Reeves v. Nelnet Loan Services et al

Filing 38

MEMORANDUM AND ORDER (Signed by Judge Nancy F Atlas) Parties notified.(sashabranner, 4)

United States District Court
Southern District of Texas

ENTERED
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
ASHLEY REEVES
Plaintiff,
v.
NELNET LOAN SERVICES, et al.,
Defendants.

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May 14, 2018
David J. Bradley, Clerk

CASE NO. 4:17-cv-3726

MEMORANDUM AND ORDER
Pending before the Court in this dispute under the Fair Credit Reporting Act,
15 U.S.C. §§ 1681 et seq. (the “FCRA” or “Act”)), are multiple motions to dismiss
Plaintiff Ashley Reeves’s First Amended Complaint and Demand for Jury Trial
(the “Amended Complaint”) [Doc. # 5].

Defendant Oklahoma Student Loan

Authority (“OSLA”) has moved to dismiss the Amended Complaint in its entirety
on the basis of lack of subject matter jurisdiction due to sovereign immunity.1
Defendants Capital One Bank (USA), N.A. (“Cap One”),2 Phoenix Financial
Services LLC (“Phoenix”), and Nelnet Servicing, LLC (“Nelnet”)3 each have
1

See Defendant OSLA’s Motion to Dismiss Complaint on Eleventh Amendment
Immunity Grounds (the “OSLA Motion”) [Doc. # 16].

2

Cap One is improperly named in the Amended Complaint as both “Capital One”
and “Capital One Bank USA.”

3

Nelnet is improperly named in the Amended Complaint as “Nelnet Loan
Services.”

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moved to dismiss the Amended Complaint in its entirety on the grounds that the
allegations therein fail to state a claim upon which relief can be granted.4 Plaintiff
filed a single response that only addressed the Initial 12(b)(6) Motions,5 to which
Cap One, Phoenix, and Nelnet have replied.6 Without seeking leave of Court,
Plaintiff filed a sur-reply to Cap One’s reply.7
4

See Defendant Cap One’s Motion to Dismiss Plaintiff’s Complaint (the “Cap One
Motion”) [Doc. # 8]; Defendant Phoenix’s Rule 12(b)(6) Motion to Dismiss
Plaintiff’s Complaint (the “Phoenix Motion”) [Doc. # 10]; Defendant Nelnet’s
Motion to Dismiss or in the Alternative Motion to Transfer Venue, Motion to
Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) and Motion for
More Definitive Statement (the “Nelnet Motion,” and, collectively, the “Initial
12(b)(6) Motions”) [Doc. # 21].
The Court notes that for all intents and purposes, the Phoenix Motion simply
adopts the arguments presented in the Cap One Motion and asks the Court to apply
those arguments to allegations and claims Plaintiff asserts Phoenix, which are
identical to those asserted against Cap One (and all other Defendants). In
addition, because the Court concludes that this case should be dismissed pursuant
to Rule 12(b)(6) of the Federal Rules of Civil Procedure, the Nelnet Motion is
denied as moot to the extent it seeks dismissal or transfer of this case based on
venue grounds or a more definitive statement from Plaintiff.

5

See Plaintiff’s Memorandum in Response to Defendants Cap One, Phoenix and
Nelnet’s Motions to Dismiss for Failure to State a Claim (the “Response”) [Doc.
# 23]. Plaintiff’s Response makes no mention of the OSLA Motion, and the time
for Plaintiff to respond to the OSLA Motion under the Court’s local procedures
has expired. Plaintiff has not moved the Court to extend her deadline to respond
to the OSLA Motion.

6

See Defendant Cap One’s Reply in Support of Dismissal [Doc. # 30]; Defendant
Phoenix’s Memorandum in Reply to the Response [Doc. # 31]; Defendant
Nelnet’s Reply to the Response [Doc. # 24].

