IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

MARTIN V. KLOTZ, : CIVIL ACTION

on behalf of himself and : 

others similarly situated :

:

v. :

:

TRANS UNION, LLC, et al. : NO. 05-4580

MEMORANDUM AND ORDER

McLaughlin, J. July 2, 2007

The defendant, a credit reporting agency (“CRA”),

provided the plaintiff a copy of his credit report. After the

plaintiff submitted documents prepared by a third party disputing

certain items in the report, the defendant sent him form letters

declining to investigate whether the disputed items were

accurate. The plaintiff alleges that the defendant’s failure to

investigate and its sending of the form letters violated the Fair

Credit Reporting Act (“FCRA”), and he seeks to bring a class

action on behalf of all individuals who received either of two

form letters denying a request to investigate negative credit

information. Before the Court is the plaintiff’s motion for

class certification. The Court will deny the motion. 

I. Facts

A. The Plaintiff’s Disputes

In April of 2003, the plaintiff received a copy of his

Case 2:05-cv-04580-MAM Document 85 Filed 07/03/07 Page 1 of 25
A portion of Mr. Klotz’s deposition is attached to the 1

Defendant’s Brief in Opposition as Exhibit F and cited herein as

“Klotz Dep. at __.”

2

credit report from the defendant. In 2003 and 2004, he submitted

to the defendant forms prepared by a company called NCER that

challenged whether the negative information in his credit file

was accurate. NCER is a credit repair organization (“CRO”), an

entity that is paid by a consumer to help clear up the consumer’s

credit report. The disputes prepared by NCER contested fourteen

items in the plaintiff’s file. Defs.’ Br. in Opp. Ex. C. 

Disputes sent in June and August of 2003 claimed that

most of the derogatory information in the plaintiff’s credit

report pertained to accounts that were paid in full before they

went to collection. Id. Disputes sent in February of 2004,

meanwhile, stated that eight of these same accounts were not his. 

Id.

At his deposition, the plaintiff was asked about this

apparent inconsistency and his role in forming the specific

objections contained in the disputes. “NCER prepared this,” he

responded. “I just took them, signed them, and sent them...[a]nd

that goes for all of them.” Klotz Dep. at 164:5-10. Similarly, 1

he testified, “I was just told to sign it and send it...I didn’t

question what was what,” adding that he did not check any of the

disputes for accuracy. Id. at 161:1-17. He further testified:

“At the time, when this was written, honestly, I didn’t pay

Case 2:05-cv-04580-MAM Document 85 Filed 07/03/07 Page 2 of 25
Because of the FCRA’s two-year statute of limitations 2

and this suit’s August 2005 filing date, the June 2003 letter is

not part of the plaintiff’s case.

The plaintiff alleges that he sent an additional 3

dispute in December of 2003. Neither this dispute letter nor any

response from the defendant has been provided by the parties. 

The plaintiff does not suggest that the December dispute or the

3

enough attention to it...I just signed it, and sent it.” Id. at

166:22-25. 

The defendant sent the plaintiff three letters in

response to his disputes. The first, received in June of 2003,

stated:

We received a dispute regarding your credit report from

a credit repair agency. Our experience shows that

credit repair agencies routinely and knowingly dispute

accurate information. For this reason, we will not

take action on the dispute submitted from the credit

repair agency. 

Am. Compl. Ex. A. 

2

In August of 2003 and February of 2004, the plaintiff

received a second and third letter from the defendant regarding

his disputes. The letters were identical, stating:

We recently received a dispute regarding your credit

report from a third party that we believe operates as a

credit repair organization. According to the Federal

Trade Commission, credit reporting agencies are not

required to process disputes submitted by third

parties. In addition, our experience shows that many

credit repair organizations dispute accurate

information or submit irrelevant disputes. We have

reasonably determined that the dispute submitted on

your behalf was frivolous or irrelevant.

Id. All three letters sent by the defendant informed the 3

Case 2:05-cv-04580-MAM Document 85 Filed 07/03/07 Page 3 of 25
letter he received in response differed materially from the other

correspondence between the parties.

A copy of Ms. Little’s deposition is attached to the 4

Plaintiff’s Brief in Support as Exhibit 2 and cited herein as

“Little Dep. at __.”

