United States District Court, W.D. Kentucky, Louisville Division
MEMORANDUM OPINION AND ORDER
N. STIVERS, CHIEF JUDGE
matter is before the Court on Defendants' Motions to
Dismiss (DN 25, 30). The motions are ripe for decision. For
the reasons stated below, the motions are GRANTED IN PART AND
DENIED IN PART.
action concerns debt related to two credit card accounts
opened by Plaintiff in April and November 2012 with
Defendants Branch Banking and Trust Co. (“BBT”)
and TD Bank USA, N.A. (“TD”). (Am. Compl.
¶¶ 24, 34, DN 18). Plaintiff alleges BBT charged
off credit card debt worth $10, 598.00 in September 2013 and
that TD charged off debt worth $2298.00 in September 2014.
(Am. Compl. ¶¶ 25, 35).
2016,  BBT issued a Form 1099-C to Plaintiff and
presumably filed the form with the Internal Revenue Service
(“IRS”). (Pl.'s Resp. Defs.' Mot. Dismiss
4, DN 36 [hereinafter Pl.'s Resp.]). The notice contains
the heading, “Cancellation of Debt, ” and is
marked with the identifiable event
“G.” (Pl.'s Resp. Def's Mot. Dismiss
Ex. A, DN 36-1). After receiving the Form 1099-C, Plaintiff
alleges BBT did not further attempt to collect the debt and,
as a result of this discharge, he owes income tax for the
discharged amount. (Am. Compl. ¶¶ 26-27).
2018, Plaintiff was in the process of securing a home
mortgage when he learned BBT and TD were reporting debts as
past due to the Credit Reporting Agency (“CRA”)
Defendants. (Am. Compl. ¶¶ 24, 34). Plaintiff
immediately filed disputes with the CRAs concerning these
tradelines. (Am. Compl. ¶¶ 28, 36). Plaintiff
alleges that the CRAs informed BBT and TD Bank of
Plaintiff's disputes with their respective reports, and
both BBT and TD Bank independently verified their reports as
accurate. (Am. Compl. ¶¶ 30, 38).
Amended Complaint accuses Defendants of negligence,
defamation and negligent and willful violations of the Fair
Credit Reporting Act (“FCRA”), 15 U.S.C. §
1681 et seq. for their handling of these disputed debts. (Am.
Compl. ¶ 1). Plaintiff alleges the Defendants failed to
investigate and correct his credit report and falsely
reported delinquent debts. (Am. Compl. ¶m 1).
BBT and TD move to dismiss Plaintiff's claims under
Fed.R.Civ.P. 12(b)(6). (Def.'s Mot. Dismiss, DN 25
[hereinafter BBT's Mot.]; Def.'s Mot. Dismiss, DN 30
[hereinafter TD's Mot.]). In its motion, BBT argues that
the Form 1099-C does not indicate that debt has been
discharged, and by relying on this form, Plaintiff's
pleadings are thus insufficient to state a claim under the
FCRA because he still owes the debt. (BBT's Mot. 1). In
its motion, TD Bank argues it cannot be liable under the FCRA
because its report was accurate. (TD's Mot. 1). Regarding
his state law claims for negligence and defamation, both
Defendants argue the FCRA preempts these state claims.
(BBT's Mot. 2; TD's Mot. 6).
Court has jurisdiction over this controversy because it
arises under the laws of the United States. 28 U.S.C. §
STANDARD OF REVIEW
survive dismissal for failure to state a claim under
Fed.R.Civ.P. 12(b)(6), “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 (2009) (internal quotation
marks omitted) (citation omitted). A claim is facially
plausible “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. When considering Defendants' Motions to
Dismiss, the Court will “accept all the Plaintiff's
factual allegations as true and construe the complaint in the
light most favorable to the Plaintiff.” Hill v.
Blue Cross and Blue Shield of Mich., 409 F.3d 710, 716
(6th Cir. 2005). “A pleading that offers labels and
conclusions or a formulaic recitation of the elements of a
cause of action will not do. Nor does a complaint suffice if
it tenders naked assertion[s] devoid of further factual
enhancement.” Iqbal, 556 U.S. at 678 (internal
quotation marks omitted) (citation omitted).
FCRA was enacted “to promote ‘efficiency in the
Nation's banking system and to protect consumer
privacy.'” Stafford v. Cross Country Bank,262 F.Supp.2d 776, 781 (W.D. Ky. 2003) (quoting 15 U.S.C.
§ 1681(a)). The FCRA places distinct obligations on
CRAs, users of consumer reports, and furnishers of
information to consumer reporting agencies. Id. at
782 (citations omitted). Furnishers of financial information
to CRAs, like BBT and TD, have responsibility to refrain from
reporting inaccurate information and to correct inaccurate
information. See 15 U.S.C. § 1681s-2(a). An affected
consumer is permitted to “bring a private cause of
action against a furnisher of credit information for either
negligent, § 1681o, or willful, § 1681n, violations
of the FCRA.” Stafford, ...