Marissa Bibbs v. Trans Union LLC

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 21-1350
_____________
MARISSA BIBBS,
Appellant
v.
TRANS UNION LLC
________________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
D.C. No. 2:20-cv-04514
District Judge: Honorable Mark A. Kearney
________________
No. 21-1527
_____________
MICHAEL PARKE,
Appellant
v.
TRANS UNION LLC
________________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
D.C. No. 2:20-cv-04487
District Judge: Honorable Eduardo C. Robreno
________________
No. 21-1530
_____________
FATOUMATA SAMOURA,
Appellant
v.
TRANS UNION LLC
________________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
D.C. No. 2:20-cv-05178
District Judge: Honorable Mark A. Kearney
________________
Argued on January 20, 2022
Before: JORDAN, RESTREPO, and SMITH, Circuit Judges.
(Opinion filed: August 8, 2022)
_________
2
Matthew B. Weisberg [ARGUED]
Weisberg Law
7 South Morton Avenue
Morton, PA 19070
Counsel for Appellants
Camille R. Nicodemus [ARGUED]
Robert J. Schuckit
Schuckit & Associates
4545 Northwestern Drive
Zionsville, IN 46077
Counsel for Appellee
_________
OPINION OF THE COURT
_________
RESTREPO, Circuit Judge.
This matter was consolidated on appeal after originating
from three separate district court cases claiming violations of
the Fair Credit Reporting Act, et seq. (“FCRA”). 15 U.S.C. §
1681. Appellants Marissa Bibbs (“Bibbs”), Michael Parke
(“Parke”), and Fatoumata Samoura (“Samoura”) (collectively
3
“Appellants”)1 borrowed student loans from various lenders,
and they made payments on those loans until they were unable
to do so. Eventually, their respective lenders closed their
accounts and transferred their loans. Shortly after the transfers,
Appellants viewed their credit reports published by Appellee
Trans Union LLC (“Trans Union”), each of which contained a
negative “Pay Status” notation stating “>Account 120 Days
Past Due<.” The entries also stated that the loans were closed,
transferred, and had account balances of zero. Appellants claim
that the pay status notations were inaccurate because
Appellants did not have any financial obligations to their
previous lenders.
Appellants seek this Court’s review of the district
courts’ orders granting Trans Union’s motions for judgment on
the pleadings. Specifically, Appellants challenge the standard
the district courts applied to review the accuracy of their credit
reports and the district courts’ dismissal of Appellants’ cases
without ordering discovery. We will affirm the district courts’
orders.
I. BACKGROUND
A. Factual Background.
Because this is a consolidated matter, we will provide
facts common to all Appellants and note any relevant
distinguishing factors. Bibbs2 borrowed student loans from the
1
Bibbs’ matter is the lead case in this consolidated matter.
2
Bibbs borrowed two student loans from Navient in 2008 and
four additional student loans from the same lender in 2010. On
June 19, 2015, she made her last payment on each of the six
loans, leaving balances due on each. On April 5, 2018, Navient
closed all six of Bibbs’s student loans and transferred them.
4
Department of Education/Navient (“Navient”), and Parke3 and
Samoura4 borrowed student loans from Fedloan Servicing
(“Fedloan”). Following nonpayment by each Appellant, their
respective lenders closed their accounts and transferred them.
Once the loans were transferred, their account balances with
Navient and Fedloan, respectively, immediately went to zero,
and all of their payment obligations were transferred. See, e.g.,
App. 22-25. “Under the “Date Closed” data point, the student
loans also noted “>Maximum Delinquency of 120 days” and a
range of dates. The range of dates corresponded to a table that
appeared under the “Remarks” notice that reflected the
“rating” of the loan. The rating reflected the payment history
over the preceding months and whether the loan was
delinquent or “OK”. Id.None of the parties dispute that Appellants failed to
maintain timely payments on their loans and that Trans Union
accurately reported Appellants’ accounts as late until the dates
they were closed and the balances were transferred. It is also
undisputed that Appellants owed no balance to their previous
creditors once their accounts were transferred. Nonetheless,
each Appellant’s credit report contained the same negative pay
status notation: “˃Account 120 Days Past Due Date˂” (“Pay
3
Parke borrowed two student loans from Fedloan Servicing in
2009. He stopped making payments on both loans in December
2015. One year later, Fedloan closed his accounts and
transferred them.
