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Iraheta v. Equifax Information Services LLC

United States District Court, W.D. Louisiana, Shreveport Division

April 18, 2018





         Before the undersigned magistrate judge, on reference from the District Court, are two motions: a motion to sever Plaintiff's claims against Defendant, Equifax Information Services LLC (“Equifax”) relating to the data security incident Equifax announced on September 7, 2017 (the “Data Breach”) [doc. # 94] filed by Equifax (the “Motion to Sever”); and Plaintiff's motion for leave to file a third amended complaint [doc. # 101] (the “Third Motion to Amend”). For reasons assigned below, the Motion to Sever is DENIED and the Third Motion to Amend is GRANTED, in part, and DENIED, in part.[1]


         The already lengthy procedural history of this matter through January 10, 2018, is set out in the memorandum order filed that date, in which the undersigned granted Plaintiff's second motion for leave to amend in part, allowing Plaintiff to amend his existing FCRA claims, to add claims for negligence and defamation, and to add claims related to the Data Breach, and denied the motion in part, prohibiting Plaintiff from adding claims for injunctive relief [doc. #82]. That same date, the undersigned filed a report and recommendation recommending that Experian's motion to dismiss be denied as moot [doc. #83]. On January 25, 2018, the District Judge, adopting the report and recommendation, denied the motion [doc. #90].

         On January 30, 2018, Equifax filed its Motion to Sever [doc. #94] (the “Motion to Sever”), seeking to sever Plaintiff's claims against it relating to the Data Breach, and pointing out that it intends to have this case “tagged” as a tag-along case in the Multi-District litigation pending in the Northern District of Georgia relating to the Data Breach (the “MDL”). Plaintiff opposed the Motion to Sever [docs. 105 & 106].

         On February 9, 2018, Plaintiff filed his Motion for Leave to File Third Amended Complaint [doc. #101] (the “Third Motion to Amend”), seeking to “(a) cure defects in [his] Second Amended Complaint; (b) add additional FCRA, negligence, and gross negligence claims against all named Defendants (to include those related to data breaches at Equifax, Experian, and Trans Union); [and] (c) seek adequate equitable relief as well as damages from all named Defendants.” Third Motion to Amend, doc. # 101, p. 1. Defendants oppose [doc. #107], arguing that the Court should deny as futile both Plaintiff's request to add new claims relating to various newly-alleged data security incidents involving Equifax, Experian, and Trans Union (the “New Privacy Claims”) and additional claims that the Court previously held were futile. Defendants argue that the New Privacy Claims are not credible, are based on incidents that have been public knowledge for a long time, and that they would unduly prejudice Defendants if they were added at this time. Defendants further argue that Plaintiff's proposed amendments to add claims for gross negligence and violations of the Gramm-Leach-Bliley Act (“GLBA”), as well as his proposed request for injunctive relief are duplicative of proposed claims which the court has already denied as futile.

         I. Leave to Amend.

         A. Legal Standard

         Under Federal Rule of Civil Procedure 15(a), a timely-filed leave to amend shall be “freely [granted] when justice so requires.” Fed.R.Civ.P. 15(a)(2). “‘Whether leave to amend should be granted is entrusted to the sound discretion of the district court . . . .'” Quintanilla v. Texas Television Inc., 139 F.3d 494, 499 (5th Cir. 1998) (quoted source omitted). Yet, “[i]n the context of motions to amend pleadings, ‘discretion' may be misleading, because Fed.R.Civ.P. 15(a) ‘evinces a bias in favor of granting leave to amend.'” Martin's Herend Imp. v. Diamond & Gem Trading United States of Am. Co., 195 F.3d 765, 770 (5th Cir. 1999) (quoting Dussouy v. Gulf Coast Inv. Corp., 660 F.2d 594, 597 (5th Cir. 1981)). A district court must have a “substantial reason” to deny a request for leave to amend. Lyn-Lea Travel Corp. v. Am. Airlines, Inc., 283 F.3d 282, 286 (5th Cir. 2002) (citation omitted).

         The Court considers the following factors in making its decision: (1) undue delay; (2) bad faith or dilatory motive; (3) repeated failure to cure deficiencies by previous amendments; (4) undue prejudice to the opposing party; and (5) futility of amendment. Rosenzweig v. Azurix Corp., 332 F.3d 854, 864 (5th Cir. 2003) (citing Foman v. Davis, 371 U.S. 178, 182 (1962)). Absent any of these factors, leave should be granted. Smith v. EMC Corp., 393 F.3d 590, 595 (5th Cir. 2004) (citing, Foman, 371 U.S. at 182).

         If the proposed claims are not credible on their face, leave to amend should be denied as futile. See Adhikari v. Kellogg Brown & Root, Inc., 845 F.3d 184, 214 (5th Cir.), cert. denied, 138 S.Ct. 134, 199 L.Ed.2d 35 (2017) (“If the allegations are ‘enough to raise a right to relief above the speculative level and the claim for relief is plausible on its face, . . . amendment would not have been futile.'” (quoting Thomas v. Chevron U.S.A., Inc., 832 F.3d 586, 593 (5th Cir. 2016)).

         B. New Privacy Claims

         Defendants attack the credibility of the New Privacy Claims by asserting that Plaintiff mined those claims from an internet article titled “4 Credit Bureau Data Breaches that Predate the 2017 Equifax Hack” (the “Web Article”). See Opposition to Amendment, doc. #107, pp. 3-4. Defendants quote excerpts from and attach the Web Article to support their assertions that Plaintiff modeled the New Privacy Claims solely on the Web Article. See Id. Defendants ...

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