Thompson v. Transunion Data Sols., LLC
| Decision Date | 12 May 2021 |
| Docket Number | No. 20-cv-04207,20-cv-04207 |
| Parties | ABRAHAM THOMPSON, Plaintiff, v. TRANSUNION DATA SOLUTIONS, LLC, et al., Defendants. |
| Court | U.S. District Court — Northern District of Illinois |
MEMORANDUM OPINION AND ORDER
Plaintiff Abraham Thompson alleges that Defendant JPMorgan Chase Bank, N.A. ("Chase") mistakenly issued a credit card in his name.1 Thompson claims that he knew nothing about the card, did not authorize it, and did not use it. After he saw the card on his credit report, Thompson sent a dispute letter to Defendant Trans Union, LLC ("Trans Union").2 Trans Union asked Chase to verify the information and ultimately declined to correct or amend Thompson's credit report. As a result, Thompson has sued Trans Union and Chase for alleged violations of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681 et seq., and common-law negligence under Illinois state law. Now, Chase moves to dismiss Thompson's claims against it pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). (Dkt. No. 19.) For the reasons given below, Chase's motion is granted in part and denied in part.
For the purposes of Chase's motion to dismiss, the Court accepts as true the well-pleaded facts in the Complaint and views them in the light most favorable to Thompson. See Firestone Fin. Corp. v. Meyer, 796 F.3d 822, 826-27 (7th Cir. 2015).
As alleged, Thompson once co-owned a radio station in South Bend, Indiana. (Compl. ¶ 10, Dkt. No. 1.) In 2016, the radio station was sold and Thompson ended his involvement with it. (Id. ¶ 11.) Chase issued a credit card in Thompson's name in connection with the radio station. (Id. ¶ 13.) However, Thompson did not know that the card had been issued in his name, never authorized the card, never signed any credit card agreement, and never used the card. (Id. ¶ 14.) Around March 2019, Thompson sent a dispute letter to Trans Union asserting his ignorance of and lack of involvement with the credit card. (Id. ¶¶ 12, 14.) In April 2019, Trans Union told Thompson that Chase had verified that the card was his. (Id. ¶ 20.) Thompson alleges, on information and belief, that Trans Union communicated his reasons for disputing the card to Chase, that Chase failed to consider his claims, and that Chase falsely informed Trans Union that the information was accurate. (Id. ¶¶ 15-19.)
In his Complaint, Thompson asserts three claims against Chase. Counts One and Two allege that Chase violated the FCRA by failing to investigate his dispute reasonably and failing to correct inaccurate information. Count Three alleges that Chase was negligent in improperly verifying that Thompson had overdue payments on the credit card. He raises other claims against Trans Union, but those are not at issue here.
To survive a motion to dismiss under Rule 12(b)(6), "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroftv. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). However, the Court need not accept a party's legal conclusions, and a party cannot defeat a motion to dismiss with "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements." Id. This pleading standard does not require a complaint to contain detailed factual allegations. Twombly, 550 U.S. at 555. Rather, "[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." Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556).
Chase has also moved to dismiss Thompson's FCRA claims for lack of standing pursuant to Federal Rule of Civil Procedure 12(b)(1). To test the jurisdictional sufficiency of a complaint, the Court "accept[s] as true all well-pleaded factual allegations and draw[s] reasonable inferences in favor of the plaintiff[]." Bultasa Buddhist Temple of Chi. v. Nielsen, 878 F.3d 570, 573 (7th Cir. 2017). The Court may, however, look at evidence the parties have submitted beyond the pleadings to determine if it has subject-matter jurisdiction. See Ezekiel v. Michel, 66 F.3d 894, 897 (7th Cir. 1995).
Thompson asserts that Chase violated the FCRA by failing to investigate his dispute reasonably and failing to correct the inaccurate information it provided to Trans Union. The FCRA describes entities like Chase that provide information to consumer reporting agencies as "furnishers." 15 U.S.C. § 1681s-2. Furnishers must follow certain procedures when they are informed of disputes by consumer reporting agencies. Id. § 1681s-2(b). Here, after Trans Union notified Chase of Thompson's dispute, Chase was required to investigate the disputed information, review all relevant information Trans Union provided, and report its conclusionsback to Trans Union. Id. § 1681s-2(b)(A)-(C). Then, if Chase found incomplete or inaccurate information, it was required to modify, delete, or block reporting of that item of information and notify any previously contacted national consumer reporting agencies. Id. § 1681s-2(b)(D)-(E).
