Superior Court of New Jersey,

Appellate Division.

James W. DABNEY, Plaintiff–Appellant,

v.

TOTAL RELOCATION SERVICES, LLC, Defendant,

and

T.D. Bank, N.A., Defendant–Respondent.

 

Argued Dec. 18, 2012.

Decided Jan. 8, 2013.

 

On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L–4749–10.

James W. Dabney, appellant, argued the cause pro se (Mr. Dabney and Pashman Stein, P.C., attorneys; Louis Pashman, of counsel; Mr. Dabney, on the brief).

 

William T. Marshall, Jr., argued the cause for respondent (Zeichner, Ellman & Krause, LLP, attorneys; Mr. Marshall and Kerry A. Duffy, on the brief).

 

Before Judges YANNOTTI, HARRIS, and HOFFMAN.

 

PER CURIAM.

*1 Proceeding pro se, plaintiff James W. Dabney appeals from the December 3, 2010 order that dismissed, pursuant to Rule 4:6–2(e), his defamation cause of action against defendant T.D. Bank, N.A. on the ground that the Fair Credit Reporting Act (FCRA), 15 U.S.C.A. §§ 1681 to 1681x, entirely preempts his intentional tort claim. We affirm.

 

I.

Because the defamation action was dismissed for failure to state a claim upon which relief can be granted, we “review [Dabney’s] factual allegations indulgently.” Cornett v. Johnson & Johnson, 211 N.J. 362, 388 (2012). “[O]ur inquiry is limited to examining the legal sufficiency of the facts alleged on the face of the complaint,” Printing Mart–Morristown v. Sharp Electronics Corp., 116 N.J. 739, 746 (1989), and our analysis is conducted de novo, following the same standard employed by the motion court. Scheidt v. DRS Techs., Inc., 424 N.J.Super. 188, 193 (App.Div.2012).

 

A.

These are the relevant facts, gleaned from Dabney’s complaint. In November 2008, Dabney hired co-defendant Total Relocation Services, LLC (TRS) to move furniture and household goods from one apartment (on 87th Street) to another (on Barrow Street) in New York City, and to his residence in Ridgewood, New Jersey. Dabney alleged that during the move, TRS damaged the “then-new pine floor” of the Barrow Street apartment.

 

Notwithstanding the damage, Dabney paid for the moving services with his credit card issued by Commerce Bank.FN1 He provided his credit card information to TRS, which completed the transaction. Later, after receiving a written estimate of $1500 to repair the damaged floor, Dabney notified Commerce Bank that he was disputing TRS’s bill in that amount.

 

FN1. Dabney asserted that his credit card relationship with Commerce Bank began in 2002, and was memorialized in a written credit card agreement, which was not appended to the complaint.

 

After an exchange of email communications with TRS, it was agreed that TRS would absorb the $1500 for the floor damage. In February 2009, Commerce Bank credited Dabney’s credit card account in the amount of $1500. Thereafter, in April 2009, TRS’s president asked Dabney to sign a general release, but Dabney would not agree to the proposed language of the instrument, rendering the settlement incomplete.

 

On June 30, 2009, TRS prevailed upon Commerce Bank to debit Dabney’s credit card account for the $1500 and transfer that amount to “a TRS-controlled account.” Commerce Bank advised Dabney of its action, informing him that the previous credit to his account had been removed, and instead a debit of $1500 would be applied. Dabney challenged the debit and did not pay the bank the contested $1500.

 

While these events were happening, a separate series of events occurred. In April 2009, TD Bank,FN2 apparently as successor to Commerce Bank, sent Dabney a letter informing him that the terms and conditions of the 2002 credit card agreement would be “radically changed.” The letter provided a mechanism for Dabney to “opt-out of the changes,” which would close the account, but “the terms of [his] existing agreement will continue to apply to the outstanding balance.” On April 21, 2009, Dabney sent a letter to TD Bank informing it that he did not accept the new terms, but requested that the bank “reconsider and withdraw the threat,” otherwise he would be “forced to review [his] entire relationship with the bank.”

