FIGUEROA v. EXPERIAN INFORMATION SOLUTIONS, INC

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW JERSEY

YESSENIA FIGUEROA,

Plaintiff,

Civ, No, 2:23-cv-482 (WJM)

v.

CAPITAL ONE, N.A., OPINION

Defendant.

WILLIAM J. MARTINI, U.S.D.U.

Before the Court is an action by Plaintiff Yessenia Figueroa against Defendant

Capital One, N.A. (‘Capital One”) alleging violations of the Fair Credit Reporting Act

(“FCRA”), 15 U.S.C. § 1681, ef seg. After Defendant moved to dismiss Plaintiff's

complaint pursuant to Federal Rule of Civil Procedure 12(b)\(6), ECF No. 15, the parties

were ordered to submit briefing regarding whether Plaintiff has Article III standing to bring

her claims in this Court. ECF No. 23. After careful consideration of the parties’

submissions, the Court holds that Plaintiff has sufficiently demonstrated Article □□

standing but has failed to state a claim under Rule 12(b)(6). For the reasons set forth below,

Capital One’s motion to dismiss, ECF No. 15, is GRANTED.

I. BACKGROUND

Plaintiff Yessenia Figueroa obtained a credit disclosure from Experian Information

Solutions, Inc. (“Experian”) on November 5, 2022. Compl. { 10, ECF No. 1. The tradelines

reported on the disclosure included monthly payment amounts of $49.00, $72.00, and

$73.00 from Capital One accounts. Compl]. | 7. However, these accounts were previously

closed by Capital One. Compl. ¢ 8. Plaintiff alleges that because the accounts have been

closed, the entire balance is due presently and that she has neither the right nor the

obligation to satisfy these debts in monthly installments. Compl. 9 8. On or about

November 28, 2022, Plaintiff submitted a letter to Experian disputing the three Capital One

tradelines. Compl. J 11. In her dispute letter, Plaintiff explained that the account reflected

by these tradelines were closed. Compl. 12. She stated that because the accounts were

closed, she no longer had an obligation to make monthly payments to Capital One. Compl.

| 12. She asked Experian to report the tradelines with a scheduled monthly payment of

$0.00, Compl. § 12. Experian forwarded Plaintiffs customer dispute to Capital One.

Compl. § 13. On January 24, 2023, Plaintiff obtained another Experian credit disclosure,

which showed that Experian and Capital One failed or refused to report the scheduled

monthly payment amount as $0,00. Compl. ¥ 14.

Plaintiff brought this action three days later alleging violations of the FCRA.! See

generally Compl. Plaintiff alleges that Capital One negligently and willfully violated the

FCRA by failing to properly investigate Plaintiff's dispute as required under 15 U.S.C. §

1681s-2(b) and failing to direct Experian to report its tradelines with a scheduled monthly

payment amount of $0.00. Compl. JJ 21-32. Specifically, Plaintiff argues that “[p]er credit

reporting industry standards and the Credit Reporting Resource Guide, which is the credit

reporting manual created by the Consumer Data Industry Association, furnishers are not to

report a monthly payment on a closed account.” Compl. 9. As a result, Plaintiff argues

that the tradelines listed in her Experian credit disclosures are inaccurate and create a

misleading impression of her consumer credit file. Compl. § 24. She asserts that the

tradelines “create a false impression to potential credit grantors that [she] continues to have

a monthly obligation on a debt, when in fact there is no such monthly obligation.” Compl.

4] 15. Notably, however, Plaintiff does not assert in her complaint that her credit reports

have actually been published to any potential credit grantor.

Il, PROCEDURAL HISTORY

Plaintiff filed the present action on January 27, 2023. ECF No. 1. Capital One moved

to dismiss the complaint on March 14, 2023. ECF No. 15. Plaintiff filed a late opposition

brief on April 18, 2023. ECF No. 17. Capital One filed a reply brief on May 3, 2023. ECF

No. 20, On August 22, 2023, this Court denied Capital One’s motion without prejudice and

issued a sua sponte order directing the parties to submit supplemental briefing regarding

whether Plaintiff has Article III standing to bring her claims in light of the U.S. Supreme

Court’s decision in TransUnion LLC y, Ramirez, 594 U.S. 413 (2021), Plaintiff timely filed

her brief on September 1, 2023. Pl.’s Supp. Br., ECF No. 24. Capital One did not file a

response.

