Memorandum on Motion to Dismiss Regarding Employment Reporting Agency Falsely Labeling Consumer Sex Offender
























Civil Action No.







Plaintiff , by undersigned counsel, hereby submits this memorandum of law in opposition to Defendants Trans Union, LLC (“Trans Union”) and Verifirst Background Screening, LLC (“Verifirst”) Motion to Dismiss Plaintiff’s Complaint (the “Motion”).  Dk. No. 24.  For the reasons stated below, Defendants’ Motion must be denied.

I. Introduction

In a case where they sold a consumer report which inaccurately labeled Plaintiff a “Sex Offender” and caused him to lose a job, Defendants now unremorsefully argue that the report they sold was accurate, and that the law does not permit Plaintiff any recovery.  Thankfully, neither the Fair Credit Reporting Act, 15 U.S.C. §§ 1681-1681x (“FCRA”) nor our Circuit’s rich and abundant interpretation of it is so draconian.  Curiously, while Defendants so aggressively argue the law and move for dismissal under it, Defendants do not cite a single FCRA case from this district nor our circuit’s recent seminal decision of Cortez  v. Trans Union, LLC, 617 F.3d 688 (3d Cir. 2010).

The reason for this is obvious.  As this Honorable Court will see, Cortez, as here,involved the same Defendant, and its same counsel, unsuccessfully arguing that it was accurate and appropriate for Trans Union to report an innocent consumer as being on the government’s criminal OFAC list.  Trans Union’s argument was received dreadfully and its arguments here should be treated no differently.  In Cortez, our Circuit issued an unequivocal and critical 91 page road map rejecting every one of Trans Union’s arguments and discussing, among other things, the accuracy standard for consumer reports, especially as they pertain to criminal records, and the elements required for proving willfulness, causation and punitive damages in FCRA cases.  No solid legal analysis of FCRA claims premised upon an inaccurate public record in our district can begin without a discussion of Cortez, and Defendants’ conscious decision to ignore it renders their arguments highly circumspect.

Defendants also ignore recent pertinent case law addressing the pleading standards for FCRA cases involving false employment reports and FCRA claims brought under section 1681k, and attempt to revive a First Amendment argument that has no basis in fact or law.  See, e.g., Smith v. Hireright Solutions, Inc., et al., 711 F.Supp.2d 426, 439 (E.D. Pa. May 12, 2010) (Judge Buckwalter holding that similar allegations against another CRA which sold an employment report satisfied the Twombly/Iqbal standard).

Defendants’ Motion is similarly flawed in that it ignores the allegations of Plaintiff’s Complaint and the pertinent facts.  As the Court will see, Plaintiff has more than adequately supported the causes of action he has plead with specific factual allegations, and there can be no serious question that Defendants grossly misreported derogatory and damaging public record information about Plaintiff.  As such, Defendants’ Motion should be denied in its entirety.



On a Rule 12(b)(6) motion to dismiss, the general rules of pleading require only a short and plain statement of the claim showing that the pleader is entitled to relief; detailed factual allegations are not necessary.  Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008). The court must accept a complaint’s factual allegations as true and view them in the light most favorable to the plaintiff.  Buck v. Hampton Twp. Sch. Dist., 452 F.3d 256, 260 (3d Cir. 2006).

Universally recognized as a notice pleading standard, Rule 8(a)(2) calls for a plaintiff filing a complaint in the federal courts to simply provide “a short and plain statement of the claim showing that the pleader is entitled to relief.”  See Bell Atlantic Corp. v. Twombly, 550 U.S. 554, 555 (2007) (“A complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations.”).  See also, Swierkiewicz v. Sorema N. A., 534 U.S. 506, 513 (2002) (calling Rule 8 a “simplified notice pleading standard”), and Scheuer v. Rhodes, 416 U.S. 232, 236 (1974):

When a federal court reviews the sufficiency of a complaint, before the reception of any evidence either by affidavit or admissions, its task is necessarily a limited one. The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims.

The Third Circuit after Twombly has consistently held that when considering a motion to dismiss pursuant to Rule 12(b)(6), the court shall:

“accept all factual allegations in the complaint as true and view them in the light most favorable to the plaintiff” and “determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief.”

