2024 11 of □ □ (12 ARACELI MARTINEZ-OLGUIN 13 United States District Judge © 15 16
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