Taylor v. Inflection Risk Solutions, LLC

Background

Tony N. Taylor alleged that Inflection Risk Solutions, LLC conducted a criminal background check for Airbnb after Taylor applied to rent an apartment. The report listed Taylor’s Minnesota conviction for bringing a dangerous weapon into a courthouse as a felony and classified the offense as involving “violence.” Taylor alleged that Minnesota law treats the conviction as a misdemeanor after successful completion of probation and that the report was inaccurate. Inflection corrected the report after Taylor disputed it, but Taylor alleged that Airbnb still permanently barred him from renting through its service.

Taylor’s amended complaint asserted two claims under the Fair Credit Reporting Act (FCRA), which requires consumer-reporting agencies to use reasonable procedures to ensure the maximum possible accuracy of information in consumer reports. Count I concerned the alleged reporting of convictions that Minnesota law deems misdemeanors as felonies. Count II concerned the alleged classification of nonviolent offenses as involving violence. Taylor also sought to represent a “deemed misdemeanor” class and an “inaccurate offense characterization” class.

Motion and Arguments

Inflection filed a partial motion to dismiss or strike. It asked the court to dismiss Count II, or alternatively to dismiss the requests for statutory and punitive damages associated with that count. Inflection also asked the court to strike the class allegations.

Inflection argued that the violence classification was accurate because Taylor had been convicted under a statute involving possession of a dangerous weapon, and Minnesota law defines a dangerous weapon as one capable of producing death or great bodily harm. Inflection also argued that any inaccurate classification could not have been willful. Taylor responded that the “offense class” category was created by Inflection rather than copied from Minnesota public records, so Inflection had a duty to ensure that its classification was accurate.

Court’s Analysis

Under Rule 12(b)(6), a complaint survives dismissal when its factual allegations, accepted as true at this stage, plausibly show that the defendant may be liable. The court concluded that Taylor plausibly alleged that Inflection failed to use reasonable procedures when deciding which offenses belonged in its “violence” category. Because Inflection was interpreting the public record rather than merely reproducing it, the court held that Taylor was entitled to discovery about how Inflection made its classifications and whether its procedures were reasonably designed to ensure accuracy.

The court also declined to decide at the pleading stage that Inflection’s conduct could not have been willful. Under the FCRA, willfulness includes knowing or reckless violations, and a statutory interpretation may be willful if it was objectively unreasonable. The court held that it could not determine as a matter of law that Inflection’s classification decision was objectively reasonable without discovery about Inflection’s process and interpretation.

Finally, the court found that Inflection’s challenge to the proposed classes was premature. Although the court expressed doubts about whether either claim could properly proceed as a class action, it declined to decide that issue at this early stage.

Disposition

The court ordered that Inflection’s partial Motion to Dismiss or to Strike was DENIED. The opinion did not decide whether Taylor will ultimately prevail, whether Inflection acted willfully, or whether either proposed class will be certified.