I. LEGAL STANDARD

Article II of the Constitution limits the jurisdiction of federal courts to “Cases” and

“Controversies.” U.S. Const. art. II, § 2. One element of this case-or-controversy

requirement is that Plaintiff, as the party invoking federal court jurisdiction, must establish

that she has standing to sue. See Raines v. Byrd, 521 U.S. 811, 818 (1997) (citing Lujan v.

Defenders of Wildlife, 504 U.S, 555, 561 (1992)}). To satisfy Article III’s standing

requirements, Plaintiff must “clearly .. . allege facts demonstrating” all three elements of

constitutional standing: (1) an “injury in fact,” (2) that is “fairly traceable” to Defendants’

challenged conduct, and (3) “that is likely to be redressed by a favorable judicial decision.”

Spokeo, Inc. v. Robins, 378 U.S. 330, 338 (2016) (citations omitted), “To establish injury

' The parties stipulated to the dismissal of Experian from the case with prejudice. ECF No. 22.

in fact, a plaintiff must show that he or she suffered ‘an invasion of a legally protected

interest’ that is ‘concrete and particularized’ and ‘actual or imminent, not conjectural or

hypothetical.’” Jd. at 339 (quoting Lujan, 504 U.S. at 560). Concrete injuries can be

tangible or intangible, See TransUnion LLC v. Ramirez, 594 U.S, 413, 425 (2021), “Absent

Article II standing, a federal court does not have subject matter jurisdiction to address a

plaintiffs claims, and they must be dismissed.” 7aliaferro v. Darby Twp. Zoning Bd., 458

F.3d 181, 188 (3d Cir. 2006). The Court presumes that it “lack[s| jurisdiction unless the

contrary appears affirmatively from the record.” I7 re Johnson & Johnson Talcum Powder

Prod. Mktg., Sales Pracs. & Liab, Litig., 903 F.3d 278, 288 (3d Cir. 2018) (citations and

quotation marks omitted).

IV. DISCUSSION

A. Plaintiff Sufficiently Alleges Article II] Standing

At issue here is the first element of constitutional standing: injury in fact. The

Supreme Court “has rejected the proposition that ‘a plaintiff automatically satisfies the

injury-in-fact requirement whenever a statute grants a person a statutory right and purports

to authorize that person to sue to vindicate that right.’” TransUnion, 594 U.S. at 426

(quoting Spokeo, 578 U.S. at 341). “[U]nder Article III, an injury in law is not an injury in

fact, Only those plaintiffs who have been concretely harmed by a defendant’s statutory

violation may sue that private defendant over that violation in federal court.” Jd. at 427.

“Central to assessing concreteness is whether the asserted harm has a ‘close relationship’

to a harm traditionally recognized as providing a basis for a lawsuit in American courts—

such as physical harm, monetary harm, or various intangible harms including .. .

reputational harm.” Jd. at 417 (quoting Spokeo, 578 U.S. at 340-41).

Based on these principles, Plaintiff asserts in part that she suffered an injury in fact

because Capital One’s “false and misleading reporting to a credit bureau about Plaintiff's

obligation on a debt has a close relation[]ship to reputational harms such as defamation and

common law fraud.” PI.’s Supp. Br. 4.2 The U.S. Supreme Court extensively analyzed the

reputational harm caused by defamation for standing purposes in its recent TransUnion

decision. There, the Court decided whether class members, who were each erroneously

labeled as potential terrorists in their respective credit reports, had Article II{ standing to

bring their FCRA claims against TransUnion, the credit reporting agency that issued the

reports. In order to determine whether the individuals suffered a harm related to the tort of

defamation, the Court noted that “[u]nder longstanding American law, a person is injured

? Plaintiff also asserts that as a result of Capital One’s “failure to correct the false and misleading information on her

credit report, she suffered credit and emotional damages of stress, anxiety, frustration, resulting in crying spells, loss

of sleep and weight gain.” Pl.’s Supp. Br, 4. She also alleges that Capital One’s “actions or omissions caused

Plaintiff to lose time attempting to correct the false information on her credit report.” Jd. Because the Court finds

that Plaintiff has suffered harm analogous to defamation, there is no need to address Plaintiffs other allegations of

harm.

when a defamatory statement ‘that would subject him to hatred, contempt, or ridicule’ is

published to a third party.” 594 U.S, at 432 (citations omitted); see also Restatement (First)

of Torts § 559 (1938). Relying on this definition, the Court determined that the class

members whose misleading credit reports were disseminated to third-party businesses

“suffered a harm with a ‘close relationship’ to the harm associated with the tort of

defamationj,]” and as such, “suffered a concrete harm that qualifies as an injury in fact.”

