Case 3:12-cv-00003-HDV-RAW Document 6 Filed 02/22/12 Page 1 of 4

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF IOWA DAVENPORT DIVISION

MOHAMED E. AHMED Plaintiff, v. SALLIE MAE, INC., Defendant.

CASE NO.: 3:12-CV-00003

MOTION TO DISMISS

COMES NOW Defendant Sallie Mae, Inc. (Sallie Mae), and, pursuant to Federal Rules of Civil Procedure 8(a)(2) and 12(b)(6), moves the Court for an Order dismissing Plaintiffs causes of action for failure to state a claim, and in support thereof states as follows: 1. Plaintiff has now alleged that Sallie Mae has damaged his credit report by

providing to all three credit reporting agencies with [sic] false and wrong information regarding [his] accounts with them. (More Definite Statement [Docket No. 5] 1 (Feb. 6, 2012).) 2. If these facts state a claim, the claim must arise under the Fair Credit Reporting

Act (FRCA). Among other things, the FRCA sets forth the duties of entities like Sallie Mae that, among other things, furnish information to consumer reporting agencies. 3. The Fair Credit Reporting Act imposes a duty upon furnishers of consumer

information to credit reporting agencies a duty to provide accurate information. See 15 U.S.C. 1681s-2(a). However, even if Sallie Mae violated this section by providing false or wrong information to a credit reporting agency, Plaintiff cannot recover because there is no private remedy for section 1681s-2(a) violations. Id. 1681s-2(c)(1), (d); see also Purcell v. Bank of Am., 659 F.3d 622, 623 (7th Cir. 2011); SimmsParris v. Countrywide Fin. Corp., 652 F.3d 355, 1

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357 (3d Cir. 2011). As a result, Plaintiff cannot obtain relief by allegingor even provinga violation of section 1681s-2(a). 4. Section 1681s-2(b) is the only section that can be enforced by a private citizen

seeking to recover damages for incorrect information furnished by a provider of information to a consumer reporting agency. See SimmsParris, 652 F.3d at 358. However, Plaintiff cannot recover under section 1681s-2(b) unless he alleges and proves the prerequisite that Sallie Mae failed to respond appropriately to a notice issued by a credit reporting agency to Sallie Mae under 15 U.S.C. section 1681i(a)(2). See 15 U.S.C. 1681s-2(b)(1). In other words, in order to state a claim for damages under section 1681s-2(b), Plaintiff must advise the credit reporting agencies of his dispute, and the credit reporting agencies must in turn provide the statutorily required notice to Sallie Mae. Without alleging the required notification of dispute, Plaintiff cannot state a claim. It follows that even if the allegations contained in the More Definite Statement are true, Plaintiff cannot obtain relief. 5. Moreover, because Fair Credit Reporting Act preempts all state law-based claims,

there is no other claim he could set forth that would entitle him to relief. Purcell v. Bank of Am., 659 F.3d 622, 623 (7th Cir. 2011). 6. Since Plaintiff has not stated a claim upon which relief can be granted, dismissal

of Plaintiffs action is required by Federal Rules of Civil Procedure 8(a)(2) and 12(b)(6). 7. Pursuant to Local Rule 7(d), a brief is electronically attached hereto, and is

incorporated by this reference. 8. required. Pursuant to Local Rule 7(l), Plaintiffs consent to the instant motion is not

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WHEREFORE, Defendant Sallie Mae, Inc., respectfully moves the Court for an Order dismissing Plaintiffs claims. Respectfully submitted,

/s/ Matthew R. Eslick AT0002409 NYEMASTER GOODE, P.C. 700 Walnut Street, Suite 1600 Des Moines, IA 50309-3899 Telephone: (515) 283-3167 Facsimile: (515) 283-3108 Email: mreslick@nyemaster.com ATTORNEY FOR DEFENDANT SALLIE MAE, INC.

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CERTIFICATE OF SERVICE I hereby certify that on February 22, 2012, I presented the foregoing to the Clerk of the Court for filing and uploading into the ECF system. I further certify that on February 22, 2012, I caused a copy of the foregoing to be served by United States mail, postage prepaid, addressed as follows: Mohamed E. Ahmed 941 22nd Ave., #14 Coralville, Iowa 52241 /s/ Matthew R. Eslick________

Case 3:12-cv-00003-HDV-RAW Document 6-1 Filed 02/22/12 Page 1 of 7

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF IOWA DAVENPORT DIVISION

MOHAMED E. AHMED Plaintiff, v. SALLIE MAE, INC., Defendant.

