Magruder v. Capital One, Nat'l Ass'n

• Decision Date: 19 May 2021
• Docket Number: Civil Action No. 19-57 (RDM)
• Parties: Stephon MAGRUDER, Plaintiff, v. CAPITAL ONE, NAT'L ASS'N, et al., Defendants.
• Court: U.S. District Court — District of Columbia

540 F.Supp.3d 1

Stephon MAGRUDER, Plaintiff,

v.CAPITAL ONE, NAT'L ASS'N, et al., Defendants.

Civil Action No. 19-57 (RDM)

United States District Court, District of Columbia.

Signed May 19, 2021

Jeffrey Warren Styles, Washington Legal Group, LLC, Washington, DC, for Plaintiff.

Timothy A. Diemand, Wiggin and Dana, LLP, Hartford, CT, for Defendant Capital One, Natl Assoc.

Constantinos G. Panagopoulos, Ballard Spahr LLP, Washington, DC, for Defendant First Premier Bank.

Syed M. Reza, Troutman Pepper Hamilton Sanders, Washington, DC, for Defendants Credit One Financial, Lvnv Funding, LLC.

Katherine Carlton Robinson, Pro Hac Vice, Schuckit & Associates, P.C., Zionsville, IN, H. Mark Stichel, Astrachan Gunst Thomas, P.C., Baltimore, MD, for Defendant Trans Union, LLC.

Geoffrey S. Irwin, Jones Day, Washington, DC, for Defendant Experian Info Services, Inc.

MEMORANDUM OPINION AND ORDER

RANDOLPH D. MOSS, United States District Judge Plaintiff Stephon Magruder brought suit under the federal Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692, et seq. , the Maryland Consumer Debt Collection Act ("MCDCA"), Md. Code Ann., Com. Law § 14-202(8), and the federal Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681 et seq. , alleging that various credit reporting agencies misrepresented information about him on his credit reports; that several banks erroneously provided those agencies with the misstated information; and that one debt collector wrongly pursued him to recover debts stemming from the agencies’ and banks’ errors. See generally Dkt. 29 (Am. Compl.). Since filing suit, Plaintiff has stipulated to dismissal of some, but not all, of the Defendants. This Court subsequently ordered Magruder "to show cause why this case should not be dismissed as to [the remaining] defendant[s] for lack of Article III standing." Minute Order (Sept. 13, 2019). For the reasons explained below, the Court concludes that Plaintiff has standing.

I. BACKGROUND

For purposes of assessing Magruder's standing at this early stage of the litigation, the Court must take the allegations of the complaint as true and must consider the "undisputed facts evidenced in the record" as they relate to Magruder's standing. Herbert v. Nat'l Acad. of Scis. , 974 F.2d 192, 197 (D.C. Cir. 1992). The Court, accordingly, premises its decision on the following allegations and undisputed facts.

In May 2017, Magruder obtained his credit reports from the three major credit reporting agencies: Equifax, Experian, and Trans Union. Dkt. 29 at 2 (Am. Compl. ¶ 11). Upon review, Magruder determined that the reports contained several inaccuracies:

• For his tradeline (i.e. , credit account) with the Navy Federal Credit Union, the reports overstated Magruder's past due amount and charge-off amount, "misrepresented the credit utilization rate by failing to distinguish between purchases and fees," and "reported [the tradeline] in a manner where it appear[ed] that Magruder made purchases in excess of his credit limit." Id. at 3 (Am. Compl. ¶¶ 13–15).

• For his tradeline with Capital One, the reports overstated his outstanding balance, failed to note that his account was charged off, and "misrepresented the credit utilization rate by failing to distinguish between purchases and fees." Id. at 4 (Am. Compl. ¶ 19).

• For his tradeline with First Premier Bank, the reports overstated his outstanding balance, failed to note that his account was charged off, "misrepresented the credit utilization rate by failing to distinguish between purchases and fees," and listed Magruder as having two accounts with First Premier when he only had one. Id. at 4–5 (Am. Compl. ¶ 22).

• For his tradeline with Credit One, the reports overstated his outstanding balance, failed to note that his account had been paid, "misrepresented the credit utilization rate by failing to distinguish between purchases and fees," and, with regards to Equifax and Trans Union's reports specifically, "completely failed to report any information regarding Plaintiff's payment of [his] debt" to Credit One. Id. at 5–6 (Am. Compl. ¶ 26–27).

