Hansen et al v. JP Morgan Chase Bank, N.A. et al

Filing 64

MEMORANDUM DECISION AND ORDER granting 26 Motion to Dismiss Transunion for Failure to State a Claim. Signed by Judge David Nuffer on 3/27/17 (alt)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH, CENTRAL DIVISION
RICK D. HANSEN and CONNIE B.
HANSEN, individual citizens of Utah,
Plaintiffs,

MEMORANDUM DECISION AND
ORDER GRANTING DEFENDANT
TRANSUNION, LLC’S MOTION TO
DISMISS

v.
Case No. 2:16-CV-744-DN
JPMORGAN CHASE BANK, NA, CHASE
BANK, JPMORGAN, JPMORGAN CHASE
& CO., CENLAR, FSB, EQUIFAX, INC.,
EXPERIAN INFORMATION SOLUTIONS,
INC., INNOVIS DATA SOLUTIONS, INC.,
TRANSUNION, LLC, and JOHN DOES
1 - 25,

District Judge David Nuffer

Defendants.

This case involves claims for damages arising from alleged incomplete or inaccurate
reporting of a government taking of real property owned by Plaintiffs Rick D. Hansen and
Connie B. Hansen (the “Hansens”) which had negative effects on the Hanses’ credit rating. 1 The
Hansens assert two claims against Defendant TransUnion, LLC (“TransUnion”): violation of the
Fair and Accurate Transactions Act of 2003 (“FACTA”); 2 and violations of the Consumer Credit
Reporting Reform Act of 1996 (“CCRRA”). 3 TransUnion seeks dismissal of the Hansens’ claims
pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim on
which relief may be granted. 4

1

Complaint, docket no. 2, filed June 29, 2016.

2

Id. ¶¶ 113-19.

3

Id. ¶¶ 120-26.

4

Defendant TransUnion LLC’s Motion to Dismiss Under Rule 12(b)(6) for Failure to State a Claim (“Motion to
Dismiss”), docket no. 26, filed Aug. 9, 2016.

Because the Hansens’ Complaint 5 fails to allege sufficient facts to support its claims
against TransUnion, TransUnion’s Motion to Dismiss 6 is GRANTED.

Contents
BACKGROUND ............................................................................................................................ 2
DISCUSSION ................................................................................................................................. 5
The Hansens’ Complaint fails to satisfy the basic pleading requirements of the federal rules
to state a claim against TransUnion .................................................................................... 6
The Hansens’ Complaint fails to state a claim for violation of the FACTA against
TransUnion ............................................................................................................. 7
The Hansens’ Complaint fails to state a claim for violations of the CCRRA against
TransUnion ............................................................................................................. 9
The argument and new theory of TransUnion’s liability in the Hansens’ Response to
TransUnion’s Motion to Dismiss do not save their claims from dismissal .......... 12
ORDER ......................................................................................................................................... 15

BACKGROUND
The Hansens were owners of certain real property in Spanish Fork, Utah (the “Property”)
where they had lived and Mr. Hansen conducted a cement curbing business for more than two
decades. 7 On December 20, 2013, the Hansens transferred ownership of the Property to the cities
of Spanish Fork and Springville as a result of an eminent domain taking for the expansion of the
Spanish Fork/Springville Municipal Airport. 8 The Hansens were paid the Property’s fair market
value for the taking. 9 However, the payment was insufficient to cover the existing debt owed on
the Property. 10

5

Docket no. 2, filed June 29, 2016.

6

Docket no. 26, filed Aug. 9, 2016.

7

Complaint at 2, 7, docket no. 2, filed June 29, 2016.

8

Id. at 2-3, ¶¶ 35-36, 53-54.

9

Id. at 3.

10

Id.

