What is Willfulness?

David A. Szwak

What is Willfulness?

Postby David A. Szwak » Fri Oct 07, 2005 11:02 pm

The FCRA describes violations of the Act as negligent or “willful.” While the courts have routinely adopted the plain language meaning of "negligent," the courts have not been so clear about what "willful" means. It might be that due to the imposition of exemplary or punitive damages for willful violations, the courts have used more conservative and strict definitions of willful. [b:d965c52579]The question is why?[/b:d965c52579] The FCRA is to be [b:d965c52579]liberally construed and in favor of the consumer and recovery by the consumer[/b:d965c52579]. Further, the law is very clear in that "[I]n the absence of statutory definition, a statutory term will be accorded its [b:d965c52579][u:d965c52579]ordinary meaning[/u:d965c52579][/b:d965c52579]." Romine v. Diversified Collection Services, Inc., 155 F.3d 1142 [9th Cir. 1998]; Northwest Forest Resource v. Glickman, 82 F.3d 825, 833 [9th Cir. 1996].

One must look to the clear language and plain words as a presumption exists that the Congress intended the plain language to apply in light of the purpose of the statute. Louisiana Credit Union League v. U.S., 693 F.2d 525 [5th Cir. 1982] [La.]; Perrin v. U.S., 100 S.Ct. 311, 444 U.S. 37 [1979]; Clardy v. U.S., 760 F.2d 590 [5th Cir. 1985]; State of Louisiana, ex rel Guste v. U.S., 656 F.Supp. 1310 [U.S.D.C. W.D. La. 1986], affirmed, 832 F.2d 935 [5th Cir.].

What does "willful" really mean? [u:d965c52579]"Willful" means "not accidental," or "on purpose, hence, knowingly, intentionally, and carelessly done in violation of law, and in disregard of the safety of the public[/u:d965c52579]." Dun & Bradstreet, Inc. v. Nicklaus, 340 F.2d 882 (8th Cir. 1965) [Ark.], cert. denied, 382 U.S. 825, 15 L.Ed.2d 70, 86 S.Ct. 57; Dun & Bradstreet, Inc. v. Robinson, 345 S.W.2d 34 (Ark. 1961); Dun & Bradstreet, Inc. v. O'Neil, 456 S.W.2d 896 (Tex. 1970).

[u:d965c52579][b:d965c52579]"Willful" also means "not accidental."[/b:d965c52579][/u:d965c52579] Southern Fleet Leasing Corp. v. Brown, 257 So.2d 819 (La. App. 1 Cir. 1972).

[u:d965c52579][b:d965c52579]“Willful" also means "proceeding from a conscious motion of the will; voluntary; knowingly; deliberate; intending the result which actually comes to pass; designed; intentional; purposeful; not accidental or involuntary."[/b:d965c52579][/u:d965c52579] Grant v. Natchitoches Manor Nursing Home, 696 So.2d 73, 76 (La. App. 3 Cir. 1997), w.d., 701 So.2d 1330 (La. 1997); Parfait v. Gulf Island Fabrication, Inc., 733 So.2d 11 (La. App. 1 Cir. 1999); Friendly Finance Service, Mid City, Inc. v. Sanders, 251 So.2d 644 (La. App. 2 Cir. 1971); Black's Law Dictionary [6th Ed. 1990], p. 1599.

[u:d965c52579][b:d965c52579]Other courts have found that "willful" means a thing done without ground for believing it is lawful, or conduct marked by careless disregard whether or not one has the right so to act.[/b:d965c52579][/u:d965c52579] Johnson v. Aymond, 722 So.2d 1224, 1234 (La. App. 3 Cir. 1998); U.S. v. Murdock, 290 U.S. 389, 54 S.Ct. 223, 78 L.Ed.2d 381 (1933).
[u:d965c52579][b:d965c52579]
"Willful" connotes an act which may be intentional, or knowing, or voluntary, as distinguished from accidental or pure happenstance.[/b:d965c52579][/u:d965c52579] Id.

[u:d965c52579][b:d965c52579]Of course, the Tenth Circuit has followed the line of case law defining “willful” as instances where the act or omission was done knowingly or with reckless disregard for the consequences.[/b:d965c52579][/u:d965c52579] Furr v. A.T.&T. Technologies, 824 F.2d 1537, 1546 [10th Cir. 1985].

