Killingsworth, Linda v. Household Bank

In the

United States Court of Appeals

For the Seventh Circuit

____________

No. 06-1616

LINDA KILLINGSWORTH,

Plaintiff-Appellant,

v.

HSBC BANK NEVADA, N.A., formerly known

as Household Bank (SB), N.A., et al.,

Defendants-Appellees.

____________

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 05 C 5729—John W. Darrah, Judge.

____________

No. 06-2178

ERIC SAWYER,

Plaintiff-Appellant,

v.

ENSURANCE INSURANCE SERVICES, INCORPORATED,

Defendant-Appellee.

____________

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 06 C 750—Milton I. Shadur, Judge.

____________

ARGUED DECEMBER 7, 2006—DECIDED NOVEMBER 9, 2007

____________

2 Nos. 06-1616 & 06-2178

Before BAUER, MANION, and SYKES, Circuit Judges.

SYKES, Circuit Judge. We have consolidated for pur-

poses of disposition two cases that require us to deter-

mine whether an amendment to the Fair Credit Report-

ing Act (“FCRA”) eliminating private rights of action

has an impermissible retroactive effect when applied to

FCRA claims that accrued prior to the amendment’s

effective date. Linda Killingsworth received a prescreened

credit card offer from Household Bank, N.A., sometime

prior to August 20, 2004. She claims the offer contained

FCRA disclosures that were not clear and conspicuous.

The plaintiff in the second suit, Eric Sawyer, applied for

auto insurance with Ensurance Insurance Services, Inc.

(“Ensurance”) in October 2004. Ensurance obtained his

credit report in connection with that application. Sawyer

contends Ensurance violated the FCRA by charging him

a higher rate based on negative information in his credit

report without giving him notice of that adverse action,

and also by using his initial credit information for subse-

quent renewals of his policy when corrected credit in-

formation would have qualified him for a lower rate.

Both plaintiffs filed class action lawsuits in the North-

ern District of Illinois. Both complaints were dismissed

based on section 311 of the Fair and Accurate Credit

Transactions Act of 2003 (“FACTA”), which amended the

FCRA to eliminate enforcement of certain FCRA provi-

sions by private civil suit. See 15 U.S.C. § 1681m(h)(8).

Sawyer and Killingsworth argue that the amendment,

effective December 1, 2004, impairs rights they possessed

prior to the new statute’s effective date and therefore

has an impermissible retroactive effect if applied to them.

As to Killingsworth’s claim, we agree and therefore

reverse. In Sawyer’s case, however, the retroactivity

question cannot be decided at the pleading stage because

the conduct alleged in his complaint straddles FACTA’s

Nos. 06-1616 & 06-2178 3

effective date. The allegations, if true, could establish

that an FCRA violation occurred before FACTA’s effective

date, and this is enough to survive the motion to dismiss.

I. Background

On December 4, 2003, Congress enacted FACTA, which

amended portions of the FCRA. FACTA’s section 311

added subsection (h) to § 1681m of the FCRA. Paragraph

(8) of that subsection provides:

(8) Enforcement

(A) No civil actions. Sections 1681n and 1681o

of this title [pertaining to private civil remedies]

shall not apply to any failure by any person to

comply with this section.

(B) Administrative enforcement. This section

shall be enforced exclusively under section 1681s

of this title by the Federal agencies and officials

identified in that section.

15 U.S.C. § 1681m(h)(8). Congress authorized the Federal

Trade Commission and the Board of Governors of the

Federal Reserve System to set the effective dates of

various FACTA provisions, including section 311. Fair and

Accurate Credit Transactions Act of 2003, Pub. L. No. 108-

59, 117 Stat. 1952, at Sec. 3. On February 11, 2004, the

Board of Governors promulgated regulations setting an

effective date of December 1, 2004, for § 1681m(h)(8). 12

C.F.R. § 222.1(c)(3)(xiii).

