SMITH v. EQUIFAX INFORMATION SERVICES, LLC et al
Filing
86
ORDER GRANTING 71 MOTION for Summary Judgment filed by US DEPARTMENT OF EDUCATION, and GRANTING IN PART 72 MOTION for Summary Judgment filed by Pennsylvania Higher Education Assistance Agency. Signed by District Judge Terrence G. Berg. (AChu)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
2:18-CV-10162-TGB
ANGELA SMITH,
Plaintiff,
ORDER
vs.
(1)
GRANTING DEFENDANT
UNITED STATES
DEPARTMENT OF
EDUCATION’S MOTION
FOR SUMMARY
JUDGMENT, AND
(2)
GRANTING IN PART
AND DENYING IN PART
DEFENDANT
PENNSYLVANIA
HIGHER EDUCATION
ASSISTANCE AGENCY’S
MOTION FOR SUMMARY
JUDGMENT
PENNSYLVANIA HIGHER
EDUCATION ASSISTANCE
AGENCY and
UNITED STATES
DEPARTMENT OF
EDUCATION,
Defendants.
Plaintiff Angela Smith was the victim of identity theft in January
2014 when someone used her name, social security number, and date of
birth to obtain four educational loans to attend Indiana Institute of
Technology. Defendant Pennsylvania Higher Education Assistance
Agency, d/b/a FedLoan (“Defendant FedLoan”) serviced the loans until
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November 2016, when they were transferred to Defendant United States
Department of Education (“Defendant USDOE”) for servicing.
On January 15, 2018, Plaintiff filed this lawsuit against Defendants
for violating the Fair Credit Reporting Act (“FCRA”) and the Michigan
Regulation of Collection Practices Act (“MRCPA”) based on the
Defendants’ conduct surrounding Plaintiff’s dispute of the debts.
Defendants have each moved for summary judgment on separate
grounds. Defendant USDOE argues that it is immune from suit pursuant
to the doctrine of sovereign immunity. Defendant USDOE’s Motion for
Summary Judgment, ECF No. 71. Defendant FedLoan argues that
Plaintiff cannot recover because she has not sustained any damages or,
alternatively, that its investigation of Plaintiff’s dispute was reasonable
as a matter of law. Defendant FedLoan’s Motion for Summary Judgment,
ECF No. 72.
For the reasons below, Defendant United States Department of
Education’s Motion for Summary Judgment (ECF No. 71) will be
GRANTED. Defendant FedLoan’s Motion for Summary Judgment (ECF
No. 72) will be GRANTED in part and DENIED in part.
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I.
Facts1
In March 2015, Plaintiff received a letter in the mail from
Defendant Fedloan that listed student loan debts that Plaintiff did not
recognize. Plaintiff’s Response to Defendant FedLoan’s Motion for
Summary Judgment, ECF No. 81 PageID.2333. Plaintiff has never had
any student loans. Id. Plaintiff obtained a copy of her credit report and
contacted Defendant FedLoan via telephone to tell them that the debts
did not belong to her. Plaintiff’s Deposition, ECF No. 72-6 PageID.1484.
After that call, on FedLoan’s advice, Plaintiff filed a police report for
identity theft. Id. FedLoan then sent Plaintiff a packet of documents to
fill out to support her claim of identity theft and requesting a copy of the
police report she filed, noting that “[f]ailure to enclose a copy of the police
report will result in us taking no further action on your claim of identity
theft.” Fraud Packet, ECF No. 72-8. FedLoan sent an identical set of
documents to Plaintiff again in August 2015. Plaintiff’s Deposition, ECF
Because Defendant USDOE’s Motion for Summary Judgment is founded on the
argument that Congress did not waive sovereign immunity in the FCRA, the Court
has omitted facts about USDOE’s investigation of Plaintiff’s disputes. The focus must
rather be on the communications between Plaintiff and FedLoan, and the Court will
reference communications between Plaintiff and USDOE only where those
communications could arguably bear on the reasonableness of FedLoan’s
investigation.
