DENNIS v. TRANS UNION, LLC

Filing 28

MEMORANDUM AND/OR OPINION. SIGNED BY HONORABLE RONALD L. BUCKWALTER ON 10/20/14. 10/20/14 ENTERED AND COPIES E-MAILED.(kw, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA

DEIDRE L. DENNIS, on behalf of herself and
all others similarly situated,
Plaintiff,
v.
TRANS UNION, LLC
Defendant.

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CIVIL ACTION

NO. 14-2865

MEMORANDUM
BUCKWALTER, S. J.

October 20, 2014

Currently pending before the Court is the Motion by Defendant Trans Union, LLC
(“Defendant”) to Dismiss Count One of Plaintiff Deidre L. Dennis (“Plaintiff”)’s Class Action
Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). For the following reasons, the
Motion is denied.
I.

FACTUAL BACKGROUND
Plaintiff is an adult individual who resides in Jersey City, New Jersey. (Compl. ¶ 2.)

Defendant is a consumer reporting agency that regularly conducts business in Pennsylvania and
which has a principal place of business located in Chester, Pennsylvania. (Id. ¶ 3.)
For several years Defendant has obtained its public records information about
bankruptcies, civil judgments, and tax liens from LexisNexis Risk & Information Analytics
Group, Inc. (“LexisNexis”), First Advantage Corporation, a Symphony Technology Group
Company (“First Advantage”), and/or other private business known as “vendors,” which furnish
such information to national Credit Reporting Agencies (“CRAs”). (Id. ¶ 6.) Plaintiff alleges

that Defendant has not retrieved actual public records from courthouses or actual government
offices for several years. (Id. ¶ 7.) Even so, on Defendant’s credit reports that it provides to
consumers, and which it calls “personal credit reports,” Defendant falsely still lists the names
and addresses of courthouses or other government offices as the true “source” of its public
records information. (Id. ¶ 8.) The public records information that Defendant receives from its
vendors is not the actual court or taxing authority records, but rather is a distilled version of those
records, which does not include all of the information available at the actual courthouses or
government offices where the true records are housed. (Id. ¶ 9.) Defendant knows that both it
and its public records vendors, such as LexisNexis and First Advantage, make mistakes in the
distilled public records information that is acquired for purposes of credit reporting. (Id. ¶ 10.)
Those distilled records frequently have numerical and other factual errors, do not contain the
most updated status of the public records, invert the debtor and creditor, and are placed upon the
wrong consumer’s report. (Id. ¶ 11.) Plaintiff alleges that Defendant receives hundreds, if not
thousands, of consumer disputes per month about public records items being misreported on
personal credit reports. (Id. ¶ 12.)
Plaintiff asserts that disclosure of the true source of a CRA’s information is vital so that
certain credit reporting errors that originate at the source can be corrected and so that consumers
always know who is furnishing important credit information about them. (Id. ¶14.) Defendant,
however, “never discloses to consumers the true source of the public records information that it
collects and reports about them.” (Id. ¶ 15.) Rather, “Defendant conceals that its sources for
public record information are private vendors that supply to it only incomplete information,
which can be inaccurate or not up to date.” (Id. ¶ 16.) According to the Complaint, Defendant is
more interested in maintaining the appearance that it receives actual public records from true

2

government sources, and in protecting its low-cost private sources of public record data, than in
disclosing vital information to consumers. (Id. ¶ 17.)
With respect to Plaintiff, Defendant disclosed in her personal credit report, prepared in
Trans Union’s Chester, Pennsylvania facility in or about August 2012, that she had a record of a
state tax lien in the amount of $33,194. (Id. ¶ 18.) Although Defendant represented to Plaintiff
that its source for this public record was the “Albany County Clerk” located at “32 N. Russell
Road” in “Albany, NY,” Defendant did not actually obtain any tax lien information about
Plaintiff, or about any consumer, from “Albany County Clerk” in Albany, New York. (Id. ¶¶
19–20.) Defendant had instead obtained that tax lien information about Plaintiff from one of its
private “vendors.” (Id. ¶ 21.) That information was “woefully deficient,” however, because
Plaintiff’s old tax lien had been for $3,194, and not for $33,194 as Defendant had listed on
Plaintiff’s credit report. (Id. ¶ 22.) Moreover, official New York State Department of Taxation
and Finance records reflect that the $3,194 tax lien was “satisfied” on July 30, 2009. (Id. ¶ 23.)
In spite of this, Defendant’s July and/or August 2012 report failed to indicate that the tax lien had
been satisfied. (Id. ¶ 24.) Upon information and belief, the transcription error listing the $3,194
satisfied tax lien as an unsatisfied lien of $33,194 originated with Defendant’s public records
vendor, not with the State of New York taxing authorities. (Id. ¶ 25.) Pursuant to its systemic
practice, however, Defendant failed to disclose to Plaintiff any information about its vendor,
which was Defendant’s true source of information regarding the tax lien at issue. (Id. ¶ 26.)
During this time, Plaintiff was seeking to secure financing for a home loan, but the entry of a
$33,194 unsatisfied tax lien appearing on her Trans Union credit report made that impossible.
(Id. ¶ 27.)

