Yackel et al v. ROCKET MORTGAGE, LLC

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No. 6:25-cv-00468
Courtney Yackel et al.,
Plaintiffs,
v.
Rocket Mortgage, LLC,
Defendant.
O R D E R
Plaintiffs brought this action for alleged violations of the Fair
Credit Reporting Act (FCRA) and the Texas Deceptive Trade
Practices Act (DTPA) as well as for alleged negligent misrepre-
sentations. Doc. 1 at 6–8. The case was referred to a magistrate
judge. Defendant moved to dismiss all claims in this action, some
for lack of standing and the others for failure to state a claim. Doc.
13. The magistrate judge issued a report recommending that de-
fendant’s motion be granted. Doc. 17 at 16. Specifically, the mag-
istrate judge recommended that plaintiff Courtney Yackel’s
claims be dismissed without prejudice for lack of standing and
that plaintiff Joel Yackel’s federal and state-law claims be dis-
missed with prejudice for failure to state a claim. Id. Plaintiff filed
written objections to the report. Doc. 18.
The court reviews the objected-to portions of a magistrate
judge’s report and recommendation de novo. 28 U.S.C.
§ 636(b)(1)(C); Fed. R. Civ. P. 72(b)(3). However, the “objections
must specifically identify those findings objected to. Frivolous,
conclusive or general objections need not be considered by the
district court.” Nettles v. Wainwright, 677 F.2d 404, 410 n.8 (5th
Cir. Unit B 1982) (en banc), overruled on other grounds by Douglass
v. United Servs. Auto. Ass’n, 79 F.3d 1415 (5th Cir. 1996) (en banc).
Furthermore, a party’s entitlement to de novo review does not en-
title it to raise arguments that were not presented to the magis-
trate judge without a compelling reason. See Cupit v. Whitley, 28
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F.3d 532, 535 & n.5 (5th Cir. 1994). When there have been no
timely objections to a report, or the objections are improper, “the
court need only satisfy itself that there is no clear error on the face
of the record.” Fed. R. Civ. P. 72(b), advisory committee’s notes
to 1983 amendment.
I. First objection
Plaintiffs object that the magistrate judge resolved a factual
dispute in defendant’s favor, which is improper at the motion-to-
dismiss stage. Doc. 18 at 2–3.
The complaint alleged that defendant violated 15 U.S.C.
§ 1681b by obtaining Joel Yackel’s credit report without a permis-
sible purpose. Doc. 1 at 6. After considering the complaint and the
various documents attached to it, the magistrate judge concluded
that plaintiff authorized defendant to obtain the credit report and
that defendant’s conduct was within the scope of that authoriza-
tion. Doc. 17 at 9–10; see also Docs. 1-7 at 2, 2-13 at 2.
Plaintiffs argue that the magistrate judge improperly resolved
disputed facts regarding defendant’s intent in contravention of
the governing standard created by Federal Rule of Civil Procedure
12. Doc. 18 at 2–3. However, when “[d]etermining whether a
complaint states a plausible claim,” the court “draw[s] on its judi-
cial experience and commons sense.” Ashcroft v. Iqbal, 556 U.S.
662, 679 (2009). Moreover, the court may review and consider
documents attached to the complaint that are central to the claim
and referenced by the complaint. Lone Star Fund V (U.S.), L.P. v.
Barclays Bank PLC, 594 F.3d 383, 387 (5th Cir. 2010); Colins v.
Morgan Stanley Dean Witter, 224 F.3d 496, 498–99 (5th Cir.
2000). If “the allegations in the complaint are contradicted by
facts established by” such documents, “the court may properly
disregard the allegations.” Martinez v. Reno, No. 3:97-cv-00813,
1997 WL 786250, at *2 (N.D. Tex. Dec. 15, 1997) (citing Nishi-
matsu Const. Co. v. Hou. Nat’l Bank, 515 F.2d 1200, 1206 (5th Cir.
1975)).
Here, the magistrate judge correctly concluded that plaintiffs’
first FCRA claim was implausible based on the documents
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attached to the complaint. Contrary to the facts alleged in the
complaint, the attached documents show that Joel Yackel author-
ized defendant to obtain his credit report in connection with his
loan application and that defendant was still considering the ap-
plication when it obtained the report. Docs. 1-7 at 2, 2-13 at 2.
Thus, because the attachments contradicted plaintiffs’ factual al-
legations, the magistrate judge properly disregarded those allega-
tions.
Accordingly, plaintiffs’ first objection is overruled.
II. Second objection
In their second objection, plaintiffs argue that consent to ob-
tain a credit report does not automatically establish that the report
was obtained in compliance with the FCRA. Doc. 18 at 3, 6 (citing
Nayab v. Capital One Bank, 942 F.3d 480 (9th Cir. 2019) and Ro-
driguez v. Your First Choice, LLC, No. 2:16-cv-02447, 2017 WL
4855406, at *4 (D. Nev. Oct. 25, 2017)). They further argue that
defendant, despite authorization, did not have a permissible rea-
son to obtain Joel Yackel’s credit report because defendant had
already decided to deny the credit application. Doc. 18 at 3.
