UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

DANIELLE HENKEL,

Plaintiff, Civil Action No. 24 - 1676 (SLS) v. Judge Sparkle L. Sooknanan

U.S. DEPARTMENT OF EDUCATION,

Defendant.

MEMORANDUM OPINION

Danielle Henkel, like so many others, took out federal student loans to finance her

education. By late 2021, she had paid off some of her loan balances and consolidated the others

into two loans issued by the Department of Education and serviced by Nelnet, an agent of the

Department. By early 2023, Ms. Henkel’s outstanding balances on the loans totaled approximately

$68,000. In the spring of 2023, the Department decided to transfer her loans from Nelnet to another

loan servicer. This is when things took a turn. Although the Department transferred her loans and

closed her account with Nelnet, her credit reports say otherwise. Rather than reporting a cleared

balance with Nelnet and a new balance with the new servicer, they show two duplicative balances,

one for each servicer. Thus, instead of showing approximately $68,000 in student debt,

Ms. Henkel’s credit reports say that she owes more than $137,000. Ms. Henkel, understandably

upset by this development, set out to correct her credit reports. She took the necessary steps to

dispute the incorrect information with the various consumer reporting agencies—obtaining credit

reports, writing dispute letters, gathering supporting documentation, and mailing various

documents. Although the consumer reporting agencies notified the Department of Education of

Ms. Henkel’s dispute, to date, it has not corrected the credit reporting error. Ms. Henkel thus sued the Department, alleging a violation of the Fair Credit Reporting

Act, 15 U.S.C. § 1681s-2(b), which requires those who furnish information to consumer reporting

agencies to investigate consumer complaints and to correct erroneous information. She alleges that

this failure to correct the error in her file has caused her substantial harm, including lost credit

opportunities, waste of time and resources lodging futile disputes trying to correct the

Department’s false credit reporting, harm to her credit reputation and credit score, and emotional

distress. And she seeks to certify two classes of federal student loan borrowers who have been

similarly harmed. The Department moves to dismiss this case under Federal Rules of Civil

Procedure 12(b)(1) and 12(b)(6) for lack of standing and failure to state a claim. Because the Court

finds that Ms. Henkel has sufficiently alleged standing and the necessary facts for a claim under

Subsection 1681s-2(b), it denies the motion.

BACKGROUND

A. Statutory Background

In 1970, Congress enacted the Fair Credit Reporting Act (FCRA) “to ensure fair and

accurate credit reporting, promote efficiency in the banking system, and protect consumer

privacy.” Safeco Ins. Co. of Am. v. Burr,

(2007) (citing

). Under

the FCRA, “if the completeness or accuracy of any item of information contained in a consumer’s

file at a consumer reporting agency is disputed by the consumer and the consumer notifies the

agency directly,” the agency must take certain steps. 15 U.S.C. § 1681i(a)(1)(A). For example,

within five business days of receiving notice of the dispute, “the agency shall provide notification

of the dispute to any person who provided any item of information in dispute[.]” Id. § 1681i(2)(A).

This notification triggers certain obligations for the person who provided the information.

See id. § 1681s-2(b). As relevant in this case, “[a]fter receiving notice . . . of a dispute with regard

to the completeness or accuracy of any information provided by a person to a consumer reporting

2 agency, the person shall . . . (A) conduct an investigation with respect to the disputed information;

(B) review all relevant information provided by the consumer reporting agency . . . ; [and]

(C) report the results of the investigation to the consumer reporting agency,” among other things.

Id. “If an item of information disputed by the consumer is found to be inaccurate or incomplete or

cannot be verified . . . [the person shall] promptly . . . (i) modify that item of information; (ii) delete

that item of information; or (iii) permanently block the reporting of that item of information.” Id.

§ 1681s-2(b)(1)(E).

“In §§ 1681n and 1681o, the Act authorizes consumer suits for money damages against

“[a]ny person’ who willfully or negligently fails to comply” with the requirements in

Subsection 1681s-2(b). Dep’t of Agriculture Rural Dev. Rural Hous. Serv. v. Kirtz,

,

50 (2024). This includes “any . . . governmental . . . agency.” Id. (quoting 15 U.S.C. § 1681a(b));

see also id. at 51 (holding Congress waived sovereign immunity).

B. Factual Background

The Court draws the facts, accepted as true, from the Plaintiff’s Amended Complaint.

Wright v. Eugene & Agnes E. Meyer Found.,

(D.C. Cir. 2023).

Years ago, Ms. Henkel “obtained federal student loans to finance her education.”

Am. Compl. ¶ 63, ECF No. 20. And by 2021, she had consolidated all outstanding loans “into two

direct consolidation loans” from the Department of Education totaling $28,772.91 and $29,733.97,

respectively.

Until about June 2023, Nelnet, an agent of the Department, serviced Ms. Henkel’s

two loans from the Department. Id. ¶ 64.

In early 2023, Ms. Henkel applied for forgiveness of her loans through the Public Service

Loan Forgiveness program. Id. ¶ 67. The Department then transferred her loan servicing from

Nelnet to the Missouri Higher Education Loan Authority (MOHELA). Id. ¶ 70. At that point,

3 her outstanding principal balance was approximately $68,500. Id. ¶ 68. After the transfer,

her “Department of Education/Nelnet account was closed and MOHELA opened a new

Department of Education account for [her] with a new loan number.” Id. ¶ 72.

Thus, the Department should have either directly or indirectly reported to the consumer reporting

agencies (CRAs) that the balance on Ms. Henkel’s Nelnet account was now $0. Id. ¶ 73.

Instead, the Department “directly and/or indirectly through its agents” continued to falsely report

to the CRAs that Ms. Henkel still owed $68,505 on her account with Nelnet. Id. ¶ 74.

In January 2024, Ms. Henkel noticed that her credit reports still showed a balance of

$68,505 on her Nelnet account. Id. ¶ 75. And at the same time, the reports showed an additional

balance of $68,548 on her MOHELA account. Id. ¶ 76. The Department thus “directly and/or

indirectly through its agents furnished information to the CRAs, including Experian, Equifax, and

TransUnion, that [she] owed it more than $137,000 in total.” Id. ¶ 77. “This was false.” Id. ¶ 78.

Ms. Henkel was “sufficiently upset” by this false credit reporting that portrayed her “as

being burdened by tens of thousands of dollars of student loan indebtedness that she did not owe[.]”

Id. ¶ 104. She thus took steps to dispute the incorrect balance through the various CRAs throughout

2023 and 2024. Id. ¶ 81. Pursuant to their statutory obligations, the CRAs notified the Department

of the dispute “directly and/or indirectly through its agents.” Id. ¶ 82. But the Department

“repeatedly failed to correct or reduce the duplicative balance to $0 and to fulfill its other statutory

obligations under FCRA [S]ection 1681s-2(b).” Id. ¶ 83. It instead “continued to verify, directly

and/or indirectly through its agents, that [she] owed it more than $137,000 in federal student loans,

including approximately $68,505 through Nelnet.” Id.

Ms. Henkel sent complaints to the Better Business Bureau and the Federal Student Aid

Ombudsman Group in January of 2024. Id. ¶ 84. Nelnet responded to her on January 25, 2024,

4 explaining that the Department had directed it to add a “suppression” to her account because of

the transfer to another servicer. Id. ¶ 85. It repeated this explanation on January 26, 2024, January

30, 2024, and February 1, 2024. Id. ¶ 86. And although she repeatedly requested information about

the “suppression” the Department had added to her account, Nelnet never provided it. Id. ¶ 87.

As a result of these events, Ms. Henkel “suffered injury and damages in the form of lost

credit opportunities, harm to credit reputation and credit score, and waste of time and resources.”

Id. ¶ 90. She alleges “[u]pon information and belief” that “one or more CRAs” published the

inaccurate information by selling her consumer report to her “existing and prospective creditors.”

Id. ¶ 96; see also id. ¶¶ 97 (alleging “[u]pon information and belief” that TransUnion published

the Department’s inaccurate information “to her prospective creditors, including to Rocket

Mortgage LLC via Factual Data on November 30, 2023 and several times in January 2024”), 99

(alleging “[u]pon information and belief” that TransUnion published the Department’s inaccurate

information “to several other entities, including her existing creditors such as Apple Card GS Bank

several times between October 2023 and February 2024”).

