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Dennis v. Trans Union, LLC

United States District Court, E.D. Pennsylvania

October 20, 2014

DEIDRE L. DENNIS, on behalf of herself and all others similarly situated, Plaintiff,
v.
TRANS UNION, LLC Defendant.

MEMORANDUM

RONALD BUCKWALTER, District Judge.

Currently pending before the Court is the Motion by Defendant Trans Union, LLC ("Defendant") to Dismiss Count One of Plaintiff Deidre L. Dennis ("Plaintiff")'s Class Action Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). For the following reasons, the Motion is denied.

I. FACTUAL BACKGROUND

Plaintiff is an adult individual who resides in Jersey City, New Jersey. (Compl. ¶ 2.) Defendant is a consumer reporting agency that regularly conducts business in Pennsylvania and which has a principal place of business located in Chester, Pennsylvania. ( Id. ¶ 3.)

For several years Defendant has obtained its public records information about bankruptcies, civil judgments, and tax liens from LexisNexis Risk & Information Analytics Group, Inc. ("LexisNexis"), First Advantage Corporation, a Symphony Technology Group Company ("First Advantage"), and/or other private business known as "vendors, " which furnish such information to national Credit Reporting Agencies ("CRAs"). ( Id. ¶ 6.) Plaintiff alleges that Defendant has not retrieved actual public records from courthouses or actual government offices for several years. ( Id. ¶ 7.) Even so, on Defendant's credit reports that it provides to consumers, and which it calls "personal credit reports, " Defendant falsely still lists the names and addresses of courthouses or other government offices as the true "source" of its public records information. ( Id. ¶ 8.) The public records information that Defendant receives from its vendors is not the actual court or taxing authority records, but rather is a distilled version of those records, which does not include all of the information available at the actual courthouses or government offices where the true records are housed. ( Id. ¶ 9.) Defendant knows that both it and its public records vendors, such as LexisNexis and First Advantage, make mistakes in the distilled public records information that is acquired for purposes of credit reporting. ( Id. ¶ 10.) Those distilled records frequently have numerical and other factual errors, do not contain the most updated status of the public records, invert the debtor and creditor, and are placed upon the wrong consumer's report. ( Id. ¶ 11.) Plaintiff alleges that Defendant receives hundreds, if not thousands, of consumer disputes per month about public records items being misreported on personal credit reports. ( Id. ¶ 12.)

Plaintiff asserts that disclosure of the true source of a CRA's information is vital so that certain credit reporting errors that originate at the source can be corrected and so that consumers always know who is furnishing important credit information about them. ( Id. ¶14.) Defendant, however, "never discloses to consumers the true source of the public records information that it collects and reports about them." ( Id. ¶ 15.) Rather, "Defendant conceals that its sources for public record information are private vendors that supply to it only incomplete information, which can be inaccurate or not up to date." ( Id. ¶ 16.) According to the Complaint, Defendant is more interested in maintaining the appearance that it receives actual public records from true government sources, and in protecting its low-cost private sources of public record data, than in disclosing vital information to consumers. ( Id. ¶ 17.)

With respect to Plaintiff, Defendant disclosed in her personal credit report, prepared in Trans Union's Chester, Pennsylvania facility in or about August 2012, that she had a record of a state tax lien in the amount of $33, 194. ( Id. ¶ 18.) Although Defendant represented to Plaintiff that its source for this public record was the "Albany County Clerk" located at "32 N. Russell Road" in "Albany, NY, " Defendant did not actually obtain any tax lien information about Plaintiff, or about any consumer, from "Albany County Clerk" in Albany, New York. ( Id. ¶¶ 19-20.) Defendant had instead obtained that tax lien information about Plaintiff from one of its private "vendors." ( Id. ¶ 21.) That information was "woefully deficient, " however, because Plaintiff's old tax lien had been for $3, 194, and not for $33, 194 as Defendant had listed on Plaintiff's credit report. ( Id. ¶ 22.) Moreover, official New York State Department of Taxation and Finance records reflect that the $3, 194 tax lien was "satisfied" on July 30, 2009. ( Id. ¶ 23.) In spite of this, Defendant's July and/or August 2012 report failed to indicate that the tax lien had been satisfied. ( Id. ¶ 24.) Upon information and belief, the transcription error listing the $3, 194 satisfied tax lien as an unsatisfied lien of $33, 194 originated with Defendant's public records vendor, not with the State of New York taxing authorities. ( Id. ¶ 25.) Pursuant to its systemic practice, however, Defendant failed to disclose to Plaintiff any information about its vendor, which was Defendant's true source of information regarding the tax lien at issue. ( Id. ¶ 26.) During this time, Plaintiff was seeking to secure financing for a home loan, but the entry of a $33, 194 unsatisfied tax lien appearing on her Trans Union credit report made that impossible. ( Id. ¶ 27.)

Plaintiff disputed the inaccurate tax lien with Defendant at its Chester, Pennsylvania dispute investigation center in or about July and/or August, 2012. (Id.) Defendant purportedly reinvestigated the tax lien and responded to Plaintiff in August 2012 that it had "verified" the accuracy of the $33, 194 tax lien and that there would be "no change" to her credit report. ( Id. ¶ 28.)

