UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

STEPHON MAGRUDER,

Plaintiff,

v. Civil Action No. 19-57 (RDM)

CAPITAL ONE, NAT’L ASS’N, et al.,

Defendants.

MEMORANDUM OPINION AND ORDER

Plaintiff Stephon Magruder brought suit under the federal Fair Debt Collection Practices

Act (“FDCPA”),

, et seq., the Maryland Consumer Debt Collection Act

(“MCDCA”),

(8), and the federal Fair Credit Reporting Act

(“FCRA”),

et seq., alleging that various credit reporting agencies

misrepresented information about him on his credit reports; that several banks erroneously

provided those agencies with the misstated information; and that one debt collector wrongly

pursued him to recover debts stemming from the agencies’ and banks’ errors. See generally Dkt.

29 (Am. Compl.). Since filing suit, Plaintiff has stipulated to dismissal of some, but not all, of

the Defendants. This Court subsequently ordered Magruder “to show cause why this case should

not be dismissed as to [the remaining] defendant[s] for lack of Article III standing.” Minute

Order (Sept. 13, 2019). For the reasons explained below, the Court concludes that Plaintiff has

standing.

I. BACKGROUND

For purposes of assessing Magruder’s standing at this early stage of the litigation, the

Court must take the allegations of the complaint as true and must consider the “undisputed facts

1 evidenced in the record” as they relate to Magruder’s standing. Herbert v. Nat’l Acad. of Scis.,

(D.C. Cir. 1992). The Court, accordingly, premises its decision on the

following allegations and undisputed facts.

In May 2017, Magruder obtained his credit reports from the three major credit reporting

agencies: Equifax, Experian, and Trans Union. Dkt. 29 at 2 (Am. Compl. ¶ 11). Upon review,

Magruder determined that the reports contained several inaccuracies:

• For his tradeline (i.e., credit account) with the Navy Federal Credit Union, the reports overstated Magruder’s past due amount and charge-off amount, “misrepresented the credit utilization rate by failing to distinguish between purchases and fees,” and “reported [the tradeline] in a manner where it appear[ed] that Magruder made purchases in excess of his credit limit.” Id. at 3 (Am. Compl. ¶¶ 13–15).

• For his tradeline with Capital One, the reports overstated his outstanding balance, failed to note that his account was charged off, and “misrepresented the credit utilization rate by failing to distinguish between purchases and fees.” Id. at 4 (Am. Compl. ¶ 19).

• For his tradeline with First Premier Bank, the reports overstated his outstanding balance, failed to note that his account was charged off, “misrepresented the credit utilization rate by failing to distinguish between purchases and fees,” and listed Magruder as having two accounts with First Premier when he only had one. Id. at 4–5 (Am. Compl. ¶ 22).

• For his tradeline with Credit One, the reports overstated his outstanding balance, failed to note that his account had been paid, “misrepresented the credit utilization rate by failing to distinguish between purchases and fees,” and, with regards to Equifax and Trans Union’s reports specifically, “completely failed to report any information regarding Plaintiff’s payment of [his] debt” to Credit One. Id. at 5–6 (Am. Compl. ¶ 26–27).

After discovering these inaccuracies, Magruder sent each reporting agency a dispute

letter identifying the purported errors and requesting that the agency correct the errors. See id. at

3 (Am. Compl. ¶ 16) (letter regarding Navy Federal Credit Union tradeline); id. at 4 (Am.

Compl. ¶ 20) (letter regarding Capital One tradeline); id. at 5 (Am. Compl. ¶ 23) (letter regarding

First Premier Bank tradeline); id. at 6 (Am. Compl. ¶ 28) (letter regarding Credit One tradeline).

2 But instead of investigating Magruder’s complaints, Equifax and Trans Union merely forwarded

Magruder’s dispute letters to the various banks with whom Magruder held his accounts. See id.

at 3 (Am. Compl. ¶ 17); id. at 4 (Am. Compl. ¶ 21); id. at 5 (Am. Compl. ¶ 24); id. at 7 (Am.

Compl. ¶ 33). Two of those banks—Navy Federal and First Premier—allegedly investigated

Magruder’s disputes in a “quick[,] sloppy[,] and superficial” manner that failed to verify whether

the information reported on Magruder’s credit reports was accurate. Id. at 4 (Am. Compl. ¶ 18);

id. at 5 (Am. Compl. ¶ 25). Another bank—Credit One—meanwhile “admitted that it could not

verify any of the information being reported” because it had transferred Magruder’s account to

LNLV Funding (“LNLV”), id. at 6 (Am. Compl. ¶ 28), “one of the largest national debt

collectors in the United States,” id. at 2 (Am. Compl. ¶ 10). LNLV, after conducting a “quick,

sloppy[,] and superficial” investigation into Magruder’s dispute, concluded that it too “could not

verify” Magruder’s debt. Id. at 6 (Am. Compl. ¶¶ 29–30). Instead, it “referred [Magruder] from

place to place” until finally directing him to contact a debt-collection law firm named Stillman.