 

FN2. Dabney makes a distinction between defendant TD Bank, N.A. and an entity—perhaps only a trade name—known as “TD Bank.” Dabney’s complaint alleges that deceptive practices were at the root of the similarity of names, but they are not directly relevant to the issues in this appeal. We further note that Dabney’s appellate briefs repeatedly refer to TD Bank, N.A. as “TD Bank Delaware.” We cannot account for this nomenclature notwithstanding Dabney’s attempt to explain found in a footnote in his reply brief.

 

*2 In May 2009, the credit card arrangement that had existed between Commerce Bank and Dabney was extinguished. According to the complaint, “subsequent to May 9, 2009, Commerce Bank d/b/a ‘TD Bank’ reported to credit rating agencies that [Dabney’s] COMMERCE BANK credit card accounts were ‘closed by customer.’ “

 

In July 2009, Dabney received a demand from defendant TD Bank, N.A. for the payment of $1500, which was the result of the “transaction dated June 30, 2009, in which [TD Bank, N.A.] had purportedly transferred monies to a third-party on the basis of some purported instrument, draft, or document that referred to [the] number of [Dabney’s] former COMMERCE BANK credit card account.” Without saying so directly, Dabney’s allegation related to the same $1500 that was at stake in his dispute with TRS.

 

Dabney denied ever having a credit card account with TD Bank, N.A. He claimed that his Commerce Bank credit card arrangement had been terminated in May 2009, at least one month before TD Bank, N.A. asserted that monies were due it. He alleged that TD Bank, N.A. “began making reports to credit rating agencies that [Dabney] purportedly was in default under some extant credit agreement between [Dabney] and [TD Bank, N.A.] (the Default Reports).” He averred further that “[t]he Default Reports were false, misleading, and defamatory of [Dabney].”

 

B.

On May 7, 2010, Dabney filed a two-count complaint against TRS for negligence, breach of contract, and unjust enrichment, and against TD Bank, N.A. for defamation. On October 14, 2010, TD Bank, N.A. moved to dismiss the complaint, arguing that Dabney’s “common law claim … is preempted by federal law.” After hearing oral argument on December 3, 2010, the motion judge issued a six-page written opinion agreeing that the FCRA “eliminated all state causes of action against furnishers of information and [Dabney’s] claims against [TD Bank, N.A.] for defamation arise directly from [TD Bank, N.A.’s] furnishing information to credit reporting agencies.” The motion judge left Dabney’s claims against TRS untouched.

 

On January 3, 2011, Dabney filed a motion for leave to appeal, which was denied in February 2011.

 

The case then proceeded to a bench trial against TRS. On March 8, 2012, the trial court entered a final judgment finding TRS liable to Dabney for $1500 in compensatory damages. This appeal followed.

 

II.

A.

A court may not dismiss a complaint for failure to state a claim under Rule 4:6–2(e) unless the pleadings are lacking even a suggestion of a cause of action. NAACP of Camden Cnty. East v. Foulke Mgmt. Corp., 421 N.J.Super. 404, 443 (App.Div.2011); see also Printing Mart–Morristown, supra, 116 N.J. at 746 (“[T]he test for determining the adequacy of a pleading [is] whether a cause of action is ‘suggested’ by the facts.”).

 

A prima facie case of defamation requires a plaintiff to establish, in addition to damages, the following three essential facts: “(1) that defendant [ ] made a false and defamatory statement concerning [plaintiff]; (2) that the statement was communicated to another person (and not privileged); and (3) that defendant[ ] acted negligently or with actual malice.” G.D. v. Kenny, 205 N.J. 275, 292–93 (2011). “A defamatory statement, generally, is one that subjects an individual to contempt or ridicule, one that harms a person’s reputation by lowering the community’s estimation of him or by deterring others from wanting to associate or deal with him.” Id. at 293 (citations omitted).

 

B.

*3 A fundamental principle of the Constitution is that Congress has the power to preempt state law. See Arizona v. United States, ––– U.S. 2492, ––––, 132 S.Ct. 2492, 2500, 183 L. Ed.2d 351, 368 (2012). The Supremacy Clause provides a clear rule that federal law “shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.” U.S. Const. art. VI, cl. 2. Because Dabney’s defamation cause of action arose in the context of T.D. Bank, N.A.’s furnishing information to consumer reporting agencies, preemption jurisprudence is implicated, which requires an examination of the purpose of the statutory scheme, “ ‘the ultimate touch-stone’ in every pre[ ]emption case.” Medtronic, Inc. v. Lohr, 518 U.S. 470, 485, 116 S.Ct. 2240, 2250, 135 L. Ed.2d 700, 716 (1996) (quoting Retail Clerks Int’l Ass’n v. Schermerhorn, 375 U.S. 96, 103, 84 S.Ct. 219, 223, 11 L. Ed.2d 179, 184 (1963)).