This left Ms. Henkel “distraught, dismayed, and distressed.” Id. ¶ 102. And she had to

waste time and resources to navigate the dispute process. Id. ¶ 105; see also id. ¶ 14 (identifying a

“waste of time and resources lodging futile disputes and trying to correct Defendant’s false credit

reporting”). She specifically “spent time writing a dispute letter with several exhibits and spent

money to send it to one or more CRAs by certified mail.” Id. ¶ 108.

C. Procedural Background

Ms. Henkel filed the operative Amended Complaint on November 21, 2024, suing the

Department of Education for violating 15 U.S.C. § 1681s-2(b). See id. ¶¶ 119–21. She also seeks

to represent two different classes in this litigation, see id., although she has not yet moved for class

5 certification. On February 5, 2025, the Department moved to dismiss this case under Federal Rules

of Civil Procedure 12(b)(1) and 12(b)(6). See Mot. Dismiss, ECF No. 23. This motion is fully

briefed and ripe for review. See Opp’n, ECF No. 25; Reply, ECF No. 27.

LEGAL STANDARD

“A motion under Rule 12(b)(1) presents a threshold challenge to a court’s jurisdiction.”

Ctr. for Biological Diversity v. U.S. Int’l Dev. Fin. Corp.,

, 69 (D.D.C. 2022)

(cleaned up). The plaintiff “bears the burden of proving by a preponderance of the evidence that

the Court has subject-matter jurisdiction over her claims.” Schmidt v. U.S. Capitol Police Bd.,

(D.D.C. 2011) (citation omitted). When evaluating a motion under Rule

12(b)(1), “the court may consider documents outside the pleadings to assure itself that it has

jurisdiction.” Sandoval v. U.S. Dep’t of Justice,

(D.D.C. 2018).

“A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests whether a

complaint has properly stated a claim upon which relief may be granted.” Kursar v. Transp. Sec.

Admin.,

(D.D.C. 2010). When deciding a Rule 12(b)(6) motion, the court

must “treat the complaint’s factual allegations as true” and “must grant [the] plaintiff the benefit

of all inferences that can be derived from the facts alleged.” Sparrow v. United Air Lines, Inc.,

(D.C. Cir. 2000) (cleaned up). But the Court need not accept the plaintiff’s

“legal conclusions cast in the form of factual allegations.” Browning v. Clinton,

(D.C. Cir. 2002) (cleaned up). And the court “may consider only the facts alleged in the complaint,

any documents either attached to or incorporated in the complaint[,] and matters of which

[it] may take judicial notice.” EEOC v. St. Francis Xavier Parochial Sch.,

(D.C. Cir. 1997).

6 DISCUSSION

The Department argues that the Court should dismiss this case for lack of standing and for

failure to state a claim upon which relief may be granted. See Mot. Dismiss. The Court disagrees

on both points. Ms. Henkel has standing because she has suffered from wasted time and resources,

injury to her reputation and credit score, and emotional distress. And she has plausibly alleged a

violation of 15 U.S.C. § 1681s-2(b), both directly and because of vicarious liability.

A. Standing

The Court first finds that Ms. Henkel has plausibly alleged standing to pursue her claim,

thereby denying the Defendant’s Rule 12(b)(1) motion. See Conf. of State Bank Supervisors v. Off.

of the Comptroller of the Currency,

(D.D.C. 2018) (“A motion to dismiss

for lack of standing proceeds under Rule 12(b)(1) because ‘the defect of standing is a defect in

subject matter jurisdiction.’” (quoting Haase v. Sessions,

(D.C. Cir. 1987))).

“Article III confines the federal judicial power to the resolution of ‘Cases’ and

‘Controversies.’” TransUnion LLC v. Ramirez,

(2021). “For there to be a case

or controversy under Article III, the plaintiff must have a personal stake in the case—in other

words, standing.”

(cleaned up). “[T]o satisfy Article III’s standing requirements, a plaintiff

must show (1) it has suffered an ‘injury in fact’ that is (a) concrete and particularized and (b) actual

or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged

action of the defendant; and (3) it is likely, as opposed to merely speculative, that the injury will

be redressed by a favorable decision.” Friends of the Earth, Inc. v. Laidlaw Env’t Servs. (TOC),

Inc.,

, 180–81 (2000).

A plaintiff bears the burden of demonstrating standing. TransUnion, 594 U.S. at 430–31

(citation omitted). “[E]ach element [of standing] must be supported in the same way as any other

matter on which the plaintiff bears the burden of proof, i.e., with the manner and degree of evidence

7 required at the successive stages of the litigation.” Lujan v. Defs. of Wildlife,

(1992) (citations omitted). This means that “at the pleading stage,” “plaintiffs are required only to

state a plausible claim that each of the standing elements is present.” Attias v. Carefirst, Inc.,

(D.C. Cir. 2017) (emphasis in original) (cleaned up).

1. Injury-in-Fact

“First, the plaintiff must have suffered an ‘injury in fact’—an invasion of a legally

protected interest which is (a) concrete and particularized; and (b) actual or imminent,

not conjectural or hypothetical.” Lujan,

(cleaned up). “It is settled that Congress

cannot erase Article III’s standing requirements by statutorily granting the rights to sue to a

plaintiff who would not otherwise have standing.” Raines v. Byrd,

, 820 n.3 (1997).

“Thus, to establish standing, a plaintiff must show ‘a concrete injury even in the context of a

statutory violation.’” Benjamin v. Rosenberg & Assocs., LLC, No. 19-cv-3012,

, at *16 (D.D.C. Aug. 26, 2021) (quoting Spokeo, 578 U.S. at 341).

“Central to assessing concreteness is whether the asserted harm has a ‘close relationship’

to a harm traditionally recognized as providing a basis for a lawsuit in American courts[.]”

TransUnion,

(quoting Spokeo, Inc. v. Robins,

, 340–41 (2016)).

“[C]ertain harms readily qualify as concrete injuries under Article III.”

. “The most

obvious are traditional tangible harms, such as physical harms and monetary harms.”

But “[v]arious intangible harms can also be concrete.”

“‘Chief among them are injuries with a

close relationship to harms traditionally recognized as providing a basis for lawsuits in American

courts,’ including but not limited to ‘reputational harms, disclosure of private information, and

intrusion upon seclusion.’” Benjamin,

, at *16 (quoting

TransUnion,

).

8 Ms. Henkel alleges that she suffered both tangible and intangible harms. In the tangible

category, she claims that she “lost credit opportunities” and had to waste “time and resources.”

Am. Compl. ¶ 90. And in the intangible category, she alleges that she suffered from harm to her

“credit reputation and credit score,”

and that she became “distraught, dismayed, and distressed”

because of the false credit reporting, id. at 102. She argues that her reputational harm is closely

related to the torts of defamation and false light. See Opp’n at 9–13, 10 n.2. And she argues that

her emotional harm is sufficiently concrete in this statutory context. The Court will analyze her

tangible and intangible harms in turn.

a. Tangible Harms

i. Lost Credit Opportunities

Ms. Henkel first claims that she “lost credit opportunities” because of the Department’s

conduct. Am. Compl. ¶ 90; see also id. ¶ 14 (same). But without more, this allegation is too

conclusory to survive a motion to dismiss. See, e.g., Rosenberg v. LoanDepot, Inc., No. 21-cv-

8719,

, at *5 (S.D.N.Y. Feb. 9, 2023) (finding plaintiff did not plausibly allege

a concrete injury because the allegation of “loss of credit” was “entirely conclusory and insufficient

to establish standing” where the plaintiff “failed to identify either a single lender that reacted

adversely to the information on her Credit Report or a single loan that she was denied”); Grauman

v. Equifax Info. Servs., LLC,

, 292 (E.D.N.Y. 2021) (Vitaliano, J.) (finding

plaintiff did not plausibly allege a concrete injury because the allegation of harm to his “ability to

acquire additional credit” was a “generalized allegation” where “[h]e ma[de] no claim that he tried

or was imminently planning to try to use his credit report to procure credit”); see also Gross v.

TransUnion,

, 273 (E.D.N.Y. 2022) (finding plaintiff did not plausibly allege

9 a concrete injury because the allegation of “increased difficulty obtaining credit” was “conclusory”

without “any specific lost credit opportunity”).

Ms. Henkel provides no good counterargument. She first argues that she need not

“specifically plead ‘the pertinent loan terms’ of particular credit applications” or “whether she

received credit on other terms.” Opp’n at 15 (quoting Mot. Dismiss at 10). But the Court does not

adopt such a bright-line rule. It says only that her conclusory allegation that she “lost credit

opportunities,” Am. Compl. ¶ 90, is insufficient.

