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Coulter v. Pennsylvania Higher Education Assistance Agency

United States District Court, E.D. Pennsylvania

May 15, 2018

RAMSEY COULTER, Plaintiff,
v.
PENNSYLVANIA HIGHER EDUCATION ASSISTANCE AGENCY, doing business as FEDLOAN SERVICING, Defendant.

          OPINION, DEFENDANT'S PARTIAL MOTION TO DISMISS, ECF NO. 4 - GRANTED IN PART

          JOSEPH F. LEESON, JR. United States District Judge

         I. Introduction

         Plaintiff Ramsey Coulter alleges that Defendant Pennsylvania Higher Education Assistance Agency (“PHEAA”) violated the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. §§ 1681-1681x, by providing inaccurate information to credit bureaus, failing to conduct a reasonable investigation after being notified that its information was in dispute, and failing to correct the inaccurate information. PHEAA has filed a partial Motion to Dismiss, contending that several of Coulter's allegations fail to state a claim under the FCRA. For the reasons set forth below, PHEAA's Motion is granted in part.

         II. Background

         Coulter's Complaint alleges the following facts.

         On April 2015, Coulter filed for Chapter 7 bankruptcy. Compl. ¶ 6. Coulter's eligible debts were subsequently discharged in September 2015, but his student loan debts were not discharged because they were not eligible. Compl. ¶ 7. In total, Coulter had seven student loan “trade lines” that were being reported by PHEAA to the Trans Union, Equifax, and Experian credit bureaus. Compl. ¶ 8. Prior to Coulter's bankruptcy, he had continuously paid his student loan accounts on time. Compl. ¶ 9.

         In November 2015, each credit bureau listed Coulter's student loans as running a $0 balance, with a comment listing the accounts as discharged in bankruptcy. Compl. ¶ 10. In fact, Coulter's student loans were never discharged, nor had he filed for an “adversarial hearing” in order to seek such discharge. Compl. ¶ 12.

         After reviewing his credit report and seeing that credit bureaus were inaccurately reporting his student loans, Coulter sent a letter to all three credit bureaus disputing the status of these trade lines. Compl. ¶ 13. The credit bureaus forwarded Coulter's disputes to PHEAA. Compl. ¶ 14. In response to the disputes received from the credit bureaus, PHEAA failed to conduct a reasonable investigation into Coulter's dispute and allowed the trade lines to remain inaccurate, significantly impacting Coulter's credit worthiness by misrepresenting Coulter's likelihood to timely pay his bills. Compl. ¶ 16.

         On the basis of these allegations, Coulter asserts that PHEAA violated the FCRA when it willfully and negligently: supplied the credit bureaus with information about him that was false, misleading, and inaccurate; failed to conduct an investigation of the inaccurate information that he disputed; failed to list the trade lines as in dispute; failed to report the results of its investigation to the relevant credit bureaus; failed to properly participate, investigate, and comply with the credit bureaus' reinvestigations concerning the inaccurate information disputed by Coulter; and continued to furnish and disseminate inaccurate and derogatory credit information concerning Coulter to the credit bureaus. Compl. ¶¶ 22-30. Coulter seeks the greater of statutory or actual damages, plus punitive damages, along with costs, interest, and attorney's fees.

         In response to Coulter's Complaint, PHEAA filed the present partial Motion to Dismiss, contending that several of Coulter's allegations improperly assert claims for which the FCRA provides no private right of action.

         III. Standard of Review - Rule 12(b)(6) Motion to Dismiss

         “To survive a 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 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). In rendering a decision on a motion to dismiss, this Court must “accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief.” See Phillips v. Cnty. of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008) (quoting Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n.7 (3d Cir. 2002)) (internal quotation marks omitted).

         IV. Analysis

         The FCRA, enacted in 1970, “created a regulatory framework governing consumer credit reporting” that “‘was crafted to protect consumers from the transmission of inaccurate information about them, and to establish credit reporting practices that utilize accurate, relevant, and current information in a confidential and responsible manner.'” Seamans v. Temple Univ., 744 F.3d 853, 860 (3d Cir. 2014) (quoting Cortez v. Trans Union, LLC, 617 F.3d 688, 706 (3d Cir. 2010)). Under the FCRA, consumer reporting agencies, or credit bureaus, “collect consumer credit data from ‘furnishers, ' such as banks and other ...


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