Sessa v. Linear Motors, LLC, 19-CV-9914 (KMK)

• Decision Date: 20 December 2021
• Docket Number: 19-CV-9914 (KMK)
• Parties: GIA SESSA, on behalf of herself and all others similarly situated, Plaintiff, v. LINEAR MOTORS, LLC, et al., Defendants.
• Court: U.S. District Court — Southern District of New York

GIA SESSA, on behalf of herself and all others similarly situated, Plaintiff, v. LINEAR MOTORS, LLC, et al., Defendants.

No. 19-CV-9914 (KMK)

United States District Court, S.D. New York

December 20, 2021

OPINION & ORDER

KENNETH M. KARAS, DISTRICT JUDGE

Gia Sessa of Putnam Valley (“Plaintiff”) brings this putative class action suit against Linear Motors, LLC d/b/a/ Curry Hyundai Subaru, Hudson Valley Federal Credit Union (“HVFCU”), CULA, LLC (collectively, “Lessor Defendants”), and TransUnion, LLC, (collectively “Defendants”), alleging that Lessor Defendants hid certain fees and taxes paid by Plaintiff upon leasing a car in violation of the Consumer Leasing Act, 15 U.S.C §§ 1667, et seq.; New York Vehicle and Traffic Law, N.Y. Veh. & Traf. § 415, et seq.; and the New York General Business Law, N.Y. Gen Bus. § 349, and alleging that Defendant TransUnion failed to accurately report Plaintiff's debt obligations vis-a-vis her vehicle lease in violation of the Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq. (“FCRA”), and New York General Business Law § 380, et seq. (“NY FCRA”). (See First Am. Compl. (“FAC”) (Dkt. No. 4).) Before the Court is TransUnion's Motion for Summary Judgment. (Not. of Mot. (Dkt. No. 111).) For the following reasons, TransUnion's Motion is granted.

I. Background

A. Factual Background

The following facts are taken from the Parties' statements pursuant to Local Civil Rule 56.1, specifically TransUnion's 56.1 Statement (Def.'s Rule 56.1 Statement (“Def.'s 56.1”) (Dkt. No. 113)) and Plaintiff's 56.1 Counterstatement (Pl.'s Rule 56.1 Counterstatement (“Pl.'s 56.1 Counterstatement”) (Dkt. No. 123-20 (filed under seal), Dkt. No. 126 (redacted))), and the admissible evidence submitted by the Parties. The facts are recounted “in the light most favorable to” Plaintiff, the non-movant. Wandering Dago, Inc. v. Destito, 879 F.3d 20, 30 (2d Cir. 2018) (citation and quotation marks omitted). The facts as described below are in dispute only to the extent indicated.^[1]

1. The FCRA

The FCRA requires that credit reporting agencies (“CRAs”) prepare “consumer reports, ” known otherwise as credit reports, using “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 FCRA does not, however, require CRAs to review the underlying legal documents giving rise to a consumer's debt obligations to verify the legal validity thereof prior to reporting said debt on the consumer's credit report. (Pl.'s 56.1 Counterstatement ¶ 32.)

The FCRA also imposes various obligations on organizations that supply data to CRAs, known as “furnishers.” See 16 C.F.R. § 660.2. Relevant to this case, the law bars furnishers from supplying information to CRAs it “knows or has reasonable cause to believe . . . is inaccurate.” 15 U.S.C. § 1681s-2(a)(1)(A); see also 12 C.F.R. § 1022.42(a) (regulations requiring furnishers to “establish and implement reasonable written policies and procedures regarding the accuracy and integrity of the information” furnished to CRAs). The Consumer Financial Protection Bureau (“CFPB”), which oversees credit ratings practices, also requires furnishers to provide CRAs with information that “correctly[] [r]eflects the terms of and liability for the account.” 12 C.F.R. § 1022.41(a)(1).

The FCRA does not pertain only to institutions; to the contrary, it encourages consumers to participate in the credit reporting process, animated by the belief that “enhancing consumers' access to their credit reports is an effective step towards ensuring an accurate credit reporting system.” S. Rep. No. 103-209, at 5 (1993). To enable such participation, the FCRA affords consumers two mechanisms to dispute the accuracy of information listed on a credit report. First, a consumer can submit a dispute directly to a CRA, who must then forward the dispute to the appropriate furnisher. See 15 U.S.C. § 1681i(a)(1)(A). Second, a consumer can submit a dispute directly to the furnisher. See id. § 1681s-2(a)(8).

2. TransUnion's General Processes Pursuant To Its CRA Obligations

Pursuant to the charge that a CRA use “reasonable procedures” to ensure accuracy, TransUnion will review a furnisher prior to accepting any information from that furnisher, a vetting process commonly referred to as “credentialing.” (See Pl.'s 56.1 Counterstatement ¶ 68.)

TransUnion's multi-faceted credentialing process includes but is not limited to reviewing the furnisher's reputation as well as the nature of the data to be furnished. (See id. ¶¶ 63-67.)