4
Samoura borrowed a total of four student loans from Fedloan
in 2008 and 2011. In 2014, she stopped making payments on
her loans. In 2015, Fedloan closed her accounts and transferred
them.
5
Status”). See, e.g., App. 22-25. Appellants argue that the Pay
Status notations on their credit reports are inaccurate and can
mislead prospective creditors into incorrectly assuming that
Appellants are currently more than 120 days late on loans that
have been closed.
Shortly after each Appellant received their credit
reports, their lawyer5 sent a letter to Trans Union disputing the
accuracy of the report saying: “The following accounts have a
balance of $0 with a late status. This is simply incorrect. If my
client owes them no money and has no payments that are
needed, then it is impossible for their current status to be listed
as late.” App. 18, 112, 150-151. Counsel then requested that
the erroneous information be corrected or removed. Trans
Union launched an investigation into each disputed claim and
provided each Appellant with snapshots of their credit reports.6
5
The same counsel represented all three Appellants both at the
district court and here on appeal.
6
In all three cases, the district courts relied on the snapshots of
Appellants’ credit reports that Trans Union provided during the
investigation, not the actual credit reports. Appellants do not
oppose this on appeal. The district court in Bibbs noted that,
even though both parties asked the Court to opine on the credit
report’s accuracy, “neither party provided an actual credit
report for our review. The parties instead agreed to provide
only the investigation results and agreed these results provide
all the information we need to determine whether Trans
Union’s reporting of [Bibbs’] debt is inaccurate or
misleading.” App. 88.
6
Trans Union timely provided each Appellant with a
report of the results of its investigation into their disputes
(“Investigation Results”). We summarize Bibbs’ Investigation
Results report here, which is nearly identical to those of Parke
and Samoura. The Investigation Results include a “Note on
Credit Report Updates,” which explains, for accounts “that
have been closed and paid, Pay Status represents the last
known status of the account.” App. 20. It also provides
definitions to help the requesting consumer understand the
investigation results. Id. It provides a “Rating Key” to explain
notations in the Investigation Results that indicate “the
timeliness of [Bibbs’] payments for each month” the loan was
held by Navient. Id. The “Rating Key” notes that “[a]ny rating
that is shaded or any value in the account detail appearing with
brackets (> <) may indicate that it is considered adverse.” Id.The substance of the Investigation Results includes a copy of
the requesting consumer’s information as it now “appears on
[her] credit report following our investigation.” App. 22. One
of the six identical snapshot excerpts included in the district
court’s opinion demonstrates the following regarding Bibbs’
accounts: they each “(1) have a zero-dollar balance; (2) were
last updated on April 5, 2018; (3) were closed on April 5, 2018;
(4) had a maximum delinquency of 120 days in July 2017 and
in April 2018; and (5) were closed because Navient transferred
them to another office.” App. 87. Each snapshot includes
information on the payment status of each of Bibbs’ accounts
up until March 2018 but not beyond then.
For all three Appellants, the snapshots and credit reports
maintained the Pay Status notations indicating that their
accounts were more than 120 days past their respective due
dates. Following the letters from Appellants’ attorney and the
subsequent investigations, Trans Union did not update or
7
correct the disputed information and, instead, stated that the
reports were accurate.
B. Procedural Background
The procedural facts are nearly identical in each of the
three consolidated matters and are therefore jointly
summarized here. We will note any distinguishing relevant
facts. Appellants each filed nearly identical complaints or
amended complaints7 against Trans Union towards the end of
2020.8 The complaints alleged violations of the FCRA against
Trans Union resulting from its issuing credit reports that
contained inaccurate or misleading information about
Appellants and its refusal to revise its reports in response to
their complaints. Trans Union filed its answers to Appellants’
operative complaints9 and then filed motions for judgment on
the pleadings. The district courts in each of Appellants’ matters
entered an order and memorandum granting Trans Union’s
motions and denying Appellants’ motions. This appeal
followed. Bibbs, Parke, and Samoura’s matters are
consolidated before this Court.
