Equifax’s Motion for Summary Judgment Denied
A federal judge in the District of Nevada denied Equifax’s motion for summary judgment in a recent Fair Credit Reporting Act (FCRA) case. In Le v Bank of America, Equifax moved to dismiss Plaintiff’s claims under the Fair Credit Reporting Act.
- On June 20, 2010, Plaintiff filed a Chapter 13 bankruptcy petition. The bankruptcy petition included accounts with Target and Countrywide. Plaintiff’s bankruptcy was discharged on October 15, 2015.
- Equifax is a consumer reporting agency (CRA). As a CRA, Equifax prepares and sells consumer reports, commonly referred to as credit reports.
- On March 29, 2016, Plaintiff disputed to Equifax its credit reporting of the Target and Countrywide accounts.
- Equifax received Plaintiff’s credit report dispute letter on April 10, 2016.
- Plaintiff incurred out-of-pocket expenses for gas, time and postage related to his credit report dispute.
Facts in Dispute:
- Whether Plaintiff received reinvestigation results from Equifax;
- Whether Equifax had reasonable procedures in place for mailing reinvestigation results; and
- Whether Plaintiff suffered actual damages as a result of not receiving the reinvestigation results for his credit report dispute from Equifax.
- “Congress enacted the FCRA`to ensure fair and accurate credit reporting, promote efficiency in the banking system, and protect consumer privacy.'” Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147, 1153 (9th Cir. 2009) (quoting Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47 (2007)). “As an important means to this end, the Act sought to make `consumer reporting agencies exercise their grave responsibilities [in assembling and evaluating consumers’ credit, and disseminating information about consumers’ credit] with fairness, impartiality, and a respect for the consumer’s right to privacy.'” Id. (alteration in original) (quoting 15 U.S.C. § 1681(a)(4)).
- Following a reinvestigation, a consumer reporting agency must provide the consumer the results of the reinvestigation. 15 U.S.C. 1681i(A)(6).
- The FCRA provides for actual damages, punitive damages, and attorney’s fees for willful violations of its statutory requirements. 15 U.S.C. § 1681n(a). If a plaintiff establishes a negligent violation of the statute, the FCRA provides for actual damages and attorney’s fees. 15 U.S.C. § 1681o(a). “
- The term `actual damages’ has been interpreted to include recovery for emotional distress and humiliation. . . . [N]o case has held that a denial of credit is a prerequisite to recovery under the FCRA.” Guimond v. Trans Union Credit Info. Co., 45 F.3d 1329, 1333 (9th Cir. 1995) (citations omitted).
- The question of whether a consumer reporting agency’s failure to reinvestigate was negligent is typically one for the jury, unless the court finds, accepting as true all facts the nonmovant asserts, that no rational jury could find that the CRA was not negligent. Dennis v. BEH-1, LLC, 520 F.3d 1066, 1070 (9th Cir. 2008) (finding “remand would be pointless” where the record showed that Experian overlooked a document that was easily accessible to the public).
- The court may find willfulness as a matter of law where the defendant “violates an unambiguous statutory requirement” and “that fact alone [is] sufficient to conclude that [the defendant’s] violation is reckless, and therefore willful.” Syed v. M-I, LLC, 853 F.3d 492, 505 n.7 (9th Cir. 2017) cert. denied, 138 S. Ct. 447 (2017) (examining a violation of Section 1681b(b)(2)(A)).
- Plaintiff contends Equifax recklessly violated his FCRA rights when Equifax:
- Delegated nearly every aspect of its statutory reinvestigation obligations to third party vendors;
- Produced no evidence of Equifax’s efforts to supervise the third parties or even keep internal records to later check and definitively confirm: (1) the results of reinvestigation were actually sent to Fidelity National for print and mail, or (2) whether Fidelity Output actually printed and mailed the reinvestigation to Plaintiff.
- Equifax argued that the plaintiff did not present evidence of the unreasonableness of Equifax’s procedures and Equifax presented evidence that a presumption that the reinvestigation results was timely mailed to Plaintiff. Equifax further argued that the FCRA is not a strict liability statute. Thus, Equifax did not negligently or willfully violate the FCRA.
- LIABILITY – The Court found that there was a genuine dispute as to the reasonableness of Equifax’s procedures with respect to its “supervision and monitoring of its vendor to ensure the mailing of reinvestigation results letters and to ensure that such letters were mailed in a timely fashion.” Likewise, “a genuine dispute regarding the reasonableness of procedures not merely because Equifax contracts certain processes to third parties, but because Equifax does not provide undisputed evidence that it adequately supervised the Fidelity entities’ efforts to comply with Equifax’s obligations under the FCRA.”
- Equifax “conceded that [it] was unaware of any procedures Equifax has to ‘confirm that Fidelity [Output] has, in fact, mailed out the reports of the reinvestigation or the documents that Equifax forwards to Fidelity [National] for mailing.'”
- The court held “a reasonable juror could find that Equifax does not have in place a reasonable means for ensuring that reinvestigation letters are being sent to consumers and that, if sent, they are being sent within the specified time frame. Summary judgment is therefore not warranted in favor of Equifax.”
- WILLFULNESS – The court held that “there remains a genuine dispute of material fact for the jury to resolve at trial. A reasonable juror could find that Equifax’s inability to confirm either that Plaintiff’s reinvestigation results were sent to Fidelity National, or that Fidelity Output actually mailed the results letter to Plaintiff or the combination of these disputed facts in conjunction with the record in this case, so violates an objective standard that Equifax’s conduct ‘entail[ed] an unjustifiably high risk of harm that [was] either known or so obvious that it should [have been] known.'” Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 57 (2007).
- DAMAGES – The court also held that Plaintiff could establish actual damages even without proof of credit harm because the deprivation of [Plaintiff’s] statutory right to receive the results of the reinvestigation letter constitutes an injury.”
- Further, “the concrete interest implied in Section 1681i involves a consumer’s access to current and accurate information about her credit file. Once a consumer disputes information on her file, triggering a reinvestigation of the file, unless and until the consumer reporting agency sends a letter containing the results of the reinvestigation, the consumer has no way of knowing whether the reinvestigation was completed or whether the perceived inaccuracies, if any, were removed from her credit report.
- The stress resulting from inaccurate information appearing on one’s credit report is unlikely to dissipate until the consumer receives the reinvestigation results letter. The statute does not require that expert evidence be submitted to establish such damages. Even when a consumer has not actually been denied credit or faced emotional harm, the Court finds that actual damages are recoverable from a failure to receive the reinvestigation results letter.”
- The court also held that a “willful violation could be inferred from Equifax’s alleged informed yet reckless failure to have in place a set of reasonable procedures for ensuring that reinvestigation letters are mailed and mailed within the specified time frame required by the FCRA.”
The Adkins Firm represents consumers with credit report errors. We represent consumers in federal court against the credit reporting agencies, debit collectors and banks.
Do you or your clients have credit report errors? Have you disputed the credit report errors and the credit reporting agencies verified the false information or did not send you the results of the investigation? If you answered yes, then you may be entitled to actual damages and attorney’s fees under the FCRA.
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