VULLINGS v. TRANS UNION, LLC et al

Filing 30

MEMORANDUM AND/OR OPINION SIGNED BY HONORABLE HARVEY BARTLE, III ON 7/9/15. 7/9/15 ENTERED AND COPIES E-MAILED.(ti, )

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

MICHELLE W. VULLINGS
v.
TRANS UNION, LLC, et al.

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CIVIL ACTION

NO. 15-2814

MEMORANDUM
Bartle, J.

July 9, 2015
Plaintiff Michelle W. Vullings (“Vullings”) has sued

three consumer reporting services 1 as well as Target Corporate
Services, Inc. (“Target”) and TD Bank USA, N.A. (“TD Bank”). 2
her five-count complaint, Vullings alleges violations of:

In

the

Fair Credit Reporting Act (“FCRA”), 15 U.S.C. §§ 1681s-2(a)-(b);
Pennsylvania’s Fair Credit Extension Uniformity Act, 73 Pa.
Cons. Stat. § 2270.1 et seq.; and Pennsylvania’s Unfair Trade
Practices and Consumer Protection Law, 73 Pa. Cons. Stat.
§ 201-1 et seq.

She also pleads common-law defamation and civil

conspiracy.
Before the court is the motion of defendants Target
and TD Bank to dismiss all but one of the claims against them.

1. The consumer reporting services sued are: Trans Union, LLC
(“Trans Union”); Experian Information Solutions, Inc.
(“Experian”); and Equifax Information Services, LLC (“Equifax”).
2. Target and TD Bank were incorrectly styled in the complaint
as “Target Corporation” and “TD Bank, N.A.,” respectively. In
an order dated July 7, 2015, we directed the Clerk of the Court
to amend the caption to reflect their true names.

I.
When deciding a Rule 12(b)(6) motion to dismiss, the
court must accept as true all factual allegations in the complaint
and draw all inferences in the light most favorable to the
plaintiff.

Phillips v. Cnty. of Allegheny, 515 F.3d 224, 233 (3d

Cir. 2008); Umland v. PLANCO Fin. Servs., Inc., 542 F.3d 59, 64 (3d
Cir. 2008).

We must then determine whether the pleading at issue

“contain[s] sufficient factual matter, accepted as true, to ‘state
a claim for relief that is plausible on its face.’”

Ashcroft v.

Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly,
550 U.S. 544, 570 (2007)).

Under this standard, “[t]hreadbare

recitals of the elements of a cause of action, supported by mere
conclusory statements, do not suffice.”

Id. at 578.

Instead, the

complaint must contain factual matter sufficient to state a
claim that is facially plausible, meaning that “the plaintiff
[has] plead[ed] 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).

On a motion to dismiss for failure to state a claim,
the court may consider “allegations contained in the complaint,
exhibits attached to the complaint and matters of public
record.”

Pension Benefit Guar. Corp. v. White Consol. Indus.,

Inc., 998 F.2d 1192, 1196 (3d Cir. 1993) (citing 5A Charles
Allen Wright & Arthur R. Miller, Federal Practice and Procedure
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§ 1357 (2d ed. 1990)).

Beyond this, district courts are

generally barred from considering “matters outside of the
[c]omplaint when ruling on” a 12(b)(6) motion.

Cerome v.

Moshannon Valley Corr. Ctr./Cornell Cos., Inc., No. 09-2070,
2010 WL 4948940, at *3 (3d Cir. Dec. 7, 2010).
II.
The facts set forth in the complaint, taken in the light
most favorable to Vullings as the plaintiff, are as follows.
In or around January 2015, while making purchases at one
of defendant Target’s stores, Vullings “instructed the store
employees to connect her existing credit card with her Target Red
Card to pay for said purchases.”

Instead, Target and TD Bank

opened a new credit card in Vullings’ name and charged a balance of
$346.86 to that card.
When Vullings became aware of the new line of credit in
March 2015, she contacted Target’s customer service hotline and was
able to pay off the balance of the card with the help of a customer
service representative.

Another Target representative stated that

she would delete the account and credit inquiry from Vullings’
credit report.

According to Vullings, this step was never taken.

