Opinion
CIVIL ACTION NO. 1:19-CV-2494-CAP
2020-09-29
Jacqueline HILL, Plaintiff, v. EQUIFAX INFORMATION SERVICES, LLC, Experian Information Solutions, Inc., and Bluestream Brands, Inc. a/k/a and d/b/a WebBank a/d/b/a Fingerhut, Defendants.
Adam Klein, Berry & Associates, P.C., Atlanta, GA, for Plaintiff. Rebecca Marie Nocharli, Jones Day, Atlanta, GA, for Defendants.
Adam Klein, Berry & Associates, P.C., Atlanta, GA, for Plaintiff.
Rebecca Marie Nocharli, Jones Day, Atlanta, GA, for Defendants.
ORDER
CHARLES A. PANNELL, JR., United States District Judge
This matter is before the court on the motion to dismiss filed by Experian Information Solutions, Inc. ("Experian"). [Doc. No. 12]. The plaintiff, Jacqueline Hill, has filed a response in opposition [Doc. No. 16], and Experian has filed a reply brief [Doc. No. 20]. The matter being fully briefed, it is now before the court for consideration.
I. Factual Allegations and Procedural Background
On a motion to dismiss, the court must take the facts alleged in the complaint as true. Resnick v. AvMed, Inc. , 693 F.3d 1317, 1321–22 (11th Cir. 2012).
On November 5, 2014, Hill filed a voluntary petition under Chapter 13 of the United States Bankruptcy Code. [Doc. No. 1 at 6, Compl. ¶17]. In her petition, she included a debt of $815 to Fingerhut. [Id. , Compl. ¶18]. As part of her bankruptcy case, she filed a plan on March 30, 2015, detailing how she intended to repay this debt. [Id. , Compl. ¶19]. This plan provided for Fingerhut to be paid through the Chapter 13 bankruptcy trustee. [Id. , Compl. ¶20]. Fingerhut did not object to the plan and the plan was confirmed on May 21, 2015. [Id. at 7, Compl. ¶¶23-24]. A copy of the order confirming this plan was served on Fingerhut on May 23, 2015. [Id. at 7, Compl. ¶25]. On October 24, 2018, the bankruptcy court entered an order discharging Hill as the debtor and closing the bankruptcy case. [Id. at 7, Compl. ¶26].
On December 18, 2018, Hill obtained a copy of her consumer credit report from Experian. [Id. at 38, Compl. ¶139]. This report stated that Hill had a debt of $815 to Fingerhut that had been written off. [Id. at 38-39, Compl. ¶¶140-141]. Hill sent a letter dated February 21, 2019, to Experian advising it that she disputed this information and that the debt had been discharged in bankruptcy. [Id. at 40, Compl. ¶144]. Included with the letter was a copy of the discharge order from the bankruptcy court. [Id. at 41, Compl. ¶146]. On March 15, 2019, Experian responded to Hill's letter, informing her that it had researched the dispute. Equifax provided her with a revised report reflecting its findings. [Id. at 42, Compl. ¶151]. The revised report again stated that the $815 Fingerhut debt had been "written off" and that this part of the report "was updated from our processing of your dispute in Mar. 2019." [Id. at 43, Compl. ¶154].
On May 31, 2019, Hill filed a complaint against the defendants, Experian, Equifax Information Services, LLC, and Bluestem Brands, Inc. She has brought a claim against Experian alleging violations of the Fair Credit Reporting Act, 15 U.S.C. § 1681e(b) and 1681i ("FCRA"). In particular, she alleges that Experian had a duty to investigate the dispute about the reporting of the Fingerhut debt, and that Experian breached this duty. She seeks actual damages for her "out-of-pocket expenses incurred as a result of [Experian's] wrongful representations regarding the Debt" [Doc. No. 1 at 46, Compl. ¶166], statutory damages pursuant to 15 U.S.C. § 1681(n) in the amount of $1,000, punitive damages, costs and attorney's fees.
Also known as WebBank and also doing business as Fingerhut.
Hill dismissed the claims against Equifax and Bluestem Brands, Inc. on October 11, 2019, and November 12, 2019, respectively. [Doc. Nos. 15, 19]. Those defendants have been dismissed from the action.
II. Legal Standard
A complaint 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). Conversely, Rule 12(b)(6) allows for dismissal of a case when the complaint "fail[s] to state a claim upon which relief may be granted." Fed. R. Civ. P. 12(b)(6). When evaluating a Rule 12(b)(6) motion, the court must take the facts alleged in the complaint as true and construe them in the light most favorable to the plaintiff. Resnick , 693 F.3d at 1321–22. To survive a Rule 12(b)(6) motion to dismiss, "a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). "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." Id. (citing Twombly , 550 U.S. at 556, 127 S.Ct. 1955 ). "The plausibility standard ... asks for more than a sheer possibility that a defendant has acted unlawfully," and when the "complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement of relief." Id. (citing Twombly , 550 U.S. at 557, 127 S.Ct. 1955 ). The complaint thus must contain more than mere "labels and conclusions, and a formulaic recitation of a cause of action's elements." Twombly , 550 U.S. at 555, 127 S.Ct. 1955. The plaintiff must allege facts that "raise the right to relief above the speculative level." Id.
