Dornhecker v. Ameritech Corp.

Majority - Pallmeyer, District Judge

Yes, the Fair Credit Reporting Act (FCRA) creates a private right of action for consumers to sue furnishers of information who fail to properly reinvestigate disputed credit information under 15 U.S.C. § 1681s-2(b). The court determined this by applying the four-factor test from Cort v. Ash to ascertain congressional intent. First, Dornhecker and Sanchez are members of the class Congress intended to protect, as the FCRA aims to ensure fair and accurate credit reporting for consumers. Second, legislative history, particularly Senator Bryan's summary, suggests an affirmative intent by Congress to create a private cause of action for violations of § 1681s-2(b) while explicitly limiting it for § 1681s-2(a). Third, implying a private remedy does not frustrate the FCRA's purpose; instead, it reinforces the Act's goal of protecting consumers from erroneous credit reporting, especially given that furnishers had no prior statutory duties. Fourth, a private right of action is appropriate as the FCRA is intended to coexist with state consumer protection laws. The court also gives deference to a Federal Trade Commission staff opinion supporting a private right of action. However, the court also ruled on several other issues: FCRA claims related to events before September 30, 1997 (the effective date of § 1681s-2) are dismissed. Dornhecker's FCRA claim arising in August 1998 is not time-barred, as the complaint was filed within the two-year statute of limitations. Sanchez's FCRA claim is dismissed without prejudice because he failed to allege that a consumer reporting agency (rather than he himself) notified Ameritech of the dispute, which is the trigger for a furnisher's duty under § 1681s-2(b). Dornhecker's FCRA claim is dismissed without prejudice because his own factual allegations demonstrated that Ameritech did investigate and correct the inaccurate information, thus "pleading himself out of court" by disproving the alleged violation. Johnson's state law claims are dismissed for lack of supplemental jurisdiction, as they do not arise from a "common nucleus of operative fact" with the federal claims, involving separate and individual fraudulent accounts rather than a common scheme. Regarding Dornhecker’s and Sanchez’s state law claims, the court found they were not preempted by FCRA § 1681t(b)(1)(F) because common law torts do not regulate furnishers' obligations. However, they are subject to preemption under § 1681h(e) unless malice or willful intent to injure is sufficiently pleaded, which the court found Plaintiffs had done at the motion to dismiss stage. Dornhecker's negligence claim for August 1998 is timely, but his defamation and invasion of privacy claims are time-barred by Illinois' one-year statute of limitations as he discovered the fraudulent report by September 1998. Sanchez's negligence, defamation, and invasion of privacy claims related to a February 1999 incident are timely. However, Sanchez’s defamation claim is dismissed without prejudice for failing to sufficiently plead special damages by specifying actual pecuniary loss.