Harris v. Pennsylvania Higher Education Assistance Agency/american Education Services
696 F. App'x 87
| 3rd Cir. | 2017Background
- Harris sued PHEAA (doing business as American Education Services) challenging student loans from 2005–2007, alleging fabricated loan information that harmed his credit. He proceeded in forma pauperis in the Eastern District of Pennsylvania.
- Original complaint included an ADA claim; the District Court dismissed it for failure to plead that PHEAA denied services or discriminated because of a disability, and allowed amendment.
- In his amended complaint Harris dropped the ADA claim and alleged violations of the Fair Credit Reporting Act (FCRA), seeking loan discharge/cancellation and $30,000 in damages; he attached collection letters and evidence of loan delinquency.
- PHEAA moved to dismiss under Rule 12(b)(6), arguing it is not a consumer reporting agency under the FCRA, is a furnisher of information, and that §1681s-2(b) duties are triggered only by notice from a consumer reporting agency (CRA), which Harris never alleged.
- The District Court dismissed the amended complaint with prejudice: PHEAA is not a consumer reporting agency; there is no private right of action under §1681s-2(a); and §1681s-2(b) does not apply because Harris never submitted a dispute through a CRA.
- On appeal the Third Circuit affirmed, explaining (1) PHEAA is a furnisher, not a CRA; (2) §1681i claims target CRAs, not furnishers; and (3) §1681s-2(b) remedies require notice via a CRA, which Harris did not allege. The Court denied Harris’s motion to vacate and declined to consider new arguments.
Issues
| Issue | Harris's Argument | PHEAA's Argument | Held |
|---|---|---|---|
| Whether PHEAA is a "consumer reporting agency" under the FCRA | PHEAA’s trade name (American Education Services) and reporting harmed his credit, implying CRA status | PHEAA is a lender/servicer, not in the business of assembling/evaluating credit reports; trade name irrelevant | PHEAA is not a CRA as a matter of law; dismissal affirmed |
| Whether Harris may sue under 15 U.S.C. § 1681i (duties/liability of CRAs) | He sought relief under §1681i for inaccurate reporting damaging his credit | §1681i applies to consumer reporting agencies, not furnishers like PHEAA | Dismissed: §1681i claim improper because PHEAA is not a CRA |
| Whether there is a private cause of action under 15 U.S.C. § 1681s‑2(a) against a furnisher | Harris sought to hold PHEAA liable as a furnisher for reporting conduct | §1681s-2(a) is enforced by agencies (no private right) | No private right under §1681s-2(a); dismissal affirmed |
| Whether Harris stated a claim under 15 U.S.C. § 1681s‑2(b) (furnisher duties after dispute) | Claimed PHEAA failed to investigate or properly handle disputes | §1681s-2(b) duties are triggered only after a CRA notifies the furnisher of a dispute; Harris notified the CFPB, not a CRA | Dismissed: Harris did not allege he submitted a dispute to a CRA, so §1681s-2(b) does not apply |
Key Cases Cited
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (plausibility standard for Rule 12(b)(6))
- DiGanni v. Stern’s, 26 F.3d 346 (2d Cir.) (definition/role of consumer reporting agencies)
- SimmsParris v. Countrywide Fin. Corp., 652 F.3d 355 (3d Cir.) (FCRA targets CRAs for §1681i; notice requirement interpretation)
- Seamans v. Temple Univ., 744 F.3d 853 (3d Cir.) (§1681s-2(b) duties triggered by notice from CRA)
- Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147 (9th Cir.) (notice to furnisher must come from CRA to trigger §1681s-2(b))