Hatch v. College Ave Student Loans, No. 25-cv-05710 (District of Idaho (D. IDAHO) Mar. 6, 2026)

Case details
Country
United States
Jurisdiction
Federal
Court
District of Idaho (D. IDAHO)
Decided
Mar. 6, 2026
Disposition
Motion Granted
JONATHAN HATCH, Plaintiff, v. COLLEGE AVE STUDENT..., Slip Copy (2026) © 2026 Thomson Reuters. No claim to original U.S. Government Works.12026 WL 636816Only the Westlaw citation is currently available.United States District Court, N.D. Illinois, Eastern Division,EASTERN DIVISION.JONATHAN HATCH, Plaintiff,v.COLLEGE AVE STUDENT LOANSand EQUIFAX INFORMATIONSERVICES, LLC Defendants.Case No. 25-cv-05710|Filed: 03/06/2026Editor's Note: This decision contains discussion of citationreferences that are incorrect or do not actually exist. Theseinvalid citations appeared in the original court opinion andhave been preserved as written since they are part of theofficial record. Any links to these invalid citations have beenremoved.Attorneys and Law FirmsHeather Bryn Hersh, Jaffer Law Firm, Dallas, TX, forPlaintiff.Erin Dougherty Foley, Pamela Quigley Devata, SeyfarthShaw LLP, Chicago, IL, Theodore Earl Roethke, SeyfarthShaw LLP, Atlanta, GA, for Defendant Equifax InformationServices, LLC.Michael C. O'Neil, Kristen DeGrande, Reed Smith LLP,Chicago, IL, for Defendant College Ave Student Loans.MEMORANDUM OPINION AND ORDERMARY M. ROWLAND United States District Judge*1 Plaintiff Jonathan Hatch sues Defendants College AveStudent Loans and Equifax Information Services, LLC(“Equifax”). Plaintiff alleges negligent and willful violationsof the Fair Credit Reporting Act (“FCRA”) under 15 U.S.C. §1681i(a) and 1681e(b). Defendant Equifax moves to dismissthe Complaint pursuant to Federal Rules of Civil Procedure12(b)(6).For the reasons stated herein, Equifax's Motion to Dismiss[19] is granted.I. BackgroundThe following factual allegations are taken from the operativecomplaint [15] and accepted as true for the purposes of themotion to dismiss. See Lax v. Mayorkas, 20 F.4th 1178,1181 (7th Cir. 2021). Additionally, because Defendants raisethis motion under Rule 12(b)(6), the Court takes facts from“documents attached to the complaint, documents that arecritical to the complaint and referred to in it, and informationthat is subject to proper judicial notice.” Geinosky v. City ofChicago, 675 F.3d 743, 745 n.1 (7th Cir. 2012).On December 27, 2019, Plaintiff Jonathan Hatch opened astudent loan account with College Ave Loans. [15] at 15.On October 31, 2022, Plaintiff filed a petition for Chapter7 bankruptcy in the U.S. Bankruptcy Court for the Districtof Idaho. Id. at 16. According to Plaintiff, the CollegeAve account (“the account”) was discharged under Chapter7 by the Bankruptcy Court on February 6. 2023. Id. at ¶¶19-20. After Plaintiff's bankruptcy discharge, Equifax beganpublishing inaccurate credit data on his report: (1) statingthat the account was open and delinquent, (2) containing latepayments from between November 2022 and January 2023,and (3) failing to include the account in bankruptcy on theEquifax consumer report. Id. at ¶¶ 22-23.On November 22, 2024, Plaintiff disputed the account withEquifax, which responded with a stall letter requestingdocuments it had already received. Id. at ¶¶ 24-25. Plaintiffresent the dispute with Equifax on January 24, 2025, withall supporting documents, but Equifax responded againrequesting documentation previously provided. Id. at ¶¶27-28. On July 24, 2025, College Ave sent Plaintiff a letterstating payment would resume on August 11, 2025. Id. at 30. That same day, Plaintiff obtained consumer reports fromthe three credit