Ybarra v. The Bank of Missouri et al

Filing 62

MEMORANDUM AND ORDER denying 22 Motion for Judgment on the Pleadings. Signed by District Judge Daniel D. Crabtree on 11/18/2020. (heo)

Case 2:19-cv-02644-DDC-KGG Document 62 Filed 11/19/20 Page 1 of 21

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS

JOANNA R. YBARRA,
Plaintiff,
Case No. 19-2644-DDC-KGG
v.
EXPERIAN INFORMATION SOLUTIONS,
INC.,
Defendant.
MEMORANDUM AND ORDER
This matter comes before the court on defendant Experian Information Solutions, Inc.’s
Motion for Judgment on the Pleadings (Doc. 22) on Count I of plaintiff’s Petition (Doc. 1-1).
Plaintiff filed a Response to the motion (Doc. 27) and defendant filed a Reply (Doc. 31). The
court considers the motion and the parties’ various arguments below and, for reasons explained
by this Order, denies defendant’s motion.
I. Factual Background
When considering a motion for judgment on the pleadings under Federal Rule of Civil
Procedure 12(c), the court accepts the well-pleaded factual allegations in the complaint as true
and views them in the light most favorable to plaintiff. Ramirez v. Dep’t of Corr., 222 F.3d
1238, 1240 (10th Cir. 2000). Applying this standard, the following facts from plaintiff’s
Petition1 (Doc. 1-1) govern defendant’s motion.

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A brief explanation about the naming conventions used in this Order: the court uses the term
“Petition” because plaintiff originally filed this action in the District Court of Wyandotte County, Kansas.
She properly used the term Petition to describe her initial pleading there, see Kan. Stat. Ann. § 60-207(a),
and since our court docketed that pleading using the same designation, see Doc. 1-1, this Order refers to
the pleading in the same fashion. Also, the moving party here is defendant Experian Information
Solutions, Inc. It is the lone remaining defendant. So, for simplicity, this Order refers to defendant
Experian simply as “defendant.”

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Plaintiff filed for bankruptcy in the District of Kansas in October 2014. Doc. 1-1 at 3 ¶
16; Doc. 23 at 5 n.2.2 “After the bankruptcy [action] was filed, Plaintiff was issued two credit
cards” by the Bank of Missouri to begin rebuilding her credit. Id. at 3–4 ¶¶ 17–18. “Plaintiff
received a discharge on February 26, 2018 which did not include the t[w]o Bank of Missouri
accounts.” Id. at 4 ¶ 19. After the bankruptcy discharge, defendant, a credit reporting agency
(“CRA”), reported the credit cards “as included in bankruptcy and discharged.” Id. at 4 ¶ 20.
This report was false. Id. at 3 ¶ 22. Defendant’s incorrect reporting of the two credit cards as
discharged in plaintiff’s bankruptcy harmed plaintiff’s ability to rebuild her credit. Id. at 4 ¶¶
22–25. Plaintiff contends that defendant has “no reasonable means of monitoring or updating
accounts that should not be listed as included in bankruptcy,” or “preventing[ing] furnishers from
inserting information that contradicts its system.” Id. at 4 ¶ 26.
“On July 23, 2018, Plaintiff, through her bankruptcy attorney, notified all Defendants of
the misreporting.” Id. at 4 ¶ 28. Defendant “failed to correct the inaccuracies and reverified to
Plaintiff that the reporting was accurate.” Id. at 7 ¶ 41. “Plaintiff disputed the inaccuracy” a
second time. Id. at 6 ¶ 39.
“The credit reports still show the discharged accounts as owing and able to be enforced
and collected.” Id. at 4 ¶ 27. “The inaccurate information negatively reflects upon the Plaintiff,

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Defendant notes the Petition erroneously lists the bankruptcy date as February 2016. Doc. 23 at 5
n.2. The court “may ‘take judicial notice of its own files and records, as well as facts which are a matter
of public record,’ without converting a motion to dismiss into a motion for summary judgment.” Johnson
v. Spencer, 950 F.3d 680, 705 (10th Cir. 2020) (quoting Tal v. Hogan, 453 F.3d 1244, 1264 n.24 (10th
Cir. 2006)). “However, ‘[t]he documents may only be considered to show their contents, not to prove the
truth of matters asserted therein.’” Tal, 453 F.3d at 1264 n.24 (quoting Oxford Asset Mgmt., Ltd. v.
Jaharis, 297 F.3d 1182, 1188 (11th Cir. 2002)). This principle includes the dates when things were filed
with the bankruptcy court. According to the docket for the bankruptcy court in the District of Kansas,
plaintiff filed for bankruptcy in October 2014. Chapter 13 Voluntary Pet., In re Ybarra, No. 14-22502
(Bankr. D. Kan. Oct. 20, 2014), ECF No. 1. The filing date erroneously asserted by the Petition does not
affect the analysis because the bankruptcy filing still occurred before plaintiff acquired the two Bank of
Missouri credit cards at issue in plaintiff’s allegations. Doc. 1-1 at 3 ¶ 17.

