Introduction

This precedential decision addresses a pernicious consumer scam in the residential solar market while laying down two clarifying rules of federal law with practical consequences beyond solar finance:

• At the pleading stage, there is no special leniency for agency allegations. Plaintiffs asserting vicarious liability must satisfy the Twombly/Iqbal plausibility standard; “agency” is not an exception to Rule 12(b)(6).
• Under the Fair Credit Reporting Act (FCRA) § 1681b(a)(3)(A), a lender may permissibly obtain a consumer report “in connection with a credit transaction involving the consumer” even if the consumer did not initiate the application. The statute does not impose a consumer‑initiation requirement in this subsection.

The case arises from a door‑to‑door sales representative for Vision Solar who allegedly forged 83‑year‑old Eva Migliore’s digital signature and opened a nearly $100,000, 25‑year loan via Sunlight Financial’s platform with Cross River Bank as originator. Migliore sued the lenders under the New Jersey Consumer Fraud Act (CFA) and the FCRA, arguing the salesman acted as their agent and that the lenders directly violated those statutes. The District Court dismissed the claims against the lenders. The Third Circuit affirmed.

Summary of the Opinion

The Third Circuit (1) exercised appellate jurisdiction under the “stand on the complaint” doctrine, (2) held that agency/vicarious liability allegations must meet Twombly/Iqbal plausibility—rejecting any suggestion that “discovery is necessary” simply because agency is alleged, (3) found the complaint failed to plead facts showing the Vision Solar salesman was the lenders’ agent under New Jersey law, (4) held the direct CFA claims failed Rule 9(b)’s particularity requirements and did not fit the statutory text of N.J.S.A. § 56:8‑2.22, and (5) concluded the lenders had a permissible purpose under FCRA § 1681b(a)(3)(A) to obtain Migliore’s credit reports despite the application being initiated by a fraudster, because the statute authorizes access for a credit transaction “involving the consumer” without requiring that the consumer initiate the transaction.

Factual and Procedural Background

A Vision Solar representative allegedly promised “free” solar panels to Ms. Migliore, never presented paperwork, created a fake email address with a misspelling of her name, and used Sunlight’s platform to digitally execute a power of attorney, a solar sale agreement, and a 25‑year loan listing Sunlight as “Envelope Originator” and Cross River Bank as lender. The panels were installed on a shaded home with a failing roof. When Migliore tried to cancel, the companies refused.

She sued Vision Solar entities and CEO Jon Seibert, plus Sunlight and Cross River, asserting New Jersey CFA and FCRA claims. After Vision Solar, LLC filed for bankruptcy and other claims were resolved, the District Court dismissed claims against Sunlight and Cross River without prejudice. Migliore elected to stand on her complaint, voluntarily dismissed remaining claims, and abandoned claims against the bankrupt entity, creating finality for appeal.

Issues Presented

1. Whether agency allegations enjoy a relaxed pleading standard or must satisfy Twombly/Iqbal plausibility at Rule 12(b)(6).
2. Whether the complaint plausibly alleged that Vision Solar’s salesman was an agent of Sunlight or Cross River, giving rise to vicarious liability under the New Jersey Consumer Fraud Act.
3. Whether Sunlight or Cross River directly violated the CFA (including §§ 56:8‑2 and 56:8‑2.22) and whether those allegations were pled with Rule 9(b) particularity.
4. Whether Sunlight and Cross River had a “permissible purpose” under FCRA § 1681b(a)(3)(A) to obtain Migliore’s credit reports when a fraudster initiated the application in her name.

Holdings

• No agency exception to plausibility: Agency allegations are subject to Twombly/Iqbal. Jurimex’s suggestion to the contrary rested on the retired Conley “no set of facts” standard and is inapplicable.
• No plausible agency alleged: The complaint did not plausibly allege Vision Solar’s salesman was the lenders’ agent under New Jersey law or under the Winback factors; thus no vicarious liability under the CFA.
• Direct CFA claims fail: The complaint lacked Rule 9(b) particularity and did not state a claim under § 56:8‑2.22 because the lenders neither “required” nor “requested” Migliore’s signature; the alleged forgery avoided asking her to sign.
• FCRA permissible purpose exists: Pulling Migliore’s credit “in connection with a credit transaction involving the consumer” satisfied § 1681b(a)(3)(A). That subsection does not require the consumer to have initiated the transaction.