III. Analysis
Experian has moved to dismiss the claim against it pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which this court may grant relief. [Doc. No. 12]. Experian argues that Hill has not alleged the injury-in-fact and causation necessary for standing, and that she has failed to tailor her claim to the "factual inaccuracy necessary for a claim under the FCRA, focusing instead on a legal question that is beyond the scope of Experian's duties under the FCRA." [Doc. No. 12-1 at 8]. Hill responds that she has sufficiently alleged causation and that her complaint shows a "clear connection" between the alleged harm and Experian's actions. [Doc. No. 16 at 18]. She also contends that her dispute letter did not require Experian to determine the legal status of the Fingerhut debt but rather sought to ensure the account was delineated as having been included in her bankruptcy petition. [Id. at 1-3].
A. Does the plaintiff have standing?
"It is by now axiomatic that ‘Article III of the Constitution limits the judicial power of the United States to the resolution of cases and controversies.’ " DiMaio v. Dem. Nat'l Comm. , 520 F.3d 1299, 1301 (11th Cir. 2008) (quoting Valley Forge Christian Coll. v. Ams. United for Separation of Church & State, Inc. , 454 U.S. 464, 471, 102 S.Ct. 752, 70 L.Ed.2d 700 (1982) ) (internal quotation marks omitted). The issue of standing is an essential part of the case-or-controversy requirement. Id. To satisfy Article III's standing requirements, a plaintiff must show that (1) she has suffered an injury-in-fact that is concrete and particularized as well as actual or imminent; (2) the injury is fairly traceable to the challenged conduct of the defendant; and (3) the injury is likely to be redressed by a favorable decision. Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc. , 528 U.S. 167, 180–81, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000) (citing Lujan v. Defenders of Wildlife , 504 U.S. 555, 560–61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) ). For an injury to be particularized, it "must affect the plaintiff in a personal and individual way." Lujan , 504 U.S. at 560 n.1, 112 S.Ct. 2130. To be "concrete," the injury need not be tangible, but it must be "real" and not "abstract." Michael v. HOVG, LLC , 232 F. Supp. 3d 1229, 1234 (S.D. Fla. 2017) (citing Spokeo, Inc. v. Robins , ––– U.S. ––––, 136 S. Ct. 1540, 1548–49, 194 L.Ed.2d 635 (2016) ). The party that invokes federal jurisdiction has the burden of proving standing. Common Cause/Ga. v. Billups , 554 F.3d 1340, 1349 (11th Cir. 2009).
Experian avers that Hill has failed to plead that she suffered an injury-in-fact, and therefore does not have Article III standing to pursue her FCRA claim. Experian contends that Hill has "offer[ed] only vague and conclusory allegations that her credit score was lowered." [Doc. No. 12-1 at 9]. In the complaint, Hill cited to Pedro v. Equifax, Inc. , 868 F.3d 1275 (11th Cir. 2017), among other cases, in support of the proposition that an allegation of a lowered credit score is sufficient to plead a concrete injury-in-fact. [Doc. No. 1 at 44, Compl. ¶160]. Experian argues that Pedro is inapposite because the FRCA claim in that case included a more specified allegation (a drop of more than 100 points in the credit score) than Hill has provided here. [Doc. No. 12-1 at 10]. In Pedro , the Eleventh Circuit determined that the plaintiff had "alleged a concrete injury because the harm caused by the alleged violation of the Act — the reporting of inaccurate information about [the plaintiff's] credit to a credit monitoring service — has a close relationship to the harm caused by the publication of defamatory information, which has long provided the basis for a lawsuit in English and American courts." This reasoning was not based merely on the fact that the plaintiff had alleged a quantifiable drop in her credit score. 868 F.3d at 1279-80. The harm alleged by Hill, like that of the plaintiff in Pedro , has a close relationship to a common law harm.
In Spokeo , the Supreme Court found that when determining if an intangible harm constitutes injury-in-fact "it is instructive to consider whether an alleged intangible harm has a close relationship to a harm that has traditionally been regarded as providing a basis for a lawsuit in English or American courts." ––– U.S. ––––, 136 S.Ct. 1540, 1549, 194 L.Ed.2d 635 (2016).
