Res Ipsa Loquitur: Some Courts Will Not Permit Its Use

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Res Ipsa Loquitur: Some Courts Will Not Permit Its Use

Postby Administrator » Tue Sep 30, 2014 12:49 am

Res Ipsa Loquitur: Some Courts Will Not Permit Its Use


Plaintiff may not invoke "res ipsa" or liability "per se" in an FCRA action. Venable v. Equifax Credit Information Services, 1994 Westlaw 268264 (U.S.D.C. E.D. Pa. 1994).


In Philbin v. Trans Union Corp., 101 F.3d 957, 964-65 (3d Cir.1996), the Third Circuit considered the appellate decisions in Cahlin and Guimond, and determined that the more plausible reading of the cases does not shift the burden of proving "reasonable procedures" to the credit reporting agency. Instead, it interpreted Cahlin and Guimond as allowing the jury to infer that reasonable procedures were not followed based upon the showing of some inaccuracy. Analogizing to the doctrine of res ipsa loquitur, Philbin construed these decisions as allowing the jury to reject such an inference, and the burden of proof remains with the plaintiff. Id. at 965.

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Ausherman v. Bank of America Corp.,
352 F.3d 896, 4th Cir.(Md.), Dec 19, 2003

Plaintiffs do, however, continue to advance, albeit very summarily, their claim that BAAF violated §1681o by acting negligently. Tellingly, they do not point to any alleged "requirement" under the Act that BAAF negligently failed to meet. [FN5] Instead, Plaintiffs argue that they can rely on the doctrine of res ipsa loquitur, i.e. the "thing speaks for itself." Plaintiffs seem to believe that this doctrine eliminates their need to prove that the FCRA imposes a requirement or duty on users and subscribers that BAAF can be said to have breached. The doctrine of res ipsa loquitur, however, simply permits a jury to infer, in certain circumstances, "both negligence and causation from the mere occurrence of the event and the defendant's relation to it"; it does not eliminate a plaintiff's obligation to prove that the defendant owed a duty to the plaintiff in the first place. Restatement (Second) of Torts § 328D cmt. b (1965). Indeed, the American Law Institute's classic statement of the res ipsa loquitur doctrine clearly explains that a plaintiff can rely on res ipsa loquitur to prove causation only if "the indicated negligence is within the scope of the defendant's duty to the plaintiff." Id. § 328D(1)(c) (emphasis added). Thus, the doctrine of res ipsa loquitur does not assist Plaintiffs here.

[[FN5. Plaintiffs do not assert that BAAF negligently used or obtained their credit reports for an impermissible purpose in violation of the "requirement" in § 1681b(f); that claim would, in any event, be futile in this case. To prevail on it, Plaintiffs would have to show that BAAF can be held vicariously liable for the action of the unknown person who used the Code to obtain the reports; the only potentially plausible ground for vicarious liability in this case is apparent authority. However, Plaintiffs have cited no case or treatise suggesting that apparent authority can be extended to an instance where, as here, no specific employee or group of employees is identified as having exercised that authority. To extend the reach of apparent authority in this case would effectively render a subscriber strictly liable any time a code supplied to it by a credit reporting service is used. In the absence of any precedent compelling this dramatic result, we decline to reach it.]]

Philbin v. Trans Union Corp., 101 F.3d 957 (3d Cir.1996), on which Plaintiffs heavily rely, does not hold to the contrary. In that case, the plaintiffs did not sue a subscriber or user of credit reports like BAAF, but instead sued Trans Union, a consumer reporting agency. As noted above, § 1681e of the Act does impose requirements or statutory duties on consumer reporting agencies, and in Philbin, unlike the case at hand, the plaintiffs proffered evidence, which the credit reporting agency itself conceded sufficed to preclude summary judgment in its favor, that the agency failed to comply with those requirements *902 or duties. Id. at 963. The consumer reporting agency maintained, however, that the plaintiffs had not forecast evidence that the agency's breach of its statutory duties caused the plaintiffs' damages. Id. In that context, the Third Circuit suggested that the plaintiffs might be able to rely on the res ipsa loquitur doctrine to prove causation. Id. at 965. Thus, Philbin nowhere suggests that the doctrine could be used to prove a duty, as Plaintiffs here seek to use it. Accordingly, we affirm the district court's order granting summary judgment to BAAF on Plaintiffs' FCRA and analogous state law claims. [FN6]

FN6. We also affirm the district court's denial of Plaintiffs' motion to amend their complaint to add class action allegations. Because BAAF is entitled to summary judgment on Plaintiffs' claims and because the claims of the putative class are identical to those of Plaintiffs, their motion to amend was futile. See Shealy v. Winston, 929 F.2d 1009, 1013-14 (4th Cir.1991) (affirming denial of motion to amend where amendment would not have cured deficiencies in plaintiff's case entitling defendant to summary judgment, on grounds of futility). Similarly, the district court did not
err in failing to address Plaintiffs' request to remove various references to "John Doe" defendants because such removal would have had no meaningful effect on the analysis or result.