2

Prior to the taking, by letters dated July 22, 2013, the Hansens notified the Property’s lien
holders, Chase Bank and CENLAR, FSB (“CENLAR”), of the government’s intent to exercise
eminent domain on the Property. 11 This spurred a series of communications over a period of
several months between the Hansens and Chase Bank and CENLAR regarding the debts owed on
the Property. 12 Despite being repeatedly informed that the transaction was a government taking,
Chase Bank and CENLAR treated the Hansens’ notice as a request for a short sale. 13 A “short
sale” is a sale for less than value, which is treated in the industry as a foreclosure. 14
The taking resulted in Chase Bank and CENLAR settling the debts for an amount that
was less than full payment. 15 When the Hansens later attempted to obtain a replacement
property, they discovered that their credit rating had dropped as a result of information Chase
Bank and CENLAR furnished to the major credit reporting agencies concerning the debts. 16
Chase Bank and CENLAR had furnished information that the Hansens were delinquent in their
payments on the debts from October 2013 through December 2013, and that the Property was
sold for less than value. 17
Beginning on January 8, 2014, the Hansens sent letters to Chase Bank and CENLAR
demanding that the information furnished to the major credit reporting agencies be corrected to
reflect a government taking. 18 In response, CENLAR issued letters recanting use of the term

11

Id. ¶ 4.

12

Id. ¶¶ 5-64.

13

Id.

14

Id. at 5-6.

15

Id. at 5, ¶¶ 20, 24, 41, 47, 50-51.

16

Id. at 6.

17

Id. at 5-6.

18

Id. at 7, ¶¶ 65, 68, 72.

3

“short sale,” and acknowledging that the transaction was a government taking and that the debt
was “paid in full.” 19 CENLAR’s letters were publicly noticed and shared with the major credit
reporting agencies. 20 However, CENLAR later furnished information to the major credit
reporting agencies that the debt was “settled for less than the full amount … due to eminent
domain of the [Property].” 21
Chase Bank initially responded to the Hansens’ demands by indicating that it “sent an
electronic notification to the major credit agencies (Equifax, Experian, Innovis and TransUnion)
requesting that they suppress the delinquent payments reporting on [the Hansens’] account for
October 2013, November 2013, and December 2013.” 22 Chase Bank also notified the Hansens
that it asked the “four major credit agencies (Equifax, Experian, Innovis and TransUnion) to
show that [the Hansens had] paid off (or settled) the account for less than the full balance as of
December 27, 2013.” 23 However, Chase Bank later informed that Hansens that it “requested that
the credit reporting agencies report the loan as paid in full for less than the full balance – settled.
The credit bureaus do not report the narrative ‘Short Sale.’” 24 Chase Bank continues to
characterize the debt as settled for “less than the full balance,” without reference to a government
taking or the exercise of eminent domain. 25

19

Id. at 7, ¶¶ 70, 76.

20

Id.

21

Id. ¶¶ 79-80.

22

Id. ¶ 67.

23

Id. ¶ 85.

24

Id. ¶ 88.

25

Id. ¶¶ 92, 94.

4

Despite the drop in their credit rating, the Hansens purchased a replacement property. 26
However, they received a higher interest rate which increased their monthly mortgage payments
by approximately $400. 27 The authorized limits on the Hansens’ personal and business credit
cards also suffered reductions which impacted the Mr. Hansen’s ability to conduct his cement
curbing business and secure future contracts. 28
DISCUSSION
TransUnion seeks dismissal of the Hansens’ claims pursuant to Rule 12(b)(6) of the
Federal Rules of Civil Procedure. 29 A defendant is entitled to dismissal under Rule 12(b)(6)
when the complaint, standing alone, is legally insufficient to state a claim for which relief may
be granted. 30 When considering a motion to dismiss for failure to state a claim, the thrust of all
well-pleaded facts in the complaint is presumed, but conclusory allegations need not be
considered. 31 Nor are the complaint’s legal conclusions and opinions accepted, whether or not
they are couched as facts. 32
The United States Supreme Court has held that satisfying the basic pleading requirements
of the federal rules “demands more than an unadorned, the defendant-unlawfully-harmed-me
accusation.” 33 “A pleading that offers labels and conclusions or a formulaic recitation of the

26

Id. at 6.