She next argues that “general factual allegations of injury resulting from the defendant’s

conduct may suffice” at the pleading stage. Opp’n at 15 (quoting Magruder v. Cap. One, Nat’l

Ass’n,

, 6–7 (D.D.C. 2021) (cleaned up)). But even at the motion-to-dismiss

stage, a plaintiff must plead an injury that is concrete and particularized. See Lujan,

. Indeed, Ms. Henkel ignores that two of the above cases—cited by the Department,

see Mot. Dismiss at 11—were decided on a motion to dismiss. See, e.g., Rosenberg,

, at *5; Grauman, 549 F. Supp. 3d at 292. And the very case she cites, which was also

decided at the motion-to-dismiss stage, said that an allegation of “loss of credit” was “largely

devoid of supporting factual allegations” and ultimately found no tangible injury where the

plaintiff “merely allege[d]” that he suffered “loss of credit opportunity.” Magruder, 540 F. Supp.

3d at 8–9. Ms. Henkel urges the Court to disregard the Defendant’s cases as inapposite largely

because they “involv[ed] information that was never published to a third party.” Opp’n at 15–16

(collecting cases). But she cites no authority for the proposition that alleging publication is a

cure-all for an otherwise conclusory allegation of lost credit opportunities; if anything, the question

of dissemination seems more tied to the intangible reputational harm discussed below, see infra,

at 15–22.

10 Finally, she points to the fact that she specifically alleged that the negative credit reporting

made it “appear that she had double the amount of student debt, a criterion that is ‘highly

influential’ in the calculation of credit scores[.]” Opp’n at 17 (quoting Am. Compl. ¶¶ 90–93).

But none of those details identify “any specific lost credit opportunity,” which is fatal to her

attempt to establish standing on this basis. Gross, 607 F. Supp. 3d at 273.

ii. Waste of Time and Resources

Ms. Henkel next claims that she suffered from a “waste of time and resources lodging futile

disputes and trying to correct [the Department’s] false credit reporting.” Am. Compl. ¶ 14; see also

id. ¶ 90. And here, she is on surer footing. “Courts have routinely found that wasted time resulting

from a defendant’s FCRA violation is a sufficiently concrete and particularized injury to establish

standing.” Healy v. Milliman, Inc., No. 20-cv-1473,

, *3 (W.D. Wash. Apr. 8,

2022) (collecting cases); Losch v. Nationstar Mortgage LLC,

, 943 (11th Cir. 2021)

(finding plaintiff bringing a FCRA claim “has shown a concrete injury in the form of the . . . time

he spent contesting the inaccurate information” “[b]ecause there is no question that wasted time is

a concrete harm” (citation omitted)); Norman v. Trans Union, LLC,

, 372–73

(E.D. Pa. 2023) (finding plaintiff bringing a FCRA claim “sufficiently establish[ed] injury-in-fact”

“[b]ecause wasted time an expense are concrete harms” (citations omitted)); Hines v. Equifax Info.

Servs., LLC, No. 19-cv-6701,

, at *8 (E.D.N.Y. July 16, 2022) (“This wasted

time and expense is a traditional monetary harm that is fairly traceable to Equifax’s policy of

summarily categorizing and handling such disputes without a thorough investigation[.]”),

R. & R. adopted as modified, No. 19-cv-6701,

(E.D.N.Y. Sept. 10, 2024).

And Ms. Henkel alleges her wasted time and resources in sufficient detail. See Am. Compl.

¶¶ 81 (“Plaintiff disputed Defendant’s false, duplicative balance reporting through the CRAs,

11 including Experian, Equifax, and TransUnion throughout 2023 and 2024”), 84 (“Plaintiff also sent

complaints about Defendant’s duplicative credit reporting to the Better Business Bureau and the

Federal Student Aid Ombudsman Group in January 2024 to which Nelnet responded on

Defendant’s behalf”), 87 (“Plaintiff repeatedly requested an explanation of the ‘suppression’

Defendant added to her account[.]”). She describes the multi-step process of disputing inaccurate

credit information:

First, consumers must obtain a copy of their credit report and carefully review it to locate the inaccurate information. Second, they must prepare a letter identifying the information and explaining why it is inaccurate. Third, consumers must print their letters and any supporting documents, such as identification documents or correspondence from a third party, which consumes paper and printing resources. Finally, consumers must properly address their letters, place them in an envelope, and pay for postage, often including additional fees for delivery confirmation and return receipts.

. And she claims that she “spent time writing a dispute letter with several exhibits and

spent money to send it to one or more CRAs by certified mail.”

. Ms. Henkel’s wasted

time and resources are sufficiently concrete to confer Article III standing.

The Department responds by citing several non-FCRA cases for the uncontroversial

proposition that the Plaintiff “‘cannot manufacture standing merely by inflicting harm on [herself]

based on [her] fears of hypothetical future harm that is not certainly impending,’ i.e., she cannot

‘bring [an] action based on costs [she] incurred in response to a speculative threat.’” Mot. Dismiss

at 19 (quoting Clapper v. Amnesty Int’l USA,

(2013)); see, e.g., Murthy v.

Missouri,

(2024) (First Amendment); Nat’l Fam. Plan. & Reprod. Health Ass’n, Inc.

v. Gonzales,

(D.C. Cir. 2006) (First Amendment); Attias v. Carefirst, Inc.,

(D.C. Cir. 2017) (reversing lower court decision involving a data breach allegedly violating

“a host of state laws and legal duties,” Attias v. CareFirst, Inc.,

(D.D.C. 2016)); In re Science Apps. Int’l Corp. (SAIC) Backup Tape Data Theft Litig.,

3d 14, 19 (D.D.C. 2014) (data breach leading to “various causes of action—ranging from state tort

law to the federal Privacy Act of 1974”); Welborn v. IRS,

(D.D.C. 2016)

(data breach leading to claims under the Privacy Act, the APA, and the Internal Revenue Code);

Chambliss v. Carefirst, Inc.,

, 566–67 (D. Md. 2016) (data breach leading to

“various tort, negligence, and statutory claims arising under Maryland law”); In re Adobe Sys.,

Inc. Privacy Litig.,

, 1227–28 (N.D. Cal. 2014) (data breach

leading to claims under California statutes and the Declaratory Judgment Act); Pharm. Rsch. &

Mfrs. of Am. v. Dep’t of Health & Hum. Servs.,

, 148–49 (APA and First

Amendment).

But it makes a category error by invoking that proposition. Clapper rejected two different

harm theories on two different grounds. See

, 415–18. It first decided that the

respondents’ assertion that their communications might be intercepted at some point in the future

failed to satisfy the injury-in-fact requirement because it was too speculative. See

(“[R]espondents’ theory of standing, which relies on a highly attenuated chain of possibilities,

does not satisfy the requirement that threatened injury must be certainly impending.”

(citations omitted)); see also Pub. Citizen, Inc. v. Trump,

(D.D.C. 2018)

(citing Clapper for the proposition that “[a]llegations of possible future injury premised on

attenuated chain[s] of inferences will not suffice” when it comes to “the injury-in-fact

requirement” (emphasis in original) (cleaned up)). It then rejected the respondents’ alternative

argument that they were suffering ongoing injuries because they had taken “costly and burdensome

measures to protect the confidentiality of their communications.” Clapper, 568 U.S. at 415–18.

But this time it pointed to the traceability element of standing. See id. at 418 (“For the reasons

discussed above, respondents’ self-inflicted injuries are not fairly traceable to the Government’s

13 purported activities under § 1881a, and their subjective fear of surveillance does not give rise to

standing.”); see also Food & Water Watch, Inc. v. Vilsack,

(D.C. Cir. 2015)

(“In Clapper, the Supreme Court explained that plaintiffs cannot manufacture standing merely by

inflicting harm on themselves based on their fears of hypothetical future harm that is not certainly

impending because such injuries are not fairly traceable to the conduct creating that fear.” (cleaned

up)); Flyers Rights Educ. Fund, Inc. v. FAA, No. 20-cv-1486,

, at *2

(D.C. Cir. Mar. 8, 2021) (same); Taylor v. FAA,

(D.D.C. 2018) (saying a

plaintiff cannot satisfy causation by “manufactur[ing] standing merely by inflicting harm on

[himself]” (cleaned up)); Nat’l Ass’n of Home Builders v. U.S. Fish & Wildlife Serv.,

(D.D.C. 2014) (finding plaintiffs failed “to show that the injury is fairly traceable”

because they “cannot manufacture standing by choosing to make expenditures based on

hypothetical future harm that is certainly not impending” (cleaned up)).