Id. (Am. Compl. ¶ 29). Magruder called Stillman, who informed him that it was likewise

“unable to validate [his] debt.” Id. (Am. Compl. ¶ 29). Nevertheless, Stillman said, “a lawsuit

had been filed and a judg[]ment obtained against” Magruder for that debt. Id. (Am. Compl.

¶ 29). Magruder asked Stillman for “proof that the lawsuit was served on him.” Id. (Am.

Compl. ¶ 31). None came. Id. at 6–7 (Am. Compl. ¶ 31).

At this point, nearly one-and-a-half years had passed since Magruder first discovered his

credit reports’ inaccuracies. Compare id. at 2 (Am. Compl. ¶ 11) with id. at 7 (Am. Compl.

¶ 32). Yet after contacting the credit reporting agencies, the banks, the debt collector, and the

debt-collection law firm, Magruder was no closer to resolving his dispute. In a last effort,

Magruder sent yet another letter to Equifax, Experian, and Trans Union asking for their help. Id.

3 at 7 (Am. Compl. ¶ 32). Trans Union responded by falsely claiming that its report was accurate;

Experian “disingenuously claimed it could not process the dispute;” and Equifax neglected to

respond at all. Id. (Am. Compl. ¶ 33).

Three weeks later, Magruder brought this suit. See Dkt. 1–2 at 2. His initial complaint,

filed in the Superior Court of the District of Columbia, alleged: (1) in Count One, that LNLV

violated § 1692e(2), (8), and (10) and § 1692f of the FDCPA by “falsely representing that a debt

was owed,” “falsely representing that a judgment had been obtained,” and “communicating

information that it knew was false to the [credit reporting agencies],” id. at 7–8; (2) in Count

Two, that LNLV violated § 14-202(8) of the MCDCA “by claiming that it had obtained

judgment against” Magruder, id. at 8; (3) in Count Three, that Navy Federal, Capital One, First

Premier Bank, Credit One, and LNLV violated § 1681s-2(b)(1)(A)–(E) of the FCRA by failing

adequately to investigate and remedy Magruder’s disputes, and that Navy Federal, Credit One,

and LNLV violated § 1681s-2(b)(1)(C)–(E) of the FCRA “by failing to report the status of the

debt as disputed,” id. at 8–10; (4) in Count Four, that Equifax, Experian, and Trans Union

violated § 1681e(b) of the FCRA “by failing to establish and/or follow reasonable procedures to

assure maximum possible accuracy in the preparation of . . . Magruder[’s] credit reports and

credit files,” id. at 10–11; and (5) in Count Five, that Equifax and Trans Union violated

§ 1681i(a) of the FCRA in various ways, most saliently, “by failing to conduct a reasonable

investigation” into Magruder’s dispute and by failing to modify Magruder’s credit reports to

remedy their purported inaccuracies, id. at 11–12.

On January 10, 2019, Trans Union removed Magruder’s suit to this Court pursuant to

, 1441, and 1446. See Dkt. 1 (Notice of Removal). Thereafter, Trans Union,

Capital One, Credit One, and LNLV answered the complaint; Equifax and Navy Federal moved

4 to dismiss; and First Premier Bank moved to stay the action and to compel arbitration. See Dkt.

7 (Trans Union answer); Dkt. 18 (Capital One answer); Dkt. 26 (Credit One Answer); Dkt. 27

(LNLV answer); Dkt. 11 (Navy Federal motion to dismiss); Dkt. 21 (Equifax motion to dismiss);

Dkt. 25 (First Premier Bank motion to stay and compel arbitration). Magruder responded by

filing an amended complaint, and Defendants renewed their answers and motions. See Dkt. 29

(Am. Compl.); Dkt. 33 (Trans Union answer); Dkt. 34 (Capital One answer); Dkt. 37 (LNLV

answer); Dkt. 38 (Credit One Answer); Dkt. 39 (First Premier Bank motion to stay and compel

arbitration). Magruder eventually stipulated to the voluntary dismissal of three defendants

(Experian, Navy Federal, and Equifax). See Minute Order (May 9, 2019) (dismissing action with

prejudice as to Experian); Minute Order (Sept. 30, 2019) (dismissing action with prejudice as to

Navy Federal); Minute Order (Feb. 7, 2020) (dismissing action with prejudice as to Equifax).

Before proceeding with the case, the Court sought to “assure[] itself of its own subject

matter jurisdiction” and, accordingly, ordered Magruder “to show cause why this case should not

be dismissed as to each defendant for lack of Article III standing.” Minute Order (Sept. 13,

2019). For the following reasons, the Court concludes that Magruder has Article III standing at

this point in the litigation.

