Juarez v. Experian Info. Sols.
| Decision Date | 31 August 2020 |
| Docket Number | No. 19 C 7705,19 C 7705 |
| Parties | JAZMINE JUAREZ, Plaintiff, v. EXPERIAN INFORMATION SOLUTIONS, INC., Defendant. |
| Court | U.S. District Court — Northern District of Illinois |
OPINION AND ORDER
After Plaintiff Jazmine Juarez incurred consumer credit card debt, Defendant Experian Information Solutions, Inc. ("Experian") reported information about the debt in credit reports it compiled and distributed. Juarez claims that this information is inaccurate, and she filed suit against Experian under the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681 et seq. Experian answered Juarez's complaint and now moves for judgment on the pleadings. Because the information reported by Experian is not factually inaccurate, Juarez cannot proceed on her FCRA claims against Experian. The Court therefore grants Experian's motion for judgment on the pleadings [20].
Juarez incurred debt for a Citibank N.A. consumer credit card ("the Debt") that was later obtained (purportedly) by Midland Funding, LLC and Midland Credit Management Inc.("Midland").2 In February 2017, Midland sued Juarez in Illinois state court to collect payment on the Debt (the "state court action"). In the state court action, Midland produced a notarized affidavit from an employee averring that Midland had purchased the Debt from Citibank in May 2016. However, Midland did not provide a purchase agreement for the Debt. Disputing the Debt, Juarez litigated the state court action, and she ultimately sought to arbitrate the dispute. Arbitration was set for October 30, 2017, but four days before the scheduled arbitration, Midland dismissed the state court action without prejudice.3
Despite dismissing the state court action, Midland continued to furnish information regarding the Debt to each of the major credit bureaus. On December 7, 2017, Juarez's counsel sent a letter to Experian, which is a consumer reporting agency ("CRA") that "assembles and/or evaluates consumer credit information" for use in credit reports. Doc. 1 ¶ 5. In the December 7 letter, Juarez's counsel asserted that Experian was reporting inaccurate information regarding Juarez and requested that Experian remove the Midland tradeline from her credit report. According to the letter, Juarez had "long disputed owing any debt" to Midland, and Juarez's counsel claimed that Midland had dismissed the state court action because it "was unable to prove that Ms. Juarez owes any money at all." Doc. 1-1 at 2. Juarez's counsel sent a number of documents with the letter, including Midland's complaint in the state court action, the aforementioned affidavit regarding Midland's ownership of the Debt, the order dismissing the state court action, and the Midland tradeline.
Experian received the December 7 letter and accompanying documentation on December 11, 2017. Juarez alleges, upon information and belief, that within five days of receiving Juarez's correspondence, Experian notified Midland of Juarez's dispute and the nature of the dispute. Experian, in turn, admits that it sent an Automated Consumer Dispute Verification ("ACDV") and a copy of Juarez's dispute to Midland. Juarez also alleges upon information and belief that Experian updated its reporting of the Debt based solely upon information provided by Midland in response to Experian's notification. Ultimately, though, Experian did not remove the Midland tradeline from Juarez's credit report, and it continued to report the Midland tradeline on Juarez's credit report as recently as November 2019.
Juarez alleges that Experian violated 15 U.S.C. § 1681e(b) and 15 U.S.C. § 1681i(a) by failing to (1) "conduct a proper and reasonable reinvestigation concerning the inaccurate information in [her] credit report after receiving notice of the dispute from" Juarez; (2) "provide all relevant information provided by [Juarez] regarding the dispute of the inaccurate information" to Midland; (3) "consider all relevant information submitted by" Juarez about the dispute; (4) "delete the inaccurate information from [Juarez's] credit file after reinvestigation" or "note the disputed status of the inaccurate information"; and (5) "employ and follow reasonable procedures to assure maximum possible accuracy of [Juarez's] credit report, information and file[.]" Doc. 1 ¶¶ 36, 40, 42, 44, 46, 48. The inaccurate information reported by Experian about Juarez reflects negatively upon Juarez, her credit application history, her financial responsibility as a debtor, and her credit worthiness.
