THORNTON v. EQUIFAX INFORMATION SERVICES LLC et al

Filing 21

ORDER granting 13 Partial Motion to Dismiss for Failure to State a Claim. Ordered by US DISTRICT JUDGE CLAY D LAND on 11/5/2018 (CCL)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
COLUMBUS DIVISION
CHRISTOPHER THORNTON,

*

Plaintiff,

*

vs.

*

EQUIFAX INFORMATION SERVICES,
LLC and KINETIC CREDIT UNION,

*

CASE NO. 4:18-CV-80 (CDL)
*
Defendants.
*
O R D E R
Christopher
reported
agencies,

false
in

Thornton
credit

violation

alleges

that

information
of

the

Fair

(“FCRA”), 15 U.S.C. §§ 1681 to 1681x.

Kinetic

to

Credit

consumer

Credit

Union

reporting

Reporting

Act

In addition to his FCRA

claims, Thornton asserts state law claims against Kinetic for
defamation and litigation expenses.

Maintaining that Thornton’s

state law claims are preempted by the FCRA, Kinetic moved to
dismiss

those

claims.

For

the

reasons

explained

in

the

remainder of this Order, Kinetic’s partial motion to dismiss
(ECF No. 13) is granted.
MOTION TO DISMISS STANDARD
“To survive a motion to dismiss” under Federal Rule of
Civil Procedure 12(b)(6), “a complaint must contain sufficient
factual matter, accepted as true, to ‘state a claim to relief
that is plausible on its face.’”

Ashcroft v. Iqbal, 556 U.S.

662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570 (2007)).

The complaint must include sufficient factual

allegations “to raise a right to relief above the speculative
level.”

Twombly, 550 U.S. at 555.

In other words, the factual

allegations must “raise a reasonable expectation that discovery
will reveal evidence of” the plaintiff’s claims.

Id. at 556.

But “Rule 12(b)(6) does not permit dismissal of a well-pleaded
complaint simply because ‘it strikes a savvy judge that actual
proof

of

those

facts

is

improbable.’”

Watts

v.

Fla.

Int’l

Univ., 495 F.3d 1289, 1295 (11th Cir. 2007) (quoting Twombly,
550 U.S. at 556).
FACTUAL ALLEGATIONS
Thornton
claims.

alleges

the

following

facts

in

support

of

his

The Court must accept these allegations as true for

purposes of the pending motion.
Thornton

filed

a

Chapter

7

bankruptcy

petition.

He

received a discharge of his debts on February 7, 2017, including
his delinquent accounts with Kinetic.
although

Kinetic

received

notice

of

Thornton alleges that
his

discharge

from

the

bankruptcy court, Kinetic falsely reported to the credit bureaus
that Thornton had delinquent balances and that his accounts had
been charged off.

Thornton received notice of these reports

when he was rejected for a loan in April 2017.

He disputed

these reports to Equifax, and he believes that Equifax notified

2

Kinetic of the disputes as required by the FCRA.
responded

that

it

had

researched

the

revisions to Thornton’s credit file.

issue

Equifax later
and

made

Thornton then applied for

a car loan and had his Equifax credit report pulled again.
alleges

that

he

was

denied

the

some

car

loan

continued to report the false information.

because

He

Kinetic

After that denial,

Thornton again disputed the report through Equifax.

He alleges

that based on the “extensive communication history regarding the
inaccuracy of the information that Kinetic was publishing to the
credit bureaus,” Kinetic knew or should have known that it was
reporting false information about Thornton’s accounts but did it
anyway, “maliciously and with intent to injure” him, despite
knowing

that

the

false

information

would

Thornton’s prospective credit grantors.

be

provided

to

Compl. ¶¶ 48-50, ECF

No. 1.
DISCUSSION
Thornton
against

asserts

Kinetic

as

reporting agencies.

a
a

FCRA

claim

furnisher

of

under

15 U.S.C. § 1681s-2

information

to

consumer

He also brings state law claims against

Kinetic for defamation and for litigation expenses pursuant to
Georgia law.
are

Kinetic argues that Thornton’s state law claims

preempted

under

the
That

15 U.S.C. § 1681t(b)(1)(F).

FCRA,
provision

specifically
states:

“No

requirement or prohibition may be imposed under the laws of any

3

State [except specified Massachusetts and California statues]
. . . with respect to any subject matter regulated under . . .
[15 U.S.C. § 1681s-2],

relating

to

the

responsibilities

of

persons who furnish information to consumer reporting agencies.”
15 U.S.C. § 1681t(b)(1)(F).
preempts

state

information

law

under

This provision on its face clearly

claims

the

against

circumstances

furnishers
alleged

of

in

credit

Thornton’s

complaint.
But Thornton points to 15 U.S.C. § 1681h(e) as an exception
to this broad preemption.
Congress

twenty-six

That provision, which was adopted by
years

before

it

enacted

15 U.S.C. § 1681t(b)(1)(F), reads as follows:
Except as provided in sections 1681n and 1681o of this
title, no consumer may bring any action or proceeding
in the nature of defamation, invasion of privacy, or
negligence
with
respect
to
the
reporting
of
information against any consumer reporting agency, any
user of information, or any person who furnishes
information to a consumer reporting agency, based on
information disclosed pursuant to section 1681g,
1681h, or 1681m of this title, . . . except as to
false information furnished with malice or willful
intent to injure such consumer.
15 U.S.C. § 1681h(e).

This

provision

provides

limited

preemption when the furnisher of credit information does not act
with malice or willful intent.

When the furnisher acts with

such intent, however, there is no preemption.
preemption
found

in

certainly

conflicts

with

15 U.S.C. § 1681t(b)(1)(F).

4

the

This limited

complete

Some

courts,

preemption
including

this one, have engaged in linguistic gymnastics to find that
these two provisions do not conflict.

See, e.g., Purcell v.

Bank of Am., 659 F.3d 622, 625-26 (7th Cir. 2011); Macpherson v.
JPMorgan Chase Bank, N.A., 665 F.3d 45, 47 (2d Cir. 2011).

This

Court now finds the rationale of those cases unpersuasive.1
When these two provisions are read in the context of the
entire

FCRA,

it

is

clear

that

both

provisions

apply

to

furnishers of credit information under the circumstances alleged
in Thornton’s complaint.

Section 1681h(e) permits a state law

defamation claim against a furnisher based on false information
provided to a consumer reporting agency with malice or willful
intent to injure the consumer.
state

law

claim

against

a

But § 1681t(b)(1)(F) preempts a
furnisher

who

knowingly

reports

inaccurate information.
The
drafter

Court
counsels

recognizes
against

conflicts in its work.”

that
too

“[r]espect
easily

for

finding

Congress

as

irreconcilable

Epic Sys. Corp. v. Lewis, 138 S. Ct.

1612, 1619, 1624 (2018) (addressing a claimed conflict between
the Federal Arbitration Act and the National Labor Relations Act
and concluding that there was no conflict because the two acts
“enjoyed separate spheres of influence”).
1

And, “respect for the

The Court recognizes that today’s ruling is contrary to its previous
ruling in Comer v. J.P. Morgan Chase Bank, N.A., No. 4:11-cv-88, 2012
WL 4210426 (M.D. Ga. Sept. 18, 2012) (finding that 15 U.S.C.
§ 1681h(e) is an exception to 15 U.S.C. § 1681t(b)(1)(F)). Better to
have learned late than never to have learned at all.

5

separation of powers counsels restraint.”
rules

“aim[]

for

harmony

over

Id.

Therefore, the

conflict

in

statutory

interpretation,” and those rules “grow from an appreciation that
it’s the job of Congress by legislation, not [the courts] by
supposition, both to write the laws and to repeal them.”
In

this

case,

the

two

provisions

of

the

FCRA

Id.

cannot

be

harmonized unless providing false information with “malice or
willful intent to injure,” § 1681h(e), means something different
than providing false information that the furnisher “knows or
has

reasonable

cause

to

believe

that

the

information

is

inaccurate,” which is prohibited under § 1681s-2(a)(1)(A).
this

language

provision

that

means

the

provides

same

thing,

complete

the

FCRA

preemption

and

If

contains

one

another

that

provides limited preemption under the same exact circumstances—a
better example of direct conflict could not be found.
The FCRA does not define “malice” or “willful intent to
injure.”
overcome

The
a

Supreme

qualified

Court

defined

privilege

under

“malice”
the

First

necessary

to

Amendment

as

publishing a statement “with knowledge that it was false or with
reckless disregard of whether it was false or not.”
Times Co. v. Sullivan, 376 U.S. 254, 280 (1964).
should apply to define

the intent

New York

This standard

necessary to overcome the

FCRA’s qualified privilege expressed in § 1681h(e); if a bank
furnishes

false

negative

credit

6

information

about

a

consumer

despite knowing that it is false and that it will appear on the
consumer’s credit report and impact credit decisions regarding
the consumer, that act can fairly be said to be with malice or
willful

intent

provisions

to

cannot

injure
be

such

harmonized:

consumer.
state

law

Thus,

the

defamation

two

claims

like the ones Thornton asserts are permitted under § 1681h(e)
but barred under § 1681t(b)(1)(F).
Having determined that an irreconcilable conflict exists,
the Court next must decide what to do about it.
warranted

because

“repeals

by

implication

are

Caution is

‘disfavored.’”

