Bibbs v. Trans Union LLC

43 F.4th 331

Marissa BIBBS, Appellant

v.TRANS UNION LLC

Michael Parke, Appellant

v.Trans Union LLC

Fatoumata Samoura, Appellant

v.Trans Union LLC

No. 21-1350

No. 21-1527

No. 21-1530

United States Court of Appeals, Third Circuit.

Argued on January 20, 2022

Opinion filed: August 8, 2022

Matthew B. Weisberg [ARGUED], Weisberg Law, 7 South Morton Avenue, Morton, PA 19070, Counsel for Appellants

Camille R. Nicodemus [ARGUED], Robert J. Schuckit, Schuckit & Associates, 4545 Northwestern Drive, Zionsville, IN 46077, Counsel for Appellee

Before: JORDAN, RESTREPO, and SMITH, Circuit Judges.

OPINION OF THE COURT

RESTREPO, Circuit Judge.

This matter was consolidated on appeal after originating from three separate district court cases claiming violations of the Fair Credit Reporting Act, et seq. ("FCRA"). 15 U.S.C. § 1681. Appellants Marissa Bibbs ("Bibbs"), Michael Parke ("Parke"), and Fatoumata Samoura ("Samoura") (collectively "Appellants")¹ borrowed student loans from various lenders, and they made payments on those loans until they were unable to do so. Eventually, their respective lenders closed their accounts and transferred their loans. Shortly after the transfers, Appellants viewed their credit reports published by Appellee Trans Union LLC ("Trans Union"), each of which contained a negative "Pay Status" notation stating ">Account 120 Days Past Due< ." The entries also stated that the loans were closed, transferred, and had account balances of zero. Appellants claim that the pay status notations were inaccurate because Appellants did not have any financial obligations to their previous lenders.

Appellants seek this Court's review of the district courts' orders granting Trans Union's motions for judgment on the pleadings. Specifically, Appellants challenge the standard the district courts applied to review the accuracy of their credit reports and the district courts' dismissal of Appellants' cases without ordering discovery. We will affirm the district courts' orders.

I. BACKGROUND

A. Factual Background.

Because this is a consolidated matter, we will provide facts common to all Appellants and note any relevant distinguishing factors. Bibbs² borrowed student loans from the Department of Education/Navient ("Navient"), and Parke³ and Samoura⁴ borrowed student loans from Fedloan Servicing ("Fedloan"). Following nonpayment by each Appellant, their respective lenders closed their accounts and transferred them. Once the loans were transferred, their account balances with Navient and Fedloan, respectively, immediately went to zero, and all of their payment obligations were transferred. See, e.g. , App. 22-25. "Under the "Date Closed" data point, the student loans also noted ">Maximum Delinquency of 120 days" and a range of dates. The range of dates corresponded to a table that appeared under the "Remarks" notice that reflected the "rating" of the loan. The rating reflected the payment history over the preceding months and whether the loan was delinquent or "OK". Id.

None of the parties dispute that Appellants failed to maintain timely payments on their loans and that Trans Union accurately reported Appellants' accounts as late until the dates they were closed and the balances were transferred. It is also undisputed that Appellants owed no balance to their previous creditors once their accounts were transferred. Nonetheless, each Appellant's credit report contained the same negative pay status notation: ">Account 120 Days Past Due Date< " ("Pay Status"). See, e.g. , App. 22-25. Appellants argue that the Pay Status notations on their credit reports are inaccurate and can mislead prospective creditors into incorrectly assuming that Appellants are currently more than 120 days late on loans that have been closed.

Shortly after each Appellant received their credit reports, their lawyer⁵ sent a letter to Trans Union disputing the accuracy of the report saying: "The following accounts have a balance of $0 with a late status. This is simply incorrect. If my client owes them no money and has no payments that are needed, then it is impossible for their current status to be listed as late." App. 18, 112, 150-151. Counsel then requested that the erroneous information be corrected or removed. Trans Union launched an investigation into each disputed claim and provided each Appellant with snapshots of their credit reports.⁶

Trans Union timely provided each Appellant with a report of the results of its investigation into their disputes ("Investigation Results"). We summarize Bibbs' Investigation Results report here, which is nearly identical to those of Parke and Samoura. The Investigation Results include a "Note on Credit Report Updates," which explains, for accounts "that have been closed and paid, Pay Status represents the last known status of the account." App. 20. It also provides definitions to help the requesting consumer understand the investigation results. Id. It provides a "Rating Key" to explain notations in the Investigation Results that indicate "the timeliness of [Bibbs'] payments for each month" the loan was held by Navient. Id. The "Rating Key" notes that "[a]ny rating that is shaded or any value in the account detail appearing with brackets (> < ) may indicate that it is considered adverse." Id. The substance of the Investigation Results includes a copy of the requesting consumer's information as it now "appears on [her] credit report following our investigation." App. 22. One of the six identical snapshot excerpts included in the district court's opinion demonstrates the following regarding Bibbs' accounts: they each "(1) have a zero-dollar balance; (2) were last updated on April 5, 2018; (3) were closed on April 5, 2018; (4) had a maximum delinquency of 120 days in July 2017 and in April 2018; and (5) were closed because Navient transferred them to another office." App. 87. Each snapshot includes information on the payment status of each of Bibbs' accounts up until March 2018 but not beyond then.