27

Id. at 6-7.

28

Id. at 7.

29

Motion to Dismiss, docket no. 26, filed Aug. 9, 2016.

30

Sutton v. Utah State Sch. for the Deaf and Blind, 173 F.3d 1226, 1236 (10th Cir. 1999).

31

Cory v. Allstate Ins., 583 F.3d 1240, 1244 (10th Cir. 2009).

32

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007); see also Brown v.
Zavaras, 63 F.3d 967, 972 (10th Cir. 1995).

33

Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 862 (2009).

5

elements of a cause of action will not do.” 34 “Threadbare recitals of the elements of a cause of
action, supported by mere conclusory statements, do not suffice.” 35 Moreover, “naked assertions
devoid of further factual enhancement” are insufficient to state a claim that will survive a motion
to dismiss.36
“The allegations must be enough that, if assumed to be true, the plaintiff plausibly (not
just speculatively) has a claim for relief.” 37 “This requirement of plausibility serves not only to
weed out claims that do not (in the absence of additional allegations) have a reasonable prospect
of success, but also to inform the defendants of the actual grounds of the claim against them.” 38
The Hansens’ Complaint fails to satisfy the basic pleading requirements
of the federal rules to state a claim against TransUnion
The Hansens’ Complaint asserts two claims against TransUnion: violation of the
FACTA; 39 and violations of the CCRRA. 40 However, the only factual allegations regarding
TransUnion relate to the information Chase Bank and CENLAR furnished to the major credit
reporting agencies concerning the debts on the Property. 41 There are no factual allegations
regarding TransUnion’s conduct or actions relating to the information it was furnished. Indeed,
TransUnion is expressly referenced in only three of the Complaint’s factual allegations, and
these allegations pertain solely to the actions of Chase Bank:
67.
On January 16, 2014 a fax was sent to Plaintiffs’ counsel regarding the
credit information reported by Chase. The letter concluded by stating that:
34

Id. (internal quotations omitted).

35

Id.

36

Id. (internal quotations omitted).

37

Robbins v. Oklahoma, 519 F.3d 1242, 1247 (10th Cir. 2008).

38

Id. at 1248.

39

Complaint ¶¶ 113-19, docket no. 2, filed June 29, 2016.

40

Id. ¶¶ 120-26.

41

Id. at 5-7, ¶¶ 67, 70, 76, 79-80, 85, 88, 92, 94.

6

“Chase sent an electronic notification to the major credit agencies
(Equifax, Experian, Innovis and TransUnion) requesting that they suppress
the delinquent payments reporting on this account for October 2013,
November 2013, and December 2013. Our records show we are not
reporting any other delinquent payment to the major credit agencies.” 42
85.
On June 27, 2014 Chase sent a notice to Plaintiff through counsel that
Chase had asked “four major credit agencies (Equifax, Experian, Innovis and
TransUnion) to show that you paid off (or settled) the account for less than the
full balance as of December 27, 2013.” 43
97.
Defendant Chase characterized to the credit reporting bureaus, including
but not limited to Equifax, Experian, Innovis and TransUnion, that the
government taking of the Plaintiffs’ real property was “settled for less than full
amount” without explanation of the true nature of the government taking,
resulting in the deliberate prejudicial type casting of the transaction, not as a
government taking to satisfy eminent domain and the public good, which leaves
no negative credit implication on the Plaintiffs, but rather to negatively and
deliberately lead to the false light conclusion, in credit terms, that it was the
equivalent to a foreclosure sale, with the negative effect on the credit rating of the
Plaintiffs. 44
There are no allegations that the Hansens contacted TransUnion regarding the information Chase
Bank and CENLAR furnished. There are no allegations regarding what TransUnion did with the
information Chase Bank and CENLAR furnished. And there are no allegations that TransUnion
was ever aware, or reasonably should have been aware, that the Hansens disputed the
completeness or accuracy of the information Chase Bank and CENLAR furnished.
The Hansens’ Complaint fails to state a claim for violation of the FACTA against
TransUnion
In asserting the Hansens’ claim for violation of the FACTA against TransUnion, the
Complaint includes only generalized, conclusory statements that:
•

42

Id. ¶ 67.

