Holland v. JPMorgan Chase Bank, N.A.

Background

Steven W. Holland alleged that Chase Bank USA, N.A. reported negative information about five credit-card accounts to TransUnion, Equifax, and Experian after he disputed the debts. Holland claimed that the debts had been legally extinguished or made unenforceable by the running of the applicable Mississippi statute of limitations. He also alleged that Chase used an automated telephone dialing system to make repeated calls to his cellular and office telephone numbers without his prior express consent, in violation of the Telephone Consumer Protection Act.

Holland brought a Fair Credit Reporting Act claim under 15 U.S.C. § 1681s-2(b), which concerns furnishing information to consumer reporting agencies after receiving notice that specific information is inaccurate. He alleged that Chase continued reporting the debts after receiving his disputes. The opinion also states that the case included a Telephone Consumer Protection Act issue concerning whether Chase made calls after January 9, 2015.

Procedural Posture

Chase moved under Federal Rule of Civil Procedure 12(f) to strike Holland’s amended complaint because it was filed after the court-authorized deadline. In the alternative, Chase moved under Rule 12(b)(6) to dismiss the Fair Credit Reporting Act claim for failure to state a claim. The court had previously dismissed Holland’s initial complaint in part and allowed him to amend within specified limits and by a specified deadline. Holland filed the amended complaint two days after the extended deadline.

Fair Credit Reporting Act Claim

The court held that a claim under § 1681s-2(b) requires an alleged factual inaccuracy in the information furnished to a consumer reporting agency. Holland’s theory was that the debts were inaccurately reported because the statute of limitations prevented Chase from obtaining a legal remedy to collect them.

The court distinguished a factual dispute about a debt—such as whether the debt existed or what amount was owed—from a legal dispute about whether the debt could be enforced in court. It concluded that Holland’s statute-of-limitations theory challenged Chase’s legal ability to collect, not the factual existence or amount of the debts. Because the amended complaint did not adequately allege a factual inaccuracy, the court concluded that Holland failed to state a claim under § 1681s-2(b).

Motion to Strike

The court recognized that Holland filed the amended complaint after the deadline and criticized his counsel’s handling of court deadlines and procedural rules. However, motions to strike pleadings are disfavored and generally require a strong reason. The court found no strong reason at that stage to punish Holland for his counsel’s shortcomings and therefore denied Chase’s motion to strike the amended complaint.

Because the court dismissed the Fair Credit Reporting Act claim on the basis that it was not adequately pleaded, it did not reach Chase’s alternative argument that Holland exceeded the scope of the court’s permission to amend. The court stated that the remaining principal question concerned whether Chase made robocalls to Holland after January 9, 2015 and that Holland was entitled to limited discovery on that issue.

Disposition

The court granted Chase’s partial motion to dismiss Holland’s Fair Credit Reporting Act cause of action and denied Chase’s motion to strike. Chase’s answer was due 21 days after the opinion.