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Plaintiff’s credit repayment history, and Plaintiff’s financial responsibility as a debtor and
Plaintiff’s credit worthiness.” Id. at 5 ¶ 31. “Plaintiff’s creditors and potential creditors have
accessed Plaintiff’s reports while the misreporting was on the credit report and were
misinformed by Defendants about the Plaintiff’s credit worthiness.” Id. at 5 ¶ 30.
Count I of plaintiff’s Petition alleges defendant violated the Fair Credit Reporting Act, 15
U.S.C. §§ 1681–1681x. Specifically, plaintiff alleges that defendant willfully and negligently
violated § 1681e(b) for failing to follow reasonable procedures to assure accuracy in its
reporting. Doc. 1-1 at 6 ¶ 38. Separately, plaintiff also alleges defendant willfully and
negligently violated § 1681i by failing to use reasonable procedures when reinvestigating
plaintiff’s disputes. Id. at 7 ¶ 42. Defendant now invokes Federal Rule of Civil Procedure 12(c)
for judgment on the pleadings against plaintiff’s two FCRA claims asserted in Count I. Doc. 22.
II. Legal Standard
“A motion for judgment on the pleadings under Rule 12(c) is treated as a motion to
dismiss under Rule 12(b)(6).” Atl. Richfield Co. v. Farm Credit Bank of Wichita, 226 F.3d 1138,
1160 (10th Cir. 2000). The court can grant a motion for judgment on the pleadings only when
the factual allegations in the Petition fail to “state a claim to relief that is plausible on its face.”
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (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.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(citing Twombly, 550 U.S. at 556). Federal Rule of Civil Procedure 8(a)(2) requires the
complaint to provide “a short and plain statement of the claim showing that the pleader is entitled
to relief.” Although this Rule “does not require ‘detailed factual allegations,”’ it demands more
than “[a] pleading that offers ‘labels and conclusions’ or ‘a formulaic recitation of the elements

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of a cause of action’” which, the Supreme Court has explained, ‘“will not do.”’ Id. (quoting
Twombly, 550 U.S. at 555).
“Under this standard, ‘the complaint must give the court reason to believe that this
plaintiff has a reasonable likelihood of mustering factual support for these claims.’” Carter v.
United States, 667 F. Supp. 2d 1259, 1262 (D. Kan. 2009) (quoting Ridge at Red Hawk, L.L.C. v.
Schneider, 493 F.3d 1174, 1177 (10th Cir. 2007)). Although the court must assume that the
Petition’s factual allegations are true, it is “‘not bound to accept as true a legal conclusion
couched as a factual allegation.’” Id. at 1263 (quoting Iqbal, 556 U.S. at 678). “‘Threadbare
recitals of the elements of a cause of action, supported by mere conclusory statements, do not
suffice’” to state a claim for relief. Bixler v. Foster, 596 F.3d 751, 756 (10th Cir. 2010) (quoting
Iqbal, 556 U.S. at 678). “This is not to say that the factual allegations must themselves be
plausible; after all, they are assumed to be true. It is just to say that relief must follow from the
facts alleged.” Silver v. Glass, 459 F. App’x 691, 695 (10th Cir. 2012) (quoting Bryson v.
Gonzales, 534 F.3d 1282, 1286 (10th Cir. 2008)).
“[T]he court must liberally construe the pleadings and make all reasonable inferences in
favor of the non-moving party.” Brokers’ Choice of Am., Inc. v. NBC Universal, Inc., 861 F.3d
1081, 1105 (10th Cir. 2017). The court’s function at this stage “‘is not to weigh potential
evidence that the parties might present at trial, but to assess whether the plaintiff’s complaint
alone is legally sufficient to state a claim for which relief may be granted.’” Tal v. Hogan, 453
F.3d 1244, 1252 (10th Cir. 2006) (quoting Sutton v. Utah State Sch. for Deaf & Blind, 173 F.3d
1226, 1236 (10th Cir. 1999)); see also Brokers’ Choice, 861 F.3d at 1104–05 (dismissal is
appropriate “if the complaint alone is legally insufficient to state a claim”).

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III. Analysis
Defendant asks the court to dismiss Count I of plaintiff’s Petition in its entirety. This
claim alleges broadly that defendant violated the Fair Credit Reporting Act (“FCRA”), 15 U.S.C.
§§ 1681–1681x. “Congress enacted [the] FCRA in 1970 to ensure fair and accurate credit
reporting, promote efficiency in the banking system, and protect consumer privacy.” Safeco Ins.
Co. of Am. v. Burr, 551 U.S. 47, 52 (2007). Here, plaintiff asserts two FCRA claims in Count I,
each one invoking a different provision in the Act. First, plaintiff claims that defendant failed to
use “reasonable procedures to assure maximum possible accuracy” of the information reported
about her. This is an element of a claim under 15 U.S.C. § 1681e(b). Second, Count I asserts
that defendant failed to “conduct a reasonable reinvestigation” to determine whether information
it had provided about plaintiff—information she later disputed—was inaccurate. 15 U.S.C. §
1681i(a)(1)(A).
Plaintiff’s two claims rely on two distinct duties imposed by the FCRA. Section
1681e(b) of the Act requires that “[w]henever a [CRA] prepares a consumer report it shall follow
reasonable procedures to assure maximum possible accuracy of the information concerning the
individual about whom the report relates.” A different provision in the Act requires, when a
consumer disputes “the completeness or accuracy of any item of information contained in a
consumer’s file at a [CRA],” the CRA to “conduct a reasonable reinvestigation to determine
whether the disputed information is inaccurate and record the current status of the disputed
information, or delete the item from the file” within 30 days after receiving notice of the dispute.
15 U.S.C. § 1681i(a)(1)(A). Plaintiff alleges defendant willfully and negligently violated both
FCRA provisions thus making defendant liable under § 1681n (willful violations) and § 1681o
(negligent violations).