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Plaintiff disputed the inaccurate tax lien with Defendant at its Chester, Pennsylvania
dispute investigation center in or about July and/or August, 2012. (Id.) Defendant purportedly
reinvestigated the tax lien and responded to Plaintiff in August 2012 that it had “verified” the
accuracy of the $33,194 tax lien and that there would be “no change” to her credit report. (Id. ¶
28.)
Plaintiff’s mortgage lender advised her that the erroneous tax lien appearing on her Trans
Union credit report was the “only condition stopping” Plaintiff from closing on her home loan.”
(Id. ¶ 29.) As part of her effort to correct this serious credit reporting error, Plaintiff contacted
the New York Department of Taxation and Finance in or about July or August 2012, but was
advised that official Albany County Clerk taxing records showed only that a $3,194 tax lien had
been satisfied on July 30, 2009. (Id. ¶ 30.) Had Defendant truthfully disclosed to Plaintiff that
the actual source of the $33,194 unsatisfied tax lien data was a private public records vendor,
Plaintiff would have had the necessary information to try to correct the error directly with the
vendor that had supplied Defendant with that erroneous information. (Id. ¶ 31.) Plaintiff would
also have known the true source of the error and could have tried to stop it from being
disseminated by that same vendor to other CRAs to which it also sells public records
information. (Id. ¶ 32.) To this day, nowhere upon personal credit reports or file disclosures
does Trans Union disclose the actual source of its public records information, and instead
continues to misdirect consumers to courthouses and government offices with which Defendant
has had no dealings in years. (Id. ¶ 34.)
The Complaint also contains allegations pertaining to a proposed class of plaintiffs as
follows: all persons residing within the territorial limits of the United States Court of Appeals
for the Third Circuit to whom, beginning two years prior to the filing of the Complaint and

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continuing through resolution of the instant case, Defendant provided a credit file disclosure
which included any civil judgment, tax lien, or bankruptcy (“the Class”). (Id. ¶ 37.) According
to the Complaint, the Class is so numerous that joinder of all members is impracticable. (Id. ¶
38.) While the precise number of Class members is known only to Defendant, Defendant sends
tens of thousands of consumer file disclosures per year, and Defendant’s uniform practice and
procedure is to always omit the true source of its public records information from such
disclosures, such that Plaintiff estimates the class size numbers in the thousands. (Id.) Questions
of law and fact common to the Class allegedly predominate over any questions affecting only
individual Class members, where the principal question is whether Defendant violated the FCRA
by misrepresenting the true source of its public records information from its consumer file
disclosures. (Id. ¶ 39.)
Plaintiff initiated the present litigation on May 20, 2014, setting forth three causes of
action: (1) Defendant’s failure to accurately and completely disclose the true source of its public
records information about Plaintiff in her consumer file disclosure in violation of 15 U.S.C. §
1681(g) and pursuant to 15 U.S.C. §§ 1681n and 1681o (Class Claim); (2) Defendant’s failure to
maintain reasonable procedures to ensure maximum possible accuracy of the report it prepared
about Plaintiff, in violation of 15 U.S.C. § 1681e(b) and pursuant to 15 U.S.C. §§ 1681n and
1681o; and (3) Defendant’s failure to conduct a reasonable reinvestigation after receiving
Plaintiff’s notice of dispute, in violation of 15 U.S.C. § 1681i(a)(1)(A) and pursuant to 15 U.S.C.
§§ 1681n and 1681o. (Id. ¶¶ 45–52.) The essence of these claims is that Defendant
systematically misrepresents to consumers the source of the public record information—such as
civil judgments, tax liens, and bankruptcies—that it places on their consumer reports, depriving
consumers of valuable congressionally-mandated information and making it more difficult for

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consumers to correct errors relating to those public records, which are caused by Defendant
and/or its private vendor sources, rather than by any courthouse or other government body that
Defendant misidentifies as its source for that information. (Id. ¶ 1.) Defendant filed a Motion to
Dismiss Count One of Plaintiff’s Class Action Complaint on July 25, 2014. 1 Plaintiff responded
on August 25, 2014. Defendant submitted a Reply on September 8, 2014. Plaintiff submitted its
Sur-Reply on September 10, 2014. Defendant submitted its Response to Plaintiff’s Sur-Reply on
September 11, 2014. The Motion to Dismiss is now ripe for judicial consideration.
II.

