Experian's Arguments re Accuracy:Toler v. PHH,etal, WD Ark

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Experian's Arguments re Accuracy:Toler v. PHH,etal, WD Ark

Postby Administrator » Fri Nov 21, 2014 3:14 am

Experian's Arguments re Accurracy:Toler v. PHH,etal, WD Ark

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D. Plaintiffs Failed to Show That the PHH Delinquency was Inaccurate2

FN 2 Other than injury and causation, Plaintiffs are required to show every element of a FCRA violation to recover under § 1681n. See Graham v. CSC Credit Servs., Inc., 306 F. Supp. 2d 873, 879 (0. Minn. 2004). Accordingly, Plaintiffs failure to show a required element of both § 1681e(b) and § 168li is fatal for all claims.
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For claims under § 1681e(b) and § 168li, Plaintiffs bear the burden to show that the
information they claim caused their injury was, in fact, inaccurate. See Paul v. Experian Info.
Solutions, Inc., 793 F. Supp. 2d 1098, 1101-02 (D. Minn. 2011). At trial, Plaintiffs presented
evidence which-taken as true for the purposes of this motion-suggests that the Talers: (a)
initially entered into a mortgage with PHH; (b) later agreed to a modified payment program with
PHH to make reduced payments; and (c) stopped making any payments in March 2011 following
statements made by PHH. This evidence fails to show that the reported delinquency was
"inaccurate" as a matter of law. See Jianqing Wu v. Trans Union, No. A W -03-1290, 2006 U.S.
Dist. LEXIS 96712 (D. Md. May 2, 2006), affd, 2007 U.S. App. LEXIS 4344 (4th Cir. 2007).
In Jianqing Wu, the Court was presented with a near-identical factual scenario, as the plaintiff
challenged Equifax's reporting of several delinquencies following the plaintiff's entrance into
various payment assistance programs for his prior loans. See id. at *3-6. In granting judgment
as a matter of law for Equifax, the court noted:
Whether or not First USA considered entrance into the Assist Program an agreement not to report Plaintiffs late payments, Plaintiff cannot escape the fact that he paid his account late on more than one occasion and did not pay the "original" amount due. Because it remains undisputed that Plaintiff actually made these payments late, the First USA entries on the Equifax reports were not "inaccurate" within the meaning of § 1681e(b).
Likewise, Plaintiff cannot recover under § 1681 e(b) for the late entries for his Universal Bank account. In his cross-motion for summary judgment, Plaintiff avers that because of a dispute over the interest rate on convenience checks for his Universal Bank account, "Plaintiff suspended payment starting for the September 28, 2000 billing statement." As noted above, Plaintiffs admission that he did not pay his account prevents a finding that these trade lines in the Equifax report were "inaccurate. "
Id. at * 13-14. Here, Plaintiffs failed to show-and do not claim-that they paid the original
amount due under the PHH mortgage at any time they claim Experian reported a delinquency.
Moreover, Plaintiffs admit that, like the plaintiff in Jianqing Wu, they suspended all payments on
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the loan as of March 2011, preventing a finding of inaccuracy for subsequent reports of
delinquency as a matter of law. Because Plaintiffs failed to show that the reported PHH
delinquency was "inaccurate" within the meaning of the FCRA, Experian is entitled to judgment
as a matter oflaw on Plaintiffs' § 168le(b) and § 1681i claims for this independent reason. 3

FN 3 - To be sure, Plaintiffs also asserted inaccuracies in various details beyond the reporting of the delinquency itself (e.g., term, payment amount, etc.). These minor alleged inaccuracies do not give rise to liability under the FCRA as a matter of law, as they do not satisfy the essential element that the inaccuracy be a proximate cause of the injury suffered. See, e.g., Lee v. Experian Info. Solutions, No. 02-C-8424, 2003 U.S. Dist. LEXIS 17420, at *8, 13­ 14 (N.D. Ill. Oct 2, 2003) (ignoring minor inaccuracies and focusing on whether there was a "material inaccuracy (that is, a continued mistaken inclusion of the [] account in [plaintiffs] credit report).") (emphasis in original); Toliver v. Experian Info. Solutions, Inc., 973 F. Supp. 2d 707,722 (S.D. Tex. 2013) (discounting inaccuracies that plaintiff did not show caused any drop in credit or adverse credit action).
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David A. Szwak
Bodenheimer, Jones & Szwak, LLC
416 Travis Street, Suite 1404, Mid South Tower
Shreveport, Louisiana 71101
318-424-1400 / Fax 221-6555
President, Bossier Little League
Chairman, Consumer Protection Section, Louisiana State Bar Association

