395 F.Supp.2d 822
United States District Court,
Doris M. GOHMAN, Plaintiff,
EQUIFAX INFORMATION SERVICES, LLC, Defendant.
No. Civ. 03-6442DSDJSM.
July 21, 2005.
Background: Consumer brought claims against credit reporting agency (CRA) for violation of Fair Credit Reporting Act (FCRA), credit defamation, and tortious interference with credit expectancy, alleging CRA's failure to maintain reasonable procedures calculated to ensure the maximum possible accuracy of consumer credit reports.
Holdings: On defendant's motion for summary judgment, the District Court, Doty, J., held that:
(1) duty under FCRA to maintain reasonable procedures calculated to ensure maximum possible accuracy of consumer credit reports is not limited to CRAs that own and maintain credit files;
(2) genuine issues of material fact precluded summary judgment as to whether CRA violated FCRA;
(3) consumer did not show alleged violations were willful, as basis for punitive damages; and
(4) FCRA preempted state law claims.
Motion granted in part.
Equifax asserts that FCRA preempts plaintiff's state law claims for credit defamation and tortious interference with credit expectancy. Equifax relies on 15 U.S.C. § 1681h(e), which states in full:
except as provided in sections 1681n and 1681o of this title, no consumer may bring any action or proceeding in the nature of defamation, invasion of privacy, or negligence with respect to the reporting of information against any consumer reporting agency, any user of information or any person who furnishes information tot a consumer reporting agency, based on information disclosed pursuant to section 1681g, 1681h, or 1681m of this title, or based on information disclosed by a user of a consumer report to or for a consumer against whom the user has taken adverse action, *829 based in whole or in part on the report except as to false information furnished with malice or willful intent to injure such consumer.
In response, plaintiff argues that section 1681h(e) does not apply because her claims are not based on disclosures pursuant to sections 1681g, 1681h or 1681m. See id. Those sections govern required disclosures to consumers and not disclosures to third parties. However, plaintiff testified that Equifax disclosed her credit information to her when she called and requested such a disclosure. (See Gohman Dep. at 105-06 (July 20, 2004); Compl. Ex. 28.) Based on her testimony, the disclosure was provided as required by section 1681g(a) and included the erroneous information that is the basis of her section 1681e(b) claim. Therefore, section 1681h applies. [FN4] See Thornton v. Equifax, Inc., 619 F.2d 700, 703-04 (8th Cir.1980); Graham v. CSC Credit Servs., Inc., 306 F.Supp.2d 873, 882 (D.Minn.2004) (later disclosure by defendant pursuant to section 1681g entitles it to "qualified immunity" under section 1681h(e)).
FN4. Other courts have found that section 1681h(e) preempts state law claims even in the absence of disclosures made pursuant to section 1681g, 1681h or 1681m. See, e.g., McKeown, 335 F.Supp.2d at 942- 43. However, the court declines to adopt this position for two reasons. First, the text of section 1681h(e) unambiguously requires such a disclosure for its preemptive effect to apply. Second, the Eighth Circuit has held that FCRA " 'does not preclude an action at common law except
where information that would give rise to a cause of action is obtained by the complainant pursuant to the provisions of the Act.' " Thornton, 619 F.2d at 703 (quoting Hood v. Dun & Bradstreet, Inc., 486 F.2d 25, 32 (5th Cir.1973)).
 Plaintiff also argues that section 1681h does not preempt her state law claims because Equifax acted with malice or willful intent to injure her when it "unreasonably" adopted procedures that led to the inaccurate credit reports. False information is reported with "malice or willful intent to injure" for purposes of section 1681h(e) if done " 'with knowledge that it was false or with reckless disregard of whether it was false or not.' " Thornton, 619 F.2d at 705 (quoting New York Times v. Sullivan, 376 U.S. 254, 279-80, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964)); see also Weinberger v. Maplewood Review, 668 N.W.2d 667, 673 (Minn.2003). Malice is more than mere negligence "and probably even more than highly unreasonable conduct." Hirman v. Rogers, 257 N.W.2d 563, 566 (Minn.1977). Here, plaintiff has pointed only to alleged unreasonable conduct by Equifax. Such conduct alone is insufficient to show malice or willful intent to injure. Furthermore, plaintiff testified in her deposition that she does not allege that Equifax had any malice towards her or willful intent to injure her. (See Gohman Dep. at 116-17 (July 20, 2004).) Therefore, summary judgment is warranted on plaintiff's state law claims.
Postby David A. Szwak » Thu Jan 12, 2006 6:08 pm
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