Tatro v. Equifax Information Services, LLC et al

Filing 50

MEMORANDUM AND ORDER granting 32 Motion for Judgment on the Pleadings; denying 35 Motion to Amend/Correct; denying 39 Motion to Vacate and granting 47 Motion for Final Judgment - So Ordered by District Judge John J. McConnell, Jr. on 7/19/2019 (Barletta, Barbara)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
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MICHAEL P. TATRO,
Plaintiff,

v.
EQUIFAX INFORMATION
SERVICES, LLC, ENCORE CAPITAL
GROUP, INC., MIDLAND FUNDING
LLC, MIDLAND CREDIT
MANAGEMENT, INC.,
CONVERGENT OUTSOURCING,
INC., FRONTLINE ASSET .
STRATEGIES LLC, and ESC/CREDIT
BASICS,
Defendants.
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C.A. No. 18-341-JJM-PAS

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MEMORANDUM AND ORDER
JOHN J. MCCONNELL, JR., United States District Judge.
Plaintiff Michael P. Tatro brought claims under the Federal Fair Credit
Reporting Act ("FCRA") and Rhode Island state law against Defendants. The Court
granted a motion to dismiss by Encore Capital Group Inc., Midland Funding LLC,
and Midland Credit Management, Inc. (collectively "the Midland Defendants") on all
of Mr. Tatro's claims against them for failure to state a claim. ECF No. 33. Mr. Tatro
now moves the Court to vacate its order dismissing his claims against the Midland
Defendants and seeks leave to file a first amended complaint. ECF Nos. 39, 35. For
the following reasons, the Court DENIES both of Mr. Tatro's motions.

I.

BACKGROUND
Mr. Tatro alleges that Defendants violated his privacy rights as well as his

rights under state and federal statutes relating to credit reporting and debt collection.
The Defendants sent Mr. Tatro's identification, including his name, date of birth, and
portions of social security number to a consumer reporting agency to obtain a credit
report. In doing so, the Defendants certified the permissible purpose of the request
as collection. Mr. Tatro denies that he is a customer or judgment debtor of the
Defendants and assert that he did not grant permission to obtain his report. Mr.
Tatro claims that Defendants thus improperly accessed his credit report without a
permissible ·purpose and by this conduct, violated the FCRA, committed identity
fraud as defined under state law, and invaded his privacy.

II.

STANDARD OF REVIEW
Rule 60(b)(6) of the Federal Rules of Civil Procedure allows the court to relieve

a party from a judgment for any reason that justifies relief. The First Circuit has
held that courts considering motions for relief from judgment under the catch·all
provision ordinarily examine non-exclusive or rigidly· applied factors: (1) the motion's
timeliness, (2) whether exceptional circumstances justifY extraordinary relief, (3)
whether the movant can show a potentially meritorious claim, which, if proven, could
bring her success at trial, and (4) the likelihood of unfair prejudice to the opposing
party. Bouret·Echevania v. Cadbbean Aviation Maint. C01p., 784 F.3d 37, 43 (1st
Cir. 2015). For a court to reconsider a prior order, the movant must demonstrate that
newly discovered evidence has come to light or that the court committed a manifest

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error of law. Unjted States v. Negwn, No. 13·184-JJM·PAS, 2017 U.S. Dist. LEXIS
178815, at *1·2 (D.R.I. Oct. 27, 2017) (quoting Mulero-Abreu v. P.R. PoHce Dep't, 675
F.3d 88, 94·95 (1st Cir. 2012); see also Lopez-Rosalia v. Pwgrama Seasonal Head

Start, 140 F. Supp. 3d 214, 220 (D.P.R. 2015) (holding that a court may invoke Rule
60(b)(6) to cure a manifest error of law if the error constitutes a reason that justifies
relie:O.
The Federal Rules also require that a motion to amend be "freely give[n]leave
when justice so requires." Fed. R. Civ. P. 15(a)(2). However, a motion for leave to
amend may be denied on grounds of undue delay, bad faith, futility, and the absence
of due diligence on the part of the movant. See Palmer v. Champjon Mortg., 465 F.3d
24, 30 (1st Cir. 2006). In determining whether it would be futile to grant a motion to
amend, a court applies the same standard of legal sufficiency as it applies to a motion

to dismiss for failure to state a claim upon which relief could be granted. Harvey v.
Snow, 281 F. Supp. 2d 376, 381 (D.R.I. 2003) (citing Con·ea-MarUnez v. A1TjllagaBelendez, 903 F.3d 49, 59 (1st Cir. 1990)).
III.

