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Pearson v. Security Finance Corp. of Alabama, Inc.

United States District Court, M.D. Alabama, Southern Division

November 6, 2017

LORENZO PEARSON, Plaintiff,
v.
SECURITY FINANCE CORPORATION OF ALABAMA INC., et al., Defendants.

          REPORT AND RECOMMENDATION OF THE MAGISTRATE JUDGE

          TERRY F. MOORER UNITED STATES MAGISTRATE JUDGE.

         This matter is pending before the Court on Defendants' Motion to Dismiss (Doc. 16), Brief in Support (Doc. 17), Plaintiff's Response (Doc. 22) and Defendants' Reply (Doc. 24).[1] Pursuant to 28 U.S.C. § 636(b) (1) this case was referred to the undersigned United States Magistrate Judge for consideration and disposition or recommendation on all pretrial matters. (Doc. 5).

         I. Introduction

         Plaintiff, who is proceeding pro se, filed this action alleging Defendants violated section 1681m of the Fair Credit Report Act (“the FCRA”) 15 U.S.C. § 1681 et seq., by failing to give Plaintiff notice of adverse action. (Doc. 1 at p.1). The Complaint seeks money damages. (Doc. 1 p. 3). Plaintiff filed multiple motions to proceed in forma pauperis. Thereafter, this Court entered an Order granting Plaintiff's applications to proceed in forma pauperis. (Doc. 10). In forma pauperis proceedings are governed by 28 U.S.C. § 1915 which requires this court to conduct a preliminary review of the complaint to ensure the action is not ''frivolous or malicious, '' ''fails to state a claim on which relief can be granted, '' or ''seeks monetary relief against a defendant who is immune from such relief.'' See 28 U.S.C.' 1915(e)(2)(B).

         Pending before the Court is Defendants' Motion to Dismiss pursuant to 12(b)(6) of the Federal Rules of Civil Procedure based upon the Plaintiff's failure to state a claim upon which relief can be granted. (Doc. 16). Defendant argues that Plaintiff's complaint is due to be dismissed since Plaintiff's claims are predicated on a statute for which no private right of action is available. McDonald v. So. Farm Bureau Life Ins. Col., 291 F.3d718, 726 (11th Cir. 2002) (Granting the defendant's motion to dismiss where statute under which the plaintiff brought suit provided no private right of action). (Doc. 17 at p. 2). With these standards in mind, the Court will address Defendants' Motions to Dismiss.

         II. Discussion and Analysis

         As Plaintiff proceeds pro se, the court will liberally construe the allegations of his complaint. See Alba v. Montford, 517 F.3d 1249, 1252 (11th Cir. 2008). Plaintiff alleges Defendants violated section 1681m of the Fair Credit Report Act (“the FCRA”) 15 U.S.C. § 1681 et seq., by failing to give Plaintiff notice of adverse action. (Doc. 1 at p.1). Defendant argues that Plaintiff cannot state a claim because there is no private right of action under that statute. (Doc. 17 at p. 2).

         Section 1681m provides in relevant part:

(h) Duties of users in certain credit transactions (8) Enforcement
(A) No civil actions. Sections 1681n[2] and 1681o[3] of this title shall not apply to any failure by any person to comply with this section.
(B) Administrative enforcement. This section shall be enforced exclusively under section 1681s[4] of this title by the Federal agencies and officials identified in that section.

15 U.S.C. § 1681m(h)(8). The language of the statute provides under the title “(A) No. civil actions” that “Sections 1681n and 1681o[5] . . . shall not apply to any failure by any person to comply with this section.” Thus, the Court is persuaded the plain language of the statute demonstrates that noncompliance with the provisions of Section 1681m cannot be remedied by a private action by the consumer, but only by enforcement by federal agencies. See Lamie v. United States, 540 U.S. 526, 534 (2004) (citations omitted) (“[i]t is well established that ‘when the statute's language is plain, the sole function of the courts - at least where the disposition required by the text is not absurd -is to enforce it according to its terms.”)

         Numerous courts have applied the unambiguous language of section 1681m and held that no private right of action exists to remedy violations under section 1681m. See Floyd-Keith v. Homecomings Financial, LLC, 2010 WL 3927596 at *8 (M.D. Ala. 2010) adopted by Floyd-Keith v. Homecomings Financial, LLC, 2010 WL 3943646 (M.D. Ala. 2010) (summary judgment entered against Plaintiff on her claims under § 1681m because Plaintiff “does not have a private right of action concerning her claim that she was not provided with the Notice of Adverse Action under the FCRA.”); Crowder v. PMI Mort. Ins. Co., 2006 WL 1528608 at *2 (M.D. Ala. 2006) (“On 4 December 2003, in enacting the FACTA, Congress amended section 1681m to eliminate private enforcement.”); Perry v. First Nat'l Bank, 459 F.3d 816, 813 (7th Cir. 2006)(holding that the “unambiguous language of § 1681m(h)(8) demonstrates that Congress intended to preempt private causes of action to enforce § 1681m”); Soroka v. JP Morgan Chase & Co., 500 F.Supp.2d 217 (S.D.N.Y. 2007)(“[t]he unambiguous plain language of the FCRA makes it clear that Congress intended for this section to be enforced only by Federal administrative agencies.”); Putlowski v. Irwin Home Equity Corp., 423 F.Supp.2d 1053, 1061-1062 (N.D. Cal. 2006)(“§ 1681m(h)(8) . . . expressly provides that there is no private right of action for violations of § 1681m.); Howard v. DirectTV Group, Inc., 2012 WL 1850922 at *5 (S.D. Ga. 2012)(dismissing Plaintiff's claims under section 1681m on the basis that “there is no private right of action to enforce §1681m”); Bourdelais v. J.P. Morgan Chase, 2011 WL 1306311 at *6 (E.D. Va. 2011)(“[v]irtually every federal district court and the only federal court of appeals to interpret § 1681m(h)(8) has found it to be clear and unambiguous; the word “section” means “section”, and thus no private right of action exists for violations of section 1681m in its entirety.”)

         Plaintiff, however, points to a footnote in Crowder, 2006 WL 1528608 at *6, fn. 4, which references a case from the Eastern District of Virginia, Barnette v. Brook Road, Inc.,429 F.Supp.2d 741 (E.D. Va. 2006), for the proposition that a private right of action exists under parts of § 1681m. In Barnette, the Eastern District of Virginia correctly recognized that prior to the 2003 amendments, FCRA authorized a private right of action under § 1681m. Id. at 747. The Court concluded that Congress, however, did not intend by amendment to eliminate the private right of action of § 1681m. Id. at 748-49. Rather, the Court concluded that due to a scrivener's error, “the limitation in § 1681m(h)(8) should read ...


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