Daniel v. West Asset Management

Filing 4

OPINION AND ORDER GRANTING Application to Proceed in Forma Pauperis and DISMISSING Complaint pursuant to 28:USC:1915(e)(2) Signed by District Judge Robert H. Cleland. (LWag)

UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

ROCHELLE DANIEL,
Plaintiff,
v.

Case No. 12-12851

WEST ASSET MANAGEMENT, INC.,
Defendant.
/
OPINION AND ORDER GRANTING APPLICATION TO PROCEED IN FORMA
PAUPERIS AND DISMISSING COMPLAINT PURSUANT TO 28 U.S.C. § 1915(e)(2)
Plaintiff Rochelle Daniel initiated this pro se action seeking damages against
Defendant West Asset Management, Inc. (“WAM”) for violations of the Fair Credit
Reporting Act (“FCRA”) pursuant to 15 U.S.C. § 1681 and the Consumer Fraud and
Abuse Act (“CFAA”) pursuant to 18 U.S.C. § 1030. On June 28, 2012, Plaintiff filed an
application to proceed in forma pauperis, which the court will grant. See 28 U.S.C.
§ 1915(a)(1). However, the court will dismiss this action pursuant to 28 U.S.C.
§ 1915(e)(2).
I. BACKGROUND
This case stems from Plaintiff’s initial complaint in a companion case involving
Defendant. Daniel v. W. Asset Mgmt., Inc., No. 11-10034, 2011 WL 5142980 (E.D.
Mich. Oct. 28, 2011). The complaint arose from a debt Plaintiff purportedly owed to
AT&T and Defendant’s efforts to collect that debt. In November 2009, Plaintiff’s account
was referred by AT&T “to Defendant, a debt collection agency, for collection.” (Id. at
*1.) Debt collection efforts were commenced by Defendant on November 14, 2009, and

Plaintiff was sent a collection letter on November 16, 2009, “informing her that her AT&T
account had been turned over to Defendant for collection[.]” (Id.) The collection letter
detailed information on how Plaintiff can either “pay the debt or contest the validity of
the debt.” (Id.)
On November 27, 2009, Plaintiff called Defendant to dispute the debt. (Id.) In
her complaint, Plaintiff alleges that “she returned to AT&T the equipment that gave rise
to the alleged debt, and that AT&T failed to update their records to indicate that the
equipment was returned.” (Id.) “The complaint further avers that Plaintiff disputed the
debt and requested debt validation,” but she was informed by a representative of the
Defendant that the debt could not be disputed over the phone and that Plaintiff must
dispute the debt “in writing per the collection letter.” (Id.)
“[F]ollowing the November 27, 2009 telephone call, Defendant documented in its
records that the account was in dispute.” (Id.) Plaintiff did not dispute the debt in
writing within a thirty-day period as required by the collection letter or pursuant to 15
U.S.C. § 1692g(b), and collection actions were undertaken by Defendant. (Id.) On
December 17, 2009, “Defendant reported Plaintiff’s allegedly delinquent account to a
consumer credit agency” but also “indicated to the credit agency that Plaintiff disputed
the debt.” (Id. at *2.) On May 4, 2010, Defendant closed Plaintiff’s account and
requested the credit bureaus “[to] delete its reporting of the subject Account from
Plaintiff’s consumer credit report.” (Id.) Plaintiff commenced suit against Defendant
averring several violations under federal law, which included: “the Telephone Consumer
Protection Act (‘TCPA’), the Fair Debt Collection Practices Act (‘FDCPA’), and the Fair