Umland v. PLANCO Financial Services, Inc., 542 F.3d 59, 64 (3d Cir. 2008), (quoting Buck v. Hampton Twp. Sch. Dist., 452 F.3d at 260, and Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n. 7 (3d Cir. 2002)). See also, Phillips v. County of Allegheny, 515 F.3d at 233 (finding Pinker “remains an acceptable statement of the standard” and “finding [Twombly] confusing”). “Rule 12(b)(6) does not countenance . . . dismissals based on a judge’s disbelief of a complaint’s factual allegations.” Twombly, 550 U.S. at 556 (quoting Neitzke v. Williams, 490 U.S. 319, 327 (1989)). “A well-pleaded complaint may proceed even if it appears that a recovery is very remote and unlikely.” Id. (quoting Scheuer v. Rhodes, 416 U.S. at 236).

To the extent Twombly, or Ashcroft v. Iqbal, 129 S.Ct. 1937 (2009), impacts the standard of review of a motion seeking dismissal of claims, the opinion merely clarifies that a complaint must “raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. The Third Circuit in Phillips noted that Twombly “‘simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence’ “of the necessary element.” 515 F.3d at 234 (quoting Twombly, 550 U.S. at 556).  And as this Court recently had occasion to observe, relying onPhillips and other post-Twombly decisions, “nothing in Twombly, Iqbal, or Fowler [v. UPMC Shadyside, 578 F.3d 203 (3d. Cir. 2009)] has altered some of the fundamental underpinnings of the Rule 12(b)(6) standard of review ….[Rule 8] requires only a short and plain statement of the claim showing that the pleader is entitled to relief and need not contain detailed factual allegations.” Smith v. HireRight Solutions, Inc., 711 F.Supp.2d 426, 431 (E.D. Pa. 2010) (citations omitted) (denying motion to dismiss FCRA claims).


A Class Action Complaint was filed by Plaintiff  on behalf of a class of similarly situated persons on April 8, 2011.  Dk. No. 1.  The Complaint asserts that the Defendants violated the FCRA by selling to prospective employers prejudicial, inaccurate and incomplete background reports about applicants, by failing to provide contemporaneous notification to the consumer that public record information was being reported about them, and by failing to maintain strict procedures designed to insure that public records information reported by Defendants is complete, accurate and up to date.  See Comp. ¶¶ 32-34; See also 15 U.S.C. §§ 1681e(b) and 1681k.  On May 27, 2011, Defendants filed a motion to dismiss all of Plaintiff’s claims.  Dk. No. 24.

A. Factual Allegations As To The Defendants’ Violations Of The FCRA

The Complaint describes a number of the FCRA’s statutory duties required of a consumer reporting agency (“CRA”).  The Complaint alleges, and no Defendant has denied, that during the relevant time period, the Defendants were each a CRA as defined by section 1681a(f) of the FCRA.  Comp. ¶¶ 6 and 7.  When a CRA furnishes a consumer report for employment purposes, it compiles and reports items of information about consumers that are matters of public record and are likely to have an adverse effect upon a consumer’s ability to obtain employment.[1] Comp. ¶ 32.  The CRA, at the time the public record information is reported to the user of the consumer report, must also comply with the appropriate of two alternate requirements under section 1681k(a).   If the CRA uses a database, in lieu of contemporaneous searches and verifications, it must notify the consumer of the fact that public record information is being reported by the CRA, together with the name and address of the person to whom such information is being reported.  See 15 U.S.C. § 1681k(a)(1).[2] A CRA is also required to follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.  See Comp. ¶¶ 30-31; see also 15 U.S.C. § 1681e(b).

Notwithstanding the statutory requirements, the Complaint alleges that Defendants neither notified the Plaintiff contemporaneously of the fact that public record information was being reported by Defendants. Comp. ¶¶ 33 and 34. It also alleges that the alternate means of compliance – section 1681k(a)(2) is inapplicable as the data sold by Defendants was from an archived database not subject to contemporaneous verification.  Id. The Complaint further alleges that Defendants’ practice exacts serious consequences on consumer job applicants.  When consumers such as Plaintiff have been reported as having criminal records that clearly belong to an individual with a different name, residing in a different state, such consumers are viewed as less desirable job applicants and are more likely not to be hired by the employers who pay Defendants for such reports.  Comp. ¶¶ 28 and 31.  Further, since consumers are not contemporaneously notified of the information being reported about them, they are prejudiced in their ability to adequately determine whether the information reported is accurate.  Comp. ¶¶ 33 and 34.  Pursuant to Defendants’ practice, by the time the consumer is made aware of the inaccurate reporting, it is too late to correct the information because it has already been sold to the employer by the Defendants and has formed the basis of a decision whether to hire the applicant.  Comp. ¶¶ 9, 15-17.

