Consumer Finance Litigation

In Foster v. PNC Bank, National Association, the Seventh Circuit affirmed the dismissal of plaintiff’s Fair Credit Reporting Act (FCRA) claim, but determined that plaintiff lacked standing because he could not show that defendant’s conduct caused his credit score to drop.

Plaintiff filed suit alleging claims for a violation of the FCRA, breach of contract, breach of the implied duty of a good faith and fair dealing, and breach of fiduciary duty. Defendant counterclaimed seeking judgment on the loan and moved for summary judgment. The district court determined that plaintiff’s affidavit submitted in opposition to defendant’s motion for summary judgment contained conclusory and speculative information and, therefore, granted defendant’s motion for summary judgment. The court then entered partial judgment as to the property at issue, and plaintiff appealed.

The first issue on appeal was the contents of plaintiff’s affidavit. Plaintiff argued that the district court erroneously held that his entire affidavit was conclusory when it contained sufficient detail. The court disagreed, noting that the district court pointed to only two, specific instances where it believed the statements were conclusory and unsupported by evidence and acknowledging that the district court relied on portions of his affidavit that were not conclusory. With respect to the two portions that the district court determined were conclusory, the court found that plaintiff’s statements were vague and unsupported by documentation. Thus, the court held that the district court did not abuse its discretion in finding portions of the affidavit conclusory.

Turning to plaintiff’s FCRA claim, which was based on the allegation that defendant failed to reasonably investigate plaintiff’s disputes in January 2012, the court affirmed dismissal, but on different grounds. The district court granted summary judgment for defendant on plaintiff’s FCRA claim, finding that plaintiff failed to prove damages as a necessary element. The court said that the district court erred in requiring plaintiff to prove damages, but held that plaintiff lacked standing to bring the claim. Specifically, the court held that plaintiff failed to show that the injury was fairly traceable to defendant’s conduct. Plaintiff claimed that defendant’s failure to reasonably investigate the disputes he submitted in January 2012 caused his credit score to drop. However, the drop in his credit score occurred in November 2011, before the disputes were submitted. Because plaintiff could not establish that defendant’s conduct in 2012 caused his credit score to drop in late 2011, he could not show causation. As a result, the court affirmed dismissal of the FCRA claim for lack of standing.

The Foster case is another example of appellate courts undertaking a sua sponte analysis of whether a plaintiff has Article III standing to assert a FCRA claim. It is worth noting that the court assumed a drop in plaintiff’s credit score was sufficient to show injury-in-fact, but ultimately held that a breakdown in causation defeated his FCRA claim.