Sometime prior to August 20, 2004, Linda Killingsworth

received a prescreened offer of credit from Household

Bank. This offer was based on Killingsworth’s credit

report, though she never gave Household authorization to

access that information. These mailings, sent to at least

200 Illinois residents, targeted people with poor credit or

4 Nos. 06-1616 & 06-2178

who had recently obtained bankruptcy discharges. En-

closed with the offer was a pamphlet containing disclo-

sures about credit terms and a statement of compliance

with 15 U.S.C. § 1681m(d),1 FCRA’s notice provision.

In October 2005 Killingsworth filed a class action

against Household Bank (now known as HSBC Bank

Nevada), Household Credit Services, Inc., and HSBC

North America Holdings, Inc. (collectively “Household”),

claiming a violation of § 1681m(d).2 Killingsworth alleged

the statutorily required disclosures were “buried” in an

insert and were neither clear nor conspicuous. Household

answered and moved for judgment on the pleadings,

arguing that § 1681m(h)(8), which eliminated private

rights of action for § 1681m violations, applied to Killing-

worth’s claim and required dismissal of the suit.

The district court granted the motion, holding that

§ 1681m(h)(8) applied to all cases filed after December 1,

2004 (the amendment’s effective date), provided the

noncomplying disclosure was received after December 4,

2003 (the amendment’s date of enactment).

* * * * *

Eric Sawyer applied for auto insurance with Ensurance

in October 2004. As part of the application process,

Ensurance pulled Sawyer’s credit report and used infor-

mation in that report to determine the cost of his policy.

Sawyer’s insurance took effect on December 20, 2004,

and was renewed twice thereafter at six-month intervals.

1

Section 1681m(d) sets forth the “[d]uties of users making

written credit or insurance solicitations on the basis of informa-

tion contained in consumer files.”

2

Killingsworth’s complaint also alleged Household violated

§ 1681b by accessing the class’s consumer reports without its

consent and for an impermissible purpose. She abandoned this

claim in the district court and has not raised it on appeal.

Nos. 06-1616 & 06-2178 5

Sawyer filed a class action alleging Ensurance violated

§ 1681m(a) of the FCRA by offering him a less favorable

rate based on negative information in his credit report

without providing him with an adverse action notice.

Sawyer also alleged that Ensurance failed to consider

interim changes to his credit rating and instead relied on

his initial credit score when subsequently renewing his

policy. His corrected credit report, he alleged, showed

an improved credit score and would have resulted in a

more favorable insurance rate. The district court granted

Ensurance’s motion to dismiss, holding that FACTA

eliminated private causes of action under § 1681m(a) and

this amendment to the FCRA applied to Sawyer’s claim.

II. Analysis

In Sawyer’s case, the district court dismissed the

complaint pursuant to Rule 12(b)(6) of the Federal Rules

of Civil Procedure for failure to state a claim. We review

the court’s dismissal order de novo, accepting the com-

plaint’s well-pleaded allegations as true and drawing

all favorable inferences for the plaintiff. Savory v. Lyons,

469 F.3d 667, 670 (7th Cir. 2006). Rule 8(a) of the Fed-

eral Rules of Civil Procedure requires that a complaint

contain a “short and plain statement of the claim show-

ing that the pleader is entitled to relief.” This “short

and plain statement” must be enough “ ‘to give the defen-

dant fair notice of what the . . . claim is and the grounds

upon which it rests.’ ” Bell Atlantic Corp. v. Twombly, 127

S. Ct. 1955, 1964 (2007) (quoting Conley v. Gibson, 355

U.S. 41, 47 (1957)). In Bell Atlantic, the Supreme Court

retooled federal pleading standards, retiring the oft-quoted

Conley formulation that “a complaint should not be

dismissed for failure to state a claim unless it appears

beyond doubt that the plaintiff can prove no set of facts

in support of his claim which would entitle him to relief.”

6 Nos. 06-1616 & 06-2178

Conley, 355 U.S. at 45-46; see Bell Atlantic, 127 S. Ct. at

1969 (Conley’s “famous observation has earned its retire-

ment.”).