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Defendant makes three arguments supporting its request for judgment against both of
Count I’s claims. First, defendant argues that Count I fails to state an inaccurate reporting claim
under § 1681e(b). Defendant contends that it cannot incur FCRA liability for inaccurately
reporting information about plaintiff’s bankruptcy because the FCRA doesn’t require a CRA like
defendant to analyze complex legal documents such as bankruptcy filings when compiling a
consumer report. Second, defendant contends plaintiff fails to state a reasonable reinvestigation
claim under § 1681i based on her two post-bankruptcy petition credit cards. Defendant argues
that plaintiff alleges no facts capable of supporting a finding that it failed to reinvestigate her
dispute reasonably. Last, and even if plaintiff has stated an FCRA claim, defendant contends she
has alleged no facts capable of supporting a finding that it “willfully” violated the FCRA. The
court addresses each argument, in turn, below.
A.

Does Plaintiff Sufficiently Plead that Defendant Violated § 1681e(b) for
Reporting Inaccurate Information on a Consumer Credit Report?

Controlling authority from our Circuit identifies the elements of an inaccurate reporting
claim under § 1681e(b). In our Circuit, such a claim requires proof that: (1) defendant “failed to
follow reasonable procedures to assure the accuracy of its reports; (2) the [credit] report in
question was, in fact, inaccurate; (3) [plaintiff] suffered injury; and (4) [defendant’s] failure
caused [plaintiff’s] injury.” Wright v. Experian Info. Sol., Inc., 805 F.3d 1232, 1239 (10th Cir.
2015) (quoting Eller v. Trans Union, LLC, 739 F.3d 467, 473 (10th Cir. 2013), cert. denied, 572
U.S. 1101 (2014)).
The current motion only challenges the pleading sufficiency of this formulation’s first
element, i.e., whether plaintiff adequately pleaded that defendant “failed to follow [the]
reasonable procedures” requirement of a § 1681e(b) claim. See Doc. 23 at 1. According to
defendant’s papers, “[c]ourts routinely h[o]ld that § 1681e(b) does not require CRAs to engage
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in the type of legally complicated analysis Plaintiff’s argument would require.” Doc. 23 at 8.3
Defendant asks the court to find defendant’s procedures reasonable as a matter of law because
“there is no reason why [defendant] could not or should not rely on the furnisher of the debt to
accurately report to it the debt’s status without some allegation that the furnisher was known to
be unreliable or untrustworthy.” Id. Defendant then asserts, “the FCRA does not, as a matter of
law, require CRAs to engage in an individualized and legally complicated review of bankruptcy
dockets and similar legal proceedings to form its own conclusions about a debt’s technical legal
status.” Id. at 2. The FCRA is not a strict liability statute, defendant correctly points out, and
simply pleading an inaccuracy, by itself, cannot sustain a claim under § 1681e. Id. at 8.
Plaintiff responds that the “reasonableness” component of the reasonable procedures
element presents a jury question and plaintiff merely must plead an inaccuracy to “establish a
prima facie case under § 1681e(b).” Doc. 27 at 3, 9. Plaintiff also asserts—albeit not in her
Petition—that defendant already uses a pre-bankruptcy reporting procedure in the Chapter 7
bankruptcy context, and defendant reasonably could apply that same procedure to Chapter 13
post-bankruptcy reporting. Doc. 27 at 9–14. According to plaintiff, this approach would prevent
inaccuracies like the one alleged in this case—listing two active credit cards as discharged in

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Plaintiff’s Petition also alleges defendant has no reasonable means of “prevent[ing] furnishers
from inserting information that contradicts its system.” Doc. 1-1 at 4 ¶ 26. Defendant argues plaintiff
fails to plead any facts supporting a plausible inference “that [defendant] prevents furnishers from
conveying information post-bankruptcy.” Doc. 23 at 8–9, 13–14. Plaintiff’s response doesn’t address
this argument. See Doc. 27. So, the plaintiff may have abandoned its allegation that defendant
“prevent[ed] furnishers from conveying information post-bankruptcy.” Doc. 1-1 at 4 ¶ 26. See Hinsdale
v. City of Liberal, Kan., 19 F. App’x 749, 768–69 (10th Cir. 2001) (affirming district court's dismissal of
plaintiff's equal protection claim after it concluded that plaintiff had abandoned the claim because he had
not addressed it in his memorandum opposing summary judgment); see also C.T. v. Liberal Sch. Dist.,
562 F. Supp. 2d 1324, 1337 (D. Kan. 2008) (concluding that plaintiff had abandoned his retaliation claim
by not responding to defendant’s motion for summary judgment against the claim).

