Sullivan v. Wells Fargo Bank, N.A.
| Decision Date | 12 November 2019 |
| Docket Number | CIVIL ACTION 19-0234-WS-M |
| Citation | 418 F.Supp.3d 939 |
| Parties | Willie SULLIVAN, Plaintiff, v. WELLS FARGO BANK, N.A., Defendant. |
| Court | U.S. District Court — Southern District of Alabama |
Kenneth J. Riemer, Underwood & Riemer, P.C., Mobile, AL, Earl P. Underwood, Jr., Underwood & Riemer, PC, Fairhope, AL, for Plaintiff.
Reid S. Manley, Rachel Ross Friedman, Burr & Forman, LLP, Birmingham, AL, for Defendant.
This matter is before the Court on the defendant's motion to dismiss. (Doc. 10). The plaintiff filed a response, (Doc. 20), along with a motion to amend the complaint. (Doc. 19). The defendant filed a reply, which addressed the proposed amended complaint but also opposed amendment on the grounds of futility. (Doc. 24). Because ruling on the defendant's futility argument would have required resolution of the underlying motion to dismiss, the Court granted leave to amend and allowed the plaintiff to file a sur-reply brief, limited to new or altered material in the amended complaint. (Doc. 25). The plaintiff did so, (Doc. 27), and the motion to dismiss is now ripe for resolution. After careful consideration, the Court concludes the motion is due to be granted in part and denied in part.
According to the amended complaint, (Doc. 26), the plaintiff visited a local Wells Fargo branch to open a personal money market account, where the branch manager ("Bolton") aggressively tried to persuade the plaintiff to take out a mortgage loan on his rental properties. The plaintiff told Bolton that, before deciding whether to seek loan options from the defendant, he would first have to consider the estimated general terms the defendant might offer – but only if those estimated terms could be provided without pulling his credit. Bolton assured the plaintiff that the defendant could provide estimated terms without pulling his credit and that, pursuant to the defendant's policy and procedures, no credit report would be pulled until and unless the plaintiff (1) elected to complete a loan application and (2) signed a written authorization for a credit pull.
Based on these assurances, the plaintiff provided the financial information requested by Bolton (his most recent personal federal income tax returns, certain information regarding the rental property and rental income, and an estimated credit score). Rather than provide estimated terms, the defendant pulled the plaintiff's credit report from TransUnion, a consumer reporting agency ("CRA"), and processed and mailed the plaintiff two signature-ready loan packages.
The plaintiff promptly sought to have the unauthorized credit pull rectified, but the defendant repeatedly refused to do so, on the grounds that the plaintiff's provision of his social security number (in connection with opening his money market account and/or on his income tax returns) authorized the defendant to pull his credit report.
Count One alleges violations of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. §§ 1681 et seq. In particular, it alleges violations of Sections 1681b(f)(1),1 1681n(b), 1681q and 1681g(g), and it invokes the civil remedies provided for willful and negligent noncompliance with FCRA's requirements under Sections 1681n and 1681o , respectively. Count Two alleges fraudulent misrepresentation. The defendant seeks dismissal of all claims.
To survive dismissal under Rule 12(b)(6), a complaint must first satisfy the pleading requirements of Rule 8(a)(2). Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). "A pleading that states a claim for relief must contain ... a short and plain statement of the claim showing that the pleader is entitled to relief ...." Fed. R. Civ. P. 8(a)(2). Pleading elements is necessary, but it is not enough to satisfy Rule 8(a)(2). The rule "requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not" satisfy that rule. Twombly , 550 U.S. at 555, 127 S.Ct. 1955. There must in addition be a pleading of facts. Though they need not be detailed, "[f]actual allegations must be enough to raise a right to relief above the speculative level ...." Id. That is, the complaint must allege "enough facts to state a claim for relief that is plausible on its face." Id. at 570, 127 S.Ct. 1955. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). "The plausibility standard ... asks for more than a sheer possibility that the defendant has acted unlawfully," and "[w]here a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief." Id. (internal quotes omitted). A complaint lacking "sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face" will not "survive a motion to dismiss." Id. But so long as the plausibility standard is met, the complaint "may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and that a recovery is very remote and unlikely." Twombly , 550 U.S. at 556, 127 S.Ct. 1955 (internal quotes omitted).
