Krausz v. Trans Union, LLC

Background

Shmaye Krausz sued loanDepot.com, LLC, under the Fair Credit Reporting Act, a federal law governing the accuracy and handling of consumer credit information. Krausz alleged that Trans Union and Equifax reported his loanDepot account as “30 days past due,” even though the account had been closed and transferred to another lender. He alleged that he notified the credit-reporting bureaus, which notified loanDepot, but that loanDepot failed to conduct a reasonable investigation.

Krausz alleged that the bureaus continued to publish the inaccurate information, as shown by “hard and soft pulls” on his credit report. He also alleged loss of credit, loss of the ability to purchase using credit, a chilling effect on future credit applications, and mental and emotional harm from credit denial.

Court’s Analysis

loanDepot moved for judgment on the pleadings under Rule 12(c). Because the motion challenged federal subject-matter jurisdiction, the court treated it under the standard for a Rule 12(b)(1) motion. The issue was whether Krausz plausibly alleged an injury concrete enough to give him constitutional standing to sue.

The court held that the allegation of “hard and soft pulls” was conclusory. It did not identify a third party that actually received a credit report containing the allegedly inaccurate account information, and it did not allege that the information caused an actual credit denial, reputational harm, or another concrete adverse consequence. The court also noted that the credit reports attached to Krausz’s opposition did not clearly show a hard inquiry: the Equifax report stated that there were no current hard inquiries, and the TransUnion report did not identify its single inquiry as hard or soft.

The court likewise found that Krausz’s allegations of lost purchasing ability and emotional distress from “credit denial” were vague and conclusory because the complaint did not allege that he was actually denied credit. Because Krausz did not allege a concrete and particularized injury, the court concluded that he lacked standing to pursue his Fair Credit Reporting Act claims.

Disposition

The court granted loanDepot’s motion for judgment on the pleadings. It stated that Krausz’s Fair Credit Reporting Act claims “must be dismissed,” instructed the Clerk to terminate the motion, and closed the case. The opinion does not state that the dismissal was with or without prejudice.