King v. Equifax Information Services, LLC

Background

Aaron King, proceeding without a lawyer, alleged that four consumer reporting agencies had included information about other people named Aaron King in his consumer files. He attributed difficulties with credit applications, insurance, loans, and government benefits to those alleged inaccuracies.

A prior order dismissed all claims against Equifax Information Services, LLC, LexisNexis Risk Solutions, Inc., and Experian Information Solutions, Inc., while Trans Union, LLC had not moved to dismiss. The prior order allowed King to seek permission to amend. King then sought leave to file a proposed Second Amended Complaint, which added allegations about denied credit applications, a previously paid short-term loan, and MetLife Insurance Company’s cancellation of his policy. The proposed complaint also reasserted previously dismissed claims and added new claims under the Fair Credit Reporting Act, a federal credit-reporting statute, as well as defamation.

Legal standard

Federal Rule of Civil Procedure 15(a)(2) generally calls for permission to amend when justice requires it, but a court may deny amendment when the proposed amendment would be futile. Amendment is futile when the proposed complaint could not survive dismissal as a matter of law. The court also stated that filings by people without lawyers are read liberally.

Claims against Equifax, LexisNexis, and Experian

The court found that King’s new allegations about denied credit applications did not plausibly establish that Equifax, LexisNexis, or Experian had inaccurately reported information. The court explained that the denial letters cited insufficient credit history and other reasons, and that the alleged denials did not by themselves show that a consumer reporting agency had reported inaccurate information.

As to Equifax, the court found that King relied on an inference from a Discover Bank denial letter, even though his own Equifax disclosure allegedly contained correct identifying information. As to Experian and LexisNexis, the court found that King’s allegations concerned information not included in a consumer report, or the failure to provide a report, rather than a plausible allegation of inaccurate reporting.

The court therefore denied King’s motion for leave to amend as to all reasserted Fair Credit Reporting Act claims against Equifax, LexisNexis, and Experian. It also denied leave to add new Fair Credit Reporting Act claims against those defendants. The proposed claim under Section 1681c-2 was inapplicable because King alleged no identity theft. The proposed Section 1681h claims were insufficient because that provision concerns the form of required disclosures, while Section 1681g addresses the disclosure obligation alleged by King.

The court further denied leave to reassert King’s claims under 42 U.S.C. Sections 1981 and 2000d, common-law fraud claims, and his breach-of-contract claim against Equifax. The court found that the proposed complaint did not provide a sufficient factual basis for the racial-discrimination, fraud, or contract theories. The court also denied leave to add King’s proposed defamation claim against Equifax because it was based on the alleged Fair Credit Reporting Act violations and lacked a discernible independent basis.

Claims against Trans Union

The court found that King’s allegations concerning MetLife made it plausible that Trans Union had inaccurately reported his information to MetLife. King alleged that MetLife had canceled his policy in 2015 for lack of payment, and that records disclosed in 2021 showed that his file had been merged with information about another Aaron King from Ohio. He also alleged that similar confusion appeared in Trans Union disclosures.

The court denied leave to add the proposed Section 1681h claim against Trans Union because it was redundant of, and misdirected under, the disclosure claim King asserted under Section 1681g. The court also dismissed Trans Union’s claims under Sections 1981 and 2000d because they alleged racial animus only conclusorily. It dismissed King’s fraud claims against Trans Union because they merely recited the elements of fraud and did not meet the heightened federal pleading requirements for fraud claims.

Disposition

Judge William Alsup denied King’s motion for leave to amend as to LexisNexis, Experian, and Equifax. The court granted the motion as to Trans Union, but only for the newly pleaded facts concerning King’s MetLife policy and the Fair Credit Reporting Act claims against Trans Union. King was given 21 calendar days to file the amended complaint, which could contain only Fair Credit Reporting Act claims against Trans Union and could add no new claims or facts. The court also ordered King and Trans Union to meet and confer about possible inaccuracies in Trans Union’s file, information that could assist identity verification and searches, and whether Trans Union had provided information to MetLife since 2015.