II. ANALYSIS

Article III of the Constitution limits “[t]he judicial power of the United States” to “Cases”

and “Controversies.” U.S. Const. art. III, § 2, cl. 2. “To state a case or controversy under Article

III, a plaintiff must establish standing.” Ariz. Christian Sch. Tuition Org. v. Winn,

,

133 (2011). To establish standing, a plaintiff must show that he has “(1) suffered an injury in

fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to

be redressed by a favorable judicial decision.” Spokeo, Inc. v. Robins,

, 1547

5 (2016) (quoting Lujan v. Defs. of Wildlife,

, 560–61 (1992)). A plaintiff must

support each of these three elements “with the manner and degree of evidence required at the

successive stages of the litigation.” Lujan,

. At the pleading stage, therefore,

“general factual allegations of injury resulting from the defendant’s conduct may suffice.”

But because “standing is not dispensed in gross,” Town of Chester, New York v. Laroe Estates,

Inc.,

(2017), a plaintiff must “demonstrate standing for each claim he

seeks to press” against each defendant, DaimlerChrysler Corp. v. Cuno,

(2006), and “for each form of relief sought,” Friends of the Earth, Inc. v. Laidlaw Env’t Servs.

(TOC), Inc.,

(2000).

The question before the Court concerns “injury in fact, the first and foremost of

standing’s three elements.” Spokeo,

(cleaned up). A plaintiff sustains an

“injury in fact” when he suffers “an invasion of a legally protected interest” that is both

(1) “actual or imminent, not conjectural or hypothetical,” and (2) “concrete and particularized.”

. An injury is “particularized,” the Supreme Court has explained, when it “affect[s]

the plaintiff in a personal and individual way.”

An injury is “concrete,” meanwhile, when it

is “real[,] not abstract”—in other words, when it “actually exist[s].”

“‘Concrete’ is not,

however, necessarily synonymous with ‘tangible.’”

. In evaluating “whether an

intangible harm constitutes injury in fact,” courts must consider “both history and the judgment

of Congress.”

As to history, “it is instructive to consider whether an alleged intangible harm

has [a] close relationship to a harm that has traditionally been regarded as providing a basis for a

lawsuit in English or American courts.”

And as to Congress, the Court must consider

whether Congress has permissibly sought to “elevate to the status of legally cognizable injuries

concrete de facto injuries that were previously inadequate in law,”

at 1549 (quoting Lujan,

6

) (alteration omitted), or, instead, has impermissibly sought to “dispense with the

constitutional baseline of a concrete injury in fact,” Hancock v. Urb. Outfitters, Inc.,

(D.C. Cir. 2016). With these precepts in mind, the Court concludes that Magruder has

standing to pursue his claims against the remaining Defendants.

Magruder alleges that he was injured by the remaining Defendants in the following ways.

First, in Counts One and Two, he alleges that LNLV’s actions “caused [him] to incur economic

damages and emotional/mental distress damages, including . . . out-of-pocket expenses, fear,

embarrassment, humiliation, frustration, anger, headaches, sleeplessness, severe emotional and

mental distress.” Dkt. 29 at 8 (Am. Compl. ¶¶ 37, 42). Second, in Count Three, he alleges that

Defendants Capital One, First Premier, Credit One, and LVNV’s violations of the FCRA caused

him to suffer “actual damages, including . . . loss of credit, out[-]of[-]pocket expense connected

with attempting to correct his reports, damage to credit profile and reputation, embarrassment,

humiliation and other mental and emotional distress.” Id. at 9 (Am. Compl. ¶ 51). Finally, in

Counts Four and Five, he alleges that Defendant Trans Union’s violations of the FCRA caused

him to suffer “actual damages, including . . . loss of credit opportunity, damages to reputation,

embarrassment, humiliation and other mental and emotional distress.” Id. at 10, 12 (Am. Compl.

¶¶ 59, 71). Magruder’s allegations of injury thus take two basic forms—claims of tangible

economic loss and of intangible emotional suffering. See id. at 8–10, 12 (Am. Compl. ¶¶ 37, 42,

51, 59, 71). Each claim, however, has its problems.

The first problem is one of fact: Magruder’s claims of tangible harm—economic

damages, loss of credit, and the like—are largely devoid of supporting factual allegations. The

amended complaint does not identify a single expense that Magruder incurred, a single dollar

that he lost, or a single credit opportunity that he was denied. See id. at 8–10, 12 (Am. Compl.

7 ¶¶ 37, 42, 51, 59, 71). It is true, of course, that “[t]he pleading standard . . . does not require

detailed factual allegations” to substantiate a claim of injury. Ashcroft v. Iqbal,

(2009) (internal quotation marks omitted)). But it is equally true that “more than an

unadorned, the-defendant-unlawfully-harmed-me accusation” is required.