CASE NO.: 3:12-CV-00003

BRIEF IN SUPPORT OF MOTION TO DISMISS

Defendant Sallie Mae, Inc., submits the following Brief in Support of its Motion to Dismiss in accordance with Local Rule 7(d). I. Factual and Procedural Background. On December 28, 2011, Plaintiff Mohamed Ahmed commenced a civil action in the Iowa District Court in and for Johnson County, seeking $5,000.00 for Credit Rating Damage relating to a financial account. (Original NoticeAction for Money Judgment [Docket No. 1-1, at 1].) On January 6, 2012, Sallie Mae removed the action to this Court. (Notice of Removal [Docket No. 1] (Jan. 6, 2012).) On January 13, 2012, Sallie Mae filed a Motion for More Definite Statement, seeking an order requiring the Plaintiff to restate his claims with greater specificity. (Mot. for More Definite Statement [Docket No. 2] (Jan. 13, 2012).) This Court granted Sallie Maes Motion on February 6. (Order of Feb. 6, 2012 [Docket No. 4].) Also on February 6, Plaintiff served upon Sallie Mae by mail a document captioned A More Definite Statement, which attempted to state Plaintiffs claims with greater specificity. (A More Definite Statement [Docket No. 5].) The instant motion challenges the allegations contained in that pleading. 1

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II.

Argument. A. Legal Standards.

Federal Rule of Civil Procedure 12(b)(6) permits a party against whom claims are brought to seek a pre-answer dismissal of the claims if the complaint fails to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). A complaint must contain a short and plain statement of the claim showing that the pleader is entitled to relief to survive a motion to dismiss for failure to state a claim. Id. R. 8(a)(2). A sufficient complaint is one that includes enough facts to state a claim to relief that is plausible on its face. Ashcroft v. Iqbal, 129 S.Ct. 1939, 1949 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Following Iqbal, this Court has employed a two-pronged approach for evaluating complaints vis--vis Rule 12(b)(6): First, a court should divide the allegations between factual and legal allegations; factual allegations should be accepted as true, but legal allegations should be disregarded. Second, the factual allegations must be parsed for facial plausibility. 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. CO2 Techs., Inc. v. Paper-Pak Indus., F. Supp. 2d , 2011 WL 6357776, at *3 (S.D. Iowa Dec. 20, 2011) (quotation marks and internal citations omitted). Even when gauged against this liberal standard, the Plaintiffs pleadings have failed to state a claim upon which relief can be granted. Dismissal of Plaintiffs claims is therefore appropriate. B. Plaintiff Has Failed to State A Claim.

Plaintiff has alleged that Sallie Mae has damaged his credit report by providing to all three credit reporting agencies with [sic] false and wrong information regarding [his] accounts with them. (More Definite Statement 1.) Specifically, Plaintiff believes his student loans are in deferment status until April 27, 2012, but Sallie Mae has chosen to mark [him] with 90 days 2

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late on September 2011 [sic]. (More Definite Statement 2.) It is apparent that if these facts state a claim, the claim must arise under the Fair Credit Reporting Act (FCRA).1 The FCRA describes the duties of entities like Sallie Mae that, among other things, furnish information to consumer reporting agencies. As a component of the FCRA, 15 U.S.C. section 1681s-2(a) imposes a duty upon furnishers of consumer information to provide accurate information to consumer reporting agencies. See 15 U.S.C. 1681s-2(a). This appears to be what Plaintiff thinks Sallie Mae did wrong. (More Definite Statement 1 (Sallie Mae . . . has damaged by credit report by providing . . . false and wrong information . . . .).) However, even if Sallie Mae violated this section by providing false or wrong information to a credit reporting agency regarding the deferment status of Plaintiffs loans, Plaintiff cannot recover because violations of section 1681s2(a) do not result in a private remedy. Id. 1681s-2(c)(1), (d) (providing that violations of section 1681s-2(a) are to be enforced exclusively by the government); see also Purcell v. Bank of Am., 659 F.3d 622, 623 (7th Cir. 2011) (holding that section 1681s-2(a) does not contain a cause of action, leaving enforcement in the hands of state and federal agencies under sections 1681s and 1681s-2(d) (citing Perry v. First Natl Bank, 459 F.3d 816 (7th Cir. 2006)); SimmsParris v. Countrywide Fin. Corp., 652 F.3d 355, 357 (3d Cir. 2011) (noting that [t]he FCRA . . . has
1

Plaintiff has notand cannotbring state law-based claims for credit rating damage because such claims are preempted by the FRCA. See 15 U.SC. 1681t(b)(1)(F)(providing, with certain inapplicable exceptions, that [n]o requirement or prohibition may be imposed under the laws of any State (1) with respect to any subject matter regulated under . . . (F) section 1681s-2 of this title, relating to the responsibilities of persons who furnish information to consumer reporting agencies); see also MacPherson v. JP Morgan Chase Bank, N.A., F.3d , 2011 WL 6450777, at *2 (Dec. 23, 2011) (holding that section 1681t(b)(1)(F) preempts all state law claims that are based on allegations that false information about a consumers finances was reported to a consumer credit reporting agency); Purcell v. Bank of Am., 659 F.3d 622, 625 (7th Cir. 2011) (same); Ross v. FDIC, 625 F.3d 808, 813 (4th Cir. 2010) (holding that claims seeking damages for allegedly false reporting of credit information based on state law defamation claims and violations of a state unfair and deceptive trade practices act are preempted). 3

