• Plaintiff's State Law Defamation and Invasion of Privacy Claims against Furnisher Preempted
  • June 10, 2010 | Author: Paul W. Sheldon
  • Law Firm: Strasburger & Price, LLP - Frisco Office
  • Sigler v. RBC Bank, 2010 U.S. Dist. LEXIS 45744 (M.D. Ala. May 10, 2010)

    Facts: Cynthia Brown obtained a consumer loan from RBC Bank and signed Plaintiff’s name to the loan documents without permission to do so. In the months that followed, Plaintiff was denied credit from a number of retail establishments due to adverse information furnished by RBC Bank to the consumer reporting agencies (“CRAs”). In June, 2009, Plaintiff filed suit against RBC Bank as well as the CRAs for violations under the Fair Credit Reporting Act (“FCRA”) as well as state law claims for invasion of privacy, defamation, fraudulent misrepresentation, and other common law claims.  RBC Bank moved to dismiss the state law defamation and invasion of privacy claims for allegedly publishing inaccurate information to the CRAs as being preempted under the FCRA.   The Court agreed.

    • Preemption. Section 1681h(e) provides “no consumer may bring any action or proceeding in the nature of . . . defamation, invasion of privacy . . . with respect to the reporting of information against any . . . person who furnishes information to a [CRA].”  Section  1681h(e) applies to users of information which take adverse action against the consumer.  It is undisputed that Plaintiff alleged that RBC Bank was a furnisher of information and not a CRA or that it was sued in its capacity as a user of information which had taken an adverse action against Plaintiff. Accordingly, Section 1681h(e) was not applicable to this action.
    • Preemption. By its terms, §  1681t(b)explicitly preempts all state laws in the areas covered by § 1681s-2, including defamation and invasion of privacy. Accordingly, Plaintiff’s claims for defamation and invasion of privacy are preempted by the FCRA.