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Credit Reporting Act (‘FCRA’).” (Id. at *1.) Ultimately, Defendant was granted summary
judgment on all counts on October 28, 2011. (Id. at *10.)
Plaintiff initiated the present cause of action against Defendant, this time averring
that Defendant violated various provisions of the FCRA and the CFAA. Plaintiff alleges
in her complaint that on or about March 16, 2012, she received her credit report
“prepared by TransUnion and discovered that on August 12, 2011, WAM requested a
copy of the report.” (Pl.’s Compl. ¶ 16, Dkt. # 1.) Plaintiff avers that such actions taken
by Defendant violated certain provisions of the FCRA and the CFAA because she no
longer “had [any] business dealings or accounts with West Asset Management.” (Id. ¶
2.)
II. STANDARD
Complaints filed in forma pauperis are subject to the screening requirements of
28 U.S.C. § 1915(e)(2). Brown v. Bargery, 207 F.3d 863, 866 (6th Cir. 2000). Section
1915(e)(2) requires district courts to dismiss complaints that are frivolous or malicious,
that fail to state a claim on which relief may be granted, or that seek monetary relief
from a defendant who is immune from such relief. 28 U.S.C. § 1915(e)(2)(B).
The Supreme Court has interpreted the term “frivolous,” with respect to a
complaint, to embrace “not only the inarguable legal conclusion, but also the fanciful
factual allegation.” Neitzke v. Williams, 490 U.S. 319, 325 (1989). Thus, a complaint “is
frivolous where it lacks an arguable basis either in law or in fact.” Id.; see also Brown,
207 F.3d at 866.
To state a claim upon which relief may be granted, a complaint must allege
enough facts that, when assumed true, “raise a right to relief above the speculative
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level,” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007), by “stat[ing] a claim to relief
that is plausible on its face,” id. at 570. A claim is facially plausible when the plaintiff
pleads facts “allow[ing] the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged,” rather than showing only “a sheer possibility that a
defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1949
(2009) (citing Twombly, 550 U.S. at 556). Dismissal of a complaint under § 1915(e)(2)
for failure to state a claim on which relief may be granted “is appropriate only if it
appears beyond a doubt that the plaintiff can prove no set of facts in support of his claim
that would entitle him to relief.” Brown, 207 F.3d at 867.
III. DISCUSSION
The court must dismiss Plaintiff’s complaint under 28 U.S.C. § 1915. Plaintiff’s
complaint avers numerous violations by Defendant under the Fair Credit Reporting Act
(“FCRA”) pursuant to 15 U.S.C. § 1681 and the Consumer Fraud and Abuse Act
(“CFAA”) pursuant to 18 U.S.C. § 1030. Specifically, Plaintiff’s claims arise from her
allegation that WAM illegally requested a copy of her credit report on August 12, 2011.
Plaintiff purports that the action taken by Defendant violated FCRA 15 U.S.C. §§ 1681q,
1681b(f), 1681n, and 1681o, as well as CFAA 18 U.S.C. §§ 1030(a)(2)(A), (c)(4)(A)(I),
and (e)(2)(B). However, Plaintiff’s claims are without merit.
First, WAM is not a credit reporting agency within the meaning of 15 U.S.C.
§ 1681a(f), which defines a consumer reporting agency as “any person which . . .
regularly engages in whole or in part in the practice of assembling or evaluating
consumer credit information or other information on consumers for purposes of
furnishing consumer reports to third parties[.]” 15 U.S.C. § 1681a(f). WAM does not
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assemble or evaluate consumer credit information for the purpose of furnishing it to third
parties. Rather, WAM is merely a debt collecting agency that “pass[es] on information
regarding unpaid debts to credit reporting agencies.” Etefia v. Russell Collection
Agency, Inc., 20 F. App’x 485, 486 (6th Cir. 2001) (holding that a collection agency was
not a credit reporting agency under 15 U.S.C. § 1681a(f)). Thus, FCRA 15 U.S.C. §
1681 does not apply to Defendant.
Second, even if Defendant is considered a credit reporting agency under the
FCRA, it cannot be credibly alleged to have “willfully report[ed] inaccurate information,
fail[ed] to maintain reasonable procedures to assure compliance with the FCRA, or
fail[ed] to . . . report that the debt” to AT&T was disputed. Id. To the contrary, in the
predicate case No. 11-10034, in which summary judgment was granted to Defendant, it
is uncontroverted that “Defendant documented in its records that the account was in
dispute.” Daniel, 2011 WL 5142980, at *1. Additionally, WAM had “a legitimate
business need for the information.” 15 U.S.C. § 1681b(a)(3)(F). Pursuant to
§ 1681b(a)(3)(F), courts “have allowed parties to obtain consumer reports . . . for use in
litigation, [where] the legal dispute typically [relates] to the collection of the debt owed by
the consumer.” Duncan v. Handmaker, 149 F.3d 424, 428 (6th Cir. 1998) (alteration in
original).1 Here, Plaintiff’s initial suit against Defendant relates to the collection of a
debt. Whether or not the report was correct is irrelevant. See Estefia, 20 F. App’x at
1