 

C.

In 1970, Congress enacted the FCRA FN3 with several purposes, including that of protecting the banking system from inaccuracy, promoting the equitable use of consumer credit information, and ensuring fairness and accuracy within the credit reporting system. See Consumer Data Indus. Ass’n v. King, 678 F.3d 898, 900 (10th Cir.2012). Together with the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C.A. §§ 1692 to 1692p, “the FCRA is the source of most consumer credit rights in the United States.” Ibid. Among the means to achieve these aims, the FCRA imposes certain duties on the sources—such as TD Bank, N.A.FN4—that provide credit information to consumer reporting agencies. Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147, 1153 (9th Cir.2009).

 

FN3. One court has described the FCRA as “not merely a ‘complex statutory scheme,’ but one that has been said to contain ‘almost incomprehensibly complex provisions.’ “ Narog v. Certegy Check Servs., Inc., 759 F.Supp.2d 1189, 1194 (N.D.Cal.2011) (citation omitted).

 

FN4. Under the FCRA, TD Bank N.A. acted as a furnisher in this case. That is, it “furnishe[d] information relating to consumers to one or more consumer reporting agencies for inclusion in a consumer report.” 12 C.F.R. § 41.41(c).

 

The FCRA created “esoteric strictures” for the collection, communication, and use of consumer information for business purposes. Burrell v. DFS Servs., LLC, 753 F.Supp.2d 438, 440 (D.N.J .2010). Through the FCRA, Congress elected to establish a system of “uniform requirements regulating the use, collection and sharing of consumer credit information.” Roybal v. Equifax, 405 F. Supp .2d 1177, 1181 (E.D.Cal.2005). In order to maintain this homogeny, Congress included express preemption provisions in the FCRA relating to various aspects of consumer credit reporting. Those pertinent to this appeal are found in 15 U.S.C.A. §§ 1681t(b)(1)(F) and 1681h(e).

 

One area Congress chose to preempt is the regulation of furnishers of credit information. This preemption, however, did not exist until 1996. Before that, § 1681h(e) FN5 controlled:

 

FN5. We are aware that § 1681h(e)—originally enacted in 1970—was amended in 1996. We set forth its current version because that is the language we must apply in this appeal.

 

Except as provided in sections 616 and 617 [15 U.S.C.A. §§ 1681n and 1681o], no consumer may bring 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, based on information disclosed pursuant to section 609, 610, or 615 [15 U.S .C.A. §§ 1681g, 1681h, or 1681m], or based on information disclosed by a user of a consumer report to or for a consumer against whom the user has taken adverse action, based in whole or in part on the report[,] except as to false information furnished with malice or willful intent to injure such consumer.

 

*4 [15 U.S.C.A. § 1681h(e).]

 

In 1996, Congress amended the FCRA with the Consumer Credit Reporting Reform Act (CCRRA). Ross v. Federal Deposit Ins. Corp., 625 F.3d 808, 813 (4th Cir.2010), cert. denied, ––– U.S. 2991, 131 S.Ct. 2991, 180 L. Ed.2d 824 (2011). Section 1681t(b)(1)(F) was a part of the amendment, and provides:

 

No requirement or prohibition may be imposed under the laws of any State …

 

(1) with respect to any subject matter regulated under

 

….

 

(F) section 623 [15 U.S.C.A. § 1681s–2], relating to the responsibilities of persons who furnish information to consumer reporting agencies….

 

[15 U.S.C.A. § 1681t(b)(1)(F).]

 

At the same time, Congress added § 1681s–2 to the FCRA, which outlines the obligations of furnishers of credit information to consumer reporting agencies. Purcell v. Bank of Am., 659 F.3d 622, 625 (7th Cir.2011). Section 1681s–2(a) prohibits furnishers from providing information known or believed to be inaccurate, and it includes the duty to correct any errors in reporting and update the information furnished to credit reporting agencies. Section 1681s–2(b) outlines furnishers’ duties to investigate the completeness or accuracy of any information they provide to credit reporting agencies, but only “[a]fter receiving notice pursuant to section 611(a)(2) [15 U.S.C.A. § 1681i(a)(2) ] of a dispute with regard to the completeness or accuracy of any information provided by a person to a consumer reporting agency.” FN6 15 U.S.C.A. § 1681s–2(b)(1).