7
After Samoura filed her complaint, Trans Union filed a
motion for judgment on the pleadings and Samoura filed a
partial cross-motion for judgment on the pleadings. The
district court entered an order in favor of Trans Union. This
appeal followed.
8
Samoura filed her complaint on October 16, 2020. Her co-
appellants filed amended complaints on December 28, 2020.
9
Trans Union filed its answers to each complaint or amended
complaint on the following dates: January 11, 2021 (Bibbs);
January 5, 2021 (Parke); and December 31, 2020 (Samoura).
8
II. JURISDICTION AND STANDARD OF
REVIEW
We have jurisdiction under 28 U.S.C. § 1291. We
review the denial of Appellants’ motions for judgment on the
pleadings de novo. Mid-Am. Salt, LLC v. Morris Cty. Coop.
Pricing Council, 964 F.3d 218, 226 (3d Cir. 2020). We analyze
a motion for judgment on the pleadings under Federal Rule of
Civil Procedure Rule 12(c) “under the same standards that
apply to a Rule 12(b)(6) motion.” Wolfington v. Reconstructive
Orthopaedic Assocs. II PC, 935 F.3d 187, 195 (3d Cir. 2019)
(internal quotations omitted). Under Rule 12(c), “a court must
accept all of the allegations in the pleadings of the party against
whom the motion is addressed as true and draw all reasonable
inferences in favor of the non-moving party.” Allstate Prop. &
Cas. Ins. Co. v. Squires, 667 F.3d 388, 390 (3d Cir. 2012)
(citation omitted). A court may grant a Rule 12(c) motion “if,
on the basis of the pleadings, the movant is entitled to judgment
as a matter of law.” Fed Cetera, LLC v. Nat’l Credit Servs.,
Inc., 938 F.3d 466, 469 n.7 (3d Cir. 2019) (internal quotations
and citation omitted). A plaintiff can survive a
Rule 12(c) motion if her complaint contains “sufficient factual
matter to show that the claim is facially plausible, thus enabling
the court to draw the reasonable inference that the defendant is
liable for [the] misconduct alleged.” Warren Gen. Hosp. v.
Amgen Inc., 643 F.3d 77, 84 (3d Cir. 2011) (quoting Fowler v.
UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009)) (internal
quotations omitted).
III. DISCUSSION
A. Background of the FCRA
The FCRA “was crafted to protect consumers from the
transmission of inaccurate information about them, and to
establish credit reporting practices that utilize accurate,
9
relevant, and current information in a confidential and
responsible manner.” Cortez v. Trans Union, LLC, 617 F.3d
688, 706 (3d Cir. 2010) (internal quotations and citation
omitted). “Congress intended to promote efficiency in the
nation’s banking system and to protect consumer privacy.” Id.(citing TRW Inc. v. Andrews, 534 U.S. 19, 24 (2001)); 15
U.S.C. § 1681(a). “The FCRA places certain duties on those
who furnish information to consumer reporting
agencies.” SimmsParris v. Countrywide Fin. Corp., 652 F.3d
355, 357 (3d Cir. 2011). For example, § 1681s-2(a)(2) requires
furnishers to correct any information they later discover to be
inaccurate. Furnishers must also provide consumer reporting
agencies (“CRAs”) with the “date of delinquency” when an
account is placed for collection or charged to profit or loss. 15
U.S.C. § 1681s-2(a)(5)(A). Consumer agencies, for their part,
must strive to “assure maximum possible accuracy” in credit
reports. 15 U.S.C. § 1681e(b).
After a credit reporting agency receives a notice pursuant
to § 1681i(a)(2) disputing the completeness or accuracy of
information provided by the agency, “the agency shall, free of
charge, conduct a reasonable reinvestigation to determine
whether the disputed information is inaccurate.” 15 U.S.C.
§ 1681i(a)(1)(A). “Thus, we can assume that absent any
indication that the information is inaccurate, the statute does
not mandate” further investigation. Cushman v. Trans Union
Corp., 115 F.3d 220, 225 (3d Cir. 1997); see also Seamans v.