Instead, Vullings discovered that the Target credit card account, a
credit inquiry, and a balance of $378 were being reported on her
credit reports by Target and TD Bank.

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In early April 2015, Vullings contacted defendants Trans
Union, Experian, and Equifax, all of which are consumer credit
reporting services, to dispute the accuracy of the information
reported to them by Target and TD Bank.

All three credit reporting

services responded that the trade line and credit inquiry had been
“verified.”

Each refused to remove the items from Vullings’ credit

report or to mark them as “disputed.”
Vullings avers that as a result of the conduct of
defendants she has suffered financial harm arising from the damage
to her creditworthiness and has incurred out-of-pocket expenses in
attempting to remedy defendants’ alleged errors.

Vullings further

maintains that she has experienced physical and emotional harm as
well as “dignitary harm” arising from damage to her credit rating
and reputation.
III.
In paragraph 35 of Count I of her complaint, Vullings
alleges that Target and TD Bank violated the FCRA by engaging in
the following conduct:
(a) Willfully and negligently failing to
properly and timely delete the inaccurate
information from the Plaintiff’s credit
files despite being provided with proof of
its inaccuracy; and

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(b) Willfully and negligently continuing to
furnish and disseminate inaccurate
information and derogatory credit account
and other information despite having
knowledge of its inaccuracy; and
(c) Willfully and negligently failing to
comply with the requirements imposed on
furnishers of information pursuant to 15
U.S.C. § 1681s-2(b); and
(d) Reporting information with actual
knowledge of errors in violation of 15
U.S.C. § 1681s-2(a)(1)(A); and
(e) Reporting information after notice and
confirmation of errors in violation of 15
U.S.C. § 1681s-2(a)(1)(B); and
(f) Failing to correct and update
information in violation of 15 U.S.C.
§ 1681s-2(a)(2)(B); and
(g) Failing to provide notice of dispute in
violation of 15 U.S.C. § 1681s-2(a)(3); and
(h) Failing to conduct an investigation
with respect to disputed information in
violation of [15 U.S.C.] § 1681s-2(a)(8);
and
(i) Obtaining consumer credit reports
without permissible purpose.
Target and TD Bank seek dismissal of Count I insofar as it is
premised on the conduct alleged in paragraph 35, except for the
conduct alleged in subparagraph 35(c).
The movants argue that subparagraphs 35(a)-(b) and
35(d)-(h) allege violations of 15 U.S.C. § 1681s-2(a) and that
administrative enforcement is the exclusive remedy for

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violations of that section.

We note that § 1681s-2(a) is not

explicitly referenced in subparagraphs 35(a) and 35(b).
However, the conduct described in those subparagraphs is
proscribed by § 1681s-2(a). 3

We will therefore treat

subparagraphs 35(a) and 35(b) as alleging violations of
§ 1681s-2(a).
Section 1681s-2(c)(1) makes clear that the sections of
the FCRA which allow for civil actions by private individuals
“do not apply to any violation of . . . subsection (a),” that
is, § 1681s-2(a).

Instead, § 1681s-2(a) is enforced through the

measures detailed in § 1681s(c)(1), specifically by “the chief
law enforcement officer of a State, or an official or agency
designated by a State,” who “may bring an action on behalf of
3. Specifically, § 1681s-2(a) provides in relevant part that
“[a] person shall not furnish any information relating to a
consumer to any consumer reporting agency if the person knows or
has reasonable cause to believe that the information is
inaccurate.” 15 U.S.C. § 1681s-2(a)(1)(A). The statute further
provides:
A person shall not furnish information
relating to a consumer to any consumer
reporting agency if—
(i) the person has been notified by the
consumer, at the address specified by the
person for such notices, that specific
information is inaccurate; and
(ii) the information is, in fact,
inaccurate.
Id. § 1681s-2(a)(1)(B).
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residents of the State.”

There exists no private right of

action for violations of § 1681s-2(a).

Huertas v. Galaxy Asset

Mgmt., 641 F.3d 28, 34 (3d Cir. 2011).

For this reason, and

noting that Vullings has articulated no argument in response, we
will dismiss Count I insofar as it is premised in the conduct
described in subparagraphs 35(a)-(b) and 35(d)-(h).
The movants also seek dismissal of Count I insofar as
it is premised on subparagraph 35(i), which avers that they
“[o]btain[ed] consumer credit reports without permissible
purpose.”