reporting agencies, including Equifax. Id. at 31. Experian and TransUnion reported the account as closedor discharged, whilst Equifax continued to report the accountas open and delinquent. Id. at ¶¶ 32-33.Equifax attached Plaintiff's November 2024 dispute letterthat attached the Bankruptcy Court's discharge document(Exhibit A, 19-2, Bankruptcy Discharge Order) to its Motionto Dismiss [19]. The letter states “[Equifax is] reportinglate payments and a balance owed on [Plaintiff's] studentloan account. This is inaccurate because [Plaintiff has]
JONATHAN HATCH, Plaintiff, v. COLLEGE AVE STUDENT..., Slip Copy (2026) © 2026 Thomson Reuters. No claim to original U.S. Government Works.2been discharged through a Chapter 7 Bankruptcy fromthis account.” Id. at 2. Attached to the dispute letter, theBankruptcy Order states “[m]ost debts are covered by thedischarge, but not all”, and lists examples of debts that arenot discharged, including “debts for most student loans.” Id.at 7. (emphasis added). Plaintiff submitted two other identicaldispute letters, which Equifax also attached. See also (ExhibitB); (Exhibit C).*2 Equifax moves to dismiss pursuant to Federal Ruleof Civil Procedure Rule 12(b)(6), arguing that Plaintiff'sdisputes to Equifax proffered a claim of inaccuracy that isnot cognizable under the FCRA because it hinges on theapplication of the law of bankruptcy as it concerns studentloans, which are outside the purview of a consumer reportingagency. [19].II. Standard“To survive a motion to dismiss under Rule 12(b)(6), thecomplaint must provide enough factual information to state aclaim to relief that is plausible on its face and raise a right torelief above the speculative level.” Haywood v. Massage EnvyFranchising, LLC, 887 F.3d 329, 333 (7th Cir. 2018) (quotingCamasta v. Jos. A. Bank Clothiers, Inc., 761 F.3d 732, 736(7th Cir. 2014)); see also Fed. R. Civ. P. 8(a)(2) (requiringa complaint to contain a “short and plain statement of theclaim showing that the pleader is entitled to relief”). A courtdeciding a Rule 12(b)(6) motion “construe[s] the complaintin the light most favorable to the plaintiff, accept[s] all well-pleaded facts as true, and draw[s] all reasonable inferences inthe plaintiff's favor.” Lax, 20 F.4th at 1181. However, the courtneed not accept as true “statements of law or unsupportedconclusory factual allegations.” Id. (quoting Bilek v. Fed.Ins. Co., 8 F.4th 581, 586 (7th Cir. 2021)). “While detailedfactual allegations are not necessary to survive a motion todismiss, [the standard] does require ‘more than mere labelsand conclusions or a formulaic recitation of the elements ofa cause of action to be considered adequate.’ ” Sevugan v.Direct Energy Servs., LLC, 931 F.3d 610, 614 (7th Cir. 2019)(quoting Bell v. City of Chicago, 835 F.3d 736, 738 (7th Cir.2016)).Dismissal for failure to state a claim is proper “when theallegations in a complaint, however true, could not raise aclaim of entitlement to relief.” Bell Atl. Corp. v. Twombly,550 U.S. 544, 558 (2007). Deciding the plausibility of theclaim is “a context-specific task that requires the reviewingcourt to draw on its judicial experience and common sense.”McCauley v. City of Chicago, 671 F.3d 611, 616 (7th Cir.2011) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009)).III. AnalysisPlaintiff's alleged inaccuracy does not state a cognizableclaim against Equifax under the FCRAEquifax argues that determining whether Plaintiff's CollegeAve account was discharged in bankruptcy requiresapplication of law to fact, which is outside its purview asa credit reporting agency (“CRA”). [19] at 5-10. Plaintiffresponds