On August 24, the United States Court of Appeals for the Eleventh Circuit affirmed the dismissal of a putative class action against TransUnion on the basis that it failed to allege a plausible claim for relief, holding that TransUnion was not objectively unreasonable in its reading of the Fair Credit Reporting Act.
The plaintiff, Kathleen Pedro, was an authorized user on her parents’ credit card but allegedly had no responsibility for the card’s debts. When Pedro’s parents passed away, the account went into default. Pedro subsequently learned her credit score had diminished as a result of TransUnion listing her parents’ credit account—with a notation that she was an authorized user—on her credit report.
Pedro filed suit, alleging TransUnion willfully violated the FCRA’s requirement to follow reasonable procedures to assure maximum possible accuracy. She alleged it was inaccurate to list her parents’ credit card on her credit report because it implied liability for the debt. TransUnion moved to dismiss, arguing Pedro could not establish it had willfully violated the FCRA because its reading of the statute was objectively reasonable. The district court granted the motion, and Pedro appealed.
In its opinion, the Eleventh Circuit first addressed the question of whether Pedro sufficiently established standing, concluding she had. The court analogized the alleged publication of an inaccurate consumer report to defamation, noting it had long been a basis for suit. The court also noted Pedro’s allegations of wasted time attempting to resolve the credit inaccuracy and concluded those allegations provided a sufficient Article III injury.
On the issue of failure to state a claim, the Eleventh Circuit held that TransUnion’s interpretation of the FCRA was objectively reasonable, stating TransUnion could have reasonably concluded that reporting Pedro’s parents’ account was permissible because the information was “technically accurate.” The court noted there are two general approaches to “maximum possible accuracy,” with some courts requiring only technical accuracy and others requiring that the reporting also not be misleading. The court concluded that TransUnion was not unreasonable in relying on technical accuracy in interpreting its obligations as they applied to Pedro.
In light of its reasonable interpretation of its statutory obligations and the lack of authority to the contrary, the court held TransUnion did not willfully violate the statute.