4

plaintiff of his right to reinvestigation if he submitted a

dispute directly and stated that the defendant does not accept

disputes from third parties unless they are accompanied by a

notarized power of attorney that (1) authorizes an attorney or

family member to represent the consumer or (2) is irrevocable and

unlimited. 

The three letters were accompanied by forms that the

plaintiff could fill out and return if he wished to pursue the

disputes of particular items. 

B. The Origin of the Letters Sent to the Plaintiff

Prior to 2002, the defendant maintained a policy of not

responding to requests for reinvestigation made by third parties. 

The defendant’s Rule 30(b)(6) witness, Eileen Little, testified

that in June of 2002, the defendant decided to apply this policy

to disputes sent from CROs. Little Dep. at 53. It drafted form 4

letters, called 345 letters, to respond to such disputes. Id.

The three letters sent to the plaintiff were 345 letters. 

According to Ms. Little, the decision to send 345 letters in

response to disputes sent by any CRO was motivated primarily by

Case 2:05-cv-04580-MAM Document 85 Filed 07/03/07 Page 4 of 25
Trans Union was served a subpoena in May of 2001 5

relating to a criminal investigation of NCER’s principals for

fraudulently promising NCER clients that it could clear up their

credit history. This lead to a civil action against NCER by the

FTC in 2003 and a criminal action against NCER’s principals in

2004.

Klotz did not review the disputes drafted by NCER: 6

“[NCER] said look it over, but I didn’t know what I was looking

over or what to compare it to.” Klotz Dep. at 172:2-3. 

5

an increased number of disputes from NCER and a government

investigation into NCER’s business practices. Id. 

5

The defendant employed investigators to determine

whether a 345 letter should be sent in response to a dispute. 

Id. at 108. Because disputes are frequently mailed en masse by

CROs, they often bear certain hallmarks. The defendant’s

investigators therefore examined each dispute’s postage,

envelope, and return address to determine whether it was sent by

a CRO. Id. at 70-71. Other factors that the investigators

considered were whether disputes were sent in identical formats

and whether the consumer’s letter was a successive dispute of all

of the derogatory information in his or her credit file. Id. at

72-73.

According to the defendant, NCER no longer mails

disputes to CRAs. Instead, NCER now sends disputes to its

clients with a cover letter instructing them to review, sign and

send the disputes to the CRA. Klotz’s disputes were sent in this

manner. The defendant is able to detect NCER’s involvement in 6

Case 2:05-cv-04580-MAM Document 85 Filed 07/03/07 Page 5 of 25
6

these cases, it claims, because the consumers often include the

cover letter from the CRO in the package they mail to the CRA, as

Klotz did. 

Certain consumers responded to the 345 letter with

powers of attorney that purported to authorize third parties to

submit disputes on their behalf. Finding that the powers of

attorney were incomplete, the defendant drafted a form called the

346 letter in October of 2003. The letter explained that the

defendant would only accept a dispute from a CRO if the power of

attorney was complete and irrevocable.

C. The Legal Background

The FCRA confers on a consumer a right to have the

negative information on his or her credit report investigated for

accuracy, providing:

If the completeness or accuracy of any item of

information contained in a consumer’s file at a

consumer reporting agency is disputed by the consumer

and the consumer notifies the agency directly of such

dispute, the agency shall reinvestigate free of charge

and record the current status of the disputed

information, or delete the item from the file....before

the end of the 30-day period beginning on the date on

which the agency receives notice of the dispute from

the consumer. 

15 U.S.C. § 1681i(a)(1)(A). When a CRA receives a dispute in

conformity with (a)(1)(A), it must provide notice of the dispute

to the entity that provided the disputed information. Id. §

1681(a)(2). 

Case 2:05-cv-04580-MAM Document 85 Filed 07/03/07 Page 6 of 25
7

A CRA need not reinvestigate every dispute, however. 

An agency can terminate a reinvestigation if it “reasonably

determines that the dispute by the consumer is frivolous or

irrelevant.” Id. 1681i(a)(3)(A). If an agency terminates the

reinvestigation, it must inform the consumer of the reasons for

the decision. Id. § 1681i(a)(3)(B), (C).