The second problem is one of law: Magruder’s remaining allegations focus on emotional

injury, yet free-standing “emotional harm, no matter how deeply felt, cannot suffice for injury-

in-fact for standing purposes.” Humane Soc. of U.S. v. Babbitt,

, 98 (D.C. Cir. 1995)

(quotation marks omitted). Instead, “a plaintiff can only establish an Article III injury in fact

based on emotional harm if that alleged harm stems from the infringement of some legally

protected . . . or judicially cognizable . . interest that is either recognized at common law or

specifically recognized as such by the Congress.” Al-Aulaqi v. Obama,

(D.D.C. 2010) (quotation marks omitted). Recall Spokeo: when it comes to intangible injuries,

“history and the judgment of Congress” matter.

.

According to Defendants, these issues of fact and law pose insurmountable obstacles to

Magruder’s standing. His allegations of tangible injury are too threadbare, and his allegations of

emotional injury are unsound as a matter of law. For the reasons that follow, however, the Court

concludes that both obstacles can be overcome—at least for now.

First, the problem of fact. Magruder’s allegations of tangible injury are thin by any

measure—he claims to have suffered economic loss, for instance, but neglects to explain how,

when, where, or in what degree. For present purposes, however, that is (barely) enough. In

Lujan v. Defenders of Wildlife,

, the Supreme Court explained that “[t]he party

invoking federal jurisdiction” must support each of the essential elements of standing “with the

manner and degree of evidence required at the successive stages of litigation.” Where, as here,

8 the question of standing arises “[a]t the pleading stage, general factual allegations of injury

resulting from the defendant’s conduct may suffice, for on a motion to dismiss [courts]

‘presum[e] that general allegations embrace those specific facts that are necessary to support the

claim.’”

(quoting Lujan v. Nat’l Wildlife Fed’n,

(1990)).

Arguably, the Supreme Court’s intervening decision in Iqbal requires more than general

factual allegations of injury. 556 U.S. at 678–79. At least with respect to “the elements of the

cause of action,” Iqbal requires more than “mere conclusory statements” and, beyond that, the

decision requires that a complaint “state[] a plausible claim for relief.” Id. at 679. D.C. Circuit

precedent post-dating Iqbal, however, has continued to invoke Lujan’s formulation of the injury-

in-fact pleading requirement. In Frank v. Autovest, LLC, for example, the court recently

observed that the plaintiff “satisfied her burden at the pleading stage by including ‘general

factual allegations of injury resulting from the defendant’s conduct.’”

(D.C. Cir. 2020) (quoting Lujan,

). 1 Thus, in that Fair Debt Collection Practices

Act case, it was sufficient for the plaintiff to allege “that she was deceived by the Defendants’

false, deceptive and misleading representations; that she suffered agitation, annoyance,

emotional distress, and undue inconvenience; and that she ‘incurred actual damages including

1 Although Autovest’s invocation of Lujan’s injury-in-fact formulation was arguably dicta—the case was before the court at the summary judgment, not motion to dismiss, stage—other D.C. Circuit decisions postdating Iqbal have made the same point. See, e.g., In re U.S. Off. of Pers. Mgmt. Data Sec. Breach Litig.,

, 60–61 (D.C. Cir. 2019) (“The Supreme Court has explained that ‘[a]t the pleading stage, general factual allegations of injury resulting from the defendant’s conduct may suffice, for on a motion to dismiss we presume that general allegations embrace those specific facts that are necessary to support the claim.’” (quoting Lujan,

)); Osborn v. Visa Inc.,

(D.C. Cir. 2015) (same); LaRoque v. Holder,

(D.C. Cir. 2011) (same); Attias v. Carefirst, Inc.,

, 625–26 (D.C. Cir. 2017) (“At the pleading stage, general factual allegations of injury resulting from the defendant’s conduct may suffice[.]” (quoting Lujan,

)); NB ex rel. Peacock v. District of Columbia,

(D.C. Cir. 2012) (same); Prisology, Inc. v. Fed. Bureau of Prisons,

(D.C. Cir. 2017) (same). 9 . . . attorney’s fees and costs.”

(internal quotation marks and citation omitted). She failed to

carry her burden on summary judgment, however, because she “fail[ed] to identify a concrete

personal injury traceable to the false representations” allegedly made by two agents of the debt

holder and the debt holder’s counsel in affidavits they filed in Superior Court,

, and,

indeed, failed to testify that she was “confused, misled, or harmed in any relevant way during the

collection action by the contested affidavits,”

. Moreover, “although [the plaintiff]

stated that [the debt holder’s] suit caused her stress and inconvenience, . . . she never connected

those harms to the [allegedly false] affidavits.”

Here, the Court is persuaded that Magruder has “cleared the low bar to establishing . . .

standing at the pleading stage.” In re U.S. Office of Personnel Mgt. Data Security Breach Lit.,

(quoting Attias,

). He alleges that he incurred tangible, “out-of-

pocket expenses” as a result of LVNV’s violation of the FDCPA, see Dkt. 29 at 7–8 (Am.

