Gesin v. Equifax Information Services Llc

Brief/Memorandum in Support

N.D. Tex.July 5, 2017

i UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION LISA L. GESIN, § § Plaintiff, § CIVIL CASE NO: 3:16-cv-03277-N § v. § § EQUIFAX INFORMATION SERVICES § LLC, § § Defendant. § DEFENDANT EQUIFAX INFORMATION SERVICES LLC’S BRIEF IN SUPPORT OF MOTION TO DISMISS Respectfully submitted by. Kendall W. Carter Texas Bar No. 24091777 kcarter@kslaw.com KING & SPALDING LLP 1180 Peachtree Street NE Atlanta, GA 30309 Tel (404) 572-2459 Daniel D. McGuire L.R. 83.10 Local Counsel Texas Bar No. 24081282 dmcguire@polsinelli.com POLSINELLI PC 2950 N. Harwood St., Suite 2100 Dallas, Texas 75201 Tel (214) 661-5580 Counsel for Equifax Information Services LLC Case 3:16-cv-03277-N Document 42 Filed 07/05/17 Page 1 of 29 PageID 373 ii TABLE OF CONTENTS INTRODUCTION ................................................................................................................... 1 FACTUAL BACKGROUND .................................................................................................. 3 STANDARD OF REVIEW ..................................................................................................... 4 ARGUMENT ............................................................................................................................ 4 I. PLAINTIFF FAILS TO ADEQUATELY ALLEGE THAT EQUIFAX’S REPORTING OF THE DISCOVER BANK ACCOUNT WAS INACCURATE. .............................................................................................................. 6 A. Plaintiff Fails to Establish an Inaccuracy Under Either §§ 1681e(b) or 1681i(a). .......6 B. Case Law, Regulatory Guidance, and Industry Practice Counsel in Favor of Dismissal. ......................................................................................................................9 1. Jurisprudence counsels in favor of dismissal. ............................................... 9 2. Regulatory guidance counsels in favor of dismissal. .................................. 14 3. Industry practice counsels in favor of dismissal. ........................................ 16 C. Plaintiff’s Allegation That Reporting Plaintiff’s Authorized User Status Could Be Misinterpreted Or Misused Does Not Mean That It Is Misleading. ......................19 II. Plaintiff Fails to Adequately Allege that She Suffered Actual Rather Than Speculative Damages Caused by Equifax. .................................................................. 21 A. Plaintiff Fails to Allege That She Suffered Actual Damages. ....................................21 B. Plaintiff’s Allegations Concerning Her Damages Are Speculative. ...........................22 CONCLUSION ...................................................................................................................... 23 Case 3:16-cv-03277-N Document 42 Filed 07/05/17 Page 2 of 29 PageID 374 iii TABLE OF AUTHORITIES Page(s) Cases Ashcroft v. Iqbal, 556 U.S. 662 (2009) ...................................................................................................................4 Bailey v. Equifax Information Services LLC, No. 13-10377, 2013 WL 3305710 (E.D. Mich. July 1, 2013) .................................9, 11, 17, 19 Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) ...................................................................................................................4 Cahlin v. Gen. Motors Acceptance Corp., 936 F.2d 1151 (11th Cir. 1991) ...........................................................................................7, 16 Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876 (9th Cir. 2010) .............................................................................................20, 21 Casella v. Equifax Credit Info. Servs., 56 F.3d 469 (2nd Cir. 1995).....................................................................................................22 Dalton v. Capital Associated Indus., Inc., 257 F.3d 409 (4th Cir. 2001) .....................................................................................................9 DeAndrade v. Trans Union LLC, 523 F.3d 61 (1st Cir. 2008) ..................................................................................................5, 21 Frazier v. Equifax Information Servies, LLC, 2:16-cv-01273-JRG-RSP, Dkt No. 28 (E.D. Tex June 5, 2017) ........................................12, 13 Frazier v. Equifax Information Servies, LLC, 2:16-cv-01273-JRG-RSP, Dkt No. 31 (E.D. Tex June 20, 2017) ............................................12 Garrett v. Trans Union, 2006 WL 2850499 (S.D.Ohio 2006)........................................................................................22 Gen. Retail Servs., Inc. v. Wireless Toyz Franchise, LLC, 255 Fed. Appx. 775 (5th Cir. 2007) ...........................................................................................3 Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147 (9th Cir. 2009) ...................................................................................................8 Henson v. CSC Credit Servs., 29 F.3d 280 (7th Cir. 1994) .....................................................................................................20 Case 3:16-cv-03277-N Document 42 Filed 07/05/17 Page 3 of 29 PageID 375 iv Heupel v. Trans Union LLC, 193 F. Supp. 2d 1234 (N.D. Ala. 2002) .........................................................................8, 10, 13 Isquith for & on Behalf of Isquith v. Middle S. Utilities, Inc., 847 F.2d 186 (5th Cir. 1988) .....................................................................................................3 Johnson v. Equifax, Inc., 510 F. Supp. 2d 638 (S.D. Ala. 2007) ................................................................................10, 13 Johnson v. Trans Union, LLC, No. 10 C 6960, 2012 WL 983793 (N.D. Ill. Mar. 22, 2012), aff’d, 524 F. App’x 268 (7th Cir. 2013) .......................................................................................................21 Ladner v. Equifax Credit Information Services, Inc., 828 F. Supp. 427 (S.D. Miss. 1993).........................................................................................22 Norman v. Experian Info. Sols., Inc., No. 3:12-CV-128-B, 2013 WL 1774625 (N.D. Tex. Apr. 25, 2013) ............................5, 17, 21 Ostiguy v. Equifax Info. Servs., LLC, No. 5:16-CV-790-DAE, 2017 WL 1842947 (W.D. Tex. May 4, 2017) ........................6, 10, 11 Oxford Asset Mgmt. v. Jaharis, 297 F.3d 1182 (11th Cir. 2002) .................................................................................................4 Pagazani v. Equifax Info. Services, LLC, 15-CV-61467, 2016 WL 2997586 (S.D. Fla. May 25, 2016) ....................................................8 Pedro v. Equifax, Inc., 186 F. Supp. 3d 1364, 1370 (N.D. Ga. 2016) ..........................................................................13 Pedro v. Equifax, Inc., No. 1:15-CV-3735-TWT, 2016 WL 2756217 (N.D. Ga. May 11, 2016) ................................13 Reed v. Experian, Info. Solutions, Inc., 321 F. Supp. 2d 1109 (D. Minn. 2004) ....................................................................................22 Seamans v. Temple Univ., 744 F.3d 853 (3d Cir. 2014).......................................................................................................9 Sepulvado v. CSC Credit Servs., 158 F.3d 890 (5th Cir. 1998), cert. denied, 526 U.S. 1044 (1999) ..............................5, 6, 7, 17 Spector v. TransUnion LLC First USA Bank, N.A., 301 F. Supp. 2d 231 (D. Conn. 2004) ..................................................................................1, 