Adkins v. SLM Corp.

• Decision Date: 29 July 2022
• Docket Number: 22-2082-SAC-TJJ
• Parties: MICHAEL D. ADKINS, Plaintiff, v. SLM CORPORATION D/B/A/ SALLIE MAE INC., et al., Defendants
• Court: U.S. District Court — District of Kansas

MICHAEL D. ADKINS, Plaintiff,
v.
SLM CORPORATION D/B/A/ SALLIE MAE INC., et al., Defendants

No. 22-2082-SAC-TJJ

United States District Court, D. Kansas

July 29, 2022

MEMORANDUM AND ORDER

SAM A. CROW, U.S. DISTRICT SENIOR JUDGE

The case comes before the court on a motion to dismiss (ECF# 70) filed by the defendant Innovis Data Solutions, Inc. (“Innovis”). Fully briefed by both sides, the motion is ripe for ruling.

PROCEDURAL BACKGROUND and FIRST AMENDED COMPLAINT

The plaintiff Michael D. Adkins brought a limited action in Wyandotte County District Court asserting claims under the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681 et seq. ECF# 1-1. In his amended complaint, Adkins alleges the defendant credit reporting agencies (“CRAs”), including Innovis, furnished consumer credit reports on him which wrongly included his father's personal information on it. ECF# 69, ¶ 20. The plaintiff's father, born in 1960, also has the name of Michael D. Adkins. Id. at ¶ 17. His father co-signed five student loans for his sister between September 2014 and May 2018, and the defendant Sallie Mae Bank (“Sallie Mae”) serviced these student loans. Id. at ¶ 18. The plaintiff is not personally liable for these loans that belong to his sister and father. ¶ 24. These student loans erroneously appeared on his credit report from Innovis and were inaccurately reported as his

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debt. ¶¶ 20 and 25. These student loans are reported as a total debt of $81,156.00 and as having a negative status. ¶¶ 21 and 22. The plaintiff's efforts to secure a mortgage have been impeded because of these negative reports for loans that are not his. ¶ 27.

The plaintiff and his father notified Sallie Mae of this reporting and collection error and engaged in a direct dispute process with his father submitting an affidavit that he co-signed his daughter's student loans. ¶¶ 28 and 29. The plaintiff also disputed the negative Sallie Mae accounts with Innovis, but Innovis indicated the information would not be removed from his file. ¶¶ 31 and 32. The plaintiff alleges his “creditors and potential creditors have accessed Plaintiff's reports while the misreporting was on the credit report and were misinformed by Defendants about Plaintiff's creditworthiness.” ¶ 34.

In count one, the plaintiff alleges that Innovis as one of the named defendant CRAs willfully and negligently violated 15 U.S.C. § 1681e(b) in failing to follow reasonable procedures to assure maximum possible accuracy in preparing the credit report that showed him a debtor of five student loan accounts. ¶ 47. He also asserts that Innovis willfully and negligently violated 15 U.S.C. § 1681i in failing to use reasonable procedures to reinvestigate his dispute and take adequate action to correct his consumer reports. ¶ 51.

Rule 12(b)(6) Standards

“A pleading is required to contain ‘a short and plain statement of the claim showing that the pleader is entitled to relief.'” SEC v. Shields, 744 F.3d 633, 640 (10th Cir. 2014) (quoting Fed.R.Civ.P. 8(a)(2)). All well-pleaded factual

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allegations in the complaint are accepted as true and viewed in the light most favoring the plaintiff. Farmer v. Kansas State University, 918 F.3d 1094, 1102 (10th Cir. 2019). But, when the complaint alleges legal conclusions, those allegations are not subject to the same rule of being accepted as true. Safe Streets Alliance v. Hickenlooper, 859 F.3d 865, 878 (10th Cir. 2017).

“A complaint cannot survive a motion to dismiss unless it ‘contain[s] sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'” Doe v. School District No. 1, Denver, Colorado, 970 F.3d 1300, 1309 (10th Cir. 2020) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). To be plausible on its face, the complaint's “factual allegations [must] allow the court to ‘draw the reasonable inference that the defendant is liable for the misconduct alleged.'” Id. Thus, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. “In determining the plausibility of a claim, we look to the elements of the particular cause of action, keeping in mind that the Rule 12(b)(6) standard [does not] require a plaintiff to ‘set forth a prima facie case for each element.'” George v. Urban Settlement Services, 833 F.3d 1242, 1247 (10th Cir. 2016) (quoting Khalik v. United Air Lines, 671 F.3d 1188, 1192-93 (10th Cir. 2012)). “The nature and specificity of the allegations required to state a plausible claim will vary based on context.” Kansas Penn Gaming, LLC v. Collins, 656 F.3d 1210, 1215 (10th Cir. 2011). Allegations “upon information and belief” may be made “so long as the complaint sets forth the factual basis of the belief.” Moore v. Kobach, 359 F.Supp.3d 1029, 1040 (D. Kan. 2019) (quoiting Jackson-Cobb v. Sprint United Management, 173 F.Supp.3d 1139, 1149 (D. Colo. 2016)). Thus, such allegations

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trigger the question whether they “are supported by specific facts asserted by the Complaint.” Id.

