OPINION & ORDER Elaine Aghaeepour (“Aghaeepour”); Anne Barr (“Barr”); Bruce Drago (“Drago”); Julie Higgins (“Higgins”); Shane Moore (“Moore”); Michele Norris (“Norris”); Jesus Rivera (“Rivera”); and Hong Zhang (“Zhang”) (collectively, “Plaintiffs”) filed the instant Complaint against Jay Cohen (“Cohen”); Sara Krieger (“Krieger”); Jennifer Centeno a/k/a Jennifer Nugent (“Centeno” or “Nugent”); and Louis Cucinotta (“Cucinotta”) (collectively, “Individual Defendants”); Joseph I. Sussman (“Sussman”); Joseph I. Sussman, P.C. (“Sussman, P.C.”) (collectively, “Sussman Defendants”); Lease Finance Group, LLC (“LFG”); MBF Leasing, LLC (“MBF”); and Northern Leasing Systems, Inc. (“NLS”) (collectively, “Corporate Defendants”) (Corporate Defendants with Individual Defendants and Sussman Defendants, collectively, “Defendants”), alleging claims under the Federal Racketeer Influenced Corrupt Organizations Act (“RICO”), 18 U.S.C. §§1962, 1964; the Federal Fair Credit Reporting Act (“FCRA”), 15 U.S.C. §§1681b(f), 1681s-2(b)(A); New York’s Anti-Deceptive Trade Practices Act (“NYFCRA”), N.Y. Gen. Bus. Law §§349, 380; and fraud. (Second Amended Complaint, (“SAC”), ECF No. 48.)Before the Court is Defendants’ Motion to Dismiss the SAC pursuant to Federal Rule of Civil Procedure 12(b)(6), federal preemption, and res judicata. (See Motion to Dismiss, ECF No. 54.) For the following reasons, Defendants’ Motion is GRANTED in part and DENIED in part.BACKGROUND1This is a case about greed, corruption, and impunity. Defendants purportedly operate a complex racketeering scheme through which they intimidate out-of-state individuals into paying unwarranted sums of money by commencing or threatening to commence fraudulent lawsuits in New York City Civil Court. The lawsuits involve efforts to collect relatively small sums of money, typically under $10,000, which Defendants claim is owed to them based on equipment lease agreements. Many of these agreements, however, contain forged signatures. Over the years, Defendants have persisted in small claims proceedings and even obtained fraudulent default judgments. They have used these judgments to harass, intimidate, and extort money from Plaintiffs, most of whom cannot afford expensive long-distance litigation in foreign venues. In furtherance of this scheme, Defendants have also improperly accessed and made inaccurate entries on Plaintiffs’ credit reports.Defendant NLS finances the equipment leases and manages and operates over 100 shell entities, including LFG and MBF, which are its subsidiaries. Individual Defendants are all principals and officers of the Corporate Defendants: Cohen is NLS’s President and Chief Executive Officer; Krieger is NLS’s Vice President for Operations; Cucinotta is NLS’s Legal Collections Manager; and Centeno is NLS’s Legal Administrative Manager.Defendant Joseph Sussman is an attorney duly admitted to the Bar in New York. Sussman, through his law firm, Joseph I. Sussman, P.C., commenced and conducted litigation on behalf of the Corporate Defendants. This litigation was based on forged leases, refusals to vacate default judgments, concealed facts from the Court (including deposition transcripts), and affirmative representations made to the Court to mislead it during litigation.With each Plaintiff, Defendants engaged in largely the same racketeering scheme, consisting of “systematic and repeated” intimidation in attempts to collect money from Plaintiffs to which Defendants were not entitled. More specifically, Defendants “bullied” Plaintiffs with threats of litigation over documents that Defendants knew were forged. In each case, Defendants would create a fraudulent financing lease with Plaintiffs as guarantors. Where Defendants had access to Plaintiffs’ bank accounts, Defendants would wrongfully debit amounts under the forged leases. Where Defendants did not have such access or when a plaintiff closed the bank account, Defendants harassed Plaintiffs — through phone calls and mailings — over “amounts due” and threatened Plaintiffs with litigation to collect the debt in default. In most cases, Defendants commenced lawsuits in the New York City courts. Since Plaintiffs are all out-of-state individuals, the lawsuits were designed to ensure that Plaintiffs had no real opportunity to raise defenses to the racketeering enterprise’s bogus lawsuits, so that the entry of a default judgment was all but certain. When Defendants were granted default judgments, many Plaintiffs were forced to hire attorneys in New York to attempt to set the judgments aside.In the course of this scheme, Defendants also wrongfully accessed Plaintiffs’ credit reports and, in some cases, made adverse entries in the credit reports. Plaintiffs allege that these actions had “significant impact on credit availability to Plaintiffs, including without limitation, denial of credit opportunities, increase in interest rates, and diverse other consequences.”As a result, Plaintiffs suffered significant economic and non-economic