43

Id. ¶ 85.

44

The FACTA amends the Fair Credit Reporting Act (“FCRA”) to improve the
accuracy of credit reporting, and Plaintiffs have a right to have their credit

Id. ¶ 97.

7

fairly reported and to make informed credit decisions not influenced by
inaccurate reporting; 45 and
•

“Defendants” violated the FACTA by deliberately reporting the government
taking in a way that adversely affected the Hansens’ credit score, after notice
and objection was asserted by the Hansens, and after having admitted that
reporting the transaction in such a manner was likely to result in a negative
credit report. 46

The Complaint’s allegations are insufficient to inform TransUnion of the actual grounds
of the Hansens’ violation of the FACTA claim. The Complaint does not specify what section of
the FACTA or the FCRA that TransUnion violated. Nor does it allege, even upon information
and belief, any conduct of TransUnion in relation to the claim. The Complaint does allege that a
credit report was generated, which includes the information furnished by Chase Bank and
CENLAR and the drop in the Hansens’ credit rating. 47 However, there is no allegation that
TransUnion prepared this report or any other report containing the information Case Bank and
CENLAR furnished. 48 The credit report attached to the Complaint also does not identify who or
what entity or agency prepared it. 49 Regardless, even if the Complaint alleged that TransUnion
had prepared the credit report, there is no allegation that TransUnion failed to follow reasonable
procedures to assure the accuracy of the report, 50 or that the report was ever communicated to a
third party. 51

45

Id. ¶¶ 114-15.

46

Id. ¶¶ 116-18.

47

Id. at 6 (citing Exhibit 2, docket no. 3-2, filed June 29, 2016).

48
15 U.S.C. § 1681e(b); see also Eller v. TransUnion, LLC, 739 F.3d 467, 473-74 (10th Cir. 2002); Wright v.
Experian Info. Sols., Inc., 805 F.3d 1232, 1239-40 (10th Cir. 2015).
49

Exhibit 2, docket no. 3-2, filed June 29, 2016.

50

15 U.S.C. § 1681e(b); see also Eller, 739 F.3d at 473; Wright, 805 F.3d at 1239-40.

51

Eller, 739 F.3d at 474 (citing 15 U.S.C. § 1681a(d)).

8

The Hansens’ Complaint also contains no allegation that the Hansens, Chase Bank, or
CENLAR ever provided TransUnion with notice of the Hansens’ dispute regarding the
completeness or accuracy of the information Case Bank and CENLAR furnished. 52 The
Complaint does allege that Case Bank and CENLAR updated and corrected the information they
furnished to the major credit reporting agencies concerning the debts on the Property. 53
However, the documents referenced in support of these allegations do not state that the credit
reporting agencies were ever informed that the updates and corrections were in response to a
dispute made by the Hansens. 54 And even if the Complaint alleged that TransUnion had prepared
a credit report containing the information furnished by Chase Bank and CENLAR, and that
TransUnion had notice of the Hansens’ dispute, there is no allegation that TransUnion failed to
follow reasonable procedures to reinvestigate the disputed information. 55
Therefore, the Hansens’ Complaint 56 fails to state a claim for violation of the FACTA
against TransUnion.
The Hansens’ Complaint fails to state a claim for violations of the CCRRA against
TransUnion
In asserting the Hanses’ claim for violation of the CCRRA against TransUnion, the
Complaint references the obligations the FCRA imposes on furnishers of information to credit
reporting agencies under 15 U.S.C. §§ 1681s-2(a) and 1681s-2(b). 57 Section 1681s-2(a) pertains

52

15 U.S.C. § 1681i; see also Wright, 805 F.3d at 1241-42.

53

Complaint at 5-7, ¶¶ 67, 70, 76, 79-80, 85, 88, 92, 94, docket no. 2, filed June 29, 2016.