The U.S. Supreme Court provided some guidance in defining “willful” by adopting the definition listed in 30 American and English Encyclopedia of Law 529-530 [2d ed. 1905], which defined [u:d965c52579][b:d965c52579]willful in terms of “voluntary action” and which “implies nothing blamable” but merely that the person’s act or omission is used as a free agent and, if an affirmative act, what was done arose from spontaneous action of his will[/b:d965c52579][/u:d965c52579]. Smith v. Wade, 461 U.S. 30, 103 S.Ct. 1625 [1981].

David A. Szwak

Postby David A. Szwak » Tue Oct 11, 2005 6:30 pm

To be in willful non-compliance with the FCRA, a defendant must have knowingly and intentionally committed an action or inaction in conscious disregard for the rights of others. Proof of malice or evil motive is not necessary. Stevenson v. TRW, Inc., 987 F.2d 288, 293 (5th Cir. 1993); Pinner v. Schmidt, 805 F.2d 1258, 1263 (5th Cir. 1986); Fischl v. GMAC, 708 F.2d 143, 151 (5th Cir. 1983); Jones v. Credit Bureau of Huntington, Inc., 703 F.Supp. 897 (U.S.D.C. Kan. 1988).

David A. Szwak

Postby David A. Szwak » Fri Oct 14, 2005 5:11 am

"The third issue raised by Experian is the recovery of punitive damages under the FCRA, and the need for a willful violation to be proved. See Title 15 U.S.C. § 1681n. A credit reporting agency has willfully violated the FCRA when it "knowingly and intentionally commit[s] an act in conscious disregard for the rights of others. See Cousins, 246 F.3d at 372. As discussed above in the Court's analysis of the exception under 15 U.S.C. § 1681p, Experian's conscious actions to (1) place a fraud alert on Comeaux's account, without ascertaining whether, in fact, she was a victim of fraud; (2) by falsely in forming Comeaux that her social security number was not on file or attainable; (3) and most importantly, ignoring any discrepancies and/or inaccuracies (as referenced in Experian depo. R. Holt) is a knowingly and intentional misrepresentation by Experian of the rights afforded to Comeaux.

"The FCRA was drafted to "prevent consumers from being unjustly damaged because of inaccurate or arbitrary information in a credit report." See Equifax, Inc. v. Federal Trade Comm'n, 678 F.2d 1047, 1048 [11th Cir.1982]. Comeaux has met the exception as provided under 15 U.S.C. § 1681p, and has demonstrated a causal link between her professed damages, as referenced in the above discussed credit denials, and Experian's inaccurate reporting. Any willfulness by Experian has been demonstrated through their conscious and intentional disregard for any discrepancies and/or inaccuracies despite being notified by Mrs. Carr in 1997 and Comeaux in 1999; for falsely informing Comeaux that her social security number was not on file or attainable; and by placing a fraud alert on Comeaux's file based solely on a consumer's representation, without ever ascertaining if Comeaux was, in fact, a victim of fraud. After due consideration, this Court finds that a genuine issue of material fact exists as to the willfulness of Experian, and the causal link between Comeaux's alleged damages, and any inaccurate reporting by Experian."

Comeaux v. Experian Information Solutions
Not Reported in F.Supp.2d, 2004 WestLaw 1354412
E.D.Tex.,2004.

David A. Szwak

Postby David A. Szwak » Tue Oct 18, 2005 10:32 pm

Wilfullness

"Willful" means "not accidental," or "on purpose, hence, knowingly, intentionally, and carelessly done in violation of law, and in disregard of the safety of the public." Coleman v. White, 95 S.W.2d 1018, 1019 (Ct. Civ. App. Beaumont 1936); Bowers v. Bingham, 159 S.W.2d 576, 577 (Ct. Civ. App. Amarillo 1942); 68 C.J.S. sec.3, p.268. "Willful" also means "not accidental." Southern Fleet Leasing Corp. v. Brown, 257 So.2d 819 (La. App. 1 Cir. 1972). "Willful" also means "proceeding from a conscious motion of the will; voluntary; knowingly; deliberate; intending the result which actually comes to pass; designed; intentional; purposeful; not accidental or involuntary." Grant v. Natchitoches Manor Nursing Home, 696 So.2d 73, 76 (La. App. 3 Cir. 1997), w.d., 701 So.2d 1330 (La. 1997); Parfait v. Gulf Island Fabrication, Inc., 733 So.2d 11 (La. App. 1 Cir. 1999); Friendly Finance Service, Mid City, Inc. v. Sanders, 251 So.2d 644 (La. App. 2 Cir. 1971); Black's Law Dictionary [6th Ed. 1990], p. 1599. Other courts have found that "willful" means a thing done without ground for believing it is lawful, or conduct marked by careless disregard whether or not one has the right so to act. Johnson v. Aymond, 722 So.2d 1224, 1234 (La. App. 3 Cir. 1998); U.S. v. Murdock, 290 U.S. 389, 54 S.Ct. 223, 78 L.Ed.2d 381 (1933). "Willful" connotes an act which is intentional, or knowing, or voluntary, as distinguished from accidental or pure happenstance. Id.