All of the above cases cited by the Department involved situations where plaintiffs took

steps to protect themselves from some speculative future harm. But Ms. Henkel does not raise such

an argument. See Opp’n at 14. She instead argues that she had to waste time and resources

remedying an ongoing legal wrong—the Department’s “own steadfast refusal to reasonably

investigate and correct its own inaccurate credit reporting.” Id.; see also Am. Compl. ¶ 83

(“Nevertheless, in its responses to Plaintiff’s disputes through the CRAs, Defendant, directly

and/or indirectly through its agents, repeatedly failed to correct or reduce the duplicative balance

to $0 and to fulfill its other obligations under FCRA [S]ection 1681s-2(b).”). And for reasons

expanded on below, there is no traceability problem with this argument. See infra, at 23–28;

see also Opp’n at 15 (“The wasted time and resources following her first unsuccessful dispute are

14 surely a result of and stem directly from Defendant’s failure to correct its false credit reporting in

the first instance, as required by FCRA [S]ection 1681s-2(b)[.]”).

The Department’s remaining cases do not alter this analysis. That is because they all deal

with the damages element of a claim rather than Article III standing. See, e.g., Casella v. Equifax

Credit Info. Servs.,

(2d Cir. 1995) (“Appellant’s expenses incurred merely to

notify appellees of inaccurate credit information, and not to force their compliance with any

specific provision of the statute, cannot be compensable as ‘actual damages’ for a violation of the

FCRA.”); Shafran v. Harley-Davidson, Inc., No. 07-cv-1365,

(S.D.N.Y.

Mar. 20, 2008) (dismissing under Rule 12(b)(6) and 9(b) because the plaintiff “has failed to show

an actual resulting injury that might support a claim for damages” where “damages are an essential

element of each of plaintiff’s claims”); Hammond v. Bank of N.Y. Mellon Corp., No. 08-cv-6060,

, at *9 (S.D.N.Y. June 25, 2010) (assuming the plaintiffs had standing and

finding that the “alleged increased risk of identity theft is insufficient to support Plaintiffs’

substantive claims” (cleaned up)).

b. Intangible Harms

i. Credit Reputation and Score

Turning to intangible harm, Ms. Henkel first claims that she suffered “harm to [her] credit

reputation and credit score” because she “appeared on [her] credit report[] to owe to [the]

Defendant far more in federal student loans than [she] actually did[.]” Am. Compl. ¶ 90.

She invokes TransUnion to argue that “this type of injury is ‘closely related’ to defamation and is

th[u]s sufficient to give rise to standing.” Opp’n at 9. She also argues that “this inaccurate reporting

portrayed [her] in a false light, a traditionally recognized reputational injury.”

at 10 n.2 (citing

15 Gerena v. Freedom Mortg. Corp., No. 23-cv-78,

, at *10 (E.D. Va. Mar. 8,

2024)). The false light argument fails, but the defamation argument works.

Ms. Henkel argues that her reputational harm is closely related to the harm underlying the

tort of false light. See Opp’n at 10 n.2. “But the false light version of the tort of invasion of privacy

requires publicity, which ‘means that the matter is made public, by communicating it to the public

at large, or to so many persons that the matter must be regarded as substantially certain to become

one of public knowledge.’” Ackerman v. Maximus Educ., LLC, No. 24-cv-975,

,

at *6 (E.D. Va. Jan. 8, 2025) (quoting Restatement (Second) of Torts § 652D (1977)).

And Ms. Henkel has not alleged such widespread publication of her allegedly incorrect credit

report. Nor does she argue that the publicity requirement should be softened the way the falsity

requirement was watered down in TransUnion,

(“In other words, the harm from a

misleading statement of this kind bears a sufficiently close relationship to the harm from a false

and defamatory statement.”)—an argument the Eleventh Circuit has rejected, see Hunstein v.

Preferred Collection & Mgmt. Servs., Inc.,

, 1245–46 (11th Cir. 2022) (“Unlike the

near-falsity that was sufficiently close to defamation in TransUnion—because it gave rise to a

similar reputational harm—communications that are private rather than public do not engender a

closely analogous invasion of privacy.” (citation omitted)). So she cannot rely on this historical

analogue. See TransUnion,

(stating the inquiry of whether an injury has a “close

relationship to a harm traditionally recognized as providing a basis for a lawsuit in American

courts” “asks whether plaintiffs have identified a close historical or common-law analogue for

their asserted injury” (cleaned up)).

But she is right to invoke defamation. TransUnion said that “[u]nder longstanding

American law, a person is injured when a defamatory statement ‘that would subject him to hatred,

16 contempt, or ridicule’ is published to a third party.”

at 432 (quoting Milkovich v. Lorain Journal

Co.,

(1990) (cleaned up)) (citing Gertz v. Robert Welch, Inc.,

(1974); Restatement of Torts § 559 (1938)). It therefore distinguished between FCRA plaintiffs

whose credit reports “were disseminated to third-party businesses” and those whose credit

information was never provided “to any potential creditors.” Id. at 432–33. The former had

suffered a concrete injury, id. at 432, while the latter had not, id. at 439. “The standing inquiry . . .

thus distinguishes between (i) credit files that consumer reporting agencies maintain internally and

(ii) the consumer credit reports that consumer reporting agencies disseminate to third-party

creditors.” Id. at 434.

Ms. Henkel argues that the Department “repeatedly published the inaccurate information

to the Big Three CRAs Equifax, Experian, and Trans Union—themselves third parties for purposes

of publication.” Opp’n at 11; see also Am. Compl. ¶¶ 74–81, 91. And she points to cases adopting

TransUnion’s reasoning in this context and finding standing where inaccurate information is

distributed to a consumer reporting agency. See Opp’n at 11–13 (citations omitted); see, e.g.,

Ewing v. MED-1 Sols., LLC,

, 1152–53 (7th Cir. 2022) (rejecting the argument that

“dissemination of false information to a credit reporting agency” is insufficient); Figueroa v. Cap.

One, N.A., No. 23-cv-482,

, at *3 (D.N.J. Jan 19, 2024) (“This Court agrees with

the Ewing Court’s analysis and joins the number of district courts that have recognized instances

where dissemination to a credit reporting agency suffices to establish defamatory publication for

standing purposes.” (collecting cases)); cf., e.g., Morgan v. LVNV Funding, LLC, No. 21-cv-12967,

, at *5 (E.D. Mich. Sept. 7, 2023) (“This Court sees no reason why publication

in this context would require showing publication to creditors.” (citing Ewing, 24 F.4th at 1153));

Pharms v. Nat’l Credit Sys., Inc., No. 619-cv-60,

, at *7 (S.D. Ga. June 29,

17 2022) (finding “a reasonable jury could conclude that Defendant provided incorrect information

about Plaintiff’s debt to a third party (TransUnion).”); Pedro v. Equifax, Inc.,

,

1279–80 (11th Cir. 2017) (“Pedro alleged a concrete injury because the harm caused by the alleged

violation of the Act—the reporting of inaccurate information about Pedro’s credit to a credit

monitoring service—has a close relationship to the harm caused by the publication of defamatory

information[.]”).

On the other side, plenty of courts have required dissemination to creditors instead of

consumer reporting agencies. See, e.g., Campbell v. Portfolio Recovery Assocs., LLC,

No. 21-cv-1322,

, at *2 (E.D.N.Y. Mar. 4, 2022) (“[T]he distribution of

inaccurate information to a credit reporting agency, as opposed to a particular creditor, . . . does

not constitute or cause concrete injury for standing purposes.”); Seaman v. Nat’l Collegiate Student

Loan Tr. 2007-2, No. 18-cv-1781,

, at *20 (S.D.N.Y. Sept. 27, 2023) (same);

Phillips v. First Credit Servs., Inc., No. 24-cv-4440,

, at *2 (S.D.N.Y. Oct. 29,

2024) (same); Biener v. Credit Control Servs., Inc., No. 21-cv-2809,

, at *7

(S.D.N.Y. Mar. 14, 2023) (“Defendant’s reporting of the debt to the three major credit reporting

agencies on its own cannot establish concrete injury.”); Spira v. Trans Union, LLC, No. 21-cv-

2367,

, at *5 (S.D.N.Y. July 19, 2022) (“But credit reporting agencies like

Equifax are not the type of third parties contemplated by the Supreme Court in TransUnion; rather,

the Supreme Court clearly contemplated potential creditors[.]”); Konig v. TransUnion, LLC, No.

