Flow Sciences v D&B Amended Complaint 031315.pdf

1009929_1 FIRST AMENDED CLASS ACTION COMPLAINT(2:14-cv-01404-TSZ)

Robbins Geller Rudman & Dowd LLP 655 West Broadway, Suite 1900, San Diego, CA 92101

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THE HONORABLE THOMAS S. ZILLY

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON

AT SEATTLE

FLOW SCIENCES INC., Individually and on Behalf of All Others Similarly Situated,

Plaintiff,

vs.

DUN & BRADSTREET CREDIBILITY CORPORATION, et al.,

Defendants.

) ) ) ) ) ) ) ) ) ) ) ) )

No. 2:14-cv-01404-TSZ

CLASS ACTION

FIRST AMENDED CLASS ACTION COMPLAINT

JURY TRIAL DEMAND

Case 2:14-cv-01404-TSZ Document 73 Filed 03/13/15 Page 1 of 27


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Now comes plaintiff Flow Sciences Inc. (Plaintiff or FSI), individually and on behalf of

all others similarly situated, through counsel, and, pursuant to Fed. R. Civ. P. 15(a)(1)(B), for its

amended complaint against defendants Dun & Bradstreet Credibility Corporation (DBCC), and

Dun & Bradstreet Corporation and Dun & Bradstreet, Inc. (collectively, D&B), states and alleges

as follows:

INTRODUCTION

1. Small businesses are the heart of this nations economy. Access to credit is the

lifeblood of small businesses. D&B is the most powerful and prominent reporter on small business

credit. Thus, the truthfulness and accuracy of a small businesss D&B credit profile, ratings, and

scores are of critical concern to the continued health of the small business. And small businesses are

sensitive to inquiries by others (e.g., potential customers) into their D&B credit profiles. DBCC is a

telesales company that markets and sells expensive internet-based credit-on-self products under the

brand CreditBuilder.

2. D&B and DBCC are separate companies, but both profit from the sale of

CreditBuilder, which they cloak in the Dun & Bradstreet name, brand, and tradition. And DBCC

represents CreditBuilder as a D&B solution to credit report problems. And small business are led

to believe that they are working with Dun & Bradstreet the company who reports on credit, has

databases, investigates trade experiences, and so on when in fact they are speaking with a DBCC

telesales agent.

3. D&B defames small businesses by placing false and inaccurate information on small

business credit reports. D&B conducts no due diligence to determine whether information reported

to it is accurate, and removes false information when challenged by an aggrieved small business

without ascertaining the accuracy of that information in the first instance, despite advising

complaining businesses that it is conducting an actual investigation of the false information.



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4. D&B sends to DBCC a list of false and inaccurate negative entries and score changes

on small business credit reports, which DBCC uses to leverage sales of CreditBuilder.

5. D&B also manipulates credit scores without any regard for the actual financial

condition of a given small business, oftentimes publicizing that a business is high risk or at risk of

financial collapse when, in reality, the business is healthy and financially sound.

6. D&B also inflates the number of inquiries made about small businesses by generating

inquiries itself and by not de-duplicating multiple requests for information from the same subscriber

on the same day. Not only do these inflated inquiries have a negative effect on certain D&B credit

scores publicized to the world, but D&B sends the inflated inquiries to DBCC (without disclosing

that they are inflated), which DBCC uses to solicit small businesses to purchase CreditBuilder.

7. DBCC markets and solicits sales for CreditBuilder through deceptive and misleading

statements which confuse reasonable persons regarding the affiliation of D&B to DBCC and to

CreditBuilder.

8. DBCC also makes promises about what CreditBuilder can do for a small business

solve certain D&B problems that the product cannot do.

9. DBCC also inflates the number of inquiries made about a small business, claiming

that there have been more unique companies making inquiries than there really have been. This

inflation is in addition to D&Bs inflation.

PARTIES & JURISDICTION

10. Plaintiff FSI is a North Carolina corporation with its principal place of business at

2025 Mercantile Drive in Leland, North Carolina 28451.

11. Defendant DBCC is a Delaware limited liability company with its principal place of

business at 22761 Pacific Coast Highway in Malibu, California 90265. At all relevant times, DBCC



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marketed, solicited, and sold CreditBuilder products in the stream of interstate commerce throughout

the state of North Carolina.

12. Defendants D&B are publicly-traded Delaware corporations with their principal

places of business at 103 John F. Kennedy Parkway in Short Hills, New Jersey 07078. At all

relevant times, D&B licensed, distributed, sold, and published small business credit reports

throughout the state of North Carolina.

13. This Court has original subject matter jurisdiction pursuant to 28 U.S.C. 1332(d)(2),

because the matter in controversy (exclusive of interest and costs) exceeds the sum of $5,000,000,

and this case is a class action in which the members of the class of plaintiffs are citizens of a state

(North Carolina) different from that of the defendants (California/New Jersey).

