Johnson v. Mbna America Bank, Na, 03-1235.

• Citation: 357 F.3d 426
• Decision Date: 11 February 2004
• Docket Number: No. 03-1235.,03-1235.
• Parties: Linda JOHNSON, Plaintiff-Appellee, v. MBNA AMERICA BANK, NA, Defendant-Appellant, and Experian Information Solutions, Incorporated; Equifax Credit Information Services, Incorporated; Trans Union LLC, Defendants.
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

357 F.3d 426

Linda JOHNSON, Plaintiff-Appellee, v. MBNA AMERICA BANK, NA, Defendant-Appellant, and Experian Information Solutions, Incorporated; Equifax Credit Information Services, Incorporated; Trans Union LLC, Defendants.

No. 03-1235.

United States Court of Appeals, Fourth Circuit.

Argued: December 4, 2003.

Decided: February 11, 2004.

COPYRIGHT MATERIAL OMITTED

ARGUED: Earle Duncan Getchell, Jr., Mcguire Woods, L.L.P., Richmond, Virginia, for Appellant. Richard John Rubin, Santa Fe, New Mexico, for Appellee. ON BRIEF: William H. Baxter, II, James E. Brown, Mcguire Woods, L.L.P., Richmond, Virginia, for Appellant. Leonard A. Bennett, Newport News, Virginia, for Appellee.

Before WILKINS, Chief Judge, TRAXLER, Circuit Judge, and Richard D. BENNETT, United States District Judge for the District of Maryland, sitting by designation.

Affirmed by published opinion. Chief Judge WILKINS wrote the opinion, in which Judge TRAXLER and Judge BENNETT joined.

OPINION

WILLIAM W. WILKINS, Chief Judge:

MBNA America Bank, N.A. (MBNA) appeals a judgment entered against it following a jury verdict in favor of Linda Johnson in her action alleging that MBNA violated a provision of the Fair Credit Reporting Act (FCRA), see 15 U.S.C.A. § 1681s-2(b)(1) (West 1998) (amended Dec. 4, 2003), by failing to conduct a reasonable investigation of Johnson's dispute concerning an MBNA account appearing on her credit report. Finding no reversible error, we affirm.

I.

The account at issue, an MBNA MasterCard account, was opened in November 1987. The parties disagree regarding who applied for this account and therefore who was legally obligated to pay amounts owed on it. It is undisputed that one of the applicants was Edward N. Slater, whom Johnson married in March 1991. MBNA contends that Johnson was a co-applicant with Slater, and thus a co-obligor on the account. Johnson claims, however, that she was merely an authorized user and not a co-applicant.

In December 2000, Slater filed for bankruptcy, and MBNA promptly removed his name from the account. That same month, MBNA contacted Johnson and informed her that she was responsible for the approximately $17,000 balance on the account. After obtaining copies of her credit report from the three major credit reporting agencies — Experian, Equifax, and Trans Union — Johnson disputed the MBNA account with each of the credit reporting agencies. In response, each credit reporting agency sent to MBNA an automated consumer dispute verification (ACDV). The ACDVs that Experian and Trans Union sent to MBNA specifically indicated that Johnson was disputing that she was a co-obligor on the account. See J.A. 278 (Experian) ("CONSUMER STATES BELONGS TO HUSBAND ONLY"); id. at 283 (Trans Union) ("WAS NEVER A SIGNER ON ACCOUNT. WAS AN AUTHORIZED USER"). The ACDV that Equifax sent to MBNA stated that Johnson disputed the account balance.

In response to each of these ACDVs, MBNA agents reviewed the account information contained in MBNA's computerized Customer Information System (CIS) and, based on the results of that review, notified the credit reporting agencies that MBNA had verified that the disputed information was correct. Based on MBNA's responses to the ACDVs, the credit reporting agencies continued reporting the MBNA account on Johnson's credit report.

Johnson subsequently sued MBNA, claiming, inter alia, that it had violated the FCRA by failing to conduct a proper investigation of her dispute. See 15 U.S.C.A. § 1681s-2(b)(1). A jury trial was held, and, following the presentation of Johnson's case, MBNA moved for judgment as a matter of law. That motion was denied. After the close of the evidence, the jury found that MBNA had negligently failed to comply with the FCRA, and it awarded Johnson $90,300 in actual damages. MBNA renewed its motion for judgment as a matter of law, asserting that § 1681s-2(b)(1) only required MBNA to conduct a cursory review of its records to verify the disputed information. Alternatively, MBNA argued that even if it were required to conduct a reasonable investigation of Johnson's dispute, the evidence showed that MBNA had met that obligation. The district court again denied MBNA's motion, concluding that § 1681s-2(b)(1) required MBNA to conduct a reasonable investigation and that there was sufficient evidence from which the jury could conclude that MBNA had failed to do so.