18-cv-7299,

, at *8 (S.D.N.Y. Apr. 19, 2023) (same); Reimer v. LexisNexis Risk

Sols., Inc., No. 22-cv-153,

, at *10 (E.D. Va. Sept. 13, 2022) (same); Krausz v.

Equifax Info. Servs., LLC, No. 21-cv-7427,

, at *9 (S.D.N.Y. Feb. 14, 2023)

(same); Whitehead v. Grant & Weber, Inc., No. 22-cv-6517,

, at *2 (E.D.N.Y.

18 Dec. 30, 2022) (same), R. & R. adopted,

(E.D.N.Y. May 4, 2023); Lewis v. Old

Navy, No 21-cv-9131,

, at *3 (S.D.N.Y. Jan. 9, 2024) (similar); McKnight v.

Receivable Collection Servs., LLC, No. 24-cv-2840,

, at *2 (E.D.N.Y. Sept. 23,

2024) (similar).

The Court is ultimately persuaded that there are circumstances where dissemination to

consumer reporting agencies is sufficient to confer standing. The Seventh Circuit in Ewing

developed this idea quite robustly. See 24 F.4th at 1152–54. There, it acknowledged dicta from

TransUnion stating that disclosures to printing vendors were not traditionally actionable as

publications for the tort of defamation. Ewing, 24 F.4th at 1153 (citing TransUnion,

n.6). But it read that language to imply that such a disclosure would be sufficient if a plaintiff

could “present evidence that the defendant had ‘brought an idea to the perception of another.’”

(quoting TransUnion,

n.6). “The essential point, one that has always been

necessary to prove publication, is this: the third party must understand the defamatory nature of

the communication.”

at 1154 (citing Restatement (Second) of Torts § 577 cmt. c.); see also

Fernandez v. RentGrow, Inc.,

, 297–98 (4th Cir. 2024) (discussing Ewing favorably).

It concluded that courts must therefore ask whether consumer reporting agencies “understood the

defamatory significance of the [incorrect] reports.” Ewing, 24 F.4th at 1154.

The Department argues that Ewing is not persuasive in part because it never considered

“that a consumer reporting agency, much like a printing vendor, is a ‘ministerial intermediary,’”

Reply at 11 (quoting Nabozny v. Optio Sols. LLC,

(7th Cir. 2023)), “that merely

‘pass[es] the information’ on to its ultimate intended recipient,”

(quoting Hunstein,

). But the cases it relies on to make this point concern privacy torts, not defamation—and

privacy torts require more widespread publication than does defamation. See Nabozny,

738 (“The ‘publication’ element in a defamation claim includes disclosure to just one person, while

the ‘publicity’ element of the privacy tort at issue here requires disclosure to many.” (citation

omitted)); Hunstein,

n.5 (“The ‘publicity’ required for public disclosure differs

from the ‘publication’ required for defamation.” (citation omitted)).

The Department also argues that Ewing “did not consider that a furnisher’s transmission of

credit information to a consumer reporting agency is a ‘communication [that] is made to a . . .

business associate in the ordinary or natural course of business.’” Reply at 11 (quoting Beck v.

Oden,

(Ga. App. 1941)). But Beck was a case addressing whether there was

“an actionable publication” when “the defendant dictated to his office stenographer the contents

of [an] alleged libelous letter.”

. And Ewing expressly addressed the line of cases

cited by TransUnion “that dealt with liability for dictating defamatory matter to a stenographer.”

Ewing, 24 F.4th at 1154 (citing TransUnion,

n.6). And it explained that those cases

“were concerned with whether the stenographer was simply mechanically transmitting the words

or whether she perceived or understood the defamatory significance of what was dictated.”

(citing Ostrowe v. Lee,

(N.Y. 1931)). Indeed, one of the cases cited in

TransUnion, see

n.6, held in no uncertain terms that “[t]here is publication of a

libel if a stenographer reads the notes that have been taken by another” and that the result is the

same if “the notes that he reads have been taken by himself,” Ostrowe,

(Cardozo, C.J.). It is true that when Beck was decided about a decade later in a different state,

the Court of Appeals of Georgia chose to adopt the more “modern” rule that communication made

to a business associate was not actionable for libel.

. But that one decision cannot

erase the historical evidence on the other side. And the Department certainly cannot argue that

Ewing failed to consider this issue altogether.

20 Having established that the essential question for publication is whether the third party

“underst[ood] the defamatory nature of the communication,” Ewing, 24 F.4th at 1154, the Court

also concludes that Ms. Henkel has sufficiently alleged facts to support an inference that the

consumer reporting agencies understood the incorrect debt reports. In Ewing, the Seventh Circuit

concluded that the consumer reporting agency understood the significance of the reports because

it “included the debts in the Consumers’ credit reports” and its “assessment of [the plaintiffs’]

creditworthiness took into account [the erroneous information],” id., as evidenced by an increased

credit score upon correction, see id. at 1149, 1150. And Ms. Henkel similarly alleges both of these

facts. First, she alleges that the incorrect information was included in her credit reports. See, e.g.,

Am. Compl. ¶ 75–76 (“In January of 2024, Plaintiff reviewed her credit reports and discovered

that [the Department] . . . was still directly and/or indirectly reporting that she had an open student

loan account with a balance of approximately $68,505” even as the Department “was directly

and/or indirectly reporting that Plaintiff had an additional federal student loan account due to [the

Department] with a total loan balance of approximately $68,548.”). Second, she alleges harm to

her credit score as a result. See id. ¶ 14 (“As a result of [the Department’s] conduct, Plaintiff and

members of the Class she seeks to represent falsely appear on their credit reports to owe double

the amount of federal student loan debt and suffer injury and damages in the form of harm to credit

reputation and credit score[.]”), id. ¶ 90 (similar). This is enough to plausibly allege that the

consumer reporting agencies understood the defamatory nature of the incorrect debt report.

The Department argues that Ms. Henkel fails to allege “that her credit information

‘was actually read and not merely processed.’” Reply at 14 (quoting TransUnion,

n.6). But Ewing explains that “[r]eading was a proxy for understanding rather than just

mechanically transmitting information” and that it “was not always required.” 24 F.4th at 1154

21 (citations omitted). And the Court has already decided that Ms. Henkel plausibly alleges

understanding on the part of the consumer reporting agencies. See supra, at 21. The Court is

therefore satisfied that she has sufficiently alleged an injury-in-fact on this basis.

ii. Emotional Distress

Ms. Henkel next argues that “emotional distress” is a sufficient basis for standing.

See Opp’n at 19. And she is correct on this point for all the same reasons she was correct about

reputational harm. Courts look to history “[i]n assessing whether an emotional harm can satisfy

the Article III injury-in-fact requirement[.]” Magruder, 540 F. Supp. 3d at 9. And the Court has

already concluded that she has been harmed in a way that is analogous to victims of defamation.

See supra, at 16–22; see also Magruder, 540 F. Supp. 3d at 11–12 (concluding that a claim of

emotional harm was sufficiently concrete in part because there is ‘a significant history, including

at common law, of lawsuits based on . . . the disclosure of adverse information claimed to have

been misleading or false’” (quoting Gambles v. Sterling Infosystems, Inc.,

(S.D.N.Y. 2017)) (collecting cases)).

The Department argues that emotional harm can never be concrete. See Reply at 17

(citing Humane Soc’y of U.S. v. Babbitt,

, 98 (D.C. Cir. 1995)). And it cites broad

language from the D.C. Circuit stating that “general emotional ‘harm,’ no matter how deeply felt,

cannot suffice for injury-in-fact for standing purposes.” Humane Soc’y of U.S., 46 F.3d at 98

(citations omitted)). But standing doctrine has developed quite a bit since those words were

penned. Fifteen years ago, a court in this District explained that Humane Society still allowed some

emotional harm to be concrete: “[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

22 as such by the Congress.’” Al-Aulaqi v. Obama,

(D.D.C. 2010) (cleaned up)

(quoting Sargeant v. Dixon,

(D.C. Cir. 1997). Then several years later,

another court in this District echoed that same test but seemed to treat the final disjunctive as more

of a conjunctive out of respect for Spokeo’s teaching that “history and the judgment of Congress”

matter. Magruder, 540 F. Supp. 3d at 8 (emphasis added) (quoting Spokeo,

);

see also id. at 10 (“Both considerations weigh in favor of the conclusion that Magruder has alleged

enough to satisfy Article III.”). In the post-TransUnion landscape, it stands to reason that

emotional distress counts as concrete as long as plaintiffs identify a historical analogue. 1

See TransUnion,

n.7 (“We take no position on whether or how such an emotional

or psychological harm could suffice for Article III purposes—for example, by analogy to the tort

of intentional infliction of emotional distress.”). Ms. Henkel therefore plausibly alleges concrete

emotional harm.