DISCUSSION

MoUon to Vacate
Mr. Tatro's Motion to Vacate centers on his assertion that the Court erred in
failing to adopt the reasoning of pjntos v. Padfjc Credjtor's Assn, 605 F.3d 665 (9th
Cir. 2010). In pjntos, the Ninth Circuit held that credit checks under 15 U.S.C. §
1681b(a)(3)(A) are authorized only when the person whose credit is being checked is
drawn in as a participant. 605 F. 3d at 676 (finding that transaction did not "involve"

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the plaintiff where she did not seek or apply for credit from a tow company but was
obliged to become associated with it after her car was towed that resulted in a lien
being placed on the car). Relying on this case, Mr. Tatro asserts that the Midland
Defendants lacked a permissible purpose for requesting his credit report because he
was not "involved in any credit transaction with Midland or a potential original
creditor." ECF No. 39 at 7. However, the reliance on the term is only relevant to 15
U.S.C. § 1681b(a)(3)(A) and not relevant to 15 U.S. C.§ 1681b(a)(3)(E), which does not
contain the word "involved." 1 Accordingly, even if the Court were to adopt the
rational of Pintos, Mr. Tatro does not aver sufficient facts to establish to a plausible
degree that the Midland Defendants obtained his credit reports for an impermissible
purpose, and that their conduct was willful or negligent. There was no manifest error
oflaw and thus, Mr. Tatro's Motion to Vacate is denied.
Mr. Tatro also argues that the Court prematurely granted the Midland
Defendants' Motion to Dismiss his state claims without first ruling on his claim that
he was not involved in a credit transaction with them. Now that the Court has
addressed that claim and because Mr. Tatro does not present any new authority for
his argument that the Court committed a manifest error in dismissing the claims, his
Motion to Vacate the dismissal of his state claims is also denied.

1 15 U.S.C. § 1681(b)(3)(E) provides that a consumer reporting agency may
furnish a credit report if it "intends to use the information, as a potential investor or
servicer, or current insurer, in connection with a valuation of, or an assessment of the
credit or prepayment risks associated with, an existing credit obligation[.]"

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Motion to Amend
Mr. Tatro also seeks leave to amend his complaint to include four new
Defendants and new causes of actions against the existing defendants, including
allegations that the existing Defendants obtained his credit report under false
pretenses. ECF No. 35. Mr. Tatro alleges that they obtained his credit report to
decide whether to purchase an account owned by him even though he was not
"involved" in the transaction, and they obtained his credit report under "false
pretenses" by certifying that they were requesting his report for collection when the
purpose was actually to decide whether or not to purchase certain accounts. ECF No.
35·1 at 31, 37.
Mr. Tatro's proposed amendments as they pertain to the existing defendants
are futile. As discussed above, the allegation that Mr. Tatro was not "involved" in a
transaction is not relevant where a creditor obtains a credit report as permitted by
15 U.S.C. § 1681(a)(3)(E). Further, Mr. Tatro's allegations that Defendants used
"false pretenses" to obtain his credit report also fail to state a claim because obtaining
a credit report in order to evaluate a potential investment is permitted by 15 U.S. C.
§ 1681(a)(3)(E). See Baker v. Bronx-Westchester Investigations, Inc., 850 F. Supp.

260, 263·64 (S.D.N.Y. 1994) (holding that if user of information has permissible
purpose to obtain consumer report, then user does not obtain report from credit
reporting agency under false pretenses); see also Schmpfv. AIG Marketing, Inc., 242
F. Supp. 2d 455 (W.D. Ky. 2003) (finding that if a person obtains and uses a consumer
report pursuant to a valid permissible purpose authorized by the FCRA, it cannot be

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held liable under a false pretenses theory). Accordingly, Mr. Tatro's amendments to
his complaint are futile as he must plausibly allege facts showing that the existing
Defendants obtained his credit report for an impermissible purpose and still fails to
do so. Thus, Mr. Tatro is denied leave to file a first amended complaint.
IV.

CONCLUSION
Mr. Tatro has failed to demonstrate that the Court committed a manifest error

of law in dismissing his claims against the Midland Defendants. The Court thus
DENIES Mr. Tatro's Motion to Vacate. ECF No. 39. In light of the futility of the
proposed amendments to the Complaint, Mr. Tatro's Motion to Leave to File a First
Amended Complaint is DENIED. ECF No. 35. 2

John J. McConnell, Jr.
United States District Judge
July 19, 2019

Defendant Convergent Outsourcing, Inc. filed a Motion for Judgment on the
Pleadings. ECF No. 32. The Court GRANTS that Motion as unopposed. Also, Encore
Capital Group, Inc., Midland Credit Management, Inc, and Midland Funding LLC
filed a Motion for Final Judgment. ECF No. 47. The Court GRANTS that Motion as
unopposed.
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