7

See Plaintiff’s Memorandum in Response to Defendant Cap One’s Reply in
Support of Dismissal [Doc. # 33]. In its discretion, the Court has chosen to
consider the arguments and authorities in Plaintiff’s sur-reply.

2
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After Plaintiff filed her Response, Defendant Navient Solutions, LLC
(“Navient”)8 also moved to dismiss the Amended Complaint in its entirety
pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure.9 Plaintiff filed a
response to the Navient Motion after the deadline to do so expired.10 However, in
the interest of justice, the Court has accepted and considered Plaintiff’s response to
the Navient Motion.11 The OSLA Motion and the 12(b)(6) Motions are now ripe
for decision.

Having considered the parties’ briefing, the applicable legal

authorities, and all pertinent matters of record, the Court concludes that the OSLA
Motion and each of the 12(b)(6) Motions should be granted.

8

Navient, formerly known as “Sallie Mae, Inc.,” is improperly named in the
Amended Complaint as “Sallie Mae.”

9

See Navient’s Motion to Dismiss the Amended Complaint (the “Navient Motion,”
and, together with the Initial 12(b)(6) Motions, the “12(b)(6) Motions”) [Doc.
# 29].

10

See Plaintiff’s Memorandum in Support of Motion for Leave to File Response
[Doc. # 35].

11

Accordingly, Plaintiff’s Motion for Leave to File Response [Doc. # 35] is
granted. Even if Plaintiff had not filed a formal response to the Navient Motion,
the Court would still conclude that Navient’s Notice of No Response [Doc. # 34]
is unpersuasive. The Navient Motion is identical, in all material respects, to the
Cap One Motion. Therefore, the Court considers the Response as being applicable
to the Navient Motion, and would deem that motion opposed irrespective of
whether Plaintiff filed a formal response thereto.

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I.

BACKGROUND
In February 2016, Plaintiff applied for and was denied a mortgage. In

response, Plaintiff obtained a copy of her credit report. Each Defendant furnished
“trade lines” on her report, which, according to Plaintiff, are “inaccurate, false and
unverifiable.” Amended Complaint, ¶ 18.12
After reviewing her credit report, Plaintiff sent a dispute letter to consumer
reporting agencies Experian, Transunion, and Equifax (the “CRAs”), each a nonparty to this lawsuit. Pursuant to their obligations under the FCRA, the CRAs
notified each Defendant that Plaintiff disputed the information they had furnished
to them for inclusion in her credit report. The CRAs also requested that each
Defendant investigate the merits of Plaintiff’s dispute.
Experian, one of the CRAs, subsequently provided Plaintiff with the results
of Defendants’ investigations. Plaintiff alleges that as a result of their respective
investigations, each Defendant “verified the disputed accounts, but unreasonably
failed to disclose that the accounts were being disputed by Plaintiff.” Id. ¶ 24.
Plaintiff alleges that Defendants’ failure to disclose to the CRAs that her accounts

12

In her Amended Complaint, Plaintiff alleges the dollar amounts of the credit limits
and balances that each Defendant furnished for her credit report. Id. ¶¶ 3-17.
Plaintiff does not allege what the “correct” credit limit and balance figures are
with respect to any Defendant.

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with them were being disputed created a “negative material misleading
impression” on her credit report. Id. ¶ 26.
On December 9, 2017, Plaintiff filed her original complaint in this lawsuit.
On February 6, 2018, Cap One moved to dismiss Plaintiff’s original complaint in
its entirety.

Defendant Cap One’s Motion to Dismiss Plaintiff’s Original

Complaint [Doc. # 4]. In response, Plaintiff amended her pleading and filed the
Amended Complaint. Defendants thereafter filed the currently pending OSLA
Motion and the 12(b)(6) Motions, which raise the same or very similar issues
identified in Cap One’s original motion to dismiss.
II.

ANALYSIS
A.

