Kathleen N. Pedro v. Transunion LLC
2017 U.S. App. LEXIS 16167
| 11th Cir. | 2017Background
- Kathleen Pedro was listed as an authorized user on her parents' Capital One card; she used the card but alleges she had no financial responsibility for the debt.
- After her parents died, the account defaulted and TransUnion placed the delinquent account on Pedro's credit report as an "authorized user" account, which caused her credit score to drop over 100 points.
- Capital One later asked TransUnion and Equifax to delete the account; after deletion Pedro's score returned to its prior level.
- Pedro sued Equifax and TransUnion under the Fair Credit Reporting Act (FCRA), alleging willful violations of 15 U.S.C. § 1681e(b) for failing to follow reasonable procedures to assure "maximum possible accuracy."
- The district court dismissed for failure to plausibly allege willfulness; the Eleventh Circuit affirmed as to TransUnion (Equifax dismissal was separately resolved at Pedro's request).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing (Article III injury) | Pedro: reporting the delinquency and resulting >100-point score drop is a concrete, particularized injury. | TransUnion: no concrete injury alleged. | Court: Pedro alleged a concrete, particularized injury (score drop, time spent remedying), so she has standing. |
| Meaning of § 1681e(b) "maximum possible accuracy" | Pedro: requires reports to be accurate and not misleading; listing an authorized-user delinquency is misleading because it implies liability. | TransUnion: reasonable to read § 1681e(b) to require only "technical accuracy" (truthfulness). | Court: both interpretations exist in precedent; though preferable reading requires non-misleading reporting, TransUnion’s technical-accuracy reading is not objectively unreasonable. |
| Willfulness under FCRA (§ 1681n) | Pedro: TransUnion acted willfully by reporting misleading info and harming her credit. | TransUnion: willfulness requires knowing/reckless violation; adopting an objectively reasonable statutory interpretation negates willfulness. | Court: willfulness not shown because TransUnion adopted an objectively reasonable interpretation of § 1681e(b); dismissal affirmed. |
| Pleadings standard for willfulness on 12(b)(6) | Pedro: willfulness is typically a fact question unsuited to dismissal. | TransUnion: when statutory interpretation is objectively reasonable, courts may resolve willfulness on pleadings. | Court: dismissal appropriate here because no plausible allegation that TransUnion's interpretation was objectively unreasonable. |
Key Cases Cited
- Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47 (2007) (establishes objective-reasonableness standard for willful FCRA violations)
- Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) (intangible harms and requirements for Article III concreteness)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (elements of standing: injury, causation, redressability)
- Levine v. World Fin. Network Nat'l Bank, 554 F.3d 1314 (11th Cir. 2009) (willfulness standard under FCRA; objective-reasonableness focus)
- Dalton v. Capital Associated Indus., Inc., 257 F.3d 409 (4th Cir. 2001) (interprets § 1681e(b) to require reports not be misleading)
- Pinner v. Schmidt, 805 F.2d 1258 (5th Cir. 1986) (adopts non-misleading standard for § 1681e(b))
- Koropoulos v. Credit Bureau, Inc., 734 F.2d 37 (D.C. Cir. 1984) (uses balancing test for reasonableness of procedures under § 1681e(b))
- Cortez v. Trans Union, LLC, 617 F.3d 688 (3d Cir. 2010) (characterizes difference between technical accuracy and maximum possible accuracy)