Plaintiff asserts that despite the statutory duties described in the FCRA and the Complaint, the Defendants nonetheless, deliberately, willfully, intentionally, recklessly and negligently adopted policies and practices that disregard these duties, in violation of the FCRA.  Comp. ¶¶ 30-32.

B. Factual Allegations As To The Representative Plaintiff

The Complaint describes the factual background of what happened to the Plaintiff, Leslie Ellis Thomas, as a result of the Defendants failure to abide by the FCRA.

In early May 2010, Plaintiff interviewed at , an X-ray film cleaning company.  Comp. ¶ 8.  After a two and a half hour interview, Plaintiff was conditionally offered the position, and was told he would be able to start on May 17, 2010.  Comp. ¶ 9.  Plaintiff was advised that in the interim a background check would be conducted.  Id.

9.                   After Plaintiff’s interview, and before May 17, 2010,  requested that  LLC (“”) provide a consumer report from VeriFirst, which purchases consumer information from Trans Union to include in its consumer report.  Comp. ¶ 10.  The consumer report (obtained by Plaintiff at a later date) indicates that the report was originally furnished to Pyromet by the Defendants on May 15, 2010, for employment purposes.  Comp. ¶ 26.  Sometime later, Plaintiff received the letter attached to his Complaint as Exhibit A.  Comp. ¶ 15.  Although the letter itself was dated May 15, 2010, Plaintiff did not receive the letter until weeks later, and the report appears to be only furnished to his potential employer, not Plaintiff, on May 15, 2010.  Comp. ¶¶ 15 and 16.  To make matters worse, VeriFirst’s notice letter did not identify the entity or person to whom it actually furnished the report, nor did the Plaintiff receive a report from his prospective employer, or Defendants.  Comp. ¶¶ 17 and 18.  [as you poit out below, defendant Verifirst did provide it weeks later, do you mean to say “did not receive timely”?]

On May 17, 2010, the date that Plaintiff was supposed to begin employment with , Plaintiff contacted  to determine when to report to work, and to determine if Pyromet had completed the background check.  Comp. ¶ 20.  Plaintiff was advised that no one there could answer his questions.  Id. Plaintiff continued to call Pyromet on May 19, 2010, May 20, 2010, May 24, 2010 and May 28, 2010, about the position he had been offered and the status of his offer of employment.  Comp. ¶¶ 22-25.  It was only later, after June 8, 2010 that Defendants mailed to Plaintiff a copy of the report to Plaintiff, and Plaintiff discovered he had been reported to  as a Sex Offender.  Comp. ¶ 26.

The subject consumer report contains information and was created by both Trans Union and VeriFirst.  Comp. ¶ 26.  The subject consumer report includes information labeling him a National Sex Offender.  Comp. ¶ 28.  The report clearly contains information that does not belong to Plaintiff, since the National Sex Offender Registry refers to a “.”  Id. Plaintiff further pleads in his Complaint that Defendants had inaccurately mixed his identity with that of a totally unrelated person.  Id. This unrelated person has a different middle name, date of birth, address, and a different social security number.  Comp. ¶¶ 28 and 30.  This information would likely have an adverse affect upon Plaintiff’s ability to obtain employment, from Pyromet or any other employer, and Plaintiff clearly alleges in his Complaint that this information was a substantial factor in his denial of employment.   Comp. ¶¶ 28 and 32.

As a result of Defendants’ loose matching criteria of personal information, they sold a report about Plaintiff containing inaccurate and derogatory information.  Comp. ¶¶ 28-32.  Further damaging the Plaintiff, Defendants failed to timely notify the Plaintiff and/or maintain strict procedures to insure that the information sold about Plaintiff was accurate, complete and up to date, providing Plaintiff an opportunity to dispute and correct the inaccuracies.  Comp. ¶¶ 28 and 32.

Based on the foregoing allegations, Plaintiff seeks to certify a class of similarly situated persons, statutory damages of $100 to $1,000 per class member, punitive damages, attorney’s fees and costs, pursuant to the FCRA.

C. There Was Nothing “Accurate” About The Public Records Information Reported About The Plaintiff


While it is not generally appropriate to discuss factual matters not alleged in the pleadings, Defendants have made an issue of the “accuracy” of the public records available for Defendants’ review and inclusion in the report they sold about Plaintiff, and Plaintiff believes it appropriate and necessary to set the record straight.

