Fair Credit Reporting Act • Preemption of Statutory and Common Law Claims

Grossman v. Trans Union, PICS Case No. 14-0094 (E.D. Pa. Jan. 17, 2014) Robreno, J. (13 pages).

Section 1681t(b)(1)(F) of the federal Fair Credit Reporting Act preempts all state law claims with respect to all subject matter regulated under section 1681s-2, which requires those who furnish consumer information to credit reporting agencies to take particular measures to ensure accuracy. Motion to dismiss granted.

Plaintiff sued furnisher of credit reporting information (Ocwen) for defamation, negligence and invasion of privacy, alleging that inaccurate information Ocwen provided to credit reporting agencies resulted in plaintiff’s denial of various loans and extensions of consumer credit.

Ocwen moved to dismiss these common law claims, arguing that they were prevented by section 1681t(b)(1)(F) of the federal Fair Credit Reporting Act (FCRA). Plaintiff argued that this section preempted only statutory claims, not those based on state common law. The district court granted the motion.

Section 1681t(b)(1)(F) prohibits states from imposing any requirement or prohibition relating to the responsibilities of furnishers of information to consumer reporting agencies that is inconsistent with §1681s-2 of the FCRA. Section 1681s-2 requires such persons to take particular measure to ensure accuracy. Ocwen argued that §1681t(b)(1)(F) preempts state law claims that relate to the subject matter of §1681s-2. Plaintiff asserted that an older provision of the FCRA (§1681h(e)) preempts only common law actions where malice or willful intent is not present, and supports his statutory approach to §1681t(b)(1)(F). However, a large body of case law interpreting preemption provisions in other statutes supports reading §1681t(b)(1)(F)’s ban as a blanket preemption provision. Moreover, although the Third Circuit has never directly held that §1681t(b)(1)(F) preempts both statutory and common law claims, it has cited with approval to other circuit opinions that adopt the blanket approach to other sections of §1681t(b)(1)(F).

Section 1681h(e), an earlier provision advanced by plaintiff, does not apply to a furnisher of information such as Ocwen, but rath-er to the disclosure of information by consumer reporting agencies to consumers, and to users of information contained in consumer reports.