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Emotional Harms For Alleged FCRA Violations?

By Daniel Lonergan, Kristin Bryan & Angelo Carosio on June 16, 2021
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Last month, a federal court addressed the kind of harms that need to be included in a plaintiff’s complaint asserting claims under the Fair Credit Reporting Act (“FCRA”) and Fair Debt Collection Practices Act (“FDCPA”) to survive a motion to dismiss.  Magruder v. Capital One, Nat’l Ass’n, 2021 U.S. Dist. LEXIS 94804 (D.D.C. May 19, 2021).  Finding that the plaintiff had “barely” overcome the bar, the court reaffirmed the minimum pleading requirements necessary for such claims.  Read on for more details.

Plaintiff’s initial lawsuit brought claims against several financial institutions and debtor collectors.  Alleging that his attempts to resolve disputes with his credit reports had had him effectively running in circles, Plaintiff brought suit against all the defendants for violations of the FCRA, and against one defendant specifically for violations of the FDCPA.

Prior to going any further with the case, the court ordered Plaintiff to show that he had suffered an “injury in fact” sufficient to satisfy the threshold requirement of Article III standing.  This necessitated that Plaintiff show that he had been harmed in a real sense, that is, that he has personally affected, and the harm was not hypothetical or abstract.  [Note: Injury for purposes of Article III in some instances can include intangible harms, including emotional harms in very specific instances.]

In assessing Plaintiff’s injury claims, the court expressed repeatedly that his claims of a tangible harm were “thin by any measure.”  Plaintiff claimed that he had suffered economic losses, but provided no details explaining the amount of the losses, or how they happened.  Still, the court found that the bar was low enough that Plaintiff’s complaint was sufficient for a number of his claims, at least at this point.

Most notably, the court found that while Plaintiff had not claimed any tangible loss as a result of Trans Union’s alleged violation of FCRA, his emotional harm was enough.  Plaintiff alleged that Trans Union’s failure to follow reasonable procedures to assure maximum accuracy (§ 1681e(b)) and failure to conduct a reasonable investigation” (§ 1681i(a)) had caused him “embarrassment, humiliation and other mental and emotional distress.”

The court found that FCRA was, at least in part, designed with this specific kind of injury in mind.  Plaintiff claimed that his credit reports incorrectly said that he had outstanding debt, when he did not.  That false claim was spread to other parties, causing emotional harms.  “The FCRA was enacted to deter just this.”  The court also extended this to the FDCPA, noting that courts have previously ruled that a plaintiff may have standing in FDCPA cases if the alleged violation “caused anxiety” or “stress and inconvenience.”

Note that in the context of the FCRA and FDCPA, other courts have taken a contrary approach as to whether such damages suffice at the pleadings stage.  This issue is far from settled in this area of data privacy law.  Not to worry, CPW will be there to keep you in the loop.

Photo of Daniel Lonergan Daniel Lonergan
Read more about Daniel LonerganEmail
Photo of Kristin Bryan Kristin Bryan

Kristin Bryan is a data privacy and cybersecurity litigator experienced in the resolution of complex disputes.

Kristin has deep expertise defending clients in federal class action and multidistrict litigations concerning allegations that their practices violated federal and state privacy laws. This includes in…

Kristin Bryan is a data privacy and cybersecurity litigator experienced in the resolution of complex disputes.

Kristin has deep expertise defending clients in federal class action and multidistrict litigations concerning allegations that their practices violated federal and state privacy laws. This includes in the context of data breach and incident response litigation. As a natural extension of her experience litigating data privacy disputes, Kristin also provides practical, business-oriented privacy advice to a wide range of clients and has represented them in government investigations regarding their privacy practices.

Kristin is CIPP/US certified and routinely publishes and speaks on cutting-edge developments in data privacy and cybersecurity litigation. Kristin is currently the co-chair of the International Association of Privacy Professional (IAPP)’s KnowledgeNet Chapter for Cleveland and on the IAPP’s Privacy Bar Advisory Board. She is a 2020-21 Vice Chair of the ABA TIPS Cybersecurity and Data Privacy Committee and managing editor of Squire Patton Boggs’ data privacy blog Consumer Privacy World.

Prior to joining the firm, Kristin worked at an international law firm in New York, specializing in Data Strategy & Security.

View full website bio.

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Photo of Angelo Carosio Angelo Carosio

Angelo has been a LexBlog employee for over 8 years, starting on the Success team and then moving into a developer role. These days he mostly spends his time working on the back-end of the LexBlog platform fixing bugs and working on new…

Angelo has been a LexBlog employee for over 8 years, starting on the Success team and then moving into a developer role. These days he mostly spends his time working on the back-end of the LexBlog platform fixing bugs and working on new features for our customers.

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  • Posted in:
    Privacy & Data Security
  • Blog:
    Consumer Privacy World
  • Organization:
    Squire Patton Boggs
  • Article: View Original Source

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