Gipson

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF TENNESSEE

AT CHATTANOOGA

VERNON L. GIPSON, )

)

Plaintiff, ) Case No. 1:25-cv-264

)

v. ) Judge Travis R. McDonough

)

FREEDOM MORTGAGE ) Magistrate Judge Christopher H. Steger

CORPORATION, )

)

Defendant. )

MEMORANDUM AND ORDER

Before the Court are Defendant Freedom Mortgage Corporation’s (“Freedom”) motion to

dismiss (Doc. 16) and motion to strike Plaintiff’s sur-reply (Doc. 21). For the following reasons,

Defendant’s motion to dismiss (Doc. 16) is GRANTED, and this case will be DISMISSED

WITHOUT PREJUDICE. Defendant’s motion to strike (Doc. 21) will be DENIED AS

MOOT.1

I. BACKGROUND

A. Factual Background

This suit stems from an alleged misreporting on Plaintiff’s credit report. Plaintiff has a

mortgage serviced by Freedom. (Doc. 15, at 1.) Plaintiff alleges that, despite his timely

payment, Freedom reported to Equifax that his April 2025 payment was late. (Id.) Plaintiff

alleges that he mailed complaints about the reported late payment to “Equifax, [Freedom], and

regulators . . . .” (Id.) Plaintiff also filed a complaint with the Consumer Financial Protection

1 Since the Court is granting the motion to dismiss, Defendant’s motion to strike is now moot.

Bureau (“CFPB”), which responded that it “contacted the data furnisher(s) for the disputed items

on [Plaintiff’s] Experian credit report and asked them to verify the accuracy of the information

with which [Plaintiff] disagree[s].” (Doc. 18-3, at 5.)

B. Procedural Background

Plaintiff, proceeding pro se, filed a claim in the Court of General Sessions for Hamilton

County, Tennessee, using a preprinted form provided by that court. (See Doc. 1-2, at 4.) Using

all four lines provided on that preprinted form, Plaintiff alleged that that Defendant violated the

Fair Credit Reporting Act by misreporting a 30-day late payment. (Id.) Defendant timely

removed the suit to this Court and filed its first motion to dismiss. (See Doc. 8, at 3.) On

October 1, 2025, the Court ordered Plaintiff to file an amended complaint in compliance with

Rule 8 of the Federal Rules of Civil Procedure and denied Defendant’s first motion to dismiss

with leave to refile. (Doc. 14.) Plaintiff filed an amended complaint (Doc. 15), and Defendant

filed a subsequent motion to dismiss (Doc. 16). Plaintiff filed an opposition to the motion to

dismiss. (Doc. 18.) Defendant replied to the opposition (Doc. 19). Plaintiff then filed a sur-

reply (Doc. 20). In response, Defendant filed a motion to strike Plaintiff’s sur-reply (Doc. 21).

II. MOTION TO DISMISS

A. Standard of Law

A defendant may obtain dismissal of a claim that fails to satisfy Rule 8 of the Federal

Rules of Civil Procedure by filing a motion pursuant to Rule 12(b)(6). According to Rule 8, a

plaintiff’s complaint must contain “a short and plain statement of the claim showing that the

pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). Though the statement need not contain

detailed factual allegations, it must contain “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). Rule 8 “demands more than an unadorned, the-defendant-unlawfully-

harmed-me accusation.” Id.

On a Rule 12(b)(6) motion, the Court considers not whether the plaintiff will ultimately

prevail, but whether the facts permit the court to infer “more than the mere possibility of

misconduct.” Id. at 679. For purposes of this determination, the Court construes the complaint

in the light most favorable to the plaintiff and assumes the veracity of all well-pleaded factual

allegations in the complaint. Thurman v. Pfizer, Inc., 484 F.3d 855, 859 (6th Cir. 2007). This

assumption of veracity, however, does not extend to bare assertions of legal conclusions, Iqbal,

556 U.S. at 679, nor is the Court “bound to accept as true a legal conclusion couched as a factual

allegation,” Papasan v. Allain, 478 U.S. 265, 286 (1986). “When a court is presented with a

Rule 12(b)(6) motion, it may consider the Complaint and any exhibits attached thereto, public

records, items appearing in the record of the case and exhibits attached to defendant’s motion to

dismiss so long as they are referred to in the Complaint and are central to the claims contained

therein.” Bassett v. Nat’l Collegiate Athletic Ass’n, 528 F.3d 426, 430 (6th Cir. 2008) (citation

omitted).