II. Claims

The plaintiff’s amended complaint asserts two claims. 

The first, alleging a violation of the Pennsylvania Unfair Trade

Practices and Consumer Protection law, is not relevant to the

present motion. 

The second claim alleges that the defendant failed to

reinvestigate as required by (a)(1)(A); failed to notify the

provider of the disputed information as required by (a)(2); and

failed to give reasons for the determination of frivolousness or

irrelevance as required by (a)(3)(C).

The plaintiff claims that these violations were willful

and thus sues under section 1681n, which authorizes a plaintiff

to seek actual damages or statutory damages, in addition to

punitive damages, for willful violations of the FCRA. 

The plaintiff seeks to pursue his FCRA claims as a

class action seeking statutory damages. He proposes a class of

all consumers who received 345 or 346 letters from August 29,

Case 2:05-cv-04580-MAM Document 85 Filed 07/03/07 Page 7 of 25
8

2003 to the present (to recover for all alleged violations within

the FCRA’s two-year statute of limitations period).

III. Analysis

The Court will first examine the components of a

section 1681i claim and then consider whether the plaintiff’s

proposed class satisfies the requirements of Rule 23. The Court

concludes that the plaintiff has failed to establish several of

the prerequisites to class certification. 

A. Section 1681i

To succeed on a section 1681i claim, a plaintiff must

show (1) that he disputed the accuracy of an item in his or her

credit file and (2) that a reasonable investigation by the agency

could have uncovered the inaccuracy. Cushman v. Trans Union

Corp., 115 F.3d 220, 226 (3d Cir. 1997). A defendant can escape

liability if it can demonstrate that it terminated a

reinvestigation upon a reasonable conclusion that the dispute was

frivolous or irrelevant. 15 U.S.C. § 1681i(a)(C)(3). 

1. Did the Consumer Invoke the Right to 

 Reinvestigation? 

Before they can recover on claims under section

1681i(a), consumers must show that they invoked their right to

reinvestigation. The statute requires a CRA to investigate a

Case 2:05-cv-04580-MAM Document 85 Filed 07/03/07 Page 8 of 25
9

disputed item only if the dispute is conveyed “directly” by the

consumer.

The FCRA charges the FTC with the FCRA’s enforcement

and authorizes the agency to issue procedural rules to assure

compliance with its provisions. The FTC has issued non-binding

commentary that lack the force of law but reveal the agency’s

interpretation of various provisions of the FCRA, including

“directly”: “[An agency] is not required to respond to a dispute

of information that the consumer merely conveys to others (e.g.,

to a source of information).” 16 C.F.R. Pt. 600, Sec. 611 ¶ 7. 

The commentary further provides that a CRA “need not

reinvestigate a dispute about a consumer’s file raised by any

third party, because the obligation under the section arises only

when ‘an item of information in his file is disputed by the

consumer.’” Id. ¶ 8. 

If the dispute is not conveyed to the CRA “directly,” a

claim under section 1681i will fail. A claim based on

(a)(1)(requiring a CRA to reinvestigate and verify or remove a

disputed item within 30 days); (a)(2)(requiring a CRA to notify

the provider of the disputed item); or (a)(3)(prescribing the

form of notice to be sent to a consumer upon a determination that

his dispute is frivolous or irrelevant) all presuppose that the

consumer has satisfied the precondition in (a)(1)(A).

Case 2:05-cv-04580-MAM Document 85 Filed 07/03/07 Page 9 of 25
10

2. Was the Item Inaccurate?

A claim under 1681i will also fail if the consumer

cannot show that the information in his or her file was

inaccurate. Cushman, 115 F.3d at 226-27. In Cushman, the United

States Court of Appeals for the Third Circuit reinstated the

plaintiff’s section 1681i claim after she had submitted evidence

of, among other things, the inaccuracy of certain information in

her file, her notification to the defendant of the inaccuracy,

and the damages resulting from the defendant’s failure reasonably

to reinvestigate. Id. 