13 Toliver v. Experian Info. Sols., Inc., 973 F. Supp. 2d 707 (S.D. Tex. 2013) ...............................................................................17, 19 Case 3:16-cv-03277-N Document 42 Filed 07/05/17 Page 4 of 29 PageID 376 v Washington v. CSC Credit Services Inc., 199 F.3d 263 (5th Cir. 2000) .....................................................................................................5 Westra v. Credit Controls of Pinellas, 409 F.3d 825 (7th Cir. 2005) .....................................................................................................8 Zahran v. Bank of Am., No. 15-C-1968, 2016 WL 826402 (N.D. Ill. Mar. 3, 2016) ......................................................9 Zoluaga v. BAC Home Loans Servicing, L.P., No. 4:11-CV-369, 2011 WL 5600377 (E.D. Tex. Nov. 16, 2011) ............................................8 Statutes Equal Credit Opportunity Act, 15 U.S.C. § 1691 et seq. .........................................................14, 18 15 U.S.C. § 1691a ..........................................................................................................................14 15 U.S.C. § 1691b ..........................................................................................................................14 Fair Credit Reporting Act, 15 U.S.C. §§ 1681-1681x ........................................................... passim 15 U.S.C. § 1681e(b) ............................................................................................................. passim 15 U.S.C. § 1681i ................................................................................................................... passim 15 U.S.C. § 1681s-2 .........................................................................................................................2 Other Authorities 12 C.F.R. § 1002.10 .......................................................................................................................14 Robert B. Avery, Kenneth P. Brevoort & Glen B. Canner, Credit Where None is Due? Authorized User Account Status and “Piggybacking Credit” (Fed. Reserve Bd. Mar. 5, 2010) .........................................................................................................3 Federal Rule of Civil Procedure 12(b) .............................................................................................3 Case 3:16-cv-03277-N Document 42 Filed 07/05/17 Page 5 of 29 PageID 377 1 INTRODUCTION This case arises under the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. §§ 1681- 1681x. Plaintiff Lisa L. Gesin alleges that Equifax, a consumer reporting agency (“CRA”), willfully and/or negligently violated two sections of the FCRA. (Amended Complaint, Doc. 39 at ¶ 39). First, Plaintiff alleges that Equifax violated the FCRA § 1681i(a) by failing to reasonably reinvestigate her dispute that reporting her Discover Bank account ******59741* (“Discover Bank Account”) was inaccurate. (Id. at ¶¶ 40, 48, 49). Second, Plaintiff alleges that Equifax violated the FCRA § 1681e(b) by inaccurately reporting her Discover Bank Account. (Id. at ¶ 50). Plaintiff expressly concedes that she was an authorized user of the Discover Bank Account, but nevertheless contends that because she was not financially responsible for the payments due on the Discover Bank Account, Equifax’s reporting of the Discover Bank Account was inaccurate. (Id. at ¶¶ 11, 14, 15, 18).). Plaintiff seeks actual, statutory and punitive damages, costs, and attorney’s fees. Plaintiff’s claim fails as a matter of law for two reasons. First, Plaintiff fails to adequately allege that Equifax’s reporting of the Discover Bank Account was inaccurate. Plaintiff admits that she was an authorized user on the Discover Bank Account and does not contend that the Discover Bank Account is inaccurate. Plaintiff does not allege—because she cannot—that any of those facts are inaccurate. Instead, Plaintiff contends that reporting accurate information about authorized user accounts is misleading—but only if that information is “negative.” (Id. at ¶¶ 18-21). In other words, Plaintiff’s Amended Complaint is predicated on the notion that Equifax’s reporting of negative authorized user information, though accurate, was somehow unfair. FCRA §§ 1681i(a) and 1681e(b) do not impose a subjective fairness standard for credit reporting. FCRA §§ 1681i(a) and 1681e(b) require that CRAs use reasonable Case 3:16-cv-03277-N Document 42 Filed 07/05/17 Page 6 of 29 PageID 378 2 procedures to ensure accuracy in the reporting of information sent to them by furnishers.1 Plaintiff cannot state a claim that Equifax negligently or willfully failed to comply with that obligation. Case law from this Circuit and others, as well as guidance from the Consumer Financial Protection Bureau (“CFPB”), the regulatory agency that promulgates regulations governing the consumer credit market, permits the practice. Moreover, Plaintiff’s argument that the Discover Bank Account might harm her ability to obtain credit is speculative and premised on the assumption that her status as to the Discover Bank Account will be ignored or misused; NOT that Equifax’s reporting of her authorized user status is misleading. The allegations added to the Amended Complaint provide no basis whatsoever to cure the defects set forth in Equifax’s initial motion to dismiss as they do not change the simple, cogent legal issue of whether Plaintiff can sustain claims under the FCRA that are necessarily predicated on showing an inaccuracy of the reported account. Many of the allegations espoused by Plaintiff are not properly before the Court and/or irrelevant to this legal determination. Rather, it is nothing more than white noise and an attempt to distract the Court from a straightforward legal analysis based on binding Circuit precedent. Second, the Amended Complaint failed to state with specificity facts concerning actual rather than speculative damages, cognizable under the FCRA, caused by Equifax’s alleged negligent or willful violation of the FCRA. For these reasons more fully set out below, the Court should grant Equifax’s Motion to Dismiss the Amended Complaint. Because the defects in the Amended Complaint are fatal, and Plaintiff has already been provided with leave by this Court to amend her Complaint, the dismissal should be with prejudice. 1 Under the Act, a “furnisher” is a person or company that provides consumer information to consumer reporting agencies. See 15 U.S.C. § 1681s-2. Case 3:16-cv-03277-N Document 42 Filed 07/05/17 Page 7 of 29 PageID 379 3 FACTUAL BACKGROUND An “Authorized User” is a person who is permitted by a revolving account holder to use an account without being legally liable to the creditor for any charges incurred. (Amended Complaint, Doc. 39 at ¶¶ 8, 15, 18, 19, 21). As Plaintiff expressly concedes, she is an Authorized User of the Discover Bank Account. (Id. at ¶¶ 8, 11, 14, 15). On February 8, 2016, Plaintiff’s counsel sent a letter to Equifax disputing the accuracy of Equifax’s reporting of the Discover Bank Account. (Id. at ¶ 11, 12, 13). In the February 8, 2016 dispute letter, Plaintiff’s counsel states: My client requests these Authorized User accounts be removed from her personal credit history. It is clear that Ms. Gesin is merely an Authorized User on the accounts and you clearly report her to be the Authorized User. (“February 8, 2016 Dispute Letter,” Appendix at 3 (emphasis added)).2 Plaintiff does not dispute that, consistent with industry practice, her consumer report indicated that she was an authorized user on the Discover Bank Account. See Robert B. Avery, Kenneth P. Brevoort & Glen B. Canner, Credit Where None