On May 14, 2011, Defendants’ sold a report about Plaintiff to his potential employer .   See Comp. ¶ 11.  See also A true and correct copy of Plaintiff’s consumer report attached hereto as Exhibit ___.  The very first page of this report indicates that it was prepared for Plaintiff, and Plaintiff only, .  Id. The first page of Plaintiff’s report includes one sex offense record.  Id. This is despite the fact that there is no record in Montana or any other jurisdiction where Plaintiff is indicated as a sex offender, as he has never been prosecuted as a criminal, let alone a sex offender.  Comp. ¶ 28.

Defendants’ argument that this information is accurate is preposterous.  Def.’s Mem. at 7-8.  Defendants believe that the information reported about the Plaintiff is accurate despite the fact that they reported Plaintiff was a sex offender, when he is not. Def.’s Mem. at 7.  Defendants prepared a report for Leslie Ellis Thomas, which improperly contained and attributed to the Plaintiff a sex offense committed by a totally unrelated stranger.  Exhibit ____.  The report prepared by Defendants was not for “,” or any individual other than Plaintiff.  Id[3].

Even if Defendants had prepared a report for , the public records information included in that report is not “complete and up to date.”  Def.’s Mem. at 7.  Not all available information from the public record was included in Defendants reports, despite their representations to the contrary.  Defendants included in the report sold about Plaintiff the following:

  • Subject

o   Photo unavailable

o   First Name:

o   Middle Name:

o   Last Name:

o   Birth Date: [blank]

o   Social Security Number: [blank]

  • Subject-

o   Residence: [blank]

o   Address: [blank]

o   City: [blank]

o   State: [blank]

o   Zip: [blank]

  • Physical Details

o   Sex: U

  • Contact Information

o   Telephone: [blank]

o   Mobile: [blank]

o   Email: [blank]

  • Aliases

o   First: Leslie

o   Last: Thomas

o   Date of Birth: [blank]

Exhibit ___.  The information available through the online public records of the Montana Department of Corrections contains considerable information not included in Defendants’ report.  Attached hereto as Exhibit B, is a True and Correct copy of the Montana Department of Corrections Correctional Offender Information.  These public records include:

  • A picture
  • Name:
  • Status: Parole
  • Gender: Male
  • Physical and Demographic Characteristics:

o   Date of Birth: 12-Mar-65

o   Birthplace: Lewistown Montana

o   Ethnicity: White

o   Marital Status: Single

o   Citizenship: United States

o   MT Resident: Yes

o   Height: 5 ft 6 in

o   Weight: 140 lbs

o   L/R Handed: R

o   Hair Color: Brown

o   Build: Medium

o   Skin Tone: Light

o   Eye Color: Blue

o   AKAs: None

o   Scar, Marks, Tattoos, and Other Physical Conditions






Ex._____.  The “publically available materials” identified above includes numerous items or identifying information that Defendants failed to provide in the report it sold about Plaintiff.  Id.


Defendants make numerous arguments in their Motion, none of which warrant the dismissal of any of Plaintiff’s claims, as shown below.

A. The Complaint Sufficiently Alleges That Defendants Violated FCRA Section 1681k


Defendants argue that Plaintiff has failed to plead that Defendants violated 1681k, which regulates a CRA’s obligations when furnishing a consumer report for employment purposes that contains public records which are likely to have an adverse effect on the consumer’s employment.  Section 1681k provides that a CRA must comply with either section 1681k(a)(1) (relating to the requirement of a CRA to provide contemporaneous notification of the fact that it sold likely adverse information relating to a public record about the consumer, along with the name and address of the person to whom it sold that information), or section 1681k(a)(2) (relating to the requirement to have strict procedures to insure that whenever public record information is likely to have an adverse effect on a consumer’s ability to obtain employment, such information is complete and up to date).  This section thus requires that when a CRA furnishes a consumer report for employment purposes, as in the present case, it do one of two things.  It may send the notice described in subparagraph one or it may follow the “Strict procedures” obligated by subparagraph two.  To satisfy this second option, “The CRA must at least re-verify information that was collected prior to the current request for a consumer report for employment purposes to ensure that the status has not changed.”  National Consumer Law Center, Fair Credit Reporting, Sixth Edition (2006), p.126; see also Poole v. Sterling Testing Sys., Inc., 410 F. Supp. 2d 557 (E.D. Ky. 2006).  “Relying upon database records updated every thirty days does not suffice.”  Fair Credit Reporting, p. 125-126. See also Allan, FTC Informal Staff Opinion Letter (May 5, 1999).    This section does not apply to the reports HireRight generates from its secondary database.  Defendants do not contend that they ever re-verified their public records files with the original source (such as a court), let alone in the period thirty days before the reports were furnished.  They never re-verify such public records data.  Thus, Trans Union and Verifirst must rely on the option provided in subsection one of §1681k(a).  They must “notify the consumer” that it the CRAs are furnishing the employment consumer report “at the time such public record information is reported to the user of such consumer report[.]”  15 U.S.C. §1681k(a).

