FCRA Case Against LexisNexis for Selling Inaccurate Public Records Data
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
Plaintiff,
v.
LEXISNEXIS RISK & INFORMATION ANALYTICS GROUP, INC., and REED ELSEVIER, INC.
Defendants.
)
PLAINTIFF’S MEMORANDUM OF LAW IN OPPOSITION TO
DEFENDANTS LEXISNEXIS RISK & INFORMATION ANALYTICS GROUP, INC. AND REED ELSEVIER, INC.’S MOTION FOR SUMMARY JUDGMENT
Plaintiff hereby respectfully responds in opposition to the motion for summary judgment (“Motion,” at Docket No. 71) filed by Defendants LexisNexis Risk & Information Analytics Group, Inc. (“LNRIAG”) and Reed Elsevier, Inc. (“Reed”) (collectively “Defendants” or “LexisNexis”). For the reasons discussed below, the Motion should be denied.
I. PRELIMINARY STATEMENT
In a remarkable about-face, Defendants completely abandon their motion to dismiss defenses (where they argued that they are not regulated by the FCRA), and now seek summary judgment in their favor on the basis of FCRA “accuracy.” Of course, Defendants did not have much of a choice in abandoning their original defenses since discovery proved all of the allegations that Plaintiff made in his Amended Complaint in support of his claim that Defendants are FCRA-regulated businesses. Defendants now claim that even as actors regulated under the FCRA, they have no liability, allegedly because they sold only “accurate” credit information in this case. This new defense also fails for several straightforward reasons.
First, even if Defendants can make out an FCRA accuracy defense (which they cannot), there is no accuracy defense to some of FCRA Plaintiff’s claims. For example, Plaintiff claims that Defendants violated FCRA section 1681g because they did not provide him with access to his credit file. Amend. Compl. at ¶ 47(d). Consumers have a right to obtain and review whatever credit information is sold about them under FCRA section 1681g, regardless of whether that information is accurate or inaccurate. Defendants’ Motion does not challenge or even mention Plaintiff’s FCRA section 1681g claim. Thus Plaintiff’s FCRA section 1681g claim proceeds to the jury regardless of Defendants’ “accuracy” defense.
Second, Plaintiff here vehemently denies that the $14,317 civil judgment reported against him on his credit reports was accurate. That judgment was not obtained against Plaintiff and was not his responsibility. That was the basis of Plaintiff’s repeated and documented disputes, and is further supported and explained by Plaintiff’s deposition testimony. Additionally, the actual court records concerning the $14,317 judgment and even some of Defendants’ internal records, and the records of co-defendant Experian, also support Plaintiff’s position that the judgment was not accurately reported against Plaintiff and did not belong on his credit report. Thus the issue of factual “accuracy” is contested and cannot be the subject of summary judgment. It is instead a genuine issue of material fact for the jury.
Third, Defendants’ legal understanding of “accuracy” is severely flawed, turning the FCRA on its head. It suggests that so long as Defendants make certain true “statements” about the judgment at issue in this case — such as the true judgment amount, or whether a judgment is actually vacated or satisfied — that is the end of the matter. But, of course, civil judgments are always reported about judgment-debtors, whether persons or businesses. Defendants collect, distill, sell, report and are supposed to investigate names and addresses, and sometimes social security numbers and dates of birth, concerning these judgments, as their own records establish. FCRA “accuracy” turns on whether the information on a report “concern[s] the individual about whom the report relates.” 15 U.S.C. § 1681e(b). The Third Circuit has found, in a case involving a public record of a tax lien on the wrong consumer’s report, that FCRA accuracy must assure that an innocent consumer does not have another person’s credit liabilities on his or her credit records. Philbin v. Trans Union Corp., 101 F.3d 957, 960 (3d Cir. 1996). Moreover, the investigation duties of companies like LexisNexis require them to review all relevant information and to “delete” or otherwise correct any inaccurate information. See 15 U.S.C. § 1681i(a) and § 1681s-2(b)(1)(E)(ii). These authorities make it clear that Defendants are misconstruing the law of FCRA accuracy, and thus are not entitled to judgment as a matter of law.
Finally, Defendants have tried to suggest through a clandestinely-obtained declaration of Experian’s Kathleen M. Centanni that their reading of “accuracy” is supported by Experian. It is not. A close reading of what the Centanni declaration says, and what is intentionally omits, shows that Defendants are really stretching the truth. To the extent that this Court, however, is inclined to rely upon the Centanni declaration for any ruling in Defendants’ favor, Plaintiff requests that further discovery on the Centanni declaration be permitted, and thus Plaintiff also submits herewith a Fed. R. Civ. P. 57(f) Declaration of Counsel in support of his response to Defendants’ Motion.
