A District Court judge in Indiana has denied a plaintiff’s motion to remand a Fair Credit Reporting Act case back to state court, ruling the plaintiff has standing for the case to be tried in federal court.
The background: The plaintiff originally filed suit in state court, alleging the defendant violated the FCRA by inaccurately reporting a debt and failing to correct the information after repeated disputes. According to the complaint, the reporting of the debt was the only negative tradeline on the plaintiff’s file at the time, and the plaintiff claimed the inaccuracy caused real-world harm, including being denied credit and housing.
- The defendant removed the case to federal court in 2023.
- After discovery closed and briefing began on cross motions for summary judgment, the plaintiff sought to remand the case back to state court, arguing the defendant, having asserted in its summary judgment motion that the plaintiff did not suffer any damages, could no longer establish Article III standing.
The ruling: Judge Gretchen S. Lund of the District Court for the Northern District of Indiana rejected that argument, saying the plaintiff’s theory “defies logic” because it would require remand in nearly every federal case where a defendant denies liability. Instead, the judge focused on the allegations in the complaint and the plaintiff’s own deposition testimony, which the court found established a concrete injury sufficient for standing.
- The opinion noted that while the Seventh Circuit has taken a narrow view of emotional-distress-only harms, it has recognized that disclosures of inaccurate information leading to credit or housing denials may constitute a concrete injury. Judge Lund highlighted the plaintiff’s allegations that a lender and a property manager received inaccurate credit information, and that the inaccuracy “erected unprovoked barriers to securing housing and stopped her from getting basic credit”
- More significantly, the judge pointed to the plaintiff’s deposition, where she testified: “I was denied housing… They said that it was because of this … statement… on my credit report” and later, “I was denied housing and credit and it hurt my credit score”
- Because these assertions demonstrated more than mere risk of future harm, Judge Lund concluded the plaintiff had adequately shown injury-in-fact.