Analysis

Precedents Cited and How They Shaped the Decision

• Bell Atlantic v. Twombly, Ashcroft v. Iqbal, Phillips v. County of Allegheny, Doe v. University of the Sciences: Together, these decisions require a complaint to contain enough nonconclusory factual matter to make liability plausible. The Third Circuit anchors its “no agency exception” rule in this line, emphasizing plausibility applies to every element, including agency.
• Jurimex Kommerz Transit G.M.B.H. v. Case Corp.: A nonprecedential decision suggesting agency allegations warrant discovery before dismissal. The Court explains Jurimex rested on Conley’s retired standard and declines to follow it.
• AT&T v. Winback & Conserve Program, Inc.: Provides agency factors for sales representatives: (1) power to conduct and conclude transactions on the principal’s behalf, (2) authority to speak as the principal or hold oneself out as the principal, (3) principal’s control over how it is represented, and (4) principal’s financial benefit—plus the fiduciary nature of true agents. This framework guides the agency analysis here.
• Covington v. International Association of Approved Basketball Officials: Confirms Twombly/Iqbal governs vicarious liability and that training/evaluation/discipline of independent contractors, without more, is insufficient to show agency-level control.
• Vorchheimer v. Philadelphian Owners Association: Courts need not accept allegations contradicted by documents incorporated into the complaint (here, the FPA’s allocation of authority).
• F.G. v. MacDonell, Saltiel v. GSI Consultants, Alexander v. CIGNA, Pepe v. Plainsboro: Clarify fiduciary duties arise in special relationships, not ordinary arm’s‑length commercial contracts; the scope of duty for independent contractors is typically set by contract.
• Sears Mortgage v. Rose; Henningsen v. Bloomfield Motors: Contractual disclaimers of agency are not dispositive; the course of dealing controls. But the FPA and alleged facts here still did not show agency.
• Government of the Virgin Islands v. Richards; I.H. ex rel. Litz v. County of Lehigh: The “touchstone” of agency is the right to control the manner and means of work, not merely supplying the tools used by the tortfeasor.
• Frederico v. Home Depot; City of Warren Police & Fire v. Prudential; Avaya: Reinforce Rule 9(b)’s demand for the “who, what, when, where, and how” of fraudulent conduct—missing here as to the lenders.
• Kirtz v. TransUnion; Safeco v. Burr; Gelman v. State Farm; Bickley v. Dish Network: Outline the FCRA framework and elements for a § 1681b(f) claim.
• Bibbs v. TransUnion (n.15): Notes permissible purposes include use “in connection with a credit transaction involving the consumer” under § 1681b(a)(3)(A).
• Domante v. Dish Network (11th Cir.): Persuasive authority that the FCRA does not require a report user to confirm beyond doubt the consumer’s identity before requesting a report.
• Kelly v. RealPage: The Court draws a negative-implication argument from statutory text: Congress specified “initiated by the consumer” in § 1681b(a)(3)(F)(i) (legitimate business need) but omitted that phrase in § 1681b(a)(3)(A) (credit transactions)—a textual signal that consumer initiation is not required for subsection (A).
• Contrasts: Lopez v. New Jersey Sun Tech (M.D. Pa.) applied the disfavored Jurimex approach; Acevedo v. Sunnova (C.D. Cal.) involved materially different facts and law (agents registered as lender’s employees and authority to apply on customers’ behalf), making it inapposite.

Legal Reasoning

1) Agency Pleading: No Special Dispensation

The Court squarely holds that agency allegations must be plausibly pled. Plaintiffs cannot rely on a generalized proposition that “discovery is needed to flesh out agency.” Twombly/Iqbal controls; conclusory labels and formulaic assertions of “acting on behalf of” are insufficient.

2) Vicarious Liability under the New Jersey CFA

Applying Winback and New Jersey agency law, the Court found three fatal gaps:

• No transactional authority: The complaint did not plausibly allege the salesman could approve loans, bind the lenders, or conclude transactions on their behalf. The FPA showed Sunlight and originators like Cross River set credit criteria, received applications directly via the platform, and made approval decisions.
• No authority to speak as the lenders: The FPA required Vision Solar to market under its own name and restricted use of Sunlight’s and lenders’ marks. There were no facts suggesting the salesman was held out as the lenders’ voice.
• No fiduciary relationship: Nothing in the FPA or alleged facts transformed an arm’s‑length commercial relationship into a fiduciary one. Contract disclaimers of agency are not dispositive, but the course of dealing as pled did not show fiduciary duties to the lenders.

Other indicia—training requirements, the ability to terminate third‑party sales organizations, review of scripts or materials, and use of the Sunlight platform—did not bridge these gaps. Under Covington, training/evaluation/discipline of independent contractors does not by itself create the level of control required for agency. And merely supplying the technological means (the e‑signature platform) does not establish the “right to control” the manner in which the contractor misused the tools.

