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Sherfield v. Trans Union LLC

United States District Court, W.D. Oklahoma

July 18, 2019

TRANS UNION, LLC, et al. Defendants.



         Before this Court is Defendant Trans Union, LLC's (“Trans Union” or “Defendant”) Motion to Dismiss Plaintiff's First Amended Complaint, pursuant to Fed.R.Civ.P. 12(b)(6). See Doc. 29. Plaintiff's claims against Trans Union, a consumer reporting agency (“CRA”), [1] turn on her contention that Wilson-Breit, Inc., d/b/a Signature Loans on May; Ginny's, Inc.; Seventh Ave, Inc.; Camelot Financial Services d/b/a Anchor Finance of Bethany, d/b/a Access Loans, d/b/a Approved Loans of OKC; Sun Loan Company; Capital One Bank USA; and Quick Loans, Inc.-together, the “Furnishers”-inaccurately reported their tradelines[2] on Plaintiff's Trans Union credit disclosure without the correct notation of “bankruptcy discharge” or “discharged in bankruptcy.” See Doc. 22, at 3.[3] Plaintiff claims that Trans Union's failure to include this notation on her credit report violates the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681 et seq. Id. at 3-5, 23-25. Having considered the parties' filings, see Docs. 29-1, 39-40, the Court grants Defendant's motion.

         I. Background

         The Court takes as true all well-pleaded factual allegations in the complaint, views them in the light most favorable to Plaintiffs, and draws from them all reasonable inferences in Plaintiffs' favor. See Burnett v. Mortg. Elec. Registration Sys., Inc., 706 F.3d 1231, 1235 (10th Cir. 2013). On April 3, 2013, Plaintiff filed for Chapter 7 bankruptcy in the United States Bankruptcy Court for the Western District of Oklahoma, Dkt. No. 13-11493. See Doc. 29-2.[4] Plaintiff received an Order of Discharge from the Bankruptcy Court on July 9, 2013. See Doc. 22, at 4; Doc. 29-3. On August 22, 2018, Plaintiff reviewed her Trans Union credit file and found that the Furnishers' tradelines described the status of her accounts with the notation, “Account Included in Bankruptcy, ” rather than with a notation specifying that the accounts had been “discharged” in bankruptcy. Doc. 22, at 4. Thereafter, on or about September 4, 2018, Plaintiff sent a letter to Trans Union disputing these tradelines. Id. In her letter, Plaintiff explained that the Furnishers “Errant Tradelines were discharged in her bankruptcy, ” attached her bankruptcy case history, and requested that Trans Union report these tradelines as having been discharged in bankruptcy. Id. Trans Union forwarded this letter to the Furnishers. Id. When Plaintiff later obtained her Trans Union credit disclosure on October 21, 2018, she saw that the tradelines continued to be reported without a notation of bankruptcy discharge. Id.[5]

         Based on these allegations, Plaintiff brings claims against Trans Union for negligent and willful violations of Sections 1681e(b) and 1681i of the FCRA. See Doc. 22, at 23-25. Therein, Plaintiff alleges that Trans Union's credit report “contained information about Plaintiff that was false, misleading, and inaccurate, ” that Trans Union negligently and/or willfully “failed to maintain and/or follow reasonable procedures to assure maximum possible accuracy of the information it reported, ” and that Trans Union negligently and/or willfully “failed to conduct a reasonable investigation as required [by law].” Id. Plaintiff argues Trans Union's “failure to perform its duties under the FCRA” has directly and proximately caused her to suffer “actual damages, ” “credit and emotional damages, ” “undue stress and anxiety, ” “mental anguish and suffering, humiliation, and embarrassment.” Id. at 5, 24-25.

         Trans Union attaches to its motion to dismiss Plaintiff's credit file, including the results of Trans Union's reinvestigation. See Docs. 29-5, 29-6. The “Public Records” section of the file reflects Plaintiff's Chapter 7 bankruptcy discharge. See Doc. 29-5, at 4. The Furnishers' tradelines list “Account Included in Bankruptcy” as the pay status of Plaintiff's accounts, no account balances due, and the accounts as closed. Id. at 5-7. As well, under “Remarks, ” the tradelines report, “Chapter 7 Bankruptcy.” Id. Trans Union's reinvestigation results show no change in how the tradelines were reported. See Doc. 29-6. Plaintiff does not dispute that the Public Records section of her credit file reports her Chapter 7 Bankruptcy as discharged. Plaintiff also does not allege that any creditors have been misled by the notation “included in bankruptcy.” And while Plaintiff vaguely alleges damage to her credit from Trans Union's actions, she does not allege that she was denied credit based on her credit report.