Pursuant to Federal Rule of Civil Procedure 12(c), a party may move for judgment on the pleadings after the parties have filed the complaint and answer. Fed. R. Civ. P. 12(c); Buchanan-Moore v. Cty. of Milwaukee, 570 F.3d 824, 827 (7th Cir. 2009). A motion under Rule 12(c) "is governed by the same standards as a motion to dismiss for failure to state a claim under Rule 12(b)(6)." Adams, 742 F.3d at 727-28. Thus, "[t]o survive a motion for judgment on the pleadings, 'a complaint must state a claim to relief that is plausible on its face.'" Denan v. Trans Union LLC, 959 F.3d 290, 293 (7th Cir. 2020) (quoting Bishop v. Air Line Pilots Ass'n, Int'l, 900 F.3d 388, 397 (7th Cir. 2018)). When assessing the facial plausibility of a claim, the Court takes "all well-pleaded allegations as true" and draws "all reasonable inferences and facts in favor of the non-movant." Bishop, 900 F.3d at 397 (citation omitted); Scherr v. Marriott Int'l, Inc., 703 F.3d 1069, 1073 (7th Cir. 2013). At the same time, the Court need not accept legal assertions, "sheer speculation, bald assertions, [or] unsupported conclusory statements," nor must the Court "ignore facts set forth in the complaint that undermine the plaintiff's claim." Taha, 947 F.3d at 469; Bishop, 900 F.3d at 397 (citation omitted); Buchanan-Moore, 570 F.3d at 827. In ruling on a Rule 12(c) motion, the Court considers the pleadings, which include the complaint, answer, and documents attached as exhibits to the complaint and answer; "documents incorporated by reference to the pleadings"; and matters that are properly subject to judicial notice. Milwaukee Police Ass'n v. Flynn, 863 F.3d 636, 640 (7th Cir. 2017) (citation omitted); N. Ind. Gun & Outdoor Shows, 163 F.3d at 452.
Juarez alleges that Experian violated § 1681e(b) and § 1681i(a)(1), (a)(2), (a)(4), and (a)(5) of the FCRA.4 Under § 1681e(b), whenever a CRA prepares a credit report, "it shallfollow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates." 15 U.S.C. § 1681e(b). Section 1681i(a) covers "[r]einvestigations of" information disputed by a consumer. Id. § 1681i(a). Relevant here, § 1681i(a) addresses the requirements of the reinvestigation (subsection (a)(1)), notice of the dispute from the CRA to the furnisher of the information (subsection (a)(2)),5 "[c]onsideration of consumer information" (subsection (a)(4)), and "[t]reatment of inaccurate or unverifiable information" (subsection (a)(5)). Id.
To state a claim under either 15 U.S.C. § 1681e(b) or 15 U.S.C. § 1681i(a), a plaintiff must sufficiently allege that the defendant's credit report contains inaccurate information. Denan, 959 F.3d at 297-98; Humphrey v. Trans Union LLC, 759 F. App'x 484, 488 (7th Cir. 2019); Handrock v. Ocwen Loan Servicing, LLC, 216 F. Supp. 3d 869, 873 (N.D. Ill. 2016). The information, however, must be factually inaccurate; an alleged legal inaccuracy is not sufficient. See Denan, 959 F.3d at 294-96; Humphrey, 759 F. App'x at 488. "Factually inaccurate information includes inaccurate amounts, tradeline items not immediately removed once vacated, and inaccurately updated loan terms[,]" whereas "legal inaccuracies include the validity of debt or a dispute regarding to whom the debt was assigned." Rodas v. Experian Info. Sols., Inc., No. 19-CV-07706, 2020 WL 4226669, at *2 (N.D. Ill. July 23, 2020) (citations omitted).
Experian argues that the Court should dismiss Juarez's claims under §§ 1681e(b) and 1681i(a) because she "fails to allege facts showing that there was anything factually inaccurate about the way" Experian reported the Debt and because Juarez's lawsuit inappropriately attempts to use the FCRA "to collaterally attack the validity of" the Debt. Doc. 21 at 6-7. Juarez counters by arguing that she is not disputing the validity of the Debt. Rather, Juarez continues, she is only disputing Midland's ownership of the debt, which is a factual inaccuracy because ownership is a pure question of fact.6
The Court agrees that Juarez is not disputing the legality or validity of the Debt. For example, she is not contending that the Debt is void ab initio under state usury laws, as was the case in Denan, see 959 F.3d at 293-95. Instead, Juarez argues only that Midland cannot collect from her because it is not the rightful owner of the Debt. This is not a dispute over the legality, validity, or enforceability of the Debt itself, but a dispute over whether a particular party (Midland) owns the Debt and can therefore collect payment on it.
Even so, the Court does not agree with Juarez that whether Midland owns the Debt is a pure question of fact. Courts generally categorize property ownership7 as a mixed question of law and fact. See, e.g., St. Louis & S.F. Ry. Co. v. Gill, 156 U.S. 649, 664 (1895) (); PGP,LLC v. TPII, LLC, 734 F. App'x 330, 333 (6th Cir. 2018) (); New Windsor Volunteer Ambulance Corps, Inc. v. Meyers, 442 F.3d 101, 111 (2d Cir. 2006) (); Kahn v. Gen. Motors Corp., 77 F.3d 457, 459 (Fed. Cir. 1996) (); Motta...
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