3) Direct CFA Claims and Rule 9(b)

Two separate grounds defeated the direct New Jersey CFA claims:

• Rule 9(b) particularity failures: The complaint used global references to “Defendants” and lacked the specific who/what/when/where/how of Sunlight’s or Cross River’s own misrepresentations or deceptive acts. That dooms fraud‑based CFA claims under Third Circuit precedent.
• Substantive mismatch with § 56:8‑2.22: This provision prohibits requesting or requiring a consumer’s signature without simultaneously providing a copy of the document. Here, the allegation is that the fraudster prevented Migliore from signing altogether by diverting documents to a sham email and forging her signature. That is not a “request” or “requirement” directed at the consumer within the meaning of § 56:8‑2.22. Even if a “request” could be inferred, the complaint did not identify which entity made it with Rule 9(b) particularity, and the only factual actor identified was the salesman—whose conduct cannot be imputed to the lenders absent agency.

4) FCRA Permissible Purpose under § 1681b(a)(3)(A)

The FCRA allows a user to obtain a consumer report “to use the information in connection with a credit transaction involving the consumer.” The Third Circuit holds that this subsection does not require the transaction to be initiated by the consumer. Congress elsewhere used “initiated by the consumer” (in § 1681b(a)(3)(F)(i)); its omission in (A) is deliberate and meaningful. Because Sunlight and Cross River obtained the report to evaluate eligibility for a loan that would involve Migliore if consummated, § 1681b(a)(3)(A) supplied a permissible purpose—even if the application was fraudulently initiated by a third party. The statute polices the purpose of obtaining the report, not the provenance of the application. Identity‑verification failures or the fraudster’s misconduct do not convert an otherwise permissible purpose into an impermissible one.

Impact and Implications

A. Pleading and Proof of Agency in Platform‑Distribution Models

This opinion sets a clear pleading bar for vicarious liability in the Third Circuit. Plaintiffs must allege concrete facts showing a right of control and at least some combination of (1) authority to conclude transactions, (2) authority to speak as the principal, and (3) fiduciary alignment—especially when the relationship is governed by a contract allocating roles and disclaiming agency. Mere oversight, training, use of the principal’s technology stack, and financial benefit do not suffice.

For fintechs, banks, and other platform‑based lenders that rely on third‑party sales channels, the decision provides litigation comfort: properly structured channel agreements, restricted brand use, and centralized credit decisioning can substantially reduce exposure to vicarious liability for rogue sellers. But there is a compliance tension: the more a lender exerts granular control (e.g., authorizing agents to bind, to speak in the lender’s name, or to submit applications on behalf of consumers), the closer it comes to agency.

B. Fraud and the FCRA’s “Permissible Purpose”

The Court aligns with the Eleventh Circuit’s Domante by clarifying that § 1681b(a)(3)(A) does not require consumer initiation. For identity‑theft victims, this narrows one route of direct FCRA liability against lenders that pull reports during fraudulent credit applications. Consumers may need to seek relief through other FCRA provisions (e.g., fraud alerts and identity‑theft blocks), state identity‑theft statutes, or direct claims against the fraudster or sales organization.

C. New Jersey CFA Litigation

Two practical lessons emerge: (1) fraud‑based CFA claims must meet Rule 9(b); group pleading against multiple defendants is risky, and (2) § 56:8‑2.22 targets a specific practice—pressing a consumer to sign without furnishing a copy. A forged digital signature that bypasses the consumer may not fit the text. Plaintiffs must carefully match the statutory elements to the factual theory.

D. Solar-Finance and Door‑to‑Door Sales

Although the Court expressed sympathy and noted allegations of a broader pattern of Vision Solar misconduct, it affirmed dismissal against the lenders and highlighted that claims against the seller/installer pathways may be the more promising litigation route. Regulators and state attorneys general may be better positioned to address business‑model abuses by sales organizations than private plaintiffs are to reach upstream finance providers absent strong agency facts.