Hill has also alleged mental distress, claiming that she has experienced "aggravation, frustration, and stress" as a result of Experian's actions. [Doc. No. 1 at 47, Compl. ¶168]. "[D]amages for mental distress are recoverable under the FCRA even if the consumer has suffered no out-of-pocket losses." Moore v. Equifax Info. Servs. LLC , 333 F. Supp. 2d 1360, 1365 (N.D. Ga. 2004). In addition to the damaged credit score and mental anguish, Hill has alleged that she suffered out-of-pocket expenses. [Id. at 46, Compl. ¶166]. The FCRA specifically provides that "any actual damages sustained by the consumer" are recoverable. 15 U.S.C. § 1681n(a)(1)(A). The court finds that Hill has adequately alleged that she suffered an injury-in-fact caused by the actions of the defendant. She therefore has standing to pursue her claim.
B. Does the complaint plead a factual inaccuracy necessary to support a claim under the Fair Credit Reporting Act?
Experian also argues that Hill has not alleged a factual inaccuracy on her credit report as required under the FCRA. [Doc. No. 12-1 at 13]. It asserts that she instead alleges "that Experian should have scoured her bankruptcy filings to determine the legal status of the disputed account." [Id. ]. Experian remarks that Hill has not alleged the reporting was factually inaccurate, and that in fact, it was accurate by stating that the account was closed and written off. [Id. at 15]. Hill counters that she has alleged the report was inaccurate because it was "incomplete for failing to note the Account's inclusion in her Chapter 13 bankruptcy." [Doc. No. 16 at 2]. Hill has alleged Experian was aware of the bankruptcy because she included the order of discharge with her dispute letter.
The language of the FCRA, on its face, requires more than technical accuracy; it requires "maximum possible accuracy of the information concerning the individual about whom the report relates." 15 U.S.C. § 1681e(b). Including information about the bankruptcy in the section about the debt does not require Experian to make a legal determination. See Campbell v. Equifax Infor. Servs., LLC , No. 4:18-cv-53, 2019 WL 1332375, at *7 (S.D. Ga. Mar. 25, 2019) (finding that "[w]hether Plaintiff's credit report accurately showed that her accounts with [the creditor] had been discharged in bankruptcy is a question of fact, not law. The legal status of her debt had already been decided by order of the court — discharged. Thus, per the allegations in Plaintiff's Complaint, there was no legal issue remaining for Defendant to determine, only the obligation to accurately modify the information [the creditor] furnished to [the defendant] so that it reflected the bankruptcy court's discharge order.") This is particularly so in light of the fact that Hill has alleged that she "included with her dispute a copy of the Discharge Order showing Fingerhut's inclusion in the discharge and notification of the discharge." [Doc. No. 1 at 41, Compl. ¶146].
Experian asserts that it is the responsibility of the furnisher of the information (in this case Bluestream Brands) to investigate Hill's claim of inaccuracy, and that Hill is inappropriately attempting to shift that duty to Experian. [Doc. No. 27 at 3]. However, 15 U.S.C. § 1681i(a)(1)(A) requires the credit reporting agency to "conduct a reasonable investigation" into a disputed item. Experian argues that there is a distinction between its responsibility to reinvestigate under 15 U.S.C. § 1681i(a)(1)(A) and the furnisher's responsibility under 15 U.S.C. § 1681s to investigate the claim of inaccuracy. [Doc. No. 27 at 3]. However, the cases cited by Experian do not go to the heart of this distinction; rather, they concern the credit agency not having a duty to make a legal determination about the status of the plaintiff's debts following a bankruptcy action. The court has already addressed that issue above.
Experian has filed a surreply to its motion to dismiss without seeking leave of court. [Doc. No. 27]. The filing of surreplies is not authorized under either the local rules of this court or the Federal Rules of Civil Procedure. Byrom v. Delta Family Care—Disability and Survivorship Plan , 343 F.Supp.2d 1163, 1188 (N.D. Ga. 2004). "Although the Court may in its discretion permit the filing of a surreply, this discretion should be exercised in favor of allowing a surreply only where a valid reason for such additional briefing exists, such as where the movant raises new arguments in its reply brief." Fedrick v. Mercedes-Benz USA, LLC , 366 F. Supp. 2d 1190, 1197 (N.D. Ga. 2005) (citation omitted). The court in this case will consider the surreply because it is in response to the four notices of supplemental authority filed by Hill after briefing on the motion to dismiss had closed. For edification on how to properly proceed in future cases, Experian is referred to Section II(A)(5) of Appendix H to this court's local rules states that "[i]f filing a document requires leave of the court, such as an amended complaint or a sur-reply brief, the attorney shall attach the proposed document as an exhibit to the motion."
IV. Conclusion
The court finds that Hill has stated a plausible claim on which this court may grant relief. Experian's motion to dismiss is therefore DENIED. [Doc. No. 12]. The clerk is DIRECTED to refer this case back to the magistrate judge for further proceedings.
SO ORDERED this 29th day of September, 2020.