Kent v. Trans Union, LLC et al

Filing 38

Memorandum Opinion and Order denied 35 Motion to Dismiss filed by Defense Finance and Accounting Services (Ordered by Judge John McBryde on 8/25/2017) (wrb)

U.S. DISTRICT COURT - - , .
NORTHERNDTSTIICTOFTEXt\S .,'

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IN THE UNITED STATES DISTRIC
NORTHERN DISTRICT OF TEX
FORT WORTH DIVISION

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CLEFIZ, •· i S. DIS1R[C'f COURT

ROWDY KENT,

§

BY---:----:::---:----Deputy

§

Plaintiff,

§
§

vs.

§

NO. 4:16-CV-322-A

§

TRANS UNION, LLC, ET AL.,

§
§

Defendants.

§

MEMORANDUM OPINION
and
ORDER
Came on for consideration the motion of defendant, Defense
Finance and Accounting Services (•DFAS"), to dismiss for lack of
subject matter jurisdiction. Plaintiff, Rowdy Kent, has filed a
response. Having reviewed the motion, the response, plaintiff's
complaint, and applicable authorities, the court concludes that
the motion should be denied.
I.

Plaintiff's Claims
Plaintiff initiated this action on May 5, 2016, asserting
claims against Trans Union, LLC (•Trans Union"), Equifax
Information Services, LLC (•Equifax•), and DFAS. The court
dismissed plaintiff's claims against Trans Union and Equifax on
November 4,

2016, after receiving notice that such claims had

been settled.

I

Plaintiff's complaint contains the following factual
allegations:
Since approximately May 2009, DFAS has been reporting to
credit reporting agencies that:
i.

Plaintiff owed a debt to DFAS (the "Debt");

ii.

The account pertaining to the Debt was opened
March 10, 2009;

iii. The balance on the Debt was $5,835;
iv.

There was a past due balance on the Debt in the
amount of $5,835; and,

v.

The Debt was charged off on May 17, 2009.

Doc.' 1 at 3, , 18.
On or about February 23, 2016, $32.00 was taken from
plaintiff's federal income tax refund and applied as a payment
toward the Debt. Subsequently, DFAS reported to credit reporting
agencies that:
i.

The last payment towards the Debt was made on
February 23, 2016;

ii.

DFAS received payment in the amount of $32.00;

iii. The balance on the Debt was $5,818;
iv.

There was a past due balance on the Debt in the
amount of $5,835;

v.

Date of first delinquency was February 2016; and

vi.

The Debt was charged off on March 20, 2016.

'The "Doc. "references are to the number of the item on the docket in this action.
2

Id. at 4, , 23.
Plaintiff claims that DFAS violated sections 1681n and
1681o of the Fair Credit Reporting Act, 15 U.S.C.

§§

1681-1681x

("FCRA"), and seeks compensatory damages, $1,000.00 in statutory
damages, punitive damages, and attorney's fees and costs.
II.

Grounds of the Motion
DFAS, a federal government agency within the Department of
Defense, alleges that the court lacks subject matter jurisdiction
over plaintiff's claims because the United States has not waived
sovereign immunity for FCRA claims. Fed. R. Civ. P. 12(b) (1).
III.

Applicable Legal Principles
Under Rule 12 (b) ( 1) of the Federal Rules of Ci vi 1 Procedure,
a case is properly dismissed when the court "lacks the statutory
or constitutional power to adjudicate the case." Home Builders
Ass•n of Miss., Inc. v. City of Madison, Miss., 143 F.3d 1006,
1010 (5th Cir. 1998)

(citations omitted). The court should grant

a motion to dismiss pursuant to Rule 12 (b) (1)

"only if it appears

certain that the plaintiff cannot prove any set of facts in
support of his claim that would entitle him to relief." Id. The
court may dismiss a complaint for lack of subject matter
jurisdiction upon consideration of "(1) the complaint alone;

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(2)

the complaint supplemented by the undisputed facts evidenced in
the record; or (3) the complaint supplemented by undisputed facts
plus the court's resolution of disputed facts.• Lane v.
Halliburton, 529 F.3d 548, 557 (5th Cir. 2008)

(citing

Barrera-Montenegro v. United States, 74 F.3d 657,

659 (5th Cir.