Temple Univ., 744 F.3d 853, 865 (3d Cir. 2014) (stating
that “where a given notice contains only scant or vague
allegations of inaccuracy, a more limited investigation may be
warranted.”). An investigation into a consumer’s complaint
must be “reasonable.” SimmsParris, 652 F.3d at 359. “[A]
reasonable procedure is one that a reasonably prudent person
would undertake under the circumstances.” Seamans, 744 F.3d
10at 864 (internal quotations and citation omitted). In addition,
“when assessing reasonableness, the factfinder must balance
‘the potential harm from inaccuracy against the burden of
safeguarding against such inaccuracy.’” Id. at
865 (quoting Cortez, 617 F.3d at 709). Whether an
investigation is reasonable “is normally a question for trial
unless the reasonableness or unreasonableness of the
procedures is beyond question.” Cortez, 617 F.3d at
709 (internal citation and quotations omitted).10
B. Issues on Appeal
There are three issues requiring this Court’s review: (1)
whether the district courts erred in applying the “reasonable
creditor” standard; (2) whether Trans Union’s credit reports for
Appellants are accurate or misleading under the “maximum
possible accuracy” requirement of § 1681e(b) of the FCRA;
and (3) whether the district courts erred in dismissing
Appellants’ cases without ordering discovery. We will address
each issue in turn.
a. What Standard Applies in Determining
Accuracy under § 1681e(b)?
Before we determine whether Appellants’ credit reports
are inaccurate or misleading and whether the district courts
erred in dismissing Appellants’ cases, we must first establish
the proper standard to apply. Appellants argue that the district
courts erred in applying the “reasonable creditor” standard to
10
The First Circuit recognizes that a plaintiff bears the burden
of showing that the investigation was unreasonable.
See Chiang v. Verizon N. Eng. Inc., 595 F.3d 26, 37 (1st Cir.
2010).
11
determine whether Appellants’ credit reports issued by Trans
Union are misleading.
Appellants would like us to view the Pay Status entries
myopically;11 they argue that even if the reports would not
mislead a “reasonable creditor,” other furnishers or potential
creditors could be misled. Appellants correctly point out that
the FCRA authorizes creditors and others to use credit reports
when making decisions that affect consumers. This may
include potential employers, landlords, insurers, or service
providers. § 1681b(a)(3). Indeed, they point out that while it is
unclear as to whom the “reasonable creditor” describes, the
FCRA does not limit report access only to individuals and
entities sophisticated in the art of reading credit reports. See 15
U.S.C.A. § 1681a(d)(1) (defining “creditor”).
Trans Union argues that the district courts properly
applied the reasonable creditor standard in concluding that
reasonable creditors would think the Pay Status notations were
only “historical” and, as a result, would never base “adverse”
decisions on that data. In response to Appellants’ argument that
an unsophisticated creditor like a local landlord might find the
11
At the heart of Appellants’ contention is that the district court
viewed the credit report excerpt in its entirety instead of
considering the data point “Pay Status” in isolation. See
Appellant’s Br. 20 (criticizing district courts for concluding
“the ‘Pay Status’ entries are not misleading . . . in light of other
information in the credit reports”) Appellant’s Br. at 30-31
(arguing that there is only one conclusion to reach “without
reference to other information in the credit reports”);
Appellant’s Br. at 32 (taking issue with Court’s conclusion that
credit report is accurate “in light of other data entries in the
reports”); and 36 (urging that the approach of “read[ing] all the
other entries before making a decision” has flaws).
12
Pay Status notations on the credit reports misleading, Trans
Union asserts that even if “someone, somewhere, young or old,
unsophisticated or maybe just in a hurry, might mis-read or
misunderstand Appellee’s reporting,” that is not the proper
standard under which courts should evaluate FCRA claims.
Appellee Br. at 32. Trans Union asserts that “the fact that some
user somewhere could possibly squint at a report and imagine
a reason to think twice about its subject would not render the
report objectively misleading.” Erickson v. First Advantage
Background Servs. Corp., 981 F.3d 1246, 1252 (11th Cir.