“Section 1681b was amended twice after the events of this case.” Duncan v.
Handmaker, 149 F.3d 424, 427, n.3 (6th Cir. 1998). See Intelligence Authorization Act
for Fiscal Year 1998, Pub. L. No. 105-107, § 311(a), 111 Stat. 2248, *2256 (1997);
Consumer Credit Reform Act of 1996, Pub. L. No. 104-208, § 2403, 110 Stat. 3009,
*3009-430 (1996). The amendment revised subsection (a)(3)(E) and added subsection
(a)(3)(F). Id.
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486. Moreover, even if WAM “did not have a legitimate business reason for requesting
the report,” Defendant “did not obtain the report under false pretenses.” Id. (citing
Duncan, 149 F.3d at 427).
“Section 1681b(3)(A) of the FCRA focuses on the extension of credit and the
collection of debt. It permits a party to obtain a consumer report ‘in connection with a
credit transaction . . . involving the extension of credit to, or review or collection of an
account of, the consumer.’” Duncan, 149 F.3d at 427 (citing 15 U.S.C.
§ 1681b(a)(3)(A)). According to Plaintiff, WAM requested a copy of the TransUnion
report on August 12, 2011, (Pl.’s Compl. ¶ 16, Dkt. # 1), which was before Plaintiff’s first
case involving Defendant was dismissed on October 28, 2011, Daniel v. W. Asset
Mgmt., Inc., No. 11-10034, 2011 WL 5142980 (E.D. Mich. Oct. 28, 2011). Thus,
pursuant to § 1681b(a)(3)(A), Defendant may obtain Plaintiff’s credit report from
TransUnion since Defendant was still a party to Plaintiff’s initial suit. Id. Hence, even if
Defendant was considered a credit reporting agency pursuant to 15 U.S.C. § 1681, it
was well within its authority to request and review Plaintiff’s credit information from
TransUnion. Therefore, Plaintiff’s claims against Defendant under 15 U.S.C. §§ 1681q,
1681b(f), 1681n, and 1681o are without merit.
Likewise, the court must dismiss Plaintiff’s 18 U.S.C. § 1030 claims against
Defendant. Section 1030(a)(2)(A) of the FCRA states that “[w]hoever intentionally
accesses a computer without authorization or exceeds authorized access, and thereby
obtains information contained . . . in a file of a consumer reporting agency on a
consumer . . . shall be punished as provided in subsection (c) of this section.” 18

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U.S.C. § 1030(a)(2)(A) (emphasis added). The CFAA does not define the term “without
authorization.” Clarity Servs. Inc., v. Barney, 698 F. Supp. 2d 1309, 1315 (M.D. Fla.
2010). However, “authorization” is defined as “‘[t]he act of conferring authority;
permission.” Id. (citing The American Heritage Dictionary 89 (1976)). Here, Defendant
needed to obtain authority or permission from TransUnion. In Plaintiff’s complaint, she
states that a WAM supervisor informed her that TransUnion sent a screen shot of her
TransUnion credit report to WAM’s legal department. (Pl.’s Compl. ¶ 22, Dkt. # 1.)
Thus, there is no unauthorized access by Defendant that violated 18 U.S.C.
§ 1030(a)(2)(A). Plaintiff fails to state a claim under §§ 1030(c)(4)(A)(I) and (e)(2)(B).
No violations by Defendant under 18 U.S.C. § 1030(a)(2)(A) are adequately alleged.
IV. CONCLUSION
Accordingly, IT IS ORDERED that Plaintiff’s application to proceed in forma
pauperis [Dkt. # 2] is GRANTED.
IT IS FURTHER ORDERED that Plaintiff’s complaint [Dkt. # 1] is DISMISSED
pursuant to 42 U.S.C. § 1915(e)(2).

s/Robert H. Cleland
ROBERT H. CLELAND
UNITED STATES DISTRICT JUDGE
Dated: October 31, 2012

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I hereby certify that a copy of the foregoing document was mailed to counsel of record
on this date, October 31, 2012, by electronic and/or ordinary mail.
s/Lisa Wagner
Case Manager and Deputy Clerk
[phone]

S:\Cleland\JUDGE'S DESK\C1 ORDERS\12-12851.DANIEL.Grant.IFP.Dismiss.1915(e)(2).wpd

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