David A. Szwak

Not Malicious: Franks v. Thomason

Postby David A. Szwak » Wed Oct 19, 2005 5:42 pm

Franks v. Thomason [1980, N.D. Ga.] 4 B.R. 814.

"Willful" within meaning of FCRA [standard for determining willful violation] is different from standard use to find willful and malicious injury within context of former Bankruptcy Act; judgment against debtor for injury to plaintiff arising out of disclosure of credit report was dischargeable in bankruptcy, notwithstanding that debtor obtained report by false pretenses and failed to disclose to plaintiff that he had obtained report, unless disclosure of report was also done willfully, rather than negligently, with intent that contents be publicized and injure plaintiff.

David A. Szwak

Postby David A. Szwak » Mon Oct 24, 2005 9:00 am

"To show willful noncompliance with the FCRA, [the consumer] must show that [the credit agency] 'knowingly and intentionally committed an act in conscious disregard for the rights of others,' but need not show 'malice or evil motive.'" Cushman, 115 F.3d 220, 226 (3d Cir. 1997) (citing Philbin, 101 F.3d at 970. In Cushman, the Third Circuit held that only defendants who have engaged in actions "on the same order as willful concealment or misrepresentations" have committed a willful violation for FCRA purposes, and are subject to punitive damages under 1681n. Cushman, 115 F.3d at 227. To justify an award of punitive damages, O'Connor must prove that Trans Union adopted its reinvestigation policy either knowing that policy to be in contravention of the rights possessed by consumers pursuant to the FCRA or in reckless disregard of whether the policy contravened those rights. See id.” James J. O'Connor v. Trans Union Corp., Civil Action No. 97-4633 [U.S.D.C. E.D. Pa. 9/28/99].

David A. Szwak

Postby David A. Szwak » Thu Oct 27, 2005 8:13 pm

Raymond v. Raymond
Slip Copy, 2005 WL 2491442
N.D.Ill.,2005

To act willfully, a defendant must knowingly and willfully violate the Act and must also be conscious that its action impinges on the rights of others. Wantz v. Experian Info. Solutions, 386 F.3d 829, 834 (7th Cir.2004). It is reasonable to infer that the defendants, as attorneys, would have known that using the consumer report for an unauthorized purpose violated the FCRA.

David A. Szwak

Postby David A. Szwak » Sun Oct 30, 2005 1:09 pm

Liability under the FCRA attaches for both negligent violations, which require a showing of actual damages, see 15 U.S.C. § 1681o, and willful violations, for which statutory and punitive damages are available, see 15 U.S.C. § 1681n. Willful violations require "conscious disregard" or "deliberate and purposeful" conduct. Casella v. Equifax Credit Info. Servs., 56 F.3d 469, 476 (2d Cir.1995). It is premature to conclude that any alleged failure to investigate was not willful. (See Recommended Ruling, at 9 ("The defendant has not offered any evidence regarding what, if anything, it did to investigate the dispute.")). Thus, defendant's argument for summary judgment on the ground of absence of damages under the FRCA also fails (again this is relevant only insofar as it informs plaintiff's CUTPA claim).

Rosenberg v. Cavalry Investments, LLC
Slip Copy, 2005 WL 2490353
D.Conn.,2005.

David A. Szwak

Postby David A. Szwak » Sun Oct 30, 2005 10:03 pm

Franks v. Thomason [1980, N.D. Ga.] 4 B.R. 814.

"Willful" within meaning of FCRA [standard for determining willful violation] is different from standard use to find willful and malicious injury within context of former Bankruptcy Act; judgment against debtor for injury to plaintiff arising out of disclosure of credit report was dischargeable in bankruptcy, notwithstanding that debtor obtained report by false pretenses and failed to disclose to plaintiff that he had obtained report, unless disclosure of report was also done willfully, rather than negligently, with intent that contents be publicized and injure plaintiff.