STANDARD OF REVIEW
Under Rule 12(b)(6), a defendant bears the burden of demonstrating that the plaintiff has

not stated a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6); see also Hedges v.
United States, 404 F.3d 744, 750 (3d Cir. 2005). In Bell Atlantic Corp. v. Twombly, 550 U.S.
544 (2007), the United States Supreme Court recognized that “a plaintiff’s obligation to provide
the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and conclusions, and a
formulaic recitation of the elements of a cause of action will not do.” Id. at 555. Following
these basic dictates, the Supreme Court, in Ashcroft v. Iqbal, 556 U.S. 662 (2009), subsequently
defined a two-pronged approach to a court’s review of a motion to dismiss. “First, the tenet that
a court must accept as true all of the allegations contained in a complaint is inapplicable to legal
conclusions. Threadbare recitals of the elements of a cause of action, supported by mere
conclusory statements, do not suffice.” Id. at 678. Thus, although “Rule 8 marks a notable and
generous departure from the hyper-technical, code-pleading regime of a prior era . . . it does not
unlock the doors of discovery for a plaintiff armed with nothing more than conclusions.” Id. at
678–79.
1

Defendant notes that it also disputes the individual claims presented in Counts Two and Three
of Plaintiff’s Complaint and that it intends to file its answer with respect to those claims
following resolution of its Motion to Dismiss Count One. (Def.’s Mem. Supp. Mot. Dismiss 3.)
6

Second, the Supreme Court emphasized that “only a complaint that states a plausible
claim for relief survives a motion to dismiss.” Id. at 679. “Determining whether a complaint
states a plausible claim for relief will, as the Court of Appeals observed, be a context-specific
task that requires the reviewing court to draw on its judicial experience and common sense.” Id.
A complaint does not show an entitlement to relief when the well-pleaded facts do not permit the
court to infer more than the mere possibility of misconduct. Id.; see also Phillips v. Cnty. of
Allegheny, 515 F.3d 224, 232–34 (3d Cir. 2008) (holding that: (1) factual allegations of
complaint must provide notice to defendant; (2) complaint must allege facts suggestive of the
proscribed conduct; and (3) the complaint’s “‘factual allegations must be enough to raise a right
to relief above the speculative level.’” (quoting Twombly, 550 U.S. at 555)).
Notwithstanding these new dictates, the basic tenets of the Rule 12(b)(6) standard of
review have remained static. Spence v. Brownsville Area Sch. Dist., No. Civ.A.08-626, 2008
WL 2779079, at *2 (W.D. Pa. July 15, 2008). The general rules of pleading still require only a
short and plain statement of the claim showing that the pleader is entitled to relief and need not
contain detailed factual allegations. Phillips, 515 F.3d at 233. Further, the court must “accept all
factual allegations in the complaint as true and view them in the light most favorable to the
plaintiff.” Buck v. Hampton Twp. Sch. Dist., 452 F.3d 256, 260 (3d Cir. 2006). Finally, the
court must “determine whether, under any reasonable reading of the complaint, the plaintiff may
be entitled to relief.” Pinkerton v. Roche Holdings Ltd., 292 F.3d 361, 374 n.7 (3d Cir. 2002).
III.

DISCUSSION
The FCRA was enacted to ensure that “consumer reporting agencies adopt reasonable

procedures for meeting the needs of commerce for consumer credit, personnel, insurance, and
other information in a manner which is fair and equitable to the consumer, with regard to the

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confidentiality, accuracy, relevancy, and proper utilization of such information.” 15 U.S.C. §
1681(b); see also Philbin v. Trans Union Corp., 101 F.3d 957, 962 (3d Cir. 1996) (quoting 15
U.S.C. § 1681(b)). If an agency is negligent in failing to adhere to the requirements of the
FCRA, the statute provides for civil liability in the form of actual damages, costs and attorney’s
fees. 15 U.S.C. § 1681o. Furthermore, if an agency willfully fails to comply with the FCRA, the
Act also imposes liability for statutory and potentially for punitive damages. See 15 U.S.C. §
1681n.
Defendant moves to dismiss Count One of Plaintiff’s Complaint for failure to state a
claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6).
Defendant sets forth two grounds for dismissal of Count One: (1) Defendant satisfied its
disclosure obligations based on its proposed meaning of the word “sources” as used in Section
1681g(a)(2); and (2) Plaintiff cannot show that any alleged violation of that section was willful.
Having considered the Complaint and the parties’ briefs, the Court finds that Plaintiff has
sufficiently alleged a violation of FCRA Section 1681g(a)(2) such that the requirements of Rule
12(b)(6) are satisfied. Accordingly, the Court will deny Defendant’s Motion to Dismiss Count
One of Plaintiff’s Complaint.
A. The Meaning of “Sources” in Section 1681g(a)(2)
The Court first addresses Defendant’s argument that Plaintiff failed to state a claim in
Count One of the Complaint “because TransUnion has properly disclosed the sources of the
public record information included in Plaintiff’s credit file, as set forth in Section 1681g(a)(2) of
the Fair Credit Reporting Act [ ].” (Def.’s Mot. Dismiss 1–2.)
Count One of Plaintiff’s Complaint alleges that Defendant is liable to Plaintiff for failure
to accurately and completely disclose the true source of its public records information about her

