ALexander v. Acceptance Now

1

MICHAEL F. ALEXANDER, Plaintiff v. ACCEPTANCE NOW, AMERICAN EXPRESS, BRIDGECREST FORMERLY DRIVETIME, CAPITAL ONE, CAPITAL ONE AUTO FINANCE, CREDENCE RESOURCE MANAGEMENT, ENHANCED RECOVERY COMPANY, FIRST PREMIER BANK, MIDLAND CREDIT MANAGEMENT, INC., PORTFOLIO RECOVERY, TBOM/OLLD CARD SERVICES, CHEX SYSTEM, INC., AND U.S. BANK CORPORATION, Defendants

No. 1:22-CV-00338-SPB-RAL

United States District Court, W.D. Pennsylvania, Erie Division

April 30, 2024

SUSAN PARADISE BAXTER UNITED STATES DISTRICT JUDGE.

REPORT AND RECOMMENDATION ON MOTIONS FOR JUDGMENT ON THE PLEADINGS

RICHARD A. LANZILLO CHIEF UNITED STATES MAGISTRATE JUDGE.

I. Recommendation

Pending are a motion for judgment on the pleadings (ECF No. 82) filed by Defendant ChexSystems, Inc. (“ChexSystems”) and a motion for judgment on the pleadings (ECF No. 89) filed by Defendants The Bank of Missouri and Fair Square Financial LLC, d/b/a Olio Card (“TBOM/OLLO”). It is respectfully recommended that both motions be GRANTED. To the extent the Complaint can be read as asserting claims under the Fair Debt Collection Practices Act (“FDCPA”) 15 U.S.C. § 1692, et seq., and the Equal Credit Opportunity Act (“ECOA”), 15 U.S.C. § 1691 et seq., it is further recommended that these claims be dismissed with prejudice.

IL Report

A. Introduction and Procedural History

Plaintiff Michael F. Alexander (“Alexander”) filed this pro se action in the Court of Common Pleas of Erie County, Pennsylvania, against thirteen Defendants, including ChexSystems, a consumer reporting agency (“CRA”), and TBOM/OLLO, a financial institution. ECF No. 1-1. His Complaint asserts varying claims against the Defendants for violation of the Fair Credit Reporting Act ("FCRA”), 15 U.S.C. § 1681, et seq., the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692, et seq., and the Equal Credit Opportunity Act (“ECOA”), 15 U.S.C. § 1691, et seq., although the only claim expressly asserted against ChexSystems and TBOM/OLLO is an FCRA claim. All claims are based on allegations that financial institutions reported inaccurate information to CRAs and the CRAs then included them on Alexander's credit reports.^[1] Alexander seeks compensatory and punitive damages as well as the removal of the contested debts from his credit reports.

Defendants removed the action to this Court pursuant to 28 U.S.C. § 1441 based on federal question subject matter jurisdiction conferred by 28 U.S.C. § 1331. See ECF No. 1. ChexSystems and TBOM/OLLO answered the Complaint, see ECF Nos. 41, 29, and now move for judgment on the pleadings pursuant to Fed.R.Civ.P. 12(c). See ECF Nos. 82, 89. They have also filed briefs in support of their motions. ECF Nos. 83 (ChexSystems), 90 (TBOM/OLLO). Alexander has filed a "Motion in Opposition to [ChexSystems'] Answer and Affirmative Defense to Plaintiffs Complaint,” which the Court liberally construes as a brief in opposition to ChexSystems' motion. See ECF No. 54. Alexander was directed to respond to TBOM/OLLO's motion by January 26, 2024. See ECF No. 91. When no response was received by the deadline, the Court issued a “show cause” order directing Alexander to either explain his failure or file his response by February 22, 2024. See ECF No. 93. As of the present date, Alexander has not filed a response to TBOM/OLLO's motion or the Court's order. The undersigned will therefore issue this Report and Recommendation on TBOM/OLLO's motion without the benefit of an opposition brief.

B. Material Facts

The few factual allegations of Alexander's Complaint relevant to ChexSystems and TBOM/OLLO are accepted as true for purposes of their pending motions. The claim against ChexSystems, a CRA, is based on it having falsely reported that Alexander owes $838.94 on U.S. Bank account no. 5022 and $218.93 on U.S. Bank account no. 1440. See ECF No. 1-1, ¶¶ 76-77. Alexander attached the two allegedly false ChexSystems credit reports to his Complaint. Id. at pp. 34-35. They record that both U.S. Bank accounts were reported for account abuse and had unpaid charge-offs in the specified amounts. Id. Alexander disputes both debts and asserts that he “never did business []or had an account” at U.S. Bank. Id. ¶ 81. Alexander has “filed an Identity Theft Report,” as well as “several dispute letters . . . challenging] the false and fraudulent reports to have them removed,” but ChexSystems has “continued to report this false, derogatory and inaccurate information.” Id. ¶ 78. Alexander asserts that ChexSystems' “actions and inactions have caused [him] harm directly by preventing [him] from obtaining reliable fair banking without high interest rates that are applied to the riskiest of investors.” Id. 79.