David A. Szwak

Postby David A. Szwak » Tue Nov 01, 2005 6:39 pm

Millstone v. O'Hanlon Reports, Inc.
[1976, 8th Cir.] [Mo.]
528 F.2d 829,

The court held that where an agent for a consumer credit reporting agency had based his report solely on the false allegations of one biased informant and falsely claimed that the report was based upon interviews with four people, the agency was liable for willful noncompliance with the reasonable procedure requirement of 1681e[b].

The report contained, among other falsehoods, allegations that a poll of four neighbors at an auto insurance applicant's former address indicated that they all disliked him, considered him to be a "hippie" type, and strongly suspected that he was a drug user.

The court, noting that the agent had spent, at most, 30 minutes in preparing the report, said that it was rife with innuendo, misstatement, and slander. Despite an agency requirement that there must be verification of information given by any one informant, the agent did not verify the information received from the one informant, and a 3-day recheck of the original investigation showed that every reported allegation was false. The court said that it was amazed that the agency claimed that its agent followed reasonable procedures promulgated by it to attain maximum possible accuracy, because everything in the record was to the contrary.

The court said that there was no doubt that the agency had willfully violated the spirit and letter of the FCRA, by trampling recklessly upon the applicant's rights thereunder.

David A. Szwak

TRW Employee Pulls Ex-Spouse's Report:Crazy Result

Postby David A. Szwak » Tue Nov 01, 2005 10:01 pm

Wright v. TRW, Inc.
872 F.2d 420, 1989 Westlaw 27516
[4th Cir.[Va.]],March 20, 1989.

Wright brought an action for punitive damages against TRW, Inc., allegedly arising from a violation of the FCRA. Wright's complaint alleged that TRW had, with neither lawful justification nor Wright's permission, intentionally sought out and obtained statutorily protected, private credit information about Wright in violation of FCRA.

Wright was awarded partial summary judgment because the court found that TRW had obtained credit information on Wright for an impermissible purpose.

The case went to trial on the issues of whether TRW had intentionally committed the violations, and if so, the amount of punitive damages to be awarded.

The trial judge denied Wright's motion for a directed verdict.

The jury returned a verdict in favor of TRW, specifically finding that there was no willful violation by TRW.

Wright’s wife, Gore, worked at TRW as a "Manager of Government Relations" in its office in Arlington, Virginia. Wright and Gore were having marital problems. Gore left their home and filed for divorce. Gore told Jack Carter, her supervisor at TRW, about the divorce and restraining order. He arranged for certain precautions so that Gore would be safe at work.

Pat Duckworth, the security representative at TRW, also learned of Gore's problems. She told H. Lee Walters, her superior in security matters, who related the information to his assistant, James Crandall, requesting that he check it out. Crandall, following standard procedures for background investigations, obtained a credit report. What was different about this one from the 15 to 30 background checks Crandall did a month was the fact that Wright was a non-employee. Nor was Wright applying for a job. When Crandall reported his findings to Walters, Walters apparently realized for the first time that he had caused Crandall to run a credit check on a non-employee. No further action was taken and the file was returned to the investigative office. Wright learned of the credit check and complained to TRW. As a result of TRW's internal investigation of Wright's complaint, Walters was suspended for two weeks without pay.

Wright argued that willfulness is satisfied if it is established that the user acted "purposefully and with full knowledge of what [he] was doing." Yohay v. City of Alexandria Employees Credit Union, 827 F.2d 967, 972 n. 8 [4th Cir.1987]. TRW disagreed and asserted that the proper definition is reflected in Yohay at 969-70 and in the court's order granting partial summary judgment. The court agreed with TRW, finding the correct legal definition of willfulness is "voluntarily and intentionally, and not because of negligence, mistake,...." Id. Although there was testimony by Crandall that he had denied it was an accident, Walters specifically testified that TRW's employees engaged in the matter really did not think about what they were doing and merely overlooked the fact that Wright was a non-employee. The jury could certainly have inferred a lack of willfulness from the testimony, if it chose to credit it. Alternatively, the record supports a conclusion that TRW acted for an innocent reason, i.e., to assess a threat to one of its employees. The evidence showed that TRW took other prudent security steps such as installing locks on the office door and providing valet parking for Gore. Wright did not plead, as part of his original claim, that TRW had negligently violated the FCRA. Walters, the security person at TRW, testified that he knew of threats against Gore, and, therefore, told Crandall to investigate Wright. Wright then testified that he did not beat his wife on July 15, 1985, supposedly to make the point that the "security problem" which Walters acted upon never existed. However, as the court explained, the real issue to which Wright should have testified was not whether or not Wright had actually abused Gore, but whether Walters could or should have reasonably relied on the information, true or not, in ordering the credit check. Wright's own testimony placed the truth of whether or not there was an assault in issue because Wright denied that he had assaulted his wife. After such testimony, it was proper for TRW's counsel to offer evidence to show that the assault had occurred. From discussions at the bench, Wright's attorney was forewarned that just that situation could arise, especially since punitive damages were the main issue, and they turned on a finding of willfulness. The judge did not improperly exclude rebuttal evidence on the issue of the actuality of the assault. The real issue was whether the assault was reported to Walters, not whether it actually occurred.