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in her consumer file disclosure, in violation of 15 U.S.C. § 1681g(a)(2). (Compl. ¶ 48.) Section
1681g of the FCRA provides that:
(a) Information on file; sources; report recipients
Every consumer reporting agency shall, upon request, and subject
to section 1681h(a)(1) of this title, clearly and accurately disclose
to the consumer:
(1) All information in the consumer's file at the time of the
request, except that-(A) if the consumer to whom the file relates requests that the first 5
digits of the social security number (or similar identification
number) of the consumer not be included in the disclosure and the
consumer reporting agency has received appropriate proof of the
identity of the requester, the consumer reporting agency shall so
truncate such number in such disclosure; and
(B) nothing in this paragraph shall be construed to require a
consumer reporting agency to disclose to a consumer any
information concerning credit scores or any other risk scores or
predictors relating to the consumer.
(2) The sources of the information; except that the sources of
information acquired solely for use in preparing an investigative
consumer report and actually used for no other purpose need not be
disclosed: Provided, that in the event an action is brought under
this subchapter, such sources shall be available to the plaintiff
under appropriate discovery procedures in the court in which the
action is brought.
15 U.S.C.A. § 1681g (emphasis added).
Defendant argues that it properly disclosed the Albany County Clerk as the source of the
tax lien information in Plaintiff’s credit file, and that it “complied with its duty under Section
1681g(a)(2) to disclose to Plaintiff the sources of information regarding her tax lien by
identifying only the Albany County Clerk.” (Def.’s Mem. Supp. Mot. Dismiss 5.) Defendant
argues further that “[t]hose who retrieve data for TransUnion are not sources of credit data, as
contemplated by Section 1682g(a)(2) [because] [t]hese intermediaries do not originate, generate
or maintain tax lien records, and accordingly they are not ‘sources’ of these records.” (Id.)
Plaintiff responds that case law, including binding Third Circuit precedent, “makes clear that

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CRAs must disclose to consumers all information maintained about the requesting consumer
including the sources of that information.” (Pl.’s Resp. Opp’n Mot. Dismiss 11.) Plaintiff
argues that she clearly pled that Defendant does not disclose to her, or to other consumers as a
matter of practice, “the actual sources from which it obtains the public record information that it
collects and reports about them,” and that she has therefore pled a cognizable claim under section
1681g(a)(2). (Id. at 12.) Because the FCRA does not define “sources,” statutory interpretation is
required.
1. The Meaning of “Sources”
Defendant urges the application of the “ordinary meaning” of “source,” which according
to Defendant is “the originator or primary agent of an act, circumstance or result” or “spring,
fountain, head, origin, original, first or primary cause, the first producer, the originator.” 2 (Def.’s
2

