Reported / Citable
Background
Pro se plaintiff John Hurt sued Essential Resources Group Inc., doing business as Essential Screens, its president Travis Powell, and employee Erin Taylor. Hurt alleges that ERG, a consumer reporting agency, included a criminal conviction in an employment background report sent to Texas Capital Bank, after which the bank rescinded his employment offer.
Hurt asserts Fair Credit Reporting Act and common-law claims. He alleges ERG did not provide the report when it was furnished to the bank, failed to give the employment-report notice required by 15 U.S.C. § 1681k(a)(1), and did not conduct a reasonable investigation or use reasonable procedures. He moved to strike several affirmative defenses, and objected to the magistrate judge’s recommendation concerning defenses asserting reliance on a reliable source and compliance with § 1681k(a)(1).
The Court’s Holding
Judge Robert W. Schroeder III overruled Hurt’s objections, adopted the magistrate judge’s report and recommendation, and granted the motion to strike only in part. The court struck defendants’ second affirmative defense as immaterial; it denied the motion as to the remaining defenses.
The court declined to strike the fifth defense, concerning reliance on a reliable source, because the defense could bear on whether ERG followed reasonable procedures under § 1681e(b). The court left for summary judgment or pretrial whether that theory is ultimately a cognizable defense. It also declined to strike the seventh defense asserting compliance with § 1681k(a)(1), holding that even if the defense were misclassified or insufficient, Hurt had not shown the prejudice needed to justify Rule 12(f)’s drastic remedy.
Key Takeaways
- A Rule 12(f) motion to strike is disfavored and generally requires more than a technical pleading-classification dispute.
- A CRA’s reliance on a purportedly reliable source may be relevant to the reasonable-procedures inquiry under FCRA § 1681e(b).
- The court reserved the ultimate viability of the reliable-source theory for summary judgment or pretrial.
Why It Matters
The order illustrates the high threshold for striking FCRA defenses at the pleading stage. Even where a defendant’s contention may overlap with an element of the plaintiff’s claim, the court may retain it absent prejudice and resolve its substantive effect on a fuller record.