1681i[c]: Casella v. Equifax

David A. Szwak

1681i[c]: Casella v. Equifax

Postby David A. Szwak » Mon Jan 09, 2006 6:58 pm

Casella v. Equifax Credit Information Services
56 F.3d 469
C.A.2 (N.Y.),1995.
Jun 05, 1995

In June 1993, Casella brought this action against Equifax and Trans Union claiming various violations of the FCRA, including 15 U.S.C. §§ 1681c, 1681i(c), and 1681g(a)(3)(A). Casella alleged, in substance, that appellees had prepared a credit report containing false and defamatory information, and that they had refused either to delete the information or to include a statement of dispute in his credit file after he notified them of the inaccuracy.
*472 In March 1992, following the denial of his applications for credit cards at two banks, Casella obtained copies of his credit reports from Equifax and Trans Union, which contained an entry indicating that he had a past due child support obligation in the amount of $4,350 owing to the San Diego County (California) Revenue & Recovery Unit ("San Diego"). Upon receiving those reports, Casella notified appellees that he disputed the accuracy of the San Diego item and provided documentation from the New York State Family Court indicating that the support obligation had been terminated. He also requested that until the matter with San Diego was resolved, appellees include a statement of dispute in his credit report and provided each appellee with a notarized copy of such statement.
Upon receiving Casella's notification, Equifax deleted the disputed entry. As a result, it did not include appellant's statement of dispute in his credit file. One month later, however, the San Diego entry reappeared in Casella's file. Equifax attributes the reappearance to the fact that San Diego again reported the information. Equifax maintains a computerized database composed largely of accounts receivable information supplied monthly by its subscribers on magnetic computer tapes. According to Equifax, when the tapes are loaded into its database, account information is automatically included in a consumer's credit file. Thus, when San Diego continued to report that Casella had a past due obligation, that information was entered in appellant's credit file. Although appellant received updated credit reports from Equifax in July 1992 and February 1993, he did not again notify the company of the inaccurate information from San Diego.
The situation with Trans Union was different. Instead of deleting the disputed entry, as Equifax did, Trans Union investigated the dispute. When the San Diego authorities confirmed the accuracy of the entry, Trans Union informed Casella that it would continue to report the obligation. It did not, however, include a statement of dispute in appellant's file. The District Court apparently thought that appellant had not provided Trans Union a statement of dispute. The record reflects, however, that on June 16, 1992, counsel for Casella requested that a consumer statement be added to appellant's file and sent a notarized copy of a 100-word statement to Trans Union. After receiving updated credit reports, Casella did not again notify Trans Union that he disputed the accuracy of the San Diego entry or request again that the statement of dispute be included in his file.
In the meantime, Casella sought to resolve his dispute directly with San Diego. On October 28, 1992, San Diego informed appellant that he had a zero balance and indicated that it would notify creditors. Equifax and Trans Union deny ever having received notification. In support of his motion for partial relief from the judgment pursuant to Fed.R.Civ.P. 60(b)(2), however, appellant provided copies of two Universal Data Forms, dated October 9, 1992, and February 4, 1993, purporting to transmit delete instructions to both appellees regarding the San Diego item. On November 2, 1992, San Diego wrote to appellant again, this time advising him that he still owed child support. In December 1992, San Diego reported to Equifax and Trans Union that Casella's child support obligation was past due.
The evidence was undisputed that during the period in which appellees reported the San Diego item in Casella's credit file, he did not apply for, and was never denied, any credit. Appellant contends, however, that he refrained from applying for any new credit out of fear that he would be rejected.
After Casella filed his complaint against Equifax and Trans Union, both defendants moved for summary judgment. Casella cross-moved for summary judgment on his claim that appellees had violated 15 U.S.C. § 1681i(c), by failing to include a dispute statement in any subsequent credit report. [FN1] *473 The District Court denied Casella's motion and granted appellees' motion for summary judgment as to all claims. In so ruling, it considered five issues. First, the Court examined whether appellees had violated 15 U.S.C. § 1681c, by including obsolete data in Casella's credit report. [FN2] It concluded that the evidence was insufficient to support that claim. Next, the Court considered whether appellees' investigations of the disputed item in Casella's report were sufficient, and ruled that as a matter of law both appellees had acted "reasonably." Turning to appellant's claim for violations of 15 U.S.C. § 1681i(c), the Court found that under the circumstances, appellees were not required to include a statement of dispute in appellant's credit file.

FN1. Section 1681i(c) provides that:
Whenever a statement of a dispute is filed, unless there is reasonable grounds to believe that it is frivolous or irrelevant, the consumer reporting agency shall, in any subsequent consumer report containing the information in question, clearly note that it is disputed by the consumer and provide either the consumer's statement or a clear and accurate codification or summary thereof.

FN2. 15 U.S.C. § 1681c provides that:

(a) Except as authorized under subsection (b) of this section, no consumer reporting agency may make any consumer report containing any of the following items of information:

. . . . .
(6) Any ... item of information which antedates the report by more than seven years.

The Court next concluded that Casella had not satisfied his burden of showing that he had suffered any damages as a result of Equifax's or Trans Union's conduct. The District Court rejected Casella's assertions that he was injured because (a) he was discouraged from applying for mortgage loans because the San Diego item was in his credit report and (b) he suffered great emotional distress. In the Court's view, Casella had not shown that appellees, rather than San Diego, were the cause of his injuries. Appellant had also failed to present any evidence of willful noncompliance with any provision of the FCRA, see 15 U.S.C. § 1681n, and thus, punitive damages were inappropriate. Finally, the Court determined that appellant had not presented evidence of either libel or wrongful communication to another credit reporting agency.
Following the District Court's decision and after he filed his notice of appeal in this Court, appellant moved in the District Court for partial relief from the judgment on the grounds of newly discovered evidence. That evidence, as noted above, consisted of two Universal Data Forms accompanied by affidavits from San Diego indicating that appellees had in fact been notified that they should delete the San Diego item. On the basis of this evidence, Casella argued that the District Court's finding that appellees had not acted willfully was erroneous. The District Judge denied Casella's motion on the grounds that (a) the evidence was cumulative, (b) even if not cumulative, it would not have changed the outcome of the case, and (c) the evidence offered could have been discovered earlier with due diligence.
On appeal, Casella raises a host of issues, but because we agree with the District Court that Casella has utterly failed to produce any evidence constituting damages under the FCRA, we need reach only that issue in affirming the judgment of the District Court.


Prior to being notified by a consumer, a credit reporting agency generally has no duty to reinvestigate credit information. See, e.g., 15 U.S.C. § 1681i(a); Swoager v. Credit Bureau of Greater St. Petersburg, 608 F.Supp. 972, 975 (M.D.Fla.1985); see also McPhee v. Chilton Corp., 468 F.Supp. 494, 498 (D.Conn.1978). Moreover, the credit reporting agency need not include a statement of dispute in a consumer's report until the consumer provides one. See 15 U.S.C. § 1681i(c). It is obvious, therefore, that neither Equifax nor Trans Union violated the FCRA before they were contacted by Casella in April and June 1992. Appellant's expenses incurred merely to notify appellees of inaccurate credit information, and not to force their compliance with any specific provision of the statute, cannot be compensable as "actual damages" for a violation of the FCRA.

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