Burgess v. Affiliated Computer Services, Inc.
Filing
30
REPORT AND RECOMMENDATION: The Magistrate Judge recommends that pltf's 16 MOTION to Amend be GRANTED and deft's 14 MOTION to Dismiss be DENIED. Signed by Magistrate Judge Joe Brown on 1/13/12. (xc:Pro se party by email notification.)(rd)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF TENNESSEE
NASHVILLE DIVISION
SHAWNELLIAS BURGESS,
Plaintiff,
v.
AFFILIATED COMPUTER SERVICES,
INC.,
Defendant.
To:
)
)
)
)
)
)
)
)
)
)
Case No. 3:11-cv-00927
Judge Trauger/Brown
Jury Demand
The Honorable Aleta A. Trauger, District Judge
REPORT AND RECOMMENDATION
Presently pending before the Magistrate Judge are Defendant’s Motion to Dismiss (Docket
Entry 14) and Plaintiff’s Motion to Amend (Docket Entry 16), which was intended by Plaintiff as
a response to the Motion to Dismiss. Defendant has also filed a Response to the Motion to Amend,
and Plaintiff has filed a Reply. (Docket Entries 19, 20). Defendant filed a Surreply to Plaintiff’s
Reply, and Plaintiff filed a subsequent Reply. (Docket Entries 25, 26). The issues underlying the
Motion to Dismiss have been thoroughly briefed, and the Magistrate Judge has reviewed the
pleadings and exhibits. For the reasons set forth below, the Magistrate Judge RECOMMENDS
Plaintiff’s Motion to Amend be GRANTED and Defendant’s Motion to Dismiss be DENIED.
I. INTRODUCTION AND BACKGROUND
Plaintiff filed this case in the Metropolitan General Sessions Court for Davidson County,
Tennessee. (Docket Entry 1). Defendant then removed the case to federal court. Id.1 In his
Amended Complaint, filed on October 13, 2011, Plaintiff claims Defendant violated the Fair
1
The Magistrate Judge remains perplexed that defendants in these lawsuits continue to
remove their cases to federal court when a general sessions court would likely provide a
less costly and quicker result.
Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681s-2 by failing to accurate report and investigate
Plaintiff’s balance to credit reporting bureaus. (Docket Entry 10). The following fact summary is
based on the allegations in Plaintiff’s Amended Complaint (Docket Entry 10).
Plaintiff’s student loans accounts were transferred to Defendant on April 22, 2010.
Plaintiff questioned whether payments were applied incorrectly to principal and interest and
whether payments were posted upon receipt. Plaintiff contacted the Federal Student Aid
Ombudsman to correct payments posted on the wrong dates. Plaintiff believes payments were
posted on the wrong dates after the Ombudsman’s office closed its file. These payments are
Plaintiff’s July, August, and September 2011 payments. Defendant responded to Plaintiff’s
inquiries with a statement that payments are effective the date the payment is received and not
when applied. Plaintiff also believes Defendant miscalculated Plaintiff’s payments of principal
and interest, and he explained his objection in a letter. Plaintiff filed a dispute with Equifax, a
credit reporting agency, and the investigation indicated Defendant was reporting Plaintiff’s
balance correctly.
On October 27, 2011, Defendant filed the pending Motion to Dismiss. (Docket Entry 14).
Plaintiff then filed a Motion to Amend Complaint (Docket Entry 16), which is intended to serve as
a Response to the Motion to Dismiss. The parties have filed several responsive pleadings. (Docket
Entries 19, 20, 25, 26).
II. LEGAL DISCUSSION
The two motions pending before the Magistrate Judge involve common questions of law.
The undersigned will first address the Motion to Dismiss, as it is dispositive. Because the
Magistrate Judge recommends denial of that Motion, Plaintiff’s Motion to Amend has also been
considered.
A. Defendant’s Motion to Dismiss
An action may be dismissed if the complaint fails to state a claim upon which relief can
be granted. Fed. R. Civ. P. 12(b)(6). In deciding a Rule 12(b)(6) motion, a district court must
view the complaint in the light most favorable to the plaintiff and take all well-pleaded factual
allegations as true, as the moving party has the burden of proving that no claim exists. Erickson
v. Pardus, 550 U.S. 89 (2007). Federal Rule of Civil Procedure 8(a)(2) requires only “a short
and plain statement of the claim showing that the pleader is entitled to relief. Specific facts are
not necessary; the statement need only give the defendant fair notice of what the . . . claim is and
the grounds upon which it rests.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007).
However, although a complaint is to be liberally construed, the District Court need not accept a
“bare assertion or legal conclusions.” Id. See also Gunasekera v. Irwin, 551 F.3d 461, 466 (6th
Cir. 2009). In other words, a court is not required to accept as true a “legal conclusion couched
as a factual allegation.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). When viewing the
complaint under the above standards, to survive a motion to dismiss, a complaint must contain
(1) “enough facts to state a claim to relief that is plausible,” (2) more than “a formulaic recitation
of a cause of action’s elements,” and (3) allegations that suggest a “right to relief above a
speculative level.” Twombly, 550 U.S. at 555-56.
Defendant argues that Plaintiff has alleged a claim under FCRA Section 1681s-2(a),
which does not provide a private right of action, and that Plaintiff has failed to state a claim
under FCRA Section 1681s-2(b) because Defendant has complied with Section 1681s-2(b).2
2
Plaintiff’s Amended Complaint notably purports to allege a claim under Section 1681s-2
and does not specify on which subsection(s) he may be basing his claim. (Docket Entry
10).
Defendant cites to previous FCRA cases filed by Plaintiff. (Docket Entry 14-2, 14-3).3 In
particular, Defendant relies on Judge Haynes’s summary judgment opinion in Burgess v. Capital
One Bank (USA), N.A., 2010 WL 1752028 (M.D. Tenn. Apr. 30, 2010).
