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Danielson v. USAA Federal Savings Bank

United States District Court, D. South Carolina, Greenville Division

June 1, 2018

David Danielson, Plaintiff,
USAA Federal Savings Bank and Early Warning Services, LLC, Defendants.


          Honorable A. Marvin Quattlebaum, Jr. United States District Judge

         Before this Court is Defendant USAA Federal Savings Bank's (“USAA FSB”) Partial Motion to Dismiss Plaintiff's Complaint (ECF No. 10) and Defendant Early Warning Services, LLC's (“EWS”) Motion to Dismiss Plaintiff's Complaint. (ECF No. 16.) USAA FSB moves to dismiss Plaintiff's causes of action for defamation per se, common law defamation, Fair Credit Reporting Act (“FCRA”) accuracy violations and FCRA reinvestigation violations for failure to state a claim upon which relief can be granted pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. (ECF No. 10.) EWS moves to dismiss Plaintiff's complaint in its entirety for failure to state a claim pursuant to Rule 12(b)(6). (ECF No. 16.) Responses and replies were filed and this Court held a hearing on the pending motions on May 11, 2018. After careful consideration of the parties' briefing, the record, and the arguments of counsel, the Court GRANTS IN PART AND DENIES IN PART USAA FSB's Partial Motion to Dismiss (ECF No. 10) and GRANTS IN PART AND DENIES IN PART EWS'S Motion to Dismiss (ECF No. 16) as more fully set forth below.


         Plaintiff filed his complaint on or around October 20, 2017, against USAA FSB and EWS alleging that Defendants failed to protect him from identity theft. According to the complaint, on or around June 9, 2015, Plaintiff received a notice from USAA FSB that his account was overdrawn. However, Plaintiff states he never had an account with USAA FSB. (ECF No. 1 at ¶ 7.) Plaintiff states that he called USAA FSB to notify the bank of the mistake and subsequently received assurances that the identity theft matter would be remedied. (ECF No. 1 at ¶¶ 9-10.) On or around October 19, 2015, Plaintiff opened a checking account with Bank of America. However, Plaintiff learned that the account had been closed on October 20, 2015. (ECF No. 1 at ¶ 12.) Plaintiff states he was referred to EWS to address issues related to his closed account, at which time he learned that USAA FSB reported him for bank fraud. (ECF No. 1 at ¶¶ 12-14.) The complaint outlines, inter alia, Plaintiff's subsequent unsuccessful efforts to resolve the matter with USAA FSB, to open checking accounts and obtain credit to conduct financial business, and to rectify any alleged false reporting of fraud by EWS. (ECF No. 1 at ¶¶ 18-37.)

         Plaintiff asserts causes of action for: (1) defamation per se; (2) common law defamation; (3) negligence/gross negligence; (4) violation of FCRA (Accuracy); (5) violation of FCRA (failure to reinvestigate); and (6) declaratory relief pursuant to S.C. Code Ann. § 15-53-10. On or around, December 12, 2017, USAA FSB filed a Partial Answer and Affirmative Defenses (ECF No. 9), as well as a Partial Motion to Dismiss (ECF No. 10.) On January 8, 2018, EWS filed its Motion to Dismiss for Failure to State a Claim. (ECF No. 16.)


         A plaintiff's complaint should set forth “a short and plain statement . . . showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). Rule 8 “does not require ‘detailed factual allegations, ' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). “To survive a 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.'” Id. (quoting Twombly, 550 U.S. at 570)). “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.” Id. (quoting Twombly, 550 U.S. at 556). In considering a motion to dismiss under Rule 12(b)(6), a court “accepts all well-pled facts as true and construes these facts in the light most favorable to the plaintiff . . . .” Nemet Chevrolet, Ltd. v., Inc., 591 F.3d 250, 255 (4th Cir. 2009). A court should grant a Rule 12(b)(6) motion if, “after accepting all well-pleaded allegations in the plaintiff's complaint as true and drawing all reasonable factual inferences from those facts in the plaintiff's favor, it appears certain that the plaintiff cannot prove any set of facts in support of his claim entitling him to relief.” Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. 1999).


         The Court will address the causes of action below in connection with each Defendant's motion:

         1. Plaintiff's First and Second Causes of Action for Defamation Per Se and Common Law Defamation.

         USAA FSB moves to dismiss Plaintiff's First and Second Causes of Action on the grounds that Plaintiff failed to bring suit until after the applicable two-year statute of limitations on defamation claims. (ECF No. 10.) USAA FSB argues that Plaintiff bases his defamation action against USAA FSB on alleged reporting to EWS which necessarily took place prior to October 20, 2015, when Plaintiff discovered his inability to open a bank account. (ECF No. 10-1 at 6.) Accordingly, USAA FSB maintains that Plaintiff's lawsuit initiated on October 20, 2017, renders the defamation claims untimely. Plaintiff argues that subsequent reporting from USAA FSB to EWS after October 20, 2015 could constitute a separate cause of action and that discovery is needed to unearth further detail. (ECF No. 20 at 4-5.)

         EWS moves to dismiss the First and Second Causes of Action on the grounds that the causes are preempted by the FCRA and that Plaintiff's complaint fails to assert any facts to trigger a narrow preemption exception. (ECF No. 16-1 at 5.) The FCRA preempts defamation claims against furnishers of credit information “except as to false information furnished with malice or willful intent to injure.” 15 U.S.C. § 1681h. EWS further argues that even if the state law defamation claims are not preempted, the allegations in those causes of action fail to state a plausible claim for relief. (ECF No. 16-1 at 6.)

         Having considered the arguments and the applicable case law, the Court finds that Plaintiff's pleadings fail to adequately state a claim for defamation per se or common law defamation (1) sufficient to satisfy the pleading standards of Iqbal and Twombly; (2) that would not be subject to preemption; and (3) would not be barred by the applicable two-year statute of limitations.[1]

         The Court, therefore, grants Defendant USAA FSB and Defendant EWS's motions to dismiss as to the First and Second Causes of Action without prejudice and with leave to amend. Plaintiff is granted leave to refile these causes of action in a manner that satisfies the applicable pleading standards and sets forth factual allegations concerning any continuing publication or republication of reporting to third parties by USAA FSB and/or EWS subsequent to October 20, 2015, and/or allegations of malice or intent to injure sufficient to trigger the preemption exception. See Taub v. McClatchy Newspapers, Inc., 504 F.Supp.2d 74 (D.S.C. ...

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