2020). Trans Union notes that numerous district courts
throughout the country have applied the reasonable creditor or
lender standard to similar cases.12
Under the FCRA, the term “creditor” means
“any person who regularly extends, renews, or
continues credit; any person who regularly arranges for the
extension, renewal, or continuation of credit; or any assignee
of an original creditor who participates in the decision to
extend, renew, or continue credit.” 15 U.S.C.A. § 1691a(e)
12
See, e.g., Jones v. Equifax Info. Servs., LLC, No. 2:18-cv-
2814, 2019 WL 5872516, at *4 (M.D. Tenn. Aug. 8, 2019)
(ruling that a credit report showing a monthly payment
obligation when the account was closed and had a zero-dollar
balance was not materially misleading because “a reasonable
prospective lender would understand [that] the report showed
a past obligation only”); Thomas v. Equifax Info. Servs., LLC,
No. 3:19-cv-286, 2020 WL 1987949, at *6 (S.D. Ohio Apr. 27,
2020) (ruling “no reasonable person would be misled into
believing that [the plaintiff] has any ongoing monthly
obligation on this installment loan” when the account was
reported closed with a zero-dollar balance).
13
(emphasis added).13 Further, the FCRA defines “person” to
include “any individual.” 15 U.S.C.A. § 1681a(b) (emphasis
added).14 Appellants’ argument implies that the reasonable
creditor standard excludes unsophisticated creditors who make
determinations on individuals using credit reports. We
disagree. It is unreasonable to assume that Congress, in
requiring the “maximum possible accuracy” and allowing
individuals and entities other than sophisticated creditors to use
credit reports to make decisions, drafted the FCRA with the
intention that only sophisticated creditors should understand
the information these reports contain. See 15 U.S.C. § 1681b(f)
(stating that a person shall not “use or obtain a consumer
report” unless it is obtained for a permissible purpose15 but not
limiting access to established sophisticated creditors). If that
were the case, individuals other than typical sophisticated
creditors would not be allowed to access individuals’ credit
Section 1681a states that the term “creditor” has the same
13
meaning under 15 U.S.C.A. § 1691a.
14
The full definition provides that a “person” under the FCRA
is “any individual, partnership, corporation, trust, estate,
cooperative, association, government or governmental
subdivision or agency, or other entity.” 15 U.S.C.A. §
1681a(b).
15
A permissible purpose under the FCRA requires that the
creditor intend to use the information in connection with a
“credit transaction involving the consumer.” 15 U.S.C. §
1681b(a)(3)(A). The FCRA defines “credit” to mean “the right
granted by a creditor to a debtor to defer payment of debt or to
incur debts and defer its payment or to purchase property or
services and defer payment therefor.” Id. §§ 1681a(r)(5),
1691a(d).
14
reports or use credit reports to make either favorable or adverse
decisions on candidates.
Although the term “creditor” broadly encompasses both
sophisticated and unsophisticated individuals and entities
alike, the term “reasonable creditor” does not accurately reflect
the intent of the FCRA. The statute does not limit the
permissible use of consumer reports to creditors; rather, the
provision contemplates a range of permissible users including,
but not limited to, potential and actual employers, investors,
and insurers. See 15 U.S.C. § 1681b(a). To account for those
possibilities, we adopt a “reasonable reader” standard which
determines how a reasonable reader would have comprehended
a report. See, e.g., Twumasi-Ankrah v. Checkr, Inc., 954 F.3d
938, 946-47 (6th Cir. 2020) (Bush, J., dissenting) (agreeing
with the majority on the legal standard and looking to how “a
reasonable reader” would have understood a report); Barrow v.
Trans Union, LLC, No. 20-CV-3628, 2021 WL 1424681, at *5
(E.D. Pa. Apr. 13, 2021) (reviewing credit report “from the
perspectives of a typical, reasonable reader and a typical,
reasonable creditor”). A court applying the reasonable reader
standard to determine the accuracy of an entry in a report must
make such a determination by reading the entry not in isolation,
but rather by reading the report in its entirety. On the other
hand, if an entry is inaccurate or ambiguous when read both in
isolation and in the entirety of the report, that entry is not
accurate under § 1681e(b).
Further, in the context of the FCRA, the reasonable
reader standard does not exclude unsophisticated creditors.