14. This Court is a proper venue pursuant to 28 U.S.C. 1404.

FACTUAL ALLEGATIONS

THE POWER OF DUN & BRADSTREET

15. The Dun & Bradstreet name has been synonymous with small business credit for

over 150 years. Dun & Bradstreet occupies a unique institutional role in American and international

business and D&B has a virtual monopoly over small business credit reporting. Dun & Bradstreet

carries the imprimatur of the federal government, which requires a small business to have a D&B-

assigned Data Universal Number System (DUNS) number in order to apply to do work on a

government contract. (A DUNS number is a unique ID recognized, recommended, and often

required by global corporations, governments, industry and trade associations. They are similar to

federal tax ID numbers, but only D&B distributes DUNS numbers. When applying for credit, loans,

or government bids, small businesses must submit a DUNS number, which vendors or others use to

pull financial and credit information.)



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16. Given the age, size, reputation, and unique importance attached to Dun &

Bradstreet and D&Bs profiles, reports, scores, and ratings, small businesses are understandably

sensitive to negative information on their reports or profiles, reductions in their scores and ratings,

and email alerts regarding their D&B information.

DUN & BRADSTREETS CREDIT-ON-SELF LINE OF BUSINESS

17. Some years ago, D&B sought to capitalize on the importance given to its reports and

small businesses concerns about monitoring and improving their credit profile. It developed an

internet-based credit-on-self product called Self Awareness Solutions (SAS), which was supposed

to provide customers with an opportunity to monitor their reports, dispute inaccurate information in

their reports, and submit positive information to help improve their scores and ratings.

18. Although the SAS line of business was profitable, by April 2009, customer criticism

had become so vocal that D&B planned killing off the products because customer complaints were

driving down its internal Voice of the Customer score, and dissatisfaction with the products was

resulting in high rates of customer attrition. Customers complained that D&B was using high-

pressure, bait-and-switch tactics to sell SAS products, and that the products did not perform as

promised.

19. In order to avoid further scrutiny and litigation over the SAS products but while

continuing to reap profits from the credit-on-self line of business D&B transferred the rights to sell

the product line (which was re-named CreditBuilder) to a new company, DBCC, in August 2010,

for $10 million in cash and annual royalties; a deal estimated at $100 million.



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DBCC DRESSES ITSELF UP AS DUN & BRADSTREET

20. D&B granted to DBCC a unique license to use the Dun & Bradstreet name, brand,

logo, and trade dress. DBCC employs these elements, as well as email and website addresses that

are similar to D&B email and website addresses: http://www.dandb.com and http://www.dnb.com

21. When small businesses call D&B directly about a problem on their credit report, they

are uniformly and seamlessly routed to a DBCC sales representative who tries to sell them

CreditBuilder, rather than attempt to fix the problem itself.

22. Although DBCC was created in August 2010, it represents to potential customers that

it help[s] businesses establish their credit with a D&B DUNS number, and that it offers D&B

solutions. It describes its sales force (which it calls credit advisors) as modern day Credit

Reporters.

23. DBCC describes itself as a component of D&Bs legacy and another chapter in its

long and storied history. DBCC represents to potential customers that its roots can be traced back

to the beginning of the credit industry. DBCC further represents: For over 170 years, millions of

businesses have relied on these credit services to pave their path to business success. By 2010, Dun

& Bradstreet Credibility Corp. launched a new chapter in this storied history as the company began

to offer products to help businesses monitor, manage and build their credit and credibility. In that

respect, we consider Dun & Bradstreet Credibility Corp. a 175 year-old startup.



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24. DBCC represents to potential customers that they should Protect Your Business

Credit with Dun & Bradstreet Credibility Search Our Database of Over 29 Million Businesses

Now. The database referred to is the D&B database, which DBCC has no ownership or control

over.

25. DBCC uses marketing materials which bear both a DBCC logo and a D&B logo and

makes no distinction between the two companies.

26. DBCC represents to potential customers that [a]t D&B Credibility Corp., we make

over 1.5 million updates to our database on a daily basis. It could be major transactions like paying

vendors or making lease or mortgage payments, but it could also be seemingly smaller transactions

like equipment leasing, advertising, shipping packages or underwriting insurance. . . . With all this

information flooding into D&B, its critical that you keep on top of your profile and credit score to

help ensure you keep your reputation solid . . . . D&B makes these updates to its databases, not

DBCC. DBCC does not play a single role, direct or indirect, in the updating of D&Bs database.

27. DBCC sales representatives uniformly refer to the D&B databases as our

databases. DBCC sales representatives uniformly advise small businesses that companies are

coming to us for credit reports. DBCC sales representatives uniformly describe credit reporting

functions (e.g., checking for liens) as something we do. In truth, DBCC does not have databases,

D&B does; DBCC does not have companies coming to it for reports, D&B does; and DBCC does

not engage in credit reporting functions, D&B does.