Complex Concepts Simplified

• Agency and Vicarious Liability: A principal is liable for an agent’s acts if the agent acts on the principal’s behalf and under its control. Indicators include authority to bind the principal to contracts, to speak as the principal, and a fiduciary relationship of loyalty. Independent contractors are not agents unless the principal retains sufficient control over the results and how the contractor represents the principal.
• Twombly/Iqbal “Plausibility”: A complaint must allege enough nonconclusory facts to make each element of a claim plausible, not merely possible. Labels like “agent” or “acting on behalf of” without concrete factual support do not suffice.
• Rule 9(b) Particularity: For fraud-based claims, the complaint must detail the who, what, when, where, and how of the alleged misrepresentation or deceptive practice. Vague references to “defendants” generally won’t do.
• FCRA “Permissible Purpose”: Users may obtain consumer reports for specified purposes. Under § 1681b(a)(3)(A), a lender may pull a report to use in a credit transaction involving the consumer; this does not require the consumer to have initiated the application. The focus is the user’s purpose, not the authenticity of the application’s origin.
• New Jersey CFA § 56:8‑2.22: Targets sellers who require or request a consumer’s signature on a sales document without simultaneously providing a full and accurate copy. If a fraudster forges a consumer’s signature without asking her to sign, the statute may not be implicated.
• “Stand on the Complaint” Doctrine: A plaintiff may create a final, appealable order from a dismissal without prejudice by clearly electing to stand on the complaint rather than amend, making the order effectively final for appellate jurisdiction.

Practice Pointers

For Plaintiffs Alleging Agency/Vicarious Liability

• Plead specific facts showing the salesperson could bind the lender (e.g., authority to approve/submit applications on the lender’s behalf, to communicate binding terms, or to accept/execute agreements as the lender’s agent).
• Identify instances where the lender authorized the seller to speak in the lender’s name, use the lender’s marks beyond compliance notices, or present itself as the lender.
• Allege concrete manifestations of control (not just training) and fiduciary obligations—e.g., compensation structures tying the seller’s duties to the lender’s interests, oversight of representations, mandatory scripts, or a requirement that agents register as the lender’s employees/agents with regulators.
• Plead a course of dealing that contradicts contractual disclaimers of agency (e.g., repeated instances where the seller concluded transactions without lender review).

For Defendants (Lenders/Fintech Platforms)

• Structure channel agreements to centralize credit decisioning with the lender; prohibit agents from concluding transactions or speaking as the lender; restrict brand use; and disclaim agency while aligning the course of dealing with that allocation.
• Provide training and compliance oversight without conferring binding authority. Document that the platform communicates directly with consumers about who the lender is and how decisions are made.
• Adopt identity‑verification controls (e.g., knowledge‑based authentication, out‑of‑band OTPs, liveness checks) to mitigate fraud risk—mindful that increasing control over outcomes is preferable to granting agents authority to bind.
• Maintain audit trails showing the lender’s limited role at the point of sale and that consumer consents are captured directly by the platform, not solely via third parties.

For Consumer Advocates

• Consider alternative legal routes when agency is tenuous: claims against sellers/installers; state identity‑theft laws; UDAP claims tied to the seller; E‑SIGN/UETA compliance; and, where applicable, the FTC Holder Rule in consumer‑credit sales.
• Use FCRA identity theft tools: fraud alerts, security freezes, and blocks under § 1681c‑2 to prevent furnishing of accounts resulting from identity theft, even if § 1681b(a)(3)(A) permits the pull.

What This Opinion Does Not Decide

• It does not exonerate the seller (Vision Solar) or its executives from liability; those claims were partly dismissed below and later voluntarily dismissed, and one entity is in bankruptcy.
• It does not hold that an “initiated by the consumer” requirement applies to other FCRA subsections; it addresses only § 1681b(a)(3)(A).
• It does not bar vicarious liability where robust facts show authority to bind or speak as the lender, or a fiduciary relationship; it simply enforces plausibility at the pleading stage.
• It does not address potential regulatory enforcement or broader policy remedies for door‑to‑door solar sales practices.

Conclusion

Key takeaways:

• Agency allegations are not insulated from Twombly/Iqbal. Plaintiffs must plead concrete facts establishing the right to control, transactional authority, and fiduciary indicia to survive Rule 12(b)(6) on a vicarious liability theory.
• Direct CFA claims must meet Rule 9(b) particularity and align with the statute’s text. Forgery that avoids requesting a consumer’s signature does not fit § 56:8‑2.22’s prohibition on requesting or requiring a signature without providing a copy.
• Under FCRA § 1681b(a)(3)(A), lenders may permissibly obtain consumer reports for a credit transaction “involving the consumer” even when the application was initiated by a fraudster. The subsection contains no consumer‑initiation requirement, and the focus is on the user’s purpose.

As a result, the Third Circuit affirmed dismissal of Migliore’s claims against Sunlight Financial and Cross River Bank. While the Court expressed sympathy for the consumer and noted allegations of a broader pattern of seller misuse, its precedential holdings sharpen pleading standards for agency and clarify the scope of the FCRA’s permissible‑purpose provision—guidance that will influence litigation strategy across fintech, bank‑partner, and third‑party distribution models in the Third Circuit and beyond.