 

FN6. A private cause of action against a furnisher of information does not arise until a consumer reporting agency provides proper notice of a dispute. Boggio v. USAA Fed. Sav. Bank, 696 F.3d 611, 615–16 (6th Cir.2012). Directly contacting the furnisher of credit information does not actuate the furnisher’s obligation to investigate a complaint. See Nelson v. Chase Manhattan Mortg. Corp., 282 F.3d 1057, 1060 (9th Cir.2002).

 

Pursuant to §§ 1681s–2(c) and 1681s–2(d), the enforcement of § 1681s–2(a) violations is limited exclusively to certain state and federal officials.   Gibbs v. SLM Corp., 336 F.Supp.2d 1, 11 (D.Mass.2004). It can be inferred from the structure of the statute that Congress did not want furnishers of credit information exposed to suit by any and every consumer dissatisfied with the credit information furnished. Hence, Congress limited the enforcement of the duties imposed by § 1681s–2(a) to governmental bodies.

 

Dabney’s complaint plainly implicates § 1681s–2(a).FN7 TD Bank, N.A. is accused of “making reports to credit rating agencies that [Dabney] purportedly was in default under some extant credit agreement.” Dabney describes such reporting as “false, misleading, and defamatory.” Although he does not use the statutory term “consumer reporting agency,” Dabney’s reference to a “credit rating agency” is its equivalent.FN8 See Burrell, supra, 753 F.Supp.2d at 441 n. 2 (“[T]he function of such entities is more accurately described by the common term, ‘credit rating agencies’ ”).

 

FN7. Because Dabney never asserted that he lodged a grievance or commenced a dispute with a consumer reporting agency about the accuracy of TD Bank N.A.’s reports, section 1681s–2(b) is inapplicable.

 

FN8. A consumer reporting agency is defined as “any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties, and which uses any means or facility of interstate commerce for the purpose of preparing or furnishing consumer reports.” 15 U.S.C.A. § 1681a(f).

 

On its face, § 1681t(b)(1)(F) precludes all state statutory or common law causes of action that would impose any “requirement or prohibition” on the furnishers of credit. Because Dabney’s defamation claim is based on alleged injury arising purely from the reporting of credit information by a furnisher of credit, it is preempted.

 

*5 However, that still leaves the language of § 1681h(e) intact and unaddressed. Notwithstanding the broad language of § 1681t(b)(1)(F), Dabney maintains that § 1681h(e) amounts to an explicit authorization of certain state common law tort claims that are based on “false information furnished with malice or willful intent to injure.” Numerous courts have analyzed § 1681h(e) alongside § 1681t(b)(1)(F), only to recognize the grim difficulties in reconciling their language. See, e.g., Barberan v. Nationpoint, 706 F.Supp.2d 408, 427–28 (S.D.N.Y.2010) (observing that “[d]istrict courts have long struggled to reconcile an apparent conflict between the two preemption provisions”). One court described the decisional law that emerged as “a decade of confusion.” Islam v. Option One Mortg. Corp., 432 F.Supp.2d 181, 190 (D.Mass.2006). Lately, however, a sufficient crystallization of consensus has emerged in several federal courts of appeal that squarely point in the direction taken by the Law Division: § 1681t(b)(1)(F) trumps § 1681h(e). FN9

 

FN9. Although the Third Circuit has yet to weigh in on the issue, one district judge recently concluded that a plaintiff’s state law claims for intentional infliction of emotional distress, defamation, and the tort of negligence were preempted by the FCRA. Burrell, supra, 753 F.Supp.2d at 451.

