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Strianese v. Diversified Consultants, Inc.

United States District Court, W.D. North Carolina, Charlotte Division

February 8, 2019

CHRISTOPHER STRIANESE, Plaintiff,
v.
DIVERSIFIED CONSULTANTS, INC. et al., Defendants.

          ORDER

          ROBERT J. CONRAD, JR. UNITED STATES DISTRICT JUDGE

         THIS MATTER

         comes before the Court on Defendants' Motion to Dismiss for Failure to State a Claim, (Doc. No. 7), and the parties' associated briefs, (Doc. Nos. 8-9); the Magistrate Judge's Memorandum and Recommendation (“M&R”), (Doc. No. 10); Plaintiff's Objection to the M&R, (Doc. No. 11); and Defendants' Response to Plaintiff's Objection, (Doc. No. 12).

         I. BACKGROUND

         Neither party has objected to the Magistrate Judge's statement of the factual and procedural background of this case. Therefore, the Court adopts the facts as set forth in the M&R.

         II. STANDARD OF REVIEW

         A district court may assign dispositive pretrial matters, including motions to dismiss, to a magistrate judge for “proposed findings of fact and recommendations.” 28 U.S.C. § 636(b)(1)(A) and (B). The Federal Magistrate Act provides that “a district court shall make a de novo determination of those portions of the report or specific proposed findings or recommendations to which objection is made.” Id. at § 636(b)(1)(C); Fed.R.Civ.P. 72(b)(3); Camby v. Davis, 718 F.2d 198, 200 (4th Cir. 1983).

         III. DISCUSSION

         Under Rule 72(b) of the Federal Rules of Civil Procedure, a district court judge shall make a de novo determination of any portion of an M&R to which specific written objection has been made. In the M&R, the Magistrate Judge recommended that Defendants' Motion to Dismiss, (Doc. No. 7), be granted in part and denied in part. Specifically, the M&R recommended dismissing Plaintiff's state-law claims of violations of the North Carolina Unfair and Deceptive Trade Practices Act (“UDTPA”), N.C. Gen. Stat. § 75-1.1 et seq., and civil conspiracy, but allowing Plaintiff's Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq., claim against Defendant Diversified Consultants, Inc. to proceed.[1]

         Plaintiff makes specific objection to the portion of the M&R that recommends dismissing Plaintiff's state-law claims as preempted by the FCRA. Plaintiff contends that FCRA preemption does not bar Plaintiff's North Carolina UDTPA and civil conspiracy claims because the Amended Complaint alleges Defendants engaged in unfair and deceptive conduct subsequent to Defendants' failure to accurately report or correct information on Plaintiff's credit report-conduct regulated by the FCRA.

         The FCRA is a comprehensive statutory scheme designed to regulate the consumer reporting industry.” Ross v. F.D.I.C., 625 F.3d 808, 812 (4th Cir. 2010) (citing 15 U.S.C. § 1681(a)). It was enacted “to ensure fair and accurate credit reporting, promote efficiency in the banking system, and protect consumer privacy.” Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 52 (2007). Congress intended the FCRA to serve as a “comprehensive series of restrictions on the disclosure and use of credit information assembled by consumer reporting agencies.” Ross, 625 F.3d at 812 (quoting FTC v. Manager, Retail Credit Co., 515 F.2d 988, 989 (D.C. Cir. 1975)). Because it is designed to serve as a comprehensive legislative framework, Congress added a “strong preemption provision, 15 U.S.C. § 1681(t)(b), . . . to avoid a ‘patchwork system of conflicting regulations.'” Id. (citing Michael Epshteyn, Note, The Fair and Accurate Credit Transactions Act of 2003: Will Preemption of State Credit Reporting Laws Harm Consumers?, 93 Geo. L.J. 1143, 1154 (2005)).

         The FCRA provides that

No requirement or prohibition may be imposed under the laws of any State . . . with respect to any subject matter regulated under . . . section 1681s-2 of this title [FCRA § 623], relating to the responsibilities of persons who furnish information to consumer reporting agencies . . . .

15 U.S.C. § 1681t(b)(1)(F). Accordingly, FCRA preempts state-law claims that arise from an alleged failure to accurately report or correct information on a consumer's credit report. See 15 U.S.C. § 1681t(b)(1)(F); Ross, 625 F.3d at 813. Any state-law claims involving allegations relating “to the responsibilities of persons who furnish information under section 1681s-2, ” are preempted by ...


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