Housen v. Transunion LLC

Background

Durey Damion Housen, who represented himself, sued Trans Union LLC and Todd M. Cello. He alleged that Defendants violated the Fair Credit Reporting Act by reporting inaccurate information and failed to comply with a contractual agreement. The alleged inaccuracies included accounts reported as too old to appear, accounts allegedly misreported as being in collection, and accounts allegedly reported as unpaid. Housen said the reporting caused denials of loans, job opportunities, credit cards, car rentals, and apartment applications. He sought correction of his credit report, a perfect credit score, and money damages.

The opinion says it was unclear whether Housen’s complaint alleged both a Fair Credit Reporting Act claim and a breach-of-contract claim. Because he was representing himself, the court interpreted the complaints broadly and assumed both claims were asserted for purposes of the motion at issue. Defendants had moved to dismiss the amended complaint for failure to state a claim, but the court did not decide that motion on the merits.

Housen’s request to dismiss

Housen moved under Federal Rule of Civil Procedure 41(a)(2) to voluntarily dismiss the action without prejudice. Defendants did not object to ending the case, but argued that the dismissal should be with prejudice. A dismissal without prejudice generally allows a plaintiff to bring the claims again, while a dismissal with prejudice bars refiling those claims.

The court applied the rule that a voluntary dismissal without prejudice should generally be allowed unless the defendants would suffer legal harm beyond the possibility of facing another lawsuit. It also considered factors including Housen’s diligence, whether he acted vexatiously, how far the case had progressed, the potential duplication of litigation expenses, and his explanation for seeking dismissal.

The court found that Housen had not acted diligently because he missed the deadline to oppose Defendants’ motion to dismiss and sought dismissal only after the court directed him to respond. But the court found no evidence that he brought the case or requested dismissal to harass Defendants or for another improper purpose. The case was still at an early stage: it had been pending for about nine months, discovery had not begun, and the parties had not incurred significant costs. The court also found that the possibility of additional expenses if Housen filed another lawsuit was not enough to establish the required legal prejudice.

Housen said he wanted dismissal because Trans Union’s terms of use contained a binding arbitration clause. Defendants responded that the terms of use did not contain such a clause, and the court found Housen’s explanation unpersuasive. Nevertheless, the court stated that dismissal did not depend on the reason given and found no evidence that Housen was seeking dismissal to avoid an adverse ruling on Defendants’ motion to dismiss.

Attorneys’ fees

Defendants sought attorneys’ fees under the court’s inherent authority. The court explained that this authority requires clear evidence that the opposing party’s claims were entirely meritless and that the party acted for an improper purpose. The court also noted that a self-represented litigant must be adequately warned before such fees are imposed.

The court found no evidence that Housen acted in bad faith, used delaying tactics, or filed frivolous motions. It therefore denied Defendants’ request for attorneys’ fees.

Disposition

The court granted Housen’s motion for dismissal without prejudice. It directed the Clerk of Court to terminate the motions identified as Documents 24 and 26 and close the case. Because the court ended the action without deciding whether Housen’s claims had merit, this was a procedural disposition rather than a ruling on the underlying Fair Credit Reporting Act or contract allegations.