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No. 72-6 PageID.1485. Plaintiff did not return either fraud packet and
she did not send a copy of the police report to Defendant FedLoan. Id.
Plaintiff did, however, continue to dispute that the debts listed on
her credit report in fact belonged to her. She sent two letters to Defendant
FedLoan on May 12, 2017 and August 22, 2017 stating: “I do not have an
account with you. I have never had an account with you . . . These are not
my accounts.” ECF No. 72-11 PageID.1607; PageID.1534. On the same
dates, Plaintiff also sent dispute letters to Defendant USDOE with
similar information, stating “I did not sign, apply [for] or authorize [] this
loan,” Id. at PageID.1600, and “I did not borrow any money to attend
school nor do I know who did . . . nor do I have any idea what dates they
allegedly attended . . . I did not borrow anything from you and I did not
sign anything authorizing these debts.” Id. at PageID.1604. In her second
letter to Defendant USDOE, Plaintiff specifically states that she is not
alleging that the loans were fraudulently obtained. Id. In this letter, she
also states that she did not file a police report alleging fraud, although a
police report from March 2015 is in the record. Id. On June 12, 2015,
Defendant FedLoan informed Plaintiff in writing that it had verified that
the debts listed did belong to her.
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During this time, Plaintiff also sent lengthy dispute letters to
various credit reporting agencies, which she included in her direct
correspondence with both Defendants. These letters to the credit
reporting agencies are dated April 1, 2016, December 3, 2016, February
25, 2017, May 12, 2017, and August 22, 2017. Correspondence, ECF No.
72-11 PageID.1535–1607. In her letters to the credit reporting agencies,
Plaintiff disputed numerous aspects of the information listed on her
credit report, including her address, date of birth, and educational
history, and always stating that the four FedLoan debts on her credit
report did not belong to her. Id.
In response to Plaintiff’s dispute letters sent directly to the credit
reporting agencies, each agency generated an electronic report of the
dispute called an Automated Consumer Dispute Verification (“ACDV”).
Leslie Harris’ Deposition, ECF No. 72-4 PageID.1195–96. Each ACDV
was forwarded to Defendant FedLoan. Id. None of the ACDVs used the
dispute code for an allegation of identity theft or fraud. Instead, the
ACDVs in the record use dispute codes 001—“loan not his/hers” or 002—
“belongs to another individual with the same or similar name.” ACDVs,
ECF No. 72-13. Defendant FedLoan “reviewed the underlying loan
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document and confirmed that it contained Plaintiff’s correct date of birth,
name and social security number” when it received the ACDVs.
FedLoan’s Motion for Summary Judgment, ECF No. 72 PageID.879–80
(citing Leslie Harris’ Deposition, ECF No. 72-4 PageID.1306; ACDVs,
ECF No. 72-13 response code section). Because the underlying loan
document did contain Plaintiff’s correct information, Defendant FedLoan
concluded that Plaintiff’s dispute was unfounded and continued to report
the disputed debts. Id. FedLoan performed the same investigation in
response to each of Plaintiff’s disputes. ECF No. 72 PageID.888. In May
2018, Defendant USDOE informed Defendant FedLoan that the debts
were fraudulently obtained. Plaintiff’s Declaration, ECF No. 81-2
PageID.2360. Based on that information, Defendant FedLoan requested
that the credit reporting agencies delete the debt from Plaintiff’s credit
report. Id.
Defendant FedLoan communicated with Plaintiff several times
regarding the fraudulent loans and Plaintiff’s purported obligation to pay
them. On March 12, 2015, Defendant sent Plaintiff two letters, one
notifying her that her payments were “past due,” ECF No. 81-6
PageID.2525, and one stating that “[FedLoan] may negatively credit
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report you,” ECF No. 81-7 PageID.2529. Defendant sent similar letters
on June 26, 2015 and August 11, 2015. ECF No. 81-8–81-9. On July 11,
2016, Defendant sent Plaintiff a letter stating that Plaintiff had ignored
Defendant’s “repeated attempts to resolve the delinquency” and as a
result “must now pay the loans IN FULL.” ECF No. 81-11 PageID.2545.