In opposition to the plaintiff's FCRA claim, the defendant argues: (1) the pulled credit report does not constitute a "consumer report"; (2) FCRA liability cannot rest on the pulling of a consumer report for the purpose of extending credit to the consumer's business; (3) the amended complaint fails adequately to allege willfulness; and (4) Sections 1681q and 1681n(b) provide the plaintiff no cause of action. (Doc. 10 at 7-14).
"A person shall not use or obtain a consumer report for any purpose unless ... the consumer report is obtained for a purpose for which the consumer report is authorized to be furnished under this section ...." 15 U.S.C. § 1681b(f)(1). The parties agree that FCRA regulates "consumer reports" and "investigative consumer reports" and that "[r]eports that do not fall within either of these definitional categories are outside the coverage of the Act." Hovater v. Equifax, Inc. , 823 F.2d 413, 417 (11th Cir. 1987).
To be a "consumer report," the communication must include information about certain aspects of a "consumer" and must be made by a "consumer reporting agency." 15 U.S.C. § 1681a(d)(1). For purposes of this motion, the defendant does not seriously dispute that the plaintiff is a consumer,2 that TransUnion is a CRA, and that the information TransUnion released bears on relevant aspects of the plaintiff.
To be a "consumer report," the communication also must be of information 15 U.S.C. § 1681a(d)(1). The Eleventh Circuit in Yang v. Government Employees Insurance Co. , 146 F.3d 1320 (11th Cir. 1998), referred to this as "the Purpose clause." Id. at 1324. The defendant, without acknowledging Yang , argues the amended complaint fails to satisfy the Purpose clause because it does not allege that the defendant pulled the plaintiff's credit for a statutorily listed purpose. (Doc. 10 at 8).
As here, the defendant in Yang argued the information it received from a CRA was not a "consumer report" because the purpose for which the defendant received it (investigation of an insurance claim) was not a purpose listed in Section 1681a(d)(1). The Yang panel noted that communicated information is a "consumer report" if it is "used or expected to be used or collected" for a specified purpose. 146 F.3d at 1324 (emphasis added). Because the disjunctive "or" joins the quoted verbs, "[u]nder the plain language of the FCRA, a ‘communication of information’ is a ‘consumer report’ if any one of the three components in the Purpose clause is met." Id. at 1324-25 (emphasis in original).
Within the Purpose clause, "used" corresponds to "ultimate use" by the recipient; this is the only verb relied on by the defendant here and in Yang. 146 F.3d at 1324. The other quoted verbs address the perspective of the communicator – specifically, whether the CRA collected the communicated information for a statutorily specified purpose (its "reason for compilation") and whether the CRA expected the communicated information to be used for a statutorily specified purpose (its "expectation of use"). Id. Because the CRA in Yang "compiled it for credit-related purposes and expected it to be used for such purposes," the information communicated to the defendant "is a protected ‘consumer report.’ " Id. at 1325.
As in Yang , so here. Regardless of the purpose for which the defendant obtained the plaintiff's credit report, it satisfies the Purpose clause and is thus a "consumer report" if TransUnion either collected the communicated information for a statutory purpose or expected the information to be used for a statutory purpose. That is precisely what the amended complaint alleges. (Doc. 26 at 4).
The defendant characterizes the amended complaint's allegations in this regard as "only conclusory." (Doc. 24 at 5). Absent a heightened pleading requirement – and the defendant suggests none – a complaint's allegations need only be plausible, not detailed. There is nothing obviously implausible about a big three credit bureau3 collecting the information in its reports on individuals, in whole or in part, for the purpose of serving as a factor in establishing the individual's eligibility for credit or insurance to be used primarily for personal, family, or household...
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