Compl. ¶¶ 36–38), and the MCDCA, see id. at 8 (Am. Compl. ¶¶ 40–43), and as a result of

Capital One, First Premier, Credit One, and LVNV’s violations of the FCRA, see id. at 8–10

(Am. Compl. ¶¶ 45–54). Magruder, however, fails to allege any tangible injury resulting from

Trans Union’s alleged violation of the FCRA; in Counts Four and Five, he merely alleges that he

“suffered actual damages, including . . . loss of credit opportunity, embarrassment, humiliation

and other mental and emotional distress.” See id. at 10–12 (Am. Compl. ¶¶ 56–61, 63–73). If

Magruder intends to allege that he has suffered or will imminently suffer some tangible loss—as

opposed to a mental or emotional injury of some sort—resulting from a lower credit rating, he

needs to say more.

Magruder’s failure to allege that he has sustained a tangible injury as a result of Trans

Union’s alleged violation of the FCRA, however, does not doom his claim at this early stage of

10 the proceeding because he does allege an emotional harm, which suffices for purposes of the

FCRA (and the FDCPA). In assessing whether an emotional harm can satisfy the Article III

injury-in-fact requirement, the Court must, as explained above, consider both “history and the

judgment of Congress.” 2 Spokeo,

. Both considerations weigh in favor of the

conclusion that Magruder has alleged enough to satisfy Article III.

“Congress enacted [the] FCRA in 1970 to ensure fair and accurate credit reporting . . .

and [to] protect consumer privacy.” Safeco Ins. Co. of Am. v. Burr,

(2007). In

doing so, “Congress plainly sought to curb the dissemination of false information by adopting

procedures designed to decrease that risk.” Spokeo,

. As explained in the

Act’s legislative history, “[t]he purpose of the fair credit reporting bill is to prevent consumers

from being unjustly damaged because of inaccurate or arbitrary information in a credit report.”

S. Rep. No. 91–517 at 1 (1969). In other words, the “FCRA . . . was crafted to protect

2 Neither Spokeo nor D.C. Circuit precedent clarify what role state legislatures (as opposed to the U.S. Congress) play in determining whether an intangible harm constitutes injury in fact. That matters because Count Two of Magruder’s complaint alleges a violation the MCDCA—a state, not federal, law. However, because the Court has concluded that Magruder’s allegations of tangible harm in Count Two suffice—at least for now—the Court need not consider whether Magruder’s allegations of emotional harm in Count Two also suffice. With that said, the Court notes that several other courts have concluded that “[s]tate [l]egislature[s] ha[ve] the power to create legal interests [the] violation [of which] can satisfy Article III.” Maddox v. Bank of New York Mellon Tr. Co., N.A., No. 19-1774,

, at *4 (2d Cir. May 10, 2021); see also Bryant v. Compass Grp. USA, Inc.,

(7th Cir. 2020) (subsequent history omitted); Cottrell v. Alcon Labs.,

(3d Cir. 2017); Utah ex rel. Div. of Forestry, Fire & State Lands v. United States,

(10th Cir. 2008); Cantrell v. City of Long Beach,

(9th Cir. 2001). That position appears to be consistent with Supreme Court caselaw as well, although the Court has yet to rule on the issue. See Diamond v. Charles,

, 66 n.17 (1986) (remarking in dicta that “[t]he Illinois Legislature . . . has the power to create new interests, the invasion of which may confer standing”); cf. Sprint Commc’ns Co., L.P. v. APCC Servs., Inc.,

(2008) (holding that an assignee of a legal claim for money retained standing to sue in federal court when that assignee had promised to give all litigation proceeds back to the assignor because “most state courts entertained suits virtually identical to” the suit before the Court throughout the nineteenth century). 11 consumers from the transmission of inaccurate information about them . . . and to establish credit

reporting practices that utilize accurate, relevant, and current information in a confidential and

responsible manner.” Guimond v. Trans Union Credit Info. Co.,

(9th Cir.

1995); see also St. Paul Guardian Ins. Co. v. Johnson,

(5th Cir. 1989) (same);

Koropoulos v. Credit Bureau, Inc.,

(D.C. Cir. 1984) (“[I]n introducing the fair

credit reporting bill, Senator Proxmire said: ‘[p]erhaps the most serious problem in the credit

reporting industry is the problem of inaccurate or misleading information.’” (cleaned up)

(quoting 115 Cong. Rec. 2411 (1969))).

Intangible injuries that result from inaccurate credit reporting fit neatly within the types

of harms that Congress sought to abate. As the Ninth Circuit summarized on remand in Spokeo:

[G]iven the ubiquity and importance of consumer reports in modern life—in employment decisions, in loan applications, in home purchases, and much more—the real-world implications of material inaccuracies in those reports seem patent on their face. Indeed, the legislative record includes pages of discussion of how such inaccuracies may harm consumers in light of the increasing importance of consumer reporting nearly fifty years ago. . . . In this context, it makes sense that Congress might choose to protect against such harms without requiring any additional showing of injury. The threat to a consumer’s livelihood is caused by the very existence of inaccurate information in his credit report and the likelihood that such information will be important to one of the many entities who make use of such reports. Congress could have seen fit to guard against that threat (and, for example, against the uncertainty and stress it could cause to the consumer’s life), especially in light of the difficulty the consumer might have in learning exactly who has accessed (or who will access) his credit report.

