Experian prevails in pair of lawsuits alleging that non-reporting of state statute of limitations of debts violates FCRA
Client(s) Experian Information Solutions, Inc.
Jones Day successfully represented Experian Information Solutions, Inc. in two lawsuits within the Second Circuit rejecting a novel theory of liability seeking to require Experian to report the state statute of limitations for bringing collection actions for charged off credit card debt. In back-to-back decisions representing the first district courts to interpret a pair of 2023 Second Circuit decisions (Sessa and Mader), the district courts in the Eastern District of New York and the District of Connecticut dismissed the complaints asserting that the non-reporting of state statute of limitations was inaccurate and misleading.
Jones Day, on behalf of Experian and in coordination with co-defendants, took lead in preparing and arguing dispositive motions on the basis that the statute of limitations of a debt is not "objectively and readily verifiable" information that consumer credit reporting agencies are required to report under the Second Circuit's Sessa decision because statute of limitations is an affirmative legal defense that credit bureaus are neither qualified to adjudicate nor capable of resolving. In the alternative, the credit bureau defendants argued that it was not inaccurate under the federal Fair Credit Reporting Act to report a debt without noting the expiration of the statute of limitations.
Both the Eastern District of New York (in Hossain v. Portfolio Recovery Associates, LLC, et al.) and District of Connecticut (in Sanchez v. JPMorgan Chase Bank, N.A., et al.) agreed, holding that consumer reporting agencies are not required to determine and apply state statutes of limitations of debts, because such calculations do not involve the "straightforward application of law to facts" and are further complicated by issues such as the restarting of the limitations periods, choice of law concerns, and potential tolling of the statute. On alternative grounds, both courts held that the omission of information regarding the statute of limitations would not render reporting of a consumer debt materially misleading because anyone reviewing the reporting of the debt should be able to determine whether collection of the debts was time-barred. Finally, the district courts held that consumers were not without remedy in these circumstances since they could lodge disputes with consumer reporting agencies under FCRA § 1681i.
The twin decisions strongly rejected the novel theory of liability asserted by plaintiffs' counsel, and provided important guidance on interpreting the Second Circuit's recent decisions concerning factual and legal inaccuracies in credit reporting.
Sanchez v. JPMorgan Chase Bank, N.A., et al., No. 3:22-cv-1396, 2023 WL 6049978 (D. Conn.); Hossain v. Portfolio Recovery Associates, LLC, et al., No. 22-cv-5124, 2023 WL 6155974, --- F. Supp. 3d --- (E.D.N.Y.)