II. FACTS
A. The Inaccurate $14,317 Civil Judgment On Plaintiff’s Credit Report
In or about 2007, Plaintiff learned that his Experian credit report showed that he had a $14,317 unpaid civil judgment lodged against him. (See Ex. 1, P.’s Experian credit report dated 1/9/07 at p. 2 of 8). [Plaintiff] has never had a judgment taken against him and he has never lived in [State], or even visited [State]. (See Ex. 2, P.’s Dep. at 14:15-15:12; 15:21-16:4; 17:20-18:6). Plaintiff never had any business with the judgment-creditor for the $14,317 judgment. (Id.). The judgment related to another [name] who lives in [State].
The actual public record of the Final Judgment entered on the docket plainly identified: (1) the judgment-debtor’s name (which did not include any middle initial, which Plaintiff uses); (2) the judgment-debtor’s address (where Plaintiff has never lived); and (3) the last four digits –[xxxx] – of the judgment-debtor’s social security number (which are entirely different from the last four digits of Plaintiff’s social security number). (See Ex. 3; Final Judgment in [Caption])
In his attempt to rectify the inaccurate reporting, Plaintiff disputed the inaccurate information with Experian, as his credit report indicated he had a right to do. (See Ex. 2, P.’s Dep. at 11:5-12:2; 14:15-16:7; 31:21-32:12; 35:12-37:7); (See Ex. 1 at p. 1 of 8). Because LexisNexis is thought to be the original supplier of this judgment, at least three of Plaintiff’s disputes were forward by Experian to LexisNexis and processed by LexisNexis: (1) in January 2007 (Ex. 4, 1/4/07 Experian CDV) and (see also Ex. 5, Lexis CDV LNRIAG-NAME 0001); (2) in September 2007 (Ex. 6, 9/25/07 Experian CDV) and (see also Ex. 7, Lexis CDV LNRIAG-NAME 0002); and (3) January 2009 (see Ex. 8, Lexis CDV LNRIAG-NAME 0003).
Despite [Plaintiff]’s best efforts, however, LexisNexis “verified” the inaccurate, derogatory reporting as accurate and failed to take any action to investigate or to remove the inaccurate data from Plaintiff’s credit report until after [Plaintiff] brought this lawsuit. (See Exs. 5, 7 and 8) ($14,317 judgment “verified”). Thus, the inaccurate $14,317 judgment reported against Plaintiff for over two years.
B. Defendants’ Role In The Credit Reporting Business
At the time that Plaintiff was disputing the accuracy of the $14,317 judgment, he had no idea how the judgment made its way onto his credit report and why it remained there, despite his disputes. And that’s how Defendants like it. Although they have in recent years cornered the market in the reporting of public records (bankruptcies, judgment and tax liens), they operate completely behind the scenes. By design, their names and trademarks appear nowhere upon records that consumers see. Thus they deliberately attempt to shield themselves from the credit reporting errors that they create and they perpetuate, by failing to correct them.
Discovery in this matter, however, has revealed the following: Defendant Reid Elsevier, Inc. (“REI”) is the American arm of an Anglo-Dutch company that has several overseas corporate entities trading under the name “Reed Elsevier.” (See Ex. 9, Reed Elsevier corporate structure, http://www.reed-elsevier.com/investorcentre/corporatestructure/Pages/Home.aspx); (See also Ex. 10, Simonton Dep. at 19:4-20:23). Within the U.S., REI has a “division” called “LexisNexis.” (See Ex. 12, http://www.lexisnexis.com) (“LexisNexis, a division of Reed Elsevier Inc.”). REI corporate representative Renee Simonton called LexisNexis an “unincorporated division” of REI. (Ex. 10, Simonton Dep. at 28:6-28:15).
Several businesses operate within REI’s LexisNexis “unincorporated division.” (Ex. 10, Simonton Dep. at 47:3-49:15). This business includes, Defendant LNRIAG (sometimes referred to simply “RIAG” in Ms. Simonton’s deposition), ChoicePoint Inc., and other entities in the business of selling public records and credit reports in the U.S. (Ex. 10, Simonton Dep. at 41:23-47:9). LNRIAG’s corporate representative and Rule 30(b)(6) witness, Mark Johnson, also agreed with this assessment. (See Ex. 13, Johnson Dep. at 60:13-61:11; see also id. at 63:22-71:74) (several of the operations within the LexisNexis public records business sell consumer reports, commonly called credit reports, both to REI sister companies and to outside companies, such as Experian). Ms. Simonton and Mr. Johnson also referred to the public records part of the business as the “risk” business. (Ex. 10, Simonton Dep. at 44:3); (Ex. 13, Johnson Dep. at 61:1- 61:11).
In its annual reports, REI describes its public records or risk solutions businesses. (See Ex. 14, http://www.reed-elsevier.com/investorcentre/reports%202007/Pages/Home.aspx). For example, REI 2009 Interim Report touts that its “risk solutions” business, including “LexisNexis” and “ChoicePoint” saw revenues grow by 206%. (See Ex. 15, http://www.reed-elsevier.com/investorcentre/reports%202007/Pages/2009Interim_restricted.aspx at p. 9). The 2009 Interim Report presents a combined financial statement, that includes “LexisNexis” and North America. (Id. at pp. 17, 25).
