On January 16, the U.S. District Court for the Eastern District of Michigan denied a motion to dismiss a plaintiff’s Fair Credit Reporting Act claims on statute of limitations grounds, taking a strict interpretation of the complaint’s allegations as to the plaintiff’s discovery of facts underlying her claims.  A copy of the decision in Blake v. TransUnion LLC, No. 18-10406, 2019 WL 211141 (E.D. Mich. Jan. 16, 2019) can be found here.

The FCRA provides for a two-year statute of limitation from the date of discovery of the FCRA violation, as well as a statute of repose requiring that FCRA claims be brought within five years of the date of the FCRA violation.  See 15 U.S.C. § 1681p.  Further, in many jurisdictions, including the Sixth Circuit, an FCRA limitations period begins to run when the plaintiff discovers the facts that give rise to the claim – not when the plaintiff discovers that these facts constitute a legal violation.

Plaintiff Leilani Blake alleged that defendants Granite Bay Acceptance, Inc. and Lease Maturity Services, LLC (“LMS”) accessed her credit report from a national consumer reporting agency, or “CRA,” for an impermissible purpose, including reselling her information, in violation of the FCRA.  Blake became aware that Granite Bay and LMS obtained her consumer information around July 24, 2014, outside of the two-year limitations period.  All three defendants filed motions to dismiss on limitations grounds.

In denying those motions to dismiss, the Court explained that because a motion to dismiss only tests the sufficiency of a complaint, such motions are typically only “appropriate vehicles to resolve a statute of limitations defense” if the “complaint affirmatively shows” that the “claims are time-barred.”  In Count I, Blake alleged that the CRA failed to maintain reasonable procedures to avoid providing consumer reports for an impermissible purpose.  In Count III, Blake alleged that Granite Bay purchased and resold her information without taking reasonable steps to ensure the purchaser had a permissible purpose.  Of critical importance, however, nowhere in the complaint did Blake allege when she learned that her information was being resold.  That fact was unclear, and the lack of clarity resulted in denial of the motions as to Counts I and III.

In Counts II and IV, Blake alleged that Granite Bay and LMS unlawfully obtained her consumer report without a permissible purpose.  Essentially, she claimed that the defendants were not in the business of making firm offers of credit and, therefore, could not use that permissible purpose to justify obtaining her consumer report.  See 15 U.S.C. § 1681b(c)(1).  Again, the complaint did not allege when Blake discovered that the defendants were not in this line of business, and thus the Court declined to dismiss those counts.

Notwithstanding the rulings, the Court noted in its opinions that it had “serious reservation about the timeliness of these claims,” suggesting that the defendants could be successful in later motions practice after development of Blake’s knowledge through discovery.

The Blake decision reiterates the importance of thoroughly reviewing all of the key allegations in an FCRA complaint, as vague language could provide for an early dismissal on procedural grounds.  Blake also cements the notion that raising statute of limitations issues at a preliminary stage of litigation could elicit valuable feedback from the Court and set the stage for future negotiations or favorable motions practice.