By Gerald L. Maatman, Jr., Jennifer A. Riley, and Emilee N. Crowther
Duane Morris Takeaways: In Sgouros v. Transunion Corp., No. 1:14-CV-01850, 2023 WL 6690474 (N.D. Ill. Oct. 12, 2023), Judge Sharon Johnson Coleman of the U.S. District Court for the Northern District of Illinois denied Plaintiff’s motion for class certification in a Fair Credit Reporting Act (“FCRA”) case because Plaintiff failed to satisfy the Rule 23 requirements of commonality, adequacy of representation, and predominance. For entities facing FCRA class actions, this decision provides a concise explanation of what factors courts may consider with respect to commonality, adequacy of representation, and predominance in ruling on a motion for class certification.
Case Background
In this litigation, Defendants are collectively a well-known American consumer credit reporting agency. In 2013, Defendants offered a 3-in-1 Credit Report, Credit Score & Debt Analysis for consumers to purchase. The 3-in-1 report included a VantageScore, which, similar to a FICO score, looks at the information in a consumer’s credit report and generates a score to help lenders determine a consumer’s creditworthiness.
On June 10, 2013, Plaintiff purchased a 3-in-1 Credit Report and VantageScore from Defendants. Id. at 1. On the same day he purchased the report, Plaintiff alleged he was denied his desired auto loan because “the credit score the lender was provided was more than 100 points lower than the number contained in the VantageScore [Plaintiff] purchased.” Id.
Plaintiff later testified he knew the VantageScore was “useless” in September 2012, and failed to provide an explanation as to why he purchased a VantageScore nine months after such realization. Id. Plaintiff also testified that, contrary to the allegations in his complaint, he did not buy the score in advance of his search for an auto loan, and “he did not read the TransUnion website content that accompanied the purchase of his VantageScore.” Id.
In 2014, Plaintiff filed suit against Defendants alleging violations the Fair Credit Reporting Act (“FCRA”) and the Missouri Merchandising Practices Act (“MMPA”). Id. Plaintiff sought to represent a nationwide class and a Missouri-based class consisting of all persons “who purchased a VantageScore 1.0 Score through TransUnion Interactive’s website, or its predecessor website, during the period October 1, 2009, to September 1, 2015.” Id.
The Court’s Decision
The Court held that Plaintiff failed to establish commonality, adequacy of representation, and predominance for both the FCRA and MMPA claims under Rule 23(a) and (b), and denied class certification. Id. at 6.
Rule 23(a)(2) – Commonality
Plaintiffs must demonstrate that “there are questions of law or fact common to the class” to meet the commonality requirement of Rule 23(a)(2). Id. at 3. Importantly, Plaintiff is required to “demonstrate that the class members ‘have suffered the same injury,’” and that the claims are “capable of classwide resolution.” Id. (citing Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011)). Plaintiff asserted five questions to establish commonality. Id. Overall, the Court found Plaintiff’s commonality questions were insufficient because they “merely restate[d] the core elements of statutory violations” and did not demonstrate “to what extent the class members suffered a common injury.” Id.
Specifically as to the alleged FCRA violations, the “core liability dispute” was whether or not Defendants failed to supply the class “with a credit score . . . that assist[ed] the consumer in understanding the credit scoring assessment of the credit behavior of the consumer and predictions about the future credit behavior of the consumer.” Id. at 2. Plaintiff asserted that the VantageScore could not assist consumers in understanding their credit score assessment “because the VantageScore was not similar enough to a FICO score and or widely used by lenders.” Id. at 4. The Court disagreed. It held that because Plaintiff failed to present any argument or evidence “independent of a comparison to a FICO score,” Plaintiff’s common questions were not “capable of common answers,” and Rule 23(a)’s commonality requirement was not met. Id.
Similarly, “[b]ecause [Plaintiff’s] MMPA common question . . . [was] premised on the same logic as the FCRA claim,” the Court found that “commonality was not met.” Id.
Rule 23(a)(4) – Adequacy of Representation
A named plaintiff must also establish they can adequately serve as a class representative under Rule 23(a)(4). Id. A named plaintiff is inadequate if they “have serious credibility problems” or if they have “antagonistic of conflicting” interests to absent class members. Id. The Court held that Plaintiff was inadequate to represent the class on both the FCRA and MMPA claims due to Plaintiff’s questionable credibility and the inconsistencies in his deposition testimony. Id. at 4-5.
Rule 23(b)(3) – Predominance
The plaintiff must also demonstrate that the putative class claims “predominate over any questions affecting only individual members,” and are “sufficiently cohesive to warrant adjudication by representation.” Id. at 5. The Court found that the FCRA’s statutory requirement of assisting a consumer in understanding their credit score is “necessarily individualized given the inherently personal nature how credit scores are calculated and consumers’ personal behaviors,” and predominance was not met. Id.
Implications For Credit Reporting Companies
This ruling provides a straightforward analysis of what elements courts may find persuasive in ruling on a motion for class certification in an FCRA class action. It ought to be a required read for corporate counsel in any FCRA case.