United States District Court, D. Maryland, Southern Division
J. HAZEL UNITED STATES DISTRICT JUDGE.
suit, Plaintiff Eric Stoer has sued Defendants VW Credit,
Inc. and Volkswagen Group of America, Inc. (collectively
“VW” or “Defendants”), alleging a
violation of the Fair Credit Reporting Act
(“FRCA”), 15 U.S.C. §§ 1681 et
seq. (Count I), and state-law defamation (Count II). ECF
No. 11. Now pending before the Court is VW's Motion to
Dismiss Plaintiff's Amended Complaint. ECF No. 12. No.
hearing is necessary. See Loc. R. 105.6 (D. Md. 2016). For
the following reasons, Defendant's Motion is granted.
dispute arises from the financing agreement that Plaintiff
entered into with VW to pay for a 2014 Passat Sedan. ECF No.
11 at 1. In 2013, Plaintiff co-signed a financing
agreement with his daughter to purchase a 2014 Passat Sedan
for her. Id. ¶ 1. Plaintiff made timely
payments pursuant to the agreement from 2013 to December
2016. Id. In December 2016, with an outstanding loan
balance of $14, 386.69, VW contacted Plaintiff with an offer
to buy back the vehicle for $30, 016.73. Id. This
would have satisfied the remainder of the loan, including the
December payment, with the remainder of the buy-back to be
paid directly to Plaintiff in the amount of $15, 630.04.
Id. Despite the buy-back initially being scheduled
to close in December, VW “delayed the settlement
closing from December to February.” Id. In the
interim, Plaintiff continued to submit monthly loan payments.
Id. ¶ 2.
January 2017, Plaintiff sought to refinance his second Home
Equity Line of Credit with Bank of America. Id.
During this process, Bank of America notified him that his
credit rating had dropped from 820 to 705 because VW had
reported that Plaintiff had missed loan payments.
Id. As a result, Bank of America declined to
refinance Plaintiff's loan. Id. ¶ 3.
alleges that on January 1, 2017, VW falsely reported that
Plaintiff had missed his December loan payment, even though
he had made the payment “with a combination of a VW
Gift Card and a personal check.” Id. ¶
19. Plaintiff sent letters to VW informing them of their
error on January 17 and 26, 2017; VW did not correct the
error. Id. On January 13, 2017, Plaintiff's
January payment was due, which he paid in full. Id.
¶ 20. On January 27, 2017, however, VW notified
Plaintiff that his payment had not been received, and placed
another negative report with the credit agencies.
Id. Again, Plaintiff wrote a letter to VW notifying
them of their error, and included a copy of the cashed check
he had sent to VW; VW again failed to correct the error.
Id. Plaintiff subsequently spoke with numerous VW
representatives, none of whom were able to rectify the error.
Id. ¶¶ 26, 27, 34. Plaintiff also filed
complaints with various credit agencies, but VW refused to
acknowledge its error to the agencies. Id.
¶¶ 28, 31.
initiated this suit on October 31, 2017, ECF No. 1, and
subsequently amended his Complaint on January 2, 2018, ECF
No. 11. Plaintiff alleges that VW violated the
FCRA, and is liable for defamation. VW filed a partial Motion
to Dismiss the Amended Complaint on January 16, 2018,
alleging that Plaintiff's defamation claim is preempted
by the FCRA. ECF No. 12 at 2.
STANDARD OF REVIEW
survive a Rule 12(b)(6) motion to dismiss, “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) (citing Bell Atlantic Corp. v. Twombly,
550 U.S. 544, 570 (2007)). “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.”
Iqbal, 556 U.S. at 678. “Threadbare recitals
of the elements of a cause of action, supported by mere
conclusory statements, do not suffice.” Id.