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bankruptcy. Id. at 11 (citing Approval Order Regarding Settlement and Release, White v.
Experian Info. Sols., Inc., No. 05-1070-DOC-MLG (C.D. Cal. Aug. 19, 2008), ECF No. 338).
The reasonableness requirement adopted in § 1681e(b) generally requires a fact-laden
inquiry. As our Circuit recognized in Wright, “[o]ther circuits applying § 1681e(b) have
recognized the ‘reasonableness of the procedures’ is a fact-dependent inquiry.” Wright, 805 F.3d
at 1239 (citing Guimond v. Trans Union Credit Info. Co., 45 F.3d 1329, 1333 (9th Cir. 1995)).
This recognition doesn’t mean that a trial is required in every reasonable procedures case,
however. In Wright, for example, the Tenth Circuit affirmed a district court’s decision awarding
summary judgment based on the reasonable procedures element of a § 1681e(b) claim. 805 F.3d
at 1241. As the district court had done, the Circuit held that the “CRAs’ reliance on LexisNexis
to report the tax lien on [plaintiff’s] credit report was reasonable.” Id. So, the Circuit affirmed
“the district court’s determination that the CRAs employed reasonable procedures under §
1681e(b) . . . .” Id.
Wright’s view of this issue isn’t an outlier. Several sister circuits have recognized that
it’s appropriate, in the right circumstances, to grant summary judgment against a § 1681e(b)
claim based on the reasonable procedures element. See, e.g., Crabill v. Trans Union, LLC, 259
F.3d 662 (7th Cir. 2001). In Crabill, Judge Posner concluded that “reasonableness” in the FCRA
context “cannot be resolved on summary judgment unless the reasonableness or
unreasonableness of the procedures is beyond question.” Id. at 664. But, Judge Posner also
cautioned that “determination of the ‘reasonableness’ of the defendant’s procedures, like other
questions concerning the application of a legal standard to given facts (notably negligence, a
failure to exercise reasonable care), is treated as a factual question even when the underlying
facts are undisputed.” Id. The Third Circuit has expressed a similar view. “[T]he

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reasonableness of a credit reporting agency’s procedures is ‘normally a question for trial unless
the reasonableness or unreasonableness of the procedures is beyond question.’” Cortez v. Trans
Union, LLC, 617 F.3d 688, 709 (3d Cir. 2010) (quoting Sarver v. Experian Info. Sol., 390 F.3d
969, 971 (7th Cir. 2004)); see also Cahlin v. Gen. Motors Acceptance Corp., 936 F.2d 1151,
1156 (11th Cir. 1991) (determining the reasonableness of procedures “will be a jury question in
the overwhelming majority of cases.”).
Here, the case hasn’t reached the summary judgment stage. Instead, defendant’s motion
asks the court to enter judgment against the § 1681e(b) claim by holding that defendant’s
procedures are reasonable based on facts alleged in the pleadings—the procedural equivalent of
a motion to dismiss. To be sure, some courts—including this one—have resolved § 1681e(b)
claims at the motion to dismiss stage. But these dismissals all turned on elements other than the
reasonable procedures element. For example, in George v. Chex Systems, Inc., Judge Marten of
our court dismissed a § 1681e(b) claim under Rule 12(b)(6). 16-2450-JTM, 2017 WL 119590, at
*2 (D. Kan. Jan. 12, 2017). But the court dismissed that claim because plaintiff had failed to
allege that his credit report contained an inaccuracy. Id.
Defendant’s motion here doesn’t direct the court to a single case where a court has
granted judgment on the pleadings based on the reasonable procedures element. Nor has
defendant identified a case granting a Rule 12(b)(6) motion based on this element. This
omission is telling, but it’s not decisive. Twombly and Iqbal still require plaintiff to plead
“factual content that allows the court to draw the reasonable inference that defendant is liable for
the misconduct alleged.” Iqbal, 556 U.S. at 678 (discussing Twombly, 550 U.S. at 556). As
applied here, this requirement obligated plaintiff to plead facts—not just conclusions or

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rhetorical flourishes—allowing a reasonable jury to find that defendant failed to use reasonable
procedures. The Petition’s allegations on this front are meager.
In paragraph 26, the Petition alleges that the two Credit Reporting Agency defendants
“have no reasonable means of monitoring or updating accounts that should not be listed as
included in bankruptcy after it sweeps credit reports” following a discharge from bankruptcy.
Doc. 1-1 at 4. Plaintiff also alleges that defendants have no reasonable means to “prevent[]
furnishers from inserting information that contradicts its system for” credit sweeps. Id. These
allegations make for a close call because, in some real sense, they sound like the inadequate
“labels and conclusions” or “a formulaic recitation of the elements” of the claim. Such mantras,
the Supreme Court has emphasized, just won’t do. Iqbal, 556 U.S. at 678 (citing Twombly, 550
U.S. at 555). But on the other side of the argument, plaintiff’s factual theory alleges that
defendant applied no “means of monitoring or updating accounts” that a credit report shouldn’t
list. Doc. 1-1 at 4 ¶ 26. Plaintiff’s Response to the motion amplifies her factual theory of the
case. There, she argues that defendant uses a pre-bankruptcy reporting procedure in the Chapter
7 bankruptcy context, defendant reasonably could apply that same procedure to Chapter 13 postbankruptcy reporting, and it hasn’t. Doc. 27 at 9–14. Given that this is plaintiff’s factual theory
of the reasonable procedures element of her claim, it’s difficult to identify how much more she
could have alleged.
By a narrow margin, plaintiff has given “the court reason to believe that this plaintiff has
a reasonable likelihood of mustering factual support” for this element of her § 1681e(b) claim.
Ridge at Red Hawk, LLC, 493 F.3d at 1177. Given these allegations and defendant’s failure to
identify any case granting a motion to dismiss or one for judgment on the pleadings based on the
reasonable procedures element, the court denies defendant’s motion for judgment on the

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pleadings against Count I’s § 1681e(b) claim. Time will tell whether plaintiff can muster the
requisite factual support to survive summary judgment. For now, though, the court concludes
that plaintiff has discharged her pleading burden.
B.