1996)). Upon a defendant's challenge to the court's subject
matter jurisdiction, "the plaintiff constantly bears the burden
of proof that jurisdiction does in fact exist.• Ramming v. United
States, 281 F.3d 158, 161 (5th Cir. 2001); Menchaca v. Chrysler
Credit Corp., 613 F.2d 507, 511 (5th Cir. 1980).
IV.
Analysis
"Sovereign immunity shields the United States from suit
absent a consent to be sued that is 'unequivocally expressed.'"
United States v. Bormes, 568 U.S. 6,

9-10

(2012)

States v. Nordic Vill., Inc., 503 U.S. 30, 33

(quoting United

(1992)). Such

consent must be construed strictly in favor of the sovereign, and
not enlarged beyond what the language requires. Nordic Vill.,
U.S. at 34

503

(citations omitted). A waiver of sovereign immunity

cannot be implied or inferred. United States v. King, 395 U.S. 1,
4 (1969).
The FCRA imposes civil liability on any "person• who
willfully or negligently fails to comply with its requirements.

4

15 U.S.C. § 1681n(a), 1681o(a). The FCRA defines a "person" to
mean "any individual, partnership, corporation, trust, estate,
cooperative, associate, government or governmental subdivision or
agency, or otherentity." 15 U.S.C. §1681a(b)

(emphasis added).

The United States Court of Appeals for the Seventh Circuit,
the first and apparently only appellate court to decide whether §
1681a(b) waives the United States' immunity from damages for
violations of the FCRA, concluded in Bormes v. United States that
it did.' 759 F. 3d 793, 797 (7th Cir. 2014). The Seventh Circuit
reasoned that:
The United States is a government. One would suppose
that the end of the inquiry. By authorizing monetary
relief against every kind of government, the United
States has waived its sovereign immunity. And so we
conclude.
Id. at 795

(emphasis original).

Here, DFAS raises similar arguments to those the government
raised in Bormes, all of which this court finds unpersuasive. The
court similarly finds unpersuasive the five cases cited by DFAS
that predate Bormes and come from district courts outside the
jurisdiction of the Fifth Circuit.' Accordingly, the court

'The case had been remanded and-transferred to the Seventh Circuit from the Supreme Court,
which instructed the Seventh Circuit to consider "whether FCRA itself waives the Federal Government's
immunity to damages under§ 1681n." United States v. Bonnes, 568 U.S. 6, 16 (2012).
3

Echols v. Morpho Detection, Inc., 2013 WL 752629, at *4 (N.D. Cal. Feb. 27, 2013); Stellick v.
U.S. Dep't ofEduc., 2013 WL 673856, at *4-5 (D. Minn. Feb. 25, 2013); Taylor v. United States, 2011
(continued ... )

5

reaches the same conclusion as the Seventh Circuit: section
1681a(b) unequivocally waives the United States' sovereign
immunity from damages for violations of the FCRA.
This holding is consistent with the memorandum opinion in
Ingram v. Experian Information Solutions, Inc., in which the
United States District Court for the Northern District of
Mississippi, Oxford Division, also held that the FCRA contains an
unequivocal waiver of the United States' sovereign immunity. 2017
WL 2507694, at *3

(N.D. Miss. June 9, 2017). After noting that it

was "persuaded by the Seventh Circuit's analysis [in Bormes) on
its own," id. at *2, the district court in Ingram predicted that
the Fifth Circuit, if presented with the issue, likely would
reach the same conclusion. Such prediction was based on the Fifth
Circuit's ruling in Moore v. U.S. Department of Agriculture,
which held that the Equal Credit Opportunity Act

("ECOA")

contained a waiver of the United States' sovereign immunity. 55
F.3d 991,

994

(5th Cir. 1995). The Ingram court noted that, like

the FCRA, the ECOA defined "person" to include any "government or
governmental subdivision or agency." Ingram, 2017 WL 2507694, at
* 3. And, the Ingram court observed that the ECOA, like the FCRA,

'( ... continued)
WL 1843286, at *5 (D. Ariz. May 16, 2011); Giller! v. U.S. De't ofEduc., 2010 WL 3582945, at *4
(W.O. Ark. Sept. 7, 20!0); Ralph v. U.S. Air Force MGIB, 2007 WL 3232593, at *3 (D. Colo. Oct. 31,
2007).
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did not contain an explicit preservation of immunity, unlike
another similar statute, the Truth in Lending Act. Id. Adopting
the same reasoning as the district court in Ingram, this court
finds it likely that the Fifth Circuit would hold that the FCRA
contains a waiver of the United States' sovereign immunity.

v.
Order
Therefore,
The court orders that defendant's motion to dismiss be, and
is hereby, denied.
SIGNED August 25, 2017.

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