Alvarez Melendez v. Citibank

• Citation: 705 F. Supp. 67
• Decision Date: 23 December 1988
• Docket Number: Civ. No. 88-0009 GG.
• Parties: Ricardo ALVAREZ MELENDEZ, Luz M. Class and their conjugal partnership, Plaintiffs, v. CITIBANK, Defendant.
• Court: U.S. District Court — District of Puerto Rico

705 F. Supp. 67

Ricardo ALVAREZ MELENDEZ, Luz M. Class and their conjugal partnership, Plaintiffs, v. CITIBANK, Defendant.

Civ. No. 88-0009 GG.

United States District Court, D. Puerto Rico.

December 23, 1988.

Heriberto Torres Villanueva, San Juan, P.R., for plaintiffs.

García Rodón, Correa Márquez & Valderas, Alice Net Carlo, Hato Rey, P.R., for defendant.

OPINION AND ORDER

GIERBOLINI, District Judge.

Plaintiffs brought this action seeking relief under the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq. (FCRA). This court's jurisdiction is also invoked pursuant to Title 28, Section 1332 (diversity of citizenship). Plaintiffs seek $100,000 damages. Pending before this court is defendant's motion to dismiss for failure to state a claim upon which relief can be granted. An opposition has been filed.

Plaintiffs' complaint alleges that defendant bank approved loan and banking transactions under plaintiffs' name although plaintiffs did not participate in, or authorize, the transactions. Plaintiffs contend that defendant bank issued reports of default and tardy repayment of the unauthorized transactions to credit institutions, causing damage to their reputation, credit standing and emotional hardship.

The FCRA imposes on consumer credit reporting agencies the duty of following reasonable procedures to assure the accuracy of consumer reports. 15 U.S.C. § 1681e(b). This Court has jurisdiction to enforce any duty imposed by the Act. 15 U.S.C. § 1681p. Defendant Citibank alleges, however, that it is not a consumer reporting agency, nor a user of reported information, as defined by the Act. Therefore, defendant contends that plaintiffs have failed to forward a claim upon which relief can be granted because plaintiffs' claim is not covered by the remedies set forth under the FCRA.

Section 1681a(f) of the FCRA defines a "consumer reporting agency" as:

.... any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages.... in the practice of assembling or evaluating consumer credit information.... for the purpose of furnishing consumer reports to third parties....

Defendant Citibank does not fall within this definition. It did not assemble or evaluate consumer credit information to distribute to third parties. It did no more than furnish information to a credit reporting agency. See Rush v. Macy's New York, Inc., 775 F.2d 1554, 1557 (11th Cir.1985) (upholding dismissal of FCRA claim granted to party who furnished information to credit reporting agencies); Mitchell v. First National Bank of Dozier, 505 F.Supp. 176 (M.D.Ala.1981); Freeman v. Southern Nat. Bank, 531 F.Supp. 94 (S.D. Tex.1982).

Second, the information provided to the credit reporting agency was not "a consumer report" under the FCRA. The definition of consumer report specifically excludes the type of information at issue here: "The term consumer report does not include.... any report containing information solely as to transactions or experiences between the consumer and the person making the report." 15 U.S.C. § 1681a(d). Therefore, when a bank furnishes information based solely on its own experience with the consumer, the information is not a consumer report and the bank is not under these circumstances a consumer reporting agency.

Plaintiffs argue that the information was indeed a consumer report because the bank's information was not as to a transaction between it and a consumer, because plaintiff Alvarez was not, in fact, a customer of defendant bank. However, from the bank's point of view, it believed Alvarez was its customer and responsible for the delinquent account. Moreover, the bank notified the United Credit Bureau that plaintiff's account was in dispute after plaintiff called possible discrepancies to its attention. We find that the information submitted by defendant bank for the purposes of the Act concerned a customer of the bank and therefore, was not a consumer report. See Smith v. First National Bank of Atlanta, 837 F.2d 1575, 1578 (11th Cir.1988) (upholding grant of summary judgment where "plaintiff was not customer of defendant bank.... but mistake caused plaintiff to appear as a customer to defendant bank.")

Plaintiff argues that defendant bank is covered under the FCRA because it is a user of consumer reports. Section 1681m of the FCRA is titled "requirements on users of consumer reports." It provides that whenever credit or insurance is denied or rates increased due to information contained in a consumer report, the user must supply the consumer with the name and address of the consumer reporting agency making the report. In relation to its business dealings with plaintiff, defendant bank was not denying credit or insurance, nor raising the rates charged to plaintiff based on a consumer report. Thus, we find that defendant bank merely furnished information regarding its credit experience with plaintiff and was not a user of consumer reports for the purpose of establishing civil liability under the FCRA.

Plaintiffs allege that defendant bank was grossly negligent and malicious in providing false information to credit reporting agencies. Section 1681h(e) of the FCRA provides:

Except as provided in.... is U.S.C. 1681n and 1681o, no consumer may bring any action or proceeding in the nature of defamation, invasion of privacy, or negligence with respect to the reporting of information against any consumer reporting agency, any user of information, or any person who furnishes information to a consumer reporting agency, based on information disclosed pursuant to.... is U.S.C. § 1681g, 1681h, or 1681m, except as to false information furnished with malice or willful intent to injure such consumer.

We agree with courts that have found that section 1681h(e) does not create a separate federal cause of action under the Act. See Freeman v. Southern Nat. Bank, 531 F.Supp. 94 (S.D.Tex.1982); Mitchell v. First Nat. Bank of Dozier, 505 F.Supp. 176 (M.D.Ala.1981). Section 1681h(e) must be read in the context of the jurisdictional statute, section 1681p which authorizes this court to "enforce any liability created under the Act as well as sections 1681n and 1681o, which limit civil...