The opinion of the court was delivered by: MARK FILIP, District Judge
MEMORANDUM OPINION AND ORDER
Plaintiff John Hinton filed this suit against Defendants Trans Union
LLC, Verizon Wireless, USA Funds, Diversified Credit, and Ford Motor
Credit, alleging various violations of the Fair Credit Reporting Act
("FCRA"), 15 U.S.C. § 1681 et seq.*fn1 On December 5, 2003, Magistrate
Judge Geraldine Soat Brown granted Mr. Hinton leave of court to file a
second amended complaint ("Amended Complaint" or "Am. Compl.") (D.E.
53), which added an additional count (Count VI) against Defendant USA
Funds under § 1681 b of the FCRA. This matter is before the Court on
Defendant USA Funds's 12(b)(6) Motion to Dismiss Count VI for Failure to
State a Claim ("Motion"). For the following reasons, Defendant USA
Funds's Motion is denied.
The following facts relevant to Count VI are taken from Mr. Hinton's
Amended Complaint, presented in the light most favorable to him, and accepted as
true for purposes of this Motion. Although it is not entirely clear, it
appears that USA Funds guaranteed (or was otherwise involved in) a student
loan that was extended to Mr. Hinton. (Am. Compl. ¶ 9,) That loan was
consolidated, and the original holder of the loan was paid in full, at
some point in September of 2000. (Id) As a consequence, Mr. Hinton's
liability to USA Funds was extinguished on September 12, 2000. (Id ¶
46.) Despite the original loan holder having been paid in full, however,
USA Funds reported inaccurate, negative credit information to credit
reporting agencies regarding Mr. Hinton's repayment of the student loan.
(Am. Compl. ¶¶ 9, 41-44.) Mr. Hinton filed suit on April 3, 2003. (D.E.
L.) During the course of this litigation, Mr. Hinton discovered that
sometime since March 1, 2003, USA Funds, without his permission, accessed
his credit report. (Id. ¶ 47.)
The purpose of a motion to dismiss under Rule 12(b)(6) is to test the
sufficiency of the complaint, not to decide the merits of the case. See
Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990), In
reviewing a motion to dismiss, the Court must construe all allegations in
the complaint in the light most favorable to the plaintiff and accept all
well-pleaded facts and allegations as true, See Bontkowski v. First Nat'l
Bank of Cicero, 998 F.2d 459, 461 (7th Cir. 1993). A complaint should
only be dismissed when "it appears beyond doubt that the plaintiff can
prove no set of facts in support of his claim which would entitle him to
relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957) III. Discussion
A. USA Funds Is a "Person" for Purposes of Section 1681 a(b) and
Therefore May Be Liable Under Section 1681 b(f)
USA Funds contends that Section "1681b only limits the dissemination of
consumer reports by `consumer reporting agencies.'" (Mem. of Law in
Supp. of Def's Motion ("Mem.") at 3.) USA Funds further contends that
"[b]ecause USA Funds, a `furnisher of information,' merely utilized a
consumer report, it cannot be held liable under § 168 lb." (Id, at 4
(emphasis added).) The Court respectfully disagrees. As discussed further
below, USA Funds cites outdated case law and an unpublished order of the
Seventh Circuit as authority for its argument that a "user" of a credit
report cannot be liable under Section 1681b. Simply put, USA Funds's
argument on this point is incorrect as a matter of law.
In 1996, Congress amended the FCRA, effective September 30, 1997, "to
add to [S]ection 168 lb a provision that forbids using or obtaining a
consumer report unless the report was obtained for a permitted purpose."
Phillips v. Grendahl, 312 F.3d 357, 364 (8th Cir. 2002) (citing
15 U.S.C. § 1681b(f)); see also, e.g., Myers v. Bennett Law Offices,
238 F. Supp.2d 1196, 1201 n.1 (D, Nev. 2002) ("Congress added [S]ection
1681b(f) to the statutory regime under the Consumer Credit Reporting Act
of 1996, Pub.L. No. 104-208, 110 Stat. 3009-426 . . ., in order to
expressly extend liability to users of credit reports."). The pre-1996
amendment version of Section 1681 b, "which generally stated the
circumstances under which consumer reporting agencies could provide
reports, did not impose a duty on users of reports to refrain from
requesting reports without a proper purpose." Phillips, 312 F.3d at 363.