28. In sum, DBCC makes representations which confuse, mislead, deceive, or outright

misrepresent the affiliation of DBCC to D&B and the affiliation of CreditBuilder to D&B. DBCC

fails to disclose the nature of the relationship between DBCC and D&B and the relationship between

CreditBuilder and D&B. That is, DBCC misleads potential customers with deceptive



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misrepresentations or omissions which conflate DBCC with D&B or Dun & Bradstreet and

position CreditBuilder as bearing the sponsorship or approval of D&B or Dun & Bradstreet.

29. On February 20, 2014, DBCC sued D&B in the Supreme Court of the State of New

York. Although DBCCs complaint is heavily redacted, the unredacted portions allege how

critically important the confusion caused by the shared name, logo, trade dress, and conflated

websites is to DBCC[s business model. DBCC says these elements are essential to DBCCs

business. For example, as part of the falling out between the two companies, D&B made

significant changes to its [website] links including . . . a pop-up box . . . which ha[s] steered

customers away from DBCC, by telling them that they are Now Leaving D&B. Previously, there

was no such notification, allowing DBCC to profit off potential customers believing that they were

still on D&Bs website or on a D&B-affiliated website. As another example, DBCC alleges that

D&B changed its websites search functions. Previously, when a business name was typed into the

D&B search box, the inquiring party was taken directly to DBCCs website and presented options

for learning more information regarding purchasing D&B COS [credit-on-self] Products.

(CreditBuilder is a COS product.) Now, a pop-up directly interferes with the search flow,

according to DBCC.

30. DBCC also misrepresents to potential customers their need for CreditBuilder by

telling them that there have been inquiries on their profiles, when no such inquiries have been

made, and that there is negative information on their reports, when such information either does not

exist or is false. Furthermore, DBCC misrepresents to potential customers the capabilities of

CreditBuilder by telling them that the product can effectively remove false information from their

report and improve their scores.



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D&B PLACES FALSE INFORMATION ON CREDIT REPORTS TO FOSTER DBCCS SALES OF CREDITBUILDER

31. One of D&Bs credit scores is called the Supplier Evaluation Risk (SER) Rating,

which purports to evaluate the risk to a supplier of doing business with the subject small business.

Many large government agencies (e.g., the U.S. Department of Veterans Affairs) and corporations

(e.g., Wal-Mart Stores, Inc. (Wal-Mart)) require that a small business maintain a certain SER

Rating to do business with them. (The SER Rating is an integer ranging from 1 to 9, with 1 being

the lowest risk and 9 being the highest risk. Wal-Mart, for example, requires a small business to

have an SER Rating of, at most, 6.)

32. D&B artificially raises the SER Ratings of a swath of small businesses, assigning

them a rating of 7-9, which indicates high risk of financial stress, despite the fact that D&B has no

basis whatsoever to identify a small business as being so close to financial collapse. D&B then

submits through a batch communication computer program these artificial changes in the SER

Rating to DBCC. Then, as part of a marketing and sales campaign designed to position

CreditBuilder as the solution to the change in SER Rating, DBCC solicits the swath of small

businesses to purchase the product to enable them to improve their SER Rating.

33. Another one of D&Bs scores is called the PAYDEX Score, which purports to

reflect the payment history of a small business and its current re-payment capabilities, as reported by

its business associates. D&B claims it must have at least three reports of trade experiences by a

subject small businesss associates to prepare a PAYDEX Score.

34. D&B issues inaccurate PAYDEX Scores because it fails to keep accurate and

current records of the current re-payment capabilities of swaths of small businesses. Also, for

swaths of small businesses about whom D&B only had two reports of trade experiences, D&B

manufactures a third fictitious trade experience so that it can give the subject small business a



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PAYDEX Score. In both cases, D&B transmits via batch computer communication these

inaccurate changes to the PAYDEX Scores to DBCC. Then, as part of a marketing and sales

campaign designed to position CreditBuilder as the solution to a low or inaccurate PAYDEX Score,

DBCC solicits the swath of small businesses to purchase the product to enable them to improve their

PAYDEX Score.

35. Another one of D&Bs scores is called the Commercial Credit Score, which purports

to represent the likelihood of a small business falling delinquent in its payments to its business

associates within the next 12 months.

36. D&B issues inaccurate Commercial Credit Scores because it fails to keep current

records of the current financial outlook of swaths of small businesses. D&B submits the inaccurate

Commercial Credit Scores to DBCC. Then, as part of a marketing and sales campaign designed to

position CreditBuilder as the solution to a low or inaccurate Commercial Credit Score, DBCC

solicits the swath of small businesses to purchase the product to enable them to improve their

Commercial Credit Score.

