Question: Does the federal Fair Credit Reporting Act preempt all actions filed under California's Consumer Credit Reporting Agency Act?
Answer: Yes, according to the First District Court of Appeal, Division One, in Liceaga v. Debt Recovery Solutions, LLC (A120277), decided December 29, 2008.
In this case, plaintiff Rebecca Liceaga's purse was stolen, and her identity was used to obtain a Sprint cell phone account. Although Liceaga had never done business with Sprint, when the thief failed to pay, Sprint assigned the account to the defendant debt collection agency, which reported her "default" to various consumer credit reporting agencies. Liceaga filed suit under California's Consumer Credit Reporting Agencies Act, alleging the debt collection agency furnished information it knew or should have known was inaccurate.
The trial court granted the collection agency's motion for judgment on the pleadings on the grounds the Fair Credit Reporting Act preempted Liceaga's claim under the CCRAA. The First District affirmed, holding the express language of the FCRA granted all state laws "relating to the responsibilities of persons who furnish information to consumer reporting agencies" except, as to California, one specific subsection of the CCRAA (Civil Code section 1785.25(a)). The First District concluded this "California exception" was, in fact, limited to the one enumerated subsection and "does not allow a private right of action." According to the Court, "Congress has preempted state court private actions against furnishers of inaccurate credit information to credit reporting agencies, and no exclusion for California actions exists."