The Court quoted approvingly the district court’s

statement that the decisive inquiry under section 1681i is

whether a defendant could have determined that a plaintiff’s

account contained inaccurate information if it had conducted a

reasonable investigation. Id. at 226. This standard requires

that a plaintiff show that the disputed information was

inaccurate. If the information in a consumer’s file was, in

fact, correct, then no investigation could have revealed the

existence of inaccurate information because there was no

inaccurate information to uncover. 

District courts within the Third Circuit have

recognized this, reading Cushman as requiring that a plaintiff

pursuing a section 1681i claim show that the information in his

or her file was inaccurate. See Crane v. Trans Union Corp., 282

Case 2:05-cv-04580-MAM Document 85 Filed 07/03/07 Page 10 of 25
The plaintiff cites O’Connor as holding that a 7

plaintiff suing under section 1681i need only show that he

disputed an item in his file and that the reinvestigation did not

resolve the dispute. P’s Br. in Supp. at 7. These, however, are

the requirements for claims under sections 1681(b) and (c),

provisions which apply “if the reinvestigation does not resolve

the dispute.” 15 U.S.C. 1681i(b). The plaintiff, in contrast,

sues under section 1681i(a) and alleges not that the defendant

failed to fulfill its post-reinvestigation obligations but that

“no reasonable reinvestigation has taken place.” Cushman, 115

F.3d at 223-24. 

11

F.Supp.2d 311, 321 (E.D. Pa. 2003)(holding that the plaintiff had

raised a dispute of material fact about the accuracy of the

information); O’Connor v. Trans Union Corp., 1999 WL 773504 at *6

(E.D. Pa. 1999) (stating that the plaintiff had shown that the

defendant failed to delete “erroneous” credit information from

his file).7

Other courts agree, explicitly holding that a plaintiff

must prove the inaccuracy of the disputed item in order to

recover under section 1681i. See, e.g., Cahlin v. General Motors

Acceptance Corp., 936 F.2d 1151, 1160 (11th Cir. 1991); Benson v.

Trans Union, LLC, 387 F.Supp.2d 834, 842 (N.D. Ill. 2005); Moline

v. Experian Info. Solutions, Inc., 289 F.Supp.2d 956, 958-59

(N.D. Ill. 2004); Molton v. Experian Info. Solutions, Inc., 2004

WL 161494 at *6 (N.D. Ill. 2004); Murphy v. Midland Credit

Management, Inc., 456 F.Supp.2d 1082, 1091 (E.D. Mo. 2006); Lenox

v. Equifax Info. Services, LLC, 2007 WL 1406914 at *4 (D. Or.

2007); Zala v. Trans Union LLC, 2001 WL 210693 at *5 (N.D. Tex.

2001)(finding that the plaintiff had produced sufficient evidence

Case 2:05-cv-04580-MAM Document 85 Filed 07/03/07 Page 11 of 25
12

of inaccuracy to avoid summary judgment); Elliot v. TRW, Inc.,

889 F.Supp. 960 (N.D. Tex. 1995). 

The plaintiff disputes that accuracy is relevant to a

section 1681i claim, arguing that the section invests a consumer

with a procedural right to reinvestigation in contrast with the

substantive protections of section 1681e(b), which requires that

an agency employ reasonable procedures to ensure the accuracy of

items on credit reports. 

Cushman’s analysis of sections 1681i and 1681e(b)

undercuts this assertion. The Cushman Court held that section

1681i, like section 1681e(b), requires that an agency perform a

“reasonable” investigation. 115 F.3d 223-24. The primary

difference between the provisions, the Court observed, is the

nature of the investigation required by each section. Where

section 1681e(b) requires that a CRA reasonably investigate any

derogatory information placed in a consumer’s credit file, a

“reinvestigation” under section 1681i occurs after the consumer

raises a specific complaint about an item. Consequently, an

agency must do more than rest on its section 1681e(b) procedures

when responding to a consumer’s request to reinvestigate under

section 1681i. Id. 

In so holding, the Court suggested that sections 1681i

and 1681e(b) provide similar protections, in contrast to the

procedural/substantive dichotomy asserted by the plaintiff. 

