Kentucky Federal Court Holds Furnishing Data to Consumer Reporting Agency Does Not Subject Furnisher to Personal Jurisdiction in Consumer’s Home State

A United States district court in Kentucky recently granted defendants’ motion to dismiss a case arising under the Fair Credit Reporting Act (FCRA) and Fair Debt Collection Practices Act (FDCPA) for lack of personal jurisdiction.

In Reid v. Tenant Tracker, Inc., the plaintiff rented an apartment in Kentucky. When she moved out, the apartment complex retained her security deposit and claimed she owed an additional $330 for cleaning costs. Later, when the plaintiff obtained a copy of her consumer report she found a tradeline furnished by Tenant Tracker in connection with the alleged apartment debt. On July 14, 2022, the plaintiff sent a dispute letter to Tenant Tracker. On July 20, 2022, defendant TT Marketing responded stating: “this account has been validated by the property and referred to another collection agency.”

The plaintiff filed suit and the defendants moved to dismiss citing lack of personal jurisdiction as their “only contacts with the [p]laintiff in Kentucky were in response to written inquiries initiated by the [p]laintiff and the responses were informational only.” Specifically, TT Marketing was engaged by the apartment manager to collect the debt and Tenant Tracker reported the debt to the national consumer reporting agencies. Both defendants and their employees were based in Texas.

The court analyzed whether Kentucky’s long-arm statute extended to the defendants under the “transacting business” prong. The plaintiff argued that TT Marketing’s purported dunning letters sent to her in connection with the debt constituted transacting business in the state. The court disagreed finding all but one of the letters sent to the plaintiff were in response to the plaintiff’s inquiries. As for the one letter not in response to the plaintiff’s inquiries, the court found that letter did not form the basis for the action as it was sent two years prior to the filing of the complaint.

The plaintiff next argued that jurisdiction was proper under FCRA because: 1) the defendants furnished credit information to the national consumer reporting agencies in an attempt to collect a debt from her in Kentucky; and 2) the credit information provided was defamatory and defendants knew the information “would be republished in Kentucky and harm [the plaintiff] in the Commonwealth.” The court disagreed. “The plaintiff fails to point to which provision of the Kentucky long-arm statue this conduct would fall under” and fails to cite to recent caselaw supporting her theory.