In Capital One, Judge Haynes cited several cases for the well-established proposition that
there is no private right of action under Section 1681s-2(a). See id. at *1. See also Huertas v.
Galaxy Asset Mgmt., 641 F.3d 28, 34 (3d Cir. 2011). Therefore, the Magistrate Judge believes
that, to the extent Plaintiff has alleged a claim under Section 1681s-2(a), that claim should be
dismissed. However, in his Second Amended Complaint, Plaintiff has clarified that he is not
asserting a claim under this subsection, and therefore this issue is moot because the Magistrate
Judge is allowing the amendment.
With regard to Plaintiff’s claim under Section 1681s-2(b), Defendant argues that it has
complied with the provisions of that section. Moreover, Defendant asserts that Plaintiff’s real
claim is not that Defendant failed to conduct an investigation, a violation of Section 1681s-2(b),
but rather that Defendant provided erroneous information to a credit bureau in violation of
1681s-2(a), for which there is no private right of action. In his Motion to Amend, considered as a
Response, Plaintiff argues that Section 1681s-2(b) has a reasonableness requirement, and
Defendant has failed to conduct a reasonable investigation into his inquiry. (Docket Entry 16).
While the Sixth Circuit has apparently not published a decision on this issue, a number of
courts have held that Section 1681s-2(b) requires a reasonable investigation. See, e.g., Boggio v.
USAA Fed. Sav. Bank, 2011 WL 3876525, *4 (S.D. Ohio Sept. 2, 2011) (citing cases for the
3
It is somewhat disingenuous for Defendant to note that Plaintiff has litigated eleven
similar cases in federal court, as Defendant removed the current case from state court.
4
proposition that the investigation in Section 1681s-2(b) must be a reasonable one). Taking
Plaintiff’s allegations as true, he has stated a claim under Section 1681s-2(b).
Section 1681s-2(b) generally requires Defendant, upon notice from a consumer reporting
agency, to conduct an investigation and report the results of the investigation to the consumer
reporting agency. 15 U.S.C. § 1681s-2(b). In his Amended Complaint, Plaintiff alleges that he
filed a dispute with Equifax on July 18, 2011. (Docket Entry 10). Plaintiff claims that Defendant
failed to investigate his dispute. Id. While Plaintiff did not specifically allege that Defendant’s
investigation was unreasonable, the Magistrate Judge believes it is clear Plaintiff was dissatisfied
with the scope of Defendant’s investigation. Plaintiff has therefore met the minimum standard to
avoid dismissal under Fed. R. Civ. P. 12(b)(6).4
B. Plaintiff’s Motion to Amend
Plaintiff’s Motion to Amend, which is also his Response to Defendant’s Motion to
Dismiss, primarily makes clear that his claim arises solely under Section 1681s-2(b). (Docket
Entry 16). As Plaintiff has amended his Complaint once, the Magistrate Judge must consider
whether to grant his Motion to Amend. Fed. R. Civ. Pro. 15(a)(2). Under Rule 15(a)(2), the
court’s leave should be freely given “when justice so requires.” Id. Leave to amend “should be
denied if the amendment is brought in bad faith, for dilatory purposes, results in undue delay or
prejudice to the opposing party, or would be futile.” Crawford v. Roane, 53 F.3d 750, 753 (6th
4
Plaintiff is cautioned, however, that this is a claim regarding the reasonableness of the
investigation, not the accuracy of the data Defendant reported to Equifax. Defendant
raises a fair point that Plaintiff’s core complaint is that Defendant reported incorrect
information regarding his account. That is a Section 1681s-2(a) claim, for which there is
no private right of action. While the Magistrate Judge believes Plaintiff’s claims are
sufficient for the purposes of Fed. R. Civ. P. 12(b)(6), they may not survive a motion for
summary judgment at a later stage.
5
Cir. 1995). The primary purpose of Rule 15(a) “is to reinforce the principle that cases should be
tried on their merits rather than on the technicalities of pleadings.” Janikowski v. Bendix Corp.,
823 F.2d 945, 951 (6th Cir. 1987) (quoting Tefft v. Seward, 689 F.2d 637, 639 (6th Cir. 1982)).
Defendant opposes Plaintiff’s Motion to Amend because the amendment would be futile.
Defendant bases this argument on the same premise underlying its Motion to Dismiss, namely
that Plaintiff has failed to state a claim under Section 1681s-2(b). For the reasons set forth above,
the Magistrate Judge believes Plaintiff has, in fact, stated a claim under Section 1681s-2(b). As
Plaintiff’s proposed Second Amended Complaint simply clarifies that his claim is based on
Section 1681s-2(b), the Magistrate Judge sees no reason to disallow amendment and believes
Plaintiff’s Motion to Amend should be GRANTED.
III. CONCLUSION
For the reasons stated above, the undersigned RECOMMENDS Plaintiff’s Motion to
Amend be GRANTED and Defendant’s Motion to Dismiss be DENIED.
Under Rule 72(b) of the Federal Rules of Civil Procedure, any party has fourteen (14) days
from receipt of this Report and Recommendation within which to file with the District Court any
written objections to the proposed findings and recommendations made herein. Any party
opposing shall have fourteen (14) days from receipt of any objections filed regarding this Report
within which to file a response to said objections. Failure to file specific objections within
fourteen (14) days of receipt of this Report and Recommendation may constitute a waiver of
6
further appeal of this Recommendation. Thomas v. Arn, 474 U.S. 140, reh’g denied, 474 U.S.
1111 (1986).
ENTERED this 13th day of January, 2012.
______________________________
Joe B. Brown
United States Magistrate Judge
7
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?