         II. Fed. R. Civ. P. 12(b)(6) Motion to Dismiss Standard

          “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)); see also Fed. R. Civ. P. 8(a)(2) (“A pleading that states a claim for relief must contain . . . a short and plain statement of the claim showing that the pleader is entitled to relief . . . .”). While a complaint “need only give the defendant fair notice of what the claim is and the grounds upon which it rests, ” Khalik v. United Air Lines, 671 F.3d 1188, 1191-92 (10th Cir. 2012) (ellipsis, internal quotation marks, and citations omitted), “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678. “Thus, the mere metaphysical possibility that some plaintiff could prove some set of facts in support of the pleaded claims is insufficient; the complaint must give the court reason to believe that this plaintiff has a reasonable likelihood of mustering factual support for these claims.” Ridge at Red Hawk, L.L.C. v. Schneider, 493 F.3d 1174, 1177 (10th Cir. 2007) (emphasis omitted).

         III. Discussion

         Plaintiff brings claims against Trans Union under 15 U.S.C. §§ 1681e(b) and 1681i.[6]Section 1681e(b) requires Plaintiff to plead that (1) Trans Union published an inaccurate report; (2) Trans Union failed to follow reasonable procedures to assure the accuracy of its reports; (3) Plaintiff sustained actual damages; and (4) Trans Union's failure to follow reasonable procedures caused Plaintiff's damages. See Wright v. Experian Info. Sols., Inc., 805 F.3d 1232, 1239 (10th Cir. 2015); Stewart v. Equifax Info. Servs., LLC, 320 F.Supp.3d 1186, 1207 (D. Kan. 2018). Section 1681i requires Plaintiff to plead that (1) her credit file contained inaccurate information; (2) she notified Trans Union of the alleged inaccuracy; (3) Trans Union failed to conduct a reasonable reinvestigation in response to her notice; and (4) she suffered damages caused by Trans Union. See Wright, 805 F.3d at 1242 (“To prevail on a § 1681i(a) claim . . ., plaintiffs must prove essentially the same elements as those for a § 1681e(b) claim-unreasonable procedures in reinvestigating a report, inaccuracy of the report, injury, and causation-in addition to proving they informed the CRA about the inaccuracy.”). Thus, the existence of a factual inaccuracy is an essential element of both claims Plaintiff asserts against Trans Union. See Pinson v. Equifax Credit Info. Servs., Inc., 316 Fed.Appx. 744, 751 (10th Cir. 2009) (“A successful FCRA claim brought under 15 U.S.C. § 1681e(b) must be based on inaccurate information disclosed in a consumer credit report.”); Kuehling v. Trans Union, LLC, 137 Fed.Appx. 904, 908 (7th Cir. 2005) (“Without evidence of some inaccuracy in the Trans Union report or reinvestigation, [plaintiff] cannot establish that Trans Union violated the FCRA-either § 1681e(b) or § 1681i(a)(1)(A).” (emphasis original)); see also Lewis v. Midland Credit Mgmt., No. CIV-15-1052-R, 2016 WL 4747414, at *2 (W.D. Okla. Sept. 12, 2016) (“A showing of inaccuracy is an essential element of a § 1681e(b) claim. Similarly, to prevail on a claim under § 1681i(a) Plaintiff must show inaccuracy in the credit report issued by any particular CRA Defendant.” (internal quotation marks, citations, and brackets omitted)). “A report is inaccurate when it is patently incorrect or when it is misleading in such a way and to such an extent that it can be expected to have an adverse effect on the consumer.” Skanes v. Equifax Info. Servs., LLC, No. CIV-19-0003-F, 2019 WL 2372624, at *2 (W.D. Okla. June 5, 2019) (citing Dalton v. Capital Associated Indus., Inc., 257 F.3d 409, 415 (4th Cir. 2001)).

         Plaintiff has failed to state a claim under Sections 1681e(b) and 1681i. Plaintiff's sole ground for asserting that Trans Union's credit report was inaccurate is that the Furnisher's tradelines on the report stated Plaintiff's accounts as included in bankruptcy, instead of discharged in bankruptcy. See generally Docs. 22, 39. But this alleged notational error is insufficient to establish an inaccuracy in Plaintiff's credit report. Numerous courts have concluded that there is no meaningful difference between an “included in bankruptcy” notation and a “discharged in bankruptcy”/“bankruptcy discharge” notation-and, more broadly, that an “included in bankruptcy” notation is neither inaccurate nor misleading. See Diaz v. Trans Union LLC, No. 1:18-cv-01341-DAD-EPG, 2019 WL 2389937, at *3 (E.D. Cal. June 6, 2019) (dismissing complaint where plaintiff provided “no authority that states or indicates that the ‘included in bankruptcy' notation is patently incorrect, materially misleading[, ] or could be expected to adversely affect credit decisions”); Smith v. Trans Union, No. 18-CV-13098, 2019 WL 2074594, at *4 (E.D. Mich. May 10, 2019) (collecting cases) (“Plaintiff has cited no authority to support the proposition that the ‘included in bankruptcy' notation is inaccurate . . . where a bankruptcy has been discharged. In fact, numerous courts have used the phrases ‘included in bankruptcy' and ‘discharged in bankruptcy' interchangeably.”); Butler v. Equifax Info. Servs., LLC, No. EDCV 18-2084 JGB (SHKx), 2019 WL 2498939, at *2 (C.D. Cal. Apr. 3, 2019) (“There is no meaningful difference between the phrase ‘included in bankruptcy' and the phrase ‘discharged in bankruptcy' and therefore no likelihood that the use of the phrase ‘included in bankruptcy' will be misinterpreted to the detriment of Plaintiff. Every Court to consider this issue directly has concluded the same.”); cf. Skanes, 2019 WL 2372624, at *3 (holding, on summary judgment, that “[t]here is no inaccuracy due to Trans Union's failure to include the phrase ‘bankruptcy discharged' or ‘discharged in bankruptcy' within the First Premier tradeline”). Moreover, the Court locates no authority-and Plaintiff cites none-holding that CRAs like Trans Union are required to use the phrase “discharged in bankruptcy”/“bankruptcy discharge” rather than “included in bankruptcy.” See Fleming v. Trans Union, LLC, No. CV 18-9785 PA (PALx), 2019 WL 2498940, at *3 (C.D. Cal. Mar. 8, 2019) (“Plaintiff cites no case law which would require Trans Union to use the phrase ‘discharged in bankruptcy' rather than ‘included in bankruptcy,' and other courts have found that ‘included in bankruptcy' is sufficient. As such, Plaintiff cannot allege Trans Union's reports contained a factual inaccuracy or were misleading.”).