David A. Szwak

Postby David A. Szwak » Thu Nov 03, 2005 1:35 pm

Riley v. Equifax Credit Information Services
194 F.Supp.2d 1239
S.D.Ala.,2002.

However, here, the Plaintiffs have provided the Court with no evidence that Trans Union " 'knowingly and intentionally committed an act in conscious disregard for" ' the Plaintiffs' § 1681e(b) rights. Cousin, 246 F.3d at 372. As in Dalton v. Capital Assoc. Indus., Inc., 257 F.3d 409, 418 (4th Cir.2001), summary judgment as to the Plaintiffs' claim for punitive damages under § 1681e(b) is appropriate, because "evidence that [Trans Union] acted willfully is wholly lacking."

David A. Szwak

Postby David A. Szwak » Fri Nov 11, 2005 1:59 pm

Nielsen v. U.S. Bank
Not Reported in F.Supp.2d, 2005 WL 189709
D.Minn.,2005.

The above-entitled matter came on for hearing before the undersigned United States District Judge on December 3, 2004, pursuant to Defendants U.S. Bank's ("U.S.Bank") Motion for Partial Summary Judgment and Experian Marketing Solutions, Inc.'s ("Experian") and Trans Union, LLC's ("Trans Union") Motions for Summary Judgment. Experian reached a settlement with Plaintiffs Kent and June Nielsen prior to the hearing. Further, Plaintiffs conceded that summary judgment was appropriate as to one of their claims brought pursuant to the Fair Credit Reporting Act ("FCRA"), §§ 1681-1681u, and as to their defamation claim brought against U.S. Bank. Accordingly, Experian's Motion for Summary Judgment is moot and the Court grants U.S. Bank's Motion for Partial Summary Judgment. For the reasons outlined below, the Court grants in part and denies in part Trans Union's Motion for Summary Judgment

