Last month, a federal court addressed the kind of harms that need to be included in a plaintiff’s complaint asserting claims under the Fair Credit Reporting Act (“FCRA”) and Fair Debt Collection Practices Act (“FDCPA”) to survive a motion to dismiss.  Magruder v. Capital One, Nat’l Ass’n, 2021 U.S. Dist. LEXIS 94804 (D.D.C. May 19, 2021).  Finding that the plaintiff had “barely” overcome the bar, the court reaffirmed the minimum pleading requirements necessary for such claims.  Read on for more details.

Plaintiff’s initial lawsuit brought claims against several financial institutions and debtor collectors.  Alleging that his attempts to resolve disputes with his credit reports had had him effectively running in circles, Plaintiff brought suit against all the defendants for violations of the FCRA, and against one defendant specifically for violations of the FDCPA.

Prior to going any further with the case, the court ordered Plaintiff to show that he had suffered an “injury in fact” sufficient to satisfy the threshold requirement of Article III standing.  This necessitated that Plaintiff show that he had been harmed in a real sense, that is, that he has personally affected, and the harm was not hypothetical or abstract.  [Note: Injury for purposes of Article III in some instances can include intangible harms, including emotional harms in very specific instances.]

In assessing Plaintiff’s injury claims, the court expressed repeatedly that his claims of a tangible harm were “thin by any measure.”  Plaintiff claimed that he had suffered economic losses, but provided no details explaining the amount of the losses, or how they happened.  Still, the court found that the bar was low enough that Plaintiff’s complaint was sufficient for a number of his claims, at least at this point.

Most notably, the court found that while Plaintiff had not claimed any tangible loss as a result of Trans Union’s alleged violation of FCRA, his emotional harm was enough.  Plaintiff alleged that Trans Union’s failure to follow reasonable procedures to assure maximum accuracy (§ 1681e(b)) and failure to conduct a reasonable investigation” (§ 1681i(a)) had caused him “embarrassment, humiliation and other mental and emotional distress.”

The court found that FCRA was, at least in part, designed with this specific kind of injury in mind.  Plaintiff claimed that his credit reports incorrectly said that he had outstanding debt, when he did not.  That false claim was spread to other parties, causing emotional harms.  “The FCRA was enacted to deter just this.”  The court also extended this to the FDCPA, noting that courts have previously ruled that a plaintiff may have standing in FDCPA cases if the alleged violation “caused anxiety” or “stress and inconvenience.”

Note that in the context of the FCRA and FDCPA, other courts have taken a contrary approach as to whether such damages suffice at the pleadings stage.  This issue is far from settled in this area of data privacy law.  Not to worry, CPW will be there to keep you in the loop.