The opinion of the court was delivered by: Pratter, J.
Plaintiff Joseph Dively filed this action, alleging violations of the Fair Credit Reporting Act that arose from the alleged inaccurate inclusion of tax liens on credit reports produced by Defendants Trans Union and MDA Lending Solutions (now "DataQuick"). DataQuick has moved to dismiss Mr. Dively's Amended Complaint. After oral argument on January 17, 2012, the matter is ripe for decision.
Defendant DataQuick is a consumer reporting agency and a reseller of consumer information which takes information furnished by Trans Union, Equifax, and Experian to create tri-merge credit reports for sale to third parties. Plaintiff Joseph Dively complains that Defendants TransUnion and DataQuick inaccurately included two tax liens, which were actually the responsibility of his father (also named Joseph Dively), on his credit report.
More specifically, in December 2010, DataQuick created a tri-merge report concerning the Plaintiff that ascribed the tax liens at issue to him, despite the fact that of the three CRAs from whom DataQuick obtained information, only TransUnion reported the liens. Mr. Dively alleges that DataQuick did nothing to reconcile this inconsistent reporting of the liens before selling the report to third parties, nor did it perform any investigation to verify the information. He contends that "even a cursory review" of the tax documents would demonstrate that the social security number associated with the liens was not his. Mr. Dively alleges that the Defendants' reports have been a substantial factor in precluding him from receiving credit offers and opportunities and from receiving the most favorable terms in financing and interest rates, and that he has suffered lost credit opportunities, harm to his credit reputation and credit score, and emotional distress as a result. He generally alleges that the Defendants' actions were malicious, intentional, willful, reckless, and grossly negligent.
Although his original complaint brought multiple claims under both federal and state law against DataQuick, his Amended Complaint (filed after DataQuick moved to dismiss the original complaint) asserts only one count against DataQuick -- for violation of § 1681e(b) of the FCRA. In that one count, he alleges that DataQuick negligently and willfully failed to employ and follow reasonable procedures to assure maximum possible accuracy of his credit report.
A Rule 12(b)(6) motion to dismiss tests the sufficiency of a complaint. Conley v. Gibson, 355 U.S. 41, 45--46 (1957). Although Rule 8 of the Federal Rules of Civil Procedure requires only "a short and plain statement of the claim showing that the pleader is entitled to relief," Fed. R. Civ. P. 8(a)(2), in order to "give the defendant fair notice of what the ... claim is and the grounds upon which it rests," Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotation marks omitted) (alteration in original) (quoting Conley, 355 U.S. at 47), the plaintiff must provide "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. (citation omitted).
To survive a motion to dismiss, the plaintiff must plead "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009); see also Matrixx Initiatives, Inc. v. Siracusano, 131 S. Ct. 1309, 1323 (2011). Specifically, "[f]actual allegations must be enough to raise a right to relief above the speculative level . . . ." Twombly, 550 U.S. at 555(citations omitted). The question is not whether the claimant will ultimately prevail but whether the complaint is "sufficient to cross the federal court's threshold." Skinner v. Switzer, 131 S. Ct. 1289, 1296 (2011) (citation omitted). An assessment of the sufficiency of a complaint is thus "a context-dependent exercise" because "[s]ome claims require more factual explication than others to state a plausible claim for relief." West Penn Allegheny Health Sys., Inc. v. UPMC, 627 F.3d 85 (3d Cir. 2010) (citations omitted).
In evaluating the sufficiency of a complaint, the Court adheres to certain well-recognized parameters. For one, the Court "must only consider those facts alleged in the complaint and accept all of those allegations as true." ALA, Inc. v. CCAIR, Inc., 29 F.3d 855, 859 (3d Cir. 1994) (citing Hishon v. King & Spalding, 467 U.S. 69, 73 (1984)); see also Twombly, 550 U.S. at 555 (stating that courts must assume that "all the allegations in the complaint are true (even if doubtful in fact)"); Mayer v. Belichick, 605 F.3d 223, 230 (3d Cir. 2010) ("[A] court must consider only the complaint, exhibits attached to the complaint, matters of public record, as well as undisputedly authentic documents if the complainant's claims are based upon these documents."). Concomitantly, the Court must also accept as true all reasonable inferences that may be drawn from the allegations, and view those facts and inferences in the light most favorable to the non-moving party. Rocks v. Philadelphia, 868 F.2d 644, 645 (3d Cir. 1989); Revell v. Port Auth. of N.Y. & N.J., 598 F.3d 128, 134 (3d Cir. 2010). Nonetheless, the Court need not accept as true "unsupported conclusions and unwarranted inferences," Doug Grant, Inc. v. Greate Bay Casino Corp., 232 F.3d 173, 183-84 (3d Cir. 2000) (citing City of Pittsburgh v. West Penn Power Co., 147 F.3d 256, 263 n.13 (3d Cir. 1998)), or the plaintiff's "bald assertions" or "legal conclusions," Morse v. Lower Merion Sch. Dist., 132 F.3d. 902, 906 (3d Cir. 1997). DISCUSSION
In the Third Circuit, to state a claim under § 1681e(b), a plaintiff must allege:
(1) inaccurate information was included in a consumer's credit report; (2) the inaccuracy was due to defendant's failure to follow reasonable procedures to assure maximum possible accuracy; (3) the consumer suffered injury; and (4) the consumer's injury was caused by the inclusion of the inaccurate entry.
Philbin v. TransUnion Corp., 101 F.3d 957, 963 (3d Cir. 1996).*fn2 The Third Circuit Court of Appeals has yet to settle on the precise burden on the plaintiff as to the second element, i.e., the cause of the inaccuracy being a failure to follow reasonable procedures, which is the only element at issue here. However, the appellate court has cited three possible standards used by other circuits. See id. at 964-66. The first test requires a plaintiff to show "some unspecified quantum of evidence" beyond a mere inaccuracy in order to engage the jury on a § 1681e(b) claim, which can include, for example, merely showing inconsistencies between two different reports concerning the plaintiff. The second test would allow the jury to infer unreasonable procedures from any inaccuracy, essentially imposing on defendants an affirmative obligation to prove that their procedures were reasonable, while not formally shifting the burden of proof to the defendant. The third test is akin to the common law res ipsa loquitur rule, and allows a defendant to escape trial only if it can prove as a matter of law that it acted reasonably. Id.; see also Cortez v. TransUnion, 617 F.3d 688, 710 (3d Cir. 2010) (continuing to refuse to choose one of the three possible frameworks).
DataQuick specifically states that it does not seek to assert that Mr. Dively insufficiently pleaded his claim, but rather argues that he simply cannot state a claim against DataQuick under the facts alleged as a matter of law. DataQuick essentially tries to cut to the chase at this early stage of the case. It claims that as a matter of law, absent prior notice from the consumer of inaccuracies, DataQuick is entitled to rely on the information provided by the three major CRAs, even if only one of those CRAs reports certain information. DataQuick attempts to ascribe to Congress an intention to relieve resellers such as DataQuick from any duty to "reconcile" the reports of the three major CRAs by noting that Congress never imposed a specific duty on resellers to do so and that Congress specifically exempted resellers from a duty to ...