Ali v. TransUnion Rental Screening Solutions, LLC

Background

Mohamed Ahmed Ali brought claims under the Fair Credit Reporting Act against TransUnion Rental Screening Solutions, LLC, which the opinion identifies as the corporation responsible for the tenant-screening report at issue. Ali alleged that, after he submitted a rental application to Pathlight Property Management on or about February 14, 2024, TransUnion sent Pathlight a report containing 37 criminal records that were not properly associated with him. Pathlight later denied his rental application based on the report. Ali’s original complaint alleged that TransUnion violated 15 U.S.C. § 1681e(b) by failing to follow reasonable procedures to ensure maximum possible accuracy.

The parties were in discovery when Ali moved for leave to file a first amended complaint. His motion was filed by the deadline in the pretrial scheduling order. The proposed amendment sought to add allegations concerning two reports TransUnion published in November 2023. One proposed claim concerned an allegedly inaccurate tenant-screening report published on November 8, 2023, which allegedly led to Ali’s rejection by a different prospective landlord. Another allegation concerned a November 26, 2023 inquiry that TransUnion allegedly included in its consumer disclosure to Ali even though it belonged to a different consumer.

Arguments and legal standard

TransUnion argued that the proposed amendment asserted mutually exclusive facts because the original complaint said Ali was seeking housing in February 2024, while the proposed amendment said he was seeking housing in November 2023. TransUnion also argued that the November 26 inquiry was not independently actionable because the mistaken disclosure was not given to a third party.

Under Federal Rule of Civil Procedure 15, courts generally must freely allow amendments when justice requires. The court explained that leave may be denied for compelling reasons such as undue delay, bad faith, repeated failure to correct earlier problems, unfair prejudice, or futility. An amendment ordinarily should be denied on the merits only if it asserts clearly frivolous claims or defenses.

Court’s analysis

The court rejected TransUnion’s argument that Ali’s allegations about November 2023 and February 2024 were mutually exclusive. It reasoned that Ali could have been looking for a new place to live in November and continued looking in February. The court also declined to determine Ali’s state of mind at the amendment stage, including whether he knew about the alleged false reporting in November and therefore should have included the November denial in his original complaint.

The court made no determination about whether the mistakenly disclosed November 26 inquiry would itself be independently actionable. It concluded, however, that the allegation could be relevant to the standards TransUnion used to ensure accuracy. The court stated that an amended pleading may include factual allegations that are not directly actionable and that, if TransUnion believed the November 26 claim was legally insufficient, the appropriate procedure would be a motion to dismiss.

Disposition

Judge John F. Docherty granted Ali’s Motion for Leave to File a First Amended Complaint. The order allowed the amendment but did not decide the ultimate merits or actionability of the proposed claims.