333 F. Supp. 3d 789
M.D. Tenn.2018Background
- Plaintiff April Blanch filed Chapter 13 in 2012; discharge entered June 7, 2017. She obtained credit reports in Sept. 2016 and disputed certain trade lines as improperly reported after discharge.
- Disputed accounts: DSNB/Macy's and Goodyear/Cbna (Citibank). Blanch sent dispute letters (Oct. 25, 2017) to TransUnion and Equifax, attaching the bankruptcy discharge order.
- TransUnion forwarded the disputes to Macy's and Citibank; TransUnion’s Nov. 1, 2017 investigation results (incorporated into the complaint) showed both furnishers reported: “Chapter 13 Bankruptcy; Acct Info Disputed By Consumr; Account Included In Bankruptcy; Account Closed by Credit Grantor; Account Balance: $0.”
- Blanch alleged emotional and credit harm and sued under the FCRA, alleging Macy’s and Citibank negligently or willfully failed to correct inaccurate or misleading bankruptcy-related reporting.
- Defendants moved to dismiss under Rule 12(b)(6); court considered TransUnion’s investigation results as incorporated into the complaint.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether reporting an account as “included in bankruptcy,” closed, with a $0 balance after discharge is inaccurate, incomplete, or materially misleading under § 1681s-2(b) | Blanch: the furnisher reports incorrectly as “included in bankruptcy” rather than as “discharged in bankruptcy,” and thus failed to correct inaccurate info after dispute | Macy’s/Citibank: reporting the account as included in bankruptcy, closed, and $0 balance accurately reflects the historical fact of the bankruptcy discharge and is not false or misleading | The court held the reporting was accurate and not materially misleading; plaintiff failed to plausibly plead an inaccuracy or incomplete reporting, so FCRA claims dismissed |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard requires plausible claim)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility framework for complaints)
- Boggio v. USAA Fed. Savings Bank, 696 F.3d 611 (6th Cir.) (furnisher duties under § 1681s-2(b) and that materially misleading reporting can violate the statute)
- Safeco Ins. Co. v. Burr, 551 U.S. 47 (standard for willful FCRA violations)
- Groff v. Wells Fargo Home Mortg., 108 F. Supp. 3d 537 (E.D. Mich.) (reporting loan closed with zero balance after discharge not inaccurate)
- Schueller v. Wells Fargo & Co., [citation="559 F. App'x 733"] (10th Cir.) (reporting closed, zero-balance after bankruptcy not inaccurate)
- Horsch v. Wells Fargo Home Mortgage, 94 F. Supp. 3d 665 (E.D. Pa.) (reports of loans closed with zero balance post-discharge are sufficiently complete)