Case 2:05-cv-04580-MAM Document 85 Filed 07/03/07 Page 12 of 25
Morris does suggest an argument for the plaintiff’s 8

position, although he has not asserted it. Arguably, the

inaccuracy requirement stems from the fact that a plaintiff

claiming negligent violations of section 1681i must show “actual

damages.” 15 U.S.C. § 1681o. One could posit that a plaintiff

cannot show actual damages if the disputed information was

accurate. In contrast, the inaccuracy of the disputed

information might seem irrelevant to a claim for a willful

violation of section 1681i, which does not require a plaintiff to

prove actual damages.

Cushman rebuts this argument. The Cushman Court listed

the evidence offered by the plaintiff, which it held was

sufficient to withstand a directed verdict: “evidence . . .

concerning the inaccuracy of the information, Cushman’s

notification to [the defendant] of the inaccuracy and the

underlying fraud, the nature of [the defendant’s] reinvestigation

and the costs incurred by it...and the damages suffered by

Cushman.” Cushman thus viewed evidence of inaccuracy as distinct

from evidence of actual damages. Cushman’s suggestion that a

plaintiff alleging a negligent violation of section 1681i must

show both inaccuracy and actual damages implies that “actual

damages” is a requirement independent of the inaccuracy

requirement, not its source. 

13

Given this relationship between the two sections, the fact that a

section 1681e(b) claim requires inaccuracy further supports the

existence of an inaccuracy requirement for a claim under section

1681i. See Philbin v. Trans Union Corp., 101 F.3d 957, 963 (3d

Cir. 1996).

The plaintiff finds support for his contention that

accuracy is irrelevant to a section 1681i claim in Morris v.

Trans Union, LLC, 420 F.Supp.2d 733 (S.D. Tex. 2006). Morris,

however, held only that inaccuracy was a defense to a section

1681i claim and not an element of a prima facie case. Id. at

751-52 & n.88.8

Case 2:05-cv-04580-MAM Document 85 Filed 07/03/07 Page 13 of 25
Further, section 1681o could not be the source of the

inaccuracy requirement if section 1681i confers a procedural

right, as the plaintiff asserts. Under the FCRA, “actual

damages” can take the form of emotional damages. See Philbin v.

Trans Union Corp., 101 F.3d 957, 963 n.3 (3d Cir. 1996). 

Emotional damages resulting from the denial of a procedural right

to have credit information reinvestigated would not presuppose

that the disputed information was inaccurate. 

14

3. Was the Dispute Frivolous or Irrelevant?

A claim based on the right to reinvestigation under

sections (a)(1) or (a)(2) will also fail if the defendant can

show that it reasonably concluded that a dispute was frivolous or

irrelevant. 15 U.S.C. 1681i(a)(3)(A).

The FTC commentary gives guidance to a CRA in

determining when a dispute is frivolous or irrelevant:

A [CRA] must assume a consumer’s dispute is bona fide,

unless there is evidence to the contrary. Such

evidence may constitute receipt of letters from

consumers disputing all information in their files

without providing any allegations concerning the

specific items in the files, or of several letters in

similar format that indicate that a particular third

party (e.g., a “credit repair” operator) is counselling

[sic] consumers to dispute all items in their files,

regardless of whether the information is known to be

accurate. 

16 C.F.R. Pt. 600, Sec. 611 ¶ 11. Individuals who send frivolous

or irrelevant disputes are still covered by section (a)(3)(B) and

(C), which provide procedures through which a CRA must notify a

consumer of the determination that his dispute was frivolous or

irrelevant. An (a)(3) claim will fail, however, if the consumer

fails to satisfy the precondition in (a)(1)(A).

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15

Having outlined the contours of section 1681i claims,

the Court will now consider whether the plaintiff’s proposed

class satisfies the requirements of Rule 23. 

B. Rule 23

In order to proceed as a class action, the plaintiff

must show that the proposed class meets the following

requirements: the class is so numerous that joinder of all

members is impracticable (“numerosity”); there are questions of

law or fact common to the class (“commonality”); the claims or

defenses of the representative parties are typical of the claims

or defenses of the class (“typicality”); and the representative

parties will be fairly and adequately protect the interests of

the class (“adequacy”). Fed. R. Civ. Proc. 23. 