In arguing its motion, Innovis refers to the exhibits attached to its answer (ECF# 21) and exhibits attached to Sallie Mae's motion to dismiss (ECF# 32) asserting they can be considered because the plaintiff's complaint references them and because they are “indisputably authentic.” ECF# 71, p. 4 n.1. The rule in this circuit is that, “if a plaintiff does not incorporate by reference or attach a document to its complaint, but the document is referred to in the complaint and is central to the plaintiff's claim, a defendant may submit an indisputably authentic copy to the court to be considered on a motion to dismiss.” GFF Corp. v. Associated Wholesale Grocers, Inc., 130 F.3d 1381, 1384 (10th Cir. 1997) (citations omitted). The plaintiff does not dispute Innovis's position or use of the exhibits but even references the same documents and facts in opposing dismissal. There being no contest over the documents and facts as referenced, the court will consider the same in deciding the pending motion. The court, however, is careful to consider only those facts directly referenced and those arguments correctly and timely presented.

Failing to Follow Reasonable Procedures--15 U.S.C. § 1681e(b)

“Whenever a consumer reporting agency prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.” 15 U.S.C. § 1681e(b). The plaintiff to prove a violation “must establish that: (1) the CRA failed to follow reasonable procedures to assure the accuracy of its reports; (2) the report in question was, in fact, inaccurate; (3) the plaintiff suffered injury; and (4) the CRA's

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failure caused his injury.” Wright v. Experian Information Solutions, Inc., 805 F.3d 1232, 1239 (10th Cir. 2015).

Innovis notes that by statute, every CRA must “clearly and accurately disclose to the consumer” when requested, “[a]ll information in the consumer's file at the time of the request,” with certain exceptions, and the “[i]dentification of each person . . . that procured a consumer report-for employment purposes” for the preceding two-year period or “for any other purpose” for the preceding one-year period. 15 U.S.C. § 1681g(a)(1) and (3)(A). Innovis attached to its answer a copy of its response to the plaintiff's request of October 28, 2021, for a copy of his consumer file. ECF# 21-1. In that file, Innovis states that they have “no record of recent requests” for the plaintiff's credit file from other businesses. ECF# 21-1, p. 9. On December 2, 2021, Innovis responded to the plaintiff's dispute showing the results of its investigation that verified the Sallie Mae accounts. ECF# 21-4. In that response, Innovis again reported that it had “no record of recent requests for” his credit file. ECF# 21-4, p. 9. The plaintiff filed this action on January 26, 2022. The plaintiff does not take issue with the court considering these documents as argued and presented by Innovis.

For the § 1681e(b) claim, Innovis argues the plaintiff cannot show that Innovis published an inaccurate consumer report about him to a third party when Innovis's exhibits show no record of recent requests for his credit file. To prevail on this claim, the plaintiff must “'prove not only that [a CRA] failed to follow reasonable procedures . . . but also that it produced inaccurate “credit reports”-[a term of art] defined in the FCRA . . . as a communication of credit information to a third party-

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that were the proximate cause of . . . injuries.'” Stewart v. Equifax Information Services, LLC, 320 F.Supp.3d 1186, 1210 (D. Kan. 2018) (quoting Eller v. Trans Union, LLC, 739 F.3d 467, 474 (10th Cir.), cert. denied, 572 U.S. 1101 (2013)). The court in Stewart granted summary judgment for the CRA as it was undisputed the CRA “never issued a consumer report about plaintiff to a third party about plaintiff in the two years before she filed this lawsuit.” Id. Innovis asks the court to follow Stewart and dismiss, because “the fact that Innovis did not prepare any consumer reports about Plaintiff means that Plaintiff cannot state a claim that Innovis violated the FCRA's accuracy provision at § 1681e(b).” ECF# 71, p. 11. This is Innovis's exclusive argument on this claim.

The plaintiff responds noting Innovis's single argument and pointing out that Innovis's documents don't cover the entire period for which credit requests could have been made. “Cherry-picking one year out of several to say that no consumer report was prepared on Plaintiff, and then using that singular example to justify threshold dismissal is insufficient.” ECF# 79, p. 5. The plaintiff insists he is entitled to discovery on this issue.

In reply, Innovis now expands its argument to challenge whether the plaintiff has pleaded “enough facts to state a” § 1681e(b) claim. ECF# 80, pp. 5-11. No longer just relying on...