is Due? Authorized User Account Status and “Piggybacking Credit” at 4-5 (Fed. Reserve Bd. Mar. 5, 2010) (consumer credit records “indicate whether a person individually holds, jointly holds, or is an authorized user on each of the tradelines in her credit record”) (emphasis added). Equifax clearly disclosed to 2 The February 8, 2016 Dispute Letter is referenced in the Amended Complaint no less than three times. It is a necessary part of Plaintiff’s claim under the FCRA § 1681i claim. Rule 12(b) gives a district court “complete discretion to determine whether or not to accept any material beyond the pleadings that is offered in conjunction with a Rule 12(b)(6) motion.” Isquith for & on Behalf of Isquith v. Middle S. Utilities, Inc., 847 F.2d 186, 194 (5th Cir. 1988) (citing 5 C. Wright & A. Miller, Federal Practice and Procedure § 1366 (1969); accord Gen. Retail Servs., Inc. v. Wireless Toyz Franchise, LLC, 255 Fed. Appx. 775, 783 (5th Cir. 2007). In the Dispute Letter, Plaintiff’s counsel also disputed the accuracy of a Bank of America account. Bank of America requested that the account be deleted. (Amended Complaint, Doc. 39 at ¶¶ 11, 15). Case 3:16-cv-03277-N Document 42 Filed 07/05/17 Page 8 of 29 PageID 380 4 potential credit grantors that she was not financially responsible for the debt. See Avery, Brevoort & Canner, supra, at 1 (noting that “[a]n authorized user is a person who is permitted to use a[] [credit card] account without being legally liable for any charges incurred”). Indeed, Exhibit F to the Amended Complaint clearly and unambiguously states Plaintiff’s status concerning the Discover Bank Account: “Account Holder: Authorized User.” (Doc. 39-1 at 26). STANDARD OF REVIEW To survive a motion to dismiss, a complaint must allege “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 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The complaint’s “[f]actual allegations must be enough to raise a right to relief above the speculative level on the assumption that all of the allegations in the complaint are true.” Twombly, 550 U.S. at 555 (internal citations and emphasis omitted). Under Iqbal and Twombly, all civil complaints must contain “more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Iqbal, 556 U.S. at 678). In addition, “the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678. Accordingly, “conclusory allegations, unwarranted deductions of facts or legal conclusions masquerading as facts will not prevent dismissal.” Oxford Asset Mgmt. v. Jaharis, 297 F.3d 1182, 1188 (11th Cir. 2002). ARGUMENT Both sections of the FCRA at issue in this litigation require Plaintiff to prove that the Discover Bank Account is inaccurately reporting as a threshold element in order to establish liability. To establish a prima facie case for failure to follow reasonable procedures under the FCRA § 1681e(b), Plaintiff must demonstrate: (1) that Equifax prepared a consumer report Case 3:16-cv-03277-N Document 42 Filed 07/05/17 Page 9 of 29 PageID 381 5 concerning Plaintiff that contained inaccurate information; (2) that the inaccuracy was due to Equifax’s failure to follow reasonable procedures to assure maximum possible accuracy; (3) that Plaintiff suffered a cognizable injury; and (4) that her injury was caused by the inclusion of the inaccurate entry. Norman v. Experian Info. Sols., Inc., No. 3:12-CV-128-B, 2013 WL 1774625, at *3 (N.D. Tex. Apr. 25, 2013). See also Sepulvado v. CSC Credit Servs., 158 F.3d 890, 895-96 (5th Cir. 1998), cert. denied, 526 U.S. 1044 (1999); 15 U.S.C. § 1681e(b). See also Washington v. CSC Credit Services Inc., 199 F.3d 263, 267 n. 3 (5th Cir. 2000) (“In order to pursue a cause of action based upon a willful or negligent violation of 15 U.S.C. § 1681e(b), the report sought to be attacked must be inaccurate.”); DeAndrade v. Trans Union LLC, 523 F.3d 61, 67 (1st Cir. 2008) (“[T]he weight of authority in other circuits indicates that without a showing that the reported information was in fact inaccurate, a claim brought under § 1681i must fail.”). Likewise, to establish a prima facie case for failure to conduct a reasonable reinvestigation under the FCRA § 1681i, Plaintiff must show that her consumer report: (1) contained inaccurate information; (2) that she disputed the accuracy of information on her credit file directly with the CRA; (3) that the CRA “did not reinvestigate free of charge and either record the current status of the disputed information or delete the item from the file in the manner prescribed by Section 1681i(a)(5) within the statutory period”; (4) that the CRA’s “noncompliance was negligent or willful”; (5) that Plaintiff suffered injury; and (vi) that Plaintiff’s injury was caused by the CRA’s failure to reinvestigate. Norman, 2013 WL 1774625, at *3-4; see also 15 U.S.C. § 1681i(a). Here, Plaintiff has failed to plead three essential elements: (1) Equifax prepared a consumer report concerning Plaintiff that contained any inaccuracy, (2) Plaintiff suffered a cognizable injury; and (3) Plaintiff’s injury was caused by the inaccuracy and Equifax’s failure to reinvestigate. Case 3:16-cv-03277-N Document 42 Filed 07/05/17 Page 10 of 29 PageID 382 6 I. PLAINTIFF FAILS TO ADEQUATELY ALLEGE THAT EQUIFAX’S REPORTING OF THE DISCOVER BANK ACCOUNT WAS INACCURATE. A. Plaintiff Fails to Establish an Inaccuracy Under Either §§ 1681e(b) or 1681i(a). A credit entry is “inaccurate” within the meaning the FCRA if (1) “it is patently incorrect,” or (2) “is misleading in such a way and to such an extent that it can be expected to adversely affect credit decisions.” Ostiguy v. Equifax Info. Servs., LLC, No. 5:16-CV-790-DAE, 2017 WL 1842947, at *3 (W.D. Tex. May 4, 2017) (quoting Sepulvado, 158 F.3d at 895). In Sepulvado, the district court concluded that the CRA’s consumer report was incomplete because it did not reveal (1) that a third party was the original debtor on the assigned obligation, and (2) that the “assigned” debt dated back to a 1988 mortgage foreclosure. Id. at 896. The district court further concluded that the CRA’s failure to include these details about the assigned debt rendered the consumer report so misleading that it was “inaccurate” within the meaning of the statute. Id. Finally, the district court concluded that the inaccuracy was caused by CRA’s failure to adopt reasonable procedures because the CRA could have easily eliminated any ambiguity by simply supplying additional information about the nature of the account. Id. The Fifth Circuit, however, disagreed and found that the reporting was neither misleading nor inaccurate as follows: [The consumer] report may have been incomplete, but it was not, as the district court found, facially misleading or inaccurate when prepared. CSC’s use of the term “assigned” (as compared to the phrase “open date” in ACT’s report) would have placed a creditor on notice that the obligation existed before the March 1994 assignment date. Id. The gravamen of Plaintiff’s Amended Complaint is that Equifax violated §§ 1681e(b) and 1681i(a) because her consumer report included negative information concerning the Case 3:16-cv-03277-N Document 42 Filed 07/05/17 Page 11 of 29 PageID 383 7 Discover Bank Account on which she was an authorized user. (Amended Complaint, Doc. 39 at ¶¶ 7-21). But Plaintiff expressly concedes that she was an authorized user on the Discover Bank Account (id.), and provided Exhibit F to the Amended Complaint that clearly shows Equifax reported her as such (Doc. 39-1 at 26). Plaintiff does not dispute that her consumer report accurately reflected that she was an authorized user. (February 8, 2016 Dispute Letter, Appendix at 1). Thus, Plaintiff cannot state a claim under §§ 1681e(b) or 1681i(a). Plaintiff’s consumer report undoubtedly reports her to be an authorized user. (Id.). Thus, like the consumer report at issue in Sepulvado, Plaintiff’s consumer report is neither facially misleading nor inaccurate because it “would have placed a creditor on notice” that she was not the owner of or liable for the Discover Bank Account. See Sepulvado, 158 F.3d at 896. Plaintiff fails to state a claim under the “facial accuracy” approach because the information in her consumer report unquestionably was accurate on its face. Based on Plaintiff’s counsel’s February 8, 2016 Dispute Letter (Appendix at 3) and Exhibit F to the Amended Complaint (Doc. 39-1 at 26), her consumer report truthfully indicated that she was an authorized user, as opposed to the financially responsible party, on the Discover Bank Account. See, e.g., Cahlin v. Gen. Motors Acceptance Corp., 936 F.2d 1151, 1160 (11th Cir. 1991) (rejecting § 1681e(b) claim where credit “report accurately reflected [the creditor’s] current characterization of the account and how it had been previously reported” by the creditor to the CRA). Plaintiff’s claim fares no better under the “misleading” standard. Plaintiff does not allege that Equifax “failed to report additional or explanatory information that would have corrected any misimpressions created by” her consumer report. Cahlin, 936 F.2d at 1157-58. Instead, she alleges that reporting any derogatory information about an authorized user account is inaccurate. Case 3:16-cv-03277-N Document 42 Filed 07/05/17 Page 12 of 29 PageID 384 8 (Amended Complaint, Doc. 39 at ¶ 20). But Plaintiff’s credit records plainly indicated that she was an authorized user on the Discover Bank Account, and thus was not financially responsible for the past-due debt. In reality, Plaintiff does not attempt to plead inaccuracy under either of these standards. Plaintiff contends, instead, that Equifax should not have included authorized user information in her consumer report to begin with, whether accurate or not, because an authorized user does not have any responsibility for payment of the debt. (Id.). This is a policy argument—not a legally cognizable claim under § 1681e(b). As the court in Heupel v. Trans Union LLC, 193 F. Supp. 2d 1234, 1240 (N.D. Ala. 2002) reasoned, “the stated purpose of the Act is not to require reporting that is ‘fair and equitable to the consumer’ as the consumer or the court may see it, but ‘fair and equitable in accordance with the requirements of [the Act].’” (Quoting 15 U.S.C. § 1681(b)) (emphasis added).3 3 Plaintiff desperately attempts to avoid dismissal by arguing at length that “reasonableness of the procedures and whether the agency followed them will be jury questions in the overwhelming majority of cases.” (Amended Complaint, Doc. 39 at ¶¶ 53-54). As an initial matter, this Court need not address any issue concerning the reasonableness of Equifax’s procedure in handling the reinvestigation because Plaintiff cannot satisfy the threshold question of showing that the account was inaccurately reported. Because this necessary precondition to establishing liability has not been met, Plaintiff cannot prevail. Moreover, as stated earlier, Plaintiff has not identified any additional procedures Equifax should have undertaken. Plaintiff merely argues that an authorized user’s status can be erroneously misinterpreted or misused, but has not alleged that such occurred in this case. While questions of reasonableness are generally an issue for the jury, “summary judgment is proper if the reasonableness of the defendant’s procedures is beyond question.” Westra v. Credit Controls of Pinellas, 409 F.3d 825, 826 (7th Cir. 2005); see also Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147, 1161 (9th Cir. 2009) (“although ‘reasonableness’ is generally a question for a finder of fact, summary judgment in this case was appropriate”). This is such a case. See, e.g., Pagazani v. Equifax Info. Services, LLC, 15-CV-61467, 2016 WL 2997586, at *5 (S.D. Fla. May 25, 2016) (granting summary judgment because the plaintiff “attacks the underlying legal issue of whether an account for which an individual is only title by the Federal agencies and officials and the State officials identified in section 1681s of this title.”); Zoluaga v. BAC Home Loans Servicing, L.P., No. 4:11-CV-369, 2011 WL 5600377, , at *5–6 (E.D. Tex. Nov. 16, 2011) (an authorized user is properly Case 3:16-cv-03277-N Document 42 Filed 07/05/17 Page 13 of 29 PageID 385 9 B. Case Law, Regulatory Guidance, and Industry Practice Counsel in Favor of Dismissal. 1. Jurisprudence counsels in favor of dismissal. Other cases decided under §§ 1681e(b) and 1681i(a), including decisions in the last couple of months from both the Eastern and Western Districts of Texas, as well as regulatory guidance, confirm that dismissal is appropriate here. In Bailey v. Equifax Information Services LLC, No. 13-10377, 2013 WL 3305710 (E.D. Mich. July 1, 2013), for example, the court addressed the same question presented here: whether it is inaccurate or misleading, under § 1681e(b), to report authorized user tradeline information.4 In Bailey, plaintiff alleged that her Equifax “credit report falsely associate[d] a balance owed on [a credit card account with her] even though she is merely an authorized user on those accounts” and is “not the owner of or liable for the account.” Id. at *1, 5 (quoting plaintiff’s filings). The court rejected plaintiff’s associated with that individual’s credit history…. This is not a factual inaccuracy that could have been uncovered by a reasonable reinvestigation, but rather a legal issue implicating applicable banking and commerce laws that a credit agency such as Equifax is neither qualified nor obligated to resolve under the FCRA.”) (quotations and alterations omitted); Zahran v. Bank of Am., No. 15-C-1968, 2016 WL 826402, at *4 (N.D. Ill. Mar. 3, 2016) (“Plaintiffs’ dispute is essentially over how their lenders have characterized certain debts … not whether, for example, [the plaintiff] was actually involved in incurring the debts that appeared on his credit report.”). 4 Bailey was decided under the “misleading” standard, not, as Plaintiff claims, solely under the “technically accurate” standard: While Defendants advocate for the “technically accurate” standard, the Court notes that the Sixth Circuit, in Boggio, has found that materially misleading information in a credit report can also violate the FCRA. The Sixth Circuit therefore has relaxed the “technically standard.” Here, though, the Court finds that Plaintiff has not made factual allegations that the information reported was inaccurate or misleading. 2013 WL 3305710 at *9, n.3. Plaintiff also cites to Dalton v. Capital Associated Indus., Inc., 257 F.3d 409, 415 (4th Cir. 2001), and Seamans v. Temple Univ., 744 F.3d 853 (3d Cir. 2014), for the uncontroversial proposition that these Courts used the “materially misleading” standard for accuracy. As stated in more detail herein, Plaintiff’s claims are meritless under this standard. Case 3:16-cv-03277-N Document 42 Filed 07/05/17 Page 14 of 29 PageID 386 10 allegations and granted the defendant’s motion to dismiss, because plaintiff in fact “ha[d] the authorization to use a second person’s account [and] that second person had a balance on” the account. Id. at *6. Thus, “the information provided [by Equifax] was accurate,” precluding plaintiff’s § 1681e(b) claim. Id. So too here. Because Plaintiff’s consumer report correctly indicated that she was an authorized user on the Discover Bank Account—and because that account was in fact delinquent—Plaintiff cannot state a claim under §§ 1681e(b) or 1681i(a). Similarly, in Heupel, plaintiff asserted a claim under §§ 1681e(b) and 1681i because her consumer report indicated that a credit account on which she was a “joint obligor” had been “subject to Chapter 13 bankruptcy.” 