On August 12, 2016, Defendant sent Plaintiff a final letter stating that
her loans had defaulted. This letter states:
Your failure to pay your federal student loans is a
severe violation of the terms and conditions of your
federal student loan agreement. Defaulted federal
student loans are not released or forgiven. The
U.S. Government pursues defaulted borrowers
until the owed amounts are collected.
Consequences of default include ineligibility for
federal student financial aid. In addition, you
account may soon be sent to the U.S. Department
of Education’s Default Resolution Group for
additional collection activities, which may include:
Wage garnishment.
Offset your federal student loan debt against
your federal tax return.
Possible legal action by the United States
Department of Justice.
Assessment of collection costs and fees.
Credit bureaus will be notified, and your
credit rating may suffer.
Please contact our experienced loan counselors
immediately to take the appropriate action. We
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may still be able to offer assistance before the
negative consequences described above take effect.
ECF No. 81-12 PageID.2546.
Plaintiff testified that she had a mortgage on her home in
Wyandotte during the time that the fraudulent debts were listed on her
credit report—from 2015 to 2018. Plaintiff’s Deposition, ECF No. 72-6
PageID.1483. During that time, her mortgage servicer did not raise any
concerns to her about her credit. Id. In fall 2015, Plaintiff obtained a car
lease without incident. Id. at PageID.1483–84. She sold her home in
October 2018 and obtained a mortgage to purchase a different home, also
without incident. Id. Around the same time, she obtained another car
lease. Id. Although the fraudulent loans did appear on her credit report
at the time she obtained the 2015 car lease, the information was not yet
derogatory—the debts were not past due at that time. Response, ECF No.
81 PageID.2337. She did not apply for any credit while the debts were
reported as past due. Plaintiff’s Declaration, ECF No. 81-2 PageID.2362.
And during the entire time-period when the fraudulent debts were
reported on her credit report, she avoided applying for new lines of credit
unless it was absolutely necessary because she feared rejection.
Plaintiff’s Deposition, ECF No.72-6 at PageID.1488.
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Plaintiff states in her declaration that the “experience of dealing
with” FedLoan’s alleged violation of the FCRA was “extraordinarily
distressing.” Plaintiff’s Declaration, ECF No. 81-2 PageID.2362. She
experienced headaches, stress, crying, anguish, and disruption of her
normal activities. Id. However, Plaintiff did not seek medical attention
for these symptoms. Plaintiff’s Deposition, ECF No. 72-6 PageID.1488.
In addition, she spent time and energy attempting to rectify the reporting
error that she would “have otherwise spent on other pursuits.” Plaintiff’s
Declaration, ECF No. 81-2 PageID.2362.
II.
Standard
“Summary judgment is appropriate if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with any
affidavits, show that there is no genuine issue as to any material fact
such that the movant is entitled to a judgment as a matter of law.”
Villegas v. Metro. Gov't of Nashville, 709 F.3d 563, 568 (6th Cir. 2013);
see also Fed. R. Civ. P. 56(a). A fact is material only if it might affect the
outcome of the case under the governing law. See Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 249 (1986).
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On a motion for summary judgment, the Court must view the
evidence, and any reasonable inferences drawn from the evidence, in the
light most favorable to the non-moving party. See Matsushita Elec. Indus.
Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citations omitted);
Redding v. St. Edward, 241 F.3d 530, 531 (6th Cir. 2001).
As the moving party, Defendants have the initial burden to show
that there is an absence of evidence to support Plaintiff’s case. Selby v.
Caruso, 734 F.3d 554 (6th Cir. 2013); see also Celotex Corp. v. Catrett, 477
U.S. 317, 325 (1986). Once the moving party has met its burden, the nonmoving party “may not rest upon its mere allegations or denials of the
adverse party’s pleadings, but rather must set forth specific facts showing
that there is a genuine issue for trial.” Ellington v. City of E. Cleveland,
689 F.3d 549, 552.
III.