Epic Sys., 138 S. Ct. at 1624 (quoting United States v. Fausto,
484 U.S. 439, 452, 453 (1988)).

“‘Congress will specifically

address’ preexisting law when it wishes to suspend its normal
operations in a later statute.”
well-settled

categories

of

repeals

Id.
by

But, “[t]here are two
implication:

(1)

Where

provisions in the two acts are in irreconcilable conflict, the
later act to the extent of the conflict constitutes an implied
repeal of the earlier one; and (2) if the later act covers the
whole subject of the earlier one and is clearly intended as a
substitute, it will operate similarly as a repeal of the earlier
act.”
(1936).

Posadas v. Nat’l City Bank of New York, 296 U.S. 497, 503
For one statute to displace another, there must be “‘a

clearly expressed congressional intention’ that such a result
should follow.”

Epic Sys., 138 S. Ct. at 1624 (quoting Vimar

7

Seguros y Reaseguros, S.A. v. M/V Sky Reefer, 515 U.S. 528, 533
(1995)).

“The intention must be ‘clear and manifest.’”

Id.

(quoting Morton v. Mancari, 417 U.S. 535, 551 (1974)); accord
Posadas,

296

specifically

U.S.

at

permits

503.

what

Of

an

course,

earlier

“[w]hen

statute

a

statute

prohibited,

or

prohibits what it permitted, the earlier statute is (no doubt
about

it)

Garner,

implicitly

Reading

repealed.”

Law:

The

Antonin

Interpretation

Scalia
of

Legal

&

Bryan
Texts

A.
327

(2012).
With regard to the two provisions of the FCRA at issue in
this case, § 1681h(e) was part of the original FCRA, which did
not impose duties on furnishers of credit information or create
a right of action against furnishers based on their furnishing
of inaccurate credit information to consumer reporting agencies.
See, e.g., Rush v. Macy’s New York, Inc., 775 F.2d 1554, 1557
(11th Cir. 1985) (noting that under the pre-1996 statute, “civil
liability

for

improper

use

and

dissemination

of

credit

information may be imposed only on a consumer reporting agency
or user of reported information who willfully or negligently
violates the [Act],” and concluding that consumers could not
bring

an

FCRA

claim

against

a

creditor

for

furnishing

information to a credit reporting agency).
Twenty-six

years

after

the

FCRA

was

originally

enacted,

Congress enacted the Consumer Credit Reporting Reform Act of

8

1996, a comprehensive overhaul of the FCRA.

As part of that

overhaul, Congress added § 1681s-2 to impose specific duties on
furnishers

of

information

to

consumer

reporting

agencies.

Consumer Credit Reporting Reform Act of 1996, Pub. L. 104-208
§ 2413(a)(2), 110 Stat. 3009-447 to 3009-448.

Congress also

added

violations

an

enforcement

scheme

for

alleged

FCRA

by

furnishers of credit information, with significant limitations
on liability and enforcement.
codified

at

15

U.S.C. §

§ 1681t(b)(1)(F),
respect

to

any

[1681s-2].”

which
subject

Id. § 2413, 110 Stat. 3009-448,

1681s-2(c)-(d).
expressly
matter

And

preempts

regulated

Congress

state

under

law

. . .

added
“with

section

Consumer Credit Reporting Reform Act of 1996, Pub.

L. 104-110 § 2419, 110 Stat. 3009-452 to 3009-453.

In summary,

the Consumer Credit Reporting Reform Act of 1996 imposed duties
on furnishers of credit information under the FCRA for the first
time; created new but limited remedies for violations of those
duties;

and declared that the

states could not regulate any

subject matter regulated under § 1681s-2 (which imposed those
new duties on furnishers of credit information).

In the Court’s

view, the Consumer Credit Reporting Reform Act of 1996 is a
clear and manifest expression of Congress’s intent to regulate
the

duties

state

law

repealed

of
on

to

credit
this

the

information

subject.

extent

it

furnishers

So,

§ 1681h(e)

conflicts

9

and

with

is

to

displace

implicitly

§ 1681t(b)(1)(F).

Thornton’s

state

law

claims

are

therefore

preempted

under

§ 1681t(b)(1)(F).
CONCLUSION
As

discussed

above,

Kinetic’s

partial

motion

to

dismiss

(ECF No. 13) is granted.
IT IS SO ORDERED, this 5th day of November, 2018.
S/Clay D. Land
CLAY D. LAND
CHIEF U.S. DISTRICT COURT JUDGE
MIDDLE DISTRICT OF GEORGIA

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