37. D&B also enters false negative payment experiences on the credit reports of swaths of

small businesses. These entries include slow pay entries (that a small business did not pay its bills

or service its debts within industry time-frames), delinquency entries (that a small business was

delinquent in a payment), and cash account entries (that a small business was on a cash-basis with

a certain vendor). D&B submits the entries of these false negative payment experiences to DBCC.

Then, as part of a marketing and sales campaign designed to position CreditBuilder as the solution to

a negative payment experience, DBCC solicits the swath of small businesses and offers

CreditBuilder as the way to repair the small businesses credit report.



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38. D&B also manufactures inquiries into the profiles of small businesses. An

inquiry means an entity has pulled D&Bs report about a small business. D&B inflates the number

of inquiries by generating its own inquiries, and by failing to de-duplicate multiple inquiries by the

same subscriber. D&B then submits the internal inquiries and the duplicate inquiries to DBCC

without disclosing that they were internal or duplicates. Then, as part of a marketing and sales

campaign designed to position CreditBuilder as the solution to a negative payment experience,

DBCC solicits small businesses by telling them there have been a high number of inquiries into their

D&B credit report.

39. Prior to the annual renewal date of a CreditBuilder customers subscription to the

product, D&B manipulates the customers credit profile in one or more of the foregoing ways to

enable DBCC to solicit the customer for renewal.

40. D&B profits off the sale of each individual CreditBuilder product.

PLAINTIFF FSIS EXPERIENCE

41. FSI produces containment systems for pharmaceutical laboratory, pilot plant, and

manufacturing areas. Its products are designed to protect operators from exposure to hazardous

particulates and vapors while performing delicate operations. Ruth Ryan is an officer of FSI. FSI

purchased a CreditBuilder product on November 14, 2012.

42. Prior to purchase, D&B artificially changed one or more of FSIs credit scores

without taking into account any actual change in the creditworthiness or financial stress of the

business. The manipulation of the score(s) was intended to make FSI susceptible to a CreditBuilder

solicitation.

43. For example, D&B artificially harmed FSIs Financial Stress Score by including in its

calculation of that score inquiries D&B had made of itself.



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44. Prior to purchase, D&B placed false negative payment experiences on FSIs credit

report without exercising any due diligence to determine whether the experiences were true; D&B

did not have any documentation supporting the experiences and it did not request any information

from FSI to confirm or dispute the experiences. The placement of false negative payment

experiences was intended to make FSI susceptible to a CreditBuilder solicitation.

45. For example, in November 2012, D&B published approximately seven separate false

entries that FSI was past due on amounts of $1000, $750, $250, or $50, when, in truth, FSI had not

failed to timely pay bills and had no out-standing debts. These false entries remained on FSIs report

for an extended period of time despite FSIs disputing their truth and D&B continued to publish

them in subsequent reports to its subscribers.

46. For another example, D&B published reports that FSI was between 30 and 90 days

late in making payment to vendors when, in truth, FSI had not been slow in making payments and

had not had any vendors take issue with its payment habits. These false entries remained on FSIs

report for an extended period of time despite FSIs disputing their truth and D&B continued to

publish them in subsequent reports to its subscribers.

47. For another example, D&B published reports that there were 43 UCC filings against

FSI when, in truth, there were 10 or fewer filings. In fact, Ms. Ryan confirmed with the Secretary of

States website that D&Bs information was false. These false entries remained on FSIs report for

an extended period of time despite FSIs disputing their truth and D&B continued to publish

them in subsequent reports to its subscribers.

48. For another example, D&B published reports that the highest credit available to FSI

was $25,000 when, in truth, it was $1 million.



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49. In August 2013, D&B published a Credit Recommendation about FSI to a global

logistics company, Expeditors. The publication said, Currently, there is a record of open

bankruptcy, receivership, liquidation, discontinuance with unpaid obligations or equivalent in D&B

files. Not approved for credit. In truth, FSI went through reorganization in 1996 and the

proceeding was closed in 1998. As a result of the false publication, FSI was denied credit.

50. In August 2013, D&B published reports that FSI had slow pays and was past due

on amounts, including (but not limited to) a slow pay entry reported in May 2012 for $100 for a

Lease Agreement. This false entry continued to appear on FSIs published D&B report.

51. Prior to purchase, D&B included in its inquiry rate calculation inquiries D&B itself

had made under one or more of its subscriber numbers, which wrongfully inflated the rate; since the

rate is used to calculate certain credit scores, it wrongfully harmed one or more of FSIs scores. The

inclusion of D&B inquiries was intended to make FSI susceptible to a CreditBuilder solicitation.

52. For example, D&B included internal inquiries in its calculation of FSIs Financial

Stress Score, which harmed that score.