594 U.S, at 432. By contrast, however, the class members whose misleading credit reports

were not disseminated to a third party “did suffer a concrete harm[,]” and thus did not

have Article III standing to bring their claims. Jd. at 439, 442 (emphasis added).

Analogizing to the subgroup found to have standing in TransUnion, Plaintiff

specifically asserts that she suffered a concrete harm when Capital One erroneously

reported to Experian, a credit reporting agency, that she owed monthly payment obligations

to Capital One. Pl.’s Supp. Br. 5. Lower courts have split on the issue of whether

dissemination of a defamatory statement to a credit reporting agency, as opposed to the

potential creditors at issue in TransUnion, creates a concrete harm. In Campbell v. Portfolio

Recovery Associates LLC, the district court held that because the distribution of inaccurate

information to a credit reporting agency was “[u[nlike the disclosures at issue in

TransUnion,” it did not constitute a concrete injury for standing purposes. 21CV1322, 2022

WL 657225, at *2 (E.D.N.Y. Mar. 4, 2022). Similarly, in Spira v. TransUnion LLC, the

district court noted that “not all ‘third-parties’ are created equal” and held that “credit

reporting agencies ... are not the type of third parties contemplated by the Supreme Court

in TransUnion{.]” No. 21-CV-2367, 2022 WL 2819469, at *4-5 (S.D.N.Y. July 19, 2022),

However, the TransUnion Court did not specify that third-party publication under

the FCRA was limited only to potential creditors. Instead, looking to generally accepted

principles of tort law, the third party to whom the defamatory information is disseminated

must only “understand its defamatory significance.” Restatement (Second) of Torts § 577

emt. ¢ (1977). The Court of Appeals for the Seventh Circuit relied on this principle in

Ewing v. MED-I Sols, LLC, 24 F.4th 1146 (7th Cir. 2022). There, at issue was whether

two plaintiff consumers suffered concrete injuries after debt collectors reported their

respective debts to credit reporting agencies without indicating that the debts were disputed

by the consumers. /d at 1149-50, 1152. The Ewimg Court found that the plaintiffs

sufficiently demonstrated third-party dissemination by showing that the debt collectors

reported false information about the plaintiffs to a credit reporting agency and rejected any

reading of TransUnion that required the plaintiffs “to make a further showing that the third

party also shared that false information.’? Jd. at 1153-54. To determine whether the

*In so holding, the Ewing court rejected any comparison of credit reporting agencies to printing vendors, to which

disclosures have traditionally not been found to rise to actionable publications. 24 F.4" at 1153-54 (citing

TransUnion, 594 U.S. at 434 n.6}. Specifically, the court reasoned that because the consumers “demonstrated third-

party dissemination, the [TransUnion] Court’s reference fin a footnote] to a general requirement that defamatory

content is read, not merely processed” was not implicated, Jd. ai 1154 (citing TransUnion, 594 U.S, at 434 n.6).

dissemination constituted defamation, the court then analyzed whether the credit reporting

agency understood the defamatory significance of the debt collectors’ erroneous reports.

Id. at 1154, Because the credit reporting agency’s assessment of the plaintiffs

creditworthiness took into account whether the reported debts were disputed or not, the

court found that the agency did understand the defamatory significance of the false

information in the reports, /@. As such, the plaintiffs “suffered an intangible, reputational

injury that is sufficiently concrete for purposes of Article III standing,” Jd.

This Court agrees with the Ewing Court’s analysis and joins the number of district

courts that have recognized instances where dissemination to a credit reporting agency

suffices to establish defamatory publication for standing purposes. See, e.g., Morgan v.

