Underwood v. Experian Information Solutons, Inc. et al
Filing
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OPINION and ORDER Signed by the Honorable Sara L. Ellis on 4/5/2017: For the reasons stated in the Opinion and Order entered this day, the Court grants Equifax's motion to dismiss 30 the complaint. (See Order For Further Details). Mailed notice(lxs, )
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
JOSEPH D. UNDERWOOD, and all others
similarly situated,
Plaintiffs,
v.
EXPERIAN INFORMATION SOLUTIONS,
INC., TRANS UNION, LLC, and EQUIFAX
INFORMATION SERVICES, LLC,
Defendants.
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No. 16 C 7829
Judge Sara L. Ellis
OPINION AND ORDER
Believing that Defendants Equifax Information Services, LLC (“Equifax”), Trans Union,
LLC, and Experian Information Solutions misreported his child support payments as delinquent,
Plaintiff Joseph Underwood filed suit under the Fair Credit Reporting Act (“FCRA”), 16 U.S.C.
§ 1681 et seq. Underwood brings claims under 15 U.S.C §§ 1681e(b) and 1681i, arguing that
Equifax has failed to ensure maximum possible accuracy in his consumer report and that Equifax
failed to adequately investigate and correct Underwood’s consumer report when Underwood
disputed the accuracy of the report. Equifax moves to dismiss [30] Underwood’s complaint,
arguing that it received the information about Underwood’s purported child support
delinquencies from the Texas Attorney General’s Office (“OAG”), and that pursuant to 15
U.S.C. § 1681s-1, Equifax is required to include in consumer reports any information it receives
from state enforcement agencies regarding child support delinquencies. 1 Therefore, Equifax
argues, it cannot be liable under other sections of the FCRA for complying with another
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Defendants Trans Union, LLC, and Experian Information Solutions, Inc., have filed motions for
judgment on the pleadings [41, 44], which are currently pending.
mandatory provision of the FCRA. Equifax alternatively moves to dismiss Underwood’s
willfulness claim because Underwood has failed to plead that Equifax acted willfully.
Because § 1681s-1 requires consumer reporting agencies (“CRAs”) to include any
information they receive from state enforcement agencies regarding child support delinquencies,
and Underwood has alleged that the delinquencies on his consumer report from Equifax
originated from OAG, Equifax cannot be liable for violations of other sections of the FCRA
based on actions it took to comply with a mandatory provision of the FCRA. The Court,
therefore, grants Equifax’s motion to dismiss.
BACKGROUND 2
Underwood has a child support obligation that he is required to satisfy by making
payments to the OAG. He pays his child support obligation through automatic deductions from
his wages, which he receives every two weeks from his employer. He, therefore, makes 26 such
payments each calendar year. Depending upon how his biweekly pay periods align with the
calendar, he receives either two or three paychecks per month. Underwood’s annual child
support obligations are divided equally among his 26 pay periods, meaning the OAG deducts the
same amount from each check regardless of whether there are two or three pay periods in a given
month. As a result, in the months where he only has two paychecks, the OAG reports his child
support payments as late because the amount of money deducted from two paychecks is
insufficient to satisfy the amount OAG has allocated as owed by Underwood on a per-month
basis. This happens even though the 26 payments Underwood makes over the course of a year
satisfy his total annual child support obligation.
2
The facts in the background section are taken from Underwood’s complaint and are presumed true for
the purpose of resolving the Rule 12(b)(6) challenges. See Virnich v. Vorwald, 664 F.3d 206, 212 (7th
Cir. 2011).
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On September 23, 2015, Underwood received a notification that his consumer report with
Equifax included a “30-day late” entry for September 2015 for Underwood’s OAG account.
Upon learning of the late entry, Underwood filed a complaint with OAG. He promptly received
a telephone call from OAG confirming that his account was current. The OAG representative
instructed Underwood to file a complaint with the CRAs to resolve the discrepancy.
On October 16, 2015, Underwood filed a complaint with all three defendant CRAs,
including Equifax, disputing the accuracy of the September 2015 late entry on his OAG account.
Equifax conducted a review and as a result deleted the late entry on Underwood’s OAG account.
After this revision, Equifax added seven additional late designations to Underwood’s OAG
account, for November and December 2014, January, February, July, and August 2015, and
January 2016.
In February 2016, Underwood filed another complaint with OAG. An OAG
representative, Connie Lauer, contacted Underwood on February 29, 2016, and she promised to
investigate Underwood’s complaint. Lauer conducted an internal review of Underwood’s
account and telephoned him with her findings. Specifically, she informed Underwood that
because of his biweekly pay schedule, he was not meeting his child support obligations for
months where he only received two paychecks, even though he met his total obligation for the
year. Lauer informed Underwood that this may be the reason for the late designations on his
account.
In an attempt to address this issue, Underwood manually paid his projected February
2016 shortfall. He did the same thing for March, April, and May 2016. These payments were on
top of his regularly scheduled automatic withdrawals. However, despite making these payments,
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the OAG online payment portal delayed actually processing the payments. Therefore, some of
the Defendants still reported a late payment for some of those months.
Underwood followed up with Lauer and notified her that he continues to have late
payments on his consumer report. Finally, on March 31, 2016, Lauer informed Underwood that
OAG’s credit reporting division confirmed to her that OAG is reporting Underwood’s account
correctly to the CRAs and she closed his complaint.