damages, including mental anguish, embarrassment, annoyance, and emotional distress.PROCEDURAL HISTORYPlaintiff filed the Complaint on July 18, 2014. (ECF No. 1.) Plaintiff filed the First Amended Complaint (“FAC”) two months later on September 9, 2014. (ECF No. 6.) A few months later, Defendants moved to dismiss the FAC. (ECF No. 13.) This Court ruled on that motion on December 1, 2015, dismissing: (1) the RICO claims of plaintiffs Glasgow, Norris, and Moore; (2) all FCRA and NYFCRA claims of plaintiffs Moore and Rivera; (3) the FCRA and NYFCRA claims based on inaccurate reporting of plaintiffs Higgins and Norris; (4) the FCRA and NYFCRA claims based on negligence of plaintiffs Glasgow, Higgins, Schilber (no longer a defendant), and Schilco (no longer a defendant); and (5) the NYFCRA §380-b claims based on impermissible access of credit reports of plaintiff Schilco. (See Opinion & Order, (“Order”), ECF No. 19.)On January 17, 2017, Plaintiffs filed the SAC. On June 8, 2017, Defendants filed the instant Motion to Dismiss the SAC. (ECF No. 54.)LEGAL STANDARDTo survive a motion to dismiss, a complaint must supply “factual allegations sufficient ‘to raise a right to relief above the speculative level.’ “ATSI Commc’ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir.2007) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). In other words, the complaint must allege “enough facts to state a claim to relief that is plausible on its face.” Starr v. Sony BMG Music Entm’t, 592 F.3d 314, 321 (2d Cir.2010) (quoting Twombly, 550 U.S. at 570). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). In applying this standard, a court should accept as true all well-pleaded factual allegations, but should not credit “mere conclusory statements” or “[t]hreadbare recitals of the elements of a cause of action.” Id.DISCUSSIONI. Federal PreemptionDefendants first argue that the NY FCRA claims are preempted and, therefore, fail to state a cause of action. (Defendant’s Memorandum, (“Def. Mem.”), ECF No. 56, at 2.) Specifically, Defendants contend that Plaintiffs’ claim that Defendants failed to notify them prior to obtaining their credit reports fails because FCRA §1681(m) addresses the same notice obligations set out in GBL §380-b(b). (Id.)Plaintiffs argue that the FCRA only limitedly preempts GBL §380-b(b) because it is silent on a notice requirement imposed by state law. They claim that because state law is simply broader than federal law, there is no true conflict between the FCRA and GBL §380-b(b). (Plaintiffs’ Opposition, (“Pl. Opp.”), ECF No. 58 at 4.) The Court agrees with the Plaintiffs.1. Legal StandardThe Constitution’s Supremacy Clause provides that “the Laws of the United States…shall be the supreme Law of the Land…anything in the Constitution or Laws of any State to the Contrary nowithstanding.” U.S. Const. art. VI, cl. 2. Because U.S. laws are to be the supreme law of the land, “[i]t follows that Congress may preempt (or invalidate) a state law by means of a federal statute.” Galper v. JP Morgan Chase Bank, N.A., 802 F.3d 437, 443 (2d Cir. 2015). “It may preempt state law expressly or it may preempt state law implicitly.” Further “[f]or any preemption inquiry, the ultimate touchstone…is the intent of Congress.” Id. (emphasis added).As this Court previously explained:The Supreme Court has recognized three typical settings in which courts will find that Congress intended to preempt state law. First, when Congress expressly provides that a federal statute overrides state law, courts will find state law preempted if, applying standard tools of statutory construction, the challenged state law falls within the scope of congressional intent to preempt. Second, when Congress legislates so comprehensively in one area as to “occupy the field,” courts may infer from the federal legislation that Congress intended to preempt state law in that entire subject area. Third, when neither of the first two categories applies but state law directly conflicts with the structure and purpose of a federal statute, [courts] may conclude that Congress intended to preempt the state law.Segedie v. Hain Celestial Grp., Inc., No. 14-CV-5029 NSR, 2015 WL 2168374, at *2 (S.D.N.Y. May 7, 2015) (internal citations and quotation marks omitted).2. New York Notice RequirementsNY GBL §380-b(b) imposes a notice requirement on persons who request consumer information, in connection with a credit application, prior to their attaining it. As such, it imposes a “pre-pull” notice requirement on credit information requests. §380-b(b) provides:No person shall request a consumer report, other than an investigative consumer report, in connection with an application made after the effective date of this article, for credit, employment, insurance, or rental or lease of residences, unless the applicant is first informed in writing or in the same manner in which the application is made that (i) a consumer report may be requested in connection with such application, and (ii) the