In Horsch v. Wells Fargo Home Mortg., 2015 WL 1344836 (E.D.Pa. 2015), Judge Yohn found that furnishers had properly reported accounts post-bankruptcy where the debtors had made post-bankruptcy payments.  Judge Yohn explained the standards for a furnishers’ re-investigation even where it was conceded that the furnishers’ re-investigation was reasonable.

The court cautioned that this issue “is normally a question for trial unless the reasonableness or unreasonableness of the procedures is beyond question.” Id. (internal quotation marks omitted). But that is precisely the case here, because plaintiffs concede that defendants’ investigations were reasonable. See FAC 22 ¶ 73 (“[I]t is believed and therefore averred that each respective Defendant, upon notice of the dispute from the CRA’s performed a ‘reasonable’ investigation, and reported to the re-spective CRA’s the results of that investigation.”).  According to defendants, this admission ends the case. See, e.g., Wells Fargo’s Reply Br. 4 (“This con-cession, standing alone, mandates dismissal.”). In essence, defendants argue that § 1681s–2(b) imposes a duty to investigate reasonably and that plaintiffs undermine their case by admitting defendants’ investigations were reasonable. But the duty to investigate is only part of what § 1681s–2(b) requires. Section 1681s–2(b)(1)(E), by contrast, provides that “if an item of information disputed by a consumer is found to be inaccurate or incomplete or cannot be verified after any reinvestigation,” then the furnisher shall “promptly—(i) modify that item of information; (ii) delete that item of information; or (iii) permanently block the reporting of that item of information.” That requirement is what the court in Taggart referred to as the furnishers’ duty to “rectify the disputed charge.” Taggart, 2010 WL 114946, at *9; see also Seamans, 744 F.3d at 866 (examining “investigative proce-dures” and “corrective protocols”). Admittedly, “[a] furnisher is not required to uncover and correct all inaccuracies on the consumer’s credit report. Rather, a furnisher is required to correct only those inaccuracies it discovers during its reasonable investigation.” Van Veen v. Equifax Info., 844 F.Supp.2d 599, 605 (E.D.Pa.2012). But this means plaintiffs can concede that defendants conducted reasonable investigations without conceding that defendants fulfilled their duty to correct the inaccuracies they discovered. Indeed, plaintiffs allege that their credit reports were inaccu-rate or incomplete, and they claim that defendants failed to rectify the errors. So the court’s inquiry must continue.

The District Court held that the furnishers properly reported the discharged obligations as a “0” balance, even though the Plaintiffs made post-discharge payments.

Defendants cite several cases for the proposition that it is accurate to report a zero balance after the Note has been discharged in bankruptcy. The most on point is Schueller v. Wells Fargo & Co ., 559 F. App’x 733, 734 (10th Cir.2014) (nonprecedential), cert. denied, 135 S.Ct. 275 (2014). There, as here, plaintiff discharged his Note in bankruptcy but continued making payments to his mortgage servicer, Wells Fargo, in order to prevent foreclosure of the mortgage on the property. These payments were not reflected on plaintiff’s credit report—which instead reported a zero balance on the mortgage—so plaintiff sued Wells Fargo for violating § 1681s–2(b). The district court dismissed plaintiff’s FCRA claim, and the Tenth Circuit affirmed, writing:  [Schueller] says the credit report should not have reflected that his account was closed and had a zero balance due, and should have included the fact that he made payments after [bankruptcy]. Wells Fargo responds that it would have been inaccurate and misleading to report that Mr. Schueller’s loan balance remained outstanding; thus, it reported that the account was closed and had a zero balance due…. Mr. Schueller has cited no authority requiring Wells Fargo to report his post-bankruptcy mortgage payments. Under these circumstances, we conclude that Mr. Schueller has not carried his burden of showing that the information Wells Fargo furnished was inaccurate or incomplete, nor has he shown that the information about his home loan debt and bankruptcy was materially misleading.  Id. at 737 (citations omitted). In other words, the court agreed that Schueller’s making payments on the mortgage to prevent foreclosure did not mean that he truly owed anything on the discharged account. Re-porting a “zero balance” was, therefore, accurate and complete. I agree with this reasoning. Here, defendants assert that plaintiffs—lacking personal liability—are in the same position. That is why defendants describe any payments made by plaintiffs as voluntary, and it is why they argue that it is accurate to report zero balances on the discharged mortgages.

The District Court thus evaluated whether the reporting was “as complete as it could be” under the Chaing and Seamans standards.