LYNV Funding, LLC, No. 21-12967, 2023 WL 5808365, at *5 (E.D. Mich. Sept. 7, 2023)

(citing to Ewing’s publication holding favorably but finding that plaintiff lacked concrete

injury on other grounds); Pharms vy, Nat’l Credit Sys., Inc., No. CV 619-060, 2022 WL

2346623, at *7 (S.D. Ga. June 29, 2022) Cinding a credit reporting agency to be a third-

patty for defamation purposes but noting that false information about plaintiff's debt was

further disseminated to potential creditors). By reporting the errant monthly payment

obligations to Experian, Capital One has communicated allegedly false information about

Plaintiff's financial standing to an entity that understands and uses this information to

assess her creditworthiness. Pl.’s Supp. Br. 5. Thus, Plaintiff has demonstrated defamatory

publication and has alleged that she suffered a concrete reputational injury sufficient to

establish Article III standing for her claims.

B. Plaintiff Fails to State a Claim Under the FCRA

However, even if Plaintiff has sufficiently alleged Article LI standing, the Court

finds that Plaintiff has not stated a claim upon which relief may be granted. After review

of the parties’ previously filed submissions, the Court will grant Defendant’s motion to

dismiss under Rule 12(b)(6). Brown v. F.B.L, 793 F. Supp. 2d 368, 382 (D.D.C., 2011)

(“[T]he Court may grant a 12(b)(6) motion to dismiss sua sponte.”).

Rule 12(b)(6) provides for the dismissal of a complaint, in whole or in part, if the

plaintiff fails to state a claim upon which relief can be granted. Fed. R. Civ, P. 12(b)(6), In

reviewing a motion to dismiss under Rule 12(b)(6), “courts accept all factual allegations as

true, construe the complaint in the light most favorable to the plaintiff, and determine

whether, under any reasonable reading of the complaint, the plaintiff may be entitled to

relief.” Phillips v. Cty. of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008) (citation and

quotation marks omitted). The complaint’s factual allegations need not be detailed, but

they must be sufficient to raise a plaintiff's right to relief above a speculative level, such

that it is “plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S, 544, 555, 570

(2007); see also Umland v. PLANCO Fin. Serv., Inc., 542 F.3d 59, 64 (3d Cir, 2008). This

facial-plausibility standard is met where the plaintiff pleads “factual content that allows the

court to draw the reasonable inference that the defendant is liable for the misconduct

alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S, at 556).

“The FCRA was crafted to protect consumers from the transmission of inaccurate

information about them, and to establish credit reporting practices that utilize accurate,

relevant, and current information in a confidential and responsible manner.” Bibbs v. Trans

Union LLC, 43 F 4th 331, 339 (3d Cir. 2022) (citation and internal quotation marks

omitted). “The FCRA places certain duties on those who furnish information to consumer

reporting agencies.” /d. (citation and internal quotation marks omitted). “The furnisher of

information has a duty to provide accurate information to the credit reporting agency, 15

U.S.C. § 1681s—2(a), and the credit reporting agency must investigate promptly any reports

of inaccuracies, 15 U.S.C. § 1681s~2(b).” Cheadle v. Experian, No. 120CV18183, 2021

WL 3144843, at *3 (D.NJJ. July 26, 2021). “To state a viable claim under the FCRA

regarding the interplay between the furnisher and the credit reporting agency, a plaintiff

must allege that she (1) sent notice of disputed information to a consumer reporting agency,

(2) the consumer reporting agency then notified the defendant furnisher of the dispute, and

(3) the furnisher failed to investigate and modify the inaccurate information.” Jd. (citations

and internal quotation marks omitted). “[A] showing of inaccuracy is essential to a

[Section] 1681s—2(b) claim.” Shechter v. Experian Info. Sols., Inc., No. CV205552, 2021

WL 323302, at *3 (D.N.J. Jan. 31, 2021) (second alteration in original) (citation and

internal quotation marks omitted). “Only if ‘the investigation finds that the information is

incomplete or inaccurate’ must the furnisher correct the information with the [consumer

reporting agencies],” Mercedes v. Wells Fargo Home Mortg., Inc., No. CIV.A. 13-5814,

2015 WL 457299, at *3 (D.N.J. Feb. 3, 2015). “Information is ‘inaccurate’ within the

meaning of the FCRA if it is technically incorrect or if, ‘through omission, it creates a

materially misleading impression.’” Stephens v. Equifax, Inc., No. CV 22-01940, 2023 WL

8531833, at *4 (D.N.J. Feb. 24, 2023) (quoting Seamans v. Temple Univ., 744 F.3d 853,

865 (3d Cir, 2014)).

Here, Plaintiff admits that she still owes the balance of her debt to Capital One.