Defendant argues that it is not relevant for purposes of statutory interpretation that Section
1681g(a)(2) uses the word “sources” rather than “source” because according to the Dictionary
Act “words importing the plural include the singular.” (Def.’s Mem. Supp. Mot. Dismiss 8
(quoting 1 U.S.C. § 1).) According to Defendant, because “source” refers to a place of origin,
“neither a conduit nor an intermediary is a source at all, and thus need not be disclosed” and,
therefore, “the statute’s use of the plural form of the word does not make a non-source into a
source.” (Id. at 8–9.) Defendant asserts that because “information” is a “mass noun” that has no
plural form, “sources” must be read “to contemplate the need to identify the sources of the
multiple items of information in a report” and “does not suggest that each particular item of
information derives from multiple sources, only that the overall mass of information in a credit
file usually will.” (Id. at 9 (internal citation omitted).)
Plaintiff argues that while Congress could have chosen to draft Section 1681g(a)(2) to
mandate the disclosure of “origins” or “the single original source” of a CRA’s information, it did
not do so, and therefore the statutory language requiring disclosure of a CRA’s “‘sources’ (which
can be singular for one source or plural for multiple sources) of information” contemplates the
possibility of more than one source for a single piece of information. (Pl.’s Resp. Opp’n Mot.
Dismiss 13.)
Within the Third Circuit, a court undertaking to determine the correct reading of statutory
language must “strive to avoid a result that would render statutory language superfluous,
meaningless, or irrelevant.” Cushman v. Trans Union Corp., 115 F.3d 220, 225 (3d Cir. 1997)
(internal citations omitted). Congress included the plural form of “source” in Section
1681g(a)(2). Accordingly, and in the absence of any limitations in the text, that section can be
read as both contemplating multiple sources for a single piece of information and/or the group of
sources for multiple pieces of information in a credit file.
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Mem. Supp. Mot. Dismiss 5 (citing Black’s Law Dictionary at 1429 (8th ed. 2003) and Williams
v. Snyder, 3 Pa. D.& C. 341, 342 (Penn. Ct. Com. Pl. 1923)).) Defendant argues that the modern
and historical context of the word “source,” as it relates to the origin or fountain-head of a river,
means that there can only be one source under the FCRA because “[o]nly the origin of the data
must be disclosed as the source, not how it is drawn from the well.” (Id. at 6–7 (citations
omitted).) Defendant argues that “[t]he purpose of the disclosure requirement is satisfied by
disclosing the ultimate origin of the data because, when reinvestigating public records data,
consumer reporting agencies typically verify by reference to what information the government
makes available.” (Id. at 8.) According to Defendant, “the only source potentially relevant to a
reinvestigation of data is the Albany County Clerk itself, the ultimate custodian of Plaintiff’s tax
lien information,” and “[d]isclosure of the Albany County Clerk as the source likewise provides
Plaintiff with the benefit of transparency such that she is informed where the information
originated.” (Id.) Thus, “[b]y disclosing the Albany County Clerk as the source of the tax lien
data at issue here, TransUnion fully satisfied its duty under Section 1681g(a)(2).” (Id.)
Defendant disagrees with Plaintiff’s proposed understanding of “sources” and urges that the term
“sources” as used in the FCRA “necessarily excludes intermediaries and conduits through which
data may flow on its way to a consumer reporting agency’s file.” (Id. at 5.)
Plaintiff submits that the meaning for “source” in Section 1681g(a)(2) is “any thing or
place from which something comes, arises, or is obtained,” or “a person, book, etc., that gives
information.” (Pl.’s Resp. Opp’n Mot. Dismiss 12 (internal citations omitted).) According to
Plaintiff, a definition for “source” that refers to the person, place, or thing from which
information is obtained is “consistent with the FCRA, which deals with the dissemination of
information (rather than water, as suggested by Defendant’s overly-narrow proposed definition),

11

and which has consistently been construed to encourage the truthful and complete disclosure of
information to consumers, including from where such information was obtained.” (Id.)
As a preliminary matter, the Third Circuit has “noted as to FCRA in particular that:
‘The breadth and scope . . . is both evident and extraordinary . . . .
Moreover, it is undeniably a remedial statute that must be read in a
liberal manner in order to effectuate the congressional intent
underlying it . . . . It is imperative that we do not allow a company
that traffics in the reputations of ordinary people a free pass to
ignore the requirements of the FCRA each time it creatively
incorporates a new piece of personal consumer information in its
reports.”
Seamans v. Temple Univ., 744 F.3d 853, 868 (3d Cir. 2014) (quoting Cortez v. Trans Union,
LLC, 617 F.3d 688, 721–23 (3d Cir. 2010)). A liberal reading of Section 1681g(a)(2) allows for
a definition of “sources” like that suggested by Plaintiff, which does not limit Defendant’s, nor
any CRA’s, “sources” to only the original source of information. Defendant’s proposed
definition, and its reading of “sources” as excluding the possibility of multiple sources for one
piece of information, are too narrow in light of the “remedial scheme” Congress intended and the
fact that Congress wrote Section 1681g(a)(2) using the plural “sources” rather than the singular
“source.” 3 Cf. Cortez, 617 F.3d at 710 (“Congress surely did not intentionally weave an
exception into the fabric of the FCRA that would destroy its remedial scheme by allowing a
credit reporting agency to escape responsibility for its carelessness whenever misleading
information finds its way into a credit report through the agency of a third party.”) As the plain
3

