Bass v. Aidvantage Fed. Student Aid Loan Servicing et al

Filing 15

MEMORANDUM OPINION & ORDER Signed by Judge Rebecca Grady Jennings on 9/25/2024 granting 13 Aidvantage's Motion to Dismiss for Failure to State a Claim. cc: Counsel (SMJ)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
LOUISVILLE DIVISION
YAEL BASS

Plaintiff

v.

Civil Action No. 3:24-cv-279

AIDVANTAGE FED. STUDENT LOAN
SERVICING AND EQUIFAX
INFORMATION SERVICES, LLC

Defendants

* * * * *
MEMORANDUM OPINION & ORDER
Defendant Maximus Education LLC d/b/a Aidvantage (“Aidvantage”)1 moves to dismiss
under Fed. R. Civ. P. 12(b)(6) for failure to state a claim upon which relief can be granted. [DE
13].2 Plaintiff Yael Bass (“Bass”) has not responded, and the time to do so has expired. This
matter is ripe. For the reasons below, Aidvantage’s Motion to Dismiss is GRANTED. [DE 13].
I.

BACKGROUND

This action arises from Bass’s claims against Aidvantage for violating the Federal Credit
Reporting Act (“FCRA”), 15 U.S.C. § 1681 et seq.3 Bass is considered a “consumer,” Aidvantage

Incorrectly named as “Aidvantage federal student aid loan servicing” in the Complaint. [DE 1-1].
The Joint Local Rules for the Eastern and Western Districts of Kentucky contemplate a single, unified
motion and memorandum. See Local Rule 7.1. Going forward, counsel is advised to file a unified motion.
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The factual allegations in the Complaint [DE 1] are considered true for purposes of this motion. See
Tackett v. M & G Polymers, USA, LLC, 561 F.3d 478, 488 (6th Cir. 2009) (citing Gunasekera v. Irwin, 551
F.3d 461, 466 (6th Cir. 2009)).
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is considered a “furnisher of information,” and Equifax is considered a “consumer reporting
agencies” (“CRA”) as defined by 15 U.S.C. § 1681s-2.4
In July 2023, Bass accessed her Equifax credit reports and discovered that Aidvantage was
furnishing an alleged default history on her Aidvantage student loan account to Equifax. [DE 1-1
at 9]. On discovery, Bass disputed the account to Equifax in writing. [Id.]. In August 2023, Bass
accessed her Equifax credit report again, and found that the alleged inaccuracy was still reported.
[Id.].
Although it is unclear, Bass appears to allege that she has a Federal Family Education Loan,
serviced by Aidvantage, and Aidvantage furnished negative information about that loan on her
Equifax credit report. [DE 1-1 at 10; DE 13-1 at 38]. Bass argues that Aidvantage negligently
and willfully violated the FCRA because Aidvantage (1) failed to investigate Bass’s direct dispute;
(2) failed to evaluate or consider any of Bass’s information, claims, or evidence; and (3) failed to
make any and/or sufficient attempts to amend or delete its reporting of the disputed items within a
reasonable time following receipt of Bass’s disputes. [DE 1-1 at 10-11]. Bass asserts that these
failures amount to Aidvantage breaching its duties to (1) ensure maximum possible accuracy of
consumer reports under 15 U.S.C.§ 1681e(b) and, (2) investigate disputed items under 15 U.S.C.
§1681i. [Id.].

The FCRA defines “consumer” to mean individual. 15 U.S.C. § 1681a(c). The FCRA defines a consumer
reporting agency as “any person which, for monetary fees, dues, or on a cooperative nonprofit basis,
regularly engages in whole or in part in the practice of assembling or evaluating consumer credit
information or other information on consumers for the purpose of furnishing consumer reports to third
parties, and which uses any means or facility of interstate commerce for the purpose of preparing or
furnishing consumer reports.” § 1681a(f). The FCRA does not define “furnisher,” however, other courts
have defined a furnisher as “any entity which transmits information concerning a particular debt owed by
a particular customer to consumer reporting agencies.” Carney v. Experian Info. Sols., Inc., 57 F. Supp. 2d
496, 501 (W.D. Tenn. 1999).
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II.

