Sessa v. Linear Motors, LLC

Background

Gia Sessa brought a proposed class action concerning her November 2018 lease of a Subaru Forester. She alleged that the lessor defendants concealed fees and taxes in violation of the federal Consumer Leasing Act and New York laws. She separately alleged that TransUnion, a credit-reporting agency, inaccurately reported her obligations under the lease in violation of the federal Fair Credit Reporting Act and the New York Fair Credit Reporting Act.

The lease required monthly payments of $237.75 and stated a residual value of $19,444.07. Information supplied to TransUnion by Hudson Valley Federal Credit Union stated that Sessa owed a $19,444 balloon payment due January 1, 2022, and listed a high balance of $25,928.60. The parties agreed that the credit information was supplied in an industry-standard format. Sessa disputed the information with the lessors, but she had not disputed it with TransUnion before filing the lawsuit. Her claims against the lessor defendants were later dismissed with prejudice by stipulation. TransUnion then moved for summary judgment, which asks whether the evidence shows that no important factual dispute requires a trial and that the moving party is entitled to judgment under the law.

Legal Standard and Issues

The court considered Sessa’s claim under section 1681e(b) of the Fair Credit Reporting Act. That provision requires a credit-reporting agency to use reasonable procedures to ensure the greatest possible accuracy of information in a consumer report. The court identified four requirements for Sessa’s claim: TransUnion failed to use reasonable procedures, reported inaccurate information, Sessa suffered an injury, and TransUnion’s failure caused that injury. The court stated that the federal and New York statutes should be interpreted alike for the issues presented.

The court adopted a flexible standard for accuracy. Under that standard, information may be inaccurate if it is plainly wrong or misleading enough that it could affect a credit decision. But the claimed error must be factual, not legal. Credit-reporting agencies are not required to decide whether a debt is legally valid or to interpret the underlying contract. They may be liable when the information they report does not match what the furnisher supplied.

The Court’s Analysis

The court ruled that TransUnion reported factually accurate information. Sessa’s own factual statement acknowledged that Hudson Valley Federal Credit Union furnished information saying she owed the $19,444 balloon payment. The court also found that TransUnion reported the information it received without omitting important information or presenting it in a misleading way.

Sessa argued that the reported payment was inaccurate because the lease did not legally require her to pay the car’s residual value. She also argued that the transaction was a sham under federal lending and leasing laws, that TransUnion’s agreements with Hudson Valley Federal Credit Union authorized only loan records, and that TransUnion had previously received disputes about similar lease reporting. The court rejected these arguments because they required interpreting the lease and deciding the legal validity of the debt. The court expressly stated that it was not deciding whether the lease terms contradicted the information furnished by Hudson Valley Federal Credit Union.

Because Sessa identified no missing material information, misleading wording, or mismatch between the information furnished and the information reported, the court found no genuine factual issue about whether TransUnion violated the Fair Credit Reporting Act. The court therefore concluded that Sessa could not establish the required inaccuracy.

Disposition

Judge Kenneth M. Karas granted TransUnion’s motion for summary judgment. The court directed the clerk to terminate the motion, enter judgment for TransUnion, and close the case.