District Court (Tex.) Says FCRA’s 2-year SofL Does Not Accrue as to Furnishers Until Furnisher’s Reinvestigation of Consumer’s Dispute is Complete

In ALVIN EILAND, Plaintiff, v. WESTLAKE SERVICES, LLC, Defendant., No. CV H-23-1272, 2023 WL 4139014, at *2–3 (S.D. Tex. June 22, 2023), Judge Lake disagreed with an automobile finance company furnisher’s arguments with respect to when an FCRA claim against a  furnisher accrues for statute of limitations purposes.

Westlake argues that Plaintiff’s claims are barred by the two-year statute of limitations because Plaintiff discovered the incorrect information in 2019, substantially more than 2 years before he filed this lawsuit.13 Under Plaintiff’s reading, the date that he first discovered the inaccuracy is not relevant to§ 1681s-2(b) because a consumer’s dispute “creates[s] new duties on Defendants to investigate, and each failure by Defendant to do so creates its own limitations period.”  In support of its motion, Defendant cites the Fifth Circuit’s decision in Mack v. Equable Ascent Financial, L.L.C., 748 F.3d 663 (5th Cir. 2014) (per curiam).15 In Mack, the plaintiff filed a FCRA action alleging that the defendant had “obtained [his] consumer credit report without a permissible purpose or [his] consent, in violation of 15 U.S.C. § 1681b.” Id. at 664. The plaintiff learned in May of 2009 that the defendant had obtained his credit report, but he did not file suit until December of 2011. Id. The Fifth Circuit upheld the district court’s grant of summary judgment on the grounds that the plaintiff filed his lawsuit more than two years after he had notice of the defendant obtaining his credit report. Id. at 664, 666. Mack stands for the proposition that the two-year FCRA limitations period begins when the consumer receives notice of facts that establish a FCRA violation.  But Plaintiff alleges that Westlake is still, after its August 27, 2021, letter, reporting incorrect information and failing to adequately investigate.16 Plaintiff’s alleges that Westlake is therefore violating § 1681s-2(b), which requires Westlake to investigate information disputed by the consumer and, if the investigation shows the information to be wrong, to modify or remove it. Plaintiff could not have discovered the alleged inadequacy of Westlake’s § 1681s-2(b) response until the initial investigation was complete. The weight of authority supports this approach. See Broccuto v. Experian Information Solutions, Inc., Civil Action No. 07-782, 2008 WL 1969222, at *4 (E.D. Va. May 6, 2008) (“The statute’s construction creates a violation every time a consumer submits a dispute to a credit reporting agency and that agency or the relevant lender does not respond to the complaint as directed by the statute.”). Westlake communicated the results of its investigation and promised the removal of the information in a letter dated August 27, 2021. For purposes of a Rule 12(b) (6) motion, the court accepts as true Plaintiff’s allegation that Westlake did not act on the investigation as required by§ 1681s-2 (b) (1) (E). Even if Plaintiff discovered that same day that Westlake had failed act on the letter, the limitations period would not expire until August 27, 2023. Moreover, Plaintiff alleges that he has again disputed the information in 2022, and that Westlake nevertheless continues to report the inaccurate repossession. Westlake’s MTD will therefore be denied.