The plaintiff seeks to proceed as a (b)(3) class and

therefore must show, in addition to the requirements above, that

common questions of law and fact predominate over questions

affecting individual members (“predominance”) and that a class

action is superior to other available methods for fair and

efficient adjudication of the controversy (“superiority”). 

1. Numerosity

The defendant concedes that the numerosity requirement

is met. The parties have stipulated that the defendant sent more

Case 2:05-cv-04580-MAM Document 85 Filed 07/03/07 Page 15 of 25
16

than 100,000 345 and 346 letters. Assuming that a class could

proceed that included consumers who received 345 or 346 letters

in response to disputes mailed either by the consumer or a CRO,

the Court agrees that the numerosity requirement is met. See

Stewart v. Abraham, 275 F.3d 220, 226-27 (3d Cir. 2001)(stating

that generally, if the number of potential plaintiffs exceeds 40,

the numerosity requirement is met). 

2. Commonality

The proposed class also meets the commonality

requirement. The plaintiff alleges that the 345 letter failed to

give a reason for the defendant’s determination that the

consumer’s dispute was frivolous or irrelevant as required by

1681i(a)(3)(C)(i). Because the putative class members received

identical 345 letters, the conformity of the letter with section

(a)(3)(C)(i) can be determined on a class-wide basis.

3. Typicality

Typicality requires that the claims or defenses of the

representative parties are typical of the claims or defenses of

the class. Georgine v. Amchem Products, Inc., 83 F.3d 610, 631

(3d Cir. 1996). The requirement prevents a situation where the

legal theories of the named plaintiffs potentially conflict with

those of the absent class members. Id. The inquiry also

Case 2:05-cv-04580-MAM Document 85 Filed 07/03/07 Page 16 of 25
At oral argument, the defendant stated that 345 letters 9

were “overwhelmingly” sent in response to disputes mailed by

CROs. Tr. at 19. 

17

assesses whether the named plaintiffs have incentives that align

with those of absent class members so that the absentees’

interests will be fairly represented. Id. 

The plaintiff fails this requirement because he is not

typical of the class in three ways. First, he never received the

346 letter and therefore his claims are not typical of the class

members who did. Second, he stands on different footing than the

majority of the class in establishing that his disputes were sent

“directly,” a prerequisite for claims under section 1681i(a). 

Third, the “frivolous or irrelevant” defense will be easier to

prove in the plaintiff’s case than in the case of the absent

class members.

To prevail on a section 1681i claim, each member must

prove that disputes were sent “directly.” The plaintiff mailed

his disputes himself, while the majority of 345 letters were sent

in response to mailings from a CRO. The majority of the 9

putative class members must therefore establish that “directly”

applies to a factual scenario that is distinct from the

plaintiff’s case. The plaintiff must show that disputes prepared

by a third party but sent by the consumer fall within the

statute’s definition of “directly.” The class members,

meanwhile, must argue for a definition of “directly” that

Case 2:05-cv-04580-MAM Document 85 Filed 07/03/07 Page 17 of 25
For the class members who were not clients of NCER, the 10

reasonableness of the defendant’s determination that their

disputes were frivolous presents a compound issue. In their

cases, the question will be whether, if it was reasonable to

conclude that disputes sent by NCER were frivolous or irrelevant,

it was reasonable to further conclude that other CROs were

engaging in practices similar to NCER. 

18

encompasses disputes mailed by third parties. The class members

cannot rely on the plaintiff to propose and prove a definition of

“directly” that does not apply to his case, and therefore he has

not established that he can fairly represent their interests. 

The atypicality of the plaintiff’s disputes also leaves

him more vulnerable than the other class members to the defense

that Trans Union reasonably concluded that the disputes were

frivolous or irrelevant. The defendant began sending 345 letters

to CROs in response to an increased volume of disputes from NCER

and federal investigations into NCER’s practices. This change in

policy reflected a judgment that disputes sent by CROs were

frivolous or irrelevant because of specific problems with NCER. 