The Court explained in Bell Atlantic that the “plaintiff ’s

obligation to provide the ‘grounds’ of his ‘entitlement to

relief ’ requires more than labels and conclusions, and a

formulaic recitation of the elements of a cause of action

will not do.” Bell Atlantic, 127 S. Ct. at 1964-65. Instead,

the Court held, the factual allegations in the complaint

“must be enough to raise a right to relief above the specu-

lative level.” Id. at 1965; see also EEOC v. Concentra

Health Servs., Inc., 496 F.3d 773, 776-77 (7th Cir. 2007);

Airborne Beepers & Video, Inc. v. AT&T Mobility LLC, 499

F.3d 663 (7th Cir. 2007). Although this does “not require

heightened fact pleading of specifics,” it does require the

complaint to contain “enough facts to state a claim to re-

lief that is plausible on its face.” Bell Atlantic, 127 S. Ct.

at 1974; see also St. John’s United Church of Christ v. City

of Chicago, 2007 WL 2669403 at *7 (7th Cir. Sept. 13,

2007). In Airborne Beepers we read Twombly together

with the Supreme Court’s decision two weeks later in

Erickson v. Pardus, 127 S. Ct. 2197, 2200 (2007), and

observed that “we understand the Court to be saying only

that at some point the factual detail in a complaint may

be so sketchy that the complaint does not provide the

type of notice of the claim to which the defendant is

entitled under Rule 8.” Airborne Beepers, 499 F.3d at 667.

Here, Ensurance primarily raises a legal argument—that

the FACTA amendment to the FCRA eliminated Sawyer’s

right to bring a private civil action—but it also challenges

the complaint’s factual sufficiency.

In Killingsworth’s case, the district court entered

judgment on the pleadings pursuant to Rule 12(c) of the

Federal Rules of Civil Procedure. Like Rule 12(b)(6)

dismissals, we review judgments on the pleadings de novo.

Nos. 06-1616 & 06-2178 7

Forseth v. Vill. of Sussex, 199 F.3d 363, 368 (7th Cir.

2000). Household argued, as did Ensurance, that the

repeal of private rights of action for § 1681m violations

meant that Killingsworth had no statutory cause of

action, essentially a Rule 12(b)(6) argument. If a defendant

raises a Rule 12(b) defense in a Rule 12(c) motion, a Rule

12(b)(6)-type analysis applies. Alexander v. City of Chi-

cago, 994 F.2d 333, 336 (7th Cir. 1993). Household

argued in the alternative that its disclosures were clear

and conspicuous as required by the FCRA, an argument

that also warrants Rule 12(b)(6)-type analysis. See id.

A threshold issue in both appeals is whether FACTA

eliminated private causes of action for the particular

violations of § 1681(m) asserted by the plaintiffs.

Killingsworth claims Household violated § 1681m(d);

Sawyer claims Ensurance violated § 1681m(a). In Perry v.

First National Bank, we addressed the question “whether

the newly added § 1681m(h)(8) was designed to preclude

private enforcement of the entirety of § 1681m, or just

§ 1681m(h),” holding that “[t]he unambiguous language of

§ 1681m(h)(8) demonstrates that Congress intended to

preempt private causes of action to enforce § 1681m.” 459

F.3d 816, 819, 823 (7th Cir. 2006). Section 1681m(h)(8)

thus eliminates both plaintiffs’ claims—if it applies. This

brings us directly to the question of the statute’s retro-

activity, as the conduct alleged in each complaint (or in

Sawyer’s case, at least some of it) predates the statute’s

effective date.3

3

Murray v. GMAC Mortgage Corp. briefly touched on the

question of the retroactivity of § 1681m(h)(8), noting that “[a]

recent amendment to [the FCRA] abolishes private remedies for

violations of the clear-disclosure requirement, which in the

future will be enforced administratively, but that change does

not apply to offers made before its effective date . . . .” 434 F.3d

(continued...)

