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Philpot v. Microbilt Corp.

United States District Court, W.D. Kentucky, Louisville Division

December 21, 2016

DELMAS PHILPOT, Plaintiff,
v.
MICROBILT CORPORATION, Defendant.

          MEMORANDUM OPINION AND ORDER

          Thomas B. Russell, Senior Judge

         Delmas Philpot filed this action against MicroBilt Corporation, alleging it violated the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681-1681x, as well as defamed him, by providing an inaccurate consumer report to his prospective employer. Now, MicroBilt moves to dismiss that action pursuant to Federal Rule of Civil Procedure 12(b)(6). It argues that Philpot has not plausibly alleged sufficient facts entitling him to recover under either theory. The Court agrees, though only in part. Accordingly, MicroBilt Corporation's Motion to Dismiss, [R. 6], is GRANTED IN PART and DENIED IN PART.

         I.

         A.

         Sometime during 2015, Delmas Philpot applied for a position with the Fenton & McGarvey Law Firm, P.S.C., in Louisville, Kentucky. [R. 1-2 at 3, ¶ 3 (Complaint).] Unfortunately, in February 2016, Fenton & McGarvey notified Philpot via letter that his application had been rejected. [Id., ¶ 4; see also Id. at 6 (Letter from the Fenton & McGarvey Law Firm).] The letter indicated that Fenton & McGarvey had decided against hiring Philpot based, in part, on information obtained from a consumer report furnished by MicroBilt Corporation. [Id. at 3, ¶ 5.] The consumer report purported to contain a summary of Philpot's criminal record, which indicated that he had been the subject of some sort of unspecified criminal charge in North Carolina but offered few, if any, additional details. [Id. at 3-4, ¶¶ 5, 8; see also Id. at 8 (Criminal National Report).] In point of fact, the criminal charges against Philpot were only for speeding. [Id. at 4, ¶ 8; see also Id. at 9 (Criminal Citation).] MicroBilt, however, took no steps to notify Philpot that it had furnished a consumer report containing that information. [Id. at 4, ¶ 6.]

         B.

         Philpot filed this action against MicroBilt in Jefferson Circuit Court on May 11, 2016, alleging that MicroBilt had violated 15 U.S.C. § 1681k(a), part of the Fair Credit Reporting Act (FCRA), as well as defamed him, by providing Fenton & McGarvey with an inaccurate and incomplete consumer report. [Id., ¶¶ 9-12.] MicroBilt timely removed that action to this Court. [See R. 1 at 1-2, ¶¶ 1-11 (Notice of Removal).] Now, pursuant to Federal Rule of Civil Procedure 12(b)(6), MicroBilt moves to dismiss Philpot's action. [See R. 6 (Motion to Dismiss).]

         II.

         A complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). In order to survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a party must “plead enough ‘factual matter' to raise a ‘plausible' inference of wrongdoing.” 16630 Southfield Ltd. P'ship v. Flagstar Bank, F.S.B., 727 F.3d 502, 504 (6th Cir. 2013) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). A claim becomes plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007)). In making that determination, the Court may consider not only the complaint, but also any attached exhibits, provided those exhibits are central to the claims contained in the complaint. See Kreipke v. Wayne State Univ., 807 F.3d 768, 774 (6th Cir. 2015), petition for cert. filed, No. 15-1419 (U.S. May 19, 2016). Should the well-pleaded facts support no “more than the mere possibility of misconduct, ” then dismissal is warranted. Iqbal, 556 U.S. at 679. The Court may grant a motion to dismiss “only if, after drawing all reasonable inferences from the allegations in the complaint in favor of the plaintiff, the complaint still fails to allege a plausible theory of relief.” Garceau v. City of Flint, 572 F. App'x 369, 371 (6th Cir. 2014) (citing Iqbal, 556 U.S. at 677-79).

         III.

         MicroBilt maintains that neither Philpot's claim under the FCRA, nor his common-law claim for defamation, merit relief. [See R. 6-1 at 3-12 (Memorandum in Support).] Philpot resists that suggestion. [See R. 9 at 6-20 (Response).] The Court will discuss the viability of those two claims in turn. Ultimately, while Philpot's claim under the FCRA is plausible, his common-law defamation claim is not.

         A.

         The FCRA imposes civil liability on any “consumer reporting agency, ” or CRA for short, which negligently fails to comply with its obligations under the Act. 15 U.S.C. § 1681o. Of those many obligations, the one pertinent to this action is found in § 1681k(a). Under that provision, a CRA which furnishes a report containing information likely adverse to a consumer's employment prospects must notify the consumer at the time the report is furnished, id. § 1681k(a)(1), unless it maintains strict procedures designed to ensure that the information reported is complete and up-to-date, id. § 1681k(a)(2).

         MicroBilt argues that Philpot's claim under § 1681k(a) comes up short for two reasons. First, Philpot has failed, so MicroBilt says, to plausibly allege that it acted as a CRA within the meaning of the FCRA. [See R. 6-1 at 5-6.] Second, even if MicroBilt happens to be a CRA, it urges that nothing in the consumer report provided to Fenton & McGarvey was “‘likely' to have an adverse effect on . . . Philpot's employment ...


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