2. Traceability

“Second, there must be a causal connection between the injury and the conduct complained

of—the injury has to be ‘fairly . . . trace[able] to the challenged action of the defendant, and not

. . . th[e] result [of] the independent action of some third party not before the court.’” Lujan,

(quoting Simon v. E. Ky. Welfare Rights Org.,

, 41–42 (1976)). “To be

fairly traceable, there must be a ‘causal connection between the assertedly unlawful conduct and

the alleged injury.’” Doe 1 v. Apple Inc.,

(D.C. Cir. 2024) (quoting Allen v.

Wright,

, 753 n.19 (1984)). “Article III standing does not require that the defendant

1 The Court notes that the same might be true even without a historical analogue. See TransUnion,

(“Various intangible harms can also be concrete. Chief among them are injuries with a close relationship to harms traditionally recognized as providing a basis for lawsuits in American courts.” (emphasis added)).

23 be the most immediate cause, or even a proximate cause, of the plaintiffs’ injuries[.]” Attias v.

Carefirst, Inc.,

(D.C. Cir. 2017). “But if the injury would occur regardless of

the challenged action—say, because some separate action would independently cause it in full—

then the fair-traceability test is not met.” Cherokee Nation v. U.S. Dep’t of the Interior,

, 106 (D.D.C. 2022) (citing Delta Constr. Co. v. EPA,

(D.C. Cir. 2015)). Traceability is easily met in this case for all three concrete harms.

First, Ms. Henkel was injured when she had to waste time and resources “lodging futile

disputes and trying to correct [the Department’s] false credit reporting.” Am. Compl. ¶ 14; see also

id. ¶ 90. This injury would not have occurred but for the Defendant’s challenged action.

Ms. Henkel challenges the Department’s failure to “report a $0 balance, correct the inaccurate

information, and fulfill all of its duties under FCRA [S]ection 1681s-2(b).” Am. Compl. ¶ 120.

And if the Department had not resisted correcting the inaccurate information, Ms. Henkel would

not have had to continue expending time and resources. See Cherokee Nation, 643 F. Supp. 3d

at 106 (“[I]f some part of the alleged injury would not have occurred, or will not occur, but for the

challenged action, then the injury is fairly traceable to the challenged action.” (citation omitted)).

This includes everything that occurred after the furnishing of the information triggered Subsection

1681s-2(b)’s requirement to fix the error. See Am. Compl. ¶¶ 81 (“Plaintiff disputed Defendant’s

false, duplicative balance reporting through the CRAs, including Experian, Equifax, and

TransUnion throughout 2023 and 2024.”), 84 (“Plaintiff also sent complaints about Defendant’s

duplicative credit reporting to the Better Business Bureau and the Federal Student Aid

Ombudsman Group in January 2024[.]”), 87 (“Plaintiff repeatedly requested an explanation of the

‘suppression’ Defendant added to her account, but Nelnet never provided it.”).

24 The Department does not challenge traceability for this harm in so many words.

See Mot. Dismiss at 19–21 (ambiguously challenging this harm as being insufficient for

“standing”); Reply at 16 (challenging this harm as being insufficiently “concrete”). It instead

argues that Ms. Henkel’s waste of time and resources was a self-inflicted harm meant to mitigate

the risk of future harm, see Mot. Dismiss at 19–21, which would pose a traceability problem,

see Vilsack,

(“In Clapper, the Supreme Court explained that plaintiffs cannot

manufacture standing merely by inflicting harm on themselves based on their fears of hypothetical

future harm that is not certainly impending because such injuries are not fairly traceable to the

conduct creating that fear.” (cleaned up)). But this argument misses the mark. Ms. Henkel does

not allege that she is acting to avoid some speculative future legal wrong; she instead took these

steps to remedy an ongoing violation. See Opp’n at 18.

Second, Ms. Henkel’s reputational harm is fairly traceable to the Department’s failure to

correct the false debt report. The Department argues that this harm is traceable to the initial

furnishing of the disputed information to consumer reporting agencies instead of the Department’s

“subsequent failure to investigate and correct the disputed information after she disputed it with

consumer reporting agencies.” Mot. Dismiss at 13; see also id. at 18 (incorporating this argument

for reputational harm); Owens v. Bank of Am., No. 17-cv-2110,

, at *8 (D.D.C.

Sept. 14, 2018) (“[T]he FCRA does not create a private right of action enabling an individual to

enforce” the provision prohibiting “an entity from ‘furnish[ing] information relating to a consumer

to any consumer reporting agency if the person knows or has reasonable cause to believe that the

information is inaccurate.’” (quoting 15 U.S.C. § 1681s-2(a)(1)) (citations omitted)). But even if

the harm to her credit score were initially caused by the furnishing of the information, the ongoing

harm she is suffering can locate its cause in more than one place. See Attias,

25 (“Article III standing does not require that the defendant be the most immediate cause, or even a

proximate cause, of the plaintiffs’ injuries[.]”). Ms. Henkel alleges that the total amount of money

someone has borrowed accounts for about thirty percent of one’s FICO score and that “total credit

usage” is “highly influential” in calculating the scoring model created by the big three consumer

reporting agencies. See Am. Compl. ¶ 92 (citations omitted). Accepting these facts as true and

drawing all inferences in her favor at this stage, correcting the error on Ms. Henkel’s credit report

would lead to some positive effect on her credit score—an effect that she has been robbed of by

the Department’s alleged indifference. See Cherokee Nation, 643 F. Supp. 3d at 106 (“[I]f some

part of the alleged injury would not have occurred, or will not occur, but for the challenged action,

then the injury is fairly traceable to the challenged action.” (citation omitted)).

The Department argues that the D.C. Circuit has foreclosed this theory of traceability.

See Mot. Dismiss at 13, 18. It cites Lo Shippers Action Comm. v. Interstate Com. Comm’n,

(D.C. Cir. 1986), for the proposition that Ms. Henkel cannot allege causation by

relying on the Department’s failure to “abat[e] [a] pre-existing injury.” Mot. Dismiss at 13 (quoting

Lo Shippers, 808 F.2d at 65). But that is not quite right. In Lo Shippers, the petitioner challenged

an order by the Interstate Commerce Commission cancelling a tariff that had become effective on

January 1, 1985. See Lo Shippers, 808 F.2d at 64–65. The petitioner, who had won before the

Commission, argued the order did not go far enough because it did not also cancel an earlier tariff

from over two years prior, which the petitioner had already previously challenged to no avail.

See id. at 65. The D.C. Circuit rejected this argument, explaining that an allegation that a defendant

“did not go far enough in abating a pre-existing injury” would “not suffice to confer standing.” Id.

The Department reads this line to essentially declare that a plaintiff never has standing to challenge

someone’s declination to alleviate an injury with a distinct cause. See Mot. Dismiss at 13.

26 But Lo Shippers undercuts this reading in the very next paragraph. There, it explains that the real

causes of the petitioner’s injury were the 1983 tariffs and the earlier decision that “refused to either

investigate or suspend the tariffs.” Id. While that earlier decision was “not subject to judicial

review,” id., it stands as an example of an entity’s choice not to remedy some earlier harm counting

as a cause of that very same harm.

This reading is reinforced by Lo Shippers’s citation to California Association of the

Physically Handicapped, Inc. v. FCC,

(D.C. Cir. 1985), also cited by the Department,

see Mot. Dismiss at 13. There, the D.C. Circuit held that certain injuries were not traceable to the

FCC’s approval of a transfer of company stock to someone who had already controlled the

company for many years. Cal. Ass’n of the Physically Handicapped,

. It explained

that the plaintiff could not “fairly trace its ongoing injury—either in origin or in endurance—to

the transfer in question” and that its “real plea is that the transfer will furnish no cure—it will not

cause the injury to abate.”