193 F. Supp. 2d at 1237, 1240. Plaintiff claimed that including this information on her consumer report was actionable under § 1681e(b) because, although her co-obligor had indeed declared bankruptcy, the consumer report inaccurately suggested that plaintiff herself had filed for bankruptcy. See id. at 1240. The Court rejected plaintiff’s claim. Because the account had been included in bankruptcy—and because plaintiff was indeed a joint obligor on that account—TransUnion’s consumer report was “accurate within the meaning of section 1681e(b) 5 and . . . provide[d] plaintiff no basis of relief.” Id. at 1241; see also Johnson v. Equifax, Inc., 510 F. Supp. 2d 638, 646 (S.D. Ala. 2007) (holding that defendant’s “reporting of [a credit] account with the ‘included in bankruptcy’ comment was accurate,” as “[i]t [wa]s undisputed that the . . . account was included in [plaintiff’s co-obligor’s] bankruptcy,” even though plaintiff herself had not filed for bankruptcy). On May 4, 2017, the Honorable David Ezra issued his opinion in Ostiguy, a Western District of Texas case involving almost identical facts to this case. Like here, the issue in Ostiguy was whether reporting the plaintiff as an Authorized User of an account with negative payment 5 Her § 1681i(a) claim was withdrawn at oral argument. Id. Case 3:16-cv-03277-N Document 42 Filed 07/05/17 Page 15 of 29 PageID 387 11 information was inaccurate. Ostiguy, 2017 WL 1842947, at *3. Like here, the plaintiff conceded in his letters to Equifax and in his complaint that he was an Authorized User of the account. Id. The plaintiff alleged that being reported as an authorized user of the Account “is causing Plaintiff damage.” Id. The Court held that the information listing the plaintiff as an authorized user of the account was not misleading in such a way and to such an extent that it can be expected to adversely affect credit decisions. Id. (citing Sepulvado, 158 F.3d at 895). The Court additionally stated that several district courts have held that the listing of a consumer as an “authorized user” of a financial account when the consumer is actually an authorized user of the account is not inaccurate within the meaning of the FCRA. Id. (citing Bailey and Pedro). The Ostiguy court added: While Plaintiff's accurate credit entry may be negatively perceived by third parties, credit reporting agencies only have “a duty to make a reasonable effort to report ‘accurate’ information on a consumer's credit history,” and do not have a duty to only report “information which is favorable or beneficial to the consumer.” Cahlin, 936 F.2d at 1158. As the Eleventh Circuit has observed, “the very economic purpose for credit reporting companies would be significantly vitiated if they shaded every credit history in their files in the best possible light for the consumer.” Id. Ostiguy, at *4. On June 5, 2017, another Authorized User decision was issued in Frazier v. Equifax Info. Servs., LLC, No. 2:16-CV-01273-JRG-RSP, 2017 WL 2664206 (E.D. Tex. June 5, 2017), report and recommendation adopted, No. 2:16-CV-01273-JRG-RSP, 2017 WL 2654923 (E.D. Tex. June 20, 2017); see Appendix pp. 6-10. The Honorable Roy Payne recommended dismissing a case with the same set of operative facts to this case, namely a concession that the plaintiff is an authorized user and that Equifax reported her in that manner. Case 3:16-cv-03277-N Document 42 Filed 07/05/17 Page 16 of 29 PageID 388 12 A credit entry is “inaccurate” if “it is patently incorrect” or “misleading in such a way and to such an extent that it can be expected to adversely affect credit decisions.” Sepulvado v. CSC Credit Servs., Inc., 158 F.3d 890, 895 (5th Cir. 1998) (citing Pinner v. Schmidt, 805 F.2d 1258, 1262 (5th Cir. 1986)). Accepting all well-pleaded facts as true, Frazier’s complaint does not state a plausible claim under either definition of inaccuracy. See Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007). There is no dispute that the credit entry listing Frazier as an “authorized user” is accurate—Frazier admits she was an authorized user of her spouse’s account. Nor is it plausible that the credit entry is misleading. Frazier does not allege Equifax or Chase erroneously reported she was financially or legally responsible for the account. Frazier acknowledges the term “authorized user” does not connote financial obligation. See, e.g., Am. Compl. ¶ 7. As other district courts have concluded, the listing of a consumer as an “authorized user” of an account when the consumer is actually an authorized user is not misleading under the FCRA. See e.g., Bailey v. Equifax Info. Servs., LLC, No. 13-10377, 2013 WL 3305710, at *5 (E.D. Mich. July 1, 2013); Pedro v. Equifax, Inc., 186 F. Supp. 3d 1364, 1370 (N.D. Ga. 2016); Ostiguy v. Equifax Info. Servs., LLC, No. 5:16-CV-790- DAE, 2017 WL 1842947, at *3 (W.D. Tex. May 4, 2017). Indeed, when an authorized user is the account holder’s spouse, the creditor must report the authorized user pursuant rules promulgated under the Equal Credit Opportunity Act (ECOA). See 15 U.S.C. § 1691; 12 C.F.R. § 1002.10. Plaintiff has been unable to articulate any reasoned basis to conclude that reporting truthful information that is required to be reported could be deemed misleading. Id., 2017 WL 2664206, at *1; Appendix, pp. 6-8. The District Court, through the Honorable Rodney Gilstrap, adopted the recommendation of the magistrate judge in Frazier on June 20, 2017, over the objection of plaintiff. Frazier, No. 2:16-CV-01273-JRG-RSP, 2017 WL 2654923, at *1 (E.D. Tex. June 20, 2017); Appendix, pp. 9-10.6 6 On June 6, 2017, the Honorable Andrew W. Austin authored a decision in which he recommended that the district judge deny Equifax’s motion to dismiss under similar circumstances. Saunders v. Equifax Info. Sys., No. A-16-CV-525-LY, 2017 WL 2455180, at *5 (W.D. Tex. June 6, 2017). Equifax respectfully disagrees with the court’s analysis in Saunders, particularly because the court disregarded relevant case law and did not examine whether the information at issue was misleading as required under the FCRA. Instead, the court improperly focused solely on whether the information negatively affected the plaintiff’s credit rating and creditworthiness, an analysis which was expressly rejected by the court in Ostiguy. Id. at *3-4. Equifax filed an objection to the Report and Recommendation, and is awaiting a ruling from the District Court. Saunders v. Equifax Info. Sys., No. A-16-CV-525-LY, Doc. 53 (W.D. Tex. June 20, 2017). Case 3:16-cv-03277-N Document 42 Filed 07/05/17 Page 17 of 29 PageID 389 13 The decisions in Heupel, Johnson, Ostiguy, and Frazier, directly support dismissing Plaintiff’s Amended Complaint. This case is identically situated to both Ostiguy and Frazier because in all three cases, Plaintiffs conceded in dispute letters and their respective complaints that they were authorized users on the accounts in question and that Equifax reported them in that manner. Additionally, in all four cases listed above, the plaintiffs’ claims were dismissed because the reported information was accurate within the meaning of the FCRA. For the same reason, the Northern District of Georgia recently granted a motion to dismiss a class action lawsuit against Equifax, finding that Plaintiff could not establish that reporting an accurate authorized user account constituted a willful violation of the FCRA. See Pedro v. Equifax, Inc., No. 1:15-CV-3735-TWT, 2016 WL 