Andrews v. Trans Union Corp., Inc.

• Decision Date: 27 May 1998
• Docket Number: No. CV 96-7369 LGB VAPX.,CV 96-7369 LGB VAPX.
• Citation: Andrews v. Trans Union Corp., Inc., 7 F.Supp.2d 1056 (C.D. Cal. 1998)
• Court: U.S. District Court — Central District of California
• Parties: Adelaide ANDREWS, Plaintiff, v. TRANS UNION CORP. et al., Defendants.

7 F.Supp.2d 1056

Adelaide ANDREWS, Plaintiff, v.TRANS UNION CORP. et al., Defendants.

No. CV 96-7369 LGB VAPX.

United States District Court, C.D. California.

May 27, 1998.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Gus T. May, Edward P. Howard, Laura N. Diamond, Victor T. Fu, Center for Law in Public Interest, Los Angeles, CA, Carlyle W. Hall, Jr., Andrew R. Henderson, Bethany A. Dreyfus, Hall & Associates, Los Angeles, CA, Gerald L. Sauer, Sauer & Wagner L.L.P., Los Angeles, CA, for Adelaide Andrews.

Daniel J. McLoon, Kevin R. Lussier, Vick K. Mansourian, Jones, Day, Reavis & Pogue, Los Angeles, CA, for TRW Inc.

Donald E. Bradley, Crowell & Moring LLP, Irvine, CA, Monica L. Thompson, Michael O'Neil, Rudnick & Wolfe, Chicago, IL, for Trans Union Corp.

ORDER GRANTING IN PART AND DENYING IN PART TRANS UNION'S MOTION FOR SUMMARY JUDGMENT AND GRANTING TRW'S MOTION FOR PARTIAL SUMMARY JUDGMENT.

BAIRD, District Judge.

I.Introduction

PlaintiffAdelaide Andrews has sued Defendants, two credit reporting agencies, over the way they handled her credit information.Each Defendant filed a separate Motion for Summary Judgment or Partial Summary Judgment.These Motions came on regularly for hearing on May 18, 1998.Having reviewed all pertinent papers on file and considered the oral argument of counsel, for the reasons discussed below, the Court will rule as follows:

Defendant Trans Union's Motion for Summary Judgment is GRANTED in part and DENIED in part as follows: Defendant Trans Union's Motion on Plaintiff's improper disclosure (§ 1681e(a)) claim is GRANTED.Defendant Trans Union's Motion on Plaintiff's accuracy (§ 1681e(b)) claim, reinvestigation (§ 1681i(a)) claim, state law (§ 17200) claim, request for punitive damages, and request for injunctive relief is DENIED.

Defendant TRW's Motion for Partial Summary Judgment is GRANTED in all respects, including Plaintiff's improper disclosure (§ 1681e(a)) claim, request for punitive damages, and request for injunctive relief.Additionally, Defendant TRW's Motion for Summary Adjudication that Plaintiff did not incur any economic damages in the form of higher interest expenses relating to TRW's furnishing her credit report to Chase is likewise GRANTED.

II.Procedural Background

PlaintiffAdelaide Andrews("Plaintiff") filed this Complaint against Trans Union Corporation, Inc. and TRW, Inc.("Defendants") on October 21, 1996 alleging four causes of action for violation of the Fair Credit Reporting Act ("FCRA"), as amended, 15 U.S.C. §§ 1681 et seq., and state law:

(1) Both Defendants wrongfully disclosed Plaintiff's consumer reports in violation of 15 U.S.C. §§ 1681band1681e(a);

(2) Both Defendants failed to employ reasonable procedures to assure maximum possible accuracy of Plaintiff's consumer reports in violation of 15 U.S.C. § 1681e(b);

(3)Defendant Trans Union failed to reasonably reinvestigate and promptly delete misinformation in Plaintiff's consumer reports in violation of 15 U.S.C. § 1681i(a);

(4) Both Defendants, by the acts and omissions entailed in the above federal allegations, have also violated California Business and Professions Code §§ 17200, et seq.

