Humphrey, Ian v. Equifax Information Services LLC et al

Filing 69

OPINION & ORDER granting 36 Motion for Judgment on the Pleadings; granting 43 Motion to Join; denying 44 Motion for Hearing; granting 50 Motion to Join; denying 51 Motion to Stay; denying as moot 52 Motion for Leave to File; granting in part and denying in part 53 Motion to Amend/Correct; denying 62 Amended Motion for Leave to File; granting 67 Motion to Join. Signed by District Judge James D. Peterson on 4/17/2017. (kwf)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN

IAN HUMPHREY,
Plaintiff,
v.

OPINION & ORDER

TRANS UNION LLC, NAVIENT SOLUTIONS, LLC,
EQUIFAX INFORMATION SERVICES LLC, and
EXPERIAN INFORMATION SOLUTIONS INC.,1

16-cv-370-jdp

Defendants.
Plaintiff Ian Humphrey brings claims against several consumer reporting agencies—
Trans Union, LLC, Equifax Information Services LLC, and Experian Information Solutions
Inc.—and his former loan servicer, Navient Solutions, LLC, for violations of the Fair Credit
Reporting Act, 15 U.S.C. § 1681 et seq. Humphrey alleges that Navient misreported to the
consumer reporting agencies that he had failed to make required payments on his student
loan accounts. As a result, the consumer reporting agencies reported inaccurate information
about Humphrey.
Now Trans Union has moved for judgment on the pleadings, pursuant to Federal Rule
of Civil Procedure 12(c). Dkt. 36. The court has already granted Experian’s motion to adopt
and join Trans Union’s motion, Dkt. 38 and Dkt. 39, and the court will grant Experian’s
motion to adopt and join Trans Union’s reply brief, Dkt. 43, and Equifax’s motion to adopt
and join Trans Union’s motion, Dkt. 50. Thus, the motion is brought, in effect, on behalf of
all three consumer reporting agency defendants.

The court acknowledges Navient’s name change, Dkt. 48, and has amended the caption
accordingly.
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Humphrey’s real issue is with Navient; he does not have any actionable claims against
the consumer reporting agencies, so the court will grant their motion for judgment on the
pleadings. The court will for the most part deny the various motions that Humphrey has filed
since the parties completed briefing on the Rule 12(c) motion.

ALLEGATIONS OF FACT
The court draws the following facts from Humphrey’s second amended complaint,
Dkt. 29, accepting them as true for purposes of the motion for judgment on the pleadings.
Finch v. Peterson, 622 F.3d 725, 728 (7th Cir. 2010).
Humphrey had student loans; Navient serviced the loans. In August 2011, Navient
sent Humphrey an “expired” Total Permanent Disability Discharge application form,
presumably because Humphrey intended to apply for the discharge and requested the
necessary forms. It is unclear what “expired” means in this context; the court infers that the
application form was somehow defective. And so Navient denied Humphrey’s application on
October 23, 2011, for that reason. Around eight or nine months later, Humphrey called
Navient and complained that it had sent him an expired application form. Apparently this
phone call accomplished little, because Navient sent Humphrey a second expired application
form. Humphrey called Navient a second time, and Navient assured Humphrey that it would
accept his application. But Navient denied Humphrey’s second application on November 26,
2012. A year or so later, Humphrey and Navient engaged in some type of alternative dispute
resolution, via the Department of Education Ombudsman Group. On June 5, 2014, the
Department of Education approved Humphrey’s Total Permanent Disability Discharge

