Eric Steinmetz v. American Honda Finance Corp.

• Court: Court of Appeals for the Ninth Circuit
• Decided: November 9, 2020
• Docket: 19-16865
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS NOV 9 2020 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

ERIC STEINMETZ, No. 19-16865

Plaintiff-Appellant, D.C. No. 2:19-cv-00064-JCM-VCF

v. MEMORANDUM* AMERICAN HONDA FINANCE CORPORATION; EXPERIAN INFORMATION SOLUTIONS, INC.,

Defendants-Appellees,

and

CAPITAL ONE; et al.,

Defendants.

Appeal from the United States District Court for the District of Nevada James C. Mahan, Senior District Judge, Presiding

Submitted October 8, 2020** Seattle, Washington

Before: GRABER and W. FLETCHER, Circuit Judges, and KOBAYASHI,***

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). District Judge.

Plaintiff-Appellant Eric Steinmetz (“Steinmetz”) appeals from the district

court’s order dismissing his first amended complaint with prejudice. We have

jurisdiction under 28 U.S.C. § 1291. We review de novo a district court’s

dismissal under Federal Rule of Civil Procedure 12(b)(6). Mashiri v. Epsten

Grinnell & Howell, 845 F.3d 984, 988 (9th Cir. 2017). “The district court’s denial

of leave to amend the complaint is reviewed for an abuse of discretion.” Cervantes

v. Countrywide Home Loans, Inc., 656 F.3d 1034, 1041 (9th Cir. 2011). We

affirm in part, reverse in part, and remand.

1. Steinmetz did not make a prima facie showing that American Honda

reported inaccurate information to the credit reporting agencies (“CRAs”) by not

reporting his payments on his car loan after his Order of Discharge was entered,

because those debts were “provided for” by his bankruptcy plan. See Matter of

Gregory, 705 F.2d 1118, 1122 (9th Cir. 1983) (holding “that the phrase ‘provided

for’ in section 1328(a) simply requires that for a claim to become dischargeable the

plan must ‘make a provision for’ it, i.e., deal with it or refer to it”).

But Steinmetz also alleged that American Honda did not report the payments

he made after filing his bankruptcy petition but before entry of discharge, that is,

*** The Honorable Leslie E. Kobayashi, United States District Judge for the District of Hawaii, sitting by designation.

2 before the bankruptcy plan “provided for” those debts. Therefore, the district court

erred in concluding that American Honda had no obligation to report the payments

Steinmetz made during the bankruptcy proceeding but before discharge. See

Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147, 1154 (9th Cir. 2009)

(holding that a consumer has a private right of action against a furnisher of credit

information for willful or negligent noncompliance with the requirements in 15

U.S.C. § 1681s-2(b)(1)). For similar reasons, the district court erred in dismissing

Steinmetz’s §§ 1681e(b) and 1681i claims against Defendant-Appellee Experian

Information Solutions, Inc. (“Experian”), to the extent that they were based on

Experian’s failure to report Steinmetz’s payments to American Honda before his

Order of Discharge.1

2. The report of multiple charge-offs does not support a plausible claim

under §§ 1681e(b) and 1681i, because Steinmetz failed to plead that anyone would

believe that the account had been charged off more than once. See Shaw v.

Experian Info. Sols., Inc., 891 F.3d 749, 757 (9th Cir. 2018) (stating that the

standard for actionable conduct is that the imprecision alleged could negatively

1 Steinmetz forfeited any claims under Nevada Revised Statutes (“NRS”) section 598C and its subsections because he failed to raise them in his opening brief. See Smith v. Marsh, 194 F.3d 1045, 1052 (9th Cir. 1999) (holding that arguments not raised in a party’s opening brief generally are forfeited).

3 affect credit decisions (citation omitted)). It is undisputed that an account can be

charged off only once.

3. However, the district court erred in dismissing Steinmetz’s §§ 1681(e)(b),

and 1681i claims against Experian for reporting inconsistent bankruptcy inclusion

dates. Steinmetz plausibly claims that a CRA’s inconsistent reporting of

bankruptcy inclusion dates is “patently incorrect” or, at least, is “misleading in

such a way and to such an extent that it can be expected to adversely affect credit

decisions,” Shaw, 891 F.3d at 756, because it could imply that he filed for

bankruptcy twice or prolong his bankruptcy’s negative effects on his credit.

4. With respect to his § 1681(g) claim, Steinmetz did not allege that he

requested a disclosure as is required under that statute. Therefore, the district court

properly dismissed his § 1681(g) claim.

5. The district court erred in dismissing Steinmetz’s § 1681e(b) claim for the

independent reason that the document Steinmetz received was not a “consumer

report” as required in that provision, and no third party ever saw it. A “consumer

report” under § 1681e includes a file procured with “a reasonable expectation that

[it] will be put to a use permissible under the [Federal Credit Reporting Act].”

Comeaux v. Brown & Williamson Tobacco Co., 915 F.2d 1264, 1274 (9th Cir.

1990). Steinmetz did not have to allege that he in fact used the report for a

4 permissible purpose (i.e. to secure credit) as long as there was a reasonable

expectation that he would.

6. The district court properly dismissed Steinmetz’s state law claims brought

under NRS sections 598, and 41.600, because Experian disclosed what was

required under state statute, and the state law consumer fraud claims are

conclusory and implausible.

7. Finally with respect to the claims for which dismissal has been affirmed,

the district court did not abuse its discretion in dismissing with prejudice. See

Cervantes, 656 F.3d at 1041.

In sum, we affirm the dismissal of Steinmetz’s NRS section 598 and 41.600

claims, as well as his §§ 1681g claim and his claims related to the reporting of

multiple charge-offs. We reverse the dismissal of the §§ 1681e(b) and 1681i

claims against Experian regarding positive payment history before the Order of

Discharge and bankruptcy inclusion dates; his § 1681s-2(b) claim against

American Honda regarding positive payment history before the Order of

Discharge; and the district court’s conclusion that Steinmetz’s § 1681e claim

necessarily fails because he did not plead that the inaccuracies occurred in a

“consumer report.”

AFFIRMED IN PART, REVERSED AND VACATED IN PART, AND

REMANDED. Each party shall bear its own costs.