Does Plaintiff Sufficiently Plead a Violation of § 1681i for Failing to Use
Reasonable Procedures in Reinvestigation?

Next, the court turns to plaintiff’s § 1681i claim alleging defendant used unreasonable
procedures in its reinvestigation. Defendant argues, “Plaintiff has identified nothing
unreasonable about [defendant]’s reinvestigation but instead premises her claim solely on the
continued existence of an inaccuracy in her credit report—a theory of liability not supported by
the FCRA.” Doc. 23 at 15. Defendant argues plaintiff’s Petition can be read to allege
“[defendant] received and processed Plaintiff’s dispute, communicated the dispute to Bank of
Missouri, and ensured that the information in Plaintiff’s credit file was consistent with the Bank
of Missouri’s response.” Id. Defendant argues that this is a reasonable reinvestigation under 15
U.S.C. § 1681i, as a matter of law. Id.
Plaintiff responds, arguing that defendant essentially “parroted” information when it
marked the two credit cards as being included in the bankruptcy without further investigation and
defendant thus performed an insufficient reinvestigation. Doc. 27 at 14. Plaintiff alleges she
disputed the credit card account information presented on her credit report twice. Doc. 1-1 at 4 ¶
28, 6 ¶ 39. Plaintiff also alleges defendant “responded by contacting the Bank of Missouri to
notify it of Plaintiff’s dispute, in response to which the Bank of Missouri either failed to
acknowledge the disputes or provided [defendant] with false information about [p]laintiff’s
credit cards.” Doc. 23 at 15 (citing Doc. 1-1 at 7, 8 ¶¶ 41, 47). Plaintiff argues that defendant, at
minimum, should have deleted the information if it couldn’t verify it instead of continuing to

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report the inaccuracy. Doc. 27 at 14. Plaintiff asserts these facts support a plausible finding that
defendant failed to use reasonable procedures in its reinvestigation. The court agrees.
The court concludes that plaintiff has pleaded a plausible claim under 15 U.S.C. § 1681i
that defendant failed to use “reasonable procedures” in its reinvestigation of the inaccurate
information after plaintiff notified defendant twice of the inaccuracies. “Sections 1681e(b) and
1681i(a) require CRAs to assure the accuracy of their consumer files and reports.” Collins v.
Diversified Consultants Inc., 754 F. App’x 714, 720 (10th Cir. 2018). “‘To prevail on a §
1681i(a) claim . . . plaintiffs must prove essentially the same elements as those for a § 1681e(b)
claim—unreasonable procedures in reinvestigating a report, inaccuracy of the report, injury, and
causation—in addition to proving they informed the CRA about the inaccuracy.’” Id. at 720–21
(quoting Wright, 805 F.3d at 1242).
“Although § 1681i(a) does not define the term ‘reasonable reinvestigation,’ courts have
consistently held a reasonable reinvestigation requires more than ‘making only a cursory
investigation into the reliability of information that is reported to potential creditors.’” Wright,
805 F.3d at 1242 (quoting Cortez v. Trans Union, LLC, 617 F. 3d 688, 713 (3d Cir. 2010)).
“Judgment as a matter of law, even if appropriate on a § 1681e(b) claim, thus may not be
warranted on a § 1681i(a) claim.” Cushman v. Trans Union Corp., 115 F.3d 220, 225 (3d Cir.
1997). “‘[A] credit reporting agency that has been notified of potentially inaccurate information
in a consumer’s credit report is in a very different position than one who has no such notice.’”
Wright, 805 F.3d at 1242 (quoting Henson v. CSC Credit Serv., 29 F.3d 280, 286 (7th Cir. 1994)
(internal quotations and citations omitted)). “‘In short, when one goes from the § 1681e(b)
investigation to the § 1681i(a) re investigation, the likelihood that the cost-benefit analysis will
shift in favor of the consumer increases markedly.’” Id. (quoting Cushman, 115 F.3d at 225).

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“The question of whether a reinvestigation is reasonable is generally one for the jury, except ‘in
cases where CRAs clearly employ reasonable procedures, the issue may be decided on summary
judgment.’” Pembroke v. Trans Union, LLC, No. 16-CV-03194-CMA-STV, 2017 WL 8897173,
at *8 (D. Colo. Oct. 27, 2017) (quoting Wright, 805 F.3d at 1239).
“[W]here a CRA is affirmatively on notice that information received from a creditor may
be suspect, it is unreasonable as a matter of law for the agency to simply verify the creditor’s
information through the [automated consumer dispute verification] process without additional
investigation.” Bradshaw v. BAC Home Loans Serv., LP, 816 F. Supp. 2d 1066, 1073–74 (D. Or.
Sept. 27, 2011). “A credit reporting agency cannot rely on the fact that i[t] has established some
procedures, but must prove by a preponderance of the evidence that such procedures are
reasonable to address the specific dispute presented.” Lee v. Security Check, LLC, No. 3:09-cv421-J-12TEM, 2010 WL 3075673, at *12 (M.D. Fla. Aug. 5, 2010).
“The grave responsibility imposed by § 1681i(a) must consist of something more than
merely parroting information received from other sources.” Crane v. Trans Union, LLC, 282 F.
Supp. 2d 311, 317 (E.D. Pa. 2003) (quoting Cushman, 115 F.3d at 225). “Therefore, a
reinvestigation that merely shifts the burden back to the consumer and the credit grantor cannot
fulfill the obligations contemplated by the statute.” Id. The “obligation to conduct a reasonable
investigation may increase the cost and expense to a CRA,” but, “it is the necessary cost
associated with discharging the congressionally mandated duties . . . and, in the majority of
cases, such as this, it passes to the trier of fact to decide whether the CRA fulfilled its
obligations.” Burke v. Experian Info. Sols., Inc., No. 1:10-cv-1064(AJT/TRJ), 2011 WL
1085874, at *7 (E.D. Va. Mar. 18, 2011). In Burke, the court held it could not determine at the
summary judgment stage that the CRA had employed reasonable procedures in its

