United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
JOHN J. THARP, Jr., District Judge.
Plaintiff Jasmine Taylor ("Taylor"), individually and on behalf a class, brings this action against Screening Reports, Inc. ("SRI") for negligently or willfully violating § 1681e(b) of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681 et seq. Taylor alleges that SRI created a background report that contained inaccurate information about an eviction case filed against her, and that this report led a leasing company to deny Taylor's application to rent an apartment. Before the Court is SRI's motion to dismiss the Second Amended Complaint (the "Complaint" or "SAC") for failure to state a claim. Dkt. 49. For the reasons discussed below, the motion to dismiss is granted in part and denied in part.
Jasmine Taylor is an individual residing in Illinois. SRI is an Illinois corporation that provides rental background screening reports for landlords and management companies to use when evaluating potential apartment tenants; SRI provides 800, 000 such reports nationally each year. The reports are customized for clients' specific needs and can include information such as employment verification, consumer credit reports, and eviction reports. Notably, SRI's eviction reports list all eviction cases that were filed against the report subject, not just those cases which resulted in a judgment of eviction. When preparing a report on an eviction case, SRI typically does not review the court records or perform any other investigation to determine whether there has been a disposition of eviction or when any such disposition occurred. Instead, SRI's standard practice is to report a disposition of eviction as occurring on the date each eviction case was filed, regardless of the actual status or timeline of the case. Further, even when an eviction case against the report subject is clearly related to a foreclosure action against another party, SRI does not include any indication of that fact in its report. See SAC, Dkt. 44-1, ¶¶ 10, 13, 32, 39, 57, 58.
Taylor lived at 7750 S. Saginaw Avenue in Chicago, Illinois (the "Saginaw property"), until approximately 2004. Bank of America filed a foreclosure action for the property in 2009 and ultimately obtained a judgment of foreclosure against the property owners, Henry and Della Walton, in 2011. On December 20, 2012, although the Saginaw property was then vacant and Taylor had not lived there since 2004, Bank of America filed an eviction complaint which falsely alleged that Taylor was residing on the premises. The Circuit Court of Cook County authorized service by publication after attempts at personal service were unsuccessful; Taylor did not receive actual notice of the complaint. On February 14, 2013, after Taylor failed to appear for the eviction trial which had been set for 9:30 a.m. that morning, the court entered an order of possession granting Bank of America the right to evict Taylor from the property. See SAC, Dkt. 44-1, ¶ 23; Ex. C to SAC, Dkt. 44-1, at 27; Ex. D to SAC, Dkt. 44-1, at 34; Ex. E to SAC, Dkt. 44-1, at 38. Pursuant to an Illinois statute,  the eviction case was immediately sealed after entry of the order of possession. See SAC, Dkt. 44-1, ¶¶ 23, 25; Resp., Dkt. 52, at 5.
While the eviction case against her was pending, Taylor applied to rent an apartment from Boggs Management, which then requested a rental background report on Taylor from SRI. Boggs Management requested that the report include a recommendation as to whether Taylor's application should be denied based on over a dozen factors, including the existence of any eviction cases filed against her within the past 84 months. See SAC, Dkt. 44-1, ¶ 38; Ex. F to SAC, Dkt. 44-1, at 41. SRI prepared the requested report in accordance with its standard practices and issued the finalized report at 10:10 a.m. on February 14, 2013, the same day that Taylor's eviction from the Saginaw property was authorized and the eviction case against her was sealed. See SAC, Dkt. 44-1, ¶¶ 25, 57. SRI did not have actual notice of the fact that the court had authorized the eviction when it issued its report. See SAC, Dkt. 44-1, ¶¶ 30, 32, 36; Resp., Dkt. 52, at 5.
In its report, SRI recommended that Boggs Management deny Taylor's application because: (1) she failed one of the credit score criteria, and (2) she had an eviction case filed against her within the previous 84 months. See Ex. F to SAC, Dkt. 44-1, at 40-42; see also SAC, Dkt. 44-1, ¶ 38. The eviction section of the report consisted of two rows containing a total of six items of information about the eviction case. The items in the first row were labeled "Plaintiff, " "County, " and "Date"; the items in the second row were labeled "Disposition, " "Address, " and "Case Number." The report listed "12/20/2012" as the date entry and "EVICTION" as the disposition entry. After receiving SRI's report, Boggs Management rejected Taylor's application to rent an apartment. Ex. F to SAC, Dkt. 44-1, at 42.
