Rollins v. Peoples Gas Light and Coke Co.

Citations: 379 F. Supp. 2d 964; 2005 U.S. Dist. LEXIS 15507; 2005 WL 1804356Docket: 05 C 0824

Court: District Court, N.D. Illinois; July 27, 2005; Federal District Court

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Harold R. Rollins filed a six-count complaint against Peoples Gas Light and Coke Company, Equifax Information Services LLC, Trans Union LLC, Chase N.A., and Cavalry Portfolio Services LLC, alleging violations of the Fair Credit Reporting Act (FCRA) and the Fair Debt Collection Practices Act (FDCPA). Peoples Gas moved to dismiss Count III, which is the sole count against it, citing failure to state a claim and lack of subject matter jurisdiction. The court granted this motion.

Rollins, a consumer, identified Equifax and Trans Union as consumer reporting agencies and described Cavalry as a debt collector that purchases charged-off debts. He claimed that in late 2003 and early 2004, his credit report inaccurately reflected charged-off accounts related to Peoples Energy/Peoples Gas and Chase, leading to erroneous billing. He informed Peoples Energy and Peoples Gas that he believed his account was confused with another person's account and refused to pay based on estimated bills. After a charged-off account was sold to Cavalry, he faced collection efforts and derogatory credit reporting. 

Rollins alleged that Equifax and Trans Union failed to effectively communicate his claims to Peoples Energy and Peoples Gas, merely confirming the accuracy of previously submitted information. In Count III, he contended that Peoples Gas violated the FCRA by providing false information to Equifax in response to his complaints.

Peoples Gas has filed a motion to dismiss the complaint, arguing it fails to state a claim under the Fair Credit Reporting Act (FCRA) Section 1681s-2(b). The company contends that the complaint does not demonstrate a failure to conduct a reasonable investigation as required by this section and instead addresses obligations under Section 1681s-2(a), for which individual consumers lack a private right of action. Additionally, Peoples Gas seeks dismissal for lack of subject matter jurisdiction, asserting that state agencies have primary jurisdiction over Illinois Utilities and that the plaintiff must exhaust state remedies before proceeding. 

The standard for reviewing a motion to dismiss under Federal Rules of Civil Procedure (FRCP) 12(b)(6) and 12(b)(1) requires the court to accept all well-pleaded allegations as true and draw reasonable inferences in favor of the plaintiff. A dismissal is warranted only if it is evident that the plaintiff cannot prove any facts that support their claims.

The plaintiff alleges that Peoples Gas violated Section 1681s-2(b) by failing to conduct a reasonable investigation after Equifax, a credit reporting agency, was notified of the dispute regarding the plaintiff's debt. Peoples Gas argues that the claims pertain to initial furnishing obligations under Section 1681s-2(a) and not the investigation obligations triggered by disputes reported to a CRA. The plaintiff counters that under the federal notice pleading standard, the allegations regarding his complaints to Equifax and the subsequent response from Peoples Gas are sufficient to state a claim under Section 1681s-2(b).

The court affirms that federal rules do not mandate the use of specific language, such as "the magic words defendant failed to conduct a reasonable investigation," for a plaintiff to assert a claim under 15 U.S.C. § 1681s-2(b). Under federal notice pleading standards, a plaintiff is required only to provide a concise statement that gives the defendant fair notice of the claim, as established in Scott v. City of Chicago. While a plaintiff can plead conclusory allegations without specific facts, they may also inadvertently nullify their claims by providing facts that demonstrate a lack of entitlement to relief, according to Northern Trust Co. v. Peters.

In Count III, the plaintiff reiterates allegations that Equifax and Trans Union failed to communicate the actual statements and documentation submitted by him, instead only confirming previously submitted information with Peoples Energy and/or Peoples Gas. The obligations under § 1681s-2(b) for furnishers of information arise only after notification by a consumer credit reporting agency (CRA) that a consumer disputes information, as per 15 U.S.C. § 1681i(a)(2). Furnishers like Peoples Gas can only be held accountable under § 1681s-2(b) if they provide inaccurate data after receiving proper notice from the CRA, which must include relevant information from the consumer.

The plaintiff's reallegation in Count III suggests that proper notice was not provided, indicating that the duties of § 1681s-2(b) were never activated, and thus he is not entitled to relief under this section. Consequently, Count III is determined to fail to state a claim. Additionally, Peoples Gas claims that the primary jurisdiction doctrine necessitates a stay of the case pending a review by the Illinois Commerce Commission due to its regulatory authority over utility service disputes. However, the court disagrees, stating that Peoples Gas failed to cite any applicable federal statute or precedent connecting the primary jurisdiction doctrine to Fair Credit Reporting Act (FCRA) cases. The court notes that the doctrine applies only when a regulatory issue, not brought under the regulatory statute itself, falls within the exclusive jurisdiction of the regulatory agency. Peoples Gas's arguments regarding billing disputes and meter readings are deemed to fall within the jurisdiction of the Illinois Commerce Commission.

Peoples Gas' argument relies on a misinterpretation of the Fair Credit Reporting Act (FCRA), suggesting that the plaintiff must prove the underlying allegations of a dispute to recover damages. However, the obligations outlined in 15 U.S.C. 1681s-2(b) for information furnishers are activated upon receiving notice of a dispute from a consumer reporting agency. The plaintiff only needs to demonstrate that a dispute existed, that Peoples Gas was notified, and that the company failed to act willfully or negligently. The actual validity of the billing or the debt itself is not relevant to the FCRA claim, affirming the court's jurisdiction over the matter. Consequently, the motion to dismiss for lack of jurisdiction is denied, while the motion to dismiss for failure to state a claim is granted. Additionally, the plaintiff voluntarily dismissed Peoples Energy and suggested a potential claim regarding an unreasonable investigation, but the court will not make that inference from the current complaint. The plaintiff may seek permission to amend the complaint if he wishes to include this assertion.