LEGAL STANDARD
A motion to dismiss under Rule 12(b)(6) challenges the sufficiency of the complaint, not
its merits. Fed. R. Civ. P. 12(b)(6); Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir.
1990). In considering a Rule 12(b)(6) motion to dismiss, the Court accepts as true all wellpleaded facts in the complaint and draws all reasonable inferences from those facts in the
plaintiff’s favor. AnchorBank, FSB v. Hofer, 649 F.3d 610, 614 (7th Cir. 2011). To survive a
Rule 12(b)(6) motion, the complaint must not only provide the defendant with fair notice of a
claim’s basis but must also be facially plausible. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct.
1937, 173 L. Ed. 2d 868 (2009); see also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.
Ct. 1955, 167 L. Ed. 2d 929 (2007). “A claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Iqbal, 556 U.S. at 678. “While a complaint attacked by a Rule
12(b)(6) motion to dismiss does not need detailed factual allegations, a 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.” Twombly, 550 U.S. at
555 (internal citations omitted). “The plausibility standard is not akin to a ‘probability
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requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.”
Iqbal, 556 U.S. at 678.
ANALYSIS
Equifax moves to dismiss the complaint arguing that because, pursuant § 1681s-1, it is
required to include in “any consumer report furnished by the [CRA] in accordance with section
1681b of this title, any information on the failure of the consumer to pay overdue support which
is provided to the [CRA] by a State or local child support enforcement agency,” 15 U.S.C.
§ 1681s-1, it cannot be held liable under other sections of the FCRA based on its compliance
with § 1681s-1. Equifax argues that because it received the information about Underwood’s
child support account with OAG being overdue directly from OAG, § 1681s-1 requires Equifax
to include it in Underwood’s consumer report. Therefore, Equifax argues, Underwood cannot
bring a claim against Equifax under §§ 1681e(b) and 1681i for complying with § 1681s-1.
Underwood does not contest Equifax’s assertion that compliance with § 1681s-1
immunizes it from suit under other sections of the FCRA; rather, he contends that the allegations
of the complaint do not establish that Equifax received the relevant information from OAG or
that Underwood’s child support obligations were at any point overdue. Because the complaint
conclusively establishes that the complained of late entries originated with OAG and OAG
communicated those entries to Equifax, and because the complaint also alleges facts establishing
that Underwood was at multiple points overdue on his child support obligations, Underwood’s
arguments fail.
Underwood’s complaint details his interactions with OAG to attempt to rectify what he
considers improper accounting of his child support obligations. In so doing, Underwood tells a
story that can only be read one way. Because of the biweekly structure of his automatic
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withdrawals, Underwood fails to satisfy his monthly child support obligations during every
month in which he is only paid twice. Underwood alleges that “his child support payments are
reported as ‘late’ because the money that OAG is allocating as owed by [Underwood] on a permonth basis is not satisfied in those months.” Doc. 1 ¶ 30. Underwood has contested this
characterization of his payment status with OAG and informed OAG that it is negatively
impacting his credit, and OAG, after investigation, has determined that it is reporting the status
of Underwood’s account accurately to the CRAs and refuses to take further action.
Underwood now asserts that these allegations do not establish that OAG is the source of the
CRAs’ information on his late child support payments. The Court disagrees. Although
Underwood could have drafted a clearer complaint, his allegations fully establish that the CRAs,
including Equifax, obtained the information regarding Underwood’s OAG account from OAG.
The complaint also alleges that Underwood’s OAG account was overdue on several
occasions. Underwood contests the method by which OAG determined that his account was
overdue, but this does not change that fact that at several points during the relevant time period,
Underwood’s OAG account was overdue and his allegations plead as much. For example,
Underwood alleges that “in certain months where Plaintiff receives only two paychecks, his child
support payments are reported as ‘late’ because the money that OAG is allocating as owed by
Plaintiff on a per-month basis is not satisfied in those months.” Doc. 1 ¶ 30. Underwood also
states that during his discussions with Lauer, the OAG representative, she told him that “by
virtue of [his] bi-weekly pay schedule, his child support obligations were not being met in certain
months.” Id. ¶ 66. These allegations definitively establish that Underwood’s OAG account was
overdue at certain points, despite Underwood’s contrary assertions.
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Section 1681s-1 requires CRAs to include in consumer reports any information they
receive from state child support enforcement agencies regarding failure to pay overdue child
support. Here, the complaint establishes that Equifax received information about several months
in which Underwood failed to pay his entire child monthly support obligation from OAG, which
is the agency responsible for enforcement of child support collections in Texas. Therefore,
pursuant to § 1681s-1, Equifax was required to include this information in its consumer report on
Underwood. Underwood now seeks to hold Equifax liable under §§ 1681e(b) and 1681i on the
basis of including this information in his consumer report. But Equifax “cannot be held liable
under two FCRA provisions (§ 1681e(b) and § 1681i) for reporting information that a third
FCRA provision (§ 1681s-1) required [it] to report.” Johnson v. Trans Union, LLC, No. 10 C
6960, 2012 WL 983793, *6 (N.D. Ill. Mar. 22, 2012). Therefore, the Court grants Equifax’s
motion to dismiss the complaint. And because this completely disposes of Underwood’s
complaint with respect to Equifax, the Court need not reach Equifax’s willfulness argument.
CONCLUSION
For the foregoing reasons the Court grants Equifax’s motion to dismiss [30] the
complaint.
Dated: April 5, 2017
______________________
SARA L. ELLIS
United States District Judge
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