Analysis
a. Defendant USDOE is immune from suit under the FCRA.
The federal government is immune from suit at common law. Santa
Clara Pueblo v. Martinez, 436 U.S. 49, 58 (1978). As a federal agency, the
Department of Education has the same presumption of immunity from
suit. See, e.g., United States Department of Energy v. Ohio, 503 U.S. 607
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(1992) (finding sovereign immunity in favor of the agency). Citizens,
through their elected representatives assembled in Congress, can waive
sovereign immunity in specific statutes if the waiver is “unequivocally
expressed in statutory text.” Federal Aviation Administration v. Cooper,
566 U.S. 284, 290 (2012) (citing cases). In order to be effective, the scope
of Congress’ waiver must “be clearly discernable from the statutory text
in light of traditional interpretive tools. If it is not, then we take the
interpretation most favorable to the Government.” Id. at 291.
Plaintiff charges that Defendant USDOE violated 15 U.S.C.
§ 1681s-2(b), which sets forth the duties of any person who furnishes
credit information. Sections 1681n and 1681o impose liability upon any
“person” for willful and negligent violations of the statute. The statute
defines “person” as “any individual, partnership, corporation, trust,
estate, cooperative, association, government or governmental subdivision
or agency, or other entity.” 15 U.S.C. § 1681a(b) (emphasis added). Yet
Defendant argues that this does not amount to an unequivocal waiver of
sovereign immunity. As discussed below, the federal Circuit Courts of
Appeal are split on the question of whether this language operates as an
unequivocal waiver of sovereign immunity, and there is no governing
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precedent from the Sixth Circuit. After reviewing the relevant law, the
Court finds Defendant’s position the most persuasive: the statute does
not clearly and unequivocally waive sovereign immunity using the kind
of language that is commonly recognized as sufficient.
The earliest circuit decision on the issue is Bormes v. United States,
759 F.3d 793 (7th Cir. 2014), which finds the statutory language
sufficient to waive sovereign immunity. In Bormes, the Seventh Circuit
used the Government’s admission that it is subject to the FCRA’s
substantive requirements to hold that the Government is likewise subject
to the penalty and enforcement provisions. And the court of appeals also
relied on a plain reading of the definition of “person” alongside the
penalties subsections to conclude that Congress had waived sovereign
immunity. But the Bormes decision fails to engage in a detailed
discussion of several applicable legal doctrines that subsequent appellate
decisions have found important.
In Robinson v. United States, a case virtually identical to the one
currently before this Court, the Fourth Circuit reached a conclusion
opposite to that of Bormes. See 917 F.3d 799 (4th Cir. 2019). Robinson is
based on three premises: (1) the term “person” is not normally read to
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include the sovereign; (2) the language found in other federal statutes
waiving sovereign immunity is much clearer and more explicit than that
which is used in the FCRA; and (3) a reading of the enforcement
provisions as a whole that waived sovereign immunity would lead to
absurd results, such as allowing criminal prosecution of the federal
government. The Robinson court’s reasoning is convincing.
In brief, Robinson relies first on a long line of cases that affirm that
the word “person” ordinarily does not mean the sovereign. E.g. Vt. Agency
of Nat. Res. v. U.S. ex rel Stevens, 529 U.S. 765, 780 (2000). Although the
definition of “person” in the FCRA does include the federal government,
and it cannot be denied that the government is bound to follow the
FCRA’s requirements, the question still is whether the sovereign may be
sued for failing that obligation. Robinson also provides legal support for
the argument that this observation is not dispositive. 917 F.3d at 802–03
(“In settling on a fair reading of a statute, it is not unusual to consider
the ordinary meaning of a defined term, particularly when there is
dissonance between that ordinary meaning and the reach of the
definition.” (quoting Bond v. United States, 572 U.S. 844, 861 (2014))).