2756217, at * 4 (N.D. Ga. May 11, 2016). The court found that “[p]lainly—under the technically accurate approach—listing accurate authorized user information does not violate [the FCRA].” Id. at 1369. The Pedro court had little difficulty concluding that authorized user reporting is not misleading either, finding that the plaintiff “has failed to cite to any authority advising the Defendants against reporting accurate authorized user information.” Id. at 1370. Despite having the benefit of Equifax’s prior motion to dismiss and an opportunity to amend her complaint, Plaintiff fails to acknowledge the existence of this case or argue that it was improperly decided.7 7 Moreover, Plaintiff’s reliance on Spector v. TransUnion LLC First USA Bank, N.A., 301 F. Supp. 2d 231, 238 (D. Conn. 2004) is misplaced as it did not involve the accuracy of the reporting of the authorized user account. Rather, Plaintiff in that case alleged that TransUnion included the bankruptcy information of her husband, the primary card holder of the account at issue, to discriminate against her on the basis of her marital status. The Court found that Plaintiff did not present any evidence to support these allegations and therefore granted TransUnion’s motion for summary judgment on that claim. Case 3:16-cv-03277-N Document 42 Filed 07/05/17 Page 18 of 29 PageID 390 14 2. Regulatory guidance counsels in favor of dismissal. Plaintiff’s claim that it is improper to report authorized user information also contradicts regulatory guidance promulgated under the Equal Credit Opportunity Act (“ECOA”), 15 U.S.C. § 1691 et seq. The ECOA prohibits credit discrimination on various bases, including marital status. See 15 U.S.C. § 1691a. To effect that broad mandate, Congress authorized the Consumer Financial Protection Bureau (“CFPB”) to promulgate regulations governing the consumer credit market. See 15 U.S.C. § 1691b. One such regulation—“Regulation B”—addresses the issue in this case. Regulation B provides that credit accounts held by married persons must be considered in a way that “reflect[s] the participation of both” the primary account-holder and his or her spouse if the spouse “is permitted to use or is contractually liable on the account.” 12 C.F.R. § 1002.10 (emphasis added). And, where a person is an authorized user on his or her spouse’s credit account, Regulation B requires that information concerning the account be included in the user’s credit records. See id. (“If a creditor furnishes credit information to a consumer reporting agency concerning an account designated to reflect the participation of both spouses, the creditor shall furnish the information in a manner that will enable the agency to provide access to the information in the name of each spouse.”). Indeed, reporting authorized user tradeline information often increases such users’ creditworthiness, as it enables them to build credit history without taking on debt. See Avery, Brevoort & Canner, supra, at 1-4. The Amended Complaint does not clarify whether Plaintiff was the spouse of the accountholder; nevertheless, the regulatory guidance issued under Regulation B also addresses situation where a non-spouse is designated as an authorized user. The Official Staff Commentary to Regulation B provides that “a creditor has the option to designate . . . all accounts with an authorized user[] to reflect the participation of both parties, whether or not the accounts are Case 3:16-cv-03277-N Document 42 Filed 07/05/17 Page 19 of 29 PageID 391 15 held by persons married to each other.” 12 C.F.R. Pt. 1002, Supp. I, § 1002.10 (emphasis added). The CFPB thus has expressly authorized creditors to send Equifax authorized user tradeline information for inclusion in the consumer reports of spousal and non-spousal authorized users alike. Consistent with this guidance, “creditors generally have followed a practice of furnishing to credit bureaus information about all authorized users, whether or not the authorized user is a spouse.” Avery, Brevoort & Canner, supra, at 1. The Amended Complaint asserts the erroneous legal conclusion that once the authorized user requests an account be deleted, the account must be deleted. (Amended Complaint, Doc. 39 at ¶ 55). Legal conclusions will not suffice to prevent dismissal. In addition, the legal conclusion is based upon a paragraph from the CFPB website (Doc. 39 at ¶ 51), which does not stand for the proposition that Plaintiff claims. Specifically, the provision merely states: “a credit bureau will generally remove the item at your request.” (Exhibit G, Doc. 39-1 at 27). The paragraph does not mandate removal; it merely states what generally occurs. (Id.). Plaintiff provides no evidence to support an allegation that an accurately reported account must be deleted simply because the Plaintiff requests it. Finally, as Plaintiff and her expert acknowledge, FICO includes authorized user accounts as it “helps lenders by providing scores that are based on a full snapshot of the consumer’s credit history.” (Amended Complaint, Doc. 39 at ¶ 17; Exhibit C, Doc. 39-1 at 10). Moreover, prohibiting consumer reporting agencies from reporting authorized user information would conflict with the congressional goals underlying the Act. “Congress enacted FCRA in 1970 to ensure fair and accurate credit reporting, promote efficiency in the banking system, and protect consumer privacy.” Safeco, 551 U.S. at 52. Elaborating on these congressional policies, the Eleventh Circuit has observed: Case 3:16-cv-03277-N Document 42 Filed 07/05/17 Page 20 of 29 PageID 392 16 Although a credit reporting agency has a duty to make a reasonable effort to report “accurate” information on a consumer’s credit history, it has no duty to report only that information which is favorable or beneficial to the consumer. Congress enacted FCRA with the goals of ensuring that such agencies imposed procedures that were not only ‘fair and equitable to the consumer,’ but that also met the ‘needs of commerce’ for accurate credit reporting. Indeed, the very economic purpose for credit reporting companies would be significantly vitiated if they shaded every credit history in their files in the best possible light for the consumer. Thus, the standard of accuracy embodied in [§ 1681e(b)] is an objective measure that should be interpreted in an evenhanded manner toward the interests of both consumers and potential creditors in fair and accurate credit reporting. Cahlin, 936 F.2d at 1158. 3. Industry practice counsels in favor of dismissal. In keeping with these policies, there are good reasons to report authorized user tradeline information even where doing so may not be favorable to the consumer. For example, an authorized user of a credit card is “legally permitted to run up charges on the account.” Avery, Brevoort & Canner, supra, at 2 n.5. As a result, authorized user tradeline information may well be relevant in evaluating the user’s creditworthiness, as it could bear on how responsibly he or she uses credit. See id. In promulgating these provisions of Reg. B, the Federal Reserve Board was motivated in part by the significant role that spousal authorized users were found to play in the maintenance of an account, such that the payment history on an account was often “as much the product of the user’s contribution as that of the obligor.” Id. at 2. The effect that eliminating authorized user accounts from credit scoring models would have on individual credit scores has been evaluated. Avery, Brevoort & Canner, supra, at 2. The results suggest that removing this information has relatively little effect on credit scores, but may reduce model predictiveness. Id. As the Amended