Taylor subsequently sued SRI on behalf of herself and a class, alleging that SRI had violated § 1681e(b) of the FCRA by failing to employ reasonable procedures in preparing its reports and producing inaccurate reports as a rule of its deficient procedures. Specifically, the Complaint asserts that SRI's report on Taylor contained inaccurate information about her eviction case and that as a result of those inaccuracies: (1) Taylor's rental application was rejected and she was unable to rent the apartment she desired, (2) Taylor had to spend time and money looking for another apartment, (3) Taylor had to spend time and money "dealing with" SRI's report, and (4) Taylor suffered embarrassment and humiliation. SAC, Dkt. 44-1, ¶¶ 47-49.
"To survive a motion to dismiss under Rule 12(b)(6), a complaint must state a claim to relief that is plausible on its face.'" Adams v. City of Indianapolis, 742 F.3d 720, 728 (7th Cir. 2014) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.'" Id. (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). Although a court must accept all of the plaintiff's factual allegations as true when reviewing the complaint, conclusory allegations merely restating the elements of a cause of action do not receive this presumption. Id. "Where a complaint pleads facts that are merely consistent with' a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief.'" Id. (quoting Twombly, 550 U.S. at 557).
The FCRA requires that "[w]henever a consumer reporting agency prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates." 15 U.S.C. § 1681e(b). A reporting agency that negligently violates § 1681e(b) is liable for any actual damages caused by inaccurate information in such a report. See id. § 1681o(a). A reporting agency that willfully violates § 1681e(b) is liable for either actual damages or statutory damages, as well as any punitive damages authorized by the court. See id. § 1681n(a). In the case of a successful action to enforce liability for actual, statutory, or punitive damages, attorney's fees and costs are also recoverable. See id. § 1681o(a)(2); id. § 1681n(a)(3). See generally United States v. Bormes, 133 S.Ct. 12, 15 (2012) (explaining liability for willfully or negligently violating the FCRA).
To state a claim that a reporting company negligently violated § 1681e(b), a plaintiff must sufficiently allege that: (1) the company prepared a report that contained inaccurate information, (2) the inaccuracy was due to the company's negligent failure to follow reasonable procedures to assure maximum possible accuracy, (3) the plaintiff suffered actual damages, and (4) those damages were caused by the inaccurate information in the report. See 15 U.S.C. § 1681e(b); id. § 1681o(a); Ruffin-Thompkins v. Experian Info. Solutions, Inc., 422 F.3d 603, 607-08 (7th Cir. 2005); Sarver v. Experian Info. Solutions, 390 F.3d 969, 971-72 (7th Cir. 2004); Crabill v. Trans Union, L.L.C., 259 F.3d 662, 663-64 (7th Cir. 2001); Henson v. CSC Credit Servs., 29 F.3d 280, 284-85 (7th Cir. 1994); see also Cortez v. Trans Union, LLC, 617 F.3d 688, 708 (3d Cir. 2010). To state a claim that a reporting company willfully violated § 1681e(b), a plaintiff must sufficiently allege that: (1) the company prepared a report that contained inaccurate information, and (2) the inaccuracy was due to the company's willful failure to follow reasonable procedures to assure maximum possible accuracy. See 15 U.S.C. § 1681e(b); id. § 1681n(a); Sarver, 390 F.3d at 971-72; Henson, 29 F.3d at 284-85.
In its motion to dismiss, SRI argues that Taylor has failed to state a claim for either a negligent or willful violation of § 1681e(b) because she has not adequately alleged that SRI's report was inaccurate. SRI further argues that even if Taylor's allegations about inaccuracy are adequate, the allegations regarding causation of actual damages are insufficient to state a claim for negligently violating § 1681e(b) and the allegations regarding willfulness are insufficient to state a claim for willfully violating § 1681e(b). See Mtn., Dkt. 49, at 2-3. In response, Taylor argues that both materially misleading reports and technically inaccurate reports qualify as inaccurate for the purposes of a § 1681e(b) claim, and that the Complaint adequately alleges that SRI's report was materially misleading or technically inaccurate. Resp., Dkt. 52, at 7-11. Taylor also contends that the Complaint adequately alleges that her rental application was denied ...