Alexander alleges that TBOM/OLLO falsely reported to CRAs that he owes $449.00 on TBOM/OLLO account no. 5379931002. Alexander disputes this debt and asserts that he “never did business nor had an account with” TBOM/OLLO. ECF No. 1-1, ¶ 71. Alexander contacted TBOM/OLLO, TransUnion, Experian, and Equifax “in an attempt to have the false information removed from [his] credit report,” but “[e]ach contact and dispute was returned as verified and accurate in regards to [account] # 5379931002.” Id. ¶ 72. Alexander also “filed an Identity Theft Report with the appropriate officials” at the CRAs regarding the disputed debt.^[2] Id. ¶ 73.

C. Standard of Review

“A motion for judgment on the pleadings under Rule 12(c) ‘is analyzed under the same standards that apply to a Rule 12(b)(6) motion.'” Woffington v. Reconstructive Orthopaedic Assocs. II PC, 935 F.3d 187, 195 (3d Cir. 2019) (quoting Revell v. Port Auth. of N.Y. & N.J, 598 F.3d 128, 134 (3d Cir. 2010)). A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of the complaint. See Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993). In deciding a Rule 12(b)(6) motion to dismiss, the court must accept as true all well-pled factual allegations in the complaint and views them in a light most favorable to the plaintiff. See U.S. Express Lines Ltd. v. Higgins, 281 F.3d 383, 388 (3d Cir. 2002). The “court[] generally consider[s] only the allegations in the complaint, exhibits attached to the complaint, matters of public record, and documents that form the basis of a claim” when considering the motion to dismiss. Lum v. Bank of Am., 361 F.3d 217, 222 n.3 (3d Cir. 2004) (citing In re Burlington Coat Factory Sec. Litig, 114 F.3d 1410, 1426 (3d Cir. 1997)).

Because Alexander is proceeding pro se, the allegations of his complaint will be held to “less stringent standards than formal pleadings drafted by lawyers.” Haines v. Kerner, 404 U.S. 519, 520-521 (1972). If the court can reasonably read a pro se litigant's complaint to state a valid claim upon which relief could be granted, it should do so despite the litigant's failure to cite proper legal authority, confusion of legal theories, poor syntax and sentence construction, or unfamiliarity with pleading requirements. See Boag v. MacDougall, 454 U.S. 364 (1982); United States ex rel. Montgomery v. Bierley, 141 F.2d 552, 555 (3d Cir. 1969) (petition prepared by a prisoner may be inartfully drawn and should be read “with a measure of tolerance”).

D. Discussion

Alexander claims that both ChexSystems and TBOM/OLLO have violated his rights under 15 U.S.C. § 168 lh(c), a provision of the FCRA that mandates that a CRA provide trained personnel to explain to the consumer certain statutorily prescribed information. See ECF No. 11, ¶¶ 75, 80. Both ChexSystems and TBOM/OLLO challenge the legal sufficiency of this claim, albeit on slightly different grounds. Although the Complaint asserts only an FCRA claim against ChexSystems and TBOM/OLLO, see id., Alexander argues in his opposition brief that he has alleged both an FDCPA claim and “Consumer Protection Act” claim against ChexSystems. See ECF No. 54, ¶ 6. Ordinarily, a plaintiff cannot amend his pleading to bring new claims in his opposition brief. However, “in keeping with its duty to ‘construe pro se complaints liberally,'” the undersigned will also address the viability of these claims. See Sproul v. Walmart, 2023 WL 2895644, at *1 (W.D. Pa. Apr. 11, 2023) (citing Bush v. City of Philadelphia, 367 F.Supp.2d 722, 725 (E.D. Pa. 2005)).

1. Alexander's Complaint fails to state a claim against ChexSystems under Section 1681h of the FCRA.

Congress passed the FCRA “to ensure fair and accurate credit reporting, promote efficiency in the banking system, and protect consumer privacy.” Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 52 (2007).^[3] See 15 U.S.C. § 1681(b). Consistent with FCRA's “consumer oriented objectives,” federal courts construe the Act liberally. See Harris v. Pa. Higher Educ. Assistance Agency/Am. Educ. Servs., 2016 WL 3473347, at *4 (E.D. Pa. June 24, 2016), affd 696 Fed.Appx. 87, 90 (3d Cir. 2017) (citing S.Rep. No. 91-517, at 3 (1969)). The FCRA places varying obligations on three types of entities: “(1) consumer reporting agencies,^[4] (2) users of consumer reports, and (3) furnishers^[5] of information to consumer reporting agencies.” Id. (citing 15 U.S.C. § 1681, et seq.).

Alexander asserts that ChexSystems' inaccurate inclusion of the two U.S. Bank debts violated § 1681 h(c), which requires CRAs “to retain ‘trained personnel' possessing the knowledge necessary to explain the information that is disclosed to consumer.” Gagliardi v Equifax Info. Servs., LLC, 2011 WL 337331, at *10-11 (W.D. Pa. Feb. 3, 2011). Section 1681g mandates that, upon request, CRAs furnish to consumers: “(1) All information in the consumer's file at the time of the request”; “(2) The sources of the information”; “(3)(A) Identification of each person .. . that procured a consumer report”; (4) The dates, original payees, and amounts of any checks...