A District Court judge in Mississippi has granted a defendant’s motion to dismiss a Fair Credit Reporting Act lawsuit over the reporting of a charged-off credit card account, ruling the plaintiff lacked standing to sue and putting him on notice for citing case law that appears to have been invented by artificial intelligence.
The background: The plaintiff opened a credit card account with a lender and later defaulted on his payments.
- The lender charged off the account and reported the balance to the three major credit reporting agencies.
- The plaintiff disputed the reporting by sending written letters to the credit reporting agencies, which forwarded the disputes to the lender. He claimed the past due balance should not have been reported because the account had been charged off and closed, that the lender never conducted a reasonable investigation into his disputes, and that it failed to correct the information or notify the credit reporting agencies of the results of any investigation.
- Representing himself, the plaintiff filed suit, alleging the inaccurate reporting harmed his credit reputation, limited his credit opportunities, increased his interest rates, and caused him emotional distress.
- The defendant moved to dismiss, arguing the plaintiff lacked standing because he could not point to a concrete injury. In response, the plaintiff attached a letter from an insurance company stating that the rate he was quoted was not the best available because of information on his credit report.
The ruling: Judge Michael P. Mills of the District Court for the Northern District of Mississippi granted the motion, finding the plaintiff failed all three elements of constitutional standing.
- The plaintiff’s emotional distress claims consisted of nothing more than “vague and conclusory assertions,” which Judge Mills ruled were not enough to establish a concrete injury.
- The insurance letter presented a closer question. Judge Mills acknowledged that higher insurance rates, if taken as true, might qualify as an injury in fact. But the letter never connected the defendant’s reporting to the insurance company’s decision, and there was “no telling what specific aspects” of the plaintiff’s credit report the insurer considered. Without that link, the injury could not be traced to the defendant’s conduct, and there was no way to know whether a ruling in the plaintiff’s favor would actually get him better rates.
- The claims were dismissed without prejudice, meaning the plaintiff can refile.
- In a footnote, Judge Mills flagged two cases the plaintiff cited in support of his claims that the court could not locate on Westlaw or by party name, calling them “likely fictitious citations generated by artificial intelligence.” Because the plaintiff was representing himself, the judge declined to impose sanctions, but warned that he “will not be given the same grace” if he refiles and cites hallucinated case law again.