Complaint states, including Authorized User accounts in credit reports can help people benefit from their shared management of a credit card account. (Doc. 39 at ¶ 17). It also Case 3:16-cv-03277-N Document 42 Filed 07/05/17 Page 21 of 29 PageID 393 17 helps lenders by providing credit scores that are based on a full snapshot of the consumer's credit history. (Id.). Equifax clearly reported the Discover Bank Account as an Authorized User account. Plaintiff fails to consider that the FICO scoring models properly consider the Authorized User status of the Account and reduced Plaintiff’s credit score for legitimate credit-related reasons; specifically, even though she is not legally liable for paying the charges on the Account, Plaintiff’s status as an Authorized User of a delinquent account may be predictive of reduced creditworthiness. As the Bailey court held, a FICO score reduction is not proof that a consumer report is misleading or that the FCRA was violated. Bailey, 2013 WL 3305710, at *6. The Amended Complaint does not allege that anyone, even the people who develop scoring models like FICO, were misled. As Plaintiff concedes, Equifax clearly reported the Discover Bank Account to be an Authorized User account, which is an industry term clearly understood by the people at FICO and the FICO scoring models. If scoring models like FICO use the Discover Bank Account information when calculating Plaintiff’s score, Equifax cannot be held responsible for that use of Equifax’s consumer report. So long as the consumer report is accurate, Equifax cannot be held responsible for scoring agencies’ decisions. See Toliver, 973 F. Supp. 2d at 729 (rejecting § 1681e(b) claim where plaintiff contended that reported information “cause[d] a disproportionate impact on her credit score” but “failed to produce any evidence to suggest that [the information was] in any way inaccurate”). At bottom, though, it is not up to Plaintiff to challenge the wisdom or fairness of reporting authorized user information. So long as the information a consumer reporting agency reports is “accurate”—and it is here—the agency cannot be held liable under §§ 1681e(b) or Case 3:16-cv-03277-N Document 42 Filed 07/05/17 Page 22 of 29 PageID 394 18 1891i(a). See Norman, 2013 WL 1774625 at *3; Sepulvado, 158 F.3d at 895-96. This Court should interpret and apply the Act in harmony with the regulations, regulatory guidance, and industry practice relating to the ECOA. Plaintiff attempts to save the case by citations to an excerpt of a deposition transcript from TransUnion (Exhibit A, Doc. 40 at 1), a printout of an Experian website page (Exhibit B, Doc. 39-1 at 1), and the affidavit of Brad Johnson (Exhibit D, Doc. 39-1 at 23), all to show that Equifax may respond differently from Trans Union and Experian when it comes to requests to delete an authorized user account. None of this information is properly before this Court as Mr. Johnson, TransUnion and Experian are not parties to this case.8 Moreover, the documents are wholly irrelevant to the issue of whether Equifax’s reporting of the Discover Bank Account was inaccurate or materially misleading. Because Plaintiff cannot prove the necessary precondition for establishing liability, namely that the account was inaccurately reported as a matter of law, the actions of the other two consumer reporting agencies or Equifax in another consumer’s case are beside the point. The fatal flaw in the Amended Complaint that Plaintiff cannot escape is that she was an authorized user on the Discover Bank Account and Equifax reported her as such. This cannot be cured by recitation of what may or may not happen in a dispute with respect to another consumer or another consumer reporting agency. Given the foregoing case law, regulatory guidance, and industry practice, all of which firmly support the practice of reporting authorized 8 For the same reasons, Plaintiff’s citation to other cases being litigated by Plaintiff’s counsel on behalf of other consumers in various courts within Texas (see Amended Complaint, Doc. 39 at ¶ 19c), is of no consequence. But, if the Court wishes to consider those cases, it should be noted that in each of them, Equifax filed dispositive motions based on the same straightforward legal analysis that each of those consumers admitted that he/she was an authorized user on the respective account at issue and, therefore, the accounts were accurately reported as a matter of law. And, as noted above, two courts (Ostiguy and Frazier) have already granted Equifax’s dispositive motions and dismissed the plaintiffs’ complaints with prejudice. Case 3:16-cv-03277-N Document 42 Filed 07/05/17 Page 23 of 29 PageID 395 19 user information, and the lack of any contrary authority, Plaintiff cannot establish a negligent or willful violation of the FCRA. C. Plaintiff’s Allegation That Reporting Plaintiff’s Authorized User Status Could Be Misinterpreted Or Misused Does Not Mean That It Is Misleading. Plaintiff’s expert suggests two ways in which an authorized user account may be misinterpreted or misused. First, Plaintiff’s expert’s statement that, despite clear reporting that an account is listed as an authorized user account, a loan officer who is not proficient in reading a consumer report might incorrectly assume that an authorized user is the primary account holder is nothing more than mere conjecture and speculation. (Exhibit C, Doc. 39-1 at 9-10). Even assuming arguendo that such an occurance may happen, the loan officer’s misinterpretation of industry codes does not equate to a finding that Equifax’s authorized user reporting is inaccurate or misleading. The mere possibility that a “lay person might not have understood the terminology” used by Equifax in its credit report is not sufficient to hold Equifax liable under the FCRA; rather, Plaintiff must show that potential creditors misperceived the information. See Bailey, 2013 WL 3305710, at *5 (quoting Dickens v. Trans Union Corp., 18 F. App'x 315 (6th Cir. 2001)). Plaintiff’s “mere speculation that the notation was misleading, without more, is insufficient as a matter of law to establish a prima facie case of inaccuracy in violation of § 1681e(b).” Id. Plaintiff does not allege that Equifax used any inaccurate code to designate Plaintiff’s authorized user status, or that any loan officer was misled. Plaintiff’s failure to allege that Equifax inaccurately designated the status of the Account means that Equifax is entitled to have Plaintiff’s claims dismissed. See Toliver v. Experian Info. Sols., Inc., 973 F. Supp. 2d 707, 719 (S.D. Tex. 2013). Second, Plaintiff’s expert suggests that an unauthorized user can be added to an account without her knowledge or consent, and Plaintiff’s expert goes to great lengths to dream up Case 3:16-cv-03277-N Document 42 Filed 07/05/17 Page 24 of 29 PageID 396 20 hyptheticals in which an authorized user could be harmed by the primary account holder. (Exhibit C, Doc. 39-1 at 2-3). However, Plaintiff neither alleges that she had no knowledge of being added as an authorized user, nor that she did not create the debt or benefit from the purchases that created the debt reporting on the Discover Bank Account. More importantly, Plaintiff does not allege or cite to any authority for the proposition that Equifax is required to investigate the relationship between the primary account holder and the authorized user (spouse, parent-child, partner, etc.), or the relationship between the authorized user and the account itself (creation of debt, benefit from purchases creating debt, etc.). Plaintiff seeks to have Equifax held liable under the FCRA for failing to determine the merits of a legal dispute between Plaintiff and the primary account holder. However, courts have found with respect to the initial collection of information that, absent reason to believe information from generally credible sources is inaccurate, a CRA is not required under § 1681e(b) to go beyond its initial source of information to verify that information. See, e.g., Henson v. CSC Credit Servs., 29 F.3d 280, 285–86 (7th Cir. 1994) (“Requiring credit reporting agencies to look beyond the face of every court document to find the rare case when a document incorrectly reports the result of the underlying action would be unduly burdensome and inefficient” in the absence of a consumer dispute). CRAs are not required to deem consumers “innocent until proven guilty by a proper reinvestigation.” Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876, 881 (9th Cir. 2010). Moreover, numerous courts have held that CRAs are neither qualified nor required by the FCRA to delve into the merits of a legal dispute between a consumer and a creditor to determine the accuracy of disputed account information. See, e.g., Wadley, 396 F. Supp. 2d at 679-80 (E.D. Va. 2005) (granting motion for summary judgment where plaintiff was “attempting to collaterally Case 3:16-cv-03277-N Document 42 Filed 07/05/17 Page 25 of 29 PageID 397 21 attack the basis of accurately reported information” in his credit file by arguing that he was not obligated to pay a car loan because the car was defective); Carvalho, 629 F.3d at 891 (“Because CRAs are ill equipped to adjudicate contract disputes, courts have been loath to allow consumers to mount collateral attacks on the legal validity of their debts in the guise of FCRA reinvestigation claims.”); Johnson v. Trans Union, LLC, No. 10 C 6960, 2012 WL 983793, at *7 (N.D. Ill. Mar. 22, 2012), aff'd, 524 F. App'x 268 (7th Cir. 2013) (finding that the plaintiff’s real dispute regarding the legal validity of his child support obligations was with the child support agency, and that FCRA litigation against CRAs was not the appropriate way to resolve the dispute). A reasonable reinvestigation does not require CRAs to resolve legal disputes about the underlying debts they report. See DeAndrade v. Trans Union LLC, 523 F.3d 61, 68 (1st Cir. 2008) (holding a reasonable reinvestigation does not entail resolving “legal issue[s] that a credit agency ... is neither qualified nor obligated to resolve under the FCRA”)). Put simply, “credit reporting agencies are not tribunals. They simply collect and report information furnished by others.” Carvalho, 629 F.3d at 891. II. PLAINTIFF FAILS TO ADEQUATELY ALLEGE THAT SHE SUFFERED ACTUAL RATHER THAN SPECULATIVE DAMAGES CAUSED BY EQUIFAX. In addition to proving an inaccuracy, to prevail on a claim under the FCRA under either §1681e(b) or §1681i, Plaintiff must prove that Equifax’s violation of the FCRA caused her injury. Norman, No. 3:12-CV-128-B, 2013 WL 1774625, at *3-4. A. Plaintiff Fails to Allege That She Suffered Actual Damages. Plaintiff has not alleged that she was unable to receive credit or higher prices paid for credit. She does not allege ever being denied credit based upon the appearance of the Account on any of her Equifax credit reports. She does not allege any actual financial damages. More importantly, she does not allege that any financial institution misinterpreted or found any Case 3:16-cv-03277-N Document 42 Filed 07/05/17 Page 26 of 29 PageID 398 22 consumer report concerning her to be misleading in the granting of credit. Instead, she merely states that she suffered physical, emotional and mental pain and anguish. Doc. 39 at ¶ 31. Citing to an element of the claim, without more, is insufficient to establish liability. See e.g. Slack v. Suburban Propane Partners, L.P., No. CIV.A. 10-2548 JLL, 2010 WL 3810870, at *1 (D.N.J. Sept. 21, 2010) (granting a motion to dismiss where Plaintiffs did not plead actual damages, but asserted only that they suffered a credit score reduction because “such allegations, without more, fail to raise the possibility of relief above the speculative level.”).9 B. Plaintiff’s Allegations Concerning Her Damages Are Speculative. Plaintiff does not allege, nor could she recover, damages as a result of her failure to actually apply for loans. Under similar circumstances, courts addressing FCRA claims have consistently held that an alleged lost opportunity to obtain credit is too speculative, absent evidence that the consumer actually was deprived of a loan or credit, to support a claim for damages. See, e.g., Casella v. Equifax Credit Info. Servs., 56 F.3d 469, 475 (2nd Cir. 1995) (absent a denied application, damages were too speculative for recovery); Garrett v. Trans Union, 2006 WL 2850499, at *12 (S.D.Ohio 2006) (summary judgment on claims for loss of credit opportunities or credit expectancy granted because they were too speculative); Ladner v. Equifax Credit Information Services, Inc., 828 F. Supp. 427, 431 (S.D. Miss. 1993) (no damages sustained where plaintiff did not complete a loan application after learning of credit file inaccuracies); Reed v. Experian, Info. Solutions, Inc., 321 F. Supp. 2d 1109, 1115 (D. Minn. 2004) (finding “lost economic opportunities… are not recoverable under FCRA”). 9 Equifax raised this issue in opposing Plaintiff’s motion for leave to amend, see Doc. 21 at 13, and therefore Plaintiff was already aware of this deficiency and provided an opportunity to cure it in the amended complaint. Because Plaintiff has not done so within the context of this operative pleading, she should be foreclosed from doing so in the future since she has had ample opportunity to do so. Case 3:16-cv-03277-N Document 42 Filed 07/05/17 Page 27 of 29 PageID 399 23 In Casella, for example, the Second Circuit rejected an argument that the plaintiff had suffered actual damages because he had lost opportunities to take advantage of favorable home loan mortgage interest rates and low housing prices as a result of erroneous consumer reports. 56 F.3d at 474. The court held that, “in the absence of any evidence that [the plaintiff] made an offer to purchase property or applied for a home mortgage, the ‘lost opportunity’ damages he alleged were too speculative.” Id. Here, because Plaintiff did not allege that she applied for credit, Equifax’s Motion should be granted in favor of Equifax on all such claims. CONCLUSION Plaintiff argues that an authorized user account should be deleted from her credit file because it negatively reflects upon the Plaintiff. Yet the law, the regulations, and the industry permit and in some instances require the practice. For these reasons, the Court should dismiss the Amended Complaint. Because the defects in the Amended Complaint are fatal and cannot be cured with amendment, the dismissal should be with prejudice. Respectfully submitted: July 5, 2016. /s/ Kendall W. Carter Kendall W. Carter Texas Bar No. 24091777 kcarter@kslaw.com KING & SPALDING LLP 1180 Peachtree Street NE Atlanta, GA 30309 Tel (404) 572-2459 Daniel D. McGuire L.R. 83.10 Local Counsel Texas Bar No. 24081282 dmcguire@polsinelli.com POLSINELLI PC 2950 N. Harwood St., Suite 2100 Dallas, Texas 75201 Tel (214) 661-5580 Counsel for Equifax Information Services LLC Case 3:16-cv-03277-N Document 42 Filed 07/05/17 Page 28 of 29 PageID 400 24 CERTIFICATE OF SERVICE This is to certify that I have this day filed a true and correct copy of the foregoing with the Court via ECF, which will send notification of such filing to the following: Dennis McCarty McCarty Law Firm P.O. Box 111070 Carrollton, TX 75011 Dated: July 5, 2016. /s/ Kendall W. Carter Kendall W. Carter Case 3:16-cv-03277-N Document 42 Filed 07/05/17 Page 29 of 29 PageID 401