Experian's Arguments re Punitives:Toler v. PHH,etal, WD Ark

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Experian's Arguments re Punitives:Toler v. PHH,etal, WD Ark

Postby Administrator » Fri Nov 21, 2014 3:11 am

C. Plaintiffs Failed to Support Availability of Punitive Damages or Show Willfulness
In the FCRA context, the Eighth Circuit has only affirmed punitive damage awards in
rare instances where "the defendant 'trampl[ ed] recklessly' on the plaintiff's rights under the
FCRA by including 'innuendo, misstatement, and slander' in the plaintiff's credit report, failing
to disclose all of the contents of the report to the plaintiff, and refusing to furnish a copy of the
report to the plaintiff." Edeh v. Equifax Info. Servs., LLC, 974 F. Supp. 2d 1220, 1245 (D. Minn.
2013) (describing Millstone v. O'Hanlon Reports, Inc., 829, 834-35 (8th Cir. 1976». The Eighth
Circuit later described the unique factual showing that led to the affirmation of punitive damages
in Millstone as follows:
In Millstone, an investigative consumer report was prepared in connection with the consumer's application for automobile insurance. The report contained several derogatory statements relating to the consumer's character, including rumored drug use, participation in demonstrations, eviction from prior residences, and complete lack of discipline of his children, all of which were false. The investigator's only source was a person with a strong bias against the consumer. On the basis of the report, the consumer's application for insurance was denied. The district court found the investigator's actions were "so heinous and reprehensible," "so slip-shod and slovenly," and "so wanton as to be clearly willful non-compliance with the Fair Credit Reporting Act."

Case 6:12-cv-06032-RTD Document 262 Filed 11/20/14 Page 7 of 17 PageID #: 7170
Hauser v. Equifax, Inc., 602 F.2d 811, 815 (8th Cir. 1979). Similarly, in the sole other Eighth
Circuit case affirming punitive damages under § 1681n, the Eight Circuit noted:
Here, the district court found that at the very early stages of the underlying litigation, appellant and her associates set out upon a course of conduct, which in the words of [Millstone], ''willfully violated both the spirit and the letter of the Fair Credit Reporting Act ... by trampling recklessly upon [appellees'] rights thereunder." That conduct was obviously a blatant attempt to extract a settlement from Dr. Bakker's insurance carrier, without regard to whether such conduct was fair or a clear violation ofRule 4.4 ofthe Arkansas Rules of Professional Conduct.
Bakker v. McKinnon, 152 F.3d 1007, 1009 (8th Cir. 1998).
Here, Plaintiffs have simply not alleged any conduct of Experian that comes close to the
"reckless trampling" of Plaintiffs' rights shown in Millstone and Bakker. Moreover, as to the
availability of statutory damages under § 1681n(a)(1)(A), Plaintiffs have failed to show any
evidence that Experian intentionally or recklessly violated the FCRA. On the contrary, Plaintiffs'
evidence shows that--even during the pendency of this litigation l-Experian has constantly
sought to report only the accurate and verified information on Plaintiffs' reports. Because
Plaintiffs failed to show evidence of a willful violation, much less actions meeting the standard
for punitive damages in the Eighth Circuit, Experian is entitled to judgment as a matter oflaw on
Plaintiffs' § 1681n claims.

FN 1 - I As a fundamental matter, Plaintiffs' references to post-litigation conduct cannot be evidence of either willfulness or emotional distress-both of which were plead in the initial complaint. See In re Seagate Tech., LLC, 497 F.3d 1360, 1374 (Fed. Cir. 2007) ("[A] willfulness claim asserted in the original complaint must necessarily be grounded exclusively in the accused infringer's pre-filing conduct."); Riley v. Equifax Credit Info. Servs., 194 F. Supp. 2d 1239, 1249 (S.D. Ala. 2002) (holding that post-complaint reports leading to additional credit denials were not properly subject to the lawsuit and could not provide a basis for any damages).
David A. Szwak
Bodenheimer, Jones & Szwak, LLC
416 Travis Street, Suite 1404, Mid South Tower
Shreveport, Louisiana 71101
318-424-1400 / Fax 221-6555
President, Bossier Little League
Chairman, Consumer Protection Section, Louisiana State Bar Association

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