Plaintiff has properly and sufficiently alleged that Defendants violated section 1681k..  Specifically for section 1681k(a)(1) “Defendant VeriFirst provided a delayed and incomplete notice, while Defendant TransUnion provided no notice at all.”  Comp. ¶¶ 4 and 33. If proven through discovery these actions of Defendants would violate section 1681k(a).

Plaintiff also alleges that Defendants do not comply as a routine matter and course with § 1681k(a)(2).  “Defendants did not attempt for any consumer to follow the option available at 15 U.S.C. § 1681k(a)(2), which requires a consumer reporting agency to actually contact the original source of public records information (e.g. the Court clerk) immediately before furnishing a report which includes such information.” Comp. ¶ 34.   Because the Defendants sell out of a preexisting database, this provision is inapplicable.  As another District Court has explained in outlining the cause of action in a nearly identical class action, “Alternatively, the CRA may adopt “strict procedures” to ensure that such reports are accurate. 15 U.S.C. § 1681k(a)(2). That section of § 1681k is not at issue in this litigation, however.”  Williams v. LexisNexis Risk Mgmt. Inc., CIV A 306CV241, 2007 WL 2439463 (E.D. Va. Aug. 23, 2007) (Certifying a national class under 15 U.S.C. § 1681k(a)(1)).

Thus, Defendants allegations that Plaintiff has not pleaded with sufficiency his § 1681k claim are baseless.  The Complaint sufficiently alleges facts in support of Plaintiff’s claim that Defendants have willfully violated §1681k, and as this Court must “accept all factual allegations in the complaint as true and view them in the light most favorable to the plaintiff,” Plaintiff has sufficiently plead his §1681k claim.  Umland v. PLANCO Financial Services, Inc., 542 F.3d 59, 64 (3d Cir. 2008), (quoting Buck v. Hampton Twp. Sch. Dist., 452 F.3d at 260, and Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n. 7 (3d Cir. 2002)).

Defendants’ inappropriately argue the merits of Plaintiff’s claims in their Motion, which is inappropriate in a motion to dismiss.  See Def.’s Mem. at 7. See also Twombly, 550 U.S. at 556 (“Rule 12(b)(6) does not countenance . . . dismissals based on a judge’s disbelief of a complaint’s factual allegations.”).   Defendants argue that the data provided on Plaintiff’s report was a complete and up to date description of what appeared in the Montana public record and thus are exempt from liability under § 1681k(a)(2).  Def.’s Mem. at 7.This argument is ludicrous for several reasons.

First, there is no Montana record that pertains to , the subject of Defendants’ report, and certainly not one that reports he is a sex offender, Defendants’ argument is completely and demonstrably false.  Exhibit ____.

Second, Defendants failed to provide ‘complete’ information about the public records it erroneously furnished about the Plaintiff.  Defendants failed to include address information, which is clearly available to them and included in the public records they allegedly used to compile the report about the Defendant.   Dk. Nos. 24-3 and 24-4.

Last, the public records referenced by Defendants in their Motion do not represent the complete public record for .  The Montana Department of Corrections provides a litany of personal identifying information in its public records available online, which Defendants failed to include in Plaintiff’s report.  Exhibit ____.

Defendants further argue that they have not violated § 1681k since they have no obligation to investigate or insure that the information reported is about the individual they sell information about is about that particular individual, so long as the information they do sell is complete and up to date.  Def.’s Mem. at 7.  This is ludicrous and turns the FCRA on its head.  1681a(d)(1) defines a consumer report as:

“any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer’s eligibility for—


. . .

(B) employment purposes[.]

And 1681e(b)(1) further requires:

(b) Accuracy of report

Whenever a consumer reporting agency prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.