8 Nos. 06-1616 & 06-2178

In Landgraf v. USI Film Products, the Supreme Court

explained the “antiretroactivity principle”—the principle

that the “legal effect of conduct should ordinarily be

assessed under the law that existed when the conduct took

place.” 511 U.S. 244, 265 (1994) (quotation omitted). The

Court observed that this principle is in tension with

another: the rule that “a court is to apply the law in effect

at the time it renders its decision.” Id. at 264 (quoting

Bradley v. Sch. Bd. of Richmond, 416 U.S. 696, 711

(1974)). Landgraf reconciled the conflict by establishing a

presumption of antiretroactivity, but the presumption

is applicable only where there is ambiguity about a stat-

ute’s temporal reach:

When a case implicates a federal statute enacted after

the events in suit, the court’s first task is to deter-

mine whether Congress has expressly prescribed the

statute’s proper reach. If Congress has done so, of

course, there is no need to resort to judicial default

rules. When, however, the statute contains no such

express command, the court must determine whether

the new statute would have retroactive effect, i.e.,

whether it would impair rights a party possessed

when he acted, increase a party’s liability for past

conduct, or impose new duties with respect to transac-

tions already completed. If the statute would operate

retroactively, our traditional presumption teaches

that it does not govern absent clear congressional

intent favoring such a result.

511 U.S. at 280; see also Labojewski v. Gonzales, 407 F.3d

814, 819 (7th Cir 2005).

3

(...continued)

948, 951 (7th Cir. 2006). In Perry, we characterized this as

dicta, as the retroactivity question was not at issue in Murray.

Perry v. First Nat’l Bank, 459 F.3d 816, 819 n.1 (7th Cir. 2006).

Nos. 06-1616 & 06-2178 9

Landgraf ’s requirement of clear congressional intent

“assures that Congress itself has affirmatively con-

sidered the potential unfairness of retroactive applica-

tion” and “allocates to Congress responsibility for funda-

mental policy judgments concerning the proper temporal

reach of statutes.” Landgraf, 511 U.S. at 272-73. When it

is not clear whether a statute is meant to apply retrospec-

tively, “prospectivity remains the appropriate default

rule.” Id. at 272; see also Labojewski, 407 F.3d at 819.

“Where Congress has not made a clear policy judgment

about retroactivity, applying the presumption against

retroactive legislation ‘accords with widely held intui-

tions about how statutes ordinarily operate’ and ‘gen-

erally coincide[s] with legislative and public expecta-

tions.’ ” Labojewski, 407 F.3d at 819 (quoting Landgraf,

511 U.S. at 272).

Household and Ensurance argue that Congress specified

FACTA’s reach, although by negative implication. See,

e.g., Lindh v. Murphy, 521 U.S. 320 (1997); cf. Hamdan

v. Rumsfeld, 126 S. Ct. 2749 (2006). They point to sec-

tion 312(f) of FACTA, codified as a note to 15 U.S.C.

§ 1681n, which states that “[n]othing in . . . any . . .

provision of this Act shall be construed to affect any

liability under § 616 or § 617 of the Fair Credit Report-

ing Act [15 U.S.C. §§ 1681n, 1681o] that existed on the

day before the date of enactment of this Act.” They con-

tend that Congress’s intent not to affect liability that

existed on or before FACTA’s enactment date means

that Congress intended liability to be extinguished after

that date—including liability arising between the statute’s

date of enactment and its effective date. That is, private

claims arising before the statute was enacted are pre-

served, but private claims arising after the statute’s

enactment date but before its effective date are not. We

think this line of reasoning reads too much into too little.

10 Nos. 06-1616 & 06-2178

In Lindh v. Murphy, the Supreme Court addressed

the question of whether amendments in the Antiter-

rorism and Effective Death Penalty Act of 1996 (“AEDPA”)

to chapter 153 of Title 28 of the United States Code

governing federal habeas corpus proceedings applied to

cases pending when AEDPA was enacted or only to cases

filed after its enactment date. The Court noted that

AEDPA amended the habeas procedures in chapter 153 of

Title 28 and also created an entirely new chapter 154 of

Title 28 to govern habeas proceedings in certain state

capital cases. The Court found it significant that AEDPA’s

creation of chapter 154 was expressly made applicable

to all cases pending on or after the date of enactment,

while the amendments to chapter 153 were not. Lindh, 521

U.S. at 327. The Court read AEDPA’s express retrospec-

tive application of chapter 154 “as indicating implicitly

that the amendments to chapter 153 were assumed and

meant to apply to the general run of habeas cases only

when those cases had been filed after the date of the Act.”

