CAREY-LAYLOR v. EQUIFAX INFORMATION SERVICES, 2:21-cv-16953

Background

Plaintiff paid off an auto loan with VW Credit; the account was closed with a $0 balance.
Equifax reported the account’s "Pay Status" as showing a past-due designation (e.g., "30-59 Days Past Due") despite the $0 balance.
On May 24, 2021, Plaintiff disputed the Pay Status with Equifax; Equifax notified VW Credit but did not change the Pay Status by July 25, 2021.
Plaintiff sued Equifax under the FCRA (15 U.S.C. § 1681s-2(b)), alleging Equifax failed to reasonably investigate, correct or mark the account as disputed, and that the reporting harmed her credit and led to a credit denial.
Equifax moved to dismiss under Rule 12(b)(6), arguing that reporting a historical delinquency on a closed $0-balance account is not inaccurate or misleading.
The court refused to consider an unverified Reinvestigation Report attached by Equifax, accepted the complaint’s allegations as true for purposes of the motion, and denied the motion to dismiss as the complaint plausibly stated a § 1681s-2(b) claim.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Plaintiff stated a claim under FCRA § 1681s-2(b) that Equifax failed to reasonably investigate and correct inaccurate/misleading reporting	The Pay Status is misleading because the account was paid and closed; the notation could cause creditors/algorithms to treat the account as still delinquent	Reporting a historical delinquency on a closed $0-balance account is technically accurate and not misleading as a matter of law	Denied dismissal: complaint plausibly alleges inaccurate or materially misleading reporting; factual resolution not appropriate on 12(b)(6)
Whether the court may consider Equifax’s attached Reinvestigation Report on a Rule 12(b)(6) motion	N/A — Plaintiff disputes that the document is the consumer report at issue and says it should not be considered	Equifax offered the excerpt to show the report’s content	Court declined to consider the exhibit because it was not part of the complaint and its authenticity/accuracy was disputed
Whether prior cases dismissing similar claims control here	Plaintiff distinguishes those cases where accounts were delinquent and transferred; here the account was paid in full at closure, making the reporting potentially misleading	Equifax relies on cases holding that historical delinquency notations do not mislead creditors when read as a whole	Court found prior decisions fact-specific and distinguished; factual differences (paid-to-zero vs transferred delinquency) mean dismissal is not warranted at pleading stage

Key Cases Cited

Bell Atl. Corp. v. Twombly, 550 U.S. 544 (establishes plausibility pleading standard)
Ashcroft v. Iqbal, 556 U.S. 662 (courts need not accept legal conclusions)
Phillips v. County of Allegheny, 515 F.3d 224 (pleading standard and construing complaint in plaintiff's favor)
Pinker v. Roche Holdings Ltd., 292 F.3d 361 (pleading standard/context)
Fowler v. UPMC Shadyside, 578 F.3d 203 (application of Iqbal/Twombly in Third Circuit)
Pension Benefit Guar. Corp. v. White Consolidated Industries, 998 F.2d 1192 (documents considered on motion to dismiss)
Cortez v. Trans Union, LLC, 617 F.3d 688 (FCRA purpose—protect against inaccurate credit reporting)
Seamans v. Temple University, 744 F.3d 853 (CRAs and furnishers' obligations under FCRA)
Simms-Parris v. Countrywide Financial Corp., 652 F.3d 355 (FCRA furnisher duties)
Saunders v. Branch Banking & Trust Co. of Va., 526 F.3d 142 (technically correct information may still be materially misleading)
Bibbs v. Trans Union LLC, 521 F. Supp. 3d 569 (discussion of when reporting historical delinquencies is not misleading)