Defendants further assert that even if their re-porting were not accurate, § 1681s–2(b) penalizes only inaccuracies of fact, not legal interpretation, relying largely on Chiang v. Verizon New England Inc., 595 F.3d 26 (1st Cir.2010). There, the court held that “a plaintiff’s required showing [under § 1681s–2(b) ] is factual inaccuracy, rather than the existence of disputed legal questions…. [F]urnishers are ‘neither qualified nor obligated to resolve’ matters that ‘turn[ ] on questions that can only be resolved by a court of law.’ “ Id. at 38 (quoting DeAndrade v. Trans Union LLC, 523 F.3d 61, 68 (1st Cir.2008)). Defendants likewise cite Van Veen, 844 F.Supp.2d 599, which itself relied on Chiang. Defendants argue that the debate over how to report a post-bankruptcy mortgage is just the kind of question properly left to a court of law, and that their decision to report zero balances on those mortgages, therefore, cannot trigger liability under § 1681s–2(b).  Since Chiang was decided, however, the Third Circuit has put forward its own interpretation of FCRA’s standards for accuracy and completeness. In Seamans, plaintiff disputed the reporting of a student loan he had taken out many years earlier while at-tending Temple University. After receiving notice, Temple conducted an investigation and complied with part of plaintiff’s request, but Temple would not make certain other changes and refused to note on the credit report that the entry at issue was under dispute. Seamans, 744 F.3d at 858–59. Plaintiff therefore filed suit under § 1681s–2(b), claiming both that defendant failed to conduct a reasonable investigation and that defendant failed to rectify inaccurate or incomplete information. The district court granted summary judgment in favor of defendant, finding in part that the information furnished by Temple was not “patently incorrect” and thus could not give rise to liability for failure to rectify that information. Seamans v. Temple Univ., 901 F.Supp.2d 584, 598 (E.D.Pa.2012) (quoting Schweitzer v. Equifax Information Solutions LLC, 441 F. App’x 896, 902 (3d Cir.2011)). The Third Circuit reversed, clarifying what constitutes incomplete or inaccurate information:  The meaning of “completeness” and “accuracy” in the specific context of a furnisher’s duties under FCRA is also a matter of first impression in this Court. It is not seriously debated, however, that factually incorrect information is “inaccurate” for purposes of FCRA. And we agree with the three Courts of Appeals to have considered the question that even if the information is technically correct, it may nonetheless be inaccurate if, through omission, it “create[s] a materially misleading impression.” Whether technically accurate information was “ ‘misleading in such a way and to such an extent that [it] can be expected to have an adverse effect’ “ is generally a question to be submitted to the jury. Seamans, 744 F.3d at 865 (emphasis added) (citations omitted). The court therefore found that genuine issues of material fact existed as to whether the reported information was inaccurate. ¶  As a consequence, the Chiang and Seamans standards produce different outcomes. Under the former, only “factual inaccuracy” triggers the duty to rectify in § 1681s–2(b). Chiang, 595 F.3d at 38. Under the latter, “technically correct” information can be inaccurate for the purposes of FCRA so long as, by omission, the information creates a “materially misleading impression.” Seamans, 744 F.3d at 865. Because Seamans controls here, the relevant question is whether defendants have created a materially misleading impression by reporting zero balances on plaintiffs’ accounts while omitting records of ongoing mortgage payments—not merely whether it is true that a zero balance exists once a Note has been discharged in bankruptcy.  3. Applying the Seamans standard to debtor plaintiffs’ claims. To determine whether the disputed credit report entries here are materially misleading under Seamans, I look to what so far is the only district court opinion within this circuit to interpret the Seamans standard: Hillis v. Trans Union, LLC, No. 2:13–CV–02203, 2014 WL 2581094 (E.D. Pa. June 10, 2014). There, plaintiff and his wife had taken out a loan to purchase a car in 2004, but the two divorced in 2007. Plaintiff’s ex-wife was awarded possession of the car in the proceedings, and the divorce decree required her to pay off the balance of the loan and indemnify her ex-husband in the event that she failed to do so. Plaintiff subsequently discovered that the car loan appeared on his credit report as a delinquent account, and when he applied for a credit-limit increase from his bank, he was rejected based in part on that credit report. In response, plaintiff filed suit against the CRAs and Santander bank—which had acquired the car loan and refused to modify its reporting—under § 1681s–2(b). The court applied Seamans and held that “[t]he information about the Car Loan that Santander provided to the credit reporting agencies was … ‘technically accurate.’ But this information was not as complete as it could have been.” Id. at *4 (quoting Seamans, 744 F.3d at 865). Based in part on this conclusion, the court denied summary judgment for Santander.  If “as complete as it could [be]” is read as “contains as much information as the space can hold,” then defendants’ reporting here would fail the test, as they no doubt are capable of providing additional information about plaintiffs’ post-bankruptcy payments. In that spirit, plaintiffs point to language in Seamans calling on furnishers to provide “more information rather than less.” See Pls.’ Supplemental Br. 10 (quoting Seamans, 744 F.3d at 862). But a nuanced interpretation of the Seamans test would take into account more than merely space constraints. Here, defendants report only zero balances on the post-bankruptcy Notes not just because that is what the relevant federal regulator has advised, see Part III.C.2.a infra, but also because reporting any post-bankruptcy payments would violate the injunctions that discharged those same Notes in bankruptcy. See, e.g., In re Helmes, 336 B.R. 105, 107 (Bankr.E.D.Va.2005) (holding that furnishers of credit information may be in violation of a bankruptcy discharge injunction unless “a debt discharged in bankruptcy [is] reported to a credit reporting agency with the notation ‘Discharged in bankruptcy’ and with a zero balance due.”). In other words, including more information about the post-bankruptcy accounts would expose defendants to the risk of future contempt actions. See In re Joubert, 411 F.3d 452 (3d Cir.2005). As a consequence, the credit report entries at issue here are as complete as they could be. I therefore conclude that the debtor plaintiffs have not made a plausible claim that the information furnished by defendants was inaccurate or incomplete—even under the broad standard set out in Seamans. Defendants therefore had no duty to rectify this information, so the claims of these plaintiffs cannot survive a motion to dismiss.