(Emphasis added). Defendants’ suggestion that it can sell consumer reports containing information relating to other individuals with impunity is in opposition to the plain statutory language, Third Circuit case law and common sense.  It is also an argument that Trans Union has unsuccessfully advanced previously in Cortez v. Trans Union, LLC, 617 F.3d 688, 708 (3d Cir 2010) (“According to Trans Union, its credit report contained the most accurate information possible because Trans Union simply included the information furnished by the government”).  The Third Circuit refused Trans Union’s argument and held that a report is prepared by a CRA for a single individual, at the request of a business providing that individual’s identifying information, so the impression is created for the recipient of the report that the inaccurate information belongs to the consumer.  Cortez, 617 F.3d at 708-9.

Thus, Plaintiff has sufficiently plead his allegations under §1681k by providing “a short and plain statement of the claim showing that the pleader is entitled to relief” and has shown that Defendants’ premature and unsupported arguments that they can escape liability because they have complied with the statute do not warrant a dismissal of his claims.  Bell Atlantic Corp. v. Twombly, 550 U.S. 554, 555 (2007).

B. The Complaint Sufficiently Alleges That Defendants Violated FCRA Section 1681e(b)


Plaintiff has sufficiently alleged that Defendants violated FCRA section 1681e(b).  Section 1681e(b) requires that “[w]henever a consumer reporting agency prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.”

Plaintiff alleges that Defendants sold a report about him to a potential employer.  Comp. ¶¶ 11 and 12.  Plaintiff alleges that this report contained inaccurate information, namely that he is a sex offender.  Comp. ¶ 28.  Plaintiff alleges that this inaccuracy is as a result of Defendants’ failure to utilize reasonable procedures, including their use of loose matching criteria.  Comp. ¶ 31.  These unreasonable procedures permitted inaccurate sex offender records to be attributed to Plaintiff and included in his report.  Id.

Defendants baldly argue that Plaintiff’s FCRA section 1681e(b) claim must be dismissed because “the information provided was the result of “reasonable procedures” designed to ensure ‘maximum possible accuracy.’”  Def.’s Mem. at 8.  Defendants fail to cite a single case, or articulate a single procedure to support their assertion.  This is not surprising, considering the Third Circuit recently upheld a jury verdict against Trans Union for including public records information for an unrelated individual on a consumer’s report, the very same allegations Plaintiff makes here.  Cortez v. Trans Union, LLC, 617 F.3d 688, 710 (3d Cir 2010).  The Court held in response to Trans Union’s arguments that it could not be held liable for reporting information gleaned from a public record that “Trans Union remains responsible for the accuracy in its reports under the FCRA and it cannot escape that responsibility as easily as it suggests here. Moreover, this merits based conclusion is inappropriate in a Rule 12(b)(6) motion.  See Vassalotti v. Wells Fargo Bank, N.A., 732 F. Supp. 2d 503, 510 n.6 (E.D. Pa. Aug. 9, 2010 (J. Brody held that the accuracy of the disputed information on a consumer’s credit report is an improper inquiry at the motion to dismiss phase).

Congress clearly intended to ensure that credit reporting agencies exercise care when deciding to associate information with a given consumer, and the record clearly supports the jury’s determination that Trans Union did not exercise sufficient care here.”  Id. Defendants’ unsupported assertion that the “information provided was a result of ‘reasonable procedures’ designed to ensure ‘maximum possible accuracy’” does not provide this Court with reason to dismiss Plaintiff claims, especially in light of the Cortez decision finding the same procedures of Defendant Trans Union in violation of § 1681e(b).

C. The Complaint Sufficiently Alleges That Defendants Acted Willfully in Violation Of The FCRA


Defendants also move to dismiss Plaintiff’s willfulness allegations. Def.’s Mem. at 4.  Defendants are wrong.  To establish a willfulness claim a plaintiff must prove that a defendants acted in reckless disregard of the FCRA.  See Safeco Ins. Co. of America v. Burr, 551 U.S. 47 (2007).  Defendants’ attack on Plaintiff’s willfulness claims is that they are too general and conclusory.  Def.’s Mem. at 5. This is untrue.  The Plaintiff states that the Defendants knew or should have known their obligations and consciously breached these duties and acted willfully.  Comp. ¶¶ 35, 37 and 49.   Such allegations are sufficient.

1. The Willfulness Standard:  Reckless or Conscious Disregard

Defendants’ challenges under Twombly and Safeco misstate the legal requirements at the motion to dismiss stage, and further, Plaintiff has satisfied his pleading requirements.