applicant upon request will be informed whether or not a consumer report was requested, and if such report was requested, informed of the name and address of the consumer reporting agency that furnished the report.3. Federal Post-Pull Notice RequirementsThe FCRA imposes notice requirements on users taking adverse actions before taking such actions. In other words, the FCRA imposes “post-pull” notice requirements on credit users that are triggered when certain “adverse actions” are to ensue. Hence, §1681m(a) first broadly outlines that a user of consumer credit information must give notice to a consumer if it takes “any adverse action with respect to any consumer that is based in whole or in part on any information contained in a consumer report.” 15 U.S.C. §1681m(a) (emphasis added). Next, §1681m(b) requires a “user of information” to provide notice to a consumer “whenever credit for personal, family, or household purposes involving a consumer is denied or the charge for such credit is increased either wholly or partly because of information obtained from a person other than a consumer reporting agency.” 15 U.S.C. §1681m(b). Similarly, §1681m(h), requires a user of consumer credit information to “provide oral, written, or electronic notice” to a consumer “in connection with an application for, or a grant, extension, or other provision of, credit on material terms that are materially less favorable than the most favorable terms available to a substantial proportion of consumers from or through that person, based in whole or in part of a consumer report.” 15 U.S.C. Section 1681m(h) (emphasis added).In sum, and as the Supreme Court has explained, the FCRA imposes a limited notice requirement on individuals who intend to take certain adverse actions against consumers “based in whole or in part on a consumer report.” Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 63, 127 S. Ct. 2201, 2212 (2007). The types of adverse actions contemplated are denying credit based on a credit report, increasing credit rates based on a credit report, and giving less favorable terms on a credit line based on a credit report. The FCRA, however, is silent as to whether seekers of credit reports who do not intend to take any adverse actions have pre-pull notice obligations. Nowhere does the statute say that its post-pull notice obligations on users of credit reports are the exclusive notice requirements imposed by the FCRA. Indeed, §1681m does not even address third-party individuals who may not be authorized to view consumer reports. Rather, the statute articulates minimum requirements on legitimate users of consumer reports for a broad, but finite, set of adverse actions that are serious enough to impose uniform federal notice requirements. Id. (reiterating that “not all ‘adverse actions’ require notice, only those ‘based … on’ information in a credit report.”)4. ApplicationThe instant issue does not fall squarely into any of the three categories through which preemption is typically analyzed. (See supra, Part I.1.) While Defendants are correct that there is explicit text related to preemption in the statute, the text does not address what happens when state law obligations exceed the FCRA. Hence, bearing in mind that the “ultimate touchstone” of the analysis is Congress’s intent, the Court begins, but does not end, its analysis with the statute’s text.Beginning with the express language of the statute, §1681t(b)(1) states that the FCRA preempts state laws “with respect to any subject matter regulated under” these sections. See 15 U.S.C. §1681(t)(b)(1). The sections listed “under” specifically include subsections (a) and (b) of Section 1681(m), which are described as “relating to the duties of a person who takes any adverse action with respect to a consumer.” Id. (emphasis added).FCRA §1681t(b)(1) also contains an express “savings clause,” which provides:“except as provided in [the] subsections [below], this subchapter does not annul, alter, affect, or exempt any person subject to the provisions of this chapter from complying with the laws of any State with respect to the collection, distribution, or use of any information on consumers, or for the prevention or mitigation of identity theft, except to the extent that those laws are inconsistent with any provision of this subchapter, and then only to the extent of the inconsistency.”Section 1681t(b)(1)(a)(emphasis added.) Therefore, even though there is express language stating that §1681(m) and its subsections preempt state law with respect to the “same subject matter,” there is also express language stating that there is no preemption of state law “except to the extent that those laws are inconsistent” with §1681t(b)(1), and even then, the preemption is “only to the extent of the inconsistency.” Id. The preemption is narrow. By its own terms, it requires three things for the preemption to apply: 1) the state law provisions must relate to the “same subject matter” as Section 1681(m)(a)-(b), 