STANDARD

A motion to dismiss under Fed. R. Civ. P. 12(b)(6) tests the legal sufficiency of the
complaint. RMI Titanium Co. v. Westinghouse Elec. Corp., 78 F.3d 1125, 1134 (6th Cir. 1996).
“To survive a motion to dismiss, 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)). A claim is plausible on
its face “when the plaintiff pleads factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S.
at 556). This standard does not “impose a probability requirement at the pleading stage; it simply
calls for enough fact to raise a reasonable expectation that discovery will reveal evidence of illegal
[conduct].” Twombly, 550 U.S. at 556. Dismissal under Rule 12(b)(6) is warranted “only if it
appears beyond doubt that the plaintiff can prove no set of facts in support of the claims that would
entitle him or her to relief.” Zaluski v. United Am. Healthcare Corp., 527 F.3d 564, 570 (6th Cir.
2008).
Because a motion to dismiss challenges the sufficiency of the pleadings, “[i]t is not the
function of the court [in ruling on such a motion] to weigh evidence.” Miller v. Currie, 50 F.3d
373, 377 (6th Cir. 1995). Rather, to determine whether the plaintiff set forth a “plausible” claim,
the Court “must construe the complaint liberally in the plaintiff's favor and accept as true all factual
allegations and permissible inferences therein.” Gazette v. City of Pontiac, 41 F.3d 1061, 1064
(6th Cir. 1994). However, the Court is “not bound to accept as true a legal conclusion couched as
a factual allegation”; “[t]hreadbare recitals of the elements of a cause of action, supported by mere
conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 555).
In deciding a motion to dismiss, the Court “may consider the Complaint and any exhibits attached

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thereto, public records, items appearing in the record of the case and exhibits attached to
defendant’s motion to dismiss so long as they are referred to in the Complaint and are central to
the claims contained therein.” Bassett v. Nat’l Collegiate Athletic Ass’n, 528 F.3d 426, 430 (6th
Cir. 2008) (citation omitted).
The Sixth Circuit has held that “if a plaintiff fails to respond or to otherwise oppose a
defendant's motion, then the district court may deem the plaintiff to have waived opposition to the
motion.” Scott v. State of Tenn, 878 F.2d 382, 1989 U.S. App. LEXIS 9653, at *4 (6th Cir. 1989)
(table) (affirming a grant of an unopposed motion to dismiss). For that reason alone, the Court
could grant Defendant's motion. But the Court chooses to address the motion on the merits to
complete the record.
III.

ANALYSIS

Bass contends that Aidvantage willfully and negligently violated 15 U.S.C. § 1681e(b) and
§ 1681i.

However, Aidvantage argues neither subsection applies because Aidvantage is a

“furnisher of information” as defined under § 1681s-2, and not a CRA.
Notably, § 1681e(b) and 1681i relate only to the duties of a CRA. See § 1681e(b)
(“Whenever a consumer reporting agency 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.”); Lewis v. Ohio Pro. Elec. Network LLC, 248 F. Supp. 2d 693
(S.D. Ohio 2003) (finding that §1681i applies explicitly to consumer reporting agencies.). Only
§ 1681s-2b provides a private right of action against a furnisher.
Even when filing a claim under § 1681s-2b, “[c]onsumers must file a dispute with a
consumer reporting agency to trigger the furnisher’s duty to investigate under §1681s-2(b).” Scott
v. First S. Nat'l Bank, 936 F.3d 509, 517 (6th Cir. 2019); See also, e.g., Merritt v. Experian, 560

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F. App'x 525, 528–29 (6th Cir. 2014) (“Furnishers’ of information to consumer reporting agencies
do have certain responsibilities to investigate [under the FCRA]—but only after receiving a request
from a consumer reporting agency to respond to a dispute.”); Stafford v. Cross Country Bank, 262
F. Supp. 2d 776, 783 n.4 (W.D. Ky. 2003) (“This means that a furnisher of credit information,
such as the Bank, has no responsibility to investigate a credit dispute until after it receives notice
from a consumer reporting agency.”). Thus, furnishers only have a duty to investigate under
§ 1681s-2(b) when the CRA informs the furnisher of the dispute, not the consumer.
Considering the allegations as true, Bass’s Complaint “fail[s] to state a claim upon which
relief can be granted” under FCRA § 1681e(b) and §1681i because these subsections create a
private right of action against CRAs, not furnishers. Fed. R. Civ. P. 12(b)(6).5 Accordingly,
Aidvantage’s Motion to Dismiss [DE 13] is GRANTED.
IV.

CONCLUSION

Accordingly, the Court, having considered the parties’ motions and related filings and being
otherwise sufficiently advised, IT IS ORDERED Aidvantage’s Motion to Dismiss [DE 13] is
GRANTED.

September 25, 2024

Even if Bass intended to assert a claim under § 1681s-2(b), which provides a private right of action for
consumers, that claim would still fail. To prevail on a § 1681s-2(b) claim, Bass must allege that a CRA
notified Aidvantage of her dispute and failed to investigate accordingly, which she fails to do. [See DE 11].
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