that whether Equifax's reinvestigation met thestatutory threshold is a fact-intensive inquiry not suited foradjudication at the pleading stage. [29] at 3-6. The Courtagrees with Equifax.The FCRA was enacted “to ensure fair and accurate creditreporting, promote efficiency in the banking system, andprotect consumer privacy.” Safeco Ins. Co. of Am. v. Burr,551 U.S. 47, 52, 127 S.Ct. 2201, 167 L.Ed.2d 1045 (2007);see also 15 U.S.C. § 1681(b). The statute therefore imposesdistinct obligations on Credit Reporting Agencies (CRAs)such as Equifax. See id. at § 1681e(b) (requiring CRAs tofollow “reasonable procedures to assure maximum possibleaccuracy” of information when preparing consumer reports);see also § 1681i (when a consumer disputes the accuracy ofinformation with a credit reporting agency, that agency must“conduct a reasonable reinvestigation to determine whetherthe disputed information and record the current status of thedisputed information, or delete the item from the file” within30 days). To state a claim under either provision, a plaintiffmust show his file contains factually inaccurate information.Chuluunbat v. Equifax Info. Sols., Inc., 4 F.4th 562, 566–67(7th Cir. 2021) (“A threshold requirement for claims underboth sections is that there must be an inaccuracy in theconsumer's credit report.”) (referring to both § 1681e(b) and§ 1681i).*3 Not all allegations of inaccuracy are cognizable underthe FCRA's provisions. Denan v. Trans Union LLC, 959F.3d 290, 292, 297 (7th Cir. 2020). The central question is“whether the alleged inaccuracy turns on applying law tofacts or simply examining the facts alone.” Chuluunbat, 4F.4th at 568 (emphasis in original). Questions that “constitutelegal determinations [are] solely within the purview of courts,not CRAs.” Grenadyor v. Discovery Fin. Servs., 2024 WL1254572, at *2 (N.D. Ill. Mar. 25, 2024) (citing Chuluunbat,4 F.4th at 568 and Denan, 959 F.3d at 297).
JONATHAN HATCH, Plaintiff, v. COLLEGE AVE STUDENT..., Slip Copy (2026) © 2026 Thomson Reuters. No claim to original U.S. Government Works.3A student loan is not discharged through Chapter 7bankruptcy unless the debtor can show that its repaymentwould cause an undue hardship. 11 U.S.C. § 523(a)(8).A bankruptcy court must first make an undue hardshipdetermination in an adversary proceeding. Fed. R. Bankr.P. 7001(6); see also Tenn. Student Assistance Corp. v.Hood, 541 U.S. 440, 450, 124 S.Ct. 1905, 158 L.Ed.2d 764(2004) (“Unless the debtor affirmatively secures a hardshipdetermination, the discharge order will not include a studentloan debt”).The bankruptcy order attached to Plaintiff's dispute lettersexplicitly cautions that not all debts are included inbankruptcy, specifically highlighting student loan debt.Importantly, here, there is no indication that Plaintiff's studentloan debt was discharged, nor that Plaintiff sought an unduehardship determination during his bankruptcy proceeding inthe first instance. Tenn. Student Assistance Corp., 541 U.S. at450. Whether Plaintiff's student loan debts were dischargedduring his bankruptcy proceedings is an unresolved “legalquestion regarding the application of section 523(a)(8)(A)(i)”. Mader v. Equifax Info. Sols., Inc., 56 F.4th 264, 270(2d Cir. 2023) (plaintiff failed to allege an inaccuracy withinthe plain meaning of section 1681(e)(b) and the unresolvedlegal question rendered his claim non-cognizable under theFCRA). This determination about Plaintiff's student loandebt is outside the purview of Equifax. Chuluunbat, 4F.4th at 568; see also Denan, 959 F.3d at 297; Williams v.Equifax, 2025 WL 1733183, at *5 (N.D. Ga. June 