Ms. Simonton and Mr. Johnson’s testimonies indicate that LNRIAG and the other LexisNexis public records businesses do not keep their own balance sheets, do not have separate accounting or legal services, and generally have the same executives on their boards as REI. (See generally Ex. 10, Simonton Dep. at 67:10- 69:3; 74:17-78:6); (Ex. 13, Johnson Dep. at 29:7 -29:10). Ms. Simonton also testified that the LexisNexis entities report to an REI executive in New York named Andrew Prozes. (See Ex. 10, Simonton Dep. at 32:11-33:12); see also http://www.lexisnexis.com/about-us/global-leadership.aspx (describing Andrew Prozes as “Chief Executive Officer for Reed Elsevier’s LexisNexis Group”). Similarly, LNRIAG’s Mark Johnson testified that his part of the business reports to REI in New York. (See Ex. 13, Johnson Dep. at 18:5-28:19). In fact, Ms. Simonton testified that the only corporate formality that is different between REI and the LexisNexis public records businesses is that various internal businesses hold its own board meetings. (See Ex. 10, Simonton Dep. at 79:19-81:6).
Through the years, REI has taken over many businesses in the U.S. which sell credit data, including: Hogan Information Services, Hollingsworth, ChoicePoint, and others. (See Ex. 13, Johnson Dep. at 19:23-20:1; 103:16-103:20; 149:6-149:16). Indeed, REI has taken over so many public records businesses that in 2008 the FTC required it to divest some of its holdings, so that it can comply with anti-trust laws, before approving the ChoicePoint acquisition. (See http://www.ftc.gov/opa/2008/09/choicepoint.shtm) (“To Preserve Competition, Order Requires Divestiture of Assets”); (see also http://www.law.com/jsp/article.jsp?id=1202424585937) (“FTC Approves ChoicePoint Acquisition, Requires Reed Elsevier Divestment”).
Importantly, the FTC has also promulgated regulations that specifically prohibit businesses such as Defendants from attempting to avoid FCRA liability through “creative” corporate structures. Specifically, the FTC provides:
(a) A consumer reporting agency shall not circumvent or evade
treatment as a “consumer reporting agency that compiles and maintains
files on consumers on a nationwide basis” as defined under section
603(p) of the Fair Credit Reporting Act, 15 U.S.C. 1681a(p), by any
means, including, but not limited to:
(1) Corporate organization, reorganization, structure, or
restructuring, including merger, acquisition, dissolution, divestiture,
or asset sale of a consumer reporting agency; or
(2) Maintaining or merging public record and credit account
information in a manner that is substantially equivalent to that
described in paragraphs (1) and (2) of section 603(p) of the Fair Credit
Reporting Act, 15 U.S.C. 1681a(p)., the FRC provides:
16. C.F.R. § 611.2. Thus, the notion that REI is simply the “ultimate corporate parent” with no liability in this matter is also hollow. At any rate, Defendants do not move to dismiss REI.
C. Defendants Failed To Correct The Inaccurate $14,317 Judgment, Which They Supplied In The First Place
Discovery in this case also revealed that Defendant LNRIAG, as part of the LexisNexis division of REI, has records of first communicating the $14,317 judgment to Experian in January 2007. (Ex. 13, Johnson Dep. at 200:17-200:23). It is possible that the $14,317 judgment was supplied by LNRIAG to Experian earlier, but that could not be confirmed. Mr. Johnson testified that he believes that the $14,317 judgment was most likely originally supplied to Experian by “Hollingsworth,” a public records company that LexisNexis acquired in 2004. (Id. at 148:1-151:1). Since the $14,317 judgment was not entered upon the court’s docket until September 7, 2005 (see Ex. 3), Hollingsworth would have been under LexisNexis’ control even at the time of the original sale of the judgment data.
There is no doubt, however, that LexisNexis has three (3) communications with Experian about the $14,317 judgment in connection with disputes that Plaintiff lodged, alleging that the judgment was not his and did not belong on his credit report. (Ex. 13, Johnson Dep. at 165:12-166:6). The disputes were “processed” in (1) January 2007 (see Exs. 4 and 5); (2) September 2007 (see Ex. 6 & 7); and (3) January 2009 (see Ex. 8).
These records show that each time LexisNexis “verified” the judgment; that the judgment records were clearly associated with a debtor’s name and address; that LexisNexis never provided to Experian or indicated on any of these records the last four digits of the true judgment -debtor’s social security number — which were entirely different from Plaintiff’s.
Mr. Johnson admitted that LexisNexis received and processed “disputes” from Plaintiff. (Ex. 13, Johnson Dep. at 165:12-166:6). Mr. Johnson, however, also admitted that LexisNexis never “investigated” any of the disputes. (Id. at 136:24-137:22; see also 147:3-147:25; 163:12-166:13). Indeed, Mr. Johnson admits that LexisNexis never gets to the bottom of whether a public records that is disputed by a consumer as not belonging to him or her actually belongs to the disputing consumer (or to somebody else), and never investigated or determined whether the Plaintiff in this case actually owes the $14,317 judgment or ever had that judgment entreated against him. (Id. at 180:13-181:16). Mr. Johnson believes that LexisNexis does not need to comply with the FCRA, either as a CRA or as a furnisher, and confirmed that LexisNexis, in fact, does not comply or even seek to comply with the FCRA in any way. (Id. at 39:11-41:16).