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Second, statutes that courts have recognized as unequivocally
waiving sovereign immunity, such as the Federal Tort Claims Act, do so
much more explicitly than the FCRA. For example, the FTCA states,
“The United States [is] liable . . . in the same manner and to the same
extent as a private individual under like circumstances, but [not] liable
for interest prior to judgment or for punitive damages.” 28 U.S.C.
§ 1346(b). This suggests that the FCRA’s more subtle language is not an
unequivocal waiver. Robinson, 917 F.3d at 803; see also Daniel v. Nat’l
Park Serv., 891 F.3d 762, 772 (9th Cir. 2018) (finding that the FCRA did
not waive sovereign immunity for monetary liability).
And finally, reading the FCRA to permit enforcement against the
United States would lead to absurd results, such as criminal prosecution
of the sovereign under 15 U.S.C. § 1681q. Plaintiff admits that such a
result would be absurd, but argues that the Court should interpret the
statute piecemeal, holding for today that only certain private
enforcement actions may proceed against the Government, while leaving
for another day the question of whether a criminal action could be
brought against the federal government. Response, ECF No. 80
PageID.2255, 2259. But courts “must interpret statutes as a whole,
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giving effect to each word and making every effort not to interpret a
provision in a manner that renders other provisions of the same statute
inconsistent, meaningless or superfluous.” Keeley v. Whitaker, 910 F.3d
878, 884 (6th Cir. 2018) (quoting Menuskin v. Williams, 145 F.3d 755,
768 (6th Cir. 1998)). An interpretation permitting one type of
enforcement action but prohibiting another would be an inconsistent
interpretation of the statute.
Importantly, the same logic does not compel the Court to interpret
the word “person” to exclude the Government in the substantive portions
of the FCRA. “Congress is free to waive the Federal Government’s
sovereign immunity against liability without waiving its immunity from
monetary damages awards.” Lane v. Pena, 518 U.S. 187, 196 (1996)
(finding that Congress waived sovereign immunity for suits seeking
equitable relief under the Rehabilitation Act of 1973, but not for suits
seeking monetary damages). The Government’s position in the instant
case is consistent with Lane.
For the reasons above, the Court finds that Congress did not
waive sovereign immunity in the penalties portion of the FCRA.
Therefore, the Department of Education is immune from suit for
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damages. Plaintiff withdrew her claims against Defendant USDOE for
liability under the Michigan Regulated Collection Practices Act (MRCPA)
in her Response, ECF No. 80 PageID.2260, so no claims against this
Defendant remain.
b. Plaintiff has presented facts from which a reasonable jury could
infer compensable emotional distress.
Defendant FedLoan argues that Plaintiff cannot maintain an action
for negligent violation of the FCRA where she has not shown that she
suffered any actual damages, citing 15 U.S.C. § 1681o (providing the
remedy of “actual damages sustained by the consumer” for negligent
violations of the FCRA). This is an accurate statement of the law. But
Plaintiff has provided facts from with a reasonable jury could find that
she suffered actual damages.
Plaintiff alleges that she suffered severe emotional distress during
the three years that the fraudulent loans were erroneously reported on
her credit report. Plaintiff’s Declaration, ECF No. 81-2 PageID.2362.
Although she did not seek medical attention for the symptoms of her
distress, a plaintiff is not required to provide medical evidence to recover
for emotional distress. See Smith v. LexisNexis Screening Solutions, Inc.,
837 F.3d 604, 611 (6th Cir. 2016) (finding the record of emotional distress
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sufficient to support the jury’s verdict awarding damages where the
plaintiff and his wife testified about Plaintiff’s emotional distress with
more than “mere conclusory statements”).
Relying upon a Second Circuit case, Casella v. Equifax Credit
Information Services, 56 F.3d 469 (2d Cir. 1995), Defendant argues that
Plaintiff cannot recover for emotional distress where she failed to show
that “any potential creditor or other person in [her] community learned
of any harmful information from [Defendant].” Casella, 56 F.3d at 475.
