Varlack v. Bank of America

Background

Tynearia A. Varlack filed this action without a lawyer against Bank of America, Early Warning Systems, and Chex Systems. The court had previously allowed her to proceed without paying the filing fee. Varlack alleged that an unauthorized account was opened in her name on September 19, 2018, and had been reported on her consumer report for six years. She alleged harm including loss of credit, mental anxiety, and damage to her character, and requested $7 billion in damages.

Varlack cited the Uniform Commercial Code and provisions of the Fair Credit Reporting Act (FCRA), a federal law regulating consumer reporting agencies, users of credit reports, and entities that provide information to those agencies. The court construed her allegations as asserting FCRA claims.

Court’s analysis

Because Varlack was allowed to proceed without paying the filing fee, the court was required to screen her complaint. It had to dismiss claims that were frivolous, malicious, legally insufficient, sought money from an immune defendant, or fell outside the court’s jurisdiction. The court also explained that, although self-represented complaints are read liberally, they must still provide enough facts to make a claim plausible.

The court addressed two possible FCRA theories:

- Reporting inaccurate information: The FCRA provision governing a furnisher’s initial reporting of information that it knows, or reasonably should know, is inaccurate does not create a private right to sue. The court therefore stated that Varlack’s claim based on the defendants’ allegedly inaccurate reporting must be dismissed.

- Failure to investigate a dispute: A different FCRA provision can support a private claim when a furnisher receives notice from a credit-reporting agency that information is disputed and then fails to conduct a reasonable investigation. The court found Varlack’s allegations insufficient because she did not say that she disputed the information with a credit-reporting agency. She also did not provide facts about the disputed information, any investigation by the defendants, or why that investigation was inadequate.

The court assumed for purposes of the order that the defendants were furnishers of information. It explained that the FCRA does not automatically require a furnisher to delete a disputed account; it requires the furnisher to investigate and report the results of that investigation.

Disposition

The court granted Varlack leave to file an amended complaint within 60 days. The amended complaint must provide a short and plain statement of the facts supporting each claim, including what each defendant did or failed to do, when and where relevant events occurred, her injuries, and the relief requested. Any facts or claims from the original complaint that she wants the court to consider must be repeated because the amended complaint will completely replace the original complaint.

The court stated that no summons would issue at that time. If Varlack failed to amend within the allowed period and could not show good cause, the complaint would be dismissed for failure to state a claim. The court also certified that an appeal would not be taken in good faith and denied fee-free status for purposes of an appeal.