Defendants rely on the analysis from Safeco Insurance Co. of America v. Burr, 551 U.S. 47 (2007), but in so doing, Defendants are putting the cart before the horse.  In Safeco, the district courts had granted summary judgment.  By contrast here, the parties are not at the stage of the litigation where a finding of willful conduct is necessary; establishing willfulness should await full discovery and dispositive motion briefing.  Korman v. Walking Co., 503 F. Supp. 2d 755, 761 (E.D. Pa. 2007) (Robreno, J.) (pointing out that Safeco arose in a different litigation context and holding that determination of willfulness not appropriate at motion to dismiss stage); Miller v. Sunoco, Inc., 2008 WL 623806, *2 (E.D. Pa. March 4, 2008) (Kauffman, J.) (same); Ehrheart v. Lifetime Brands, Inc., 498 F.Supp.2d 753, 756 (E.D. Pa. 2007) (Padova, J.) (motion to dismiss denied where the complaint sufficiently alleged that defendant’s violation of FCRA was either knowing or reckless, “accordingly, … the Complaint plausibly alleges that Defendant’s violation … was willful”).  Accord, Hedlund v. Hooters of Houston, 2008 WL 2065852, *3-4 (N.D. Tex. 2008) (citing cases).

In addition to being premature,Defendants argue the wrong standard.A plaintiff need not allege a knowing violation (although the fact that Defendants here must have had knowledge of their own written compilation of inaccurate reporting is hardly controvertible), but only that the defendant recklessly committed an act in reckless or conscious disregard of the rights of others, and Plaintiff has done that.  See Cushman v. Trans Union Corp., 115 F.3d 220, 227 (3d Cir. 1997). This is alower standard than the standard for willful violations or punitive damages claims under most common law torts.  Although the terms “willful” or “willfully” are not defined in the FCRA, case law has held that neither malice nor evil motive need be established for a finding of a willful violation.  Id.; see also Stevenson v. TRW, Inc., 987 F.2d 288, 294 (5th Cir. 1993), citing Fischl v. General Motors Acceptance Corp., 708 F.2d 143, 151 (5th Cir. 1983).

Many courts have noted that willfulness under the FCRA is demonstrated by recklessness and not by a knowing violation of the law.  Cushman, 115 F. 3d at 227; Stevenson, 987 F2d at 293 (citing Pinner v. Schmidt, 805 F.2d 1258, 1263 (5th Cir. 1986).  See also Reynolds v. Hartford Fin. Servs. Group, 435 F.3d 1081, 1097-99 (9th Cir. 2006), rev’d on other grounds by Safeco Ins. Co. of America v. Burr, 551 U.S. 47 (2007) (discussing meaning of “willfully” under FCRA and relying on Cushman).  Such reckless or conscious disregard may be found when a defendant adopts a policy either knowing it to be in “contravention of the rights possessed by consumers under the FCRA or in reckless disregard for whether the policy contravenes those rights.” Cushman, 115 F. 3d at 227; see also Reynolds, 435 F.3d at 1097-99.

D. The Complaint Sufficiently Alleges Causation

Defendants argue that Plaintiff’s negligence claims set forth under section 1681o cannot survive because he has not pleaded causal harm.  Def.’s Mem at 5.  Defendants are wrong.  While it is true that a negligence claim under 1681o of the FCRA does require a causal link between Defendants’ action and the harm suffered by Plaintiff, Plaintiff has done so.  Comp. ¶¶ 3, 8-30 and 32.  Plaintiff alleges that he lost employment with Pyromet and that the inaccurate sex offender record was a substantial factor in that job loss.   Comp. ¶ 32.  To prove causation under the FCRA Plaintiff needs to show that the inaccuracy was a substantial factor in the denial.  Id.

Thus Plaintiff’s Complaint sufficiently pleads causation and cognizable damages suffered as a result of Defendants’ inaccurate reporting.