After sorting the factual allegations from the legal conclusions, the Court next considers

whether the factual allegations, if true, would support a claim entitling the plaintiff to relief.

Thurman, 484 F.3d at 859. This factual matter must “state a claim to relief that is plausible on its

face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Plausibility “is not akin to a

‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted

unlawfully.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 556). “[W]here the well-

pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the

complaint has alleged—but it has not ‘show[n]’—‘that the pleader is entitled to relief.’” Id. at

679 (quoting Fed. R. Civ. P. 8(a)(2)).

The Court is mindful that pro se complaints are liberally construed and are held to less

stringent standards than formal pleadings prepared by attorneys. Bridge v. Ocwen Fed. Bank,

681 F.3d 355, 358 (6th Cir. 2012). “[L]iberal treatment of pro se pleadings does not require

lenient treatment of substantive law,” and ultimately, those who proceed without counsel must

still comply with the procedural rules that govern civil cases, including the pleading standards set

forth in Rule 8(a) of the Federal Rules of Civil Procedure. Durante v. Fairlane Town Ctr., 201

F. App’x 338, 344 (6th Cir. 2006); Whitson v. Union Boiler Co., 47 F. App’x 757, 759 (6th Cir.

2002); Kafele v. Lerner, Sampson, Rothfuss, L.P.A., 161 F. App’x 487, 491 (6th Cir. 2005)

(“[P]ro se litigants are not relieved of the duty to develop claims with an appropriate degree of

specificity.”). Thus, although the standard of review for pro se litigants is liberal, it requires

more than the bare assertion of legal conclusions. Lillard v. Shelby Cnty. Bd. of Educ., 76 F.3d

716, 726 (6th Cir. 1996).

B. Analysis

1. Failure to Conduct Reasonable Investigation Pursuant to § 1681s-2(b)

Plaintiff first asserts that Defendant failed to conduct a reasonable investigation as

required by 15 U.S.C. § 1681s-2(b). (Doc. 15, at 3.) Under § 1681s-2(b), “[u]pon receiving

notice of a dispute from a CRA [credit reporting agency], a furnisher faces [five duties.]”

Boggio v. USAA Fed. Sav. Bank, 696 F.3d 611, 614 (6th Cir. 2012); 15 U.S.C. § 1681s-2(b)(1)

(listing the five duties). One of those duties requires a furnisher to “conduct an investigation

with respect to the disputed information[.]” 15 U.S.C. § 1681s-2(b)(1)(A). But that duty arises

“only after a furnisher has received proper notice of a dispute from a CRA.” Boggio, 696 F.3d at

615–16; Brown v. Wal-Mart Stores, Inc., 507 F. App’x 543, 547 (6th Cir. 2012) (“A private

cause of action against a furnisher of information does not arise until a consumer reporting

agency provides proper notice of a dispute.”). A “consumer reporting agency” is a “person

which . . . regularly engages in whole or in part in the practice of assembling or evaluating

consumer credit information or other information on consumers for the purpose of furnishing

consumer reports to third parties . . . .” 15 U.S.C. § 1681a(f). “Directly contacting the furnisher

of credit information does not actuate the furnisher’s obligation to investigate a complaint.”

Brown, 507 F. App’x at 547.

Here, Defendant argues that “the Amended Complaint lacks any allegation that the

consumer reporting agency notified Freedom of the dispute.” (Doc. 17, at 5.) Plaintiff claims he

sent a complaint to Equifax, a credit reporting agency, and Freedom, a furnisher of information.

(Doc. 15, at 1.) Plaintiff’s amended complaint does not allege that Equifax provided notice of

the dispute to Freedom. (See generally Doc. 15.) Plaintiff provided documentation that states

that the CFPB “contacted the data furnisher(s) for the disputed items on [Plaintiff’s] Experian

credit report and asked them to verify the accuracy of the information with which [Plaintiff]

disagree[s].” (Doc. 18-3, at 5.) However, the CFPB is “not a ‘consumer reporting agency’ under

the FCRA” because it “is not in the business of assembling and evaluating consumer credit

information.” Harris v. Pennsylvania Higher Educ. Assistance Agency/Am. Educ. Servs., 696 F.

