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Danielson v. USAA Federal Savings Bank

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

February 26, 2019

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

          OPINION AND ORDER

          DONALD C. COGGINS, JR. UNITED STATES DISTRICT JUDGE.

         This matter comes before the Court on Defendant Early Warning Services, LLC's ("EWS") Motion to Dismiss Plaintiff's Amended Complaint. ECF No. 52. Plaintiff filed a Response, and Defendant EWS filed a Reply. ECF Nos. 54, 55. Therefore, the Motion is ripe for review.

         I. Procedural and Factual History

         Plaintiff filed a Complaint against Defendants USAA Federal Savings Bank ("USAA") and EWS, alleging that Defendants failed to protect him from identity theft. Both Defendants filed Motions to Dismiss, ECF Nos. 10, 16, and the Court granted the Motions in part and denied the Motions in part. ECF No. 39. However, the Court granted Plaintiff leave to amend his Complaint. Id. at 9.

         Plaintiff filed an Amended Complaint, which outlines in detail the factual history of this case. Accepting the Plaintiff's allegations as true, which the Court must at this stage of the proceedings, Defendant USAA permitted someone to open financial accounts using Plaintiff's identity without Plaintiff's authority, knowledge, or consent. ECF No. 47 at 3. As a result of these accounts, Defendant USAA lost substantial sums of money and blamed Plaintiff for the losses. Id. When Plaintiff discovered the fraudulent accounts, he contacted Defendant USAA, who assured him not to worry about the situation and that the accounts would be marked as "identity theft." Id. Despite its assurances to Plaintiff that he need not worry about the identity theft, Defendant USAA reported Plaintiff's alleged bank fraud to Defendant EWS. Id. at 4. Defendant EWS, in turn, reported this information to various financial institutions, which essentially prohibited Plaintiff from opening a bank account anywhere. Plaintiff contacted the Defendants numerous times about the situation; however, the situation is still not resolved. Id. at 9.

         Plaintiff's Amended Complaint contains nine causes of action: (1) Defamation Per Se as to Defendant USAA; (2) Defamation as to Defendant USAA; (3) Negligence/Gross Negligence as to Defendant USAA; (4) violation of the Fair Credit Reporting Act ("FCRA") by Defendant USAA; (5) Defamation Per Se as to Defendant EWS; (6) Defamation as to Defendant EWS; (7) Negligence/Gross Negligence as to Defendant EWS; (8) violation of the FCRA by Defendant EWS; and (9) declaratory relief to vindicate Plaintiff's claims of identity theft. In response, Defendant EWS again filed a Motion to Dismiss Plaintiff's Defamation, Defamation Per Se; Negligence/Gross Negligence, and FCRA claims. ECF No. 52. Although Defendant EWS captions the Motion as a Motion to Dismiss, the Court notes that it previously construed Plaintiff's Ninth Cause of Action for Declaratory Relief to seek relief as to Defendant EWS. ECF No. 39 at 8-9. Accordingly, even if Defendant EWS were to prevail, it would remain a party to this action. As discussed below, however, the Court rejects Defendant EWS's arguments as to each cause of action and denies its Motion to Dismiss.

         II. Legal Standard

         Rule 12(b)(6) of the Federal Rules of Civil Procedure permits the dismissal of an action if the complaint fails “to state a claim upon which relief can be granted.” Such a motion tests the legal sufficiency of the complaint and “does not resolve contests surrounding the facts, the merits of the claim, or the applicability of defenses . . . . Our inquiry then is limited to whether the allegations constitute ‘a short and plain statement of the claim showing that the pleader is entitled to relief.'” Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992) (internal quotation marks and citation omitted). In a Rule 12(b)(6) motion, the court is obligated to “assume the truth of all facts alleged in the complaint and the existence of any fact that can be proved, consistent with the complaint's allegations.” E. Shore Mkts., Inc. v. J.D. Assocs. Ltd. P'ship, 213 F.3d 175, 180 (4th Cir. 2000). However, while the Court must accept the facts in a light most favorable to the nonmoving party, it “need not accept as true unwarranted inferences, unreasonable conclusions, or arguments.” Id.

         To survive a motion to dismiss, the complaint must state “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570(2007). Although the requirement of plausibility does not impose a probability requirement at this stage, the complaint must show more than a “sheer possibility that a defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A complaint has “facial plausibility” where the pleading “allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id.

         III. Analysis

         A. Fifth and Sixth Causes of Action - Defamation Per Se and Defamation

         Defendant EWS first contends that Plaintiff's Defamation and Defamation Per Se causes of action should be dismissed for three reasons. First, Defendant EWS contends that Plaintiff's Amended Complaint fails to satisfy the requisite pleading standards of Twombly and Iqbal. Second, Defendant EWS contends that Plaintiff's Defamation and Defamation Per Se causes of action are subject to preemption under the FCRA. Finally, Defendant EWS claims Plaintiff's Defamation and Defamation Per Se causes of action are barred by the applicable two-year statute of limitations.

         Defendant EWS's first two arguments are intertwined in its Motion to Dismiss; therefore, the Court will address them jointly. Essentially, Defendant EWS contends that Plaintiff fails to plausibly allege that Defendant EWS furnished information "with malice or willful intent to injure [Plaintiff]." See 15 U.S.C. § 1681h(e) (prohibiting consumers from bringing "any action or proceeding in the nature of defamation, invasion of privacy, or negligence with respect to the reporting of information against any consumer reporting agency, any user of information, or 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"). Plaintiff's Amended Complaint added the following factual allegation:

Upon information and belief, Defendant EWS continued to report that Plaintiff had engaged in fraudulent activity, after Defendant USAA FBS contends it sent notice to Defendant EWS rescinding its previous reporting. If true, Defendant EWS's continued publication of false information about ...

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