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Re: Experian's Arguments re Accuracy:Toler v. PHH,etal, WD A

Postby Administrator » Fri Nov 21, 2014 3:16 am

Experian's Arguments re Reas Procs:Toler v. PHH,etal, WD Ark

F. Plaintiffs Failed to Show That Experian Maintained Unreasonable Procedures Prior to Plaintiffs' Dispute
Under § 1681 e(b), when the alleged inaccuracy is received directly from the creditor,
"independent verification of infonnation provided by creditors is not needed absent knowledge
that the infonnation may be inaccurate." Zahran v. Transunion Corp., No. 01-C-1700, 2003 U.S.
Dist. LEXIS 5089, at *14-15 (N.D. IlL March 28, 2003) (citations omitted). The risk that some
inaccuracies may result from Experian's procedures does not render those procedures
unreasonable. See Jianqing Wu, 2006 U.S. Dist. LEXIS 96712 at *21. Additionally, "[i]t would
be unreasonable to require a consumer reporting agency to develop systems that would catch
infrequent and irregular mistakes that furnishers might make. The Act does not impose such
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requirements." Schmitt v. Chase Manhattan Bank, NA., No. 03-3295, 2005 U.S. Dist. LEXIS
18029, at *12-13 (D. Minn. Aug. 23,2005) (citation omitted).
On this element, Plaintiffs admit that the alleged inaccuracy came from PHH directly, but
offered two bases for why Experian's procedures are allegedly unreasonable: (1) Experian's
procedures led to an alleged inaccuracy; and (2) Experian's procedures should have caught
PHH's irregular reporting. Both of these bases, taken together and viewed in light most
favorable to Plaintiffs, do not meet their burden on this element. See Schmitt, 2005 U.S. Dist.
LEXIS 18029, at *12-13. Instead, Plaintiffs were required-and failed-to show that, outside of
the § 1681i reinvestigation context, either: (a) Experian had specific knowledge that the
information PHH was reporting may be inaccurate; or (b) that any inaccuracy provided by PHH
occurred with such a regularity or frequency that Experian's procedures should be designed to
catch such inaccuracy. See Jianqing Wu, 2006 U.S. Dist. LEXIS 96712 at *21; Schmitt, 2005
U.S. Dist. LEXIS 18029, at * 12-13. Plaintiffs simply offered no evidence suggesting either of
the above or otherwise showing how a "reasonable" procedure would have uncovered the alleged
"inaccuracy"-namely the unique details of a purportedly modified loan between Plaintiffs and
PHH-in this case. In essence, Plaintiffs appear to make the same argument rejected against
Equifax as a matter oflaw in Jianqing Wu:
Seemingly, Plaintiff holds the opinion that nothing short of an in-person review of each derogatory item reported would satisfy the requirements of § 1681 e(b) of the FCRA. Not surprisingly, Plaintiff has not provided any caselaw to support this proposition. To make Equifax liable under the FCRA for relying on the records of businesses, which Equifax has identified as trustworthy, would vitiate one of the purposes of the FCRA, to facilitate commerce. Under the system Plaintiff proposes, the economic costs of investigation would render it economically infeasible for CRAs to function. Nothing in the FCRA or its implementing regulations evinces the intent to place such heavy burdens on CRAs.
Jianqing Wu, 2006 U.S. Dist. LEXIS 96712 at *22. Because Plaintiffs failed to show that
Experian knew the delinquency may be inaccurate in the e(b) context or otherwise show how a
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different procedure would have removed the delinquency, Experian is entitled to judgment as a
matter of law on Plaintiffs' § 1681 e(b) claims for this independent reason.
David A. Szwak
Bodenheimer, Jones & Szwak, LLC
416 Travis Street, Suite 1404, Mid South Tower
Shreveport, Louisiana 71101
318-424-1400 / Fax 221-6555
President, Bossier Little League
Chairman, Consumer Protection Section, Louisiana State Bar Association


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