E. Selling False Information To Potential Employers About Consumers Is Not Protected Speech Under the First Amendment


Defendants further argue that the requirement that they report information about consumers accurately violates their First Amendment rights.  Def.’s Mem at 8.  Defendant Trans Union has advanced its First Amendment argument previously, and has been advised that it lacks merit. Trans Union Corp. v. FTC, 245 F.3d 809, 811 (D.C. App. 2001); cert denied, 536 U.S. 915 (2002), (Trans Union alleged that FCRA claims were subject to strict scrutiny under the First Amendment, the Court found such allegations were “without merit”).  The Court further explains Defendant’s misapplication of Dun & Bradstreet, Inc. v. Greenmoss Builders, Inc., 472 U.S. 749, which Defendants have also misapplied here, stating “the Supreme Court held that a consumer reporting agency’s credit report warranted reduced constitutional protection because it concerned “no public issue.”  Trans Union Corp., 245 F.3d at 817 (citing Dun & Bradstreet, 472 U.S. at 762).  Here, Mr. Thomas’ consumer report issued by Defendants was for a private use, by a private company for private employment considerations.  Comp. ¶¶ 10 and 16.  Since the consumer report at issue here “was speech solely in the interest of the speaker and its specific business audience” there is no matter of public concern which would heighten this Court’s scrutiny of Plaintiff’s claims under the FCRA.  Dun & Bradstreet, 472 U.S. at 762.

Additionally, Defendants’ allegation that they “have done nothing more than report information from a public record” is unavailing.  Defendants compile and sell reports about specific individuals, and such reports are governed by the FCRA requirement that reports be made with maximum possible accuracy.  Cortez, 617 F.3d at 708.  Reporting a subject consumer is included in a Sex Offender List, when the subject consumers name, address, date of birth, social security number, physical description and other personal information is clearly different from the information included in the public record, is not reporting with maximum possible accuracy.  As discussed at length above, such an argument is unavailing under the FCRA, and Plaintiff is entitled to proceed on his claims.

F. Defendants’ Public Policy Argument Is Absurd


Defendants finally argue that “the risk to the public of not detecting that an applicant has a serious criminal record far outweighs any short-term, inconvenienced to an applicant.”  Def.’s Mem. at 2.  Defendants are CRAs and have obligations under the FCRA to report information about consumers with the maximum possible accuracy.  15 U.S.C. § 1681e(b).  Defendants also have an obligation to provide consumers with an opportunity to review employment records for inaccuracies before an employment decision is made about them, or in the alternative utilize strict policies to insure that what they do report is complete and up to date.  15 U.S.C. § 1681k.  Defendants have no obligation under the FCRA to “provide the broadest possible range of data,” and obviously, Defendants have not provided any legal support for their contention.    Defendants’ obligations, as articulated in the plain statutory language and the FCRA case law, is the exact opposite of “providing the broadest possible range of data,” and a fact well known to Defendants.  Cortez, 617 F.3d at 709.  Moreover, if Defendants actually satisfy their FCRA statutory duties and report complete and accurate information, employers and the public will suffer no harm.

Thus Defendants’ attempt to argue for dismissal of Plaintiff’s claims on public policy grounds is baseless and must be denied.



For all the foregoing reasons, Plaintiff  respectfully requests that the Court deny the Defendants’ Motion to Dismiss and enter an Order requiring Defendants to file an Answer to the Complaint within fourteen (14) days.

Respectfully submitted,

Francis Mailman Soumilas, P.C.

By:      /s/ James A. Francis



Land Title Building, 19th Floor

100 South Broad Street

Philadelphia, PA 19110

(215) 735-8600

Robert P. Cocco, P.C.


1500 Walnut Street, Suite 900

Philadelphia, PA 19102

(215) 351-0200


Consumer Litigation Associates, P.C.


12515 Warwick Boulevard, Suite 100

Newport News, VA 23606

(757) 930-3660

Dated: July 1, 2011 Attorneys for Plaintiff and the Class

[1] The statute cites examples of such public record information as relating to “arrests, indictments, convictions, suits, tax liens, and outstanding judgments.”  15 U.S.C. § 1681k(a)(2).

[2] In circumstances in which the CRA does a contemporaneous search and can verify the current status and correctness of the public record directly from the courthouse, it may elect to comply with section 1681k9a)(2) instead.  Under this section, the CRA is required to maintain strict procedures designed to insure that whenever public record information which is likely to have an adverse effect on a consumer’s ability to obtain employment is reported, that information is complete and up to date.  Id.  See also Comp. ¶¶ 4, 33-34.

[3] While not as common as “John Smith” or “Mary Jones”, “Leslie Thomas” is not particularly rare or unusual.   According to U.S. Census data, during the relevant time period, “Thomas” was the tenth most common name in the United States and there were known to be nearly 1,000 persons named “Leslie Thomas.”   See e.g. last viewed on June 30, 2011.