D. Plaintiff Suffered Several Forms Of FCRA-Cognizable Damages As A Result Of Defendants’ Conduct
In this Motion, Defendants do not challenge that Plaintiff suffered FCRA damages, and thus Plaintiff will not set out here a damages record in detail. He will simply note that, during a period of more than two years he was continuously rebuffed in his attempts build up his credit because of the inaccurate $14,317 judgment. (See generally Ex. 2, P.’s Dep. at 12:15-14:14; 18:12-18:20; 22:9-23:5; 26:18-29:4; 38:14-41:12; 44:2-46:23; 75:18-83:16; 84:5-88:3; 108:18-109:4; 146:3-154:6; 156:1-156:6). For example, Plaintiff produced records from third party lenders which specifically declined his applications for credit because there was a “judgment” on his credit report. (See, e.g., Discover credit denial, dated September 30, 2008 and Chase Bank credit denial dated October 1, 2008, which are collectively attached hereto as Ex. 16). Plaintiff also claims that he lost other credit opportunities with Sovereign Bank and FIA Card Services in 2007, and First USA in 2008. Credit inquiries from those companies, none of which extended credit to Plaintiff, are reflected on his credit report. (See Ex. 17, Experian credit report dated 1/6/09) (listing inquiries on p. 3 of 8).
Further, Plaintiff testified in detail about his non-economic damages in the form of emotional distress and mental anguish and embarrassment as a result of being unable to obtain the above credit. Plaintiff does not have a single major credit card to his name. He determined that at least one such card was necessary, at least for emergency reasons, as many simple transactions today require credit. Plaintiff cannot book an airplane flight or a hotel without a credit card, and cannot make certain purchases, such as Internet purchases. His attempts to establish credit, however, were rejected by Chase and Discovery, and others, because of the inaccurate judgment. (See generally Ex. 2, P.’s Dep. at at 12:15-14:14; 18:12-18:20; 22:9-23:5; 26:18-29:4; 38:14-41:12; 44:2-46:23; 75:18-83:16; 84:5-88:3; 108:18-109:4; 146:3-154:6; 156:1-156:6). Plaintiff also alleges that the inability to build credit also hurt his contractor/landscaping business. Plaintiff also felt defamed by being labeled as a credit deadbeat who skips out on his obligations. (Id.).
III. STANDARD
Pursuant to Federal Rule of Civil Procedure 56(c)(2), a motion for summary judgment will only be granted if:
The pleadings, the discovery and disclosure material on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to a judgment as a matter of law.
Fed. R. Civ. P. 56(c)(2) (revised as of Dec. 1, 2009). The Third Circuit has said that summary judgment may only be granted if the movant shows, by admissible evidence, that there exists no genuine issue of material fact that would permit a reasonable jury to find for the nonmoving party. Wetzel v. Tucker, 139 F.3d 380, 383 n.2 (3d Cir. 1998); Miller v. Indiana Hosp., 843 F.2d 139, 143 (3d Cir. 1988), cert. denied, 488 U.S. 870 (1988).
A court may not, at the summary judgment stage, weigh evidence or make credibility decisions. These tasks are left to the fact-finder. Petruzzi’s IGA Supermarkets, Inc. v. Darling-Delaware Co., Inc., 998 F.2d 1224, 1230 (3d Cir. 1993), cert. denied, 510 U.S. 994 (1993). To raise a genuine issue of material fact, the respondent need not match, item-for-item each piece of evidence proffered by the movant. As the Third Circuit has explained:
In practical terms, if the opponent has exceeded the “mere scintilla” threshold and has offered a genuine issue of material fact, then the court cannot credit the movant’s version of events against the opponent, even if the quality of the movant’s evidence far outweighs that of its opponent. It thus remains the province of the factfinder to ascertain the believability and weight of the evidence.
In re Unisys Savings Plan Litigation, 74 F.3d 420, 433 n. 10 (3d Cir. 1996). If there are gaps in the pertinent materials submitted by the movant, without explanation, that justifies denial of the motion. O’Donnell v. United States, 891 F.2d 1079, 1082 (3d Cir. 1989).
In the case at bar, there exist genuine issues of material fact and Defendants are not entitled to judgment as a matter of law. Summary judgment, therefore, is inappropriate.
