Marissa Bibbs v. Trans Union LLC
43 F.4th 331
| 3rd Cir. | 2022Background
- Three plaintiffs (Bibbs, Parke, Samoura) defaulted on student loans; servicers closed and transferred the loans, and account balances with the original servicers became $0.
- Trans Union’s credit-report snapshots continued to show a Pay Status field reading ">Account 120 Days Past Due<" while also showing the accounts as closed and with $0 balance.
- Plaintiffs’ counsel disputed the entries; Trans Union investigated, provided investigation snapshots, and declined to change the Pay Status entries.
- Each plaintiff sued under the Fair Credit Reporting Act (FCRA) alleging inaccurate or misleading reporting (§§ 1681e(b) and 1681i(a)); district courts granted Trans Union’s motions for judgment on the pleadings; the appeals were consolidated.
- The Third Circuit framed three central questions: the proper accuracy standard ("reasonable creditor" v. "reasonable reader"), whether the reports were inaccurate/misleading under § 1681e(b), and whether Trans Union’s reinvestigations and dismissal without discovery were erroneous.
- The court adopted a "reasonable reader" standard, held the reports were not inaccurate or misleading when read in their entirety, and affirmed dismissal without ordering discovery.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper accuracy standard under § 1681e(b) | Pay Status should be judged in isolation; any reader could be misled, so court should not apply a "reasonable creditor" test | District courts correctly applied a "reasonable creditor" standard; only an objective, commercially reasonable user matters | Adopted a "reasonable reader" standard (includes unsophisticated users); evaluate entries in context of entire report |
| Whether Pay Status was inaccurate or misleading under § 1681e(b) | The Pay Status without verb tense is ambiguous and misleading; it implies a current obligation despite $0 balance/closed status | The report plainly states the account is closed and balance is $0; Pay Status denotes historical delinquency and is not materially misleading | Report is accurate as read in its entirety; Pay Status is historical and not materially misleading |
| Reasonableness of Trans Union’s reinvestigation under § 1681i(a) | Investigation was inadequate; Trans Union should have corrected or removed Pay Status after dispute | Reinvestigation was reasonable because the underlying reporting was not inaccurate or misleading | Because entries are not inaccurate/misleading, § 1681i(a) claims fail; no unreasonable reinvestigation shown |
| Need for discovery before dismissal | Plaintiffs requested discovery to prove how readers interpret the Pay Status and whether scores/decisions were harmed | Trans Union argued the question is one of law under the objective reasonable-reader standard and no discovery was necessary | Discovery not required where, as here, the reports are legally accurate on their face; dismissal affirmed |
Key Cases Cited
- Cortez v. Trans Union, LLC, 617 F.3d 688 (3d Cir. 2010) (FCRA aims for accuracy; materially misleading information may violate § 1681e(b))
- Seamans v. Temple Univ., 744 F.3d 853 (3d Cir. 2014) (reasonableness of reinvestigation and materially misleading standard)
- Cushman v. Trans Union Corp., 115 F.3d 220 (3d Cir. 1997) (limits on required reinvestigation when notice lacks specifics)
- Philbin v. Trans Union Corp., 101 F.3d 957 (3d Cir. 1996) (elements of negligence under § 1681e(b))
- DeAndrade v. Trans Union LLC, 523 F.3d 61 (1st Cir. 2008) (a § 1681i claim ordinarily requires a showing that the reported information was inaccurate)
- Shaw v. Experian Info. Sols., Inc., 891 F.3d 749 (9th Cir. 2018) (applies same understanding of "inaccurate" to § 1681e and § 1681i)
- TRW Inc. v. Andrews, 534 U.S. 19 (2001) (Congressional purpose behind FCRA to promote efficiency and protect consumer privacy)