United States District Court, D. Arizona
Robert J. Baron, Plaintiff,
Mark A. Kirkorsky, P.C., Defendant.
G. Campbell, United States District Judge.
Robert Baron brought this action against Defendant Mark
Kirkorsky, P.C., alleging violations of the Fair Credit
Reporting Act (“FCRA”), 15 U.S.C. § 1681
et seq. Doc. 12. Defendant now moves to dismiss
pursuant to Federal Rule of Civil Procedure 12(b)(6). Doc.
12. The motion is fully briefed, and the parties have not
requested oral argument. Docs. 15, 18. For the reasons set
forth below, the Court will deny Defendant's motion.
August 2011, Plaintiff enrolled in a medical technician
training program at the Arizona Medical Training Institute
(“ATMI”). Doc. 11 ¶ 1. Plaintiff executed a
written enrollment agreement (the “Enrollment
Agreement”) in which he agreed to a deferred-tuition
payment plan. Id. ¶¶ 2-3. A subsequent
dispute caused Plaintiff to leave the program before
graduation. Id. ¶ 5.
then filed a state-court action against ATMI and its owner,
James Dillard (“Dillard”), alleging fraud,
negligence, and intentional infliction of emotional distress.
Doc. 1 ¶¶ 9-12. The Maricopa County Superior Court
dismissed the action with prejudice due to Plaintiff's
failure to comply with discovery rules. Doc. 1 ¶ 13;
Doc. 11 ¶ 8. The court entered a judgment in favor of
Dillard and ATMI for court costs (the
“Judgment”). Doc. 1 ¶¶ 13-14; Doc. 18
is the debt collection law firm to which ATMI and Dillard
subsequently assigned their interest in the Judgment. Doc. 1
¶ 15. In its effort to collect the Judgment, Defendant
requested and obtained copies of Plaintiff's consumer
report from Experian on four separate occasions over an
18-month period. Id. ¶¶ 18-24. Plaintiff
commenced this action in April 2017, alleging Defendant
willfully, or, in the alternative, negligently violated the
FCRA by obtaining Plaintiff's consumer credit reports
without a permissible purpose. See id.
FCRA requires that a person have a “permissible
purpose” for obtaining or using a consumer report,
commonly known as a “credit report.” 15 U.S.C.
§ 1681b (2012); TRW, Inc. v. Andrews, 534 U.S.
19, 23 (2001). Section 1681b provides an exhaustive list of
the permissible purposes. See Spokeo, Inc. v.
Robins, 136 S.Ct. 1540, 1545 (2016). The permissible
purpose at issue here involves a recipient's intention
“to use the information in connection with a credit
transaction involving the consumer on whom the information is
to be furnished and involving the extension of credit to, or
review or collection of an account of, the consumer.”
§ 1681b(a)(3)(A). The parties dispute whether
Defendant's conduct falls within the scope of this
Early Interpretations of § 1681b(a)(3)(A).
relies on Pintos v. Pacific Creditors Association
(Pintos II), 565 F.3d 1106, 1110 (9th Cir. 2009), to
argue that any judgment creditor has a permissible purpose
for requesting a credit report. Doc. 12 at 2-3. In Pintos
II, the Ninth Circuit considered whether §
1681b(a)(3)(A) permitted a collection agency to obtain a
credit report in connection with a 2002 vehicle towing debt.
565 F.3d at 1110-11. The Ninth Circuit identified two
requirements for the permissible purpose in §
1681b(a)(3)(A): (1) a credit transaction involving the
consumer; and (2) the collection of an account of the
consumer. Id. at 1112. Because the plaintiff had not
requested that her illegally parked vehicle be towed, she was
not “involved” in the transaction and §
1681b(a)(3)(A) did not provide a permissible purpose.
Id. at 1112-13.
II distinguished its seemingly contradictory decision in
Hasbun v. County of Los Angeles, 323 F.3d 801 (9th
Cir. 2003), which held that § 1681b(a)(3)(A) extended to
the collection of a child support judgments. See id
at 1113-14. Court judgments, like towing debts, do
not necessarily “involve” a consumer, but the
Ninth Circuit explained that an exception applies for court
judgments: “[i]f a debt has been judicially
established, there is a ‘credit transaction involving
the consumer' no matter how it arose.” Id.
Defendant relies on this exception to contend that its
assigned interest in the state-court judgment granted it a
per se permissible purpose for obtaining Plaintiff's
credit report. Doc. 12 at 3-5.
counters that the Fair and Accurate Credit Transactions Act
of 2003 (“FACTA”), which did not apply to the
2002 debt at issue in Pintos II and therefore was
not considered when the Ninth Circuit distinguished
Hasbun, defeats Defendant's argument. Doc. 5 at
7-8. Plaintiff asserts that FACTA's definition of
“credit” now limits the scope of transactions for
which third parties can seek credit reports and clarifies
that a judgment debt is no longer a per se permissible
purpose. Id. at 8.
Circuit decisions like Pintos II and Hasbun
may be reassessed in light statutory amendments. See
United States v. McNeil, 362 F.3d 570, 574 (9th Cir.
2004) (“[W]hen Congress amends statutes, our decisions
that rely on the older versions of the statutes must be
reevaluated in light of the amended statute.”); see
also Zazueta-Carrillo v. Ashcroft, 322 F.3d 1166, 1172
(9th Cir. 2003) (“[W]e are not bound by decisions of
prior panels if subsequent legislation has undermined those
decisions.”). Therefore, the Court must assess the
impact on these cases of FACTA's definition of
Post-FACTA Interpretations of ...