53. Prior to purchase, D&B sent to DBCC a list of inquiries, which included D&Bs own

inquiries, without disclosing to DBCC that D&Bs own inquiries were included. The inclusion of

the D&B inquiries but without identifying and disclosing them was intended to provide DBCC

leverage to sell FSI a CreditBuilder product.

54. For example, D&B generated its own inquiries about FSI on April 27, 2011, February

11, 2011, March 27, 2012, April 17, 2012, April 20, 2012, July 6, 2012, September 4, 2012,

September 19, 2012, September 20, 2012, and November 12, 2012. D&Bs generation of its own

inquiries was a consistent and uniform practice. For example, on November 12, 2012, D&B made



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an inquiry itself; and it sent that inquiry to DBCC, who sent FSI an email alert on November 14,

2012, that a new inquiry had been made.

55. Prior to purchase, D&B sent to DBCC a list of inquiries, which included duplicate

inquiries, without disclosing to DBCC that they were nothing more than multiple types of requests

by the same subscriber on the same day. The inclusion of the duplicate inquiries but without

identifying them as such was intended to provide DBCC leverage to sell FSI a CreditBuilder

product. D&Bs non-de-duplication was a consistent and uniform practice.

56. For example, D&B did not de-duplicate inquiries by the same subscriber on the same

day on November 12, 2012; and it sent those duplicates to DBCC, who sent FSI an email alert that

counted the duplicates as separate inquiries.

57. As a result of D&B generating its own inquiries and failing to de-duplicate other

inquiries, both D&B and DBCC told FSI that there had been a high number of inquiries to D&B

over the last 12 months, and that high number was a factor for why FSI had a negative Financial

Stress Score. Both D&B and DBCC advised FSI that its Financial Stress Score indicated that it was

a moderate to high risk of severe financial stress, such as bankruptcy, over the next 12 months.

58. Prior to purchase, DBCC held itself out as D&B and CreditBuilder as a D&B-

affiliated product. FSI was confused by DBCCs representations. This confusion was designed to

leverage the power of Dun & Bradstreet to sell a CreditBuilder product.

59. For example, DBCC sent FSI form marketing materials that bore the Dun &

Bradstreet logo and which positioned CreditBuilder as a unique D&B-related product.

60. For another example, in an early November 2012 phone call, a sales representative,

Sandy Gilliam, led Ms. Ryan to believe she was communicating with Dun & Bradstreet. In truth,

Ms. Gilliam was a DBCC salesperson.



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61. For another example, FSI received a November 13, 2012 email from a DBCC Expert

Credit Advisor, which referred to FSIs profile with Dun & Bradstreet Credibility Corp. There is

no such profile; there is only the D&B profile. The email also said, we get your companys profile

updates and that it is us completing the necessary background checks on your company. Only

D&B updates profiles, and only D&B performs background checks.

62. During the early November 13, 2012 sales call, Ms. Gilliam told Ms. Ryan there had

been over 100 inquiries by separate companies. The November 13 email contained the same

statement. These representations were false; there had only been 24 companies who had made

inquiries. Ms. Gilliam told Ms. Ryan the high number of inquiries was driving FSIs scores

negatively, and it was urgent the FSI address this and improve its credibility and that CreditBuilder

was the only solution.

63. During the early November 13, 2012 sales call, Ms. Gilliam also told Ms. Ryan there

were a large number of UCC filings. This was also false.

64. By November 14, 2012, FSI believed it had no choice but to enroll in one of the

credit building solutions offered in the letters in order to repair its credit and the false information

reported on its D&B profile. So it purchased a CreditBuilder product for $1,599.00 and a $149.00

activation fee.

65. Had D&B not seeded FSIs credit report with false information, FSI would not have

purchased the product.

66. Had D&B not given DBCC the internal and duplicate inquiries for use in the

solicitation, FSI would not have purchased the product.

67. Had DBCC not held itself out as D&B and CreditBuilder out as a D&B solution, FSI

would not have purchased the product.



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68. Had DBCC not represented that CreditBuilder was the solution to false entries

appearing on FSIs report, FSI would not have purchased the product. In truth, there was a free

method of disputing false entries.

69. Despite having purchased CreditBuilder, false items continued to appear on FSIs

D&B credit report.

70. On February 1, 2013, FSI again received an email alert which indicated that there

were new inquiries into FSIs record with D&B. In truth, there had been only one. The other was

manufactured by D&B in one of two ways: it sent DBCC its own inquiry; or it sent DBCC a

duplicate inquiry.

71. In June 2014, D&B published a false report that FSI had slow pays and was past

due on amounts, including (but not limited to) the May 2012 slow pay of $100.

CLASS ALLEGATIONS

72. This action is brought on behalf of the named plaintiff as well as on behalf of the

following class members (Class Members or the Class), pursuant to Federal Rule of Civil

Procedure 23(b)(2)-(3): All purchasers of a CreditBuilder product in the State of North Carolina.