54

Exhibit 4, docket no. 3-4, filed June 29, 2016; Exhibit 5, docket no. 3-5, filed June 29, 2016; Exhibit 67, docket
no. 6-7, filed June 29, 2016; Exhibit 70, docket no. 6-10, filed June 29, 2016; Exhibit 76, docket no. 6-16, filed
June 29, 2016; Exhibit 79, docket no. 6-19, filed June 29, 2016; Exhibit 80, docket no. 6-20, filed June 29, 2016;
Exhibit 84, docket no. 7-4, filed June 29, 2016; Exhibit 87, docket no. 7-7, filed June 29, 2016; Exhibit 91, docket
no. 7-11, filed June 29, 2016; Exhibit 93, docket no. 7-13, filed June 29, 2016.
55

15 U.S.C. § 1681i; Wright, 805 F.3d at 1241-42.

56

Docket no. 2, filed June 29, 2016.

57

Id. ¶¶ 121-124.

9

to the duty of furnishers to provide accurate information to credit reporting agencies. 58
Section 1681s-2(b) pertains the duties of furnishers to comply with certain investigative
procedures after receiving notice from a credit reporting agency that a consumer disputes the
completeness or accuracy of furnished information. 59 The Complaint also includes a generalized,
conclusory statement that:
125. Plaintiffs alleges that none of the [CCRRA’s] mandatory [investigative]
steps were followed and that the information given to the [credit reporting
agencies] was intended to disrupt the [CCRRA’s] procedure to create a
conclusionary prejudice inclined to trigger a derogatory credit history event that
even furnishers CENLAR and Chase admittedly knew and warned was a
likelihood of their actions. 60
The Complaint’s allegations are insufficient to state claim against TransUnion for
violations of the CCRRA. The Tenth Circuit has held that “while [the] FCRA allows federal
agencies and state officials to enforce the[] obligations [of Section 1681s-2(a)], it does not allow
consumers … a private right of action to do so.” 61 Therefore, even assuming that the Hansens’
Complaint includes allegations demonstrating that the duties of Section 1681s-2(a) apply to
TransUnion, which it does not, and allegations that TransUnion violated these duties, which it
also does not, any claim that TransUnion violated Section 1681s-2(a) fails as a matter of law.
Additionally, while a private right of action exists for violations of Section 1681s-2(b), 62
the Tenth Circuit has held that “[t]he furnisher’s duty to investigate arises only after a [credit
reporting agency] notifies the furnisher of a dispute and, conversely, does not arise when notice

58

15 U.S.C. § 1681s-2(a).

59

Id. § 1681s-2(b).

60

Complaint ¶ 125, docket no. 2, filed June 29, 2016.

61

Brunson v. Provident Funding Associates, 608 Fed. App’x 602, 611 (10th Cir. 2015) (citing Sanders v. Mountain
Am. Fed. Credit Union, 689 F.3d 1138, 1147 (10th Cir. 2012)); see also Pinson v. Equifax Credit Infor. Servs.,
Inc., 316 Fed. App’x 744, 751 (10th Cir. 2009); 15 U.S.C. § 1681s-2(c).
62