For all three Appellants, the snapshots and credit reports maintained the Pay Status notations indicating that their accounts were more than 120 days past their respective due dates. Following the letters from Appellants' attorney and the subsequent investigations, Trans Union did not update or correct the disputed information and, instead, stated that the reports were accurate.

B. Procedural Background

The procedural facts are nearly identical in each of the three consolidated matters and are therefore jointly summarized here. We will note any distinguishing relevant facts. Appellants each filed nearly identical complaints or amended complaints⁷ against Trans Union towards the end of 2020.⁸ The complaints alleged violations of the FCRA against Trans Union resulting from its issuing credit reports that contained inaccurate or misleading information about Appellants and its refusal to revise its reports in response to their complaints. Trans Union filed its answers to Appellants' operative complaints⁹ and then filed motions for judgment on the pleadings. The district courts in each of Appellants' matters entered an order and memorandum granting Trans Union's motions and denying Appellants' motions. This appeal followed. Bibbs, Parke, and Samoura's matters are consolidated before this Court.

II. JURISDICTION AND STANDARD OF REVIEW

We have jurisdiction under 28 U.S.C. § 1291. We review the denial of Appellants' motions for judgment on the pleadings de novo. Mid-Am. Salt, LLC v. Morris Cty. Coop. Pricing Council , 964 F.3d 218, 226 (3d Cir. 2020). We analyze a motion for judgment on the pleadings under Federal Rule of Civil Procedure Rule 12(c) "under the same standards that apply to a Rule 12(b)(6) motion." Wolfington v. Reconstructive Orthopaedic Assocs. II PC , 935 F.3d 187, 195 (3d Cir. 2019) (internal quotations omitted). Under Rule 12(c), "a court must accept all of the allegations in the pleadings of the party against whom the motion is addressed as true and draw all reasonable inferences in favor of the non-moving party." Allstate Prop. & Cas. Ins. Co. v. Squires , 667 F.3d 388, 390 (3d Cir. 2012) (citation omitted). A court may grant a Rule 12(c) motion "if, on the basis of the pleadings, the movant is entitled to judgment as a matter of law." Fed Cetera, LLC v. Nat'l Credit Servs., Inc. , 938 F.3d 466, 469 n.7 (3d Cir. 2019) (internal quotations and citation omitted). A plaintiff can survive a Rule 12(c) motion if her complaint contains "sufficient factual matter to show that the claim is facially plausible, thus enabling the court to draw the reasonable inference that the defendant is liable for [the] misconduct alleged." Warren Gen. Hosp. v. Amgen Inc. , 643 F.3d 77, 84 (3d Cir. 2011) (quoting Fowler v. UPMC Shadyside , 578 F.3d 203, 210 (3d Cir. 2009) ) (internal quotations omitted).

III. DISCUSSION

A. Background of the FCRA

The FCRA "was crafted to protect consumers from the transmission of inaccurate information about them, and to establish credit reporting practices that utilize accurate, relevant, and current information in a confidential and responsible manner." Cortez v. Trans Union, LLC , 617 F.3d 688, 706 (3d Cir. 2010) (internal quotations and citation omitted). "Congress intended to promote efficiency in the nation's banking system and to protect consumer privacy." Id. (citing TRW Inc. v. Andrews , 534 U.S. 19, 24, 122 S.Ct. 441, 151 L.Ed.2d 339 (2001) ); 15 U.S.C. § 1681(a). "The FCRA places certain duties on those who furnish information to consumer reporting agencies." SimmsParris v. Countrywide Fin. Corp. , 652 F.3d 355, 357 (3d Cir. 2011). For example, § 1681s-2(a)(2) requires furnishers to correct any information they later discover to be inaccurate. Furnishers must also provide consumer reporting agencies ("CRAs") with the "date of delinquency" when an account is placed for collection or charged to profit or loss. 15 U.S.C. § 1681s-2(a)(5)(A). Consumer agencies, for their part, must strive to "assure maximum possible...