OSLA Motion

OLSA argues Plaintiff’s FCRA claims are barred by the Eleventh
Amendment of the United States Constitution and moves to dismiss these claims
under Federal Rule of Civil Procedure 12(b)(1) for lack of subject matter
jurisdiction. “‘A case is properly dismissed for lack of subject matter jurisdiction
when the court lacks the statutory or constitutional power to adjudicate the case.’”
Smith v. Reg’l Transit Auth., 756 F.3d 340, 347 (5th Cir. 2014) (quoting Krim v.
pcOrder.com, Inc., 402 F.3d 489, 494 (5th Cir. 2005)). When there is a challenge
to the court’s subject matter jurisdiction, the party asserting jurisdiction bears the
burden of establishing jurisdiction exists. Alabama–Coushatta Tribe of Tex. v.
5
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United States, 757 F.3d 484, 487 (5th Cir. 2014); Gilbert v. Donahoe, 751 F.3d
303, 307 (5th Cir. 2014).
In the OSLA Motion, OSLA asserts that it is an “arm of the State of
Oklahoma,” that it has not consented to the jurisdiction of this (or any) Court for
the adjudication of Plaintiff’s FCRA claims, and that Congress has not abrogated
the states’ Eleventh Amendment immunity with respect to FCRA claims.13 See
generally OSLA Motion [Doc. # 16]. The arguments and authorities presented in
the OSLA Motion constitute a strong challenge to this Court’s subject matter
jurisdiction over Plaintiff’s claims against OSLA. Plaintiff has not responded,
directly or indirectly, to that Motion.

The Court therefore deems the OSLA

Motion unopposed.14 Having neither opposed the OSLA Motion nor otherwise
addressing the arguments and authorities discussed therein, Plaintiff has failed to

13

See, e.g., Densborn v. TransUnion, LLC, No. 08 C 3631, 2009 WL 331466, at *2
(N.D. Ill. Feb. 10, 2009) (“We join those courts and hold that because Congress
enacted the FCRA pursuant to its authority under the Commerce Clause, it lacks
the authority to abrogate a State’s sovereign immunity through that statute.”);
Rovers v. Oregon Dept. of Justice Division of Child Support, No. 05-6122-AA,
2005 WL 2218457 (D. Or. Sept. 13, 2005) (“I find no evidence that the FCRA can
abrogate Oregon’s sovereign immunity, and therefore plaintiff’s claims pursuant
to the FCRA, against this defendant, fail as a matter of law.”); Wright v. Applied
Bank, et. al., Civ. Action No. 11-585-GMS, 2012 WL 3758957, at *2 (D. Del.,
Aug. 28, 2012) (Philadelphia Traffic Court immune from FCRA suit).

14

Pursuant to the Local Rules of the United States District Court for the Southern
District of Texas, failure to respond to a motion is taken as a representation of no
opposition. S.D. TEX. R. 7.3, 7.4.

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carry her burden of establishing that jurisdiction exists over her claims against
OSLA. Accordingly, the OSLA Motion is granted.
B.

The 12(b)(6) Motions

In her Amended Complaint, Plaintiff asserts the same five causes of action
against each Defendant: violation of the each of the duties set forth in FCRA §§
1681s-2(b)(1)(A)-(E) applicable to “furnishers” of information.

With the

exception of the credit line and balance figures each Defendant reported to the
CRAs, Plaintiff alleges identical causes of action against each Defendant based on
the exact same allegations. See Amended Complaint, ¶¶ 34-303. There is no
dispute that Defendants are “furnishers” of information within the meaning of
FCRA. However, Defendants argue that Plaintiff has failed to allege facts that
state a plausible claim for relief. The Court addresses seriatim Defendants’ FCRA
duties in issue.
1.

