Groettum v. Kohl's Department Stores, Inc.

Background

Amanda Groettum alleged that Kohl’s Department Stores, Inc. and Capital One Financial Corporation reported to consumer reporting agencies that she was deceased, even though she was alive. According to the complaint, the reports interfered with her ability to obtain credit for medical care and loans or mortgage opportunities while she was searching for a home. She also alleged emotional distress and other harm.

Groettum asserted two claims. The first alleged that the defendants violated the Fair Credit Reporting Act (FCRA) by failing to reasonably investigate disputes after receiving notice from consumer reporting agencies and by failing to correct or delete inaccurate information. The second claimed credit defamation under Minnesota common law. The defendants sought partial judgment on the pleadings against the credit-defamation claim.

Court’s Analysis

Judgment on the pleadings is a ruling based on the pleadings when there is no dispute about material facts and the moving party is entitled to judgment as a matter of law. The court applied the same standard used for a motion to dismiss for failure to state a claim.

The court explained that the FCRA contains two express preemption provisions concerning state-law claims against entities that provide information to consumer reporting agencies. Section 1681h(e) limits certain defamation claims, while § 1681t(b)(1)(F) broadly bars state-law requirements or prohibitions concerning subjects regulated by § 1681s-2, which governs the responsibilities of information furnishers.

The court concluded that the conduct alleged in Groettum’s credit-defamation claim was the same conduct regulated by § 1681s-2: furnishing allegedly false information to consumer reporting agencies. It therefore held that § 1681t(b)(1)(F) preempted the Minnesota claim.

Groettum argued that the court should use a “temporal approach,” under which § 1681h(e) would govern conduct before a dispute was reported and § 1681t(b)(1)(F) would govern conduct afterward. The court rejected that approach, reasoning that the two FCRA provisions are compatible and that § 1681t(b)(1)(F) preempts more state-law claims without repealing § 1681h(e).

Disposition

Judge Eric C. Tostrud granted the defendants’ motion for partial judgment on the pleadings. The order dismissed Groettum’s credit-defamation claim, Count II, with prejudice. The opinion’s order did not state that the FCRA claim was dismissed or otherwise resolve it.