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reinvestigation because, in part, “the consumer reports that [the CRA] prepared based on the
responses it did receive from [the furnisher] not only failed to indicate that the [furnisher]
account was disputed but also stated that the account was ‘verified.’” Id. The CRA “refused to
do anything further” in response to the consumer’s letter notifying the CRA of the dispute. Id.
The court thus determined a reasonable fact finder could find the CRA “acted reasonably under
the circumstances” but it also could reach the opposite conclusion. Id. So, summary judgment
wasn’t warranted. Id.
Unlike the § 1681e(b) claim, the parties supply the court with several cases deciding a
Rule 12(c) motion on a § 1681i claim. For example, the Eastern District of Virginia held that
plaintiff sufficiently had pleaded a claim under this provision by alleging that he reported an
inaccuracy several times and the inaccuracy remained on his credit report. Hintz v. Experian
Info. Sols., Inc., No. 3:10-cv-535-HEH, 2010 WL 4025061, at *6 (E.D. Va. Oct. 13, 2010). It
explained, the “decisive inquiry [when evaluating a § 1681i claim] is whether the defendant
credit bureau could have uncovered the inaccuracy if it had reasonably reinvestigated the
matter.” Id. (quoting DeAndrade v. Trans Union LLC, 523 F.3d 61, 68 (1st Cir. 2008)). Because
plaintiff had alleged that he reported an inaccuracy and it remained on his credit report, the court
found “these allegations are sufficient to state a claim to relief that is plausible.” Id.
The other cases defendant cites in its Memorandum, see Doc. 23 at 16, don’t support its
argument that the court should hold its reinvestigation practices and procedures reasonable as a
matter of law. The Tenth Circuit, in Wright, analyzed the cost and burden placed on a CRA if it
employed the procedures proposed by plaintiff at the summary judgment stage. Wright, 805
F.3d at 1243. After the court evaluated all the summary judgment evidence, it determined the
CRA’s reinvestigation reasonable for three reasons. Id. at 1242–43. First, plaintiff could not

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prove that “hiring tax experts at the CRAs to examine” the tax documents at issue would have
produced a different result. Id. Second, the CRA could not contact the IRS, like plaintiff
suggested, because the CRAs never received a release from plaintiff for his tax information. Id.
at 1243–44. And third, a reasonable reinvestigation does not require CRAs to determine the
legal validity of a debt which is a “‘question for a court to resolve.’” Id. at 1245 (quoting
DeAndrade, 523 F.3d at 68). This analysis doesn’t fit the facts that govern this motion.
According to the Petition, defendant could discover the two credit cards were not discharged
after an investigation because it was not listed on the bankruptcy filings (Doc. 1-1 at 4 ¶ 19).
Here, defendant could access the bankruptcy records to verify or investigate the dispute by
plaintiff (Doc. 23 at 5–6 (noting plaintiff’s bankruptcy filings were public record)), unlike
Wright where the CRA couldn’t access plaintiff’s IRS filings without a release. Wright, 805
F.3d at 1243. And here, defendant does not challenge the inaccuracy in plaintiff’s credit report
nor argue that plaintiff is asking it to determine the “legal validity” of the debt. See Doc. 23.
In Davis v. Equifax Information Services LLC, the court granted summary judgment for a
CRA after discovery showed the CRA had “contacted the original furnisher of information and
forwarded the disputed information to the creditor as required by § 1681i.” 346 F. Supp. 2d
1164, 1175 (N.D. Ala. 2004). The court evaluated the summary judgment facts, which included
admissible evidence establishing the procedures the CRA employed in its investigation. See id.
The procedures included contacting the furnisher of the information and deleting any information
the CRA couldn’t verify. Id. at 1175. But the facts alleged here, which govern the current
analysis, establish that defendant didn’t look to other sources of information or delete the
information after notice by plaintiff. Doc. 27 at 14.