         Given the interchangeability of these notations, then, the Court is not persuaded by Plaintiff's argument that “[s]tating . . . an account is ‘included in bankruptcy' suggests that the bankruptcy is pending and that no discharge has been granted.” Doc. 39, at 6; see Butler, 2019 2498939, at *3 (“Because these terms are interchangeable, the Court is not persuaded by Plaintiff's argument that ‘included in bankruptcy' could suggest that bankruptcy is pending and that no discharge has been granted. The Court can find no authority supporting the conclusion that these terms are not strictly synonymous in the context of credit reporting, much less that the use of one, rather than the other, could lead to confusion.” (internal quotation marks and citation omitted)). Nor is Plaintiff's mere belief that such a notation may be inaccurate or misleading sufficient to sustain a claim under the FCRA. See Smith, 2019 WL 2074594, at *4 (quoting Shaw v. Equifax Info. Sols., Inc., 204 F.Supp.3d 956, 961 (E.D. Mich. 2016)) (“‘A personal opinion such as Plaintiff's constitutes “mere speculation that the notation was misleading” and is insufficient to support a claim of inaccuracy under the FCRA.'” (additional citations and brackets omitted)); see also Dickens v. Trans Union Corp., 18 Fed.Appx. 315, 318 (6th Cir. 2001) (“[Plaintiff's] mere speculation that the notation [“Included in Bankruptcy”] was misleading, without more, is insufficient as a matter of law to establish a prima facie case of inaccuracy in violation of § 1681e(b).”).

         Even if an “included in bankruptcy” notation had some potential to mislead, such potential is mitigated by the credit report's inclusion of information regarding Plaintiff's Chapter 7 bankruptcy. The report's “Public Records” section, which shows that Plaintiff's bankruptcy was discharged, “obviates any potential confusion from creditors as to the status of the accounts marked as ‘included in bankruptcy.'” Butler, 2019 WL 2498939, at *3; see also Diaz, 2019 WL 2389937, at *3 (quoting Torion v. JPMorgan Chase Bank, Nat'l Ass'n, No. 17-cv-00422-PJH, 2017 WL 2986250, at *6 (N.D. Cal. July 13, 2017)) (“Courts have found that, even if a report of ‘included in bankruptcy' is misleading, the fact that the bankruptcy is reported as discharged in the public records section of the report ‘eliminates the possibility that a lender would be misled by the reporting.'”); Mestayer v. Experian Info. Sols., Inc., No. 15-cv-03645-EMC, 2016 WL 7188015, at *3 (N.D. Cal. Dec. 12, 2016) (disclosure of bankruptcy filings vitiates risk of misleading creditors). In addition, each tradeline is reported as closed and with no balance due, and the tradelines' “Remarks” sections state, “Chapter 7 Bankruptcy.” These facts further cut against Plaintiff's assertion that Trans Union's reporting of the tradelines contained inaccuracies. See Blanch v. Trans Union, 333 F.Supp.3d 789, 793 (M.D. Tenn. 2018) (“There was nothing false or ‘inaccurate' about [tradeline furnishers] reporting [plaintiff's] accounts as included in her bankruptcy, closed, and with a zero balance.”); see also Walker v. Trans Union, LLC, No. 2:19-cv-00085-ALB, 2019 WL 2884339, at *2 (M.D. Ala. July 3, 2019) (finding no inaccuracy and dismissing plaintiff's claims where CRA credit file reported account as “included in bankruptcy, ” closed, and with a zero balance).[7]

         Thus, it is clear from viewing the credit file in its entirety that Plaintiff's Chapter 7 bankruptcy discharge resolved her accounts with the Furnishers. Trans Union's actions- reporting the tradelines with an “included in bankruptcy” notation and declining to insert a “discharged in bankruptcy”/“bankruptcy discharge” notation in its place-do not constitute inaccuracies. And without an inaccuracy, Plaintiff is unable to sustain a ...

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