Robins v. Spokeo, Inc.,

(9th Cir. 2017) (emphasis added); see also In re

Horizon Healthcare Servs. Inc. Data Breach Litig.,

(3d Cir. 2017) (plaintiffs

had standing to sue under FCRA when laptops containing their personal information were stolen

from defendants, as this “unauthorized dissemination of their own private information—the very

injury that FCRA is intended to prevent” constituted “a de facto injury that satisfies the

12 concreteness requirement” regardless of “whether or not the disclosure of that information

increased the risk of identity theft or some other future harm”); Thomas v. FTS USA, LLC,

(E.D. Va. 2016) (“Congress sought ‘to prevent consumers from being unjustly

damaged because of inaccurate or arbitrary information,’ and ‘to prevent an undue invasion of

the individual’s right of privacy in the collection and dissemination of credit information.’”

(quoting S. Rep. No. 91–517 at 1).

Magruder’s allegations of harm fall within the scope of injuries that courts have found to

be cognizable under the FCRA, even if intangible. Magruder alleges, for example, that his credit

reports were materially misleading because they stated that he had outstanding debts on four

separate tradelines when, in reality, he had no such debts. Dkt. 29, at 3–5 (Am. Compl. ¶¶ 11–

13, 19, 22, 26–27). That misinformation, Magruder further alleges, was repeatedly disseminated

to third parties without Magruder’s permission. Id. at 7 (Am. Compl. ¶ 34) (“Equifax, Experian

and Trans Union have each prepared and published to third parties’ multiple inaccurate

consumer reports about [Magruder] that contained the inaccurate derogatory debts from Capital

One, Navy Federal, First Premier, Credit One and LVNV.”). And Magruder claims he suffered

emotional harm as a result of those allegedly unlawful publications. Id. at 8–10, 12 (Am. Compl.

¶¶ 37, 42, 51, 59, 71). The FCRA was enacted to deter just this. See S. Rep. No. 91–517 at 1;

Spokeo,

; Safeco,

; Spokeo,

Guimond,

; Johnson,

; In re Horizon Healthcare,

; Koropoulos,

. Congress’s judgment, therefore, suggests that Magruder’s allegations of intangible

harm qualify as a legally cognizable injury in this context. Spokeo,

.

History confirms that conclusion. “As other courts have observed, the interests that

FCRA protects also resemble other reputational and privacy interests that have long been

13 protected in the law.” Spokeo,

. For example, there is “a significant history,

including at common law, of lawsuits based on (1) the unauthorized disclosure of a person’s

private information, and (2) the disclosure of adverse information claimed to have been

misleading or false.” Gambles v. Sterling Infosystems, Inc.,

(S.D.N.Y.

2017); see also Thomas,

(“[I]t has long been the case that an unauthorized

dissemination of one’s personal information, even without a showing of actual damages, is an

invasion of one’s privacy that constitutes a concrete injury sufficient to confer standing to sue.”)

(citing Samuel D. Warren & Louis D. Brandeis, The Right to Privacy,

(1890)). Most significantly, “the common law provided for per se liability—without proof of

special harm—for slanderous statements that would adversely affect one’s” employment or

commercial interests. Gambles,

(citing Restatement (Second) of Torts

§ 573 (1977)). Those interests overlap with the type of injuries that can flow from the

dissemination of inaccurate or misleading credit reports, which are often relied upon by

employers and creditors. See Pedro v. Equifax, Inc.,

, 1279–80 (11th Cir. 2017)

(“The reporting of inaccurate information about [the plaintiff’s] credit to a credit monitoring

service[] has a close relationship to the harm caused by the publication of defamatory

information, which has long provided the basis for a lawsuit in English and American courts.”);

In re Horizon Healthcare, 846 F.3d at 639–40 (“[T]he intangible harm that FCRA seeks to

remedy has a close relationship to a harm [i.e. invasion of privacy] that has traditionally been

regarded as providing a basis for a lawsuit in English or American courts.” (quotation marks

omitted)); Spokeo,

(“Courts have long entertained causes of action to vindicate

intangible harms caused by certain untruthful disclosures about individuals, and we respect

Congress’s judgment that a similar harm would result from inaccurate credit reporting.”).

14 In this case, then, history and legislation point in the same direction: because Magruder’s

emotional distress was allegedly caused by the “dissemination of false information” about him,

Spokeo,

, and by the presence of “inaccurate or misleading information” about

him in his credit reports, Koropoulos,

n.4, that harm, under the FCRA and against

the backdrop of common-law privacy torts described above, qualifies as a legally cognizable

injury in fact for purposes of Article III. Spokeo, 136 S. Ct. 1548–50. Magruder therefore has

standing to pursue Counts Three through Five of his complaint. Dkt. 29, at 8–12 (Am. Compl.