(emphasis added). The D.C. Circuit therefore acknowledged that an

ongoing injury can be traceable “in endurance” to some behavior that did not cause it “in origin.”

That is exactly what is happening here.

The Department also offers an out-of-circuit FCRA opinion as an example of a court

finding “no standing as [the] plaintiff failed to show that [her] injury ‘is fairly traceable to [the]

allegedly inadequate investigation’ rather than to the initial furnishing of the information.” Reply

at 4 (quoting Thompson v. Equifax Info. Servs., LLC,

, 544 (E.D. Mich. 2020)).

But it misreads that case. The court there found that the plaintiff failed to establish after discovery

that her intangible harm was traceable to either the inadequate investigation or the inaccurately

reported information—this was because there was an accurately reported loan of a much greater

magnitude on her trade line. Thompson, 441 F. Supp. 3d at 544. But declaring as a matter of law

27 at the motion-to-dismiss stage that consumers’ intangible harms flow solely from the initial

furnishing of information would make it impossible for anyone to bring a claim under Subsection

1681s-2(b). Cf. Woodward v. GEICO Advantage Ins. Co., No. 21-cv-952,

, at *5

(D. Md. July 25, 2022) (“If the preexisting high rates caused by [the] inaccurate information

insulate an insurer from liability for causing a continuation of those high rates by refusing to

conduct a proper investigation, insurers would have virtual impunity for inaccurate information on

consumers’ CLUE Reports.”). That is why courts routinely allow such claims to proceed.

See Opp’n at 8–9 (collecting cases).

Third, Ms. Henkel’s emotional harm is also fairly traceable to the Department’s failure to

correct the inaccurate debt report. She alleges that the inaccurate student loan information caused

her to be “distraught, dismayed, and distressed.” Am. Compl. ¶ 102. And she “manifested [her]

negative emotional responses to [the Department’s] direct and/or indirect reporting of inaccurate

Student Loan Information by disputing it with one or more CRAs.”

. These negative

emotions would therefore subside were the Department of Education to resolve her disputes,

making them fairly traceable to the Department’s failure to do so. See Cherokee Nation,

643 F. Supp. 3d at 106 (“[I]f some part of the alleged injury would not have occurred, or will not

occur, but for the challenged action, then the injury is fairly traceable to the challenged action.”

(citation omitted)). Any counterargument that attempts to pin her emotional harm on the initial

furnishing of information alone suffers from the same problems the Court identified above when

discussing traceability for Ms. Henkel’s reputational harms. See supra, at 25–28.

3. Redressability

“Third, it must be likely, as opposed to merely speculative, that the injury will be redressed

by a favorable decision.” Lujan,

(cleaned up). “This analysis is ‘virtually always

28 the reciprocal’ of the second, fair-traceability requirement.” Cherokee Nation, 643 F. Supp. 3d

at 106 (quoting Vietnam Veterans of Am. v. Shinseki,

(D.C. Cir. 2010)).

“Thus, if the defendant’s challenged actions are a but for cause of the plaintiff’s alleged injury,

then that injury generally is likely redressable for standing purposes.”

Here, all of Ms. Henkel’s

concrete injuries occurred because the Department of Education failed to fix the incorrect

information. See supra, at 23–28. An award of damages would therefore likely redress her injury.

See Cherokee Nation, 643 F. Supp. 3d at 106 (“Typically, redressability is absent only when the

Court’s decision would have ‘no real effect’ on the plaintiff’s injury.” (quoting Kaspersky Lab,

Inc. v. U.S. Dep’t of Homeland Sec.,

(D.C. Cir. 2018) (cleaned up))).

B. Merits

Turning to the merits, the Court finds that Ms. Henkel has plausibly alleged a claim under

15 U.S.C. § 1681s-2(b). She sufficiently alleged that the Department provided the challenged

information to consumer reporting agencies. And the Court reads the statutory provision to allow

for vicarious liability as well, making her allegations about the Department’s agents sufficient at

this stage. The Court also finds that damages for non-pecuniary and non-economic harms are

available under the FCRA. It therefore denies the Defendant’s Rule 12(b)(6) motion.

1. Direct Liability

The Department of Education argues that it does not fit the description of entities covered

by Subsection 1681s-2(b). That Subsection provides: “After receiving notice . . . of a dispute with

regard to the completeness or accuracy of any information provided by a person to a consumer

reporting agency, the person shall . . . conduct an investigation with respect to the disputed

information.” 15 U.S.C. § 1681s-2(b)(1)(A). The statutory obligations therefore apply to a

“person” only after that person has (1) “provided” information to a consumer reporting agency and

29 (2) “receiv[ed] notice” of a dispute about that information. Id. Ms. Henkel has sufficiently alleged

both of these conditions.

First, Ms. Henkel plausibly alleges that the Department provided the disputed information

to a consumer reporting agency. According to the Amended Complaint, “information about

[one of her student loans] is listed on her credit report as being furnished by ‘Dept of

Ed/Aidvantage’ and information about another is listed as being furnished by ‘MOHELA/DEPT

OF ED.’” Am. Compl. ¶ 5. Drawing all inferences in her favor, as the Court must at this stage,

it reads this allegation to be saying that the Department of Education furnished the information.

Discovery might reveal that this was not the case. See Ellis v. Pa. Higher Educ. Assistance Agency,

No. 07-cv-4498,

, at *18–19 (C.D. Cal. Aug. 12, 2008) (finding at

the summary judgment stage that “[t]here is no evidence that KeyBank separately provided

information to the CRAs” even though the “Plaintiff’s credit report lists PHEAA and KeyBank

jointly as the entities responsible for his loans”). But the allegations suffice at the pleading stage.

Second, again drawing all inferences in her favor, Ms. Henkel plausibly alleges that the

Department of Education received notice of her dispute. See Am. Compl. ¶ 120 (“After receiving

notice from one or more CRAs of Plaintiff’s and Class members’ disputes of inaccurate

information that Defendant, directly and/or indirectly through its agents, had previously furnished

to the CRA about them . . . .”); see also

(“[T]he CRAs provided notice of Plaintiff’s

disputes to Defendant directly and/or indirectly through its agents.”). The Department therefore

falls within the gamut of Subsection 1681s-2(b).

2. Vicarious Liability

The Department next argues that Subsection 1681s-2(b) does not make it vicariously liable

for any violations committed by its agents—including Nelnet. See Mot. Dismiss at 25–28.

30 “Vicarious liability is a common law concept, wherein one may be liable for the acts of another[.]”

Certain Underwriters at Lloyd’s London v. Great Socialist People’s Libyan Arab Jamahiriya,

(D.D.C. 2011) (cleaned up); see also Est. of Wilson v. District of Columbia,

No. 23-cv-1987,

, at *15 (D.D.C. Sept. 29, 2024) (“Respondeat

superior is not an independent tort claim, but rather a legal theory of vicarious liability that

transfers liability from an agent to its principals.” (citations omitted)). And “courts may take it as

a given that Congress has legislated with an expectation that . . . [common law] principle[s] will

apply except when a statutory purpose to the contrary is evident.” United States v. Texas,

(1993) (cleaned up). “In order to abrogate a common-law principle, the statute must speak

directly to the question addressed by the common law.”

(cleaned up).

Subsection 1681s-2(b) does not speak directly to the question of vicarious liability, so the

Court will join the chorus of courts holding that vicarious liability applies. See, e.g., Ellis,

, at *19–21; Haddad v. Charles Riley & Assocs., No. 09-cv-12597,

, at *34–38 (E.D. Mich. Apr. 12, 2010); Feldmann v. Lakeview

Loan Servicing L.L.C., No. 20-cv-580,

, at *4 (W.D. Wash. Apr. 27, 2021),

partially reconsidered on different grounds,

(W.D. Wash. May 21, 2021).

The Department points to no case holding otherwise. See Mot. Dismiss at 25–28;

Reply 21–23. It instead attempts to weaken the persuasive value of these cases by advancing a

textual argument not addressed in those opinions. See Reply at 23 (“These cases failed to consider

that Sections 1681b and 1681d expressly codify vicarious liability while Section 1681s-2(b) does

not, an omission that courts presume to be intentional.” (citations omitted)). It explains that other

provisions of the FCRA contain “language making one actor responsible for a different actor’s

actions.” Mot. Dismiss at 26–27 (collecting provisions). And it highlights Subsection 1681s-2(b)’s

31 relative silence, arguing that this implies a statutory abrogation of vicarious liability principles.