II.

MBNA first maintains that the district court erred in ruling that § 1681s-2(b)(1) requires furnishers of credit information to conduct a reasonable investigation of consumer disputes. Section 1681s-2(b)(1) imposes certain duties on a creditor who has been notified by a credit reporting agency that a consumer has disputed information furnished by that creditor:

After receiving notice pursuant to section 1681i(a)(2) of this title of a dispute with regard to the completeness or accuracy of any information provided by a person to a consumer reporting agency, the person shall —

(A) conduct an investigation with respect to the disputed information;

(B) review all relevant information provided by the consumer reporting agency...;

(C) report the results of the investigation to the consumer reporting agency; and

(D) if the investigation finds that the information is incomplete or inaccurate report those results to all other consumer reporting agencies to which the person furnished the information and that compile and maintain files on consumers on a nationwide basis.¹

MBNA argues that the language of § 1681s-2(b)(1)(A), requiring furnishers of credit information to "conduct an investigation" regarding disputed information, imposes only a minimal duty on creditors to briefly review their records to determine whether the disputed information is correct. Stated differently, MBNA contends that this provision does not contain any qualitative component that would allow courts or juries to assess whether the creditor's investigation was reasonable. By contrast, Johnson asserts that § 1681s-2(b)(1)(A) requires creditors to conduct a reasonable investigation.² We review this question of statutory interpretation de novo. See Holland v. Pardee Coal Co., 269 F.3d 424, 430 (4th Cir.2001).

In interpreting a statute, we must first "determine whether the language at issue has a plain and unambiguous meaning with regard to the particular dispute in the case." Robinson v. Shell Oil Co., 519 U.S. 337, 340, 117 S.Ct. 843, 136 L.Ed.2d 808 (1997). "Our inquiry must cease if the statutory language is unambiguous and the statutory scheme is coherent and consistent." Id. (internal quotation marks omitted). "The plainness or ambiguity of statutory language is determined by reference to the language itself, the specific context in which that language is used, and the broader context of the statute as a whole." Id. at 341, 117 S.Ct. 843.

The key term at issue here, "investigation," is defined as "[a] detailed inquiry or systematic examination." Am. Heritage Dictionary 920 (4th ed.2000); see Webster's Third New Int'l Dictionary 1189 (1981) (defining "investigation" as "a searching inquiry"). Thus, the plain meaning of "investigation" clearly requires some degree of careful inquiry by creditors. Further, § 1681s-2(b)(1)(A) uses the term "investigation" in the context of articulating a creditor's duties in the consumer dispute process outlined by the FCRA. It would make little sense to conclude that, in creating a system intended to give consumers a means to dispute — and, ultimately, correct — inaccurate information on their credit reports, Congress used the term "investigation" to include superficial, un reasonable inquiries by creditors. Cf. Cahlin v. Gen. Motors Acceptance Corp., 936 F.2d 1151, 1160 (11th Cir.1991) (interpreting analogous statute governing reinvestigations of consumer disputes by credit reporting agencies to require reasonable investigations); Pinner v. Schmidt, 805 F.2d 1258, 1262 (5th Cir.1986) (same). We therefore hold that § 1681s-2(b)(1) requires creditors, after receiving notice of a consumer dispute from a credit reporting agency, to conduct a reasonable investigation of their records to determine whether the disputed information can be verified.

III.

MBNA next contends that even if § 1681s-2(b)(1) requires creditors to conduct reasonable investigations of consumer disputes, no evidence here supports a determination by the jury that MBNA's investigation of Johnson's dispute was unreasonable. We review the denial of MBNA's motion for judgment as a matter of law de novo. See Baynard v. Malone, 268 F.3d 228, 234 (4th Cir.2001). We must view the evidence in the light most favorable to Johnson, the nonmovant, and draw all reasonable inferences in her favor without weighing the evidence or assessing the witnesses' credibility. See id. at 234-35. "The question is whether a jury, viewing the evidence in the light most favorable to [Johnson], could have properly reached the conclusion reached by this jury." Id. at 235 (internal quotation marks omitted). We must reverse if a reasonable jury could only rule in favor of MBNA; if reasonable minds could differ, we must affirm. See id.

As explained above, MBNA was notified of the specific nature of Johnson's dispute — namely, her assertion that she was not a co-obligor on the account. Yet MBNA's agents testified that their investigation was primarily limited to (1) confirming that the name and address listed on the ACDVs were the same as the name and address contained in the CIS,³ and (2) noting that the CIS contained a code indicating that Johnson was the sole responsible party on the account. The MBNA agents also testified that, in investigating consumer disputes generally, they do not look beyond the information contained in the CIS and never consult underlying documents such as account applications. Based on this evidence, a jury could reasonably conclude that MBNA acted unreasonably in failing to verify the accuracy of the information contained in the...