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application, “for identical reasons, and on [the] same physicians’ credentials, [as] were
previously denied.” Dkt. 29, ¶ 19.
Since then, Navient has reported and continues to report to consumer reporting
agencies that Humphrey did not make required payments from September through
December 2012 and July through December 2013. Humphrey alleges that, “[o]n information
and belief, the Derogatory Information was false, as Humphrey was not required to make
payments to Navient during the 120-day period after he notified them of his intent to file a
discharge application nor during Navient’s review period.” Id. ¶ 21. Humphrey disputed the
reports of non-payment with Navient; Navient stood by the information it reported.
Humphrey also disputed the reports with the consumer reporting agencies—Trans Union,
Equifax, and Experian (CRAs)—and the agencies reported the disputes to Navient. Navient
responded by validating all loan items. The CRAs continued to report the “derogatory
information.”
Humphrey requested that the CRAs “reinvestigate” the non-payment issue and asked
for information regarding how each verified the information. Humphrey summarily alleges
that, “[o]n information and belief, [the CRAs] did not conduct a reasonable investigation
into the accuracy of [their] reporting of Humphrey’s accounts with Navient.” Id. ¶¶ 30, 32,
34. Humphrey continued to dispute the non-payment issue with defendants in 2015.
Humphrey brings claims against the CRAs for willful and negligent violations of the
FCRA for “failing to follow reasonable procedures to assure maximum possible accuracy of
the information in consumer reports,” failing to comply with the FCRA’s reinvestigation
requirements, and failing to give Humphrey his credit file. Id. ¶¶ 71, 79. Humphrey brings
claims against Navient for failing to investigate the information it reported, failing to review

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all information it received from the CRAs, failing to report the results of its investigation to
the CRAs, failing to report that the information is supplied was inaccurate, and failing to
modify, delete, or permanently block the inaccurate information.
The court has subject matter jurisdiction over Humphrey’s claims pursuant to 28
U.S.C. § 1331, because they arise under federal law.

ANALYSIS
A. Motion for judgment on the pleadings
The CRAs have moved for judgment on the pleadings as to all of Humphrey’s claims
against them. The court will grant judgment on the pleadings “[o]nly when it appears beyond
a doubt that the plaintiff cannot prove any facts to support a claim for relief and the moving
party demonstrates that there are no material issues of fact to be resolved.” Moss v. Martin,
473 F.3d 694, 698 (7th Cir. 2007). The court reviews motions for judgment on the pleadings
under the same standard as motions to dismiss for failure to state a claim upon which relief
can be granted, although under Rule 12(c) the court considers all pleadings, not just the
complaint. N. Ind. Gun & Outdoor Shows, Inc. v. City of S. Bend, 163 F.3d 449, 452 (7th Cir.
1998). “The essence of the motion is not that the plaintiff has pleaded insufficient facts, it is
that even assuming all of her facts are accurate, she has no legal claim.” Brown v. Pick ’N Save
Food Stores, 138 F. Supp. 2d 1133, 1136-37 (E.D. Wis. 2001) (citing Payton v. RushPresbyterian-St. Luke’s Med. Ctr., 184 F.3d 623, 627 (7th Cir. 1999)).
Before we turn to the merits, Humphrey requests oral argument on the pending 12(c)
issues. Humphrey contends that oral argument is necessary “for the Court to determine
whether Humphrey’s allegations deal with factual inaccuracies in Trans Union’s and

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Experian’s reporting.” Dkt. 44, at 1. But as explained, Rule 12(c) considers the legal
sufficiency of Humphrey’s claims as plead. The parties had the opportunity to fully brief the
salient issues, and the court will not entertain oral argument simply to allow Humphrey a
second opportunity to make his case. Humphrey has not explained why oral argument is
necessary; he reiterates his Rule 12(c) arguments and states that “Trans Unions and Experian
should not be permitted the chance to win dismissal without defending their errant position
in oral arguments.” Id. at 3. But the court is satisfied that it is able to fully and fairly resolve
the motion on the parties’ written submissions, and the court will deny Humphrey’s motion.
The court must determine whether Humphrey has identified any actionable claims
against the CRAs. Humphrey alleges that the CRAs violated two FCRA provisions:
§ 1681e(b) for failure to “follow reasonable procedures to assure maximum possible
accuracy,” and § 1681i for failure to comply with reinvestigation requirements.2 To state a
claim under either section, Humphrey must allege that the CRAs prepared reports containing
inaccurate information. See Wantz v. Experian Info. Sols., 386 F.3d 829, 834 (7th Cir. 2004)
(“In the absence of evidence that Experian disclosed incorrect information . . . Wantz cannot
even show that it violated the Act’s reinvestigation requirement [i.e., § 1681i].”), abrogated on
other grounds by Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47 (2007); Henson v. CSC Credit Servs.,
29 F.3d 280, 284 (7th Cir. 1994) (as to § 1681e(b)); see also Omar v. Experian Info. Sols., Inc.,