Sanders, 689 F.3d at 1147

10

is provided directly from a consumer.” 63 “Thus, a consumer cannot recover under
[Section] 1681s-2(b) if they do not initiate the process for recovery by notifying a [credit
reporting agency] of the dispute.” 64
The Hansens’ Complaint fails to allege sufficient facts, even upon information and belief,
to support a claim that TransUnion violated Section 1681s-2(b). There is no allegation that
TransUnion ever furnished inaccurate information to a credit reporting agency regarding the
Hansens. Indeed, the Complaint alleges that TransUnion is a credit reporting agency, not a
furnisher of information to credit reporting agencies. 65 There is also no allegation that the
Hansens, as consumers, ever initiated the investigative procedures of Section 1681s-2(b) by
providing notice of their dispute to TransUnion or any other credit reporting agency. Rather, the
Complaint alleges that the Hansens raised their dispute directly with Chase Bank and CENLAR,
and through the office of Senator Orrin Hatch. 66 And there is no allegation that Chase Bank or
CENLAR, as furnishers, or any other individual or entity ever provided TransUnion or any other
credit reporting agency with notice that the Hansens disputed the furnished information.
The closest the Complaint comes to alleging that the Hansens initiated the investigative
procedures of Section 1681s-2(b) is found in following allegation:
Either the [credit reporting agency] was not provided, with a [consumer dispute
verification form], containing sufficient detail to explain that this was a “taking”
and not a foreclosure type action, in which case the furnisher of information is to
blame for causing the negative credit report, or the furnisher did provide direct
information clearly classifying the transaction as a government taking based on
eminent domain and the [credit reporting agency] mischaracterized the transaction

63
Willis v. Capital One Corp., 611 Fed. App’x 500, 502 (10th Cir. 2015) (internal quotations omitted); see also
Sanders, 689 F.3d at 1147; Pinson, 316 Fed. App’x at 751.
64

Willis, 611 Fed. App’x at 502 (internal quotations omitted); see also Sanders, 689 F.3d at 1147; Pinson, 316 Fed.
App’x at 751.
65

Complaint at 5-7, ¶¶ 67, 70, 76, 79-80, 85, 88, 92, 94, docket no. 2, filed June 29, 2016.

66

Id. at 7, ¶¶ 65, 68, 72, 75, 82-83, 86, 89-90, 93, 98-99, 107, 118, 140.

11

as carrying a negative impact. The results were the same as neither the [credit
reporting agency] nor the furnisher satisfy the reasonable obligation test. 67
However, this allegation is generalized, conclusory, and argumentative. The allegation is also
found in a claim for failure to reasonably investigate after multiple contacts that is asserted
against Chase Bank and CENLAR, not TransUnion. 68 The allegation does not refer to
TransUnion as the relevant credit reporting agency. 69 Nor is the allegation incorporated into the
Hansens’ violations of the CCRRA claim against TransUnion. 70 Moreover, the allegation
acknowledges that the credit reporting agency may not have been provided with a consumer
dispute verification form. 71
Therefore, the Hansens’ Complaint fails to state a claim against TransUnion for violating
the investigative procedures of Section 1681s02(b). Accordingly, the Complaint 72 fails to state a
claim for violations of the CCRRA against TransUnion.
The argument and new theory of TransUnion’s liability in the Hansens’ Response to
TransUnion’s Motion to Dismiss do not save their claims from dismissal
In an attempt to recast their claims against TransUnion, the Hansens argue that this is a
case about TransUnion’s due diligence in receiving and publishing a negative credit entry. 73 For
the first time, the Hansens cite to 15 U.S.C. § 1681e(b) as the predicate for TransUnion’s
liability. 74 And for the first time, the Hansens argue that TransUnion negligently or willfully

67

Id. at 130.

68

Id. at ¶¶ 127-136.

69

Id. at ¶ 130.

70

Id. at ¶¶ 120-26.

71

Id. at ¶ 130.

72

Docket no. 2, filed June 29, 2016.

73

Plaintiff’s Response to Defendant TransUnion LLC’s Motion to Dismiss Under Rule 12(b)(6) for Failure to State
a Claim (“Hansens’ Response”) at 2, docket no. 36, filed Aug. 23, 2016.
74

Id. at 3.

