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Court reconciles seemingly redundant FCRA provisions for first time

To avoid concluding that two preemption provisions in the Fair Credit Reporting Act, or FCRA, are redundant, the court, for the first time, joined other district courts in holding that one preemption provision applied to state statutory claims and the other addressed only state common law claims.


James Hoback discovered a discrepancy in his credit history when he applied for a credit card and his application was denied on the basis of poor credit. The cause of his poor credit was a tradeline on his credit report—a Synchrony Bank/AAMCO co-branded credit card account on which Hoback was listed as a co-signer. Hoback has never contracted with Synchrony for credit for himself or anyone else.

According to Hoback’s complaint, Synchrony has “continued to publish and re-publish false information that [Hoback] is delinquent on this credit line and has failed to make timely payments.” Synchrony has published this information to Equifax, TransUnion and Experian, among other credit reporting agencies.

Upon discovering the AAMCO credit card on his report, Hoback complained to Equifax, TransUnion, and Experian and “alerted each that the derogatory information being published about him was incorrect.” All three requested that Synchrony investigate the information to determine its accuracy. Synchrony did not do so and continued to publish Hoback’s credit history with the Synchrony Bank/AAMCO co-branded credit card to third parties.

Hoback filed suit in the Bedford County Circuit Court on April 8, 2019, asserting claims for defamation and violations of the FCRA. Synchrony removed the case to federal court and has filed a motion to dismiss. Synchrony argues Hoback’s defamation is preempted by the FCRA.


The FCRA includes two specific preemption provisions. In arguing that Hoback’s first count is preempted, Synchrony points to § 1681t(b)(F) which, on its face, appears to preempt any and all state law claims, whether statutory or at common law, including those based on allegations of willful false reporting. Hoback responds by pointing out the second of the FCRA preemption provisions, § 1681h(e), which seems to bar certain common law actions in several specific circumstances. Hoback argues that Synchrony’s reading of § 1681t(b)(F) as a complete preemption of state law claims would render § 1681h(e) superfluous.

Nearly every district court in the Fourth Circuit has adopted what is known as the “statutory approach” to the preemption language of the FCRA, designed to reconcile two preemption provisions so that neither is redundant. The statutory approach holds that § 1681t(b)(1)(F) only applies to state statutory claims and that § 1681h(e) only addresses state common law claims. The Western District of Virginia has not yet applied this analysis simply because this is, so far as the court is aware, the first time it has been presented with the opportunity.

The court agrees with Hoback that the statutory approach is the best way to read the FCRA’s preemption provisions. The court will thus construe § 1681t(b)(1)(F) as applying only to state statutory claims. Therefore, it does not preempt Hoback’s defamation claim.

Synchrony next argues that § 1681h(e) of the FCRA still preempts Count One because Hoback does not plausibly allege Synchrony acted “with malice or willful intent to injure.” Both parties acknowledged during argument that, were the court to find that Hoback does not allege sufficient facts to show malice or willful intent to injure, Count One would be preempted by § 1681h(e).

The FCRA itself provides no definition of malice, and courts have split between applying a federal or state standard. Six districts in the Fourth Circuit have defined malice under the FCRA § 1681h(e); the clear majority applied a state law definition. The court will apply the state law definition of malice.

Hoback’s allegations that he alerted Equifax, TransUnion and Experian about the incorrect information being reported; that these complaints resulted in three requests to investigate and that Synchrony continued to publish the complained-of report are sufficient to advance beyond the 12(b)(6) stage of proceedings.

Motion to dismiss denied.

Hoback v. Synchrony Bank, Case No. 19-cv-18, June 11, 2019. WDVA at Lynchburg (Urbanski). VLW 019-3-276. 11 pp.

VLW 019-3-276

Virginia Lawyers Weekly