Humphrey alleges that the CRAs also violated § 1681g when they failed to provide him his
credit file. But, as Trans Union points out, Humphrey does not allege that he requested his
credit file, so these claims necessarily fail. See § 1681g(a)(1) (“Every consumer reporting
agency shall, upon request, . . . clearly and accurately disclose to the consumer . . . [a]ll
information in the consumer’s file at the time of the request.” (emphasis added)).
2

Humphrey does not mention or defend his § 1681g claims in his briefing, so, presumably, he
has decided to drop them.

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No. 10-cv-1047, 2012 WL 2930778, at *4 (S.D. Ind. July 18, 2012) (“It is seemingly selfevident that a plaintiff cannot have a viable claim under the FCRA unless his credit report is
somehow inaccurate.”).
And the purportedly inaccurate information must be actually, factually inaccurate.
DeAndrade v. Trans Union LLC, 523 F.3d 61, 66-67 (1st Cir. 2008) (collecting cases and
stating, “It is thus clear that to prevail on a § 1681e(b) claim, a plaintiff must demonstrate
that his or her credit report sports an actual inaccuracy. . . . [And] the weight of authority . . .
indicates that without a showing that the reported information was in fact inaccurate, a claim
brought under § 1681i must [also] fail.”). Here, at first blush, it appears that the CRAs
reported factually accurate information: they reported Humphrey’s delinquencies as Navient
reported them, and Navient verified the accuracy of its information after Humphrey pressed
the issue. Humphrey disputes the “accuracy” of the information because he does not believe
that he missed required payments.
The DeAndrade line of cases confirms that this type of “inaccuracy” is not actionable
against reporting agencies. A credit report contains factual inaccuracies if the reporting
agency could have uncovered the purported inaccuracy had they reasonably reinvestigated.
Id. at 68; see also Cahlin v. Gen. Motors Acceptance Corp., 936 F.2d 1151, 1160 (11th Cir. 1991)
(A § 1681i(a) “claim is properly raised when a particular credit report contains a factual
deficiency or error that could have been remedied by uncovering additional facts that provide
a more accurate representation about a particular entry.”). Reporting agencies are not courts:
they are not required to investigate and adjudicate legal disputes regarding the validity of
underlying debts. Brill v. Trans Union LLC, No. 15-cv-300, 2015 WL 9095103, at *4 (W.D.
Wis. Dec. 16, 2015) (“[C]redit reporting agencies are not tribunals. They simply collect and

