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United States District Court, Southern District of New York

July 7, 2003


The opinion of the court was delivered by: Lewis Kaplan, District Judge


Plaintiff, who claims to be owner of an entity called County Vanlines, Inc. ("CVL"), brings this action under the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq. (the "FCRA"). Defendant moves to dismiss.


The complaint alleges essentially the following:

Plaintiff created CVL, but sold it in 1994. Two years later, he repossessed it because the buyer had run the business into the ground. In December 1998, CVL applied to Fleet Bank for a loan, to be guaranteed by plaintiff, in order to buy a trailer but the application was rejected based on a credit report, dated December 22, 1998, issued by defendant to the bank, a copy of which is Exhibit A to the complaint. Cpt ¶¶ 6-7 & Ex. A. According to the complaint, the report negligently and inaccurately associated the poor performance of the company while it was owned by the buyer with plaintiff. Id. ¶ 7. Plaintiff therefore sought and obtained a corrected report concerning CVL. He alleges that his "personal report was also corrected," id. ¶ 8, although there is no suggestion in the complaint that defendant issued a personal credit report on plaintiff to Fleet Bank or that Fleet Bank relied on any such report in denying CVL's application for a loan. Indeed, beyond the implication inherent in the suggestion that a corrected personal report was issued, there is no suggestion that any prior personal report was inaccurate in any way.

In March 2001, "the Plaintiff once again made an application for a loan (for additional equipment) this time with the Bank of New York, (BONY) and again personally guaranteeing the loan." Id. ¶ 9. Plaintiff later was informed that the application was rejected based on "credit reports" issued by defendant. Id. He requested a copy of "the report" and was sent "the report," a copy of which is attached to the complaint as Exhibit B, in June 2001. Id. Exhibit B in fact is a "business profile" regarding CVL dated April 16, 2001. Its only reference to plaintiff is under the heading "Company Background Information," where plaintiff is listed as the principal and chairman of the company.*fn1 Plaintiff subsequently requested a copy of "the report issued . . . to BONY" and that the defendant sent it during June 2001. Id. ¶ 9.

The complaint contains two claims for relief. The first alleges that the 1998 and April 2001 reports were inaccurate in that they negligently portrayed plaintiff as "in bed with" and "equally responsible" with the buyer for the debts and operations of the business while it was under the buyer's control and caused him humiliation, stress, and anguish, pain from gout, and large medical bills. It is unclear whether the first is intended to rest on common law negligence, the FCRA, or both. The second, on the other hand, clearly asserts that the foregoing circumstances state a violation of the FCRA in that "the defendants [sic] negligently failed to use reasonable procedures to assure the maximum possible accuracy of the consumer report pertaining to plaintiff." Id. ¶ 14.

Defendant seeks dismissal on several grounds. In opposing the motion, however, it has submitted additional materials not referred to in the complaint. In particular, it offers a consumer credit report on plaintiff, sent to BONY on April 5, 2001 and a version of the report it claims to have sent to BONY, which also is dated April 5, 2001.


Defendant's first contention is that plaintiff, an individual, has no claim under the FCRA with respect to any report on CVL. It is correct.

The FCRA applies to "consumer reports," see, e.g., 15 U.S.C. § 1681a(d)(1), and creates a cause of action in favor of "any consumer" who is damaged by reason of negligent noncompliance with the statute, id. § 1681oa. Its object is to regulate credit reports used in establishing eligibility for personal, family or household purposes. E.g., Matthews v. Worthen Bank & Trust Co., 741 F.2d 217, 219 (8th Cir. 1984); Berman v. Parco, 986 F. Supp. 195,213 (S.D.N.Y. 1997); Boothe v. TRW Credit Data, 523 F. Supp. 631, 633 (S.D.N.Y. 1981). Accordingly, the complaint, insofar as it relies on the reports on CVL issued to Fleet Bank in 1998 and to BONY in 2001 fails to state a claim upon which relief maybe granted under the statute. In any case, any claim based on the 1998 report is barred by the two year FCRA statute of limitations. 15 U.S.C. § 1681p. See also TRW, Inc. v. Andrews, 122 S.Ct. 441, 444, 447 (2001) (rejecting discovery rule under the FCRA).

This leaves the personal report on plaintiff issued to BONY in or about April 2001,*fn2 which was provided to BONY in connection with the proposal that plaintiff guarantee CVL's business financing for the purpose of acquiring additional equipment. As the Federal Trade Commission has said, however, "[a] report on a consumer for credit or insurance in connection with a business operated by the consumer is not a `consumer report,' and the Act does not apply to it." 16 C.F.R. Part 600, App. cmt. 6(b). In consequence, the complaint fails to state a claim under the FCRA upon which relief may be granted.

This might be sufficient to dispose of the case, both because it is unclear whether plaintiff asserts any state law claim and because the complaint does not allege any basis for federal jurisdiction other than the FCRA. It is not clear, however, that plaintiff could not allege diversity of citizenship. Moreover, plaintiff refers in his papers to a proposed amended complaint. In consequence, the better course of action is to dismiss the complaint with leave to replead.


For the foregoing reasons, the motion to dismiss the complaint is granted. Plaintiff may serve and file an amended complaint no later than July 21, 2003.*fn3 Any amended complaint shall clearly state the basis for invoking federal jurisdiction as well as the claims asserted and the basis therefor.


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