Background
Trans Union is a consumer reporting agency. As a consumer reporting agency, Trans Union collects credit information provided to it by other sources and generates consumer reports that are then given to consumers or others. Trans Union also maintains the credit files of millions of consumers.
When a consumer disputes the veracity of the information compiled by Trans Union, Trans Union investigates the dispute using one of two systems developed for the purpose of processing and tracking disputes: the Consumer Dispute Verification process ("CDV") and the Automated Consumer Dispute Verification process ("ACDV"). The CDV process involves Trans Union contacting the party that is providing the disputed information (the "Furnisher"). Trans Union asks the party to verify certain personal information regarding the consumer and to verify the accuracy of the financial information being reported to Trans Union.
If the Furnisher verifies the information, Trans Union maintains the information as it exists in Trans Union's database. If the Furnisher reports that the information is inaccurate, Trans Union either deletes the information from the consumer's credit file or modifies that information. Trans Union then notifies the consumer of the results of the investigation.
On February 26, 2002, Plaintiffs received notice that their application for a line of credit at Sam's Club had been denied because of bankruptcy proceedings that had been reported to Sam's Club by Experian, a consumer reporting agency. Thereafter, Plaintiffs contacted Experian and U.S. Bank, the provider of the loan that was purportedly dissolved in the bankruptcy proceeding, to have the information regarding the bankruptcy removed from Plaintiff's credit history. At one time, Plaintiffs had an auto loan with U.S. Bank, but Plaintiffs had never filed for bankruptcy or been late with any of their payments on the loan. In fact, Plaintiffs paid off the loan earlier than was expected under the terms of the loan agreement. Plaintiffs assert that U.S. Bank told them that it had notified all of the credit reporting agencies of the error.
*2 On April 16, 2002, June Nielsen requested a copy of her consumer report from Trans Union. Despite U.S. Bank's previous assurances, the report still contained the reference to the bankruptcy. On April 22, 2002, June Nielsen contacted Trans Union via telephone. During the telephone call, she disputed the veracity of the bankruptcy notation. Thus, Trans Union initiated an investigation of the accuracy of the information.
On April 23, 2002, Trans Union submitted a CDV to U.S. Bank. In the CDV, Trans Union advised U.S. Bank of the nature of June Nielsen's dispute. The CDV stated, in part, "Acct reaffirmed or not included in Bkrpcy. Update Consumer Info Indictr, Acct Status, Curr Bal and Pymt Hist Profile." (Affidavit of Eileen Little ("Little Aff."), ¶ 15, Ex. 1.)
U.S. Bank returned the CDV to Trans Union stating that Trans Union should "change data as shown" but without any direction as to how the U.S. Bank account's information should be changed. (Little Aff., ¶ 16, Ex. 1.) Because U.S. Bank did not provide specific information regarding the account, Trans Union deleted the entire U.S. Bank account from June Nielsen's consumer credit report. Trans Union mailed June Nielsen the results of its investigation on May 17, 2002.
Kent Nielsen claims that he contacted Trans Union in either March or April of 2002 regarding the erroneous information. Kent Nielsen asserts that Trans Union took no action with regard to his request for an investigation. Trans Union denies that this contact ever took place.
On July 3, 2002, Kent Nielsen contacted Trans Union to request a copy of his credit report after he was denied credit while attempting to obtain an automobile loan. He claims that the car dealership had run a credit report and that the report contained the erroneous bankruptcy notation. However, the credit report that Kent Nielsen received from Trans Union contained information regarding the U.S. Bank loan, but did not contain information regarding the purported bankruptcy.

Discussion
I. Standard of Review
Summary judgment is proper if there are no disputed issues of material fact and the moving party is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(c). The court must view the evidence and the inferences that may be reasonably drawn from the evidence in the light most favorable to the nonmoving party. See Enter. Bank v. Magna Bank of Missouri, 92 F.3d 743, 747 (8th Cir.1996). However, as the Supreme Court has stated, "[s]ummary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed 'to secure the just, speedy, and inexpensive determination of every action." ' Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986) (quoting Fed.R.Civ.P. 1).
The moving party bears the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. See Enter. Bank, 92 F.3d at 747. The nonmoving party must demonstrate the existence of specific facts in the record which create a genuine issue for trial. See Krenik v. County of Le Sueur, 47 F.3d 953, 957 (8th Cir.1995). A party opposing a properly supported motion for summary judgment may not rest upon mere allegations or denials, but must set forth specific facts showing that there is a genuine issue for trial. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986); Krenik, 47 F.3d at 957.
II. Trans Union's Motion for Summary Judgment
A. FCRA Section 1681i
*3 Section 1681i(a) of the FCRA sets forth the procedure that consumer reporting agencies must follow when conducting consumer information investigations. [FN1] Section 1681i(a) states:


FN1. At various points in their brief, Plaintiffs refer to a consumer
reporting agency's duty pursuant to 15 U.S.C. § 1681e to maintain reasonable procedures to assure maximum possible accuracy concerning information contained in consumer reports. Plaintiffs' reliance on Section 1681e is misplaced for two reasons. First, Plaintiffs have never alleged that Trans Union violated Section 1681e. Second, the duty to reinvestigate imposed by 15 U.S.C. § 1681i is more stringent than the duty set out in Section 1681e. See Sarver v. Experian Information Solutions, Inc., 299 F.Supp.2d 875, 877 n. 1 (N.D.Ill.2004).


