1681i[a][5]:Thomas v. Gulf Coast Credit

David A. Szwak

1681i[a][5]:Thomas v. Gulf Coast Credit

Postby David A. Szwak » Sun Nov 13, 2005 7:18 pm

Thomas v. Gulf Coast Credit Services, Inc.
214 F.Supp.2d 1228

Victim of identity theft brought action alleging that consumer reporting agencies violated Fair Credit Reporting Act (FCRA). On agencies' motions for summary judgment, the District Court, DeMent, Senior District Judge, held that: (1) fact issues remained as to whether agencies acted reasonably after consumer disputed inaccurate information in her credit report; (2) fact issues remained as to whether consumer suffered emotional distress as result of agency's failure to timely remove erroneous information; and (3) consumer was not entitled to recover punitive damages.
Motions granted in part, and denied in part.

Plaintiff asserts that Defendants are liable under § 1681i because Defendants failed to reinvestigate and correct erroneous information contained in Plaintiff's files. Section 1681i(a)(1)(A) provides, in pertinent part:
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 ... before the end of the 30-day period beginning on the date on which the agency receives notice of the dispute from the consumer.
15 U.S.C. § 1681i(a)(1)(A). Defendants do not dispute that Plaintiff notified them of a dispute in accordance with § 1681i(a). Rather, as with Plaintiff's § 1681e(b) claim, Defendants contest the causation issue. Absent evidence linking any alleged failure to reinvestigate with actual damages, Defendants contend that Plaintiff's claim fails as a matter of law. The same arguments are offered in this regard as those presented as to Plaintiff's § 1681e(b) claims. As will be discussed, the court is persuaded by such arguments, and the same outcomes reached as to Plaintiff's § 1681e(b) claims are due presently.
The Eleventh Circuit has held that a § 1681i(a) "claim is properly raised when a particular credit report contains a factual deficiency or error that could have been remedied by uncovering additional facts that provide a more accurate representation about a particular entry." Cahlin, 936 F.2d at 1160. Unlike with § 1681e(b), there is no statutory basis for interpreting Cahlin as requiring the actual issuance of a consumer credit report under this cause of action; indeed, § 1681i(a) explicitly extends coverage to inaccuracies extant within "a consumer's file at a consumer reporting agency." 15 U.S.C. § 1681i(a)(1)(A).
[8] That said, the FCRA permits consumer reporting agencies two options: to either delete the disputed information or to record the status of the reinvestigation. *1237 Id. The emphasis, then, is placed upon minimizing the risk that a consumer suffer prejudice due to arguably inaccurate information. Absent indication that Experian or Gulf Coast forwarded any information about Plaintiff, it stands to reason that Plaintiff cannot assert a claim for damages against said Defendants. Indeed, because Cahlin requires "evidence tending to show that [Plaintiff] was damaged as a result of an allegedly inaccurate [Trans Union] report," Plaintiff's claim against Trans Union likewise fails for the reasons discussed in the context of Plaintiff's § 1681e(b) claims. 936 F.2d at 1160-61; see also Field v. Trans Union LLC., No. 01-C-6398, 2002 WL 849589, *6 n. 2, 2002 U.S. Dist. LEXIS 7973, at *20 n. 2 (N.D.Ill. May 3, 2002) ("Because Field fails to proffer evidence of actual damages to support her § 1681o claims, CSC's argument that it conducted reasonable reinvestigation under § 1681i is moot.").
Equifax, however, did issue two credit reports that caused Plaintiff to suffer damages, one of which was issued after Plaintiff disputed the information in her file. Equifax does not dispute that it was required by statute to record the status of the disputed information and that, if the information was proven inaccurate or unverifiable, it was due to be deleted. 15 U.S.C. §§ 1681i(a)(1)(A); 1681i(a)(5). Again Equiax offers the vague Bryant Affidavit to show that, upon notification of the disputed information, Equifax "conducted reinvestigations per its established procedures." (Bryant Aff. ¶ 3.) In so doing, it "either deleted disputed accounts or verified the accounts with the creditors." (Id.) Notably, the standard to which courts hold consumer reporting agencies in this regard is not as high as under § 1681e(b) wherein procedures should aim at maximum possible accuracy. See Yelder v. Credit Bureau of Montgomery, L.L.C., 131 F.Supp.2d 1275, 1281 (M.D.Ala.2001).
Nonetheless, the issue remains one of reasonableness, i.e., whether Equifax made "reasonable efforts to investigate and correct inaccurate or incomplete information brought to its attention by the consumer." Cahlin, 936 F.2d at 1160. [FN10] Reasonableness, of course, is a question of fact guided by an examination of the method by which a consumer notified a credit agency of a dispute, as well as by balancing the cost of verifying the information with the possible harm of reporting inaccurate information. Bruce v. First U.S.A. Bank, N.A., 103 F.Supp.2d 1135, 1143 (E.D.Mo.2000). While Equifax asserts for the first time in its Reply brief that the reasonableness of its investigation is a defense to Plaintiff's § 1681i claim (Doc. No. 58 at 3), it offers no evidence supporting the reasonableness thereof. Moreover, it conveniently overlooks the fact that the cases upon which it relies note "[t]he reasonable procedures defense creates a jury question." Thomas v. Trans Union, L.L.C., 197 F.Supp.2d 1233, 1237 (D.Or.2002); Bruce 103 F.Supp.2d at 1143 ("Whether a reasonable investigation has been conducted is generally a question of fact for the jury.").

FN10. The court takes this opportunity to point out that, in all likelihood, it will draft jury charges based upon the thoughtful analysis in Swoager v. Credit Bureau of Greater St. Petersburg, 608 F.Supp. 972 (M.D.Fla.1985), a case decided within the Eleventh Circuit.

[9] As with Plaintiff's § 1681e(b) claim, the court cannot examine the reasonableness of Equifax's procedures without any evidence supporting a conclusion one way or the other. Plaintiff has shown that she voiced numerous complaints about the accuracy of her files, yet Equifax continued to release damaging information. Again, it very well may be the case that cost prohibitive investigations render consumer reporting agencies practicably impotent in *1238 the face of the identity theft phenomenon. Equifax has presented insufficient evidence to demonstrate as much, however, so the court cannot conclude that, as a matter of law, it reasonably reinvestigated Plaintiff's disputes. As such, the court cannot grant summary judgment on the issue of whether Plaintiff's damages ensued from Equifax's failure to reasonably act. [FN11]

FN11. The damages analysis in the court's § 1681e(b) discussion equally applies to Plaintiff's § 1681i claim against Equifax.

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