A District Court judge in Wisconsin has granted a motion for judgment on the pleadings filed by the defendants in a Fair Credit Reporting Act case, ruling that credit reporting agencies were not required to resolve the legal validity of a disputed rental debt when reinvestigating it.
The background: The dispute traces back to the end of an apartment lease.
- In 2022, the plaintiff signed a one-year lease at a Wisconsin apartment complex. She renewed the lease the following summer, on the same day the property changed hands and a new management company took over.
- Weeks after the renewal, the new owner and manager issued a 30-day notice to vacate, citing federal COVID/CARES-Act rules. The plaintiff moved out in August 2023, and a new tenant took the unit the following month.
- The plaintiff then received a security deposit letter referencing a balance of more than $6,000 that did not itemize deductions. A move-out statement she attached to her own complaint showed credits for her $500 security deposit and 17 days of rent, leaving a balance of $4,735.
- Over several months, the plaintiff disputed the debt with three credit reporting agencies, submitting proof of her move-out date. The collection agency working the account sought verification from the landlord, which confirmed the balance was correct, and collection efforts continued. The plaintiff said she was later denied housing because the balance appeared on her credit report.
- The plaintiff, representing herself, sued the landlord, the management company, and the credit reporting agencies, accusing the agencies of failing to conduct a reasonable reinvestigation under the FCRA and asserting defamation, negligence, and intentional infliction of emotional distress claims against all the defendants.
- The credit reporting agencies moved for judgment on the pleadings, arguing the dispute raised legal questions they were not required to answer; the landlord and management company joined the motion.
The ruling: Judge Brett H. Ludwig of the District Court for the Eastern District of Wisconsin granted the motion, dismissing the challenged claims and the credit reporting agencies from the case.
- The judge, who wrote that the plaintiff never alleged she had paid the rent or that the balance was factually wrong, noted her objections concerned improper charges and unenforceable lease clauses, legal issues the agencies were “not equipped, nor required, to resolve” during a reinvestigation.
- The defamation and negligence claims were preempted by the FCRA, which bars such claims unless false information was furnished with malice or willful intent, something the complaint asserted only in conclusory fashion.
- Judge Ludwig also pointed out that the agencies reported the debt as disputed and under reinvestigation; the complaint, he wrote, merely alleged they did not adopt the plaintiff’s preferred interpretation of her lease.
- The emotional distress claim failed because the plaintiff pleaded no facts showing the defendants intended to cause her distress or engaged in extreme and outrageous conduct.
- The case will proceed on the plaintiff’s remaining claims against the landlord and management company, including that they violated their duties as furnishers of information under the FCRA.