IV. ARGUMENT
A. Accuracy Is Not A Defense To Plaintiff’s FCRA Section 1681g Claim
As will be discussed in detail below, Defendants sold anything but “accurate” information in this case. But some of Plaintiff’s FCRA claims are not predicated upon, and do not require, any finding that Defendants sold inaccurate information about Plaintiff. At paragraph 47(d) of his Amended Complaint, Plaintiff brought an FCRA section 1681g claim against LexisNexis. (See Amended Complaint, Docket No. 38, ¶ 47(d)); (See also Id. at ¶¶ 24-25). This section of the FCRA requires consumer reporting agencies (“CRAs”) to provide to consumers all of the information in their files and certain disclosures of consumer rights. See 15 U.S.C. § 1681g. These duties exist regardless of whether the information is accurate or inaccurate. Id.
Defendants do not challenge or even mention Plaintiff’s FCRA section 1681g claim in their Motion. Defendants do not argue in this Motion that they are not CRAs, and in fact lost that very argument when this Court denied their motion to dismiss on that basis. (See Docket No. 66). Nor is there any dispute that Defendants refuse to provide to consumers, and did not provide to Plaintiff or even make available to him, any copy of information about him and the disputed judgment from their computer files and databases. Accordingly, Plaintiff’s FCRA section 1681g claim is unaffected by Defendants’ Motion and must proceed to the jury.
B. The $14,317 Civil Judgment On Plaintiff’s Credit Report Was Not “Accurate,” And Thus Plaintiff’s FCRA Section 1681e(b), 1681i, and 1681s-2(b) Claims Must Also Proceed To Trial
Plaintiff also brings claims under FCRA sections 1681e(b), 1681i and 1681s-2(b). (See Amended Complaint, Docket No. 38, ¶¶ 47(a)–(c)). FCRA section 1681e(b) requires companies such as LexisNexis to “follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.” 15 U.S.C. § 1681e(b) (emphasis added). FCRA sections 1681i and 1681s-2(b) require CRAs and furnishers respectively to investigate consumer disputes of alleged inaccuracies. 15 U.S.C. §§ 1681i and 1681s-2(b). Unlike their motion to dismiss, Defendants do not argue that these FCRA sections do not regulate them or apply to them. Rather they now say that “[for] purposes of this motion
. . . even were the FCRA to apply to them” they are still entitled to judgment in their favor, allegedly because the “statements” they made about Plaintiff were “entirely accurate.” (Def. Mem. at 2 & n.1) (emphasis in original).
1. FCRA Accuracy Defined
It is true that FCRA section 1681e(b) claims have an element of “accuracy.” See 15 U.S.C. §§ 1681e(b); Philbin v. Trans Union Corp., 101 F.3d 957, 963 (3d Cir. 1996) (a consumer plaintiff must show that “inaccurate information was included in a consumer’s credit report”). For purposes of the investigation duties under FCRA section 1681i and 1681s-2(b), a consumer must merely dispute the information that he believes or alleges to be inaccurate. See 15 U.S.C. §§ 1681i, 1681s-2(b); Cushman v. Trans Union Corp., 115 F.3d 220, 223 (3d Cir. 1997) (FCRA section 1681i investigation standard); Saunders v. Branch Banking & Trust Co., 526 F.3d 142 (4th Cir. 2008) (FCRA section 1681s-2(b) investigation standard).
Importantly, FCRA accuracy requires that the credit information on a consumer’s report actually belong to that consumer, and not somebody else. The face of the act provides that “maximum possible accuracy” under the FCRA requires procedures that assure that the information on a report “concern[s] the individual about whom the report relates.” 15 U.S.C. § 1681e(b). The reason is obvious: it may be accurate that somebody owes $10,000,000 to a given bank, but if Plaintiff does not owe that money then the information should not be on his report. Similarly, it may be accurate that somebody filed for bankruptcy 60 days ago, but if that was not Plaintiff, then it is not accurate for that bankruptcy to be on his report.
The Third Circuit agrees that this is the only reasonable reading of FCRA accuracy. In Philbin, the Third Circuit reversed summary judgment for a CRA and found that a consumer-plaintiff named James R. Philbin, Jr. may proceed to the jury with his FCRA section 1681i and 1681e(b) claims, the same claims that Plaintiff brings here. In that case, the consumer-plaintiff claimed he had a $9,500 public record tax lien appear on his report that belonged to James R. Philbin, Sr., his father. Philbin, 101 F.3d at 960. The Third Circuit did not consider that tax lien to be accurate as to Philbin, Jr.
In Cushman, the Third Circuit found that a consumer-plaintiff may proceed with her FCRA section 1681i and 1681e(b) claims where she alleged that three credit cards appearing on her credit report were not hers, and “suggested that a third party had fraudulently applied for and obtained the cards.” Cushman, 115 F.3d at 222. The amount of the credit card balances or the account numbers and other data may have been accurate — but none of that information was accurately reported as to the consumer-plaintiff Cushman.
Other courts have noted that even if a credit item is “technically accurate,” a furnisher or CRA still violated the FCRA if the way in which they report that item is “misleading or materially incomplete.” See Evantash v. G.E. Capital Mortg. Servs., Inc., 2003 WL 22844198, at *1, 4 (E.D. Pa. Nov. 25, 2003) (denying summary judgment and permitting consumer-plaintiff to proceed to jury trial with FCRA claims against CRAs and furnisher who reported on her report that she had a joint mortgage loan “included in bankruptcy,” when only her husband had filed for bankruptcy, but she had not); Koropoulos v. Credit Bureau, Inc., 734 F.2d 37, 42 (D.C. Cir. 1984) (technical accuracy not a valid FCRA defense); Saunders v. Branch Banking & Trust Co., 526 F.3d 142 (4th Cir. 2008) (same).
