KATHLEEN N. PEDRO, on behalf of herself and all others similarly situated., Plaintiff - Appellant,
EQUIFAX, INC., Defendant, TRANSUNION LLC, Defendant-Appellee.
from the United States District Court for the Northern
District of Georgia D.C. Docket No. 1:15-cv-03735-TWT
WILLIAM PRYOR, MARTIN and ROSENBAUM, Circuit Judges.
WILLIAM PRYOR, CIRCUIT JUDGE.
appeal requires us to decide whether a consumer reporting
agency adopted an objectively unreasonable interpretation of
the Fair Credit Reporting Act, 15 U.S.C. § 1681 et
seq., when it stated on a consumer's credit report
that she was an authorized user of her parents' credit
card account. Kathleen Pedro's parents listed her as an
authorized user on their credit card account, which later
went into default. A consumer reporting agency, TransUnion
LLC, listed the delinquent account on Pedro's credit
report with a notation that she was an authorized user of the
account. TransUnion also included the account when
calculating Pedro's credit score, which caused her credit
score to fall. Pedro then filed a complaint that TransUnion
willfully violated a provision of the Act that requires that
a consumer reporting agency "follow reasonable
procedures to assure maximum possible accuracy of the
information concerning the individual about whom the report
relates." 15 U.S.C. §§ 1681e(b), 1681n. The
district court dismissed the complaint for failing to allege
a plausible claim for relief. Because it was not objectively
unreasonable for TransUnion to interpret section 1681e(b) to
permit it to report an account for which a consumer is an
authorized user, we affirm.
Kathleen Pedro's parents fell ill, they designated her as
an authorized user on their credit card account with Capital
One. Pedro used the card to help her parents make purchases
and to purchase airline tickets that she used to visit her
parents. She alleged that, as an authorized user, "she
never assumed and had no financial responsibility for any
debts on that card."
Pedro's parents died in 2014, their account with Capital
One went into default. On January 25, 2015, Pedro received an
alert from a credit monitoring service that informed her that
her credit score had dropped more than 100 points on her
Equifax credit report. Pedro also discovered that her credit
score had dropped on her TransUnion credit report, and she
determined that the default on her parents' Capital One
account caused the credit drop.
Pedro complained that the delinquency on her parents'
account had affected her credit, Capital One removed Pedro
from the account. But TransUnion did not remove the account
from Pedro's credit report. TransUnion instead listed the
account on her credit report with the notation account
relationship terminated. Capital One eventually requested
that TransUnion and Equifax delete the account from
Pedro's credit reports, and the agencies complied. Pedro
alleged that her credit score then "returned to its
prior excellent level."
filed a complaint in the district court that Equifax and
TransUnion had willfully violated the Fair Credit Reporting
Act, 15 U.S.C. § 1681 et seq., by failing to
"follow reasonable procedures to assure maximum possible
accuracy" of the credit reports of authorized users of
credit card accounts, id. §§ 1681e(b),
1681n. She alleged that the procedures used by Equifax and
TransUnion that led them to report her parents' account
on her credit report caused her credit reports to reflect a
debt she did not owe, which in turn caused her credit report
and score to be inaccurate. The gravamen of Pedro's
complaint was that it was inaccurate to list her parents'
credit card account on her credit report because it implied
that she was liable on the account when she was not. She
sought statutory damages, punitive damages, attorney's
fees, and the certification of a class action.
moved to dismiss Pedro's complaint, Fed.R.Civ.P.
12(b)(6), and TransUnion joined the motion. The agencies
argued that Pedro could not establish a willful violation of
the Act because the agencies followed an objectively
reasonable interpretation of the Act. See Safeco Ins. Co.
of Am. v. Burr, 551 U.S. 47, 69 (2007). The district
court granted the motion to dismiss. It determined that Pedro
failed to allege a willful violation of section 1681e(b)
because it was not objectively unreasonable for the consumer
reporting agencies to read section 1681e(b) to permit them to
report information about accounts for which the consumer is
an authorized user. Pedro appealed, and at her request, we
dismissed her appeal as to Equifax.
STANDARD OF REVIEW
review de novo the dismissal of a complaint under
Federal Rule of Civil Procedure 12(b)(6) for failure to state
a claim and construe all the allegations as true."
Feldman v. Am. Dawn, Inc., 849 F.3d 1333, 1339 (11th
Cir. 2017). "A plaintiff must plausibly allege all the
elements of the claim for relief. Conclusory allegations and
legal conclusions are not sufficient; the plaintiff must
state a claim to relief that is plausible on its face."
Id. at 1339-40 (citations and internal quotation
marks omitted). "A claim has facial plausibility when
the plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged." Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009).
divide our discussion in two parts. First, we explain that
Pedro has standing because she alleged that she suffered an
injury in fact. Second, we explain that the district court
correctly dismissed Pedro's complaint because TransUnion
could not have willfully violated the Fair Credit Reporting
Pedro Alleged That She ...