App’x 87, 91 (3d Cir. 2017). Since Plaintiff fails to allege that a credit reporting agency notified

Freedom to trigger Freedom to conduct an investigation under § 1681s-2(b), this claim fails.

2. Failure to Ensure Maximum Possible Accuracy

Plaintiff’s second claim is brought pursuant to 15 U.S.C. § 1681e(b) for a failure to

ensure maximum possible accuracy. (Doc. 15, at 3.) Section 1681e(b) states, “[w]henever a

consumer reporting agency prepares a consumer report it shall follow reasonable procedures to

assure maximum possible accuracy of the information concerning the individual about whom the

report relates.” 15 U.S.C. § 1681e(b) (emphasis added).

Plaintiff’s amended complaint alleges that Freedom “is a national mortgage servicer” that

“furnished information to Equifax . . . .” (Doc. 15, at 1.) As mentioned above, CRAs are in the

business of assembling and evaluating consumer credit information. See 15 U.S.C. § 1681a(f).

Since Freedom is not a “consumer reporting agency,” Plaintiff cannot state a claim against

Freedom under § 1681e(b) because that statute applies only to “consumer reporting agencies.”

Therefore, Plaintiff’s claim under § 1681e(b) also fails.

3. Negligence and Willful Misreporting

Plaintiff’s third claim is for “Negligence and Willful Misreporting.” (Doc. 15, at 3.)

Plaintiff’s amended complaint does not clearly state whether this claim is brought under the

FCRA or Tennessee state law. (See id.)

The FCRA allows consumers to bring suit to recover damages from “any person who is

negligent,” 15 U.S.C. § 1681o, or who “willfully fails to comply with any requirement imposed,”

15 U.S.C. § 1681n. See Boggio, 696 F.3d at 615. Section 1681s-2(a) requires “furnishers of

information to provide accurate information.” 15 U.S.C. § 1681s-2(a); Boggio, 696 F.3d at 614

(“furnishers have a duty to provide the CRAs with accurate information about their

consumers.”). However, “§ 1681s-2(c) expressly precludes consumers from enforcing the

requirement that furnishers, under § 1681s-2(a), initially provide complete and accurate

consumer information to a CRA.” Id. at 615 (noting enforcement of § 1681s-2(a) belongs to “the

Federal agencies and officials and the State officials . . .”). Liberally construing Plaintiff’s

amended complaint, it appears he is attempting to assert a claim that Freedom negligently and

willfully misreported Plaintiff’s April 2025 payment under 15 U.S.C. § 1681s-2(a). (See Doc.

15, at 1, 3.) Since consumers are precluded from enforcing § 1681s-2(a), Plaintiff cannot bring

forth a claim against Freedom from negligently or willfully misreporting Plaintiff’s payments.

If Plaintiff is attempting to assert Tennessee state law claims, “[t]he FCRA preempts

state common law causes of action concerning a furnisher’s reporting of consumer credit

information to consumer reporting agencies.” Scott v. First S. Nat’l Bank, 936 F.3d 509, 522

(6th Cir. 2019). Plaintiff’s claims for “negligence and willful misreporting” relates to Freedom’s

furnishing information about Plaintiff’s mortgage payments. (Doc. 15, at 3.) Since these claims

concern Freedom’s reporting of consumer credit information, these causes of action are

preempted. Accordingly, Plaintiff’s claims for negligence and willful misreporting are

dismissed.

III. CONCLUSION

For the reasons set forth above, Defendant’s motion to dismiss (Doc. 16) is GRANTED,

and Plaintiff’s amended complaint will be DISMISSED WITHOUT PREJUDICE.

Defendant’s motion to strike (Doc. 21) is DENIED as moot.

AN APPROPRIATE JUDGMENT WILL ENTER.

/s/ Travis R. McDonough

TRAVIS R. MCDONOUGH

UNITED STATES DISTRICT JUDGE