If the completeness or accuracy of any item of information contained in a consumer's file at a consumer reporting agency is disputed by the consumer and the consumer notifies the agency directly of such dispute, the agency shall reinvestigate free of charge and record the current status of the disputed information, or delete the item from the file in accordance with paragraph (5), before the end of the 30-day period beginning on the date on which the agency receives the notice of the dispute from the consumer.
Paragraph five provides that after the investigation takes place, if "an item of the information is found to be inaccurate or incomplete or cannot be verified, the consumer reporting agency shall promptly delete that item of information from the consumer's file or modify that item of information, as appropriate, based on the results of the reinvestigation."
1. Kent Nielsen's FCRA Section 1681i Claim
Kent Nielsen asserts that he initially contacted Trans Union in March or April of 2002 regarding the erroneous bankruptcy notation. He claims that when he contacted Trans Union, he requested that Trans Union investigate the bankruptcy notation. Trans Union denies that Kent Nielsen ever contacted it before July 3, 2002. When Kent Nielsen contacted Trans Union in July, Trans Union asserts that he merely requested a copy of his consumer report. Trans Union sent Kent Nielsen a copy of his consumer credit report the same day that he made the request.
Trans Union contends that Kent Nielsen lacks standing to bring a Section 1681i claim because he never initiated a dispute. Trans Union points out that in his deposition, Kent Nielsen only testified that he "believes" he contacted Trans Union in April or March 2002. Trans Union also points out that Kent Nielsen responded to its interrogatories by stating that his first contact with Trans Union was as a result of his denial of credit in July 2002.
Based on a review of Kent Nielsen's deposition testimony and his answers to Trans Union's interrogatories, the Court finds that he lacks standing to bring a Section 1681i claim. In order to raise a genuine issue of material fact, Kent Nielsen needed to definitively allege that he requested that Trans Union investigate the U.S. Bank account. He failed to do so. Therefore, the Court grants Trans Union's Motion for Summary Judgment as to Kent Nielsen's FCRA claim because "the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment...." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986).

B. FCRA Section 1681n
Plaintiffs contend that Trans Union "willfully" violated Section 1681i, subjecting Trans Union to liability under Section 1681n. Section 1681n provides that any consumer reporting agency or user of information which "willfully fails to comply with any requirement imposed under this subchapter with respect to any consumer is liable to that consumer...." 15 U.S.C. § 1681n. Trans Union denies that it violated Section 1681n.
The Court has reviewed the record before it and finds that Plaintiffs have failed to present any evidence showing that Trans Union "knowingly and intentionally committed an act in conscious disregard for the rights of others." Phillips v. Grendahl, 312 F.3d 357, 368 (8th Cir.2002). Thus, summary judgment is granted as to Plaintiffs' Section 1681n claim.


The malice or willful intent to injure required to establish a claim under 1681h(e) is of a higher degree than that required to establish a 1681n claim. See Reed v. Experian Information Solutions, Inc., 321 F.Supp.2d 1109, 1117 (D.Minn.2004). As previously stated in the Court's analysis of the 1681n claim, the Court finds that Plaintiffs have failed to present evidence that Trans Union's actions were motivated by malice or the willful intent to injure. Accordingly, the Court grants Trans Union's Motion for Summary Judgment as to this claim.

David A. Szwak

Postby David A. Szwak » Sun Dec 04, 2005 9:48 am

Spector v. Experian Information Services Inc.
321 F.Supp.2d 348
D.Conn.,2004.


Plaintiff has also failed to present any evidence of willful noncompliance with any provision of the FCRA. See 15 U.S.C. § 1681n. Under the FCRA, "any person who willfully fails to comply with any requirement imposed under [the FCRA] with respect to any consumer is liable to that consumer in an amount equal to the sum of ... such amount of punitive damages as the court may allow." 15 U.S.C. § 1681n. Plaintiff is correct that punitive damages may be available even where a plaintiff has sustained no actual damages. See 15 U.S.C. § 1681n(2); Casella, 56 F.3d at 476; Boothe v. TRW Credit Data, 557 F.Supp. 66, 71-72 (S.D.N.Y.1982). However, to survive summary judgment on a willful non-compliance claim, a plaintiff must set forth affirmative evidence demonstrating "conscious disregard" or "deliberate and purposeful" actions necessary to make out a claim for willful noncompliance under the FCRA. 56 F.3d at 476 (quoting *358 Pinner v. Schmidt, 805 F.2d 1258, 1263 (5th Cir.1986))("[i]n each case where punitive damages have been allowed the defendant's conduct involved willful misrepresentations or concealments.") Based on the record before this court, there is no evidence that Wachovia engaged in deliberate or reckless conduct that would warrant punitive damages. In fact, plaintiff admits that "Wachovia followed its normal procedure in responding to plaintiff's dispute and has no information indicative of any departure from normal procedures." (Pl.'s Rule 56(a)(1) Statement). Accordingly, summary judgment is also granted in favor of defendants on plaintiff's claim of willful non-compliance.


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