12

transmitted credit reports containing the information Chase Bank and CENLAR furnished
concerning the debts on the Property. 75
“Normally a claim or theory that is not adequately raised in the complaint will not be
considered.” 76 However, the Tenth Circuit has recognized that “it might be appropriate for a
court to consider additional facts or legal theories asserted in a response brief to a motion to
dismiss if they [are] consistent with the facts and theories advanced in the complaint[.]” 77
“[Tenth Circuit] cases interpret the inclusion of new allegations in a response to a motion [to
dismiss], as a potential request to amend the complaint.” 78
Nevertheless, the Hansens have not requested leave to amend their Complaint. 79 And the
Hansens’ argument and new theory of TransUnion’s liability are deficient. To prevail on a claim
for violation of Section 1681e(b), the Hansens must establish: (1) TransUnion failed to follow
reasonable procedures to assure the accuracy of its reports; (2) the report in question was, in fact,
inaccurate; (3) the Hansens suffered injury; and (4) TransUnion’s failure caused their injury. 80
The Hansens still do not allege, even on information and belief, that TransUnion failed to
follow reasonable procedures to assure the accuracy of the information furnished by Chase Bank
and CENLAR. Nor do they allege that they, Chase Bank, CENLAR, or any other individual or
entity ever provided TransUnion with notice that the Hansens’ disputed the completeness or
accuracy of the furnished information. Rather, the Hansens seek discovery to uncover what

75

Id. at 4.

76

Fuqua v. Lindsey Mgmt. Co., Inc., 321 Fed. App’x 732, 734 (10th Cir. 2009).

77

Hayes v. Whitman, 264 F.3d 1017, 1025 (10th Cir. 2001).

78

Martinez v. Potter, 347 F.3d 1208, 1211 (10th Cir. 2003).

79

Hansens’ Response, docket no. 36, filed Aug. 23, 2016.

80

15 U.S.C. § 1681e(b); see also Eller, 739 F.3d at 473; Wright, 805 F.3d at 1239-40.

13

procedures TransUnion followed and to determine whether or not those procedures were
reasonable. 81
The official Federal Trade Commission commentary on Section 1681e(b) provides:
The section does not require error free consumer reports. If a consumer reporting
agency accurately transcribes, stores and communicates consumer information
received from a source that it reasonably believes to be reputable, and which is
credible on its fact, the agency does not violate this section simply by reporting an
item of information that turns out to be inaccurate. However, when a consumer
reporting agency learns or should reasonably be aware of errors in its reports that
may indicate systematic problems (by virtue of information from consumers,
report users, for periodic review of its reporting system, or otherwise) it must
review its procedures for assuring accuracy. Examples of errors that would
require such review are the issuance of a consumer report pertaining entirely to a
consumer other than the one on whom a report was requested, and the issuance of
a consumer report containing information on two or more consumers (e.g.,
information that was mixed in the file) in response to a request for a report on
only one of those consumers. 82
Considering this persuasive commentary, and in the absence of allegations that
TransUnion failed to follow reasonable procedures, and that TransUnion was ever aware, or
reasonably should have been aware, that the information Chase Bank and CENLAR furnished
was disputed by the Hansens, the Hansens fail to state a claim against TransUnion for violation
of Section 1681e(b). 83 Therefore, the argument and new theory of TransUnion’s liability in the
Hansens’ Response 84 do not save their claims from dismissal.

81

Hansens’ Response at 5, docket no. 36, filed Aug. 23, 2016

82

Cassara v. DAC Servs., Inc., 276 F.3d 1210, 1217 (10th Cir. 2002) (quoting 16 C.F.R. Part 600 App. (2000)).

83

Docket no. 2, filed June 29, 2016.

84

Docket no. 36, filed Aug. 23, 2016.

14

ORDER
IT IS HEREBY ORDERED that TransUnion’s Motion to Dismiss 85 is GRANTED.
Consequently, the Hansens’ third cause of action for violation of the FACTA 86 and fourth cause
of action for violations of the CCRRA87 against TransUnion are DISMISSED.
Signed March 27, 2017.
BY THE COURT

________________________________________
District Judge David Nuffer

85

Docket no. 26, filed Aug. 9, 2016.

86

Complaint ¶¶ 113-19, docket no. 2, filed June 29, 2016.

87

Id. ¶¶ 120-26.

15