Pintos v. Pacific Creditors Ass'n

• Decision Date: 30 April 2009
• Docket Number: No. 04-17485.,No. 04-17558.,04-17485.,04-17558.
• Citation: 565 F.3d 1106
• Parties: Maria E. PINTOS, Plaintiff-Appellant, v. PACIFIC CREDITORS ASSOCIATION; Experian Information Solutions, Inc., Defendants-Appellees. Maria E. Pintos, Plaintiff-Appellee, v. Pacific Creditors Association, Defendant, and Experian Information Solutions, Inc., Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

565 F.3d 1106

Maria E. PINTOS, Plaintiff-Appellant, v. PACIFIC CREDITORS ASSOCIATION; Experian Information Solutions, Inc., Defendants-Appellees.

Maria E. Pintos, Plaintiff-Appellee, v. Pacific Creditors Association, Defendant, and Experian Information Solutions, Inc., Defendant-Appellant.

No. 04-17485.

No. 04-17558.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted January 9, 2007.

Filed April 30, 2009.

[565 F.3d 1109]

Andrew J. Ogilvie (argued), Kemnitzer, Anderson, Barron, Ogilvie & Brewer, LLP, San Francisco, CA, for appellant/cross-appellee Maria E. Pintos.

Daniel J. McLoon (argued), Jones Day, Los Angeles, CA, Adam R. Sand and Marc S. Carlson, Jones Day, San Francisco, CA, for appellee/cross-appellant Experian Information Solutions, Inc.

Andrew M. Steinheimer (argued) and Mark E. Ellis, Ellis Coleman Poirier LaVoie & Steinheimer, LLP, Sacramento, CA, for appellee Pacific Creditors Association.

Appeal from the United States District Court for the Northern District of California, Claudia Wilken, District Judge, Presiding. D.C. No. CV-03-05471-CW.

Before: MARY M. SCHROEDER, RICHARD R. CLIFTON, and CARLOS T. BEA, Circuit Judges.^*

[565 F.3d 1110]

ORDER AND OPINION ORDER

The opinion in the above-captioned matter filed on September 21, 2007, and published at 504 F.3d 792, is WITHDRAWN. The superseding opinion shall be filed concurrently with this order. The pending petition for panel rehearing and rehearing en banc is dismissed as moot. The parties may file new petitions as to the opinion for rehearing and rehearing en banc in accordance with the Federal Rules of Appellate Procedure.

OPINION

CLIFTON, Circuit Judge:

Maria E. Pintos appeals the district court's summary adjudication of her claims under the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681 et seq. Pintos contends that Pacific Creditors Association ("PCA") violated the FCRA by obtaining, without any FCRA-sanctioned purpose, a credit report on her from Experian Information Solutions, Inc., a credit reporting agency. Pintos also argues that Experian violated the FCRA by furnishing the report to PCA.

The district court granted summary judgment in favor of the defendants, concluding that PCA was authorized to obtain Pintos's credit report under the FCRA, which allows for the furnishing of reports "in connection with a credit transaction involving the consumer ... and involving the ... collection of an account of[ ] the consumer." 15 U.S.C. § 1681b(a)(3)(A). The district court determined that the transaction involved the collection of an account, relying upon our decision in Hasbun v. County of Los Angeles, 323 F.3d 801 (9th Cir.2003). We conclude that Hasbun is more limited, however. Because the current case involves neither a transaction for which Pintos sought credit nor the collection of a judgment debt, we conclude that § 1681b(a)(3)(A) did not authorize PCA to obtain the credit report on Pintos. Thus, we vacate the judgment of the district court and remand for further proceedings regarding the defendants' liability. We also vacate the district court's order regarding Experian's motion to seal certain documents and remand for consideration under the proper legal standard.

I. Background

Police officers found a sport utility vehicle belonging to Pintos parked on the street in San Bruno, California, on May 29, 2002. The vehicle's registration was expired. At police direction, the vehicle was towed, and the towing company, P & S Towing, obtained a lien on the vehicle for towing and impound costs. P & S later sold the vehicle when Pintos failed to reclaim it or pay the outstanding charges. Since the vehicle's sale price did not cover the amount owed, P & S asserted a deficiency claim against Pintos and later transferred that claim to PCA, a collection agency.¹

PCA sought and obtained a credit report on Pintos from Experian on December 5 2002, in connection with its effort to collect on the debt assigned by P & S. Pintos subsequently filed a complaint against PCA and Experian under the FCRA. She alleged that PCA violated the FCRA by obtaining her credit report without any FCRA-sanctioned purpose and that Experian was liable for providing the report to PCA.

PCA and Experian filed separate motions for summary judgment. Both argued that, under 15 U.S.C. § 1681b(a)(3)(A), PCA had a permissible purpose for obtaining Pintos's credit report because it was seeking to collect a debt, the towing deficiency claim. Experian further argued that it was not liable for a violation because it had fulfilled its obligations under 15 U.S.C. § 1681e, which immunizes a reporting agency against FCRA violations by the agency's subscribers so long as the agency takes certain steps.

