Alert

Judgment on the Pleadings Granted Due to Insufficient Pleading of FCRA Violations

December 30, 2024

The United States District Court for the District of Maryland granted a defendant’s motion for judgment on the pleadings in a case arising under the Fair Credit Reporting Act (FCRA) due to an alleged error regarding the misspelling of the plaintiff’s middle name in her credit report received from the defendant.

Background

In Waller, the plaintiff alleged that she received a copy of her credit report in October 2021 that incorrectly stated her middle name as “Mary” instead of “Munirah.” The plaintiff alleged she then contacted the defendant by emailing the CEO and filed a complaint with the Consumer Financial Protection Bureau to notify the defendant of the error and to ask that it be corrected. In response, the plaintiff received a notice from the defendant’s “Executive Escalations” department that her concern was being reviewed. In February 2024, the plaintiff requested and received another credit report from the defendant, which still had her middle name as “Mary.”

The plaintiff complained that both the misstatement of her middle name as well as the defendant’s failure to correct the error constituted violations of multiple provisions of the FCRA. The defendant moved for judgment on the pleadings, and the plaintiff moved for summary judgment. The defendant argued that the plaintiff’s suit must be dismissed as untimely under the FCRA’s applicable statute of limitations and that the misstatement of the plaintiff’s middle name has no bearing on her creditworthiness and is not actionable under the FCRA. The court only considered the defendant’s motion for judgment on the pleadings by finding that “a summary judgment analysis is inappropriate at this stage.”

Court’s Analysis and Decision

First, the court analyzed the defendant’s argument that the claims are time-barred by the FCRA’s two-year statute of limitations. The defendant argued that since the plaintiff admitted she contacted the defendant on October 16, 2021, to request the deletion of the incorrect middle name, the plaintiff discovered the violation on or before that date, and therefore her claims are time barred.

The plaintiff asserted that since she discovered the defendant was still including the erroneous middle name on her report in February 2024, the commencement of the suit in March 2024 is “undisputedly timely.” The court noted that “[w]hile neither the Fourth Circuit nor other courts in this district have directly considered the question, there is some precedent to suggest that separate reports sent later but regarding an earlier yet ongoing dispute are not barred by the statute of limitations.” The court held that despite the same error being in both reports, the error in the February 2024 report was within the statute of limitations, but the plaintiff’s claims stemming from the October 2021 report were not.

Second, the court found the section 1681(a) and 1681(b) claims fail because these sections do not create duties that a defendant can be liable for as “[b]oth are statements of legislative intent and do not give rise to causes of action.”

Third, the court analyzed the plaintiff’s section 1681e(b) claim, based on the defendant’s alleged duty to investigate, and found that the plaintiff has not alleged facts sufficient to show standing. The plaintiff failed to allege the defendant “provided the inaccurate information about her middle name to any third party . . . [n]or has she alleged any facts that would indicate a ‘material risk of future harm’ sufficient to establish standing in the absence of dissemination to third parties.” Although the plaintiff alleged she suffered various forms of “emotional distress” and “physiological distress” as a result of the defendant’s actions, the court noted, “in the event that an inaccurate credit report is not disseminated to a third party, allegations of emotional distress that stem from ‘frustration with the dispute process and resulting depression, emotional distress, and economic damages are either insufficient or too conclusory to constitute a concrete injury’ under the FCRA.” The court found “[a]s Plaintiff does not allege that the inaccurate information was ever sent to a third party, and thus cannot show concrete harm, she likewise cannot successfully utilize her claims of emotional damages as a basis for establishing standing under section 1681e(b).”

Next, the court held that the plaintiff’s section 1681i(a)(1)(A) claim based on the defendant’s alleged failure to reinvestigate disputes despite the defendant receiving dispute notices starting in October 2021 could not proceed. The court found the plaintiff failed to allege any facts to show the defendant engaged in unreasonable procedures and noted that the “’mere failure’ to delete disputed information does not, absent other evidence, indicate a violation of the FCRA, as the agency ‘might well have fulfilled their obligations under § 1681 by reinvestigating the disputed items and determining that they should not be deleted.’”

Lastly, the court addressed the plaintiff’s claim that she never authorized the defendant’s counsel to send her correspondence and thus, these communications sent in May 2024 “run afoul of the FCRA’s mandate ‘to deliver notices required under section 1681a(6)(A).’” The court could not locate any applicable provision of the FCRA that covered the subject correspondences, which informed the plaintiff that the name “Mary” had been removed from her credit report and, thus, dismissed her “unauthorized” correspondence claim.

Key Takeaway

Waller v. TransUnion not only serves as a reminder of the powerful tool of filing a motion for judgment on the pleadings but also highlights the technicalities and pleading requirements to maintain claims under the FCRA. When a plaintiff fails to meet these requirements, pursuing a motion for judgment on the pleadings can likely result in a swift ending to the case.