Defendant expresses concern that Plaintiff’s proposed understanding of “sources” would mean
that, under Defendant’s former procedure of actually sending its own employees to public
records facilities, the employee who retrieved the records would be a “source” “merely by
serving as the courier of the public records information,” and that “the individual responsible for
recording that information in TransUnion’s internal systems” would also be a “source.” (Def.’s
Reply 2.) Plaintiff’s proposed definition for “sources” is not so broad as Defendant fears—it
contemplates disclosure of the entity or entities which are sources of information for a CRA, not
the identity of every individual involved in Defendant’s data retrieval and entry.
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language of Section 1681g(a)(2) does not limit “sources” in any way, the Court will not impose a
limitation on the number of sources a CRA could have, and therefore be required to disclose, for
a particular piece of information.
2. Case Law Interpreting “Sources”
While there is a dearth of cases interpreting the meaning of “sources” as used in Section
1681g(a)(2), one case which has considered the issue is instructive. 4 In Dreher v. Experian
Information Solutions, Inc., the court focused its discussion on the meaning of “sources” in
Section 1681g(a)(2) in the context of a dispute where Experian consistently cited one entity “as
the sole source of the information” appearing on the plaintiff’s credit report, but where “the
main, if not exclusive, supplier of the disputed information was another entity” which was not
disclosed to the plaintiff. Dreher, No. Civ.A.11-0624, 2013 WL 2389878, at *1 (E.D. Va. May
30, 2013). 5 The court denied the defendant’s motion for partial summary judgment because the

4

Defendant notes that there is a lack of binding precedent within this Circuit regarding the
meaning of “sources” in Section 1681g(a)(2). Even so, numerous courts within this Circuit have
read other sections of the FCRA with an understanding that there can be more than one source
for a single piece of information, including the original source of information or the source the
CRA actually used, original or not. See, e.g., Cushman, 115 F.3d at 225 (observing that the
“grave responsibility” imposed by FCRA section concerning reinvestigation “must consist of
something more than merely parroting information received from other sources.”); Shannon v.
Equifax Info. Servs., LLC, 764 F. Supp. 2d 714, 724 (E.D. Pa. 2011) (discussing factors set forth
by the Third Circuit in Cushman for when a CRA should go beyond the original source during a
reinvestigation, including when the CRA knows or should know that the source is unreliable);
Dixon-Rollins v. Experian Info. Solutions, Inc., 753 F. Supp. 2d 452, 458, 465 (E.D. Pa. 2010)
(discussing a CRA’s obligation as including going beyond “the original source” in order to verify
the accuracy of “its original source” or “its initial source” in case concerning reinvestigation
requirements under FCRA). By using adjectives like “original” and “initial” and by referring to
a defendant’s sources as “its source” as opposed to “the source,” courts within the Third Circuit
have demonstrated an understanding that the meaning of “sources” is not as narrow as Defendant
proposes.
5

Defendant correctly points out that Dreher is not binding on this Court. The Dreher court’s
reasoning, however, is illustrative regarding the meaning of “sources” within the context of the
FCRA and specifically with regard to Section 1681g(a)(2). The Dreher court’s analysis is
particularly useful because it relied heavily on a Third Circuit opinion in discussing whether a
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undisclosed entity “is clearly one of the ‘sources’ of Experian’s information, [and] a jury could
find that Experian’s disclosure was objectively unreasonable.” Id. The record showed that the
defendant had listed one entity “exclusively” and “as the sole source of the negative information,
even though the entity with whom Experian actually communicated throughout [the relevant
time period]” was the undisclosed entity. Id. at *2. The court reasoned that “[w]hatever else it
might mean, the term ‘sources of the information’ certainly includes the entity that gave the
information to Experian.” Id. at *5. 6
In this case, Plaintiff has alleged that the erroneous information about her tax lien which
appeared on her credit report—the incorrect amount and the inaccurate status of the debt—came
from the third party that Defendant utilized to obtain public records information, and not from
the Albany County Clerk. While the “ultimate origin of the data,” in Defendant’s words, is the
Albany County Clerk, Defendant’s source for the line of information that actually appeared on
Plaintiff’s credit report was the undisclosed third party. Assuming the allegations in the
Complaint are true for purposes of this Motion to Dismiss, Defendant’s actual source of the tax
lien information was a third party whose identity was not disclosed to Plaintiff when she made
jury could find that the defendant in that case committed a willful violation of the FCRA because
of its allegedly reckless conduct. See Dreher, 2013 WL 2389878 at *4–8 (citing and discussing
Fuges v. Sw. Fin. Servs., Ltd., 707 F.3d 241 (3d Cir. 2012)).
Defendant also argues that Dreher’s interpretation of “sources” is not applicable because
that case was decided subsequent to the events described in Plaintiff’s Complaint and thus does
not constitute clearly-established authority. As discussed below, however, in the Third Circuit
the absence of clearly-established authority does not give a defendant a “free pass” on liability
under the FCRA. See Cortez, 617 F.3d at 721.
6