Applicable Legal Standard

A motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil
Procedure is viewed with disfavor and is rarely granted. Turner v. Pleasant, 663
F.3d 770, 775 (5th Cir. 2011) (citing Harrington v. State Farm Fire & Cas. Co.,
563 F.3d 141, 147 (5th Cir. 2009)). The complaint must be liberally construed in
favor of the plaintiff, and all facts pleaded in the complaint must be taken as true.
Harrington, 563 F.3d at 147. The complaint must, however, contain sufficient
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factual allegations, as opposed to legal conclusions, to state a claim for relief that is
“plausible on its face.” See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Patrick v.
Wal-Mart, Inc., 681 F.3d 614, 617 (5th Cir. 2012). When there are well-pleaded
factual allegations, a court should presume they are true, even if doubtful, and then
determine whether they plausibly give rise to an entitlement to relief. Iqbal, 556
U.S. at 679. Additionally, regardless of how well-pleaded the factual allegations
may be, they must demonstrate that the plaintiff is entitled to relief under a valid
legal theory. See Neitzke v. Williams, 490 U.S. 319, 327 (1989); McCormick v.
Stalder, 105 F.3d 1059, 1061 (5th Cir. 1997).
2.

FCRA § 1681s-2(b)(1)(A)

Under FCRA § 1681s-2(b)(1)(A), a furnisher of information is required to
“conduct an investigation with respect to the disputed information” after receiving
notice of a dispute from a consumer reporting agency. 15 U.S.C.

§ 1681s-

2(b)(1)(A). According to Plaintiff’s own allegations, after being notified by the
CRAs of her dispute, each Defendant conducted an investigation, verified the
disputed accounts, and reported the investigation results to the CRAs. Amended
Complaint, ¶ 24. Plaintiff also acknowledges that a CRA provided those results to
her. Id. Therefore, there is no doubt Defendants here “conducted an investigation”
into Plaintiff’s dispute.

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In the Amended Complaint, Plaintiff challenges the adequacy of the
investigations

Defendants

conducted.

Under

the

FCRA,

Defendant’s

investigations of disputes received from consumer reporting agencies must be
reasonable. See Robertson v. J.C. Penney Co., No. CIV.A. 2:06CV3KSMTP, 2008
WL 623397, at *8 (S.D. Miss. Mar. 4, 2008) (“Section 1681s-2(b)(1)’s
investigation requirement for furnishers, however, is analogous to the requirement
imposed upon credit reporting agencies under § 1681i(a) to reinvestigate a
consumer's dispute regarding information contained in his credit report and,
therefore, furnishers of credit are required to conduct a reasonable investigation.”).
However, Plaintiff has failed to allege facts that Defendants’ respective
investigations were unreasonable. Plaintiff merely makes one unsupported and
conclusory allegation regarding each Defendant: Plaintiff asserts each Defendant
“failed to conduct a reasonable re-investigation of information forwarded to them
by a Consumer Reporting Agencies” and “failed to have reasonable procedures to
notate consumers[’] disputes.” Amended Complaint, ¶¶ 35, 65, 95, 125, 155, 185,
215, 245, 275. Plaintiff alleges no facts that would support a reasonable inference
that any Defendant, let alone every Defendant, conducted an unreasonable
investigation into her dispute or lacked adequate account notation procedures. For
example, Plaintiff does not allege facts supporting a plausible inference that she
had discharged any of the debts reported by Defendants or that she had not actually
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opened a reported credit line or incurred a reported debt. Cf. Robertson, 2008 WL
623397 at *8 (finding certain defendant’s investigation unreasonable as a matter of
law where evidence showed the plaintiff had paid the debt reported by that
defendant, and that defendant had issued the plaintiff a confirmation number
indicating the same). Conclusory assertions alone are not sufficient to state a
plausible claim for relief. See Shaunfield v. Experian Info. Sols., Inc., 991 F. Supp.
2d 786, 806 (N.D. Tex. 2014) (dismissing the plaintiff’s FCRA claims because
“[h]is assertions read more like a recitation of the elements of a § 1681s–2(b) claim
than specific allegations of wrongdoing.”). Accordingly, each of the 12(b)(6)
Motions is granted on Plaintiff’s claims under FCRA § 1681s-2(b)(1)(A).
3.