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Nor does the analysis in Pembroke v. Trans Union, LLC, apply here. No. 16-CV-03194CMA-STV, 2017 WL 8897173 (D. Colo. Oct. 27, 2017). There, the Colorado federal court
granted a motion to dismiss after it determined that plaintiff had failed to plead an inaccuracy
and, instead, “attempt[ed] to mount an improper collateral attack on the underlying debt.” Id. at
*8. The court noted “if the consumer has already litigated the validity of the debt in a judicial
action, he may have a valid claim under the FCRA if the CRA, upon notice of the adjudication of
the debt, continues to improperly report it.” Id. at *7. But here, defendant doesn’t contend that
plaintiff has pleaded no inaccuracy. See Doc. 23.
Unlike defendant’s cases, plaintiff sufficiently pleads an inaccuracy in her report.
Additionally, plaintiff alleges she notified defendant twice of the inaccuracies in her report. The
inaccuracy in her report and her notifications to defendant plead a plausible claim that defendant
failed to use reasonable procedures in its reinvestigation by continuing to report inaccurate
information. Defendant must show its reinvestigation consisted of more than relying on the
initial source of information after notification by plaintiff. See Crane, 282 F. Supp. 2d at 317.
So, defendant is not entitled to dismissal on these facts. The Petition’s factual allegations and the
reasonable inferences they permit, when viewed in plaintiff’s favor, plead a plausible claim
under 15 U.S.C. § 1681i.
C.

Has Plaintiff Sufficiently Pleaded Defendant Willfully Violated the FCRA?

Last, the court considers whether plaintiff sufficiently has pleaded willful violations of
the FCRA. Defendant argues it “cannot have willfully violated § 1681e(b) by simply reporting
the data it received from the Bank of Missouri, because courts have repeatedly found this
reasonable as a matter of law.” Doc. 23 at 17. Plaintiff responds, asserting that the “willfulness”
issue is one that the court cannot resolve at the Rule 12(c) stage (or on a motion to dismiss).

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Doc. 27 at 20–21. Plaintiff also argues that defendant’s “parroting” information from furnishers
creates a substantial risk to consumers. Id. at 18–20. Defendant does not respond to plaintiff’s
argument that willfulness requires a fact-based analysis best determined by a jury. See Doc. 31.
The FCRA does not define willful, providing simply that “[a]ny person who willfully
fails to comply with any requirement imposed under this subchapter with respect to any
consumer is liable to that consumer” for additional damages. 15 U.S.C. § 1681n(a). Our Circuit
defines a “‘willful’ violation [as] either an intentional violation or a violation committed by an
agency in reckless disregard of its duties under the FCRA.” Birmingham v. Experian Info. Sols.,
Inc., 633 F.3d 1006, 1009 (10th Cir. 2011) (citing Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47,
57–58 (2007)). The Circuit also explains that “[r]ecklessness is measured by ‘an objective
standard: action entailing an unjustifiably high risk of harm that is either known or so obvious
that it should be known.’” Id. (quoting Safeco, 551 U.S. at 68). “‘[A] company subject to FCRA
does not act in reckless disregard of it unless the action is not only a violation under a reasonable
reading of the statute’s terms, but shows that the company ran a risk of violating the law
substantially greater than the risk associated with a reading that was merely careless.’” Id.
(quoting Safeco, 551 U.S. at 69); see also Llewellyn v. Allstate Home Loans, Inc., 711 F.3d 1173,
1183–84 (10th Cir. 2013) (affirming decision granting summary judgment against willful
violation claim after the plaintiff failed to introduce evidence showing defendant’s delay in
removing the inaccurate information was caused by recklessness). But see Burns v. Trans
Union, LLC, No. 4:18-03120-MGL, 2019 WL 3890833, at *3 (D.S.C. Aug. 19, 2019) (“As a
consumer, [plaintiff] is unable to plead [furnisher]’s specific errors during their internal
investigation without discovery.”) (citing Felts v. Wells Fargo Bank, N.A., 893 F.3d 1305, 1313
(11th Cir. 2018)). The District of South Carolina reasoned that requiring plaintiffs to plead

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specific instances or errors during an investigation created too high a burden “in light of the
limited information available to [plaintiff] at this stage of litigation.” Id. at *4.4
The court does not view these authorities as inconsistent with the pleading duties
imposed in Twombly and Iqbal. “A defendant’s willfulness must be adequately pled in the
complaint for a plaintiff to sustain her cause of action.” Rawlings v. ADS Alliance Data Sys.,
Inc., No. 2:15-cv-04051-NKL, 2015 WL 3866885, at *5 (W.D. Mo. June 23, 2015).
“‘[A]ssertions that [a defendant] was aware of the FCRA, but failed to comply with its
requirements, are sufficient to support an allegation of willfulness and to avoid dismissal.’” Id.
(quoting Miller v. Quest Diagnostics, 2:14-CV-04278-SRB, 85 F. Supp. 3d 1058, 1059–61
(W.D. Mo. Jan. 28, 2015)); see also In re TJX Co., Inc., No. 07-md-1853-KHV, 2008 WL
2020375, at *2 (D. Kan. May 9, 2008) (denying defendant’s motion to dismiss willfulness claim
because “complaint alleges that defendants recognized their statutory duty to limit the
information which appeared on customer receipts, but intentionally ignored that duty and refused
to take steps to comply with [Fair and Accurate Credit Transactions Act] regulations.”). “Since
they frequently involve facts beyond the pleadings, issues of willfulness often cannot be resolved
at the motion to dismiss stage.” Lavery v. RadioShack Corp., No. 13-cv-05818, 2014 WL
2819037, at *2 (N.D. Ill. June 23, 2014).
i.