Defendant further argues that Dreher is not relevant because the dispute in that case “focused
upon disclosure of a successor owner of the credit information at issue, which is distinctly
different from a conduit of information, who merely collects the data from its owner.” (Def.’s
Mem. Supp. Mot. Dismiss 11 (emphasis in original).) Defendant’s argument is misplaced,
however, because it is not whether an entity is the owner of information, versus a collector of
information that is then passed on to CRA, that determines its status as a “source,” but rather
whether that entity is the one which actually provided credit information to a CRA, and is,
therefore, a source of information for that CRA.
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her request. Such failure to disclose that source to Plaintiff upon her request could constitute a
violation of Section 1681g(a)(2) and, accordingly, Plaintiff has adequately stated a claim for a
relief on that basis.
B. Willfulness Requirement
Defendant’s second ground for dismissal concerns the requirement that a plaintiff show
that an FCRA violation was willful. Defendant, relying on Safeco Insurance Company of
America v. Burr, 551 U.S. 47 (2007) and Fuges v. Southwest Financial Services, Ltd., 707 F.3d
241 (3d Cir. 2012), argues that Plaintiff failed to state a claim in Count One of the Complaint
because “her allegations relating to how TransUnion discloses the sources of data fail to establish
that TransUnion’s actions were inconsistent with all objectively reasonable interpretations of
Section 1681g(a)(2), and therefore Plaintiff fails to sufficiently plead a willful violation of the
FCRA.” 7 (Def.’s Mot. Dismiss 2.)
To show willful noncompliance with the FCRA, a plaintiff must prove that the
defendants “knowingly and intentionally committed an act in conscious disregard for the rights
of others, but need not show malice or evil motive.” Cushman, 115 F.3d at 226 (quoting Philbin,
101 F.3d at 970). “A company cannot be said to have willfully violated FCRA if the company
acted on a reasonable interpretation of FCRA’s coverage.” Fuges, 707 F.3d at 248. “‘A dearth
of authoritative guidance’ makes it less likely that a party’s conduct was objectively
unreasonable, but the absence of such authority does not ‘immunize’ an actor from potential
7

Defendant also argues that: (1) the award of statutory damages for this claim, on an individual
or class basis, would violate its Due Process rights; (2) an adoption of Plaintiff’s understanding
of “sources” would “impose an impermissible burden on protected First Amendment Activity—
the distribution of information contained with government records;” and (3) because an appellate
court or government agency has not interpreted Section 1681g(a)(2), “the first word from the
legal system on a reasonable question of statutory interpretation cannot be a class action seeking
to impose the ‘crushing liability’ of enormous statutory and punitive damages.” (Def.’s Reply 6–
8 (citations omitted).) At the motion to dismiss stage, and prior to actual certification of a
purported class, these arguments are premature.
15

liability where the statue is ‘far too clear’ to support the actor’s interpretation.” Id. (citing Cortez
v. Trans Union, LLC, 617 F.3d 688, 721–22 (3d Cir. 2010)). An actor’s “objectively
unreasonable actions with respect to a particular consumer’s account can support a jury finding
of willfulness. Blanket policies, too, can underpin such a finding.” Seamans, 744 F.3d at 868
(internal citations omitted). The United States Supreme Court has clarified that reckless
disregard of FCRA requirements also qualifies as a willful violation within the meaning of
Section 1681n(a). See Safeco 551 U.S. at 71. “In determining whether an actor’s conduct was
reckless, a court should examine the text of the statute, case law that existed at the time of the
alleged violation, and any agency interpretations.” Seamans, 744 F.3d at 868 (citing Safeco, 551
U.S. at 69–70). Ultimately, whether an act was done with knowing or reckless disregard for
another’s rights remains a fact-intensive question. Whitfield v. Radian Guar., Inc., 501 F.3d 262,
271 (3d Cir. 2007), vacated as moot, 128 S. Ct. 2901 (2008); Manno v. Am. Gen. Fin. Co., 439
F. Supp. 2d 418, 430 (E.D. Pa. 2006) (noting that whether an act was done with knowing or
reckless disregard for another’s rights is a fact-intensive question.) Typically, willfulness “is a
factual issue, not a question of law, [which] therefore cannot be decided either on appeal or by
the District Court as a matter of law.” Whitfield, 501 F.3d at 271.
First, with respect to the statutory text, the plain language of Section 1681g(a)(2) refers to
“sources” and not a single source. As “the breadth and scope of the FCRA is both evident and
extraordinary,” and “is undeniably a remedial statute that must be read in a liberal manner in
order to effectuate the congressional intent underlying it,” it is possible that Defendant “ran a risk
of violating the law substantially greater than the risk associated with a reading that was merely
careless.” Cortez, 617 F.3d at 721–22; Safeco, 551 U.S. at 69. Second, Plaintiff is not obligated
at the motion to dismiss phase to prove that Defendant’s omission of the third party entity as a

