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Pigg v. Fair Collections & Outsourcing of New England, Inc.

United States District Court, S.D. Indiana, Indianapolis Division

July 18, 2017

VIVIAN PIGG, Plaintiff,
v.
FAIR COLLECTIONS & OUTSOURCING OF NEW ENGLAND, INC., Defendant.

          ORDER

          Hon. Jane Magnus-Stinson, Chief Judge

         Plaintiff Vivian Pigg defaulted on her lease agreement with her former landlord. [Filing No. 34 at 2.] The debt was transferred to Defendant Fair Collections & Outsourcing of New England (“Fair Collections”), and Fair Collections attempted to collect the debt from Ms. Pigg. [Filing No. 34 at 2.] Ms. Pigg claims that without a permissible purpose, Fair Collections procured her credit report. [Filing No. 34 at 2.] In addition, Ms. Pigg asserts that after she filed for bankruptcy protection, Fair Collections contacted Ms. Pigg on numerous occasions to collect the debt. [Filing No. 34 at 4.] She initiated this litigation alleging that Fair Collections violated the Fair Credit Reporting Act (“FCRA”) and the Fair Debt Collection Practices Act (“FDCPA”). [Filing No. 1; Filing No. 34.] Fair Collections has now filed a Motion to Dismiss Count I of Plaintiff's First Amended Complaint, [Filing No. 38], and Ms. Pigg opposes that motion, [Filing No. 46].

         I.

         Standard of Review

         Federal Rule of Civil Procedure 8(a)(2) “requires only ‘a short and plain statement of the claim showing that the pleader is entitled to relief.'” Erickson v. Pardus, 551 U.S. 89, 93 (2007) (quoting Fed. R. Civ. Pro. 8(a)(2)). “Specific facts are not necessary, the statement need only ‘give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.'” Erickson, 551 U.S. at 93 (quoting Bell Atlantic v. Twombly, 550 U.S. 544, 555 (2007)).

         A motion to dismiss asks whether the complaint “contain[s] sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). In reviewing the sufficiency of a complaint, the Court must accept all well-pled facts as true and draw all permissible inferences in favor of the plaintiff. See Active Disposal, Inc. v. City of Darien, 635 F.3d 883, 886 (7th Cir. 2011). The Court will not accept legal conclusions or conclusory allegations as sufficient to state a claim for relief. See McCauley v. City of Chicago, 671 F.3d 611, 617 (7th Cir. 2011). Factual allegations must plausibly state an entitlement to relief “to a degree that rises above the speculative level.” Munson v. Gaetz, 673 F.3d 630, 633 (7th Cir. 2012). This plausibility determination is “a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id.

         II.

         Relevant Background

         The following background is set forth pursuant to the applicable standards, accepting all well-pled factual allegations against Fair Collections from Ms. Pigg's Amended Complaint as true. Ms. Pigg had entered into a lease agreement with her landlord, Ashford Keystone Apartments, and later incurred a debt as a result of a default on the lease agreement. [Filing No. 34 at 2.] Fair Collections attempted to collect an outstanding balance that Ms. Pigg allegedly owed. [Filing No. 34 at 2.] After Fair Collections attempted to collect the debt from Ms. Pigg, it reported the debt to various credit reporting agencies. [Filing No. 34 at 2.] On June 18, 2015, Ms. Pigg reviewed her TransUnion report and noticed that Fair Collections procured her credit report on April 15, 2015. [Filing No. 34 at 2.] Ms. Pigg claims that Fair Collections never received permission from Ms. Pigg to obtain her credit report. [Filing No. 34 at 3.]

         III.

         Discussion

         Fair Collections' sole challenge in its Motion to Dismiss is to Ms. Pigg's FCRA claim brought under 15 U.S.C. § 1681b(f). [Filing No. 39 at 1.] It argues that Ms. Pigg “admits that she defaulted on her rental agreement with her former landlord” and that “[Fair Collections] began attempting to collect from her the unpaid rent on behalf of [her] former landlord.” [Filing No. 39 at 3.] Fair Collections argues that “[t]hese admissions demonstrate that [Fair Collections] obtained [Ms. Pigg's] credit report for the permissible purpose of ‘collection of an account.'” [Filing No. 39 at 3.] Fair Collections argues that Ms. Pigg's claim that the rental agreement is not “credit” under the law and was not a credit transaction is “both false and irrelevant for purposes of analyzing [Fair Collections'] liability under the FCRA.” [Filing No. 39 at 3.] Fair Collections claims that the end result is that “unpaid rent constitutes consumer debt for which [Fair Collections] was attempting to collect.” [Filing No. 39 at 4.]

         In response, Ms. Pigg argues that Fair Collections has based its Motion to Dismiss on a misreading of the statute. [Filing No. 46 at 6.] She claims that in order for the credit agency to furnish a consumer report to a person, it “must be in connection with a credit transaction involving the consumer, and then, either involving extension of credit to that consumer or review or collection of an account of that consumer.” [Filing No. 46 at 6.] Ms. Pigg claims that Fair Collections ignores the first requirement that the consumer report must be in connection with a credit transaction and focuses solely on the language “collection of an account.” [Filing No. 46 at 6.] Ms. Pigg argues that a lease agreement is not considered a credit transaction, and that the case law that Fair Collections relies on “is over twenty years old and its legal basis has eroded over time.” [Filing No. 46 at 7.] Lastly, Ms. Pigg cites to a Seventh Circuit Court of Appeals case that she claims demonstrates that a residential lease is not a credit transaction. [Filing No. 46 at 8-9.]

         In reply, Fair Collections argues that the focus here is “whether [Fair Collections] had a permissible purpose for allegedly requesting a copy of [Ms. Pigg's] credit report.” [Filing No. 50 at 1.] Fair Collections claims that “all the ‘permissible purposes' under the FCRA do not all involve or relate to the issuance of credit, ” and it mentions in passing several examples of permissible purposes. [Filing No. 50 at 1-2.] Fair Collections further argues that the case law that it cited remains good law, and that the case that Ms. Pigg relies on is factually different from the underlying litigation. [Filing No. 50 at 2-3.] Fair Collections claims that “[e]very day [Ms. Pigg] stays in the apartment without paying she is being extended a form of credit which will ultimately be collected from her.” [Filing No. 50 at 3-4.] It argues that Ms. Pigg's interpretation of the statute is wrong, and that the portion of ...


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