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report information furnished by others.” (quoting Carvalho v. Equifax Info. Servs., LLC, 629
F.3d 876, 891 (9th Cir. 2010))), aff’d sub nom. Brill v. TransUnion LLC, 838 F.3d 919 (7th
Cir. 2016). When a consumer claims that he is not legally obligated to pay a reported debt,
he typically has a claim against the creditor, not the reporting agencies. The creditor is the
proper target, as it “is in a much better position to determine the authenticity of its own
records.” Id. at *3 (collecting cases).
Here, Humphrey does not allege that there were additional facts that the CRAs could
have uncovered that would have prompted them to correct the purported inaccuracy. In fact,
Humphrey does not identify anything specific that the CRAs could have or should have done
differently. Well, he does argue that they should have read, analyzed, and applied applicable
federal regulations and concluded that Humphrey was not legally obligated to make payments
during the time periods at issue. But, as discussed, they were not required to do what
amounts to an adjudication of his complaint against Navient.
Humphrey’s story is relatively straightforward: he did not make a number of loan
payments to Navient, ostensibly because he did not have to; Navient reported that the
accounts were delinquent and confirmed as much to the CRAs; and Humphrey suffered for it.
Humphrey’s fight is with Navient, not the CRAs. Where the validity of the reported
information turns on questions of law, there is no factual inaccuracy, and the consumer has
no actionable FCRA claims against the reporting agencies. Thus, the court will grant the
CRAs’ motion for judgment on the pleadings and dismiss Humphrey’s claims against them.

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B. Remaining motions
1. Motion to stay
First, the court will deny Humphrey’s motion to stay. Dkt. 51. Humphrey requests
that the court stay its decision on the Rule 12(c) motion to allow him the opportunity to
amend his complaint. But Humphrey’s proposed third amended complaint—containing
several new factual allegations in support of his claims against the CRAs—does not change
the foregoing analysis or save his claims against the CRAs.3 So there is no reason to allow
those amendments or stay the decision on the CRAs’ motion.
2. Motion to modify schedule
Second, the court will for the most part deny Humphrey’s motion to modify the
schedule. Dkt. 53. Humphrey asks for a brand new schedule. He states that discovery has
been “on hold” pending resolution of the Rule 12(c) motion. But that was a choice the
parties made; the court did not stay discovery. In fact, the court was under the impression
that the parties were conducting discovery. Similarly, Humphrey complains that Navient has
been unwilling to produce discovery without a protective order in place. But fact that the

Humphrey attempts to beef up his allegations that he was not required to make payments
“from the time he filed an application for total permanent disability discharge until the time
the loan servicer (or lender) approved or denied that application.” Dkt. 61, ¶ 20; see also id.
¶ 21 (“Humphrey was not required to make payments to Navient for some or all of the
months of September-December 2012, and therefore was not delinquent when he did not
make them.”); id. ¶¶ 22-23 (“From July 2013 onward, a student loan borrower such as
Humphrey was not required to make payments to the loan servicer (or lender) for a period of
120 days from the time he provided the loan servicer (or lender) a notice of his intent to file
an application for total permanent disability discharge. Humphrey was not required to make
payments to Navient for some or all of the months of July-December 2013, and therefore was
not delinquent when he did not make them.”). Humphrey alleges that his claims against the
CRAs “stem from the errant reporting of delinquencies on his Navient accounts as conduct
prohibited by the FCRA, and are not based at all on any legal dispute between him and
Navient.” Id. ¶ 73. But his allegation that it is not a legal dispute does not make it so.
3

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parties did not move for a protective order until five months after discovery began was a
problem of their own making. Now Humphrey complains that his expert disclosure deadline
is fast approaching (it has actually passed, at this point) and that he has been unable to
retain experts without discovery. Maybe Humphrey is correct, that he “has been stymied
from obtaining important documents, answers, and admissions.” Dkt. 63, at 3. But
Humphrey is to blame for his current situation: he agreed to stay discovery, he did not pursue
a protective order sooner, and he did not move to compel production (assuming defendants
were as uncooperative as Humphrey describes). This indicates that Humphrey at least
passively—if not actively—agreed to stall discovery. Humphrey has not been “unable” to
conduct discovery.
Humphrey is right about one thing: he is in a bind. But it is a bind of his own making.
This district does not offer extensions or completely reset schedules cavalierly. But the court
is not totally unsympathetic to the reality of the situation. The court will reset the expert
disclosure deadlines, as Humphrey’s has passed. The proponents’ expert disclosure deadline is
reset to May 1, 2017. Respondents’ is reset to June 1, 2017. And, as a result, the dispositive
motion deadline is reset to June 15, 2017. The court will not move any other deadlines.
3. Motions for leave to amend
And finally, the court will deny Humphrey’s motions for leave to amend his
complaint. Dkt. 52 and Dkt. 62.4 Humphrey has filed a proposed third amended complaint.
Dkt. 61. In addition to new factual allegations, Humphrey incorporates four new claims