After discovering these inaccuracies, Magruder sent each reporting agency a dispute letter identifying the purported errors and requesting that the agency correct the errors. See id. at 3 (Am. Compl. ¶ 16) (letter regarding Navy Federal Credit Union tradeline); id. at 4 (Am. Compl. ¶ 20) (letter regarding Capital One tradeline); id. at 5 (Am. Compl. ¶ 23) (letter regarding First Premier Bank tradeline); id. at 6 (Am. Compl. ¶ 28) (letter regarding Credit One tradeline). But instead of investigating Magruder's complaints, Equifax and Trans Union merely forwarded Magruder's dispute letters to the various banks with whom Magruder held his accounts. See id. at 3 (Am. Compl. ¶ 17); id. at 4 (Am. Compl. ¶ 21); id. at 5 (Am. Compl. ¶ 24); id. at 7 (Am. Compl. ¶ 33). Two of those banks—Navy Federal and First Premier—allegedly investigated Magruder's disputes in a "quick[,] sloppy[,] and superficial" manner that failed to verify whether the information reported on Magruder's credit reports was accurate. Id. at 4 (Am. Compl. ¶ 18); id. at 5 (Am. Compl. ¶ 25). Another bank—Credit One—meanwhile "admitted that it could not verify any of the information being reported" because it had transferred Magruder's account to LNLV Funding ("LNLV"), id. at 6 (Am. Compl. ¶ 28), "one of the largest national debt collectors in the United States," id. at 2 (Am. Compl. ¶ 10). LNLV, after conducting a "quick, sloppy[,] and superficial" investigation into Magruder's dispute, concluded that it too "could not verify" Magruder's debt. Id. at 6 (Am. Compl. ¶¶ 29–30). Instead, it "referred [Magruder] from place to place" until finally directing him to contact a debt-collection law firm named Stillman. Id. (Am. Compl. ¶ 29). Magruder called Stillman, who informed him that it was likewise "unable to validate [his] debt." Id. (Am. Compl. ¶ 29). Nevertheless, Stillman said, "a lawsuit had been filed and a judg[ ]ment obtained against" Magruder for that debt. Id. (Am. Compl. ¶ 29). Magruder asked Stillman for "proof that the lawsuit was served on him." Id. (Am. Compl. ¶ 31). None came. Id. at 6–7 (Am. Compl. ¶ 31).

At this point, nearly one-and-a-half years had passed since Magruder first discovered his credit reports’ inaccuracies. Compare id. at 2 (Am. Compl. ¶ 11) with id. at 7 (Am. Compl. ¶ 32). Yet after contacting the credit reporting agencies, the banks, the debt collector, and the debt-collection law firm, Magruder was no closer to resolving his dispute. In a last effort, Magruder sent yet another letter to Equifax, Experian, and Trans Union asking for their help. Id. at 7 (Am. Compl. ¶ 32). Trans Union responded by falsely claiming that its report was accurate; Experian "disingenuously claimed it could not process the dispute;" and Equifax neglected to respond at all. Id. (Am. Compl. ¶ 33).

Three weeks later, Magruder brought this suit. See Dkt. 1–2 at 2. His initial complaint, filed in the Superior Court of the District of Columbia, alleged: (1) in Count One, that LNLV violated § 1692e(2), (8), and (10) and § 1692f of the FDCPA by "falsely representing that a debt was owed," "falsely representing that a judgment had been obtained," and "communicating information that it knew was false to the [credit reporting agencies]," id. at 7–8; (2) in Count Two, that LNLV violated § 14-202(8) of the MCDCA "by claiming that it had obtained judgment against" Magruder, id. at 8; (3) in Count Three, that Navy Federal, Capital One, First Premier Bank, Credit One, and LNLV violated § 1681s-2(b)(1)(A)–(E) of the FCRA by failing adequately to investigate and remedy Magruder's disputes, and that Navy Federal, Credit One, and LNLV violated § 1681s-2(b)(1)(C)–(E) of the FCRA "by failing to report the status of the debt as disputed," id. at 8–10; (4) in Count Four, that Equifax, Experian, and Trans Union violated § 1681e(b) of the FCRA "by failing to establish and/or follow reasonable procedures to assure maximum possible accuracy in the preparation of ... Magruder[’s] credit reports and credit files," id. at 10–11; and (5) in Count Five, that Equifax and Trans Union violated § 1681i(a) of the FCRA in various ways, most saliently, "by failing to conduct a reasonable investigation" into Magruder's dispute and by failing to modify Magruder's credit reports to remedy their purported inaccuracies, id. at 11–12.

On January 10, 2019, Trans Union removed Magruder's suit to this Court pursuant to 28 U.S.C. §§ 1331, 1441, and 1446. See Dkt. 1 (Notice of Removal). Thereafter, Trans Union, Capital One, Credit One, and LNLV answered the complaint; Equifax and Navy Federal moved to dismiss; and First Premier Bank moved to stay the action and to compel arbitration. See Dkt. 7 (Trans Union answer); Dkt. 18 (Capital One answer); Dkt. 26 (Credit One Answer); Dkt. 27 (LNLV answer); Dkt. 11 (Navy Federal motion to dismiss); Dkt. 21 (Equifax motion to dismiss); Dkt. 25 (First Premier Bank motion to stay and compel arbitration). Magruder responded by filing an amended complaint, and Defendants renewed their answers and motions. See Dkt. 29 (Am. Compl.); Dkt. 33 (Trans Union answer); Dkt. 34 (Capital One answer); Dkt. 37 (LNLV answer); Dkt. 38 (Credit One Answer); Dkt. 39 (First Premier Bank motion to stay and compel arbitration). Magruder eventually stipulated to the voluntary dismissal of three defendants (Experian, Navy Federal, and Equifax). See Minute Order (May 9, 2019) (dismissing action with prejudice as to Experian); Minute Order (Sept. 30, 2019) (dismissing action with prejudice as to Navy Federal); Minute Order (Feb. 7, 2020) (dismissing action with prejudice as to Equifax).

Before proceeding with the case, the Court sought to "assure[ ] itself of its own subject matter jurisdiction" and, accordingly, ordered Magruder "to show cause why this case should not be dismissed as to each defendant for lack of Article III standing." Minute Order (Sept. 13, 2019). For the...