However, the 1996 amendments added subsection (f) to Section 1681 b,
which provides that [a] person shall not use or obtain a consumer credit
report for any purpose unless (1) the consumer report
is obtained for a purpose for which the consumer
report is authorized to be furnished under this
section; and (2) the purpose is certified in
accordance with section 1681e of this title by a
prospective user of the report through a general or
15 U.S.C. § 1681b(f) (emphasis added). Section 1681 a(b) of the FCRA, in
turn, defines (he term "person" as "any individual, partnership,
corporation, . . . or other entity." 15 U.S.C. § 1681a(b).
Post 1996 amendment case law within this circuit all of which was in
existence prior to USA Funds's filing of its Motion reflects this
change. See, e.g., Chester v, Purvis, 260 F. Supp.2d 711, 718 n.1 (S.D.
Ind. 2003) ("[The statute] governs not merely obtaining a consumer credit
report, but using one as well.") (emphasis in original); Castro v. Union
Nissan, Inc., No. 01-4996, 2002 WL 1466810, at *3 (N.D. Ill, July 8,
2002) ("[T]he statute itself makes clear that a person or entity that
uses or obtains a consumer's credit report . . . may be found civilly
liable to that consumer.") (citing 15 U.S.C. § 1681b(f)); Del Amora v.
Metro Ford Sales and Serv., Inc., 206 F. Supp.2d 947, 949 (N.D. Ill.
2002) ("The FCRA prohibits any person from using or obtaining a consumer
report for other than permissible purposes.") The pre-1996 amendment case
law discussing the scope of Section 1681b cited by USA Funds is
In both its Motion and its Reply Memorandum in Support of its Motion
("Reply"), USA Funds cites Dumas v. City of Chicago, 234 F.3d 1272 (7th
Cir. 2000) (unpublished table order), for the proposition that Section
1681b only "imposes civil liability only for the dissemination of
consumer credit reports by consumer reporting agencies. . . ." (Mem. at
3; Reply at 4.) USA Funds's "citation of this case and the failure to
provide an explanation in a parenthetical or otherwise indicate that it is
an unpublished [order] is, to say the least, somewhat misleading." Anzaluda v. Chicago Transit Auth, No. 02-2902, 2003 WL 124462, at *3
(N.D. Ill. Jan, 14, 2003). Local Circuit Rule 53 specifically provides
that such an order is not to be cited or used as precedent "in any
federal court within this circuit in any written document" 7th Cir. Rule
53(b)(2)(iv)(a), Even if the Court were permitted to consider Dumas
(which it is not), Dumas relies on pre-1996 amendment case law as support
for what appears to be an alternative basis for its holding and
therefore, as set forth above, is similarly inapposite.
B. Mr. Hinton's Allegations Are Sufficient Under the Federal Rules of
USA Funds takes issue with Mr. Hinton's factual allegations and argues
that Count VI should be dismissed because Mr. Hinton "must allege and
establish that USA Funds obtained the consumer report for an
impermissible purpose." (Mem. at 4.) The Court respectfully disagrees.
Under Federal Rule of Civil Procedure 8(a)(2), Count VI of Mr. Hinton's
Amended Complaint must only contain a "short and plain statement of the
claim showing that [he] is entitled to relief." Fed.R. Civ. P, 8(a)(2).
Mr. Hinton's Amended Complaint alleges, among other things, that USA
Funds impermissibly accessed his credit report, that USA Funds did not
have a legitimate business reason to do so (an allegation that the Court
construes as a statement that USA Funds did not have a permissible
purposes to obtain or use the report), and that he has suffered damages as
a result. (Am. Compl. ¶ 47.) Accordingly, Mr. Hinton's allegations are
sufficient under Federal Rule 8(a)(2), and "[a] complaint ...