Rather, a plain reading of the statute’s text makes it clear that
any person (or their assignee) who regularly extends, renews,
or continues credit is a creditor. Therefore, the reasonable
reader standard runs the gamut to include sophisticated entities
15
like banks and less sophisticated individuals such as local
landlords.
b. The Accuracy of Appellants’ Credit Reports
under § 1681e(b)
Applying the reasonable reader standard, Appellants’
question remains: Are their credit reports containing the Pay
Status notations misleading or inaccurate? Appellants argue
that, because of the allegedly inaccurate Pay Status notations
on Appellants’ credit reports, Trans Union is liable for
negligent noncompliance under § 1681e(b) of the FCRA,
which requires CRAs to include only accurate information on
consumers’ credit reports. 15 U.S.C. § 1681e(b). This Court
must decide whether the district courts erred in determining
that the information in Appellants’ credit reports is sufficient
under § 1681e(b)’s “maximum possible accuracy” standard
and that Trans Union is not otherwise liable for negligent
noncompliance. Id. Negligent noncompliance with FCRA §
1681e(b) consists of four elements: “(1) inaccurate information
was included in a consumer’s credit report; (2) the inaccuracy
was due to defendant’s failure to follow reasonable procedures
to assure maximum possible accuracy; (3) the consumer
suffered injury; and (4) the consumer’s injury was caused by
the inclusion of the inaccurate entry.”16 Cortez, 617 F.3d at 708
(quoting Philbin v. Trans Union Corp., 101 F.3d 957, 963 (3d
Cir. 1996)). Section 1681e(b) provides in relevant
part: “Whenever a consumer reporting agency prepares a
consumer report it shall follow reasonable procedures to assure
maximum possible accuracy of the information concerning the
16
Appellants also allege willful violations of the FCRA, which
require the additional showing that the defendant acted
knowingly or with reckless disregard of the statute’s terms.
Seamans, 744 F.3d at 868 (3d Cir. 2014).
16
individual about whom the report relates.” 15 U.S.C. §
1681e(b). This standard mandates “more than merely allowing
for the possibility of accuracy.” Cortez, 617 F.3d at 709. An
inaccuracy is the threshold requirement for a § 1681e(b) claim.
Cahlin v. Gen. Motors Acceptance Corp., 936 F.2d 1151, 1156
(11th Cir. 1991) (noting that the FCRA “implicitly requires”
evidence that a CRA “prepared a report containing ‘inaccurate’
information” in order to demonstrate a prima facie case of a §
1681e(b) violation); see also Dalton v. Capital Assoc. Indus.
Inc., 257 F.3d 409, 415 (4th Cir. 2001) (stating that an
inaccurate report is one that is “patently incorrect” or
“misleading in such a way and to such an extent that it can be
expected to have an adverse effect.”). Moreover, “the
distinction between ‘accuracy’ and ‘maximum possible
accuracy’ is not nearly as subtle as may at first appear,” and “it
is in fact quite dramatic.” Cortez, 617 F.3d at 709. As this
Court explained, even if the information in a credit report “is
technically correct, it may nonetheless be inaccurate if, through
omission, it creates a materially misleading impression.” 17
17
This case differs from other matters this Court has considered
concerning allegations of inaccurate information on credit
reports, holding that the negative reporting was inaccurate. In
Cortez, the appellant’s identity was mistaken for someone on a
list of suspected terrorists whose name closely resembled hers.
617 F.3d at 688 (ruling in favor of appellants). In Philbin v.
Trans Union Corp, appellants disputed a tax lien that was
erroneously included in their report. 101 F.3d 957, 963 (3d Cir.
1996) (ruling in favor of appellants). In Cushman v. Trans
Union Corp., this Court examined a credit line that was
fraudulently opened in appellant’s name. 115 F.3d 220, 225
(3d Cir. 1997) (ruling in favor of appellants). Unlike the
information disputed in the matter before us, in each of the
17
Seamans, 744 F.3d at 865 (internal quotations and citation
omitted).
Appellants argue that the disputed Pay Status is
misleading. Appellant Br. at 30. The entry on the report states,
“Pay Status: ˃Account 120 Days Past Due Date˂.” There are
no verbs such as “is” or “was” or any other language in this
entry that make “patently” clear whether it means “currently”
120 days past due or “historically” 120 days past due.
