1681e[b] Explained By Judge Ward:Pace v. Experian

Maximum Possible Accuracy
David A. Szwak

1681e[b] Explained By Judge Ward:Pace v. Experian

Postby David A. Szwak » Sun Nov 13, 2005 10:54 pm

Pace v. Experian Information Solutions Inc.
Not Reported in F.Supp.2d, 2004 WL 1057795

To prove negligent noncompliance with § 1681e(b), a plaintiff must establish that (1) inaccurate information was included in his credit report; (2) the inaccuracy was due to the defendant's failure to follow reasonable procedures to assure maximum possible accuracy; (3) the plaintiff suffered injury; and (4) the injury was caused by the inclusion of the inaccurate entry. See Zala v. Trans Union, L.L.C., 2001 WL 210693, at *3 (N.D.Tex. Jan.17, 2001). Under § 1681e(b), a plaintiff must demonstrate that an inaccuracy in a credit report resulted from negligent failure to use reasonable procedures when the report originally was prepared, not upon reinvestigation. Sepulvado v. CSC Credit Services, Inc., 158 F.3d 890, 895 (5th Cir.1998), cert. denied, 526 U.S. 1044, 119 S.Ct. 1344, 143 L.Ed.2d 507 (1999); Swoager v. Credit Bureau of Greater St. Petersburg, Florida, 608 F.Supp. 972, 974-75 (M.D.Fla.1985). The FCRA, however, "does not impose strict liability for inaccurate entries." Sepulvado, 158 F.3d at 896. "The standard of conduct by which the trier of fact must judge the adequacy of agency procedures is what a reasonably prudent person would do under the circumstances." Thompson v. San Antonio Retail Merchants Assoc., 682 F.2d 509, 513 (5th Cir.1982). Section 1681e(b) "does not require that a consumer reporting agency follow reasonable procedures to assure simply that the consumer report be 'accurate,' but to assure 'maximum possible accuracy." ' Pinner, 805 F.2d at 1263.
*2 Although Experian urges that its procedures were reasonable as a matter of law, the court disagrees and holds that the reasonableness of the procedures is a question for the jury. The court notes that this holding on this issue is consistent with the holding of several other courts, including those in this district. See Crabill v. Trans Union L.L.C., 259 F.3d 662, 664 (7th Cir.2001)("The determination of the 'reasonableness' of the defendant's procedures, like other questions concerning the application of a legal standard to given facts (notably negligence, a failure to exercise reasonable care), is treated as a factual question even when the underlying facts are undisputed. It therefore cannot be resolved on summary judgment unless the reasonableness or unreasonableness of the procedures is beyond question, which it is not in this case."). As the court said in Jensen v. Experian Info. Solutions, Inc., 2001 WL 1045510 (E.D.Tex. March 30, 2001)(Faulkner, Magistrate Judge):
The mere fact that inaccurate information appeared on Plaintiff's credit report does not make Experian liable or demonstrate that reasonable procedures were not followed. The law does not hold Experian strictly liable for the reporting of inaccurate information. The question that must be decided is did Experian follow reasonable procedures in creating Plaintiff's credit report. Experian has presented evidence explaining the procedures it follows in creating credit reports. The Court finds that in this case this decision cannot be settled by a motion for summary judgment. The question of whether Experian followed reasonable procedures must be decided by the trier of fact at trial. Summary judgment should be denied on Plaintiff's claim that Experian violated § 1681e(b).
The question whether Experian violated § 1681e(b) is for the jury.

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