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“source” was based on a reading of the FCRA that was either knowingly erroneous or was
objectively unreasonable and therefore reckless. Rather, at this phase Plaintiff need only allege
facts that plausibly support her allegation that Defendant’s decision to exclude that information
could, under the FCRA’s plain language, be an objectively unreasonable interpretation such that
Defendant willfully violated Section 1681g(a)(2). 8 See, e.g., Korman v. Walking Co., 503 F.
Supp. 2d 755, 761 (E.D. Pa. 2007) (“Defendant’s imploration of the Court to determine whether
Defendant’s interpretation was ‘reasonable’ is inappropriate here: at the motion to dismiss stage,
the Court’s only role is to determine whether the complaint is sufficient.”). Defendant argues
that “Plaintiff has not pled and cannot plead that to disclose only the origin of the data, rather
than the intermediary who retrieved it from the data’s original owner, is inconsistent with all
objective reasonable interpretations of Section 1681g(a)(2).” (Def.’s Mem. Supp. Mot. Dismiss
16.) As succinctly stated in Korman, however, the Court need only determine whether Plaintiff’s
Complaint is sufficient, and not whether Plaintiff will succeed at the summary judgment phase or
at trial. Third, as discussed above, some Third Circuit precedent exists to support a potential
finding that Defendant’s interpretation of “sources” was too narrow with respect to its disclosure
obligations. Moreover, the absence of direct precedent is not the end of the matter, because
according to the Third Circuit “the lack of definitive authority does not, as a matter of law,
immunize [a defendant] from potential liability.” Cortez, 617 F.3d at 721 (noting that the
absence of federal appellate precedent “merely establishes that the issue has not been presented
to a court of appeals before [and that] [t]he credit agency whose conduct is first examined under
8

As stated previously, a finding of willfulness can be supported by knowing or reckless conduct.
At the motion to dismiss stage, and without the benefit of discovery, Plaintiff is not expected to
be able to demonstrate that Defendant acted knowingly in allegedly violating Section
1681g(a)(2). As with recklessness, Plaintiff need only allege facts which allow the Court to infer
the plausibility of her claim that Defendant willfully violated Section 1681g(a)(2) by not
disclosing on Plaintiff’s credit report the third party entity which provided Defendant with
information about the tax lien.
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that section of the [FCRA] should not receive a free pass because the issue has never been
decided.”).
Here, Plaintiff specifically identifies a practice that allegedly violates FCRA rules:
Defendant utilizes third parties to obtain public records information but does not disclose its
sources of the information in responding to a consumer’s request for their credit report. (Compl.
¶ 1.) The Complaint then goes on to identify conduct which could violate Section 1681g(a)(2)
with respect to Plaintiff specifically: erroneous information about Plaintiff’s tax lien, supplied by
a third party, appeared on Plaintiff’s credit report but was attributed to a different entity as the
source even though Section 1681g(a)(2) mandates the disclosure of “sources.” (Compl. ¶¶ 18–
26.) In short, such allegations satisfy the Twombly/Iqbal standards for pleading a willful
violation of § 1681g(a)(2) of the Fair Credit Reporting Act. The facts alleged in the Complaint
clearly allow this Court to infer the plausibility of a claim that Defendant willfully failed to
include all of its sources of the information about Plaintiff’s tax lien on Plaintiff’s credit report.
Defendant’s decision, either intentionally or recklessly, to omit the third party as its source on
Plaintiff’s credit report and instead list the Albany County Clerk as its source could, under
Section 1681g(a)(2)’s plain language, be an objectively unreasonable interpretation. While
Plaintiff may not ultimately be able to prove that Defendant acted either knowingly or recklessly,
thereby constituting a willful violation of Section 1681g(a)(2), the Court remains mindful of the
fundamental tenet that a plaintiff, having set forth a legally and factually viable cause of action,
is entitled to the benefit of discovery before being put to his or her proofs. Accordingly,
Defendant’s Motion to Dismiss Count One of the Complaint is denied on this ground as well.

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IV.

CONCLUSION
For all of the foregoing reasons, the Court finds that Plaintiff has set forth a viable claim

for willful violation of section 1681g(a)(2). As such, Defendant’s Motion to Dismiss Count One
of Plaintiff’s Complaint will be denied and Defendant shall be required to file an Answer to the
Complaint within twenty days.
An appropriate Order follows.

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