FCRA § 1681s-2(b)(1)(B)

FCRA § 1681s-2(b)(1)(B) obligates a furnisher of information to “review all
relevant information provided by the consumer reporting agency” in connection
with a consumer dispute. 15 U.S.C. § 1681s-2(b)(1)(B). Plaintiff alleges, with
respect to Defendants, that “they failed to consider all relevant information
forwarded to them by the consumer reporting agencies and failing to review the
account level documentation and by failing to notate disputed information.”
Amended Complaint, ¶¶ 41, 71, 101, 131, 161, 191, 221, 251, 281. Although the
information that a furnisher is supposed to review pursuant to § 1681s-2(b)(1)(B)
is forwarded from a consumer reporting agency, that information originates with
10
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the consumer.

See 15 U.S.C. § 1681i(2)(A) (stating notice from consumer

reporting agency to furnisher shall include “all relevant information regarding the
dispute that is received by the agency from the consumer”) (emphasis added); id. §
1681i(2)(B) (“The consumer reporting agency shall promptly provide to the
[furnisher] all relevant information regarding the dispute that is received by the
agency from the consumer”) (emphasis added). Plaintiff alleges that she sent a
dispute letter to the CRAs, but fails to allege what, if any, information she provided
to them in connection with her dispute letter.

Amended Complaint, ¶ 19.

Consistent with that omission, Plaintiff does not identify in any way in the
Amended Complaint the information Defendants received from the CRAs but
failed to consider in their investigations related to her dispute.

Plaintiff’s

allegations regarding this section of the FCRA amount to little more than a
formalistic recitation of the applicable statutory language.

Such a formalistic

recitation “will not do” in terms of satisfying Plaintiff’s obligation to plead
sufficient facts to state a facially plausible claim for relief. Iqbal, 556 U.S. at 678.
Therefore, the 12(b)(6) Motions are granted with respect to each of Plaintiff’s
FCRA § 1681s-2(b)(1)(B) claims.
4.

FCRA § 1681s-2(b)(1)(C)

After completing an investigation into disputed information, a furnisher
must, under FCRA § 1681s-2(b)(1)(C), “report the results of the investigation to
11
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the consumer reporting agency.” 15 U.S.C. § 1681s-2(b)(1)(C). As discussed in
section II.B.2 supra, Plaintiff alleges in her Amended Complaint that Defendants
reported the results of their investigations to the CRAs.

However, Plaintiff

contends that all Defendants violated this section of the FCRA because “they
[each] failed to report the notation of the disputed information to the consumer
reporting agencies.” Amended Complaint, ¶¶ 47, 77, 107, 137, 167, 197, 227, 257,
287. To the extent Plaintiff argues that Defendants failed to fully report the results
of their investigations to the CRAs because they did not report that Plaintiff’s
accounts with them should be marked as “disputed,” that argument is without
merit. The gravamen of Plaintiff’s Complaint is that Defendants unreasonably
concluded after their investigation that there was no need to mark Plaintiff’s
accounts as disputed. The assertion that the results of Defendants’ investigations
were that Plaintiff’s accounts should be noted as “disputed” is unsupported by, and
directly contrary to, the allegations in the Amended Complaint.

Therefore,

Plaintiff has not alleged facts that plausibly suggest the investigation results that
Defendants reported to the CRAs were in any way inconsistent with the
conclusions Defendants actually reached upon completing their respective
investigations.
To the extent Plaintiff takes issue with the merits of Defendants’
investigations and their decisions not to instruct the CRAs to mark her accounts as
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“disputed,” that contention also fails. The plain language of FCRA § 1681s2(b)(1)(C) merely speaks to a furnisher’s obligation to report investigation results
to a consumer reporting agency, not the substance of those results. Plaintiff cites
no authority to support its implied assertion that a consumer has a right of action
against a furnisher of information under FCRA § 1681s-2(b)(1)(C) when it is
dissatisfied with investigation results that were otherwise properly delivered to a
consumer reporting agency. Plaintiff has failed to allege a plausible claim for
relief under FCRA § 1681s-2(b)(1)(C). Consequently, the 12(b)(6) Motions are
granted regarding the § 1681s-2(b)(1)(C) claims Plaintiff asserts in the Amended
Complaint.
5.