The court will grant Equifax’s motion to adopt and join Trans Union’s response to
Humphrey’s motion for leave to amend. Dkt. 67.
4

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against Navient: violation of “Regulation V” (12 C.F.R. § 1022), negligence, breach of the
covenant of good faith and fair dealing, and unjust enrichment.
The court will freely grant leave to amend when justice so requires, but the court need
not allow leave to amend when there is undue delay, bad faith, dilatory motive, undue
prejudice to the opposing party, or when the amendment would be futile. Foman v. Davis, 371
U.S. 178, 182 (1962); Bethany Pharmacal Co. v. QVC, Inc., 241 F.3d 854, 860-61 (7th Cir.
2001). Humphrey’s new claims against Navient are late and futile. Humphrey offers no
explanation for why he could not have pleaded the new claims against Navient from the
beginning. In fact, according to Humphrey, he has not had the opportunity to conduct any
discovery, so he did not learn any new information that could have given rise to new claims
along the way. Regardless, the claims are futile and, as drafted, would not withstand a motion
to dismiss for failure to state a claim upon which relief can be granted.
First, Humphrey alleges that Navient failed to “establish and implement reasonable
written policies and procedures regarding the accuracy and integrity of the information” it
reported, in violation of 12 C.F.R. § 1022.42(a), and failed to “conduct a reasonable
investigation of [Humphrey’s] direct dispute[s],” in violation of 12 C.F.R. § 1022.43. But, as
Navient points out, it is not clear that the C.F.R.s create a private right of action for a
furnisher’s failure to comply with the regulation, separate from the FCRA. 15 U.S.C
§ 1681s-2 recognizes that there is a private right of action for claims regarding willful or
negligent violations of the FCRA by furnishers—not violations of the regulations. See 15
U.S.C. § 1681s-2(c), (d) (permitting private enforcement of § 1681s-2(b) pursuant to
§ 1681n and § 1681o). Humphrey is already bringing such claims against Navient.
Humphrey has not demonstrated how this claim under the regulation is actionable.

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Second, Humphrey alleges that Navient was negligent when it gave him expired
discharge applications. But Humphrey does not flesh out a viable negligence theory. He does
not allege that Navient owed Humphrey a duty; he summarily alleges that Navient “failed to
exercise ordinary care.” Dkt. 61, ¶ 105. To state a common-law negligence claim, Humphrey
must establish the existence of a duty of care, that Navient breached that duty, a causal
connection between the breach and Humphrey’s alleged injury, and actual loss or damage.
Nichols v. Progressive N. Ins. Co., 2008 WI 20, ¶ 11, 308 Wis. 2d 17, 746 N.W.2d 220.
Humphrey’s claim, as pleaded, would not survive a motion to dismiss for failure to state a
claim upon which relief can be granted.
Third, Humphrey alleges that Navient violated its duty of good faith and fair dealing
when it gave him expired discharge applications. Under Wisconsin law, every contract
contains an implied duty of good faith in its performance and enforcement. Wis. Stat.
§ 401.304; see also Foseid v. State Bank of Cross Plains, 197 Wis. 2d 772, 541 N.W.2d 203, 213
(Ct. App. 1995). A breach of the implied duty of good faith is a breach of the contract. Foseid,
541 N.W.2d at 212. Generally, “[t]he implied covenant of good faith prevents parties to a
contract from ‘intentionally and purposely do[ing] anything to prevent the other party from
carrying out his or her part of the agreement.’” Non Typical Inc. v. Transglobal Logistics Grp.
Inc., No. 10-cv-1058, 2011 WL 1792927, at *6 (E.D. Wis. May 11, 2011) (quoting Tang v.
C.A.R.S. Prot. Plus, Inc., 2007 WI App 134, ¶ 41, 301 Wis. 2d 752, 734 N.W.2d 169). So
“to state a claim for breach of duty of good faith, a plaintiff must allege facts ‘that can
support a conclusion that the party accused of bad faith has actually denied the benefit of the
bargain originally intended by the parties.’” Uebelacker v. Paula Allen Holdings, Inc., 464 F.
Supp. 2d 791, 803 (W.D. Wis. 2006) (quoting Zenith Ins. Co. v. Emp’rs Ins., 141 F.3d 300,