17, 2025),report and recommendation adopted, No. 1:24-CV-04152-LMM-RDC, 2025 WL 2146367 (N.D. Ga. July 15, 2025)(granting defendant's motion to dismiss because the purportedinaccuracy regarding the status of the plaintiff's studentloan debts would require the CRA to “step into the court'sshoes to interpret section 523(a)(8)(A)(i))”); Johnson v.TransUnion, No. 122CV02533JPBJKL, 2023 WL 6035573,at *4 (N.D. Ga. Aug. 11, 2023), report and recommendationadopted, No. 1:22-CV-02533-JPB, 2023 WL 9315262 (N.D.Ga. Nov. 30, 2023) (“[T]he problem for Plaintiff is theaccuracy of the [disputed student loan debt] hinges entirelyon whether the debt was discharged in bankruptcy, which,under the circumstances of his case, presents a legal issueand, therefore, is not actionable under either § 1681e(b) or §1681i.”).Put another way, to determine whether Plaintiff's CollegeAve account was discharged through bankruptcy proceedings,Equifax would have to delve into the dischargeability ofstudent loans in bankruptcy. This application of law to facts isoutside the competency of a CRA like Equifax. Chuluunbat,4 F.4th at 568. Additionally, because the bankruptcy courtdid not find an undue hardship as to Plaintiff's studentloans, “no reasonable procedures could have uncovered aninaccuracy in [plaintiff's] credit report” Denan, 959 F.3dat 296 (quoting DeAndrade v. Trans Union LLC, 523 F.3d61, 68 (1st Cir. 2008) (“If a court had ruled the [loans]invalid and Trans Union had continued to report it as a validdebt, then [plaintiffs] would have grounds for a potentialFCRA claim.”)) (emphasis in original). Absent an inaccuracy,Plaintiff cannot bring a claim under the FCRA. Chuluunbat,4 F.4th at 566-67.*4 Accordingly, the FCRA claims (Count III-VI) aredismissed with prejudice.IV. ConclusionFor the stated reasons, Defendant's Motion to Dismiss [19]is granted. Counts III (negligent violation of 15 U.S.C. §1681i(a)), IV (willful violation of 15 U.S.C. § 1681i(a)),V (negligent violation of 15 U.S.C. § 1681e(b)), and VI(willful violation of 15 U.S.C. § 1681e(b)) are dismissed withprejudice. Separately, the Court orders Plaintiff's counsel,Attorney Heather Hersh, to show cause on April 9, 2026 at1:30 p.m. on why she should not be sanctioned pursuant to(1) Rule 11(b)(2), (2) 28 U.S.C. § 1927, and (3) the inherentpower of the Court, for citing potentially non-existent casesto the Court in her opposition brief [29] and sur-reply [31].Indeed, the Court is concerned that counsel has misled theCourt in citing cases that are nonexistent, or at a minimum,has failed to diligently cite check her submissions. In the eventthat the Court has simply been unable to find the cited casesin its research, Plaintiff's counsel shall provide the Court witha true and accurate copy of Horan v. Equifax Info. Servs.,LLC, No. 8:20-cv-02187-PWG, 2022 WL 2190906 (D. Md.June 17, 2022) and Jones v. TransUnion, LLC, No. 1:15-cv-00489, 2015 WL 7566685 (N.D. Ill. Nov. 24, 2015). Ifcounsel is unable to do so, Plaintiff's counsel shall submit asworn declaration explaining to the Court how the oppositionbrief and sur-reply were generated and how counsel cameto locate Horan and Jones, by April 3, 2026. Show-causehearing set for April 9, 2026, at 1:30 pm via Webex (https://us-courts.webex.com/join/mary_rowlandilnd.uscourts.gov).ENTER:
JONATHAN HATCH, Plaintiff, v. COLLEGE AVE STUDENT..., Slip Copy (2026) © 2026 Thomson Reuters. No claim to original U.S. Government Works.4All CitationsSlip Copy, 2026 WL 636816End of Document© 2026 Thomson Reuters. No claim to original U.S.Government Works.
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