Willful Violation of § 1681e’s Maximum Possible Accuracy Requirement

Defendant argues, as a matter of law, that plaintiff cannot establish a willful violation of
§ 1681e because defendant merely reported information provided by Bank of Missouri about

4

See also Tillman v. Equifax Info. Servs., LLC, No. 19-12860, 2020 WL 249004, at *4 (E.D. Mich.
Jan. 16, 2020) (“[T]he plaintiff is not required at the pleading stage to recite an exhaustive inventory of
information overlooked or a litany of steps not taken by the defendant during its investigation. Such a
requirement would hold plaintiffs to an impossible standard of pleading, since information about the
conduct of the investigation is at this stage of the case exclusively within the knowledge of the
defendant.”).

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plaintiff’s two credit cards. Doc. 23 at 17. It argues courts have found accurately reporting
information from furnishers is “reasonable” without prior notice of systematic issues or
inaccuracies and, so, plaintiff is required to plead additional facts supporting a willfulness
violation. See id.
Plaintiff responds that defendant’s failure to employ procedures similar to White showed
a “willful disregard of reasonable procedures to ensure maximum possible accuracy.” Doc. 27 at
10 (citing Safeco Ins. Co., 551 U.S. 47). Since defendant already employs procedures in Chapter
7 pre-petition debts that could have prevented plaintiff’s inaccurate credit report, plaintiff
contends it was reckless not to employ those procedures for plaintiff’s Chapter 13 post-petition
debts. See id.
At this stage, the court may infer defendant’s inaccurate reporting resulted from willful or
reckless disregard of FCRA’s requirements. See Birmingham, 633 F.3d at 1009. And, the court
may infer from the Petition’s allegations—construed in plaintiff’s favor—that defendant relied
upon procedures it knew or should have known presented an undue risk of inaccuracies because
it already employed additional procedures and protections for Chapter 7 pre-petition debts under
White because of similar risks. The court thus denies defendant’s motion on the § 1681e
willfulness violation.
ii.

Willful Violation of § 1681i’s Reasonable Reinvestigation Requirement

Defendant argues it “cannot have willfully violated the FCRA” because it is “not required
to engage in an individualized and legally complicated review of bankruptcy dockets and similar
legal proceedings to form its own conclusions about the debt’s technical legal status.” Doc. 23 at
17. Plaintiff responds that her bankruptcy attorney notified defendant of the inaccuracy (see
Doc. 1-1 at 4 ¶ 28) and “[defendant] failed to give this correspondence the credit it was due.”

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Doc. 27 at 19. Plaintiff alleges, “[a]t a minimum [defendant] should have deleted the accounts,
but it also failed to do that.” Id. Plaintiff argues “[t]here can be no excuse for ignoring a dispute
which included information taken directly from Plaintiff’s bankruptcy and supplied by Plaintiff’s
bankruptcy attorney.” Id. at 18. Instead, plaintiff alleges defendant “engaged in the practice of
parroting its information furnisher, a practice which leads to an unjustifiably high risk of harm
that [defendant] is well aware of.” Id. Defendant does not dispute that plaintiff alleges she
notified defendant of the inaccuracy in her credit report. Nor does defendant deny plaintiff
alleges that defendant relied solely on Bank of Missouri’s reporting even after the notice by
plaintiff’s bankruptcy attorney. Instead, defendant simply argues that such conduct cannot
constitute unreasonable reinvestigation measures. See Doc. 23.
“[O]nce a claimed inaccuracy is pinpointed, a consumer reporting agency conducting
further investigation incurs only the cost of reinvestigating that one piece of disputed
information.” Cushman, 115 F.3d at 225. “[T]he caselaw is clear that a reporting agency does
not act reasonably under the FCRA by deferring entirely to another source of information. The
grave responsibility imposed by [the FCRA] must consist of something more than merely
parroting information received from other sources.” Centuori v. Experian Info. Sols., Inc., 431 F.
Supp. 2d 1002, 1008 (D. Ariz. 2006). Once a consumer disputes a reporting, a CRA must look
beyond the information from the creditor to meet its statutory duties under § 1681i. See DixonRollins v. Experian Info. Sols., Inc., 753 F. Supp. 2d 452, 459 (E.D. Pa. Sept. 23, 2010) (“[T]he
Third Circuit recently confirmed that a reasonable reinvestigation ‘must mean more than simply .
. . making only a cursory investigation into the reliability of information that is reported to
potential creditors.’”) (quoting Cortez, 617 F.3d at 713). “A reasonable jury could find that a
knowing violation of the FCRA was the result of defendants’ ‘parroting information received

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from other sources.’” Campbell v. Chase Manhattan Bank, USA, N.A., No. 02-3489(JWB), 2005
WL 1514221, at *16 (D.N.J. June 27, 2005), reconsidered on other grounds, 2005 WL 1924669
(D.N.J. Aug. 10, 2005).
At this stage, plaintiff sufficiently pleads a willfulness violation of § 1681i because she
alleges she notified defendant of the inaccuracy and defendant continued inaccurately reporting
the two credit cards as discharged. Taking all the facts pleaded as true, as it must, the court holds
plaintiff has pleaded sufficiently that defendant willfully violated § 1681i when it relied solely on
Bank of Missouri’s report even after notice from plaintiff it was inaccurate. The court thus
denies defendant’s motion to dismiss the willfulness violation of § 1681i.
IT IS THEREFORE ORDERED BY THE COURT THAT defendant’s Motion for
Judgment on the Pleadings (Doc. 22) is denied.
IT IS SO ORDERED.
Dated this 18th day of November, 2020, at Kansas City, Kansas.
s/ Daniel D. Crabtree
Daniel D. Crabtree
United States District Judge

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