The defendant has a colorable argument that the application of

this policy to NCER was justified because of its knowledge of the

possibility that NCER was systematically disputing accurate

information on behalf of its clients. Allowing the plaintiff to

represent the class could prejudice the class members who did not

employ NCER.10

Even if it were impermissible for the defendant to

conclude that all disputes that originated from NCER were

Case 2:05-cv-04580-MAM Document 85 Filed 07/03/07 Page 18 of 25
Such a conclusion does not, contrary to the plaintiff’s 11

assertion, allow the defendant to invent a post-hoc justification

for the sending of the 345 letters. Instead, the reasonableness

of the frivolous determination turns on the factors that its

investigators weighed in considering whether to send 345 letters,

including the form and substance of the disputes.

19

frivolous or irrelevant, the defendant can still argue that its

determination that the plaintiff’s disputes were frivolous or

irrelevant was reasonable. The plaintiff, in addition to

disputing all of his negative information multiple times,

submitted contradictory disputes, first alleging that he had paid

off certain accounts and then maintaining that the accounts were

not his. Because of the possibility that these circumstances

could support Trans Union’s determination that the disputes were

frivolous, he fails the typicality requirement. 

11

4. Adequacy

The adequacy inquiry has two focuses. The first is

whether counsel is qualified to represent the class. In re

Warfarin Sodium Antitrust Litigation, 391 F.3d 51 (3d Cir. 2004). 

The defendant concedes, and the Court is satisfied, that

plaintiff’s counsel is adequate.

The second question is whether there are conflicts of

interest between the named plaintiff and the class he seeks to

represent. Id. Class members cannot be adequately represented

by a named plaintiff with divergent interests. In re Diet Drugs,

Case 2:05-cv-04580-MAM Document 85 Filed 07/03/07 Page 19 of 25
20

385 F.3d 386, 395 (3d Cir. 2004). 

The plaintiff is an inadequate class representative for

the same reasons that he is atypical: he has not shown that he

can fairly represent those who received a 346 letter, those whose

disputes were mailed from CROs, or those whose disputes bore

fewer indicia of frivolousness. 

5. Predominance

The plaintiff has also failed to show that common

issues predominate over individual ones. The success of the

class members’ claims will depend on several issues that must be

determined individually: (1) whether a dispute was sent

“directly”; (2) for claims under (a)(1) and (a)(2), whether the

disputed information was inaccurate; and (3) for claims under

(a)(1) and (a)(2), whether Trans Union reasonably concluded that

the disputes were frivolous or irrelevant.

Balanced against this series of individual issues is

one common question: whether the 345 letter comports with the

requirements of (a)(3)(C). This question, however, is

subordinate to the individual question of whether the disputes

were sent “directly.” Determining the defendant’s liability on

any of the class members’ claims therefore requires a case-bycase assessment. 

This case is therefore akin to Pendleton v. Trans Union

Case 2:05-cv-04580-MAM Document 85 Filed 07/03/07 Page 20 of 25
21

Systems, 76 F.R.D. 192 (E.D. Pa. 1977), where the court refused

to certify a class under section 1681e(b). The court noted that

where individual factual determinations enter into proving the

defendant’s liability, classes are rarely certified. Id. at 195. 

As in this case, the question of whether each proposed class

member could prevail on his or her claims required an individual

determination. Id.; see also Harper v. Trans Union, LLC, 2006 WL

3762035 at *8 (E.D. Pa. 2006)(refusing to certify a class based

on violations of section 1681e(b), reasoning that the

“plaintiff’s claim may be typical of the absent class members in

that all claims arise from the same conduct, but due to the

highly individualized proofs required I find that common

questions do not predominate”).

The plaintiff contends that the requirement of a

“direct” dispute does not present an individual issue, arguing

that when a consumer seeks the help of a third party in disputing

items on a credit report and authorizes the third party to send

disputes on his or her behalf, the statute’s definition of

“directly” is satisfied. 

Even if the Court were to adopt the plaintiff’s

definition, he has not shown that whether the disputes were sent

“directly” by the consumer does not present individual issues. 