73. The number of Class Members is so numerous and geographically diverse that their

joinder is impracticable. There are thousands of small businesses within the state of North Carolina

that meet the Class definition.

74. The questions of law and fact arising from the named plaintiffs claims are questions

common to each member of the Class, and these common questions predominate over any individual

questions. These common questions include the following:

(a) Did DBCCs representations or omissions create a likelihood of confusion

about the affiliation between itself and CreditBuilder with D&B?



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(b) Were DBCCs representations or omissions about itself, D&B, and

CreditBuilder misleading to potential customers, and, if so, was it objectively reasonable to rely on

those representations or omissions when a potential customer decided whether to purchase

CreditBuilder?

(c) Did D&B institute a process by which false information was placed on small

business credit reports?

(d) Is the publication of false credit information by D&B defamatory?

(e) Did D&B breach a duty to report accurate, current, and truthful information

owed to small businesses? and

(f) How does negative information on a small businesss credit report impact

access to credit?

75. The named plaintiffs claims are typical of those of the Class Members. And the

named plaintiff will fairly and adequately protect the interests of the Class, and has retained

experienced counsel to do so.

76. This case can easily be managed as a class action because the defendants keep

electronic databases containing data about each Class Member, which are readily searchable. Notice

can be sent to virtually every Class Member by their DUNS number.

77. Given that the damage to individual Class Members would likely be dwarfed by the

expense of litigating a claim on an individual basis, a class action is the most efficient way to

adjudicate this matter.

78. In addition, a Class may be certified because: (a) the prosecution of separate actions

by individual Class members would create a risk of inconsistent or varying adjudication with respect

to individual Class members that would establish incompatible standards of conduct for defendants;



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(b) the prosecution of separate actions by individual Class members would create a risk of

adjudications with respect to them that would, as a practical matter, be dispositive of the interests of

other Class members not parties to the adjudications, or substantially impair or impede their ability

to protect their interests; and/or (c) defendants have acted or refused to act on grounds generally

applicable to the Class thereby making appropriate final declaratory and/or injunctive relief with

respect to the members of the Class as a whole.

COUNT I

UNFAIR TRADE PRACTICES CLAIM AGAINST DBCC

79. This cause of action incorporates all of the allegations in the other parts of this

complaint. This cause of action is brought against DBCC only. This cause of action is brought

under North Carolinas Unfair Trade Practice Act, N.C. Gen. Stat. 75.1.1, et seq. (the Act).

80. DBCCs marketing, solicitations, and other representations regarding itself, D&B,

and CreditBuilder constitute unfair or deceptive acts or practices in or affecting commerce and

which have injured FSI and the Class. The unfair or deceptive acts are set forth in this complaint

and include (but are not limited to): (a) passing off goods or services as those of another; (b) causing

a likelihood of confusion or misunderstanding as to the source, sponsorship, approval, or

certification of goods or services; (c) causing a likelihood of confusion or misunderstanding as to the

affiliation, connection, or association with, or certification by another; and (d) representing that

goods or services have sponsorship, approval, characteristics, uses, or benefits that they do not have

or that a person has a sponsorship, approval, status, affiliation, or connection that the person does not

have.

81. The acts or practices had a capacity or tendency to deceive or created a likelihood of

deception.



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82. DBCC engaged in unfair or deceptive acts willfully, and has refused to take

responsibility for them.

83. Pursuant to 75-16 of the Act, judgment shall be for treble the amount fixed by the

verdict. And pursuant to 75-16.1 of the Act, a reasonable attorney fee should be allowed as part of

the court costs.

COUNT II

NEGLIGENT MISREPRESENTATION CLAIM AGAINST DBCC


complaint. This cause of action is brought against DBCC only.

85. DBCC had a duty to exercise reasonable care in communicating information to others

who it intended would rely on the information it supplies.

86. DBCC breached this duty by making representations, as set forth in this complaint,

that it knew, or should have known, were likely to mislead members of the Class. Those

representations include, but are not limited to:

(a) That DBCC was D&B or a part of D&B in a way that it was not;

(b) That CreditBuilder was a D&B solution, when it was not;

(c) That DBCC had credit reporting databases, had companies coming to it to pull

information, or that DBCC conducted credit reporting activities (e.g., checking public records for

liens), which it did not;

(d) That there had been a certain number of unique companies making

inquiries, when there had been fewer;

(e) That there had been a certain number of unique companies making

inquiries, when in fact inquiries were duplicates or were D&Bs inquiries;



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(f) That a potential customers credit profile was incomplete, when it was not;

(g) That a potential customers SER rating indicated high risk when it did not;

(h) That a potential customers credit report contained a delinquency or

inaccuracy, when it did not;

(i) That a customer would be able to dispute, in a meaningful way, inaccurate

information on its credit profile after purchasing CreditBuilder, or that the product would improve

credit scores, when it would not;

(j) That a potential customers DS Status exposed them to risk, when it did not;

(k) That DBCC had accurate, up-to-date information relevant to a potential

customers business, when it did not;

(l) That a customer would be able to submit trade references through

CreditBuilder, when, in fact, there were restrictions on the references that could be submitted;

(m) That CreditBuilder would help a customer, when, in fact, non-renewal of the

product could harm a customers credit score; and

(n) That CreditBuilder provided a meaningful process for disputing negative trade

experiences, when, in fact, no investigation takes place, and negative items re-appear after a month.