Compl. 7 8. Her only contention is that Capital One furnished inaccurate information to

Experian by reporting that she owes monthly payment obligations of $49.00, $72.00, and

$73.00 when her accounts were closed. Compl. {f 7-8. Plaintiff specifies that Capital One’s

reporting is “false and misleading” because it failed to follow a purported industry

standard—the Credit Reporting Resource Guide—that requires monthly installments to be

reported as $0.00 when the underlying accounts are closed, instead of the monthly amounts

previously owed, Compl. 9.4

“ In support of its argument, Capital One attaches several exhibits to its moving brief, including monthly statements

from Plaintiffs Capitai One account and letters to Plaintiff from Capital One regarding the closure of her accounts.

The Court finds that Plaintiffhas failed to allege that the tradelines issued -by Capital

One contain inaccurate information. Nothing in Capital One’s reporting makes plaintiff's

obligations look greater than they are. In fact, a report showing a $0.00 monthly obligation

would be more misleading of Plaintiff's financial obligation, because it would incorrectly

suggest that Plaintiff does not owe any balance to Capital One. Further, district courts have

“rejected the argument that failure to comply with industry standards violates the FCRA

where the information itself is nonetheless true.” Sheridan v. FLA Card Servs., N.A., No.

C13-01179, 2014 WL 587739, at *5 (N.D. Cal. Feb. 14, 2014) (reviewing FCRA claim

where plaintiff asserted that defendant violated industry standards by reporting overdue

payments while her bankruptcy was pending); see also, e.g., Dash v. Midland Funding

ELC, No. 8:16-CV-2128-T-36, 2017 WL 841116, at *3 (M.D. Fla. Mar. 3, 2017)

(collecting cases rejecting FCRA claims that rely on violations of industry standards and

finding them “persuasive” in the context of a Fair Debt Collection Practices Act claim).

Plaintiff cites to two cases, Burns v. Trans Union, LLC, No. CV 4:18-03120, 2019

WL 3890833 (D.S.C. Aug. 19, 2019) and Friedman y. CitiMortgage, Inc., No. 18 CV

11173, 2019 WL 4194350 (S.D.N_Y. Sept. 3, 2019), to argue that “[clourts have held that

reporting a scheduled monthly payment amount for a closed account is an adequate basis

for liability under the FCRA.” Opp. Br. 12. However, these cases are distinguishable from

the circumstances here. In Burns, the plaintiff alleged that the defendant violated the FCRA

by listing a monthly payment on its credit line despite the plaintiffs account being closed

and charged off. Here, Plaintiff has not alleged that her account has been similarly charged

off. In Friedman, the court found that a defendant furnished inaccurate information where

it erroneously reported that the plaintiff owed the defendant monthly payments and that the

plaintiff's pay status was late. However, there, the mortgage loan at issue had been

transferred to another lender and the plaintiff was no longer obligated to make any

payments to the defendant, causing lenders to believe that he owed more money than he

was obligated to pay. As stated supra, Plaintiff still owes the balance of her debt to Capital

One and the monthly obligations reported by Capital One do not misrepresent the total

amount of her debt. “Accordingly, because Plaintiff has failed to identify a factual

inaccuracy in [her] credit report, [she has not alleged a proper basis upon which to impose

FCRA liability on [Capital One].” Seror v. Equifax, No. CV 18-14804, 2019 WL

13396463, at *3 (D.N.J. July 8, 2019). Thus, Plaintiffs claims will be dismissed.

Vv. CONCLUSION

Goldstein Decl., Exs, 1-7. ECF No. 15-2, Plaintiff notes that she has not stipulated to the exhibits’ authenticity and

that the exhibits are not integral to her claims. Opp. Br. 7-9, She argues that the Court should not consider these

exhibits at the motion to dismiss stage, or in the alternative, should treat Capital One’s filing as a motion for summary

judgment, Opp. Br. 10-11, The Court does not need to decide this issue at this juncture because it does not rely on the

exhibits in its finding that Plaintiff has failed to state her claims under Rule 12(b)(6).

For the reasons set forth above, Capital One’s motion to dismiss, ECF No. 15, is

GRANTED. Plaintiff may file within 30 days an amended complaint that cures the

deficiencies articulated herein.

An appropriate Order accompanies this Opinion.

LA wf,

Len MA AG, Zh U

OV J. MARTINI, U.S.D.J.

Date: January 7 , 2024