FCRA § 1681s-2(b)(1)(D)

Under FCRA § 1681s-2(b)(1)(D), “if the investigation finds that the
information is incomplete or inaccurate,” a furnisher of information must report
that fact to all of the consumer reporting agencies that it provides information to
and all consumer reporting agencies that “maintain files on consumers on a
nationwide basis.”

15 U.S.C. § 1681s-2(b)(1)(D).

“A credit entry may be

‘inaccurate’ within the meaning of the statute either because it is patently incorrect,
or because it is misleading in such a way and to such an extent that it can be
expected to adversely affect credit decisions.” Sepulvado v. CSC Credit Servs.,
Inc., 158 F.3d 890, 895 (5th Cir. 1998); Toliver v. Experian Info. Sols., Inc., 973 F.
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Supp. 2d 707, 715 (S.D. Tex. 2013). Plaintiff argues that each Defendant violated
this section of the FCRA because “it failed to report to all national consumer
reporting agencies that the information was inaccurate, erroneous or unverifiable
and it failed to report to Equifax that the information was being disputed.”
Amended Complaint, ¶¶ 53, 83, 113, 143, 173, 203, 233, 263, 293. Thus, Plaintiff
is asserting that each Defendant is liable for two distinct reporting failures: (i) the
failure to report that the information it is furnishing regarding Plaintiff is
inaccurate and (ii) the failure to report that Plaintiff disputes the information it is
furnishing. Neither of these assertions has merit.
In her Amended Complaint, Plaintiff alleges that the trade lines each
Defendant provided to the CRAs are “inaccurate, incomplete, false, and
unverifiable without any supporting account level documentation such as the initial
contract, payment and balance history, proof of the interest rate, late fees, and
finance charges applied.” Id. ¶ 18. However, the Amended Complaint is devoid of
any factual allegations that support her otherwise conclusory assertion. Plaintiff
has alleged no facts regarding the basis for her disagreement with Defendants’
reporting or facts that would support a reasonable inference that she has correctly
identified inaccuracies or misleading entries in Defendants’ reporting. Absent such
well-pleaded factual allegations, Plaintiff has not satisfied the plausibility threshold
because her right to relief based on Defendants’ alleged incorrect trade line
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reporting is purely speculative. See In re Great Lakes Dredge & Dock Co. LLC,
624 F.3d 201, 210 (5th Cir. 2010) (“To be plausible, the complaint’s ‘[f]actual
allegations must be enough to raise a right to relief above the speculative level.’”
(quoting Twombly, 550 U.S. at 555)).
Plaintiff’s claims that Defendants have improperly neglected to indicate that
her accounts are disputed also fail.

The Fifth Circuit has not addressed the

question of whether a furnisher’s continuing failure to flag an account as disputed
constitutes a violation of FCRA § 1681s–2(b). The Third,15 Fourth,16 and Ninth
Circuits17 have held that it does. Even assuming the Fifth Circuit would reach the
same conclusion, dismissal of Plaintiff’s claims in this case is warranted. Only
“bona fide” disputes or disputes with an indicia of merit obligate furnishers to
disclose that a consumer’s account is subject to dispute. See Gorman, 584 F.3d at
1163 (“[A] furnisher does not report ‘incomplete or inaccurate’ information within
the meaning of § 1681s–2(b) simply by failing to report a meritless dispute,
because reporting an actual debt without noting that it is disputed is unlikely to be
materially misleading. It is the failure to report a bona fide dispute, a dispute that
could materially alter how the reported debt is understood, that gives rise to a
15

Seamans v. Temple Univ., 744 F.3d 853 (3d Cir. 2014).