A credit item may be considered inaccurate or incomplete for purposes of the FCRA if the way in which a CRA or furnisher reported it is misleading to potential creditors. Agosta v. Inovision, Inc., 2003 WL 22999213, at *5 (E.D. Pa. Dec. 16, 2003); see Curtis v. Trans Union, Nos. 02-C-207, 02-C-208, 2002 WL 31748838, at *4 (N.D. Ill. Dec. 9, 2002) (finding that even factually correct information may be “inaccurate” for FCRA purposes where such information may be misleading to a party reviewing the consumer’s credit report); see also DiPrinzio v. MBNA America Bank, N.A., Civ. No. 04-872, 2005 WL 2039175 at *3-4 (E.D. Pa. Aug. 24, 2005) (materially incomplete reporting of a true credit account is not accurate for FCRA purposes where creditor omitted that consumer had a disputed joint account and had separated from her husband who had actually incurred the debt after separation).
One court within this Circuit put it this way:
the FCRA uses the word “accuracy” more “objectively” than [Defendant] would prefer. An objective understanding of accuracy requires congruence between the legal status of a consumer’s account and the status a CRA reports. Put another way, a consumer report cannot be “accura[te]” under either section 1681e(b) or section 1681i if it contains information that is legally incorrect.
Crane v. Trans Union, LLC, 282 F. Supp. 2d 311, 318 (E.D. Pa. 2003) (citing Cushman v. Trans Union Corp., 115 F.3d 220 (3d Cir. 1997)) (emphasis added) (footnote omitted).
2. FCRA Accuracy Applied To The Facts Of This Case Clearly Shows That The $14,317 Judgment Was Not Accurately Reported As To Plaintiff
Inaccuracy is precisely Plaintiff’s claim in this case. He claims that he is not legally responsible for the $14,317 civil judgment that appears on his report. He claims that it is inaccurate and misleading for that judgment to remain on his report, despite multiple investigations by LexisNexis, even though he is clearly not the judgment-debtor. Plaintiff’s deposition testimony, the records of Plaintiff’s disputes, Experian’s records, and even the court records make it abundantly clear that the $14,317 civil judgment belonged to an unrelated person named [Name], and not Plaintiff. The disputed credit information at issue therefore is simply not accurate, and thus Defendants have no accuracy defense.
Contrary to Defendants’ suggestion, Plaintiff here is not making an academic claim about court record accuracy in general. Nor is he commenting about the judgment records of the court; or whether another person named [Name] truly owes a judgment in the amount of $14,317 to a creditor called [Creditor], and never satisfied the judgment. Plaintiff brought this lawsuit under the FCRA because a $14,317 judgment wrongly appeared on his credit report for over two years, causing him to be denied credit repeatedly, and because Defendants failed to correct the error despite Plaintiff’s repeated and clear disputes. Thus “accuracy” is not an abstract question here or an inquiry into the court records of the court. “Accuracy” must be measured as to the Plaintiff and his credit report: Was it accurate for the $14,317 judgment about another person named [Name] report and remain upon Plaintiff’s credit report? The only reasonable answer is no.
3. There Is No “Accuracy” Defense Under The FCRA Where An FCRA-Regulated Business Allegedly Made Some Partially True “Statements” In Certain Records About A Credit Item
Under the FCRA claims that Plaintiff brings here, a CRA must “follow reasonable procedures to assure maximum possible accuracy.” 15 U.S.C. § 1681e(b). An entity that has investigation duties (under either FCRA section 1681i or 16181s-2(b)) must conduct a qualitatively “reasonable investigation” into the dispute. Cushman, 115 F.3d 220; Saunders, 526 F.3d 142. Both of these statutory investigation provisions state that the investigating entity (regardless of whether it is wearing a CRA hat or a furnisher hat) has a duty on its own to take action to “delete” the inaccurate item if it cannot be “verified” as accurate. 15 U.S.C. § 1681i(a); 15 U.S.C. § 1681s-2(b)(1)(E)(ii).
None of these FCRA investigation standards concern “statements” made by one FCRA actor to another. None even remotely suggests that a partially true “statement” about a credit item can ever amount to an “accuracy” defense. Defendants cite no authority at all for this alleged defense.
Instead, Defendants take the incredible position that when they reported the $14,317 judgment at issue in this case, they made “no representation” that the judgment “relates to any specific individual.” (Def. Mem. at 2) (emphasis added). They also say that they “did not associate” the public record judgment with “any sort of identifier to indicate to which specific consumer that record relates.” (Id.) Further, they say that they do not “make or reflect any linkage between public record information relating to different court or tax lien proceedings to indicate that the same person was the debtor or the defendant in each proceeding.” (Id.) These statements are false.