¶¶ 44–73).

The same result and a similar analysis apply to Magruder’s claim under the FDCPA, a

statute that Congress enacted “to eliminate abusive debt collection practices by debt collectors.”

(e). The Senate report explains:

[D]ebt collection abuse by third party debt collectors is a widespread and serious national problem. Collection abuse takes many forms, including . . . misrepresentation of a consumer’s legal rights, . . . impersonating public officials and attorneys, and simulating legal process. . . . While unscrupulous debt collectors comprise only a small segment of the industry, the suffering and anguish which they regularly inflict is substantial.

S. Rep. 95-382, at 2 (1977). A House Report similarly observes that at the time of the FDCPA’s

passage, “there ha[d] been an increasing incidence of debt collectors abusing consumers by using

various means of harassment and deception,” including by sending “phony legal documents.” H.

Rep. No. 95-131, at 2 (1977). And as the statutory text explains, prior to the FDCPA, there was

“abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by

many debt collectors,” which, in turn, “contribute[d] to the number of personal bankruptcies, to

marital instability, to the loss of jobs, and to invasions of individual privacy.” 15 U.S.C.

§ 1692a(a). Congress enacted the FDCPA to put an end to these abuses. See id. § 1692f

(prohibiting use of “unfair or unconscionable means to collect or attempt to collect any debt”);

15 id. § 1692e(2)(a) (prohibiting debt collectors from falsely representing the “legal status of any

debt”); see also Hamilton v. United Healthcare of La., Inc.,

(5th Cir. 2002)

(“Congress, through the FDCPA, has legislatively expressed a strong public policy disfavoring

dishonest, abusive, and unfair consumer debt collection practices, and clearly intended the

FDCPA to have a broad remedial scope.”); Barany-Snyder v. Weiner,

(6th

Cir. 2008) (same).

To be sure, an FDCPA plaintiff must do more to establish standing than point to an

alleged FDCPA violation; it is not enough, in other words, that Congress sought to curb the

challenged practice. See Autovest,

. 3 “[A]n FDCPA plaintiff,” nevertheless,

“possesses multiple avenues to standing.”

at 1189 (citing Hagy v. Demers & Adams,

(6th Cir. 2018)). For instance, in Hagy, the Sixth Circuit suggested that an

FDCPA plaintiff might have Article III standing if the challenged “non-disclosure created a risk

of double payment, caused anxiety, or led to any other concrete harm.”

(emphasis added). And in Autovest, the D.C. Circuit suggested that “stress and inconvenience”

might be cognizable harms for purposes of Article III if, in fact, there was a clear causal link

between those harms and the purportedly unlawful conduct.

.

Although a close question, the Court concludes that Magruder’s allegations are

sufficient—at this early stage of the litigation—to establish standing based on intangible injury.

3 At least two circuits have concluded that “the violation of a procedural right granted by [the FDCPA] is sufficient in and of itself to constitute concrete injury in fact because Congress conferred the procedural right to protect a plaintiff’s concrete interests and the procedural violation presents a material risk of real harm to that concrete interest.” Macy v. GC Servs. Ltd. P’ship,

(6th Cir. 2018); see also Cohen v. Rosicki, Rosicki & Assocs., P.C.,

(2d Cir. 2018) (“Congress . . . sought to protect consumers’ concrete economic interests in enacting [the FDCPA].”). As discussed, the D.C. Circuit foreclosed this approach in Autovest,

; see also Casillas v. Madison Ave. Assocs., Inc.,

(7th Cir. 2019). 16 In Count One of his amended complaint, Magruder alleges that LNLV “falsely represent[ed] that

a debt was owed,” “falsely represent[ed] that a judgment had been obtained” against him to

recover on that debt, and improperly communicated information that it knew it was false to the

credit reporting agencies.” Dkt. 29 at 7 (Am. Compl. ¶ 36). Magruder also alleges, elsewhere in

the amended complaint, that the debt LNLV mistakenly reported led the Stillman law firm to

“advise[] [Magruder] that a lawsuit had been filed and a judg[]ment obtained against him” for

that debt. Id. at 6 (Am. Compl. ¶ 29). The attendant mental distress that Magruder allegedly

suffered was, on this theory of the case, caused by a series of statutory violations at the heart of

Congress’s scheme, namely, the prohibition against debt collectors mischaracterizing the “legal

status of any debt” and then disseminating false information about that debt, 15 U.S.C.

§ 1692e(2)(a), all leading to the issuance of “phony legal” process, H. Rep. No. 95-131, at 2

(1977); see also S. Rep. 95-382, at 2 (“Collection abuse takes many forms, including . . .

misrepresentation of a consumer’s legal rights, . . . impersonating public officials and attorneys,

and simulating legal process.”).

