The creditor made a loan to the debtor. However, the debtor failed to pay. The debtor did not dispute non-payment but instead claimed that the amount she owed the creditor had been improperly reported. Her allegation against the creditor included violations of the following laws: Fair Credit Reporting Act (“FRCA”), Texas Deceptive Trade Practices Act (“DTPA”), and the Texas Debt Collection Act (“TDCA”). A magistrate judge recommended that the court grant the creditor’s motion to dismiss in the magistrate’s Findings, Conclusions, and a Recommendation (“FCR”). The debtor argued four main points in her objection to the magistrate’s findings that she made before the district court. First, she argued that the creditor’s continued participation in litigation matters made the timing of the FCR as “flawed and unfair.” Next, the debtor objected to the FCR’s determination that preemption disqualified her DTPA and TDCA claims. Her third claim was an objection directed towards the discretion used by the magistrate judge. The debtor argued that precedent from non-binding circuits should have been applied when the magistrate judge analyzed the applicable duty to report a disputed account. Finally, the debtor alleged that the court had failed to consider all the evidence in the FCR.
In Davidson v. Texan Credit Corp., No. 4:24-cv-01172-P, 2025 WL 1625353, 2025 U.S. Dist. LEXIS 108699 (N.D. Tex. June 9, 2025) (opinion not yet released for publication), the district court accepted the FCR from the lower court and affirmed the magistrate’s reasoning. The court first analyzed the timing of the FCR and found that the creditor had no reason to discontinue its actions in the lawsuit when there was an active motion to dismiss pending. The court then held that DTPA and TDCA claims are subject to preemption when, as here, the claim is based on the same facts as the FRCA claim. Seelbach v. Ditech Fin. LLC, No. 3:17-CV-3386-D, 2018 WL 3496479, 2018 U.S. Dist. LEXIS 121006, (N.D. Tex. July 19, 2018). The debtor’s argument must be based on different allegations to establish these claims. Third, the lender’s duty to mark an account as disputed had not been properly pleaded by the debtor. Accordingly, that objection was deficient because it did not include an allegation contesting the misleading nature or inaccuracy of the credit report. The magistrate judge had applied cases from multiple circuits, including cases from district courts in the Fifth Circuit. Last, the court rejected the argument that the magistrate judge had not considered all the evidence in the FCR because the magistrate had no duty to consider supplementary information not presented in the complaint. “The Court cannot consider evidence that has not been presented to it based on the one party’s assertion that there is likely more to the agreement.”
By Justin Saunders [email protected]
Edited By Conor Doris [email protected]
Edited By Hayden Mariott [email protected]