First, contrary to Defendants’ contentions, it is simply impossible to report public records such as judgments without “any sort of identifier,” “any linkage,” or any “association” or “relation” to “any specific individual.” Judgments are about specific individuals — or in the commercial arena, about specific businesses. There is no way in the credit reporting business to report or furnish any information about a judgment without also providing information about who owes the judgment. Indeed, that is the whole point of putting judgments on the credit reports of individual consumers, to indicate that they had a judgment entered against them and that they owe money to a creditor for that judgment. That is exactly why the $14,317 judgment at issue in this case was placed on a specific individual’s credit report, namely Plaintiff’s report.
Second, Defendants’ own records, which memorialize their communications with Experian about this judgment, plainly show on their face that this judgment is “associated” with and “relates” to a “specific individual.” This is not a case where Defendants are merely communicating information only about a judgment amount, or only about the correct civil action number, or only about whether the subject judgment was satisfied.
Specifically, Exhibit A to Mark Johnson’s Declaration (which is attached to Defendants’ Motion) shows the January 3, 2007 and (on the second page of Exhibit A) the September 23, 2007 communications between LexisNexis and Experian concerning two of Plaintiff’s disputes about the $14,317 judgment. (See also Ex. 5, 7, and 8, hereto). In relation to the $14,317 judgment, these records provide a “Defendant’s name,” a “Verified Defendant Address,” and field for the “SSN” or social security number of the debtor. These records plainly show under “Claims Code” that the Plaintiff in this case is disputing that the judgment is not his and is erroneously appearing on his credit report. Plaintiff provides his full name, his phone number (and requests that he be contacted at that phone number), his actual address, and even his social security number (redacted on the forms). Defendants’ notion therefore that they do no not “relate” the disputed $14,317 civil judgment in this lawsuit to “any specific consumer” is nonsense.
As noted above, both section FCRA sections 1681i and 1681s-2(b) require entities charged with investigating disputes to “delete” or otherwise correct inaccurate credit information or information that cannot be verified as accurate. 15 U.S.C. § 1681i(a) & § 1681s-2(b)(1)(E)(ii). Again, in this Motion, Defendants do not challenge that they had one or both of these investigation responsibilities. Yet their own records show that, instead of “deleting” the inaccurate judgment on Plaintiff’s report, they “verified” it as accurate. (See Exhibit A to M. Johnson declaration, and also Exs. 5, 7 and 8 hereto). Defendants cannot so woefully fail in their duties and now argue that they have a defense based on the purported “accuracy” of the information they sold in this case.
4. Both LexisNexis and Experian Are Liable
Defendants also suggest that since Experian controls its own “matching criteria,” only it can be liable in this type of case. This suggestion flatly contradicts the FCRA and 40 years of FCRA jurisprudence. The FCRA provides for separate liability for every CRA (see 15 U.S.C. §§ 1681e(b), 1681g(a), 1681i(a)), every reseller (see 15 U.S.C. § 1681e(e)), every furnisher of credit information (see 15 U.S.C. § 1681s-2(b)), and every user of credit information (see 15 U.S.C. § 1681m). There are scores of published decisions interpreting the FCRA that find more than one covered entity liable in the same case for their own actions or omissions related to the same inaccurate credit-reporting transaction. See, e.g., Evantash v. G.E. Capital Mortgage Servs., Inc. and Trans Union, Civ. No. 02-1188, 2003 WL 22844198 (E.D. Pa. Nov. 25, 2003) (motions for summary judgment denied as to multiple CRAs and as to furnisher for their individual responsibilities in misreporting inaccurate information and failing to correct it following plaintiff’s disputes); Sheffer v. Experian Info. Solutions, Inc. and Trans Union, Civ., No. 02-7407, 2003 WL 21710573 at *3-4 (E.D. Pa. July 24, 2003); Sheffer v. Experian Information Solutions, Inc., 249 F. Supp 2d. 560, 561 (E.D. Pa. 2003) (same); White v. TransUnion, LLC, 462 F. Supp. 2d 1079 (C.D. Cal. 2006) (same).
Thus, nothing in the FCRA prevents more than one entity (whether a consumer reporting agency, reseller, credit furnisher or credit user) from being liable under the act simply because other entities can also be liable for the same credit reporting transactions. Further, the U.S. Supreme Court has held that in cases alleging a violation of a federal statute there exists no right to off-set unless the statute itself or federal common law so provides. See Texas Industries, Inc. v. Radcliff Materials, Inc., 451 U.S. 630, 638 (1981). Each defendant, if covered by the federal statute, can have its own liability. Id. There is no right to off-set on the face of the FCRA and, to Plaintiff’s knowledge, no federal common law has ever recognized such a right. See generally Betts v. Equifax Credit Information Servs., 245 F. Supp. 2d 1130, 1136 (W.D. Wash. 2003); Cintron v. Savit Enterprises, et al., 2009 WL 971406, *2-4 (D.N.J. Apr. 9, 2009).