Plaintiff's mortgage lender advised her that the erroneous tax lien appearing on her Trans Union credit report was the "only condition stopping" Plaintiff from closing on her home loan." ( Id. ¶ 29.) As part of her effort to correct this serious credit reporting error, Plaintiff contacted the New York Department of Taxation and Finance in or about July or August 2012, but was advised that official Albany County Clerk taxing records showed only that a $3, 194 tax lien had been satisfied on July 30, 2009. ( Id. ¶ 30.) Had Defendant truthfully disclosed to Plaintiff that the actual source of the $33, 194 unsatisfied tax lien data was a private public records vendor, Plaintiff would have had the necessary information to try to correct the error directly with the vendor that had supplied Defendant with that erroneous information. ( Id. ¶ 31.) Plaintiff would also have known the true source of the error and could have tried to stop it from being disseminated by that same vendor to other CRAs to which it also sells public records information. ( Id. ¶ 32.) To this day, nowhere upon personal credit reports or file disclosures does Trans Union disclose the actual source of its public records information, and instead continues to misdirect consumers to courthouses and government offices with which Defendant has had no dealings in years. ( Id. ¶ 34.)

The Complaint also contains allegations pertaining to a proposed class of plaintiffs as follows: all persons residing within the territorial limits of the United States Court of Appeals for the Third Circuit to whom, beginning two years prior to the filing of the Complaint and continuing through resolution of the instant case, Defendant provided a credit file disclosure which included any civil judgment, tax lien, or bankruptcy ("the Class"). ( Id. ¶ 37.) According to the Complaint, the Class is so numerous that joinder of all members is impracticable. ( Id. ¶ 38.) While the precise number of Class members is known only to Defendant, Defendant sends tens of thousands of consumer file disclosures per year, and Defendant's uniform practice and procedure is to always omit the true source of its public records information from such disclosures, such that Plaintiff estimates the class size numbers in the thousands. (Id.) Questions of law and fact common to the Class allegedly predominate over any questions affecting only individual Class members, where the principal question is whether Defendant violated the FCRA by misrepresenting the true source of its public records information from its consumer file disclosures. ( Id. ¶ 39.)

Plaintiff initiated the present litigation on May 20, 2014, setting forth three causes of action: (1) Defendant's failure to accurately and completely disclose the true source of its public records information about Plaintiff in her consumer file disclosure in violation of 15 U.S.C. § 1681(g) and pursuant to 15 U.S.C. §§ 1681n and 1681o (Class Claim); (2) Defendant's failure to maintain reasonable procedures to ensure maximum possible accuracy of the report it prepared about Plaintiff, in violation of 15 U.S.C. § 1681e(b) and pursuant to 15 U.S.C. §§ 1681n and 1681o; and (3) Defendant's failure to conduct a reasonable reinvestigation after receiving Plaintiff's notice of dispute, in violation of 15 U.S.C. § 1681i(a)(1)(A) and pursuant to 15 U.S.C. §§ 1681n and 1681o. ( Id. ¶¶ 45-52.) The essence of these claims is that Defendant systematically misrepresents to consumers the source of the public record information - such as civil judgments, tax liens, and bankruptcies - that it places on their consumer reports, depriving consumers of valuable congressionally-mandated information and making it more difficult for consumers to correct errors relating to those public records, which are caused by Defendant and/or its private vendor sources, rather than by any courthouse or other government body that Defendant misidentifies as its source for that information. ( Id. ¶ 1.) Defendant filed a Motion to Dismiss Count One of Plaintiff's Class Action Complaint on July 25, 2014.[1] Plaintiff responded on August 25, 2014. Defendant submitted a Reply on September 8, 2014. Plaintiff submitted its Sur-Reply on September 10, 2014. Defendant submitted its Response to Plaintiff's Sur-Reply on September 11, 2014. The Motion to Dismiss is now ripe for judicial consideration.

II. STANDARD OF REVIEW

Under Rule 12(b)(6), a defendant bears the burden of demonstrating that the plaintiff has not stated a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6); see also Hedges v. United States , 404 F.3d 744, 750 (3d Cir. 2005). In Bell Atlantic Corp. v. Twombly , 550 U.S. 544 (2007), the United States Supreme Court recognized that "a plaintiff's obligation to provide the grounds' of his entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. at 555. Following these basic dictates, the Supreme Court, in Ashcroft v. Iqbal , 556 U.S. 662 (2009), subsequently defined a two-pronged approach to a court's review of a motion to dismiss. "First, 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." Id. at 678. Thus, although "Rule 8 marks a notable and generous departure from the hyper-technical, code-pleading regime of a prior era... it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions." Id. at 678-79.

Second, the Supreme Court emphasized that "only a complaint that states a plausible claim for relief survives a motion to dismiss." Id. at 679. "Determining whether a complaint states a plausible claim for relief will, as the Court of Appeals observed, be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id . A complaint does not show an entitlement to relief when the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct. Id .; see also Phillips v. Cnty. of Allegheny , 515 F.3d 224, 232-34 (3d Cir. 2008) (holding that: (1) factual allegations of complaint must provide notice to defendant; (2) complaint must allege facts ...


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