If a furnisher passes the credentialing process, TransUnion also requires a furnisher to “contractually agree to, among other things, comply with all of the obligations imposed on that furnisher, ” including all applicable statutory and regulatory obligations under the FCRA, regulations promulgated thereunder, and equivalent state laws and regulations. (Id. ¶ 69.) Importantly, per the agreement, data are also supposed to be furnished in a particular way, namely an industry-wide format called “Metro2, ” (id. ¶ 74), which “allows a furnisher to report a balloon payment obligation for any type of account with a deferred payment obligation, including an auto lease, ” (id. ¶ 41).

After TransUnion credentials and signs an agreement with a furnisher, it “conducts an onboarding process . . . with a furnisher to test and verify the integrity of the data the company intends to furnish.” (Def.'s 56.1 ¶ 75.)^[2] Once the data furnisher begins providing TransUnion with information, the company continues to monitor, screen, and validate the quality and integrity of data furnished, including using proprietary techniques and strategies. (See id. ¶¶ 7682.)

3. Plaintiff's Car and Debt Instrument

In November 2018, Plaintiff leased a Subaru Forester from Linear Motors, which was financed by HVFCU.^[3] (See id. ¶¶ 1-3.) The lease obligated Plaintiff to pay $237.75 per month.

(See Decl. of Gia Sessa (“Sessa Decl.”), Ex. 1 (Dkt. No. 124-1) at 4.) The lease states that $12, 721.25 is the “Total of Payments, ” meaning “the Amount [Plaintiff] will have paid to [the lessor] by the end of the Lease.” (Id.) The lease also states that the “Residual Value, ” meaning “[t]he value of the Vehicle at the end of the Lease used in calculating [Plaintiff's] Base Monthly Payment, ” is $19, 444.07. (Id. at 2.)

Section 14 of the lease purports to release Plaintiff from any obligation following the termination of liability assuming Plaintiff had performed by the terms of the contract. (See id. at 3.) Per Section J of the lease, Plaintiff had “the option to purchase the Vehicle . . . at the end of the Lease Term for the Residual Value, assuming all payments are made on the exact scheduled date, plus a Purchase Option Fee of $325 and applicable fees and costs.” (Id. at 4.)

Plaintiff disputes this characterization. (See Pl.s's Mem. 15.) For the reasons discussed below, this semantic difference does not come to bear. And where the Parties disputed facts with purely semantic objections or by asserting irrelevant facts that do not materially challenge the substance described, the Court will not consider them as creating disputes of fact. See Ocampo v. 455 Hosp. LLC, No. 14-CV-9614, 2021 WL 4267388, at *1 n.1 (S.D.N.Y. Sept. 20, 2021) (“Where the Parties identify disputed facts but with semantic objections only or by asserting irrelevant facts, which do not actually challenge the factual substance described in the relevant paragraphs, the Court will not consider them as creating disputes of fact.”); Baity v. Kralik, 51 F.Supp.3d 414, 418 (S.D.N.Y. 2014) (“Many of [the] [p]laintiff's purported denials-and a number of [its] admissions-improperly interject arguments and/or immaterial facts in response to facts asserted by [the] [d]efendant[], often speaking past [the] [d]efendant[]' asserted facts without specifically controverting those same facts.... [A] number of [the] [p]laintiff['s] purported denials quibble with [the] [d]efendant['s] phraseology, but do not address the factual substance asserted by [the] [d]efendant[].”); Pape v. Bd. of Educ. of Wappingers Cent. Sch. Dist., No. 07-CV-8828, 2013 WL 3929630, at *1 n.2 (S.D.N.Y. July 30, 2013) (explaining that the plaintiff's 56.1 statement violated the rule because it “improperly interjects arguments and/or immaterial facts in response to facts asserted by [the] [d]efendant, without specifically controverting those facts, ” and “[i]n other instances, . . . neither admits nor denies a particular fact, but instead responds with equivocal statements”); Goldstick v. The Hartford, Inc., No. 00-CV-8577, 2002 WL 1906029, at *1 (S.D.N.Y. Aug. 19, 2002) (noting that plaintiff's 56.1 statement “does not comply with the rule” because “it adds argumentative and often lengthy narrative in almost every case[, ] the object of which is to ‘spin' the impact of the admissions [the] plaintiff has been compelled to make”). Therefore, for purposes of this Opinion, the Court adopts the more common parlance of “lease” with respect to a debt instrument to temporarily rent a car.

Notwithstanding the lease's terms, the Parties agree that “[t]he data [HVFCU] furnished to [TransUnion] indicated that Plaintiff owed a . . . payment of $19, 444.00 . . . that was due on January 1, 2022, ” which is referred to as a “balloon payment.” (Pl.'s 56.1 Counterstatement ¶ 8.)^[4] HVFCU “also furnished information to [TransUnion] indicating that the ‘High Balance' amount for her account was $25, 928.60.” (Id. ¶ 13 (citation omitted).) It is also undisputed that HVFCU furnished data regarding the lease in Metro2 format. (Id. ¶ 35 (citations omitted).)

4. Trans Union's and HVFCU's Actions and Interactions

TransUnion credentialed...