It is quite difficult to lose an FCRA case via summary judgment. As long as you can show an inaccuracy appeared on your credit report, you should be able to survive summary judgment since, once an inaccuracy is shown, the question becomes whether or not the credit bureau's procedures and/or actions were reasonable, which is almost always a jury question. Thus, as long as there is an inaccuracy, losing via summary judgment is difficult to do. But this pro se plaintiff was able to lose via summary judgment not once but three times. This is yet another example of why consumers need to hire attorneys experienced in FCRA litigation to represent them and never, ever, should consumers represent themselves.
In the case styled Michael L. McDonald v. Equifax, Experian and Trans Union pending in the United States District Court for the Northern District of Texas, Dallas Division, McDonald filed claims against all three national credit bureaus for violations of unspecified sections of the Fair Credit Reporting Act. While he did not identify the statutes in his Complaint, his case appeared to claim garden variety 1681e(b) claims for failing to follow reasonable procedures to assure the maximum possible accuracy of the credit reports regarding McDonald and 1681i for failing to conduct reasonable investigations of the disputed information.
According to the opinion penned by U.S. District Judge Jane J. Boyle, McDonald learned of various inaccuracies on his Equifax credit report when he was denied a loan. He then obtained copies of his credit reports from Experian and Trans Union and learned of additional errors appearing on his credit reports published by those companies. He lodged several disputes regarding the inaccurate credit information with all three credit bureaus. However, the CRAs failed to correct the errors. McDonald then filed litigation against Equifax, Experian and Trans Union.
Apparently, McDonald failed to correctly serve Experian with the Complaint. The opinion does not indicate how McDonald messed up service of process, as Experian had already been dismissed from the case prior to the motions before the Court. Trans Union and Equifax both filed motions for summary judgment, arguing that McDonald failed to present any evidence of any inaccuracies on his credit report.
All McDonald had to do was come up with some type of sworn testimony or documentation that his credit reports contained inaccuracies. It could have been as simple as an affidavit from McDonald himself swearing that the reports contained inaccurate information. Or he could have produced some type of documentation that demonstrated the inaccurate nature of the information. Any competent attorney could have easily beaten the credit bureaus' motion for summary judgment in this case. However, lawyerless McDonald failed to provide any documentation or any sworn testimony. As a result, Judge Boyle was correct in dismissing McDonald's claims.
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Showing posts with label 1681h(e). Show all posts
Showing posts with label 1681h(e). Show all posts
September 21, 2009
September 04, 2009
New FCRA case - Hamilton v. DirecTV
A new FCRA opinion was handed down on August 14, 2009 by District Judge W. Harold Albritton in the United States District Court for the Middle District of Alabama, Northern Division.
The case is styled Annie Hamilton v. DirecTV, but includes claims against Experian, Equifax and Trans Union. Hamilton claimed that DirecTV had placed seven fictitious accounts on her credit reports with Experian, Equifax and Trans Union. Hamilton disputed the accounts to the credit bureaus, who all removed the accounts only to reinsert one of the accounts back onto all of her credit reports. NOTE TO PLAINTIFF'S ATTORNEY - that's a claim right there - violation of 1681i's requirement that the credit bureaus inform the consumer before reinserting an account that was previously deleted. After the reinsertion of the account, Hamilton disputed the account to the credit bureaus again, who refused to remove it. Equifax did remove the account for a while, only to reinsert it again.
The issue before Judge Albritton was a motion for partial dismissal filed by Trans Union and joined by Experian and Equifax. The motion sought to dismiss Hamilton's claim for injunctive relief, namely seeking a declaratory judgment that she did not owe DirecTV and enjoining the CRAs from publishing the account on her credit reports.
The problem is that the FCRA does not provide for injunctive relief as only the FTC can "enforce" the FCRA while private consumers can only receive compensation for their injuries caused by violations of the FCRA. The Plaintiff tries to do an end run around the FCRA by claiming that she can get injunctive relief via her defamation claim. While I agree that the Plaintiff's defamation claim is not preempted by 15 U.S.C. 1681h(e) of the FCRA, a defamation claim is not a means to get injunctive relief.