(citing Twombly, 550 U.S. at 555 (“a
plaintiff's obligation to provide the ‘grounds'
of his ‘entitle[ment] to relief' requires more than
labels and conclusions, and a formulaic recitation of a cause
of action's elements will not do.”)).
purpose of Rule 12(b)(6) “is to test the sufficiency of
a complaint and not to resolve contests surrounding the
facts, the merits of a claim, or the applicability of
defenses.” Presley v. City of Charlottesville,
464 F.3d 480, 483 (4th Cir. 2006) (citation and internal
quotation marks omitted). When deciding a motion to dismiss
under Rule 12(b)(6), a court “must accept as true all
of the factual allegations contained in the complaint,
” and must “draw all reasonable inferences [from
those facts] in favor of the plaintiff.” E.I. du
Pont de Nemours & Co. v. Kolon Indus., Inc., 637
F.3d 435, 440 (4th Cir. 2011) (citations and internal
quotation marks omitted). The Court need not, however, accept
unsupported legal allegations, see Revene v. Charles
County Comm'rs, 882 F.2d 870, 873 (4th Cir. 1989),
legal conclusions couched as factual allegations, Papasan
v. Allain, 478 U.S. 265, 286 (1986), or conclusory
factual allegations devoid of any reference to actual events.
United Black Firefighters of Norfolk v. Hirst, 604
F.2d 844, 847 (4th Cir. 1979).
argues that because Plaintiff does not sufficiently allege
that VW acted maliciously, his defamation claim is preempted
by the FCRA and should be dismissed. Section 1681h(e) of the
FCRA provides that “no consumer may bring any action or
proceeding in the nature of defamation . . . with respect to
the reporting of information against . . . any person who
furnishes information to a consumer reporting agency . . .
except as to false information furnished with malice or
willful intent to injure such consumer.” Thus, §
1681h(e) provides “qualified immunity from state law
defamation claims to those who furnish information to a
consumer reporting agency, ” with the exception of
those who do so with “malice or willful intent to
injure such consumer.” Spencer v. Hendersen-Webb,
Inc., 81 F.Supp.2d 582, 597 (D. Md. 1999).
FCRA does not define “malice” and “[c]ourts
are split on whether state or federal law governs the meaning
of ‘malice' in § 1681h(e).” Ross v.
F.D.I.C., 625 F.3d 808, 815 (4th Cir. 2010) (recognizing
split but declining to resolve because plaintiff could not
succeed under either standard). This Court has previously
defined “malice” in this context as requiring
proof that “one of the defendants acted with reckless
disregard to the truth or falsity of the reported
debt.” Tucker v. Specialized Loan Servicing,
LLC, No. PWG-14-813, 2016 WL 6476286, at *11 (D. Md.
Nov. 1, 2016) (quoting Spencer v. Hendersen-Webb,
Inc., 81 F.Supp.2d 582, 598 (D. Md. 1999)).
“Reckless disregard requires the plaintiff to show that
the defendant either (1) made the statement with a
‘high degree of awareness of...probable falsity';
or (2) actually entertained serious doubts as to the truth of
the statement.” Id.
Plaintiff has not sufficiently pleaded that VW acted with
malice in reporting that Plaintiff had missed loan payments.
While Plaintiff alleges in conclusory fashion that VW
“acted with malice” in that VW “failed to
consider the valid factual situation of the Plaintiff,
” ECF No. 11 ¶ 50, and failed to “research
and fact-check their allegations prior to contacting the
credit reporting agencies, ” id. ¶ 54,
this is insufficient to plead malice. Plaintiff must allege
that VW acted with a “high degree of awareness of . . .
probable falsity” or that it “actually
entertained serious doubts as to the truth of the
statement” at the time that VW made the reports to the
credit agencies. Here, however, in each instance, Plaintiff
alleges that he informed VW of its errors after they
had submitted reports to the credit agencies. Additionally,
he alleges that when he contacted VW, their employees
continued to tell him that the late payments existed,
id. ¶ 34, which contradicts the conclusory
assertion that they entertained serious doubts about the
accuracy of the statements or knew them to be false when made
to reporting agencies. Thus, while VW's conduct may
constitute an FCRA violation, Plaintiff has not pleaded that
VW acted with malice. See also Alston v. United