87. Each of the misrepresentations or concealments of fact were material to the

transaction at hand (i.e., the purchase of a CreditBuilder product), and were related to the sale of the

product, not the use of any website.

88. Each of the misrepresentations or concealments was made negligently or with

recklessness as to their falsity.

89. Class Members reasonably relied on DBCCs misrepresentations in deciding whether

to purchase CreditBuilder.



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90. As a direct and proximate result of DBCCs negligent misrepresentations, Plaintiff

and Class Members sustained damages, including money spent purchasing CreditBuilder.

COUNT III

DECEPTIVE TRADE PRACTICES CLAIM AGAINST D&B


complaint. This cause of action is brought against D&B only. This cause of action is brought under

the Act.

92. The following practices by D&B are unfair and deceptive under the Act:

(a) Generating inquiries itself and sending them to DBCC for use in solicitations,

but without disclosing that the inquiries were by D&B itself;

(b) Generating duplicate inquiries for requests by the same subscriber on the same

day for information about the same subject company, and sending them to DBCC for use in

solicitations, but without disclosing that the inquiries were duplicates;

(c) Failing to conduct real investigations of trade disputes that require the supplier

to provide substantiation of any negative trade experience reports; and

(d) Returning properly-disputed negative trade experiences to a subjects report

after one month, forcing the subject to dispute the item again.

93. D&Bs unfair and deceptive conduct is undertaken willfully.

COUNT IV

DEFAMATION CLAIM AGAINST D&B


complaint. This cause of action is brought against D&B only.



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95. D&B published to third persons false and defamatory matters about the Plaintiff and

Class Members. The defamatory material includes:

(a) False negative trade experiences, e.g., slow pay entries;

(b) Statements that a company is in or near bankruptcy; and

(c) Statements that a company has a lien or open lawsuit against it.

96. These publications were unprivileged, and they were made with actual malice.

97. These publications were defamatory per se in that they contained negative

information about the Plaintiffs and Class Members businesses and creditworthiness.

98. As a direct and proximate result of D&Bs defamation, the Plaintiff and Class

Members suffered damages, including general (presumed) damages and actual damages (e.g., loss of

credit opportunities). As for FSI, its lender refused to refinance its line of credit due, in whole or in

part, to the false and inaccurate information and faulty scores and ratings D&B had placed on its

credit report.

99. As a further direct and proximate result of D&Bs defamation, the Plaintiff and each

Class Member purchased CreditBuilder in order to address the false and defamatory information on

their credit reports; therefore, each member of the Class incurred the same special damage: the cost

of CreditBuilder.

100. Given D&Bs actual malice, the imposition of punitive damages is warranted.

COUNT V

NEGLIGENCE CLAIM AGAINST D&B


complaint. This cause of action is brought against D&B only.



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102. D&B owes a duty to those small businesses about whom it has information to make

sure that the information is accurate when it transmits that information to DBCC. D&B breaches

this duty by:

(a) Sending internal inquiries to DBCC without disclosing that they are internal;

and

(b) Sending duplicate inquiries to DBCC without disclosing that they are

duplicates.

103. D&B also owes a duty to those small businesses about whom it formulates scores to

make sure that the scoring is commercially reasonable. D&B breaches this duty by:

(a) Changing small businesses scores and rating without taking into account the

actual financial condition of the individual business.

104. D&B also owed a duty to those small businesses who dispute items on their credit

reports to engage in a reasonable and meaningful dispute resolution process. D&B breaches this

duty by:

(a) Failing to conduct an investigation into the disputes items, and failing to

require the reporting supplier to produce any substantiation;

(b) Failing to audit suppliers who have high dispute rates; and

(c) Automatically removing items without conducting any investigation, only to

have them return again, forcing the subject to dispute them again.

105. As a direct and proximate result of D&Bs negligence, Plaintiff and Class members

have sustained damages, including money spent purchasing CreditBuilder to attempt to remedy the

inaccurate and untimely information.