16

Saunders v. Branch Banking And Tr. Co. Of VA, 526 F.3d 142 (4th Cir. 2008).

17

Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147, 1153 (9th Cir. 2009).

15
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furnisher's liability under § 1681s–2(b)); Seamans, 744 F.3d at 867 (“a private
cause of action arises under 15 U.S.C. § 1681s–2(b) when, having received notice
of a consumer’s potentially meritorious dispute, a furnisher subsequently fails to
report that the claim is disputed.”); Saunders, 526 F.3d at 151 (“we assume without
deciding that a furnisher incurs liability under § 1681s–2(b) only if it fails to report
a meritorious dispute.”).
Plaintiff alleges in her Amended Complaint that she disputes the information
Defendants reported the CRAs. She does not, however, support that conclusory
assertion with any factual allegations that would permit the Court to conclude that
the disputes plausibly are bona fide or even “potentially meritorious.”
Consequently, Plaintiff has not alleged a plausible claim for relief under FCRA
§ 1681s-2(b)(1)(D).

The Court grants the 12(b)(6) Motions with respect to

Plaintiff’s claims made pursuant to that section of the FCRA.
6.

FCRA § 1681s-2(b)(1)(E)

Finally, FCRA § 1681s-2(b)(1)(E) mandates that if a furnisher determines
that information disputed by a consumer is “inaccurate or incomplete or cannot be
verified after any reinvestigation,” the furnisher, in its reporting to consumer
reporting agencies, must “modify that item of information,” “delete that item of
information,” or “permanently block the reporting of that item of information.” 15
U.S.C. § 1681s-2(b)(1)(E). Plaintiff alleges that each Defendant “failed to have a
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procedure to (i) modify the information in their system, (ii) delete the inaccurate or
unverifiable information, or (iii) block the re-reporting of inaccurate or
unverifiable information,” and “failed to have a procedure to modify the
information in their system, [or] report the disputed information with Equifax.”
Amended Complaint, ¶¶ 59, 89, 119, 149, 179, 209, 239, 269, 299. Plaintiff’s
FCRA § 1681s-2(b)(1)(E) claim essentially is a formalistic recitation of the statute.
Such allegations are insufficient to state a plausible claim for relief under federal
pleading standards. This claim also is pleaded deficiently because, as discussed in
Sections II.B.2-5, supra, Plaintiff has failed adequately to allege that Defendants
provided the CRAs with any inaccurate, incomplete or unverifiable information.
See also Mendoza v. GE Capital Retail Bank, No. SA-12-CA-226-XR, 2012 WL
1038754, at *3 (W.D. Tex. Mar. 27, 2012) (“Nothing in § 1681s–2(b) requires
defendant to correct information simply because the consumer believes it is
erroneous.”) (citing Bashore v. Resurgent Capital Servs., L.P., 452 F. App’x 522,
524 (5th Cir. 2011)). She also has not adequately alleged facts suggesting that she
has asserted any bona fide or potentially meritorious dispute regarding her account
that would obligate one or more of Defendants to notate her accounts as disputed.
See Section II.B.5, supra. Having failed to allege facts establishing any predicate
inaccuracy or incompleteness in the information Defendants reported to the CRAs,
Plaintiff cannot plausibly claim a violation of § 1681s-2(b)(1)(E), i.e., that there is
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information that requires modification, deletion, or blocking by Defendants.
Therefore, the 12(b)(6) Motions are granted regarding this claim.18
C.

Leave to Amend

Plaintiff already has amended her Amended Complaint once and was on
notice of the deficiencies in her pleading by virtue of Cap One’s first motion to
dismiss. Instead of addressing those deficiencies in the Amended Complaint or by
seeking leave to further amend, Plaintiff chose to stand on the merits of her
Amended Complaint.