Based on this. Judge Albritton correctly granted the Defendants' motion for partial dismissal, thereby eliminating Hamilton's claims for injunctive and declaratory relief.
While this is a correct decision, what does it really get the CRAs? Are they really going to reinsert the fictitious account again and just subject themselves to more litigation and liability to the Plaintiff? Surely not. The only reason to even file such a motion was to run up attorneys' fees for the defense lawyers and to make the plaintiff's attorney work harder to get justice for his client. I can tell you for a fact that the CRAs lawyers do this to lawyers new to suing the credit bureaus to try to dissuade them from filing more litigation in the future. They no longer file such frivilous motions in cases where I am involved, probably because they realize that I'm too stubborn (or stupid) to run off. Unfortunately, the CRAs' motion in this case was a waste of the Court's resources, even though it was correctly granted.
The case is styled Annie Hamilton v. DirecTV, but includes claims against Experian, Equifax and Trans Union. Hamilton claimed that DirecTV had placed seven fictitious accounts on her credit reports with Experian, Equifax and Trans Union. Hamilton disputed the accounts to the credit bureaus, who all removed the accounts only to reinsert one of the accounts back onto all of her credit reports. NOTE TO PLAINTIFF'S ATTORNEY - that's a claim right there - violation of 1681i's requirement that the credit bureaus inform the consumer before reinserting an account that was previously deleted. After the reinsertion of the account, Hamilton disputed the account to the credit bureaus again, who refused to remove it. Equifax did remove the account for a while, only to reinsert it again.
The issue before Judge Albritton was a motion for partial dismissal filed by Trans Union and joined by Experian and Equifax. The motion sought to dismiss Hamilton's claim for injunctive relief, namely seeking a declaratory judgment that she did not owe DirecTV and enjoining the CRAs from publishing the account on her credit reports.
The problem is that the FCRA does not provide for injunctive relief as only the FTC can "enforce" the FCRA while private consumers can only receive compensation for their injuries caused by violations of the FCRA. The Plaintiff tries to do an end run around the FCRA by claiming that she can get injunctive relief via her defamation claim. While I agree that the Plaintiff's defamation claim is not preempted by 15 U.S.C. 1681h(e) of the FCRA, a defamation claim is not a means to get injunctive relief.
Based on this. Judge Albritton correctly granted the Defendants' motion for partial dismissal, thereby eliminating Hamilton's claims for injunctive and declaratory relief.
While this is a correct decision, what does it really get the CRAs? Are they really going to reinsert the fictitious account again and just subject themselves to more litigation and liability to the Plaintiff? Surely not. The only reason to even file such a motion was to run up attorneys' fees for the defense lawyers and to make the plaintiff's attorney work harder to get justice for his client. I can tell you for a fact that the CRAs lawyers do this to lawyers new to suing the credit bureaus to try to dissuade them from filing more litigation in the future. They no longer file such frivilous motions in cases where I am involved, probably because they realize that I'm too stubborn (or stupid) to run off. Unfortunately, the CRAs' motion in this case was a waste of the Court's resources, even though it was correctly granted.
June 16, 2009
New case involving an investigative consumer report for employment purposes
The United States District Court for the District of Connecticut released an interesting new opinion on May 28, 2009. The case is Deborah Adams v. National Engineering Service Corporation and involves claims arising from a background check that contained errors and cost the plaintiff a new job.
Basically (and I do mean basically) what happened is that National Engineering Service Corporation ("NESC") was contracted by a potential employer of Adams to run a background check on Adams. NESC got a company called "Verifications" (who was also a defendant in the lawsuit) to run the background check. Verifications prepared the investigative consumer report which contained errors, namely several convictions that showed up under someone with the same name and date of birth as the plaintiff but was not the plaintiff. Verifications was provided the report by yet another company that was not a defendant but probably should have been. Due to the erroneous criminal record, Adams was not hired.