Common-law history supports this conclusion as well. As the Eighth Circuit has

explained:

[In the FDCPA] Congress identified a harm—being subjected to attempts to collect debts not owed. This alleged intangible harm has a close relationship to a harm that has traditionally been regarded as providing a basis for a lawsuit in English or American courts. It is similar to the harm suffered by victims of the common-law torts of malicious prosecution, wrongful use of civil proceedings, and abuse of process. . . . The harm of being subjected to baseless legal claims, creating the risk of mental distress, provides the basis for both [FDCPA] claims and the common-law unjustifiable-litigation torts.

Demarais v. Gurstel Chargo, P.A.,

, 691–92 (8th Cir. 2017) (quotation marks

omitted). That analysis has been endorsed by others. See, e.g., Trichell v. Midland Credit

Mgmt., Inc.,

, 1009 (11th Cir. 2020) (Martin, J., concurring in part and dissenting in

17 part) (recognizing the “close relationship” between FDCPA claims based on unlawful attempts to

collect debts to “abuse of process torts”); cf. Buchholz v. Meyer Njus Tanick, PA,

(6th Cir. 2020) (suggesting that abuse of process may be an analogous tort where FDCPA

liability is premised on a debt collector falsely pursuing litigation against a debtor).

As explained, LNLV is alleged to have “falsely represent[ed] that a judgment had been

obtained” against Magruder and, it can be inferred, caused the Stillman law firm to “advise[]

[Magruder] that a lawsuit had been filed and a judg[]ment obtained against him” for that debt.

Dkt. 29 at 6 (Am. Compl. ¶ 29). Magruder’s protestations against LNLV’s efforts in that regard

have analogs in the “common-law unjustifiable-litigation torts” just discussed. Demarais,

. For those reasons, “history and the judgment of Congress” tip in favor of cognizing

Magruder’s allegations of emotional harm as an injury-in-fact insofar as the FDCPA is

concerned. Spokeo,

.

* * *

For now, the problems of fact and law that inhere in Magruder’s allegations of injury

have been overcome: Magruder’s tangible injuries are adequately pled—barely, to be sure—

while Magruder’s intangible injuries survive Spokeo’s demands—at least at the pleading stage.

It bears emphasis, however, that Magruder has only barely cleared the standing hurdle at the

pleading stage and that establishing standing at summary judgment is considerably more

demanding than it is here. To survive a Rule 56 motion, Magruder will have to “set forth by

affidavit or other evidence specific facts” to establish, with respect to each defendant pursued in

each Count, that he suffered a legally cognizable injury, fairly traceable to that defendant, and

redressable by a favorable judicial decision. Lujan,

. This requirement applies

with equal force to both Magruder’s intangible and tangible injuries; “mere allegations” will no

18 longer suffice.

At that point in the litigation, Magruder will need to be far more specific

about the alleged injuries; he will need to offer proof that he actually sustained (or will soon

sustain) those injuries; and he will need to offer evidence that the alleged FDCPA and FCRA

violations caused those injuries.

For present purposes, however, it is premature to determine what Magruder will need to

show at the next stage of the litigation. Even if some greater showing of emotional injury is

indeed required at summary judgment—such as medical evidence or testimony from family

members about the harm Magruder suffered, see, e.g., In re Dawson,

, 1150 (9th

Cir. 2004)—that requirement does not apply when evaluating Magruder’s claims at this early

juncture. The parties should be aware, however, that the issue looms. See, e.g., Doe v. Chao,

, 617–18 (2004);

(Ginsburg, J., joined by Stevens and Breyer, J.J.,

dissenting) (“Doe has standing to sue, the Court agrees, based on allegations that he was torn all

to pieces and greatly concerned and worried because of the disclosure of his Social Security

number and its potentially devastating consequences. . . . Standing to sue, but not to succeed, the

Court holds[.]” (ellipses, citation, and internal quotation marks omitted)); Rice v. United States,

(D.D.C. 2007) (plaintiffs demonstrated standing at summary judgment “by

submitting [uncontested] declarations . . . in which named plaintiffs claim to have suffered

‘anger, dismay, anxiety, and fear about what has occurred and what could happen’”); but see

Beck v. McDonald,

(4th Cir. 2017) (“We also reject the Plaintiffs’ claim that

emotional upset and fear [of] identity theft and financial fraud . . . are ‘adverse effects’ sufficient

to confer Article III standing. . . . That assertion reflects a misunderstanding of the Privacy Act

and is an overextension of Doe v. Chao[.]” (citations and internal quotation marks omitted));

Autovest,

(finding plaintiff failed to establish standing at summary judgment

19 where she testified that she experienced “stress and inconvenience” but failed to “connect[]”

those harms to the defendants’ statutory violations).

CONCLUSION

For the foregoing reasons, the Court concludes that, at this stage of the proceedings,

Magruder has standing to pursue his claims. First Premier Bank may renew its motion to stay

and compel arbitration by June 18, 2021.

SO ORDERED.

/s/ Randolph D. Moss RANDOLPH D. MOSS United States District Judge

Date: May 19, 2021

20