Owens v. Trans Union LLC et al

Filing 45

MEMORANDUM AND ORDER denying 35 Motion to Stay Case. Signed by Magistrate Judge Kenneth G. Gale on 2/16/17. (df)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
KELLY OWENS,

)
)
Plaintiff,
)
)
vs.
)
)
STUDENT LOAN CORPORATION, )
INC., et. al,
)
)
Defendants. )
)

Case No. 16-2382-JWL-KGG

MEMORANDUM & ORDER ON
DEFENDANT’S MOTION TO STAY
Now before the Court is Defendants’ “Motion to Stay.” (Doc. 35.) Having
reviewed the submissions of the parties, the Court DENIES Defendants’ motion.
BACKGROUND
The present action was brought by Plaintiff against the Student Loan
Corporation (“SLC”) and two credit reporting agencies, Trans Union and Experian
(“CRA Defendants” or “Defendants”). Plaintiff alleges that SLC reported
“inaccurate and derogatory information to the CRAs regarding the payment history
of one of [Plaintiff’s] student loans.” (Doc. 40, at 2.) According to Plaintiff, this
false credit information has caused her the “loss of financial opportunities, loss of
employment, and loss of housing opportunities . . . .” (Id.)
SLC moved to stay the proceedings as to itself and compel arbitration with

Plaintiff. (Doc. 20.) This motion was granted by the District Court, directing the
Plaintiff and SLC to proceed to arbitration and staying the present litigation only as
to the claims between Plaintiff and SLC. (Doc. 30.)
The CRA Defendants bring the present motion, requesting the Court to enter
a stay as to the claims against them as well. These Defendants argue that the
findings of fact in the SLC arbitration “will, by necessity, decide or clarify these
core issues of accuracy and damages, which will in turn impact Plaintiff’s claims
against the CRA Defendants even if those findings are not binding.” (Doc. 36, at
1.) Plaintiff opposes the CRA Defendants’ motion, arguing that a stay is
unnecessary, would cause undue prejudice to her, and that the facts considered by
the arbitrator “do not predominate over the questions presented to this Court . . . .”
(Doc. 40, at 1.)
ANALYSIS
A decision whether or not to stay proceedings is within the inherent power
of the Court to control its docket. United States v. Balfour-Walton, No. 16-2484JTM-GEB, 2016 WL 6718057 (D. Kan. Nov. 15, 2016) (citing Universal
Premium Acceptance Corp. v. Oxford Bank & Trust, No. 02-2448-KHV, 2002
WL 31898217, at *1 (D. Kan. Dec. 10, 2002). The decision rests within the sound
discretion of the Court. Id.
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The Court may exercise that power in the interest of
economy of time and effort for itself and for counsel and
parties appearing before it. In discharging its discretion,
the Court must ‘weigh competing interests and maintain
an even balance.’ The party requesting the stay ‘must
make out a clear case of hardship or inequity in being
required to go forward, if there is even a fair possibility
that the stay for which he prays will work damage to
someone else.’ The Tenth Circuit Court of Appeals has
cautioned that ‘the right to proceed in court should not be
denied except under the most extreme circumstances,’
relying in part on a U.S. Supreme Court decision
announcing, ‘[o]nly in rare circumstances will a litigant
in one cause be compelled to stand aside while a litigant
in another settles the rule of law that will define the rights
of both.’
Id. (internal citations omitted).
In determining whether to stay a non-arbitrating party’s claims stay, courts
in this District typically review the following factors:
(1) whether a stay would promote judicial economy; (2)
whether a stay would avoid confusion and inconsistent
results; and (3) whether a stay would unduly prejudice
the parties or create undue hardship.
Ronning Engineering Co., Inc. v. Adkins Energy, 2006 WL 2038024, at *1 (D.
Kan. July 18, 2006) (citing Meadows Indemn. Co. v. Baccala & Shook Ins. Serv.,
Inc., 760 F.Supp. 1036, 1046 (E.D.N.Y.1991) (cited in Coors Brewing Co., 51
F.3d at 1518)). The Court finds that an analysis of these factors weighs against
staying these proceedings as to Plaintiff’s claims against the CRA Defendants.
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As stated by Plaintiff, “[j]udicial and party resources would not be preserved
because the claims against SLC are not so intertwined with the claims against
[CRA] Defendants that the [CRA] Defendants would be saved any significant
expenditure of resources.” (Doc. 40, at 4.) Further, “this Court will have to
determine, for itself, the issues of whether Defendants reported inaccurate
information about [Plaintiff], and whether Defendants conducted a reasonable
investigation of [Plaintiff’s] disputed information.” (Id.) As such, any judicial
economy benefit is negligible.
The second factor, whether a stay would avoid confusion and inconsistent
results, also weighs against entering a stay. The roles played by SLC and the CRA
Defendants in the context of Plaintiff’s credit are separate and distinguishable. As
explained by Plaintiff, SLC, as a creditor of Plaintiff, is “a furnisher of credit
information, while [the CRA] Defendants are credit reporting agencies.” (Doc. 40,
at 5.) In other words, SLC submits information about Plaintiff to the CRA
Defendants who, in turn, compile and disseminate that information along with
what they receive from Plaintiff’s other creditors. The statutory and regulatory
duties and obligations imposed on the CRA Defendants are distinct from those
imposed on the SLC. Thus, Plaintiff’s fair credit reporting claims “against [the
CRA] Defendants do not depend on the success or failure of her claim against

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SLC.” (Id.) As such, the “results” of this litigation as to the CRA Defendants are
not necessarily dependent on findings and conclusions made as to SLC in the
arbitration.
The factor that has the most bearing to the Court’s determination of the
present matter is the prejudice or undue hardship imposed on Plaintiff. The CRA
Defendants argue that the stay will not result in any hardship to Plaintiff. (Doc. 36,
at 9.) Rather, according to them, Plaintiff “will be spared having to duplicate her
efforts in both arbitration and this action.” (Id.)
Plaintiff counters that Defendants are not in a position to argue what she
should and should not be spared, particularly as these Defendants are not involved
in both proceedings. (Doc. 40, at 8.) Rather, Plaintiff contends that she “continues
to have difficulties securing housing, and being able to properly care for her son –
all because the inaccurate information that she complains is reported on her credit
report continues to be reported.” (Doc. 40, at 8.)
Considering all of the factors and the arguments presented, the balance
weighs against entering a stay in this action. Defendants’ motion (Doc. 35) is
DENIED.

IT IS THEREFORE ORDERED that Defendants’ motion to stay (Doc.

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35) is DENIED.
IT IS SO ORDERED.
Dated at Wichita, Kansas, on this 16th day of February, 2017.
S/ KENNETH G. GALE

KENNETH G. GALE
United States Magistrate Judge

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