Counts One and Two request relief against Chase pursuant to 15 U.S.C. § 1681s-2(a). But, as Chase points out, Thompson lacks standing under that provision because it does not provide for a private cause of action. See Purcell v. Bank of Am., 659 F.3d 622, 623 (7th Cir. 2011). The Court's analysis does not stop there, however, because Thompson may pursue relief against Chase under 15 U.S.C. § 1681s-2(b). To state a claim under that section, Thompson must allege that "(1) he disputed an inaccuracy by notifying a [consumer reporting agency]; (2) the [consumer reporting agency] contacted the furnisher to alert it to the dispute; and (3) the furnisher failed to adequately investigate." Lyons v. Equifax Info. Servs., LLC, 455 F. Supp. 3d 746, 748 (N.D. Ill. 2020). Thompson claims that while the Complaint contains a typographical error, he intended to plead for relief under the proper section of the FCRA. The Court accepts this explanation. Notably, the typographical error does not affect the factual allegations of the Complaint, and those allegations establish that Thompson has standing to bring a claim under § 1681s-2(b). As the Seventh Circuit has explained, Hatmaker v. Mem'l Med. Ctr., 619 F.3d 741, 743 (7th Cir. 2010); see also Bartholet v. Reishauer A.G. (Zurich), 953 F.2d 1073, 1078 (7th Cir. 1992) (). Accordingly, the Court does not find Thompson's scrivener's error to be a fatal mistake and proceeds to consider whether Thompson has stated a claim under § 1681s-2(b).
Unlike consumer reporting agencies, furnishers must resolve legal questions regarding liability when necessary to resolve disputed information. "Accuracy for furnishers . . . means information that correctly [r]eflects . . . liability for the account." Denan v. Trans Union LLC, 959 F.3d 290, 295 (7th Cir. 2020) (internal quotation marks omitted) (citing 12 C.F.R. § 1022.41(a)). In Denan, the Seventh Circuit explained that "it makes sense that furnishers shoulder this burden: they assumed the risk and bear the loss of unpaid debt, so they are in a better position to determine the legal validity of a debt." Id. However, that portion of the Seventh Circuit's opinion could be considered dicta, as the only question presented by the case was whether a consumer reporting agency was required by the FCRA to resolve legal issues regarding debts after receiving a consumer dispute. Id.; see also United States v. Crawley, 837 F.2d 291, 292-93 (7th Cir. 1988) (). Previously, courts in this District have concluded that furnishers need not resolve all disputed legal questions regarding debts. See Lyons, 455 F. Supp. 3d at 748-49 (). Aside from Crawley, a case the parties did not cite in their briefs, the Seventh Circuit has not opined on the extent of furnishers' responsibilities to resolve legal questions regarding the validity of debts. Id.
Looking to other courts of appeals, the First Circuit has found that furnishers need not make legal determinations when investigating disputes, holding that an FCRA plaintiff "must show the factual inaccuracy of the information the furnisher provided, not the existence of disputed legal questions, as furnishers are neither qualified nor obligated to resolve matters that turn on questions that can only be resolved by a court of law." Zahran v. Bank of Am., No. 15 C1968, 2016 WL 826402, at *4 (N.D. Ill. Mar. 3, 2016) (internal quotation marks omitted) (citing Chiang v. Verizon New England Inc., 595 F.3d 26, 38 (1st Cir. 2010)). However, several courts of appeals "have held that a credit entry can be 'incomplete or inaccurate' within the meaning of the FCRA 'because it is patently incorrect, or because it is misleading in such a way and to such an extent that it can be expected to adversely affect credit decisions.'" Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147, 1163 (9th Cir. 2009) (emphasis added) (quoting Sepulvado v. CSC Credit Servs., Inc., 158 F.3d 890, 895 (5th Cir. 1998)); see also Seamans v. Temple Univ., 744 F.3d 853, 865 (3d Cir. 2014); Saunders v. Branch Banking & Tr. Co. of Va., 526 F.3d 142, 148 (4th Cir. 2008); Koropoulos v. Credit Bureau, Inc., 734 F.2d 37, 40 (D.C. Cir. 1984) (...
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