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PRAYER FOR RELIEF

WHEREFORE, Plaintiff demands judgment against each defendant, including:

A. Certifying this action as a Class Action, appointing Plaintiff as Class Representative,

and appointing Plaintiffs counsel as Class Counsel;

B. An injunction ordering DBCC to fully disclose the nature of its relationship to D&B

in all marketing literature, sales calls, and other forms of solicitation;

C. An injunction ordering D&B to fully disclose to each Class Member the identities of

each person or entity that purportedly made an inquiry or report to D&B regarding that Class

Member and upon which D&B relied in publishing its credit reports and ratings;

D. Actual damages in amounts to be proven at the trial of this matter;

E. Attorneys fees and costs;

F. Punitive damages; and

G. Pre- and post-judgment interest, as appropriate.

JURY DEMAND

Plaintiff demands a trial by jury.

DATED: March 13, 2015

By: s/Christopher Collins

FRANK J. JANECEK, JR. (admitted pro hac vice) CHRISTOPHER COLLINS (admitted pro hac vice) ROBBINS GELLER RUDMAN & DOWD LLP 655 West Broadway, Suite 1900 San Diego, CA 92101-3301 Telephone: 619/231-1058 619/231-7423 (fax) E-mail: [email protected]

[email protected]



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STUART A. DAVIDSON (admitted pro hac vice) ROBBINS GELLER RUDMAN & DOWD LLP 120 East Palmetto Park Road, Suite 500 Boca Raton, FL 33432 Telephone: 561/750-3000 561/750-3364 (fax) E-mail: [email protected]

BRAD J. MOORE, WSBA #21802 STRITMATTER KESSLER WHELAN 200 Second Avenue West Seattle, WA 98119 Telephone: 206/448-1777 206/728-2131 (fax) E-mail: [email protected]

ROSS E. SHANBERG (admitted pro hac vice) SHANBERG, STAFFORD & BARTZ LLP 19200 Von Karman Avenue, Suite 400 Irvine, CA 92612 Telephone: 949/622-5444 949/622-5448 (fax) E-mail: [email protected]

JACK LANDSKRONER (admitted pro hac vice) DREW LEGANDO (admitted pro hac vice) LANDSKRONER GRIECO MERRIMAN, LLC 1360 West 9th Street, Suite 200 Cleveland, OH 44113 Telephone: 216/522-9000 216/522-9007 (fax) E-mail: [email protected]

[email protected]

Attorneys for Plaintiff Flow Sciences Inc.




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CERTIFICATE OF SERVICE

I hereby certify that on March 13, 2015, I authorized the electronic filing of the foregoing

with the Clerk of the Court using the CM/ECF system which will send notification of such filing to

the e-mail addresses denoted on the attached Electronic Mail Notice List, and I hereby certify that I

caused to be mailed the foregoing document or paper via the United States Postal Service to the non-

CM/ECF participants indicated on the attached Manual Notice List.

I certify under penalty of perjury under the laws of the United States of America that the

foregoing is true and correct. Executed on March 13, 2015.

s/ CHRISTOPHER COLLINS CHRISTOPHER COLLINS

ROBBINS GELLER RUDMAN & DOWD LLP 655 West Broadway, Suite 1900 San Diego, CA 92101-8498 Telephone: 619/231-1058 619/231-7423 (fax) E-mail: [email protected]


Mailing Information for a Case 2:14-cv-01404-TSZ Flow Sciences, Inc. v. Dun & Bradstreet, Inc. et al

Electronic Mail Notice List

The following are those who are currently on the list to receive e-mail notices for this case.

Mikael A. Abye [email protected],[email protected]

Thomas Matthew Brennan [email protected],[email protected],[email protected]

Christopher Collins [email protected],[email protected],[email protected],[email protected]

Stuart A. Davidson [email protected],[email protected],[email protected],[email protected]

Gretchen J. Hoog [email protected],[email protected],[email protected]

Charles C Huber [email protected],[email protected],[email protected],[email protected]

Inyoung Hwang [email protected],[email protected],[email protected],[email protected],[email protected]

Frank J Janecek , [email protected],[email protected]

Jack Landskroner [email protected],[email protected]

Gail E Lees [email protected],[email protected]

Drew Legando [email protected],[email protected]

Timothy W Loose [email protected],[email protected],[email protected]

Michael D McKay [email protected],[email protected],[email protected]

Bradley Jerome Moore [email protected],[email protected]

Zathrina Zasell G Perez [email protected],[email protected]

Richard F Schwed [email protected],[email protected],[email protected],[email protected],[email protected],Matthew

Ross E Shanberg [email protected]

Manual Notice List

The following is the list of attorneys who are not on the list to receive e-mail notices for this case (who therefore require manual noticing). You may wish to use your mouse to select and copy this list into your word processing program in order to create notices or labels for these recipients.

(No manual recipients)

Page 1 of 1WAWD CM/ECF Version 6.1-

3/13/2015https://ecf.wawd.uscourts.gov/cgi-bin/MailList.pl?171068100751469-L_1_0-1


Flow Sciences v D&B Amended Complaint 031315.pdf

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