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308 (7th Cir. 1998)). Humphrey has not stated a claim for breach of the duty of good faith
and fair dealing because he has not pleaded the existence of a contract between Navient and
Humphrey or a breach of that contract.
Finally, Humphrey alleges that “[a]ll payments made by Humphrey to Navient
following its first rejection of his application for total permanent disability discharge are
conferred upon Navient by Humphrey,” creating unjust enrichment. Dkt. 61, ¶ 115. It
appears that Humphrey is alleging that all payments made after Navient rejected his
discharge application qualify as unjust enrichment because Navient should have discharged
the loan (the only reason it did not discharge the loan was because Humphrey submitted an
expired application form, which he received from Navient). “To prevail on an unjustenrichment claim, a plaintiff must prove three elements: ‘(1) a benefit conferred upon the
defendant by the plaintiff, (2) appreciation by the defendant of the fact of such benefit, and
(3) acceptance and retention by the defendant of the benefit, under circumstances such that
it would be inequitable to retain the benefit without payment of the value thereof.’” Lindquist
Ford, Inc. v. Middleton Motors, Inc., 557 F.3d 469, 477 (7th Cir. 2009) (quoting Seegers v.
Sprague, 70 Wis. 2d 997, 236 N.W.2d 227, 230 (1975)). Unjust enrichment is a quasicontractual “legal cause of action governed by equitable principles.” Id. at 476-77. It is
possible that Humphrey may have an unjust enrichment claim against Navient, if he is able to
prove that they should not have kept payments made after Navient should have granted the
discharge. But Humphrey’s allegations are insufficiently developed, generalized, and do not
actually state that Humphrey made such payments to Navient. Humphrey’s claim, as drafted,
is conclusory and fails to state a claim.

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The court will deny Humphrey leave to amend his second amended complaint
because he has not explained why the proposed amendments are timely and viable.

ORDER
IT IS ORDERED that:
1. Defendant Experian Information Solutions Inc.’s motion to adopt and join,
Dkt. 43, is GRANTED.
2. Defendant Equifax Information Services LLC’s motions to adopt and join, Dkt. 50
and Dkt. 67, are GRANTED.
3. Plaintiff Ian Humphrey’s motion for oral argument, Dkt. 44, is DENIED.
4. Defendant Trans Union, LLC’s motion for judgment on the pleadings, Dkt. 36, is
GRANTED. Plaintiff’s claims against defendants Trans Union, Equifax, and
Experian are dismissed.
5. Plaintiff’s motion to stay, Dkt. 51, is DENIED.
6. Plaintiff’s motion to modify the schedule, Dkt. 53, is GRANTED in part and
DENIED in part. The proponents’ expert disclosure deadline is reset to May 1,
2017. Respondents’ is reset to June 1, 2017. And, as a result, the dispositive
motion deadline is reset to June 15, 2017. All other deadlines remain in place.
7. Plaintiff’s motion for leave to amend, Dkt. 52, is DENIED as moot, and his
amended motion for leave to amend, Dkt. 62, is DENIED.
Entered April 17, 2017.
BY THE COURT:
/s/
________________________________________
JAMES D. PETERSON
District Judge

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