Dreher v. Experian Info. Solutions, Inc.

Citation856 F.3d 337
Decision Date11 May 2017
Docket NumberNo. 15-2119,15-2119
Parties Michael T. DREHER, Plaintiff-Appellee, v. EXPERIAN INFORMATION SOLUTIONS, INC., Defendant-Appellant, and Equifax, Inc.; Trans Union, LLC; Equifax Information Services, LLC; Cardworks, Inc.; Cardworks Servicing, LLC, Defendants.
CourtUnited States Courts of Appeals. United States Court of Appeals (4th Circuit)

856 F.3d 337

Michael T. DREHER, Plaintiff-Appellee,
Equifax, Inc.; Trans Union, LLC; Equifax Information Services, LLC; Cardworks, Inc.; Cardworks Servicing, LLC, Defendants.

No. 15-2119

United States Court of Appeals, Fourth Circuit.

Argued: March 21, 2017
Decided: May 11, 2017

ARGUED: Meir Feder, JONES DAY, New York, New York, for Appellant. Deepak Gupta, GUPTA WESSLER PLLC, Washington, D.C., for Appellee. ON BRIEF: Daniel J. McLoon, JONES DAY, Los Angeles, California, for Appellant. Jonathan E. Taylor, Richard J. Rubin, GUPTA WESSLER PLLC, Washington, D.C.; Leonard A. Bennett, Matthew J. Erausquin, Susan M. Rotkis, CONSUMER LITIGATION ASSOCIATES, P.C., Newport News, Virginia; Kristi Cahoon Kelly, Andrew Guzzo, KELLY & CRANDALL, PLC, Fairfax, Virginia, for Appellee.

Before KING, SHEDD, and THACKER, Circuit Judges.

Vacated and remanded by published opinion. Judge Thacker wrote the opinion, in which Judge King and Judge Shedd joined.

THACKER, Circuit Judge:

This appeal is from a $11,747,510 judgment in an approximately 69,000 member class action. We consider whether the decision of Experian Information Solutions, Inc. ("Experian") to list a defunct credit card company, rather than the name of its servicer, as a "source[ ] of ... information" on an individual's credit report—without more—creates sufficient injury in fact under the Fair Credit Reporting Act ("FCRA") for purposes of Article III standing. 15 U.S.C. § 1681g(a)(2).

We conclude that where an individual fails to allege a concrete injury stemming from allegedly incomplete or incorrect information listed on a credit report, he or she cannot satisfy the threshold requirements of constitutional standing. Here, we discern no concrete injury on behalf of the named plaintiff. Therefore, we vacate and remand with instructions that the case be dismissed.



In 2010, Michael Dreher was undergoing a background check for a security clearance when the federal government discovered he was associated with a delinquent credit card account. Dreher's cousin had taken out the credit card in Dreher's name to cover expenses for a failing bowling alley.1 To clear up the matter, Dreher requested credit reports from three credit agencies, including Experian. Dreher received a series of Experian credit reports, which listed a delinquent account under the names "Advanta Bank" or "Advanta Credit Cards" (collectively, "Advanta") and provided Pennsylvania and New York P.O. Box addresses. J.A. 160, 168.2

Thereafter, in early 2011, Dreher sent letters to Advanta. First, in March 2011, he "requested some verification that [he] owed this debt," and receiving no response, he sent another letter on April 15, 2011, which was similar in content. J.A. 155. Dreher then received a response on Advanta letterhead dated April 18, 2011, with a March 2011 statement showing an outstanding balance of $15,746.94, along with the online credit card application bearing Dreher's name and social security number. On May 23, 2011, Dreher sent a follow-up correspondence "instructing [Advanta] to delete the inaccurate information

856 F.3d 341

from [his] credit files." Id . Again receiving no response, he "lost hope that Advanta ... would fix their mistake." Id. He contacted Experian directly about the issue, but still his credit report listed the delinquent Advanta account. According to Dreher, this process caused "additional stress and wasted hours of [his] time."Id. at 156. It did not, however, affect his security clearance; in fact, based on Dreher's representation that he was paying down the balance, the government approved his clearance, which took a total of eight days to process. The Advanta account was finally "deleted from Dreher's credit file" on June 6, 2012. Stipulation at 3, Dreher v. Experian Infos. Sols. , No. 3:11-cv-624 (E.D. Va. filed Nov. 6, 2015), ECF No. 411.