Id. By relying on this negative implication—a principle

of statutory interpretation—the Court did not reach

Landgraf ’s second step. The Court held that Congress

intended AEDPA’s amendments to chapter 153 to apply

prospectively only. Id. at 336-37.

The Third Circuit has characterized Lindh as estab-

lishing an intermediate step in the Landgraf framework,

requiring courts “to examine a statute under normal rules

of statutory construction for evidence of congressional

intent to apply the statute prospectively only.” Mathews v.

Kidder, Peabody & Co., Inc., 161 F.3d 156, 162 (3d Cir.

1998). While Landgraf reaffirmed the “traditional rule

requiring retroactive application to be supported by a

clear statement” from Congress, Lindh established that

general rules of statutory interpretation apply to deter-

mine whether Congress has clearly spoken either way—as

Nos. 06-1616 & 06-2178 11

to prospective or retrospective application. Lindh, 521

U.S. at 326; Mathews, 161 F.3d at 160-62.

In Hamdan the Court relied on the Lindh principle that

“a negative inference may be drawn from the exclusion

of language from one statutory provision that is in-

cluded in other provisions of the same statute,” see

Hamdan, 126 S. Ct. at 2765, and found prospective intent

by implication. Section 1005(e)(1) of the Detainee Treat-

ment Act of 2005 (“DTA”) stripped courts of jurisdiction

to hear habeas corpus petitions from detainees at

Guantanamo Bay, Cuba. Another part of the DTA specified

that § 1005(e)(2) and (3)—also jurisdiction-modifying

provisions—applied to all claims pending on or after

the date of the Act’s enactment. The Court held that

the omission of § 1005(e)(1) from the provision making

§ 1005(e)(2) and (3) retrospective meant that § 1005(e)(1)

was intended to apply prospectively only. Id. at 2766.

Here, in contrast, FACTA’s section 312(f) preserves

private causes of action for liability that accrued prior to

FACTA’s date of enactment, but because FACTA’s enact-

ment and effective dates are different, the negative im-

plication argument loses its logic. Drawing a negative

inference from FACTA’s section 312(f) fails to distinguish

between FACTA’s enactment and effective dates or

account for claims arising between the two dates. If

applied here, the negative implication argument simply

conflates FACTA’s enactment and effective dates; if all

claims accruing after the date of enactment are extin-

guished without regard to the effective date, the latter

date has no meaning. We think this stretches the

Lindh/Hamdan adaptation of Landgraf too far.

We conclude Congress has not clearly spoken to the

question of whether § 1681m(h)(8) applies to FCRA claims

that arose between FACTA’s enactment and effective

dates, and thus move on to the second inquiry of the

12 Nos. 06-1616 & 06-2178

Landgraf analysis. This requires us to determine

whether the elimination of private rights of action would

have an impermissible retroactive effect if applied to the

events in these suits. More specifically, we ask whether

the application of the FACTA amendment eliminating

private rights of action would “impair rights a party

possessed when he acted, increase a party’s liability for

past conduct, or impose new duties with respect to trans-

actions already completed.” Landgraf, 511 U.S. at 280. If

the statute would have any of these effects if applied here,

the “traditional presumption” of prospectivity applies. Id.

Killingsworth’s cause of action accrued between FACTA’s

enactment and effective dates. While a plaintiff ’s sus-

taining an injury is usually a necessary part of a claim’s

accrual, see TRW Inc. v. Andrews, 534 U.S. 19, 30 (2001);

In re Copper Antitrust Litig., 436 F.3d 782, 789 (7th Cir.