But Plaintiff applied for an auto lease in fall 2015, after the fraudulent
loans had appeared on her credit report for at least six months. Therefore,
Plaintiff has shown that at least one potential creditor saw the debts
reported on Plaintiff’s credit report. Plaintiff’s Deposition, ECF No. 72-6
PageID.1483–1484. Plaintiff notes in her response that she obtained this
auto lease before the debts were “negative[ly] reporting,” which did not
occur until February 2016. ECF No. 81 PageID.2342. But neither party
has specifically argued that pre-delinquency reporting is not “harmful
information,” using the wording of the Casella rule.
Although the debts did not prevent Plaintiff from obtaining credit,
denial of credit is not a prerequisite to recovery for emotional distress.
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Guimond v. Trans Union Credit Info. Co., 45 F.3d 13929, 1333 (9th Cir.
1995); cf. Casella, 56 F.3d at 475 (denying Plaintiff recovery because no
person learned of the harmful information, not because Plaintiff was
never denied credit due to the harmful information).2
Drawing all inferences in Plaintiff’s favor, she has provided facts
sufficient to allow a reasonable jury to conclude that she has incurred
actual damages.
c. Plaintiff has presented facts from which a jury could find that
Defendant’s investigation of her dispute was negligently or
recklessly unreasonable.
Plaintiff has alleged that Defendant FedLoan violated 15 U.S.C.
§ 1681s-2(b), which reads in part:
(1) After receiving notice . . . of a dispute with
regard to the completeness or accuracy of any
information provided by a person to a consumer
reporting agency, the person shall—
During oral argument on this Motion, counsel directed the Court to Thompson v.
Equifax, No. 2:18-cv-12495, ECF No. 40 PageID.357 (E.D. Mich. May 9, 2019). In this
Order, this Court granted a motion to compel discovery of the plaintiff’s credit score
over the last three years. The Order held that such information was discoverable
because it was relevant to the plaintiff’s injury. In dicta, the Court opined that the
information could be relevant “to the extent that” Plaintiff’s injury must be tied to
the effect that the errant debt reporting had on her credit score. The Court’s previous
Order did not—and did not need to—determine whether a claim for emotional
distress was cognizable without evidence that Plaintiff’s credit score was harmed.
Instead, the Court found only that such information would be relevant to the question
of injury.
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(A) conduct an investigation with respect to the
disputed information;
(B) review all relevant information provided by the
consumer reporting agency pursuant to section
1681i(a)(2) of this title;
(C) report the results of the investigation to the
consumer reporting agency;
***
In order to comply with the investigation requirement of the FCRA, a
furnisher of credit information must conduct a reasonable investigation.
Boggio v. USAA Fed. Sav. Bank, 696 F.3d 611, 616 (6th Cir. 2012). “[H]ow
thorough an investigation must be to be ‘reasonable’ turns on what
relevant information was provided to a furnisher by the CRA giving
notice of a dispute.” Id. at 617. If a furnisher of information’s
investigation is negligently unreasonable, as noted in the subsection
above, the consumer may recover actual damages pursuant to 15 U.S.C.
§ 1681o. If the investigation is willfully unreasonable, a consumer may
recover statutory damages pursuant to 15 U.S.C. § 1681n. And “where
willfulness is a statutory condition of civil liability, we have generally
taken it to cover not only knowing violations of a statute, but reckless
ones as well.” Safeco Ins. Co. of Am. v. Burr, 551, U.S. 47, 51 (2007). How
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thorough an inquiry must be to be “‘reasonable’ turns on what relevant
information was provided to a furnisher by the CRA giving notice of a
dispute.” Boggio, 696 F.3d at 617.
Reasonableness of an investigation is generally a question for the
jury to decide. Guimond, 45 F.3d at 1333, accord Ricketson v. Experian
Info. Solutions, 266 F. Supp. 1083, 1093 (W.D. Mich. 2017). This is the
case unless the evidence “is so one-sided that one party must prevail as
a matter of law.” Boggio, 696 F.3d at 614.