Unbeknownst to Dreher, in early 2010, the Utah Department of Financial Institutions had closed Advanta, which had failed to withstand the 2008 financial crisis, and named the Federal Deposit Insurance Corporation ("FDIC") as receiver. Deutsche Bank Trust Company ("Deutsche Bank") received a security interest in Advanta receivables and appointed CardWorks, Inc., and CardWorks Servicing LLC (collectively, "CardWorks") as servicer of Advanta's portfolio, effective August 1, 2010. This meant that CardWorks would "respond[ ] to credit card customer complaints and effect[ ] compromises and settlements of ongoing credit card customer disputes." J.A. 346. In its capacity as Advanta's servicer, CardWorks decided to do business using the Advanta name, the phone number Advanta used prior to August 2010, and the Advanta website, with the goal of "mak[ing] the servicing transfer seem as innocuous as possible." Id.

CardWorks then had to decide how to list Advanta accounts, or tradelines,3 on consumer credit reports. On October 4, 2010, Tom Wineland, a post-closing asset manager for the FDIC, signed a letter to Experian agreeing that the tradeline appearing for all Advanta accounts on Experian credit reports should bear the Advanta name. Authorized representatives from CardWorks and the former Advanta Bank also signed the letter. Wineland explained that he agreed to using the Advanta moniker because the successor creditor of the Advanta accounts, Deutsche Bank, remained the same after Advanta was placed in receivership; in addition, "Advanta Credit Cards" "was the name least confusing to cardholders who (a) might not recognize the new servicer of their credit accounts represented in the tradelines, and (b) ... would continue to access their accounts and make payments at the [Advanta] website." J.A. 344. Using the name of the initial creditor also comported with Experian's "common practice to utilize an associated subscriber name that will assist consumers to recognize the accounts and enable consumers to correct any inaccuracies or lodge disputes if necessary." Id. at 354.


On September 21, 2011, Dreher individually sued Experian and CardWorks in the Eastern District of Virginia.4 He later amended his complaint to assert three class claims and seven individual claims on

856 F.3d 342

the basis that, inter alia, Experian willfully violated the FCRA by failing to include the name "CardWorks" in the Advanta tradelines on its credit reports. On October 5, 2012, Experian moved for partial summary judgment on Dreher's class claims, arguing that Dreher did not produce evidence of willfulness as required under the FCRA. On May 30, 2013, the district court denied the motion. It later certified the class to include

[a]ll natural persons who: (1) requested a copy of their consumer disclosure from Experian on or after August 1, 2010; (2) received a document in response that identified "Advanta Bank" or "Advanta Credit Cards" as the only source of the information for the tradeline; (3) and whose "date of status" or "last reported" field reflected a date of August 2010 or later.

J.A. 327. On July 3, 2014, Experian filed a petition for permission to bring an interlocutory appeal on the certification issue, which this court denied. See Order, Experian Info. Sols. , No. 14-325 (4th Cir. filed Sept. 2, 2014), ECF No. 16.

The parties then filed cross-motions for partial summary judgment on October 31, 2014, wherein Experian argued that Dreher and the class members lacked Article III standing, and Dreher argued Experian willfully violated the FCRA. The district court granted Dreher's motion, concluding as a matter of law that "Experian committed a willful violation of the [FCRA]," J.A. 407, because "[n]o jury could find Experian's intentional omission of CardWorks was objectively reasonable," id. at 404. In turn, it denied Experian's motion, reasoning that the FCRA "creates a statutory right to receive the ‘sources of information’ for one's credit report," and when a credit reporting agency fails to disclose those sources, "it violates that right, thus creating a sufficient injury-in-fact for constitutional standing." Id. at 390. The district court did not analyze whether the injury was specific and concrete. Instead, it concluded that any violation of the statute sufficed to create an Article III injury in fact. However, the district court also recognized "this Order involves a controlling question of law as to which there is substantial ground for difference of opinion [and] an immediate appeal ... would materially advance the ultimate termination of the litigation." Id. at 407-08. Experian again attempted to lodge an interlocutory appeal with this court, to no avail. See Order, Experian Info. Sols. v. Dreher , No. 14-491 (4th Cir. filed Jan. 29, 2015), ECF No. 22.

In February 2015, the district court severed the class claim5 from the individual claims for separate jury trials. Rather than hold a jury trial on statutory and punitive damages on the class claim (Dreher did not seek actual damages), the parties stipulated to an award of $170 in statutory damages for each class member and no punitive damages. On August 26, 2015, the district court entered final judgment on behalf of Dreher and the class in the amount of $170 per class member, totaling over $11.7 million.6 Experian timely noted this appeal, and we held the case in abeyance pending the United...

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