2006); Barry Aviation, Inc. v. Land O’Lakes Mun. Airport

Comm’n, 377 F.3d 682, 688 (7th Cir. 2004); Cada v. Baxter

Healthcare Corp., 920 F.2d 446, 450 (7th Cir. 1990),

the FCRA contemplates possible awards of statutory

damages where the violation is willful, see 15

U.S.C. § 1681n(a)(1)(A), an allegation found both in

Killingsworth’s and Sawyer’s complaints. See Safeco Ins.

Co. of Am. v. Burr, 127 S. Ct. 2201, 2210 (2007). Thus,

actual damages are not necessarily a precondition for

suit; Killingsworth’s cause of action arose from House-

hold’s alleged willful failure to comply with § 1681m and

that is when the right to statutory damages arose. See

Murray v. GMAC Mortgage Corp., 434 F.3d 948, 953 (7th

Cir. 2006) (explaining that statutory damages allow for

the recovery of modest damages, that likely are small

and difficult to quantify, without proof of injury).

Accordingly, prior to FACTA’s effective date,

Killingsworth had a right of private civil action for dam-

ages, a right that would be impaired if FACTA’s repeal of

Nos. 06-1616 & 06-2178 13

private rights of action were applied retrospectively.

Section 1681m(h)(8) not only eliminates civil actions, but

also the damages recoverable under § 1681n, including

statutory, actual, and punitive damages for willful

failure to comply with § 1681m. The current § 1681m(h)(8)

specifies that § 1681m shall be enforced exclusively

under § 1681s, the administrative enforcement provision

of the FCRA.

The Third Circuit’s decision in Mathews supports our

conclusion, although it addressed retroactivity in the

context of a different statutory scheme. Mathews held

that a provision of the Private Securities Litigation Re-

form Act (“PSLRA”) eliminating private causes of action

for racketeering claims under the Racketeer Influenced

and Corrupt Organizations Act (“RICO”) based on predi-

cate acts of securities fraud should apply prospectively

only. 161 F.3d at 165. The court concluded that applying

the PSLRA’s amendment of RICO retrospectively would

impair the plaintiff ’s substantive rights and alter the

legal consequences that attached to the events in suit. The

court explained:

In this case, the events in question are the alleged

fraudulent acts by the defendants. If the RICO Amend-

ment is applied to this case, it would attach new legal

consequences to these events. Before the Amendment,

the legal consequences included liability under the

federal securities laws and RICO; after the Amend-

ment, the legal consequences included liability only

under the securities laws.

Id. at 164. The court also analogized to the circumstances

in Landgraf, which concerned an amendment to Title VII

making compensatory and punitive damages available

in employment discrimination actions, whereas only back

pay had been previously allowed. The court observed that

“[i]f a change in the law from back pay to compensatory

14 Nos. 06-1616 & 06-2178

and punitive damages is seen as creating a new cause of

action and impairing a party’s rights, certainly a change

from treble damages (under RICO) to compensatory

damages alone (under the securities laws) may be seen as

destroying a cause of action and impairing a party’s

rights.” Id. at 165.

We find the logic of Mathews persuasive here. Killing-

worth alleges that Household’s FCRA violation occurred

prior to August 20, 2004, before the December 1, 2004

effective date of § 1681m(h)(8), when she had a right to a

private cause of action for damages under the statute.

That preexisting substantive right would be impaired if

FACTA’s amendment eliminating private rights of action

were applied retrospectively. The amendment therefore

has an impermissible retroactive effect on claims like

Killingsworth’s that accrued prior to its December 1, 2004

effective date.

In Sawyer’s case, however, the issue of retroactivity

may ultimately be irrelevant. His complaint is not

precise about when the FCRA violation occurred, and

discovery may show that it occurred after December 1,

2004, when FACTA became effective. At the pleading

stage, however, we cannot say Sawyer’s complaint is

wholly insufficient; he alleges that he applied for insur-

ance in October 2004, before FACTA’s effective date, and

his insurance took effect on December 20, 2004, after

FACTA became effective. He claims Ensurance violated

the FCRA by not giving him an adverse action notice in

connection with the use of his credit information prior to

issuing the policy and also by failing to use more favor-

able credit information when the policy renewed.

