United States District Court, D. South Carolina, Spartanburg Division
Timothy M. Cain United States District Judge.
Earl Gavin (“Gavin”), proceeding pro se, filed
this action against Defendant Enterprise Systems Inc.
(“Enterprise Systems”) alleging claims based on
violations of the Fair Credit Reporting Act
(“FCRA”), 15 U.S.C. §§ 1681, et. seq.,
and the Fair Debt Collections Practices Act
(“FDCPA”), 15 U.S.C. §§1692 et. seq.
(ECF No. 1). Enterprise Systems filed a motion to dismiss
(ECF No.15). In accordance with 28 U.S.C. § 636(b) and
Local Rule 73.02(B)(2), D.S.C., all pre-trial proceedings
were referred to a magistrate judge. On November 30, 2016,
the Magistrate Judge filed a Report and Recommendation
(“Report”) recommending that the court grant the
motion to dismiss. (ECF No. 24). On December 19, 2016, Gavin
timely filed objections to the Report (ECF No. 31).
Accordingly, this matter is now ripe for review.
Complaint, Gavin alleges that on January 16, 2014, Enterprise
Systems initiated a “soft pull” of his credit
report from Experian without permission. (ECF No. 1,
Complaint at 1). He alleges that he sent Enterprise Systems
notice of the pending lawsuit on June 16, 2015. Id.
Enterprise Systems responded by letter dated August 4, 2015,
and stated that it had not requested a credit report. Rather
it explained that it had requested a soft inquiry, which it
contended was permissible for purposes under 15 U.S.C. §
1681b(a)(3)(A) of using the information when it involves
“the extension of credit” or the “review or
collection of an account.” (ECF No. 1-2).
motion to dismiss filed pursuant to Federal Rule of Civil
Procedure 12(b)(6) tests the legal sufficiency of a complaint
or pleading. Francis v. Giacomelli, 588 F.3d 186,
192 (4th Cir. 2009). “[T]he legal sufficiency of a
complaint is measured by whether it meets the standard stated
in Rule 8 [of the Federal Rules of Civil Procedure] . . . and
Rule 12(b)(6) (requiring that a complaint state a claim upon
which relief can be granted.)” Id. Rule
8(a)(2) requires that a pleading must contain “a short
and plain statement of the claim showing that the pleader is
entitled to relief.” Fed.R.Civ.P. 8(a)(2). This
pleading standard requires that a complaint must contain
“more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action will not
do.” Bell Atlantic Corp v. Twombly, 550 U.S.
544, 555 (2007).
Ashcroft v. Iqbal, the Untied States Supreme Court
stated that to survive a 12(b)(6) motion to dismiss, “a
complaint must contain sufficient factual matter, accepted as
true, ‘to state a claim to relief that is plausible on
its face.' ” Ashcroft v. Iqbal, 556 U.S.
662 (2009) (quoting Twombly, 550 U.S. at 570).
“A claim has facial plausibility when [a party] pleads
factual content that allows the court to draw the reasonable
inference that the [opposing party] is liable for the
misconduct alleged.” Id. The plausibility
standard “asks for more than a sheer possibility that a
[party] has acted unlawfully.” Id. Rather,
“[i]t requires [a party] to articulate facts, when
accepted as true,, that ‘show' that [the party] has
stated a claim entitling [them] to relief[.]”
Francis, 588 F.3d at 193 (quoting Twombly,
550 U.S. at 557). Such “factual allegations must be
enough to raise a right to relief above the speculative
level.” Twombly, 550 U.S. at 555.
“Determining whether a complaint states [on its face] a
plausible claim for relief [which can survive a motion to
dismiss] will . . . be a context-specific task that requires
the reviewing court to draw on its judicial experience and
common sense.” Iqbal, 129 S.Ct. at 1950.
However, “where the well-pleaded facts do not permit
the court to infer more than the mere possibility of
misconduct, the complaint has alleged - but it has not
show[n]” - “that the pleader is entitled to
relief.” Id. (quoting Fed.R.Civ.P. 8(a)(2)).
Magistrate Judge determined that Enterprise Systems obtained
Gavin's credit report for a permissible purpose. (Report
at 6). In his objections, Gavin contends that the FRCA allows
a party to obtain a credit report for only the collection of
an account used primarily for personal, family, or household
purposes. (Objections at 5). He contends that while the debts
in question may have been such accounts, “it is equally
possible that the debts in question were not such accounts,
and were incurred for business (or some other)
purposes.” Id. Therefore, he argues, that the
issue involves a party's state of mind, and a jury should
decide it rather than the court on a motion to dismiss.
FCRA creates a private right of action allowing injured
consumers to recover “any actual damages” caused
by negligent violations and both actual and punitive damages
for willful violations. It is a violation of the FCRA when a
party obtains a consumer report for an impermissible purpose.
See 15 U.S.C.A. §§ 1681n, 1681o.
“‘Permissible purposes' are defined by
statute and include approximately ten listed permissible
purposes.” King v. Equable Ascent Fin., LLC,
C/A No. 1:12-CV-443, 2013 WL 2474377 at *2 (M.D. N.C. June
10, 2013) (citing 15 U.S.C. § 1681b(a)). A relevant
permissible purpose includes a person who “intends to
use the information in connection with a credit transaction
involving the consumer on whom the information is to be
furnished and involving the extension of credit to, or review
or collection of an account of, the consumer.” 15
U.S.C.A. § 1681b(a)(3)(A).
establish a FCRA claim of willful or negligent acquisition of
a consumer report, a plaintiff must prove each of the
following: (i) that there was a consumer report, (ii) that
defendants used or obtained it, (iii) that they did so
without a permissible statutory purpose, and (iv) that they
acted with the specified culpable mental state. See
Phillips v. Grendahl, 312 F.3d 357, 364 (8th Cir. 2002).
To prevail on the theory of willful violation of the FCRA,
the plaintiff must “show that the defendant knowingly
and intentionally committed an act in conscious disregard for
the rights of the consumer.” Ausherman v. Bank of
America Corp., 352 F.3d 896, 900 (4th Cir.2003)
(internal citations omitted). And to succeed on a claim for
negligent violation of the FCRA, the plaintiff must first
demonstrate that the defendant owed him a duty. Id.
at 901. The current Complaint does not satisfy either of
Gavin contends whether Enterprise Systems was acting for a
permissible reason should be a question for a jury, there are
no allegations in his Complaint which would support a finding
of a wilful violation. In his objections, Gavin contends that
there is a “possibility” that the debts were not
accounts within the meaning of the FCRA. (Objections at 5).
Plaintiff, however, has not provided factual allegations that
are detailed enough to satisfy the Twombley
requirement of “rais[ing] a right to relief above the
speculative level[.]” Twombly, 550 U.S, at
555. Viewing the complaint in the light most favorable to
Gavin, he fails to state a claim for a FCRA violation.
as to an alleged negligent violation, Gavin has not alleged
any actual damages that he suffered as a consumer flowing
from the violation, such as a decrease in credit score,
denial of credit, lost credit, or that he had his credit
limits lowered or was required to pay a higher interest rate
for credit. Young v. Harbor Mortor Works, Inc., C/A
No. 07-31, 2009 WL 187793, at *5 ...