Konig v. Transunion, LLC

Background

Maurice Konig sued Bank of America, N.A. (BANA) and TransUnion, LLC under the Fair Credit Reporting Act. He alleged that the defendants reported his old BANA mortgage accounts for longer than the law allows and failed to properly handle his disputes about the accounts. He sought certification of proposed nationwide and New York classes.

The opinion states that Konig defaulted on four mortgage loans in 2008 and 2009. BANA later transferred the loans to other servicers but reported the accounts to credit-reporting agencies with a status of “current” and without a date of first delinquency. After Konig disputed the information, BANA instructed TransUnion to change certain payment dates, and TransUnion updated the accounts. The accounts continued to show a “current” status.

Konig later applied for and received an automobile loan. The lender reviewed his credit reports, which included the BANA mortgages, and Konig testified that his credit was “excellent.” The opinion also states that Konig did not provide evidence that he had been denied a needed loan or other credit because of the reporting.

Standing analysis

Before deciding class certification, the court examined whether Konig had Article III standing. Article III standing is the constitutional requirement that a plaintiff show a concrete and particularized injury, a connection between that injury and the defendant’s conduct, and a likelihood that court relief would address the injury.

The court held that Konig could not establish this requirement for either his BANA claims or his TransUnion claims. Merely violating the Fair Credit Reporting Act, or creating a possible future risk of harm, was not enough. The court also concluded that BANA’s sharing of the information with credit-reporting agencies did not by itself establish a concrete injury.

As to TransUnion, Konig appeared to rely on the disclosure of the information to the company that reviewed his credit in connection with his automobile-loan application. But the court found no evidence of an actual financial or reputational consequence from that disclosure because the loan was approved. The court likewise rejected the alleged effects on credit opportunities, creditworthiness, and emotional well-being as insufficiently concrete on the record presented.

Ruling and disposition

Because Konig lacked Article III standing, the court concluded that it lacked subject-matter jurisdiction, meaning authority to decide the case in federal court. The court did not reach the parties’ remaining arguments about whether the proposed classes satisfied Rule 23’s requirements.

The court denied Konig’s motion for class certification as moot. Because the action had originally been filed in state court and then removed to federal court, the court remanded the case to the Supreme Court of the State of New York, County of Rockland, rather than dismissing it. The clerk was directed to remand the case and terminate the federal action.