Appellants assert that, “without reference to other information
in the credit reports, the only way to read this entry is to
conclude it means ‘currently’ past due.” Appellant Br. at 31.
This is a critical point on which Appellants diverge from the
district courts and Trans Union. Trans Union asserts that the
Pay Statuses, when read in the entirety of the reports, are
clearly historical notations. Trans Union therefore argues that
the reports are accurate and do not leave room for ambiguity.
For example, as the district court in Bibbs pointed out, the
example snapshot18 states clearly that the loan is closed. The
snapshot of the report states in all capital letters, “ACCT
CLOSED DUE TO TRANSFER; TRANSFERRED TO
ANOTHER OFFICE.” It also says, “Date Closed:
04/05/2018.” These are two clear statements that the account
is closed. Trans Union further disagrees with Appellants’
argument that the past due status can create ambiguity
regarding the Appellants’ financial obligations, because the
report lists the balance of the loan as “$0.” Trans Union
three previous cases, the disputed information was never true
at any point in time.
18
In its opinion, the district court included an image of Bibbs’
snapshot. See App. 87; Bibbs v. Trans Union, LLC, 521 F.
Supp. 3d 569, 573 (E.D. Pa. 2021).
18
maintains that it has not omitted any pertinent information
regarding the status of the account that could create a
materially misleading impression. Trans Union asserts that this
is logical: one simply cannot owe payment on an account that
is closed, even if the pay status lists it as 120 days past due.
As we hold here, to determine whether Trans Union is
in violation of § 1681e(b), we apply the reasonable reader
standard. Each credit report contains the “120 Days Past Due”
Pay Status notation and the two conspicuous statements on the
report stating that the respective account is closed. Even if the
information on Appellants’ credit reports is technically
accurate, is a reasonable creditor that reads Appellants’ credit
reports in their entirety likely to incorrectly believe that
Appellants currently owe their respective former creditors
payments?
Perhaps Trans Union could have made the reports even
clearer, but the reports, as is, are clear. We apply the reasonable
reader standard reading the report in its entirety. Although §
1681e(b) sets the goal for credit reporting agencies to achieve
the “maximum possible” amount of accuracy, we recognize
that the idea of a maximum in this context is an elusive one.
The possibility of further clarity is not an indication of
vagueness; just because a report could potentially be a bit
clearer does not mean that it is not very clear at present.
Appellants’ reports contain multiple conspicuous statements
reflecting that the accounts are closed and Appellants have no
financial obligations to their previous creditors. These
statements are not in conflict with the Pay Status notations,
because a reasonable interpretation of the reports in their
entirety is that the Pay Status of a closed account is historical
information.
19
We therefore agree with the district courts’ orders and
hold that Appellants’ credit reports are accurate under §
1681e(b).
c. The Reasonableness of Trans Union’s
Reinvestigation Procedure under § 1681i(a)
Appellants also argue that the district court erred in
dismissing their claims that Trans Union violated § 1681i(a) by
“failing to conduct a good faith investigation and failing to
permanently delete or modify inaccurate information after
receiving [Appellants’] dispute.” App. 109. We disagree.