2) those provisions must be “inconsistent”, and 3) the application of preemption cannot exclude more law than is necessary to alleviate the inconsistency.We begin with the first requirement for preemption — that the statutes be dealing with the same subject matter. Defendants argue that based on Judge Forrest’s reasoning in Ritchie v. Northern Leasing Systems, Inc., 12-cv-4992, 2016 WL 1241531 (S.D.N.Y. Mar. 28, 2016), aff’d sub nom. 701 F. App’x 45 (2d Cir. 2017), the common subject matter between the two statute provisions is “when notice must be given to a consumer.” (See Def. Reply Br., ECF No. 57, at 2.)This description is overbroad. FCRA §1681t describes the FCRA subsections that preempt state law (subsections (a) and (b) of section 1681m) as governing “duties of a person who takes any adverse action with respect to a consumer.” §1681t(b)(c). While Judge Forrest interpreted the preempted subject matter as “requirements on users of consumer reports,” which is §1681m’s subtitle, the FCRA text specifically lists “subsections (a) and (b) of section 1681(m)” and describes them as “relating to the duties of a person who takes an adverse action with respect to a consumer.” Not only does Judge Forrest’s broader description contradict the statute’s text, but it also nullifies the FCRA’s savings clause, which states that “the [FCRA] does not annul, alter, affect, or exempt and person … from complying with the laws of any State…” and that it only preempts inconsistencies with state law and only to the extent of the inconsistency. FCRA §1681t.This brings us to the second reason why there is no preemption issue — there is no inconsistency with state law. As a matter of logic, there is no “inconsistency” with a state pre-pull notice requirement on seekers of credit information and federal a post-pull notice requirement on users taking adverse actions. Black’s Law Dictionary defines “inconsistency” as: “A part of something that is incompatible with another part of the whole thing” or as “[a] conflict between two things…” Black’s Law Dictionary (10th ed. 2014) (emphasis added).The notice requirement under each statute applies at different times and may implicate different individuals. Even where a requester of credit information later takes an adverse action, and is therefore obliged to comply with both statutes, there is no incompatibility or conflict between the statutes. Rather, the individual would simply have successive obligations.Defendants’ reading the two separate obligations as somehow “inconsistent” makes no sense as neither obligation abrogates the other. Further, Judge Forrest’s interpretation of Safeco, 551 U.S. 47, misstates what the Supreme Court held. It did not hold that the only notice requirements that could be legally imposed were those outlined in §1681m. Rather, it held that the notice requirements articulated within §1681m, the post-pull requirements imposed prior to a user taking an adverse action, are limited to “only when the adverse action is based in whole or in part on a consumer report.” In other words, the Supreme Court left open the possibility that users of credit reports could still take certain adverse actions against consumers without giving them notice, so long as the credit report was not the basis for those adverse action. See generally id.This reading aligns with the purpose of the statute. The Senate Report on the statute states that the Bill seeks to “prevent an undue invasion of the individual’s right of privacy in the collection and dissemination of credit information.” (S. Rep. No. 517, 91st Cong., 1st Sess. 8 (Nov. 5, 1969)). Indeed, the Report repeatedly emphasizes this consumer-protectionist purpose:“Whenever an individual is rejected for credit, insurance or employment because of an adverse credit report, the individual is given the right to be told the name of the agency making the report.” (Id.);“Credit reporting agencies would be required to inform the consumer of all information in his credit file.” (Id.);“Following disclosure, the consumer would be given an opportunity to correct inaccurate or misleading information in his credit file.” (Id.);“In addition, the bill requires that the information in a person’s file be kept confidential and only used for legitimate business transactions.” (Id.).The Report goes so far as to explain that the impetus for enacting the statute with minimum requirements was the lack of robust state law: “Until this year, there has been virtually no State legislation regulating credit reporting other than a 1916 Oklahoma statute with limited scope.” (Id.) And again, the Report listed numerous specific problems that it sought to alleviate:“One problem which the hearings on S.823 identified is the inability at times of the consumer to know he is being damaged by an adverse credit report” (Id.);“Standard agreements between credit reporting agencies and the users of their reports prohibit the user from disclosing the contents of the report to the consumer.” (Id.);“In some cases, the user is even precluded from mentioning the name of the credit reporting agency” (Id.)