Plaintiff’s repeated failure to cure deficiencies in her

pleadings persuades the Court that she is not entitled to leave to amend her
Amended Complaint.19 U.S. ex rel. Willard v. Humana Health Plan of Texas Inc.,
18

Not all Defendants in this case have moved to dismiss the Amended Complaint.
However, because the Court concludes that the Amended Complaint is deficiently
pleaded as a matter of law and because the claims against all Defendants are
premised on essentially identical allegations, dismissal of Plaintiff’s claims
regarding each Defendant is appropriate. See Taylor v. Acxiom Corp., 612 F.3d
325, 339–40 (5th Cir. 2010) (holding plaintiffs were not prejudiced by district
court's dismissal sua sponte of some defendants who did not join the motion to
dismiss “because the plaintiffs make the same allegations against all defendants.”);
Siddhar v. Varadharajan, No. CIV.A. 4:13-CV-1933, 2014 WL 2815498, at *5
(S.D. Tex. June 20, 2014) (same).

19

The sum total of Plaintiff’s “request” for leave to amend is the following two
sentences in her Response: “Because Ms. Reeves stated a claim on which relief
can be granted, the Court should deny the Corporations’ motions and retain the
case on the Court’s docket. However, if the Court deems it necessary, Ms. Reeves
requests the Court grant him [sic] leave to amend his [sic] complaint.” Response
[Doc. # 23], p. 8. Plaintiff did not attach any proposed amended pleading to the
Response. The Fifth Circuit has explicitly held that such “bare statements,”
standing alone, do not constitute a motion for leave to amend. See U.S. ex rel.
Hebert v. Dizney, 295 F. App’x 717, 725 (5th Cir. 2008) (“Relators briefly argue
(continued…)

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336 F.3d 375, 386 (5th Cir. 2003). Accordingly, dismissal of Plaintiff’s claims in
this case pursuant to the 12(b)(6) Motions shall be with prejudice.20
III.

CONCLUSION
For the foregoing reasons, it is hereby
ORDERED Defendant Oklahoma Student Loan Authority’s Motion to

Dismiss Complaint on Eleventh Amendment Immunity Grounds [Doc. # 16] is
GRANTED. All claims against Defendant Oklahoma Student Loan Authority are
DISMISSED WITHOUT PREJUDICE. It is further
ORDERED that each of Defendant Cap One’s Motion to Dismiss Plaintiff’s
Complaint [Doc. # 8], Defendant Phoenix’s Rule 12(b)(6) Motion to Dismiss
Plaintiff’s Complaint [Doc. # 10], Defendant Nelnet’s Motion to Dismiss or in the
Alternative Motion to Transfer Venue, Motion to Dismiss pursuant to Federal Rule
(continued…)
that they moved for leave to amend in their memorandum and sur-reply
memorandum to the district court in opposition to the motion to dismiss. However,
the sum total of their request consisted of the following: ‘If this Court finds these
allegations insufficient, relators request leave to amend their complaint’ and
‘Nonetheless, if this Court finds the allegations insufficient, plaintiff requests
leave to amend.’ These bare statements, however, unaccompanied by a proposed
amendment, do not constitute a motion.”).
20

Dismissal of claims against OSLA on the basis of sovereign immunity cannot be
with prejudice. See Warnock v. Pecos Cty., Tex., 88 F.3d 341, 343 (5th Cir. 1996)
(“Because sovereign immunity deprives the court of jurisdiction, the claims barred
by sovereign immunity can be dismissed only under Rule 12(b)(1) and not with
prejudice.”); Anderson v. Jackson State Univ., 675 F. App’x 461, 464 (5th Cir.
2017) (same).

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of Civil Procedure 12(b)(6) and Motion for More Definitive Statement [Doc. # 21],
and Navient’s Motion to Dismiss the Amended Complaint [Doc. # 29] are
GRANTED. All claims against all Defendants other than Oklahoma Student Loan
Authority are DISMISSED WITH PREJUDICE.
An Order of Dismissal will be entered separately.
SIGNED at Houston, Texas, this 14thday of May, 2018.
___

NAN Y F. ATLAS
SENIOR UNI
STATES DISTRICT JUDGE

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