See

But this argument from implication is a far cry from the direct speech required for

abrogation. See Texas,

; see, e.g., In re Leopold to Unseal Certain Elec.

Surveillance Applications & Orders v. United States of America,

(D.C. Cir.

2020) (“[T]he Rule expressly directs secrecy as the default position, and thus displaces the

common-law right of access.” (citation omitted)). And Ms. Henkel has advanced a plausible

explanation for this textual irregularity. See Opp’n at 26–27. She explains that the other provisions

deal with employment and investigative reports, which “are often one-off inquiries conducted

through a third-party data broker.”

And she argues that the one-off nature of these relationships

makes an agency relationship unlikely. See id. at 27. It therefore makes sense that Congress would

have expressly incorporated vicarious liability in its text, even while leaving the background

principle to apply to Subsection 1681s-2(b), which involves more ongoing relationships with

consumer reporting agencies. See id. Regardless of whether this was the true congressional

purpose, the Court finds this argument persuasive enough that it cannot conclude that a statutory

purpose of abrogation is “evident.” Texas,

. This is especially true given the

FCRA’s remedial nature. See Wilson v. Corelogic SafeRent, LLC, No. 14-cv-2477,

, at *4 (S.D.N.Y. Sept. 29, 2017) (“FCRA is undeniably a remedial statute that must be

read in a liberal manner in order to effectuate the congressional intent underlying it.” (cleaned up)).

The Department also tries to undercut two of the above cases by arguing that they

incorrectly relied on the idea that plaintiffs would be without a remedy unless vicarious liability

were available. See Reply at 23 (citing Ellis,

, at *7; Haddad,

, at *12). It explains that a remedy would be available under its reading—the plaintiff

32 would just need to sue the entity that actually furnished the information. See

But even if that

were true, it does not explain how Subsection 1681s-2(b) can be read to speak clearly to the

question of vicarious liability, which is what is required for abrogation, see Texas,

.

Finally, the Department argues that “even under principles of agency [law],” it would still

not be responsible for Nelnet’s actions because “[a]gency law does not make an actor responsible

for an independent contractor’s torts[.]” Mot. Dismiss at 28 (citations omitted). Ms. Henkel

counters by arguing that courts have found “questions of actual control to be issues of fact.” Opp’n

at 29 (collecting cases); see, e.g., Haddad,

, at *36–38 (holding that

whether an entity was an agent was “a question of fact for a jury to decide” because the entity’s

“mere status as an ‘independent contractor’ [was] not dispositive of this issue”); see also Opp’n at

32 (“At minimum, as discussed, supra, the degree of control Defendant exercises over Nelnet is a

question of fact not appropriate for determination in a motion to dismiss.”). And the Department

cites no case stating the opposite. In fact, it never really addresses this argument at all. See Reply

at 23–25. The Court therefore agrees with Ms. Henkel and will leave this factual question for a

later stage of these proceedings.

3. Actual Damages

Finally, the Department argues that the FCRA’s civil liability provisions limit damages to

proven pecuniary or economic harm and that Ms. Henkel failed to plausibly allege any such harm.

See Mot. Dismiss at 21–22. Those provisions state that consumers are entitled to “any actual

damages sustained by the consumer as a result of the failure” to comply with the FCRA. 15 U.S.C.

§§ 1681n(a)(1)(A), 1681o(a)(1). “Because the term ‘actual damages’ has [a] chameleon-like

quality, we cannot rely on any all-purpose definition but must consider the particular context in

which the term appears.” F.A.A. v. Cooper,

(2012).

33 The Court is persuaded that the FCRA allows for damages for non-pecuniary and

non-economic harms given the decades of out-of-circuit case law reaching this same conclusion.

See, e.g., Millstone v. O’Hanlon Reports, Inc.,

, 834–35 (8th Cir. 1976) (finding no

error for an award based in part on “loss of sleep, nervousness, frustration and mental anguish over

the report”); Thompson v. San Antonio Retail Merchants Ass’n,

, 513–14

(5th Cir. 1982) (per curiam) (“Even when there are no out-of-pocket expenses, humiliation and

mental distress do constitute recoverable elements of damage under the Act.”); Fischl v. Gen.

Motors Acceptance Corp.,

(5th Cir. 1983) (“Even where no pecuniary or out-

of-pocket loss has been shown, the FCRA permits recovery for humiliation and mental distress.”

(citations omitted)); Guimond v. Trans Union Credit Info. Co.,

(9th Cir. 1995)

(“The term ‘actual damages’ has been interpreted to include recovery for emotional distress and

humiliation.” (collecting cases)); Dalton v. Cap. Associated Indus., Inc.,

(4th Cir. 2001) (“Dalton alleges that he suffered emotional distress and a loss of reputation as a

result of the false report. Damages for such injuries are recoverable under FCRA.”); Bach v. First

Union Nat’l Bank,

(6th Cir. 2005) (upholding damages award for “pain,

suffering and humiliation” and collecting cases upholding emotional distress damages); Cortez v.

Trans Union, LLC,

(3d Cir. 2010) (“[D]amages for violations of the FCRA

allow recovery for humiliation and embarrassment or mental distress even if the plaintiff has

suffered no out-of-pocket losses.” (citation omitted)).

The Department pushes back against this mountain of case law by pointing to Cooper,

a Supreme Court case holding that “actual damages” under the Privacy Act were limited to proven

pecuniary or economic harm. See Reply at 17–19; see also Cooper,

. It explains

that Cooper concluded the Privacy Act’s remedial scheme should parallel that of the common-law

34 torts of libel per quod and slander, which allow plaintiffs to recover general damages only if they

first prove pecuniary loss in the form of special harm. See Reply at 17–18 (citing Cooper, 566 U.S.

at 295–96). And it highlights two grounds for the Court’s conclusion, arguing that they apply to

the FCRA as well. See

First, “the Privacy Act’s remedial provision authorizes plaintiffs to

recover a guaranteed minimum award of $1,000 for violations of the Act, but only if they prove at

least some ‘actual damages.’” Cooper,

(cleaned up). And the Department reads

the FCRA to do something similar, see Reply at 18, although the text does not clearly demand

such a reading either on its own terms or in comparison to the Privacy Act, compare 15 U.S.C.

§ 1681n(a)(1)(A) (FCRA providing for “any actual damages sustained by the consumer as a result

of the failure or damages of not less than $100 and not more than $1,000”), with 5 U.S.C. § 552a

(Privacy Act providing for “actual damages sustained by the individual as a result of the refusal or

failure, but in no case shall a person entitled to recovery receive less than the sum of $1,000”

(emphasis added)). Second, the Privacy Act “serves interests similar to those protected by

defamation and privacy torts.” Cooper,

. And the Department points out that these

are the very same interests that Ms. Henkel argues the FCRA serves in her standing arguments.

See Reply at 18 (citations omitted).

But Cooper itself explained why we should not import its reasoning to the FCRA context.

When faced with lower court opinions holding that the FCRA allows for compensation for mental

and emotional distress, Cooper emphasized that the FCRA provided “only [a] limited interpretive

aid” “[s]ince the term ‘actual damages’ can mean different things in different contexts.” 566 U.S.

at 301–02. And it highlighted three differences between the Privacy Act and the FCRA. See

. First, it explained that the FCRA does not “contain[] text that precisely mirrors the Privacy

Act.”

Second, looking to legislative history, it explained that Congress did not “specifically

35 decline to authorize recovery for general damages”—which would have included non-pecuniary

damages—when it enacted the FCRA but it did when it enacted the Privacy Act.

“And most

importantly,” the FCRA cases did not “involve[] the sovereign immunity canon.”

The Department concedes that “the sovereign immunity canon does not apply here.” Reply

at 18 n.1. These three distinctions therefore persist. And just as Cooper declined to import the

FCRA reasoning when construing the Privacy Act, so too does this Court decline to import

Cooper’s reasoning to the FCRA context.

And even assuming the FCRA does limit recovery to damages for proven pecuniary or

economic harm, Ms. Henkel plausibly alleged such harm in her Amended Complaint. See, e.g.,

Am. Compl. ¶ 108 (“Plaintiff spent time writing a dispute letter with several exhibits and spent

money to send it to one or more CRAs by certified mail.”).

CONCLUSION

For the foregoing reasons, the Court denies the Defendant’s Motion to Dismiss,

ECF No. 23.

A separate order will issue.

SPARKLE L. SOOKNANAN United States District Judge

Date: July 22, 2025

36