Pintos filed a cross-motion for partial summary judgment on the issues of permissible purpose and Experian's alleged negligence. She attached to that motion several Experian documents detailing the company's internal procedures for complying with its FCRA obligations. Claiming these documents were confidential and proprietary, Experian filed a motion to seal them.

The district court granted the defendants' motions for summary judgment on November 9, 2004. Citing Hasbun, the court agreed that § 1681b(a)(3)(A) permitted PCA to obtain Pintos's credit report. The court denied Experian's motion to seal documents, without explanation.

Pintos filed a timely notice of appeal on December 8, 2004. Experian cross-appealed the district court's denial of its motion to seal on December 9, 2004. It also sought reconsideration by the district court of the denial of that motion. On April 29, 2005, the district court held that it lacked jurisdiction over the matter since Experian already appealed the order to this court. Nevertheless, the court stated that, if it had jurisdiction, it would grant Experian's motion under Phillips ex rel. Estates of Byrd v. General Motors Corp., 307 F.3d 1206 (9th Cir.2002), and it stayed its prior order on the subject pending the appeal.

II. Discussion

We review grants of summary judgment de novo. ACLU v. City of Las Vegas, 466 F.3d 784, 790 (9th Cir.2006). Crossmotions for summary judgment are evaluated separately under this same standard. Id. at 790-91; Hoopa Valley Indian Tribe v. Ryan, 415 F.3d 986, 989-90 (9th Cir.2005).

A. 15 U.S.C. § 1681b(a)(3)(A)

"Congress enacted the FCRA in 1970 to promote efficiency in the Nation's banking system and to protect consumer privacy." TRW Inc. v. Andrews, 534 U.S. 19, 23, 122 S.Ct. 441, 151 L.Ed.2d 339 (2001). Those two goals lie in tension, and the FCRA strikes a balance between them. The Act authorizes credit reporting agencies to "furnish ... consumer report[s]" because "[c]onsumer reporting agencies have assumed a vital role in assembling and evaluating consumer credit and other information on consumers." 15 U.S.C. §§ 1681(a)(3), 1681b(a). At the same time, the FCRA "requir[es] credit reporting agencies to maintain reasonable procedures designed to assure maximum possible accuracy of the information contained in credit reports." Andrews, 534 U.S. at 23, 122 S.Ct. 441 (citations and internal quotation marks omitted). Importantly for this case, the FCRA permits agencies to furnish credit reports only for "certain statutorily enumerated purposes." Id.

The statutory limitation on the furnishing of credit reports is particularly relevant here, as the parties dispute whether PCA had a permissible purpose in obtaining Pintos's credit report. Defendants contend that it did, under 15 U.S.C. § 1681b(a)(3)(A):

(a) In general

Subject to subsection (c) of this section, any consumer reporting agency may furnish a consumer report under the following circumstances and no other:

* * *

(3) To a person which it has reason to believe—

(A) intends to use the information in connection with a credit transaction involving the consumer on whom the information is to be furnished and involving the extension of credit to, or review or collection of an account of, the consumer;

To qualify under § 1681b(a), the "credit transaction" must both (1) be "a credit transaction involving the consumer on whom the information is to be furnished" and (2) involve "the extension of credit to, or review or collection of an account of, the consumer." Concluding that the transaction here involved the "collection of an account," the district court held that the statute authorized PCA to obtain Pintos's credit report. But the district court did not address whether the transaction was "a credit transaction involving" Pintos. That may have been because Hasbun did not separately discuss that requirement, but our court has discussed it in other cases and it is clearly set out in the statute.

One decision in which we discussed that requirement was Andrews v. TRW, Inc., 225 F.3d 1063, 1067 (9th Cir.2000), rev'd on other grounds, TRW, Inc. v. Andrews, 534 U.S. 19, 122 S.Ct. 441, 151 L.Ed.2d 339 (2001), in which we addressed whether the plaintiff, a victim of identity theft, was "involved" in credit transactions initiated by an imposter posing as the plaintiff. The imposter had obtained the plaintiff's social security number and birth date and used that information to apply for credit from various companies. Id. at 1064-65. The companies in turn requested and obtained the plaintiff's credit report from TRW. Id. at 1065. The plaintiff sued TRW, claiming that it furnished her credit report "without reasonable grounds for believing that she was the consumer whom the credit applications involved." Id. (internal quotation marks omitted). The district court granted summary judgment in TRW's favor on this claim, ruling that TRW's disclosures "were made for a purpose permissible under § 1681b(a)(3)(A), because the Plaintiff, even against her will, was `involved' in the credit transaction initiated by the Imposter." Id. at 1066.

On appeal, we concluded that the plaintiff was not "involved" in the credit transaction and reversed the summary judgment...