“Unless a person knows he is being rejected for credit or insurance employment because of a credit report, he has no opportunity to be confronted with the charges against him and tell his side of the story” (Id.)“A third problem is that even when individuals gain access to the information in their credit file, they sometimes have difficulty in correcting inaccurate information” (Id.)“In other cases, the consumer may have difficulty in getting his version of a legitimate dispute recorded in his credit file” (Id.)“A fourth problem is that information in a person’s credit file is not always kept strictly confidential” (Id.)The purpose of the FCRA was to increase, not decrease, the opportunities for consumers to be notified about their credit reports and to protect their interests in credit report accuracy. Hence, the Court finds that there is no inconsistency between the NY GBL and the FCRA, which impose separate notice requirements that both support the FCRA’s protectionist purpose and do not contradict one another.The Court then turns to the third requirement for preemption set in the FCRA’s text, which is that the application of preemption cannot exclude more law than is necessary to alleviate the inconsistency. Again, the savings clause in the statute provides:except as provided in [the] subsections [below], this subchapter does not annul, alter, affect, or exempt any person subject to the provisions of this chapter from complying with the laws of any State with respect to the collection, distribution, or use of any information on consumers, or for the prevention or mitigation of identity theft, except to the extent that those laws are inconsistent with any provision of this subchapter, and then only to the extent of the inconsistency.”Section 1681t(b)(1)(a)(emphasis added.) The Senate Report directly explains how this savings clause functions, providing that the phrase “State laws which are inconsistent with Federal law are preempted to the extent to the inconsistency” means that “no State law would be preempted unless compliance would involve a violation of Federal law.” (S. Rep. No. 517, 91st Cong., 1st Sess. 8 (Nov. 5, 1969)). The Court has already explained that complying with New York state law does impose violating federal law. The statutory history thus reiterates that when a state consumer protection law is merely broader than the federal law, the degree of inconsistency is zero.2Accordingly, Defendants’ Motion to Dismiss the NY FCRA/ GBL §380-b(b) based on federal preemption is denied.II. Failure to State a Claim due to Plaintiffs’ Lack of Credit ApplicationsDefendants argue that even if Plaintiffs’ GBL claims are not preempted, they should be dismissed because Plaintiffs never applied for credit, a requirement for triggering the notice requirements under GBL §380-b(b). (Def. Rep. at 3, ECF No. 57.)The Court agrees that the case law on GBL §380-b(b) reflects that the New York pre-pull notice requirements pertain to a consumer applying for credit. See Pietrafesa v. First Am. Real Estate Info. Servs., Inc., No. 1:05-CV-1450, 2007 WL 710197, at *6 (N.D.N.Y. Mar. 6, 2007) (“By its plain terms, §380-b(b) applies to requests for a consumer report ‘in connection with an application … for credit.’”); Ritchie, 2016 WL 1241531, at *19 (“The NYFCRA also requires that an applicant for credit must be given notice if her consumer report may be requested.”) While Defendants contend that the SAC does not reflect that Plaintiffs applied for credit, reading the SAC in the light most favorable to Plaintiffs, the Court finds that it does. For example, it states:Some consumers entered leases with Corporate Defendants but were unable to disavow them: “Defendants subject such complainants ‘to an onerous process designed to prevent or dissuade them from disavowing the lease’” (SAC 39.)In October 2007, an Enterprise representative visited Plaintiff Elaine Aghaeepour, offered check processing, and attained her bank account and social security number, which it later used to create a fraudulent lease. (SAC 60.) Aghaeepour’s acts in furnishing her personal information could be read as applying for credit, despite her claims that the lease Northern Leasing and MBF later created was fraudulent.In October 2014, an Enterprise representative visited Plaintiff Anne Barr, offering to switch her credit card machines to make them compliant with new laws, and eliciting her banking and other personal information. (SAC
89-90.) Barr’s acts in furnishing her personal information could be read as applying for credit, despite her claims that the lease Northern Leasing and MBF later created was fraudulent.In June 2014, an Enterprise representative visited Plaintiff Bruce Drago, offering credit card processing services. Like other Plaintiffs, Drago provided his banking and other personal information, which was used to make fraudulent leases. (SAC