 

The Second Circuit has expressly solved FCRA’s preemption puzzle by interpreting § 1681t(b)(1)(F) as creating a broad preemption, barring all state law claims, regardless of whether or not the state law claims are based on malice or willfulness. See Macpherson v. JPMorgan Chase Bank, N.A., 665 F.3d 45, 47–48 (2d Cir.2011), cert. denied, ––– U.S. 2113, 132 S.Ct. 2113, 182 L. Ed.2d 870 (2012). The court of appeals reasoned as follows:

 

Section 1681h(e) preempts some state claims that could arise out of reports to credit agencies; § 1681t(b)(1)(F) simply preempts more of these claims. Put differently, the operative language in § 1681h(e) provides only that the provision does not preempt a certain narrow class of state law claims; it does not prevent the later-enacted § 1681t(b)(1)(F) from accomplishing a more broadly-sweeping preemption.

 

[Ibid. (internal quotations omitted).]

 

This approach is consistent with Congressional intent—the maintenance of a uniform set of duties across all furnishers of credit information—as well as being in alignment with the Seventh Circuit’s views:

 

Section 1681h(e) does not create a right to recover for willfully false reports; it just says that a particular paragraph does not preempt claims of that stripe. Section 1681h(e) was enacted in 1970. Twenty-six years later, in 1996, Congress added § 1681t(b)(1)(F) to the United States Code. The same legislation also added § 1681s–2. The extra federal remedy in § 1681s–2 was accompanied by extra preemption in § 1681t(b)(1)(F), in order to implement the new plan under which reporting to credit agencies would be supervised by state and federal administrative agencies rather than judges. Reading the earlier statute, § 1681h(e), to defeat the later enacted system in § 1681s–2 and § 1681t(b)(1)(F), would contradict fundamental norms of statutory interpretation.

 

[ Purcell, supra, 659 F.3d at 625.]

 

*6 Having canvassed the vast array of judicial opinions dealing with FCRA preemption, we conclude that the straight forward total preemption approach of these courts of appeal is most faithful to Congress’s purpose in having a national system for credit reporting. We eschew other methodologies that require unnecessary and unwarranted legalistic gymnastics to parse the contorted and sometimes opaque language of the FCRA. To engage in an endless semantic misadventure just brings more complexity to an already arcane statute. We do not wish to contribute to the “disarray” that litters the decisional landscape. See Gorman, 584 F.3d at 1166. We elect to follow Macpherson and Purcell not because they are easy, but because they are correct. See Ilodianya v. Capital One Bank USA NA, 853 F.Supp.2d 772, 775 (E.D.Ark.2012) (declaring that “Purcell and Macpherson are well reasoned and persuasive”).

 

We also reject Dabney’s argument that Congress made a preemption distinction between state statutory and common law claims. See Premium Mortg. Corp. v. Equifax, Inc., 583 F.3d 103, 106–07 (2d Cir.2009) (stating that “[p]laintiff’s distinction between statutory and common-law claims under this section of the FCRA’s express preemption provision is … unpersuasive” and holding that the word “laws” in § 1681t(b) encompasses state statutory and common law claims). “Common law claims, by their nature, refine the contours of liability over time. And, with each state ruling on its own common law claims, national furnishers would likely be subject to inconsistent obligations in the various states.” Cosmas v. Am. Express Centurion Bank, 757 F.Supp.2d 489, 501 (D.N.J.2010). If such a crazy-quilt came to be, the congressional goal of ensuring consistent, accurate collection and dissemination of credit information would be compromised. Ibid.

 

In like vein, we find unpersuasive the argument that New Jersey can provide a defamation remedy for conduct that fails to conform to § 1681t(b)(1)(F)’s “requirement.” “The phrase ‘[n]o requirement or prohibition’ sweeps broadly and suggests no distinction between positive enactments and common law; to the contrary, those words easily encompass obligations that take the form of common-law rules.” Cipollone v. Liggett Group, Inc., 505 U.S. 504, 521, 112 S.Ct. 2608, 2620, 120 L. Ed.2d 407, 426 (1992) (plurality opinion); see also Riegel v. Medtronic, Inc., 552 U .S. 312, 323–24, 128 S.Ct. 999, 1007–08, 169 L. Ed.2d 892, 902–03 (2008).

 

In summary, the federal credit reporting system implemented by Congress requires that Dabney’s state intentional tort claim must yield to the FCRA under the Supremacy Clause. Therefore, his common-law claim of defamation was properly dismissed. It is not for this court to remake the balance struck by Congress, or to introduce limitations on Congressional policy where no limitation has been written by the national legislature.

 

*7 Affirmed.