Plaintiffs are correct that a defendant may violate the FCRA
even if it has permission to obtain a plaintiff’s credit report. How-
ever, as explained above, the documents attached to the complaint
show that defendant was still considering plaintiffs’ loan applica-
tion when it obtained the credit report. As Joel Yackel authorized
defendant to pull his credit report in connection with his loan ap-
plication, defendant acted with a permissible purpose.
Moreover, the cases cited in the objections involve facts fun-
damentally different than those of this case. The plaintiffs in both
cases alleged that any access to their credit report occurred out-
side the bounds of an existing relationship or agreement between
the parties. See Nayab, 942 F.3d at 496–99; see also Rodriguez, 2017
WL 4855406, at *4. In contrast, plaintiffs pleaded facts and filed
documents demonstrating that Joel Yackel did have an existing re-
lationship with defendant at the time his credit report was pulled.
Docs. 1 at 2–6, 1-3 at 1–10, 1-7 at 2, 2-13 at 2. Plaintiffs have not
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cited any cases with facts similar to their own in which the defend-
ant was found to have acted unlawfully in obtaining a credit report.
Accordingly, plaintiffs’ second objection is overruled.
III. Third objection
Plaintiffs also object that the magistrate judge relied on argu-
ments made for the first time in defendant’s reply, which plaintiffs
had no opportunity to respond to. Doc. 18 at 4–5. However, as
explained above, the magistrate judge’s conclusion that the FCRA
claim was implausible was based on the complaint and the various
documents attached to it. In other words, the magistrate judge
reached that conclusion independently of defendant’s reply.
Accordingly, plaintiffs’ third objection is overruled.
IV. Fourth objection
In their final objection, plaintiffs argue that their claims
should not be dismissed with prejudice and that they should be
given an opportunity to replead. Doc. 18 at 5–8. Plaintiffs do not
object to the dismissal of their negligent-misrepresentation claim,
their claim under § 1681m, or their DTPA claims. Id. at 5. How-
ever, plaintiffs contend that, if allowed to replead, they could al-
lege facts sufficient to show that defendant obtained Joel Yackel’s
credit report without a permissible purpose. Id. at 6.
Federal Rule of Civil Procedure 15(a)(2) states that district
courts should freely grant leave to amend when “justice so re-
quires.” However, the court may deny leave to amend if an
amendment would be futile. Ariyan, Inc. v. Sewerage & Water Bd.
of New Orleans, 29 F.4th 226, 232 (5th Cir. 2022). An amendment
is futile when “the complaint as amended would be subject to dis-
missal.” Varela v. Gonzales, 773 F.3d 704, 707 (5th Cir. 2014) (per
curiam) (citation omitted).
Here, plaintiffs have already submitted documentary evidence
that contradicts their allegations and indicates that defendant ob-
tained Joel Yackel’s credit report in connection with defendant’s
consideration of his loan application. See Docs. 1-7 at 2, 2-13 at 2;
see also Docs. 1-3, 2-9, 2-10. Additional facts would not overcome
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the exhibits that plaintiffs have already provided, so plaintiffs’
amended complaint would still be subject to dismissal. See Wilson
v. Grest, No. 2:17-cv-02997, 2017 WL 4998651, at *4 (E.D. La.
Nov. 2, 2017) (holding that any amendment to plaintiff’s com-
plaint would be futile because “plaintiff’s allegations [were] con-
tradicted by the documentary evidence”). Because the attached
exhibits contradict plaintiffs’ allegations, the court finds that
granting leave to amend would be futile.
Plaintiffs also appear to suggest that allowing leave to amend
would give plaintiffs an opportunity to plead additional facts and
demonstrate that both plaintiffs have standing to proceed in this
case. Doc. 18 at 6–8. However, plaintiffs only address why Joel
Yackel has standing, which was never questioned by defendant or
the magistrate judge. Thus, plaintiffs fail to specifically identify
the findings or reasoning they object to.
Accordingly, plaintiff’s fourth objection is overruled.
V. Conclusion
Having reviewed the report de novo and being satisfied that
there is no error, the court accepts the report’s findings and rec-
ommendations in part. The court grants defendant’s motion to
dismiss (Doc. 13) in part. Courtney Yackel’s claims under the
FCRA are dismissed without prejudice for lack of standing. Joel
Yackel’s claims under the FCRA are dismissed with prejudice for
failure to state a claim. However, contrary to defendant’s request
and the recommendation of the magistrate judge, the court dis-
misses all state law claims in this action without prejudice for lack
of pendent jurisdiction. Bass v. Parkwood Hosp., 180 F.3d 234, 246
(5th Cir. 1999) (“When a court dismisses all federal claims before
trial, the general rule is to dismiss any pendent claims. However,
the dismissal . . . should expressly be without prejudice . . . .” (ci-
tation omitted)).
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So ordered by the court on March 2, 2026.
J. CAM PB EL L BA RK ER
United States District Judge
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