Yelder v. Credit Bureau of Montgomery, L.L.C.,
131 F.Supp.2d 1275, M.D.Ala., Jan 19, 2001

To establish a claim of negligence, a plaintiff must establish that the defendant owed a duty to the plaintiff, that defendant breached that duty, and that the breach proximately caused plaintiff to be injured. Martin v. Goodies Distribution, 695 So.2d 1175, 1177 (Ala.1997). Providian argues that even assuming it owes a duty of reasonable care to a person in whose name a credit card account is opened to ensure that the person opening the account is not an imposter, it has not breached that duty. Cf. Patrick v. Union State Bank, 681 So.2d 1364, 1371 (Ala.1996) (holding that "a bank owes a duty of reasonable care to the person in whose name, and upon whose identification, an account is opened to ensure that the person opening the account and to whom checks are given is not an imposter"). Yelder asserts that she has produced sufficient evidence to create a fact issue of whether Providian breached its duty simply because Providian issued a credit card to an imposter. Alternatively, Yelder asserts that Providian breached its duty by failing to follow *1285 commercially reasonable procedures in verifying credit card applications. The court will address each of these arguments in turn.

First, Yelder asserts that the doctrine of res ipsa loquitur applies to infer negligence. In particular, Yelder contends that "[t]he fact that the card was issued, and chargers were made is at least some evidence, in and of itself, that any verification procedures Providian has in place are inadequate." (Pl. Br. in Resp. to Def. Providian's Reply Br., at 5). For the doctrine of res ipsa loquitur to apply, a plaintiff must establish that: (1) the defendant had full management and control of the instrumentality which caused the injury; (2) the circumstances are such that according to common knowledge and the experience of mankind the accident could not have happened if those having control of the instrumentality had not been negligent; and (3) the plaintiff's injury resulted from the accident. Ex parte Crabtree Industrial Waste, Inc., 728 So.2d 155, 156 (1998).

The Alabama Supreme Court's decision in Patrick v. Union State Bank provides guidance as to whether the doctrine of res ipsa loquitur applies in this case. In Patrick, the court faced a factually analogous issue of whether a bank negligently allowed an imposter to open a checking account in plaintiff's name. 681 So.2d at 1365. The court in Patrick implicitly held that the doctrine of res ipsa loquitur did not apply. First, the court recognized that the plaintiff could not satisfy the second element of the res ipsa loquitur because it stated that "we recognize that strict observance of an identification policy does not provide a fool-proof mechanism to deter banking fraud." Id. at 1370. Second, the court did not hold that the plaintiff established sufficient facts that the bank breached its duty by simply allowing an imposter to open an checking account in the name of the plaintiff. Instead, the court relied on the plaintiff's experts who testified that the bank failed to follow commercially reasonable procedures in opening a checking account. Id. at 1367, 1370. In particular, the bank did not follow the reasonable procedures of requiring photographic identification and of verifying the authenticity of signatures contained on the identification and the bank signature card. Id. at 1370.

Likewise, this court finds that Yelder cannot rely solely on the doctrine of res ipsa loquitur to prove a credit card provider failed to follow the standard of care. While the doctrine of res ipsa loquitur allows one to prove negligence through circumstantial evidence, "[i]f one can reasonably conclude that the accident could have happened without any negligence on the part of the defendants, then the res ipsa loquitur presumption does not apply." Ex parte Crabtree Industrial Waste, Inc., 728 So.2d at 158. As with a bank, a credit card provider who strictly adheres to a verification policy will not stop all credit card fraud. Thus, one could reasonably conclude that the fraud could have occurred without any negligence. Accordingly, the court finds that the doctrine of res ipsa loquitur does not apply in this situation. Beard v. Goodyear Tire & Rubber Co., 587 A.2d 195, 201 (D.C.1991) (holding that a plaintiff cannot rely on the doctrine of res ipsa loquitur to prove a credit card provider violated the standard of care by issuing a credit card to an imposter).
David A. Szwak
Bodenheimer, Jones & Szwak, LLC
416 Travis Street, Suite 1404, Mid South Tower
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