They argue that nowhere in Vullings’ complaint does

she allege that either Target or TD Bank obtained a consumer
credit report.

Without such allegations, the movants urge,

subparagraph 35(i) is merely “a ‘bald assertion[]’ and a ‘legal
conclusion[],’ which this Court need not accept.”
in original.)

(Alterations

Vullings simply responds in her opposing brief

that since the movants opened a credit card in her name,
“clearly said Defendants obtained Plaintiff’s consumer reports
. . . as obtaining consumer reports is certainly part of the
process” of opening a credit card.

Vullings further states in

her brief that her credit report demonstrates that the movants
obtained the consumer report on January 3, 2015 and March 12,
2015, and that Target has acknowledged doing so.
As noted above, when ruling on a motion to dismiss
under Rule 12(b)(6), we may not consider matters outside the
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pleadings with the exception of certain matters of public
record.

Cerome, 2010 WL 4948940, at *3; Pension Benefit Guar.

Corp., 998 F.2d at 1196.

We will therefore exclude from

consideration the statements contained in Vullings’ responsive
brief about the movants having obtained her credit report.

This

leaves subparagraph 35(i), which is precisely the type of
“conclusory statement[]” that cannot survive a motion to
dismiss.

Iqbal, 556 U.S. at 578.

We will therefore dismiss Count

I insofar as it is premised on subparagraph 35(i).
IV.
We turn next to the argument of Target and TD Bank
that Counts II, IV, and V must be dismissed insofar as those
counts plead liability against them.

Count II contains

state-law defamation claims against all defendants.

It avers

that defendants defamed Vullings by publishing inaccurate
information about her creditworthiness.

Count II further pleads

that defendants “acted with malice by failing to communicate the
information provided to them by Plaintiff to all creditors,
prospective creditors, furnishers of information and all other
entities to whom said Defendants provide credit information
concerning the Plaintiff.”

Counts IV and V, meanwhile, allege

violations of Pennsylvania’s Fair Credit Extension Uniformity
Act, 73 Pa. Cons. Stat. § 2270.1 et seq., and Pennsylvania’s

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Unfair Trade Practices and Consumer Protection Law, 73 Pa. Cons.
Stat. § 201-1 et seq.
In urging dismissal of Counts II, IV, and V against
them, the movants rely on § 1681t(b)(1)(F) of the FCRA.

That

subsection provides in relevant part that “[n]o 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.”
The movants maintain that this preemption provision mandates
dismissal of Vullings’ state common-law defamation claim and her
state statutory claims.
It is clear that the FCRA’s preemption provision
compels dismissal of Vullings’ state statutory claims, as those
claims are brought under “requirement[s] or prohibition[s] . . .
imposed under the laws of [a] State . . . with respect to . . .
subject matter regulated under” § 1681s-2.

The complaint

insofar as it asserts claims under Pennsylvania’s Fair Credit
Extension Uniformity Act, 73 Pa. Cons. Stat. § 2270.1 et seq.,
in Count IV and under Pennsylvania’s Unfair Trade Practices and
Consumer Protection Law, 73 Pa. Cons. Stat. § 201-1 et seq., in
Count V will be dismissed.
Target and TD Bank take the position that the
preemption provision, § 1681t(b)(1)(F), also necessitates
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dismissal of Vullings’ common-law defamation claim.

The

provision, the movants argue, preempts all forms of state
“laws,” including the common law.
In response, Vullings directs our attention to
§ 1681h(e) of the FCRA, which provides:
Except as provided in sections 1681n and
1681[o] of this title, no consumer may bring
any action or proceeding in the nature of
defamation, invasion of privacy, or
negligence with respect to the reporting of
information against any consumer reporting
agency, any user of information, or any
person who furnishes information to a
consumer reporting agency, based on
information disclosed pursuant to section
1681g, 1681h, or 1681m of this title, or
based on information disclosed by a user of
a consumer report to or for a consumer
against whom the user has taken adverse
action, based in whole or in part on the
report except as to false information
furnished with malice or willful intent to
injure such consumer.
Section 1681h(e) was part of the FCRA when it was enacted in
1970.