The fact that a consumer received a 345 letter indicates only

that the defendant believed that the request originated from a

Case 2:05-cv-04580-MAM Document 85 Filed 07/03/07 Page 21 of 25
The main case cited by the plaintiff underscores that a 12

determination of whether a dispute was sent “directly” must be

determined on a case-by-case basis. In Milbauer v. TRW, Inc.,

707 F.Supp.92 (E.D.N.Y. 1989), a case which predates the FTC

commentary, the court held that a credit reporting agency could

not neglect to answer a dispute merely because it was

communicated through a third party (in that case, the plaintiff’s

lawyer). The Court found that “it would be unfair, under

circumstances like those present here, to deprive an individual

of the assistance he may need by banning all third parties from

communicating, on the consumer’s behalf, directly with the

consumer reporting agency.” Id. at 95 (emphasis added).

22

CRO. Whether consumers were merely “assisted” by third parties

who were authorized to send particular disputes on their behalf,

as the plaintiff alleges, cannot be determined from the fact that

the defendant sent 345 letters to the consumers. 

12

The plaintiff also argues that whether the defendant

reasonably determined that a dispute was “frivolous or

irrelevant” does not present an individual issue. Despite the

plaintiff’s contentions, however, the decision to send 345

letters was not mechanical. Instead, the decision was made after

an examination of each dispute’s envelope and its form. 

The defendant often used a dispute’s origination from a

CRO as a proxy for its frivolousness or irrelevance. If the use

of this proxy was justified, the reasonableness of the

defendant’s termination of the reinvestigation will turn on an

individual issue: whether a particular dispute contained

hallmarks sufficient to identify its origination from a CRO.

Even if the use of the proxy was not justified, the

Case 2:05-cv-04580-MAM Document 85 Filed 07/03/07 Page 22 of 25
23

Court must still consider individual issues. Ms. Little

testified that in certain cases, the evidence of frivolousness or

irrelevance was direct, as when the consumer disputed all of the

information in his or her file, or when the consumer submitted

successive disputes. In these cases, the defendant need not have

relied on a dispute’s origination from a CRO as a proxy for its

frivolousness. Whether the determination that the dispute was

frivolous or irrelevant was supported by these features must be

determined on an individual basis. 

6. Superiority

The plaintiff has also failed to show that a class

action is the superior method of adjudicating the controversy. 

The plaintiff argues that a class action is effectively the only

method of adjudication because the FCRA’s limit on statutory

damages would inhibit an individual plaintiff from bringing suit. 

But the FCRA requires that a court award a successful plaintiff

attorneys’ fees, and punitive damages are available for

violations of the FCRA that were willful, as the plaintiff

alleges here. See 15 U.S.C. § 1681n. These financial incentives

might not encourage each putative class member to bring suit, but

they dispel the notion that a class action is the only way to

adjudicate the lawfulness of the defendant’s practices. 

Further, the lack of predominance supports the

Case 2:05-cv-04580-MAM Document 85 Filed 07/03/07 Page 23 of 25
24

conclusion that proceeding as a class action is not a superior

method of adjudicating the controversy. See, e.g., Barabin v.

Aramark Corp., 210 F.R.D. 152, 162 n.4 (E.D. Pa. 2002); Kline v.

Security Guards, Inc., 196 F.R.D. 261, 274-74 (E.D. Pa. 2000). 

The potential efficiencies of a class action are not realized

where an individual assessment of each putative class member’s

claims must be made. The plaintiff’s proposed class presents

such a situation. Because he has failed to show typicality,

adequacy, predominance, and superiority, his motion for class

certification must be denied.

An appropriate order follows. 

Case 2:05-cv-04580-MAM Document 85 Filed 07/03/07 Page 24 of 25
IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

MARTIN V. KLOTZ, : CIVIL ACTION

on behalf of himself and : 

others similarly situated :

:

v. :

:

TRANS UNION, LLC, et al. : NO. 05-4580

ORDER

AND NOW, this 2nd day of July, 2007, upon consideration

of the plaintiff’s motion for class certification (Docket No. 53)

and all briefs in support and opposition, and after oral argument

heard on the motion on May 10, 2007, IT IS HEREBY ORDERED that

for the reasons stated in the accompanying memorandum, the motion

is denied.

BY THE COURT:

/s/ Mary A. McLaughlin

Mary A. McLaughlin, J.

Case 2:05-cv-04580-MAM Document 85 Filed 07/03/07 Page 25 of 25