The renewals, according to the complaint, occurred at

six-month intervals after the original policy was issued.

This conduct occurred after FACTA’s effective date and

therefore is not actionable. To the extent that Sawyer’s

Nos. 06-1616 & 06-2178 15

FCRA claim is based on Ensurance’s conduct leading up

to the initial issuance of the policy, it may or may not

be barred. See Safeco, 127 S. Ct. at 2211-12 (higher

initial rate may be an “increase” for purposes of adverse

action notice if it is based on credit report). As we have

noted, the allegations surrounding this event straddle

FACTA’s December 1, 2004 effective date. Accepting the

allegations as true, the FCRA violation could have oc-

curred before FACTA’s effective date; discovery may or

may not bear this out.

Ensurance also argues that Sawyer has not sufficiently

pleaded a willful violation of the FCRA. But the cases

Ensurance cites in support of this argument are sum-

mary judgment cases. See Wantz v. Experian Info. Solu-

tions, 386 F.3d 829, 834 (7th Cir. 2004) (“To act willfully,

a defendant must knowingly and intentionally violate the

[applicable provision] and it ‘must also be conscious

that [its] act impinges on the rights of others.’ ” (quoting

Philips v. Grendahl, 312 F.3d 357, 368 (8th Cir. 2002))).

Sawyer might (or might not) be able to defeat a summary

judgment motion on the element of willfulness (assuming

this claim goes forward), but his complaint contains

sufficient detail to survive a motion to dismiss. He

alleges that Ensurance failed to give him an adverse ac-

tion notice based on negative information in his credit

report. He alleges he removed the negative information

from his report sometime between October 2004 and

December 2005 and would have qualified for a more

favorable rate, but Ensurance nevertheless intentionally

and willfully charged him an increased rate based on the

negative credit information. This is enough factual detail

to state a claim for a willful violation of the FCRA.

For its part, Household also challenges the sufficiency

of Killingsworth’s complaint, specifically its allegation

that the § 1681m(d) disclosures were not clear and conspic-

16 Nos. 06-1616 & 06-2178

uous. But the pleadings contain discrepancies that make

it impossible to resolve this question at this stage of the

case. Killingsworth attached a copy of the purportedly

offending disclosures as an exhibit to her complaint.

Household attached a different document as an exhibit to

its motion for judgment on the pleadings, explaining that

the exhibit presents the disclosures “in a more readable

format than [that] . . . reproduced with the Complaint.”

Which version is “more readable” begs the ultimate

question here; the claimed FCRA violation is based on

allegations that Household’s actual disclosures were not

clear and conspicuous. Household’s version includes both

aesthetic and substantive differences from the disclosure

form attached to the complaint. This is not an issue

capable of resolution on the pleadings, or at least not on

these pleadings.

Finally, Household—like Ensurance—argues that

Killingsworth has not sufficiently pleaded a willful viola-

tion of the FCRA. For similar reasons, we reject the

argument. Killingsworth alleges that Household “prese-

lected” and targeted her (among others) for its credit

solicitation and accessed her credit information without

her knowledge or permission for that purpose. She alleges

that Household developed and approved the text and

format of the solicitation, including numerous specific

disclosures of credit terms and conditions that were

neither clear nor conspicuous, and that it did all this

willfully. This is enough factual detail to state a claim for

a willful violation of the FCRA.

For the foregoing reasons, we conclude that FACTA’s

elimination of private rights of action for § 1681m viola-

tions has an impermissibly retroactive effect when ap-

plied to claims that accrued before its December 1, 2004

effective date. Killingsworth’s claim may proceed; we

reverse the judgment on the pleadings in her case and

remand for proceedings consistent with this opinion.

Nos. 06-1616 & 06-2178 17

Sawyer’s claim may proceed for now; some of the allega-

tions in his complaint, if true, could establish that an

FCRA violation occurred before FACTA’s effective date.

We reverse the judgment dismissing his case and

remand for proceedings consistent with this opinion.

REVERSED AND REMANDED.

A true Copy:

Teste:

________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit

USCA-02-C-0072—11-9-07