Section 1681t(b)(1), on which the movants rely, was added

in 1996, as was § 1681s-2, under which Vullings brings her FCRA
claims.

It appears to be Vullings’ position that

notwithstanding the FCRA’s preemption provision, § 1681h(e)
permits her to bring a defamation claim as long as that claim
involves “false information furnished with malice or willful
intent to injure [the] consumer.”

Vullings goes on to urge that

her complaint adequately alleges such malice.

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Target and TD Bank have the better of the argument.

A

number of well-reasoned court decisions have concluded that
§ 1681t(b)(1), which was enacted years after § 1681h(e),
preempts more claims than does § 1681h(e) and extends to state
common-law claims like the one before us.

In Purcell v. Bank of

America, for example, the Seventh Circuit reviewed the decision
of a district court to dismiss without prejudice a plaintiff’s
common-law defamation claims and concluded that the lower court
should have entered judgment for defendants on those claims on
the ground that they were preempted by § 1681t(b)(1) of the
FCRA.

659 F.3d 622 (7th Cir. 2011).

Writing for the court,

Judge Frank Easterbrook noted that § 1681t(b)(1) was added to
the FCRA 26 years after the statute’s enactment as part of an
effort to “implement [a] new plan under which reporting to
credit agencies would be supervised by state and federal
administrative agencies rather than judges.”

Id. at 625.

Judge

Easterbrook reasoned that §§ 1681h(e) and 1681t(b)(1) “are
compatible: [§ 1681h(e)] preempts some state regulation of
reports to credit agencies, and [§ 1681t(b)(1)] preempts more.”
The two subsections were no more in conflict, he observed, than
“a 1970 statute setting a speed limit of 60 for all roads in
national parks and a 1996 statute setting a speed limit of 55.
It is easy to comply with both:
per hour.”

don’t drive more than 55 miles

Id.
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Other courts have adopted the persuasive reasoning of
the Purcell decision.

See, e.g., MacPherson v. JPMorgan Chase

Bank, N.A., 665 F.3d 45, 47-48 (2d Cir. 2011); Himmelstein v.
Comcast of the Dist., L.L.C., 931 F. Supp. 2d 48, 58 (D.D.C.
2013); Ilodianya v. Capital One Bank USA NA, 853 F. Supp. 2d
772, 774-75 (W.D. Ark. 2012); contra Manno v. Am. Gen. Fin. Co.,
439 F. Supp. 2d 418, 425 (E.D. Pa. 2006).

We will do the same.

Section 1681t(b)(1)(F) preempts the state common-law defamation
claim contained in Count II of Vullings’ complaint.
V.
Finally, Target and TD Bank ask us to dismiss Count
III, in which Vullings alleges that the two entities engaged in
civil conspiracy by entering into an agreement under which they
“agreed to willfully or knowingly violate the FCRA.”

Vullings

further avers that Target and TD Bank acted in furtherance of “a
conspiracy to violate a legal duty for their own financial
gain,” that they had an independent legal duty to Vullings and
that they conspired to violate that duty, and that they engaged
in the acts alleged in the complaint “pursuant to, and in
furtherance of,” the purported conspiracy.
The movants counter that Vullings’ civil conspiracy
claim must fail because Target is the agent of TD Bank, and
under Pennsylvania law, “an entity cannot conspire with one who
acts as its agent.”

Gen. Refractories Co. v. Fireman’s Fund
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Ins. Co., 337 F.3d 297, 313 (3d Cir. 2003) (citing Heffernan v.
Hunter, 189 F.3d 405, 413 (3d Cir. 1999)).

Even if Target is

not TD Bank’s agent, they further maintain, Vullings has not
adequately pleaded the details of the conspiracy.

See In re

Asbestos Sch. Litig., 46 F.3d 1284, 1293 (3d Cir. 1994) (quoting
Burnside v. Abbot Labs., 505 A.2d 973, 982 (Pa. Super. Ct.
1985)).

We need not reach the merits of the movants’ arguments,

because Vullings has said nothing in her brief in response to
either.

Insofar as the instant motion seeks dismissal of Count

III, we will therefore grant it as unopposed.

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