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Adams v. Fifth Third Bank

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

September 6, 2019

DANA ADAMS, ET AL. Plaintiffs
v.
FIFTH THIRD BANK Defendant

          MEMORANDUM OPINION AND ORDER

          Rebecca Grady Jennings, United States District Court District Judge

         Before the Court is Defendant's Renewed Motion for Summary Judgment [DE 47] and Plaintiffs' Motion to File Their First Amended Complaint [DE 45]. The matters are ripe. For the reasons below, the Court will GRANT Defendant's Renewed Motion for Summary Judgment and DENY Plaintiffs' Motion to File Their First Amended Complaint.

         I. BACKGROUND

         In August 2015, Fifth Third Bank (“Fifth Third”) sued Plaintiffs Dana Adams and Robert Jones in Kentucky state court to collect a note and mortgage (the “Kentucky suit”). [DE 1 at 1-2, ¶¶ 2, 13; DE 47-2 at 315]. In March 2016, Fifth Third initiated a “hard inquiry” into Plaintiffs' credit reports from both Trans Union, LLC (“Trans Union”) and Equifax Information Services, LLC. [DE 1 at 1-2, ¶¶ 21, 23].

         In April 2016, Plaintiffs filed the present complaint, alleging that Fifth Third violated the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq. (the “FCRA”) by making inquiries into their credit reports without having a permissible purpose for doing so. [Id. at 1, ¶ 1, 5-6, ¶ 33, 34]. Plaintiffs sought damages under 15 U.S.C. § 1681n(b) and § 1681o. [Id. at 6-7, ¶¶ 56, 58]]. The Court granted Fifth Third's motion for judgment on the pleadings in part, dismissing Plaintiffs' claims under 15 U.S.C. § 1681o, but allowing Plaintiffs' claims under 15 U.S.C. § 1681n to proceed. [DE 24 at 180]. In September 2017, Fifth Third moved for summary judgment on the remaining claim. [DE 27]. That motion was never ruled upon.

         In March 2018, the parties deposed Jeremy Hejl, a senior manager of consumer collections at Fifth Third. [DE 47-4 at 335]. Plaintiffs then filed a Motion to File Their First Amended Complaint (the “Motion to Amend”) under Fed.R.Civ.P. 15(a)(2). [DE 45]. Alleging that Trans Union is “responsible for characterizing Fifth Third's request for Plaintiffs' credit reports as hard credit requests” in violation of 15 U.S.C. § 1681b(c)(3), Plaintiffs moved to amend their complaint to add Trans Union as a party. [Id. at 256]. Plaintiffs also moved to “include facts and allegations that they were unaware of at the time they filed their complaint and which they only recently learned of.” [Id.]. Fifth Third opposes the Motion to Amend as futile. [DE 46 at 272-73]

         In April 2018, Fifth Third filed a Renewed Motion For Summary Judgment (the “Motion for Summary Judgment”), arguing that they initiated the credit inquiries in relation to the Kentucky suit, but that they had done so for the permissible purpose of “collecting the outstanding debt owed to it by Plaintiffs.” [DE 47 at 310]. In Response, Plaintiffs argue that Defendant's inquiries were not made for a permissible purpose because Defendant “wanted Plaintiffs' credit reports for purposes other than collection of the account.” [DE 52 at 356]. Fifth Third disputes Plaintiffs' characterization of the evidentiary record and case law. [DE 53 at 392-97].

         II. STANDARD

         Summary judgment is proper on a showing that “there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(a). The party seeking summary judgment bears the burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The party opposing the motion may establish a genuine issue of fact by introduction of “any of the kinds of evidentiary materials listed in Rule 56(c).” Id. at 324. Such evidence may include depositions, answers to interrogatories, affidavits, and admissions on file. Id. at 323. Further, “a party opposing a properly supported motion for summary judgment may not rest upon mere allegations or denials of his pleadings, but . . . must set forth specific facts showing that there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) (quoting First Nat'l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 288 (1968)). All evidence must be construed in the light most favorable to the party opposing summary judgment. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

         Fed. R. Civ. Pr. 15(a)(2) states that absent the opposing party's consent, plaintiffs may not amend their pleadings without the Court's leave. A court should “freely give leave when justice so requires.” Fed.R.Civ.P. 15(a)(2). But the court “should deny a motion to amend where the proposed amended complaint could not withstand a Fed.R.Civ.P. 12(b)(6) motion.” Massingill v. Ohio Adult Par. Auth., 28 Fed.Appx. 510, 511 (6th Cir. 2002) (citation omitted). In other words, a court “may deny a plaintiff leave to amend . . . when the proposed amendment would be futile.” Kottmyer v. Maas, 436 F.3d 684, 692 (6th Cir.2006). When reviewing a Fed.R.Civ.P. 12(b)(6) motion to dismiss, the court must construe the complaint in the light most favorable to the plaintiff, Bloch v. Ribar, 156 F.3d 673, 677 (6th Cir. 1998), accept the complaint's factual allegations as true, Broyde v. Gotham Tower, Inc., 13 F.3d 994, 996 (6th Cir. 1994), and determine whether plaintiff has pleaded “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).

         A proposed amendment adding defendants is also futile when summary judgment would be appropriate as to those defendants “for the same reasons that summary judgment is appropriate” as to the original defendants. Pollard v. Blue, Civil Action No. 4:06-CV-P134-M, 2009 WL 3160355, at *5 (W.D. Ky. Sept. 25, 2009) (concurrently granting summary judgment to existing defendants and denying a motion to amend to add defendants).

         III. DISCUSSION

         A. Motion for Summary Judgment

         In 1968, Congress enacted the FCRA to promote “efficiency in the Nation's banking system and to protect consumer privacy.” 15 U.S.C. § 1681(a). The “FCRA provides a private right of action against businesses that use consumer reports but fail to comply” with their obligations under that act. Safeco Ins. Co. of Am. V. Burr,551 U.S. 47, 53 (2007). “The FCRA places distinct obligations on three types of entities: (1) consumer reporting agencies; (2) users of consumer reports; and (3) furnishers of information to consumer reporting agencies.” Stafford v. Cross Country Bank, 262 F.Supp.2d 776, 782 (W.D. Ky. 2003). Users of consumer reports may “access consumers' credit reports only if the access is for a ‘permissible ...


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