5. Defendants’ Construction Of Accuracy Would Allow Erroneous And Fraudulent Information To Be Reported On The Credit Reports Of Innocent Consumers
Finally, it should be noted that the construction of “accuracy” that Defendants are advocating would turn the FCRA on its head, and would have disastrous consequences for consumers. Defendants’ position suggests that so long as any information reported concerning a public record judgment is accurate (such as the amount, or whether the amount has been satisfied), then it does not matter whether information identifying the debtor is accurate. Under Defendants’ reading, their roles as CRAs and furnishers (which they do not, and cannot, deny being) impose no responsibilities upon them at all in (1) assuring that a judgment is reported as to the correct judgment-debtor or (2) taking action to delete a judgment from appearing on the wrong person’s credit report.
If Defendants are correct, then consumers would have no recourse in cases of fraud or mistaken identity. According to Defendants’ theory, consumer-plaintiffs such as the ones in Philbin and Cushman, supra, would be out of luck. So long as a tax lien account was reported in the correct amount, it would not matter that it remained on the wrong person’s report. So long as fraudulently opened turned derogatory credit accounts were reported with the correct balances, then the victim would have to live with those accounts on his or her credit report.
The FCRA is a remedial, consumer protection statute, to be liberally construed in favor of consumers, not the credit reporting industry. See 15 U.S.C. § 1681; Cushman, 115 F.3d at 222. To Plaintiff’s knowledge, no court has ever agreed with Defendants’ hyper-technical reading of accuracy, and this Court should not be the first. Both CRAs and finishers have duties under the FCRA to assure accuracy and to delete errors. Defendants do not contest that they are covered by these duties. They must, therefore, accept their level of responsibility — and liability — for communicating inaccurate information about Plaintiff and for failing to delete it from his credit report.
C. Plaintiff Has Agreed To Withdraw His Common Law Claims
Now that Defendants have abandoned their argument that they are not regulated by the FCRA, Plaintiff is willing to withdraw his remaining common law claims of negligence and defamation, which would not provide him with any additional relief. Plaintiff proposed to Defendants to enter into a stipulation to that effect, in the exact same form of a stipulation that counsel for the parties here entered into recently in a similar case, but to date Defendants have not responded. Plaintiff would expect that these claims will be disposed by stipulation or voluntary withdrawal, and thus does not brief the common law negligence and defamation claims here.
D. Plaintiff Requires Further Discovery Concerning The Declaration Of Experian’s Kathleen M. Centanni
To the extent that this Court is inclined to rely upon the Centanni declaration for any ruling in Defendants’ favor, Plaintiff requests that further discovery on the Centanni declaration be permitted.
In support of their Motion, Defendants attach only two declarations. One declaration is of their corporate representative, Mark Johnson, and the other is of Kathleen M. Centanni, a compliance manager of Experian. Co-Defendant Experian settled this matter with Plaintiff in November 2009. Ms. Centanni was never identified by LexisNexis as a person with information about this matter. Nor was she indentified by Experian. Indeed, the only Experian witness indentified in this matter was in Experian’s Initial Disclosures, and that representative was a different Experian employee named Kimberly Hughes.
Defendant LNRIAG supplemented its Initial Disclosures on December 15, 2009 — one day before the close of discovery. (See Docket No. 48, Scheduling Order). For the first time, Defendant LNRIAG stated that it would reply on an Experian “corporate representative” concerning “Experian’s creation of consumer reports . . .” and “Experian’s efforts to investigate Plaintiff’s contentions . . . .” Defendants did not identify Kathleen M. Centanni or any Experian “corporate representative” by name. Plaintiff believes that literally dozens, if not hundreds, of Experian employees could fit that description. Indeed, all of Experian’s operation is in the business of creating consumer reports, commonly called credit reports, and hundreds of employees at Experian participate in the area of consumer disputes.
Plaintiff believes that he must minimally have Ms. Centanni’s deposition in order to respond to Defendant’s arguments as to what they allege and infer about Experian’s understanding of the transactions involving Plaintiff. Plaintiff requested a status conference to discuss this issue with this Court by letter dated January 28, 2010, the day after Defendants filed their Motion. This Court issued an Order dated February 1, 2010, denying Plaintiff’s request for additional discovery. (Docket No. 72).
Therefore, Plaintiff now attaches and makes part of this response to Defendants’ Motion the Declaration of Plaintiff’s Counsel (Ex. 18), which sets forth the pertinent facts concerning the disclosure of Ms. Centanni, and requests pursuant to Fed. R. Civ. P. 57(f) that this Court permit additional discovery concerning the Centanni Declaration or deny Defendants’ Motion.
V. CONCLUSION
For the foregoing reasons, Plaintiff respectfully requests that this Court deny Defendants LexisNexis Risk & Information Analytics Group, Inc. and Reed Elsevier, Inc.’s Motion for Summary Judgment in its entirety.
Respectfully Submitted,
FRANCIS & MAILMAN, P.C.