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several provisions that create liability for violations of the Act, but holding that these provisions cannot be used by a private individual to assert a claim for a violation of section 1681s-2(a)). As a result, Plaintiff cannot obtain relief by allegingor even provinga violation of section 1681s-2(a). Section 1681s-2(b) is the only section that can be enforced by a private citizen seeking to recover damages related to incorrect information furnished by a provider of information to a consumer reporting agency. SimmsParris, 652 F.3d at 358 (collecting authorities). It is a prerequisite to any claim under this section that the would-be plaintiff give notice of his dispute to a credit reporting agency, and that the credit reporting agency in turn give the statutorilyrequired notice of the dispute to the furnisher of credit information. 15 U.S.C. 1681i(a)(2), 1861s-2(b)(1). The notice from a credit reporting agency to a furnisher is sometimes referred to as an AUD, or automated universal data form. Section 1681s-2(b) lists the duties placed upon a furnisher of information [a]fter receiving notice pursuant to section 1681i(a)(2) . . . of a dispute with regard to the completeness or accuracy of any information provided . . . to a consumer reporting agency. 15 U.S.C. 1681s-2(b)(1). Section 1681i(a)(2) notices originate from consumer reporting agencies, and follow complaints by consumers to credit reporting agencies regarding the accuracy or completeness of reported information. See id. 1681i(a)(2)(A) (requiring a credit reporting agency to provide notification of a dispute to any person who provided any item of information in dispute), (B) (requiring a credit reporting agency to forward all relevant information regarding the dispute that is received from the agency from the consumer). Once served with such a notice, a furnisher of information has a statutory obligation to conduct an investigation, review information submitted by the credit reporting agency, report its findings to the credit

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reporting agency, and correct errors found during the investigation. Id. 1681s-2(b)(1)(A)-(E). With some inapplicable exceptions, this process must be completed within a thirty-day period beginning when the consumer reporting agency is first notified of a dispute by a consumer. Id. 1681i(a)(1)(A), 1681s-2(b)(2). It is axiomatic that a provider of information like Sallie Mae cannot be liable for a violation of section 1681s-2(b) unless and until it receives a section 1681i(a)(2) noticeor AUDfrom a credit reporting agency. Id. 1681s-2(b)(1). It also follows that a section 1681i(a)(2) notice cannot exist unless and until a consumer disputes the accuracy of reported information to a consumer reporting agency. Id. 1681i(a)(1)(A); see also SimmsParris, 652 F.3d at 357 (noting that a consumer must first inform the credit agency that s/he disputes the information before section 1681s-2(b) duties arise). Here, Plaintiffs pleadings accuse Sallie Mae of reporting false information to one or more credit reporting agencies. (More Definite Statement 2.) Plaintiff has not alleged compliance with any of the prerequisites to obtaining relief under section 1681s-2(b). For example, he has not alleged he has notified a credit reporting agency of his dispute, he has not alleged that Sallie Mae timely failed to timely respond to a section 1681i(a)(2) notice, or that Sallie Mae refused to correct information identified in such a notice. Since the duties contained in section 1681s-2(b) have not arisen, it is impossible for Sallie Mae to have violated them. It follows that even if the allegations contained in the More Definite Statement are true, Plaintiff cannot obtain relief.

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III.

Conclusion. Plaintiff cannot obtain a private remedy under section 1681s-2(a), and he has not stated a

claim for relief under section 1681s-2(b). As a result, Sallie Mae respectfully moves the Court for an Order dismissing Plaintiffs action.

Respectfully submitted, /s/ Matthew R. Eslick AT0002409 NYEMASTER GOODE, P.C. 700 Walnut Street, Suite 1600 Des Moines, IA 50309-3899 Telephone: (515) 283-3167 Facsimile: (515) 283-3108 Email: mreslick@nyemaster.com ATTORNEY FOR DEFENDANT SALLIE MAE, INC.

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CERTIFICATE OF SERVICE I hereby certify that on February 22, 2012, I presented the foregoing to the Clerk of the Court for filing and uploading into the ECF system. I further certify that on February 22, 2012, I caused a copy of the foregoing to be served by United States mail, postage prepaid, addressed as follows: Mohamed E. Ahmed 941 22nd Ave., #14 Coralville, Iowa 52241 /s/ Matthew R. Eslick________