Wexler v. Reliant Capital Solutions, LLC
2:19-cv-01779
E.D.N.YJan 24, 2020Background
- In Dec. 2018 Plaintiff Marshall Wexler disputed an allegedly erroneous Reliant tradeline on his Trans Union credit report via the CFPB portal; the tradeline arose from accounting errors related to his law school account.
- Trans Union notified Reliant of the dispute; Trans Union told Plaintiff it asked the reporting company to review and investigate.
- Plaintiff alleges Reliant failed to reasonably investigate, failed to mark the account as disputed, and on Jan. 24, 2019 sent Plaintiff a letter attempting to collect $638.50.
- The tradeline was later removed from Plaintiff’s Trans Union report and Reliant admitted it had made a mistake; Plaintiff claims emotional distress and lost time and alleges he did not pursue some rentals because of the tradeline.
- Reliant moved to dismiss Plaintiff’s Second Amended Complaint under Fed. R. Civ. P. 12(b)(6). Trans Union had been dismissed earlier from the action.
- The court denied dismissal of the FCRA claim (15 U.S.C. § 1681s-2(b)) and granted dismissal of the FDCPA claims (15 U.S.C. § 1692e and 1692e(8)); leave to amend was denied as futile.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Reliant had a duty under FCRA § 1681s-2(b) after Plaintiff disputed via the CFPB portal | The CFPB portal transmitted Plaintiff’s dispute directly to Trans Union, triggering Reliant’s investigatory duties under § 1681s-2(b) | Reliant: § 1681s-2(b) duties arise only after direct notice from the consumer to the CRA or a reseller; filing with CFPB does not suffice | Court: Plaintiff plausibly alleged the portal served as direct notice to Trans Union; discovery warranted; motion to dismiss FCRA claim denied |
| Whether Reliant violated FDCPA § 1692e(8)/1692e by failing to note the debt as disputed and attempting collection | Reliant reported the debt as not disputed and attempted collection after learning of the dispute | Reliant: it reported the tradeline before learning of the dispute and/or removed it promptly; FDCPA doesn’t impose a duty to update tradelines beyond accurate reporting | Court: Timeline and allegations insufficient to plausibly show a § 1692e(8) violation; tradeline deleted shortly after dispute; FDCPA claim dismissed |
| Whether Plaintiff should be granted leave to amend further | (Not requested) | (N/A) | Court: Leave to amend denied as futile; Plaintiff already amended twice |
Key Cases Cited
- Faber v. Metropolitan Life Insurance Co., 648 F.3d 98 (2d Cir. 2011) (pleading standard and drawing inferences on Rule 12(b)(6))
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading must contain factual allegations supporting legal conclusions)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard)
- Harris v. Mills, 572 F.3d 66 (2d Cir. 2009) (application of Twombly/Iqbal in Second Circuit pleadings analysis)
- In re Elevator Antitrust Litigation, 502 F.3d 47 (2d Cir. 2007) (context-specific plausibility inquiry)
- Huebner v. Midland Credit Management, Inc., 897 F.3d 42 (2d Cir. 2018) (deletion of disputed account promptly can defeat FDCPA § 1692e(8) claim)
- Jin v. Metropolitan Life Insurance Co., 310 F.3d 84 (2d Cir. 2002) (considerations for leave to amend after dismissal)