Defendant argues that Plaintiff’s statements that she was not
claiming that the loans were fraudulently obtained rendered Defendant’s
investigation of her disputes reasonable as a matter of law. This
argument is unavailing.
Defendant FedLoan received lengthy correspondence from Plaintiff
detailing her claims that the accounts listed did not belong to her. In this
case, some of the CRAs forwarded Plaintiff’s correspondence to
Defendant FedLoan along with the ACDVs, as Defendant stated during
oral argument, and Plaintiff copied Defendant on her dispute letters to
the CRAs, e.g. ECF No. 72-11 PageID.1533–35. There is no question that
Defendant was aware of the details of Plaintiff’s disputes via one or both
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of these avenues. And Plaintiff’s letters provided extensive information
that would be relevant to an investigation of her dispute and that would
lead a person who read and considered her letters to conclude that
Plaintiff’s true complaint was one of identity theft or fraud. A reasonable
jury could find that Defendant’s investigation—merely matching
Plaintiff’s identifying information with the information listed on the
master promissory note and nothing more—was not reasonable given all
the information included in Plaintiff’s letters that would tend to indicate
that she was the victim of identity theft. This a question of fact for the
jury to decide after considering the evidence.
This is true notwithstanding Plaintiff’s assertion that she was not
claiming identity theft. Indeed, Plaintiff had no direct knowledge that
she had been the victim of identity theft. It is understandable, then, that
she would be hesitant to make such an accusation. Boggio makes clear
that the depth of the investigation required is a sliding scale based on the
information provided by the consumer. Here, Plaintiff provided
voluminous information; the jury should evaluate it and consider
whether the investigation was reasonable in that context.
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d. There is no genuine issue of material fact as to whether Defendant
FedLoan misrepresented information to Plaintiff in a manner
violating the MRCPA.
The MRCPA makes it unlawful to misrepresent the “legal status of
a legal action being taken or threatened,” “[t]he legal rights of the creditor
or debtor,” or “that the nonpayment of a debt will result in the debtor’s
arrest or imprisonment, or the seizure, garnishment, attachment, or sale
of the debtor’s property.” Mich. Comp. Laws § 445.252(f). Plaintiff argues
that Defendant’s communication with her misrepresented each of these
matters.
Defendant’s statements in its letters to Plaintiff were not
misrepresentations. Each statement, detailed in Section I, supra, was
true—Plaintiff does not specifically deny this in her Response to
Defendant’s Motion. The only misrepresentation, if it can be called that,
was that the loans belonged to Plaintiff at all—forming the basis for all
of Defendant’s communications with Plaintiff. Plaintiff has presented no
case law supporting her contention that failing to uncover identity theft
and acting upon the assumption that loans belong to the person listed on
the loan documents constitutes a violation of MRCPA’s prohibition on
misrepresentations. And to the extent that the alleged violation of the
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MRCPA flows from Defendant’s alleged failure to comply with the FCRA,
that claim is preempted by the FCRA. See 15 U.S.C. § 1681t(b)(1)(F) (“No
requirement or prohibition may be imposed under the laws of any State
with respect to any subject matter regulated under section 1681s-2 of this
title, relating to the responsibilities of persons who furnish information
to consumer reporting agencies . . .”).
Based on the foregoing, Defendant FedLoan’s Motion for Summary
Judgment is GRANTED as to the MCRPA claim only.
IV.
Conclusion
For the foregoing reasons, Defendant USDOE’s Motion for
Summary Judgment (ECF No. 71) is GRANTED. This Defendant is
DISMISSED from the case. Defendant FedLoan’s Motion for Summary
Judgment (ECF No. 72) is GRANTED in part and DENIED in part.
SO ORDERED.
DATED July 17, 2019.
BY THE COURT:
/s/Terrence G. Berg
TERRENCE G. BERG
United States District Judge
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