FCRA claim fails due to lack of damages

Where the plaintiff alleged that a company inaccurately reported his driver’s license number and state of issuance, but he only alleged emotional distress or wasted time damages in conclusory fashion, and his only economic damages were $1 in postage, the suit was dismissed for lack of standing.

Background

Ruhi Reimer sued LexisNexis Risk Solutions Inc., or LNRS, for allegedly inaccurately reporting his driver’s license number and state of issuance and failing to use reasonable procedures to assure accuracy in reporting. He also sued State Farm Mutual Automobile Insurance Company for allegedly failing to conduct a reasonable investigation after receiving notice of a dispute, all in violation of the Fair Credit Reporting Act, or FCRA. Both defendants have filed motions to dismiss the amended complaint.

Standing

In Spokeo, Inc. v. Robins, 578 U.S. 330 (2016), the Supreme Court gave an incorrect zip code as the paradigmatic example of a statutory violation that would not confer standing. Defendants argue that plaintiff’s alleged injury equals reporting an incorrect zip code, as no concrete harm comes from the alleged inaccuracy.

Plaintiff argues that the reporting need not result in harm; the third-party dissemination of the alleged inaccuracy provides sufficient injury-in-fact alone under TransUnion LLC v. Ramirez. 141 S. Ct. 2190 (2021). The Ramirez court found that third-party dissemination of plaintiff’s misleading consumer reports satisfied standing requirements of a concrete harm. 

Here, plaintiff alleges that third-party dissemination occurred as “LNRS disbursed Plaintiff’s consumer report and/or consumer information to numerous third parties, such as American Express, Rapid Financial Services, LLC, and Nationwide Credit Inc.” The question becomes whether the dissemination to third parties of plaintiff’s inaccurate information regarding his driver’s license number and state of issuance sounds more akin to Spokeo’s inaccurate zip code or Ramirez’s “potential terrorist” alerts. While taking all allegations as true at this stage, the court holds that the alleged inaccuracies more closely resemble the former, rather than the latter, because they lack disparaging content.

Plaintiff pleaded no harms that resulted from the dissemination to third parties of the inaccurate driver’s license numbers and states of issuance. Although plaintiff alleges “loss of credit” when describing his injuries in each of the counts in the complaint, he offers no factual support. 

While plaintiff argues that no harm needed to result from the dissemination, the Fourth Circuit held in Dreher v. Experian Informational Solutions, Inc., 856 F.3d 337 (4th Cir. 2017), that, for informational injuries under the FCRA, the injury allegedly suffered must give rise to more than a procedural violation divorced from a concrete harm. Additionally, other courts have often found that a harm must result from the dissemination or else the injury threshold would not rise above the level of a mere procedural violation, which Spokeo rejected.

Plaintiff correctly argues, however, that some courts have found dissemination without subsequent harm as sufficient to confer injury-in-fact. However, one can easily distinguish those cases from plaintiff’s case. Allegations of debts which consumers do not own reported to third parties may satisfy the concrete injury requirement of injury-in-fact. However, these allegations sound in defamation, due to the possibility of reputational harm that could result from the inaccurate debts, especially when reported to potential creditors, whereas spreading inaccurate driver’s license numbers or states of issuance lacks the same risk of reputational harm.

Cases that find dissemination alone sufficient to confer standing involve a heightened risk of harm based on the nature of the information shared with third parties. The type of information here, however, does not rise to the level of subjecting plaintiff to potential hatred, contempt or ridicule, and thus does not reach the level of a defamatory statement. Similarly, additional cases that find concrete harm from the sole act of dissemination, due to the fact that the reported inaccuracies include false criminal histories, differ remarkedly from the inaccurate driver’s license or state of issuance of which the plaintiff complains.

Plaintiff also alleges that he suffered from emotional distress as a result of LNRS’s failure to establish or follow procedures under the FCRA. But plaintiff offers no specific facts to demonstrate these feelings. Similarly, plaintiff insufficiently pleads claims of wasted time spent correcting his consumer report to support a finding of a concrete harm for standing. Finally, while plaintiff alleges that he suffered “economic losses over $1 in the form of postage expenses when mailing additional disputes” to defendants, one dollar of mailing expenses is simply not enough to premise standing under Article III.

Defendants’ motions to dismiss granted.

Reimer v. LexisNexis Risk Solutions LLC, Case No. 3:22-cv-00153, Sept. 13, 2022. EDVA at Richmond (Gibney). VLW 022-3-402. 25 pp.