NESC first claimed that it was not subject to the FCRA because it claimed it was not a consumer reporting agency since it didn't prepare the report since Verifications did. The Court found that NESC is a consumer reporting agency because it "evaluated" the consumer report when its employee commented in an e-mail to the employer that the background check was "not good at all."
The Court then found that the Plaintiff presented sufficient evidence for her 15 U.S.C. 1681e(b) claim to survive. 1681e(b) requires consumer reporting agencies must follow reasonable procedures to assure maximum possible accuracy of the credit reports they create. Most courts (like this one) have held that whether reasonable procedures were used is almost always a question for the jury and thus not appropriate for summary judgment where there is evidence of an error on the credit report. In Adams, the defendants did not contest that the background check contained errors, so the Court found that the plaintiff's 1681e(b) claims survived.
The only claims of the plaintiff that were dismissed were some state law claims, primarily because the court found no evidence of malice on the part of the defendants (just evidence of stupidity, apparently). Since 15 U.S.C. 1681h(e) provides CRAs with qualified immunity from state law claims unless there is malice, the Court dimissed the state law claims for defamation and negligence. It dismissed the other state law claims on other grounds.
The only beef I have with the Court's ruling is that it did not consider all of 1681h(e). 15 U.S.C. 1681h(e) grants qualified immunity for certain state law claims if there is no malice but only for certain disclosures of consumer reports, i.e. disclosures made pursuant to 1681g, 1681h or 1681m. Disclosures pursuant to these sections only go to the consumer himself. Thus, disclosures made to third parties (i.e. Adams' potential employer) do not get the benefit of qualified immunity. In defense of the Court in this case, there are many other Courts that have also missed this point.
Overall, though, a great and informative decision.
Basically (and I do mean basically) what happened is that National Engineering Service Corporation ("NESC") was contracted by a potential employer of Adams to run a background check on Adams. NESC got a company called "Verifications" (who was also a defendant in the lawsuit) to run the background check. Verifications prepared the investigative consumer report which contained errors, namely several convictions that showed up under someone with the same name and date of birth as the plaintiff but was not the plaintiff. Verifications was provided the report by yet another company that was not a defendant but probably should have been. Due to the erroneous criminal record, Adams was not hired.
NESC first claimed that it was not subject to the FCRA because it claimed it was not a consumer reporting agency since it didn't prepare the report since Verifications did. The Court found that NESC is a consumer reporting agency because it "evaluated" the consumer report when its employee commented in an e-mail to the employer that the background check was "not good at all."
The Court then found that the Plaintiff presented sufficient evidence for her 15 U.S.C. 1681e(b) claim to survive. 1681e(b) requires consumer reporting agencies must follow reasonable procedures to assure maximum possible accuracy of the credit reports they create. Most courts (like this one) have held that whether reasonable procedures were used is almost always a question for the jury and thus not appropriate for summary judgment where there is evidence of an error on the credit report. In Adams, the defendants did not contest that the background check contained errors, so the Court found that the plaintiff's 1681e(b) claims survived.
The only claims of the plaintiff that were dismissed were some state law claims, primarily because the court found no evidence of malice on the part of the defendants (just evidence of stupidity, apparently). Since 15 U.S.C. 1681h(e) provides CRAs with qualified immunity from state law claims unless there is malice, the Court dimissed the state law claims for defamation and negligence. It dismissed the other state law claims on other grounds.
The only beef I have with the Court's ruling is that it did not consider all of 1681h(e). 15 U.S.C. 1681h(e) grants qualified immunity for certain state law claims if there is no malice but only for certain disclosures of consumer reports, i.e. disclosures made pursuant to 1681g, 1681h or 1681m. Disclosures pursuant to these sections only go to the consumer himself. Thus, disclosures made to third parties (i.e. Adams' potential employer) do not get the benefit of qualified immunity. In defense of the Court in this case, there are many other Courts that have also missed this point.
Overall, though, a great and informative decision.
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