If a consumer disputes “the completeness or accuracy of
any item of information” in his consumer report and notifies
the consumer reporting agency of the dispute, § 1681i(a)
requires the agency to “conduct a reasonable reinvestigation to
determine whether the disputed information is inaccurate.” 15
U.S.C. § 1681i(a)(1)(A). The parties before us agree that,
before a court can consider whether an agency’s
reinvestigation was reasonable, it must first determine that the
disputed information was in fact inaccurate. As the First
Circuit noted in DeAndrade v. Trans Union LLC, “it is difficult
to see how a plaintiff could prevail on a claim for damages
under § 1681i without a showing that the disputed information
disclosed by the credit agency was, in fact, inaccurate.” 523
F.3d 61, 67 (1st Cir. 2008). And in Cushman, we endorsed the
district court’s view that “[t]he decisive inquiry [for the
plaintiff’s § 1681i claim] is whether Trans Union could have
determined that [there was an inaccuracy] if it had reasonably
investigated the matter”. 115 F.3d at 226. We therefore join
“the weight of authority in other circuits[,]” which indicates
that, “without a showing that the reported information was in
20
fact inaccurate, a claim brought under § 1681i must fail.”19
DeAndrade, 523 F.3d at 67; see also, e.g., Denan, 959 F.3d at
296-98; Shaw v. Experian Info. Sols., Inc., 891 F.3d 749, 756
(9th Cir. 2018); Wright v. Experian Info. Sols., Inc., 805 F.3d
1232, 1242 (10th Cir. 2015); Cahlin, 936 F.2d at 1160. In
holding that a plaintiff must show an inaccuracy to proceed
under either § 1681e(b) or § 1681i(a), we also conclude that
information that is technically accurate but materially
misleading is sufficient to trigger § 1681i(a), just as it is for §
1681e(b).20 See Shaw, 891 F.3d at 756 (“[W]e apply the same
understanding of ‘inaccurate’ in analyzing § 1681e and § 1681i
claims.”); cf. Cortez, 617 F.3d at 713 (noting that information
that is “misleading or inaccurate” triggers a duty under a
different subsection of § 1681i(a)); Seamans, 744 F.3d at 865
(adopting the “materially misleading” standard for claims
under 15 U.S.C. § 1681s-2(b), which “imposes essentially the
same [reinvestigation] obligation on furnishers of information”
as § 1681i(a) does on consumer reporting agencies, Chiang v.
Verizon New England Inc., 595 F.3d 26, 37 (1st Cir. 2010)).
19
We note that this position does not undermine § 1681i(a)(3),
which allows a consumer reporting agency to terminate a
reinvestigation if it “reasonably determines that the dispute by
the consumer is frivolous or irrelevant[.]” 15 U.S.C. §
1681i(a)(3)(A).
20
Textually, while the phrase “maximum possible accuracy”
does not appear in § 1681i the way it does in § 1681e(b), the
former provision does allow a consumer to dispute the
“completeness or accuracy” of information and requires a CRA
to delete or modify anything that is “inaccurate or incomplete.”
15 U.S.C. § 1681i(a)(5)(A) (emphasis added).
21
As we have already held, the Pay Status entries in
Appellants’ credit reports are neither inaccurate nor misleading
to a reasonable reader. That forecloses Appellants’ claims
under § 1681i(a), just as it does their § 1681e(b) claims.
Accordingly, the district courts did not err in dismissing
Appellant’s complaints.
d. Discovery on Accuracy of Appellants’ Credit
Reports
Appellants argue that discovery is necessary to
determine whether the Pay Status notations would mislead a
creditor and whether creditors are likely to make adverse
decisions against Appellants based on the lower credit scores
caused by the Pay Status entries..21 The reasonable reader
standard is an objective standard, reading the report in its
21
The district courts evaluating similar matters are not
currently in agreement as to whether discovery is necessary,
with the majority dismissing analogous claims without
ordering discovery. See Ostrander v. Trans Union LLC, No.
CV 20-5227, 2021 WL 3271168, at *8 (E.D. Pa. July 30, 2021)
(in a factually analogous case, stating that
“no reasonable creditor would understand the monthly
payment notation to indicate a current payment obligation. . . .
[R]eporting historical monthly payment amounts on closed
accounts with a zero balance is not inaccurate or misleading.”)
(citations omitted); but see Barrow v. Trans Union, LLC, 2021
WL 1425681, at *5 (E.D. Pa. 2021) (rejecting Bibbs on
“strikingly similar” facts, denying Trans Union’s Motion for
Judgment on the Pleadings, and ordering discovery on the
question of how the plaintiff’s credit report “would or would
not [be] interpret[ed].”).
22
entirety, not a subjective one.22 Because the credit reports are
accurate under § 1681e(b) as a matter of law, discovery is not
necessary.
IV. CONCLUSION
Accordingly, we will affirm the district courts’ order
granting Trans Union’s Motion for Judgment on the Pleadings.
22
Even if the Pay Status notation decreases Appellants’ credit
scores, this sort of adverse historical notation and consequence
is permissible under § 1681c(b). Unfortunately for Appellants,
this may indeed lead creditors to make adverse decisions
affecting Appellants, but it would be within their right to do so
because Appellants’ credit reports are accurate.
23