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Hollins v. Trans Union, LLC

United States District Court, S.D. Texas, Houston Division

May 3, 2019

TRANS UNION LLC, et al., Defendants.


         Pending before the court[1] is Defendant Trans Union LLC's (“Trans Union”) Motion to Dismiss (Doc. 18). The court has considered the motion, the response, the reply, and the applicable law. For the reasons set forth below, the court RECOMMENDS that the motion be DENIED.

         I. Case Background

         On August 27, 2018, Plaintiff filed this lawsuit, alleging that Trans Union and others violated the Fair Credit Reporting Act[2](“FCRA”) by preparing credit reports concerning Plaintiff that contained false, misleading, and inaccurate information.[3]Specifically, Plaintiff alleged that the reports issued by Trans Union inaccurately identified the status of certain accounts as “included in bankruptcy” instead of “discharged in bankruptcy.”[4]Plaintiff further alleged that Trans Union violated the FCRA by negligently or willfully failing to follow reasonable procedures to assure the maximum possible accuracy of Plaintiff's report and, upon her dispute, negligently or willfully failing to conduct a reasonable reinvestigation.[5]

         Plaintiff alleged that she “ha[d] been forced to refrain from applying for new credit or more favorable terms on existing credit lines.”[6] Plaintiff claimed that she suffered actual damages, mental anguish and suffering, humiliation, and embarrassment.[7]Plaintiff sought statutory or actual damages, punitive damages, costs, interest, and attorneys' fees.[8]

         On November 28, 2018, Trans Union filed the pending motion to dismiss.[9] Shortly thereafter, Plaintiff filed a notice of dismissal as to one of the other defendants and filed an amended complaint that reflected that dismissal.[10] The amended complaint featured several substantive changes to the factual allegations, including the omission of the allegation that Plaintiff had been “forced to refrain” from credit applications and negotiations.[11]Plaintiff did not amend any other part of the complaint.

         II. Dismissal Standard

         Rule 12(b)(6) allows dismissal of an action whenever the complaint, on its face, fails to state a claim upon which relief can be granted. The court should construe the allegations in the complaint favorably to the pleader and accept as true all well-pleaded facts. Harold H. Huggins Realty, Inc. v. FNC, Inc., 634 F.3d 787, 803 n.44 (5th Cir. 2011)(quoting True v. Robles, 571 F.3d 412, 417 (5th Cir. 2009)).

         A complaint need not contain “detailed factual allegations” but must include sufficient facts to indicate the plausibility of the claims asserted, raising the “right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007); see also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Plausibility means that the factual content “allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. 678. A plaintiff must provide “more than labels and conclusions” or “a formulaic recitation of the elements of a cause of action.” Twombly, 550 U.S. at 555. In other words, the factual allegations must allow for an inference of “more than a sheer possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S. 678.

         III. Discussion [12]

         Congress designed the FCRA to meet “the needs of commerce for consumer credit, personnel, insurance, and other information” while also ensuring “the confidentiality, accuracy, relevancy, and proper utilization” of consumer information. 15 U.S.C. § 1681(b); Stevenson v. TRW Inc., 987 F.2d 288, 292 (5th Cir. 1993). “The FCRA imposes a host of requirements concerning the creation and use of consumer reports.” Spokeo, Inc. v. Robins, ___ U.S. ___, 136 S.Ct. 1540, 1545 (2016).

         The FCRA requires that consumer reporting agencies “follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.” 15 U.S.C. § 1681e(b); see also Spokeo, Inc., 136 S.Ct. at 1553-54 (quoting 15 U.S.C. § 1681e(b)). The statute also imposes on the consumer reporting agencies a duty to conduct a reasonable reinvestigation into any item that is disputed by a consumer and to correct any inaccuracy. 15 U.S.C. § 1681i(a)(1)(A); see also Pinner v. Schmidt, 805 F.2d 1258, 1262 (5thCir. 1986). The question with regard to latter duty is whether the consumer reporting agency could have discovered that the item was inaccurate by reasonably reinvestigating the matter. Toliver v. Experian Info. Sols., Inc., 973 F.Supp.2d 707, 730, 732 (S.D. Tex. 2013)(quoting DeAndrade v. Trans Union LLC, 523 F.3d 61, 68 (1stCir. 2008)).

         Pursuant to the Fifth Circuit's direction, the court interprets the FCRA in favor of the consumer. See Wagner v. TRW, Inc., 139 F.3d 898, 898 (5th Cir. 1998)(unpublished). The FCRA allows a consumer to sue any person who negligently or willfully violates any duty imposed by the statute. 15 U.S.C. §§ 1681n, 1681o. If a consumer suffers damages as a result of a consumer reporting agency's negligent noncompliance with the FCRA, the agency is liable for actual damages, costs, and reasonable attorney's fees. 15 U.S.C. § 1681o; see also Stevenson, 987 F.2d at 292. Punitive damages are available in the case of willful noncompliance. 15 U.S.C. § 1681n; see also Stevenson, 987 F.2d at 292.

         Trans Union asserts that the key issue in this case is whether “included in bankruptcy” constituted a factual inaccuracy, which is an element of proof for the claims brought against Trans Union. On that issue, Trans Union argues that “included in bankruptcy” is not inaccurate and that “to report the account any differently would risk running afoul of the court's ruling in White, et al. v. Experian Info. Sols, Inc., et al.[13]

         The White order on which Trans Union relies is, according to Trans Union's brief, an unpublished approval order in a Chapter 7 class-action settlement entered in a case out of the U.S. District Court for the Central District of California. Trans Union provides neither a copy of the cited order nor an adequate citation. Regardless, the court is not moved by Trans Union's discussion of that unpublished, non-precedential, and distinguishable order. Furthermore, Trans Union's caution that the court “would risk running afoul” of such an order carries no ...

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