Plaintiff seeks injunctive and declaratory relief, actual and punitive damages in amounts to be determined at trial, disgorgement of any profits resulting from the state law violation, and attorneys' fees and costs.

Plaintiff alleges that when she sought a residential mortgage on or about May 31, 1995, the bank indicated delinquent information existed in Plaintiff's credit report.Plaintiff alleges that this negative information was a result of identity fraud because, although the social security number, last name, and first initial were hers, the other information (first name, date of birth, and address) belonged to an imposter.

Accordingly, Plaintiff alleges that both Defendants, credit reporting companies, violated their duties under the Fair Credit Reporting Act, 15 U.S.C §§ 1681, et seq., by releasing her credit report without sufficient identification, thereby allowing the imposter to open the fraudulent accounts, and by not promptly rectifying the misinformation after Plaintiff advised them of the dispute and investigation.

Although Defendants both subsequently removed the delinquent misinformation, Trans Union retained the inquiries on Plaintiff's consumer report.Further, Plaintiff alleges sustained distress, commercial impairment, and loss of time and money.Plaintiff also alleges that the emotional distress caused a flare-up of her preexisting Lupus condition.

Plaintiff filed her complaint in this court on October 21, 1996.On October 20, 1997, this Court denied Defendant Trans Union's Motion for Leave to File Third-Party Complaint, which sought to implead the imposter as a third-party defendant.The Court held that Defendant Trans Union had no right of contribution or indemnity against the alleged imposter, and thus, impleader was improper.

On March 24, 1998, Defendant Trans Union filed a Motion for Leave to File an Amended Answer.Since this Motion was noticed to be heard after the Motions Cut-Off date, it also sought to amend the scheduling order.By Order filed on April 15, 1998, The Court granted this Motion.

On February 23, 1998, each Defendant filed their own Motion for Summary Judgment or Partial Summary Judgment.On March 2, 1998, Plaintiff filed her Oppositions.On March 9, 1998, Defendants filed their Replies.A hearing was held on May 18, 1998.¹

III.Detailed Factual Background

The following facts are undisputed, at least for the purposes of these Motions, unless otherwise noted:²

A.How the Consumer Reporting Agencies Operate and are Regulated

Defendants were both consumer reporting agencies governed by the FCRA during the time period relevant to this case.³(Pl.'s Stmt. Genuine Issues in Opp. to Trans Union's Mot. [hereinafter TU Genuine Issues]¶ 1;TRW Genuine Issues¶ 1.)Each Defendant maintained a computer system which stored credit information about hundreds of millions of consumers — Trans Union's system is named CRONUS and TRW's system was named the Legacy System.(TU Genuine Issues¶ 7;TRW's Reply to Genuine Issues¶ 3.)

Defendants' computers have two main functions.The first is to receive information from large creditors, such as department stores, credit card issuers, banks, etc.This information consists of things like repayment history, credit limits, balances, etc., on individual consumers.Thus, Defendants' computers are repositories of huge amounts of consumer credit information.(See generally,TRW's Reply to Genuine Issues¶ 3;TU Genuine Issues¶ 7 at 3, ¶ 2 at 25.)

The second function of Defendants' computers is the key to this case.Their computers allow Defendants' "subscribers" to access the data in real-time for various purposes, such as to facilitate credit transactions.For example, when a subscribing credit grantor is contemplating extending credit to a consumer, the credit grantor obtains a report from Defendants describing the consumer's past use of credit.Based on the contents of that report, the credit grantor can make an informed decision whether to grant or deny credit.Defendants' computers are programmed to analyze a subscriber's request for a report and compare the identifying information (i.e., the name, address, social security number, etc.) with the data in the computer.Based on a proprietary scheme, Defendants' computers release information that is "sufficiently" similar to the identifying information in the request.In other words, a subscriber's request for a report on Steve Smith may return information listed under Steve Smith, Steven Smith, S. Smith, etc., depending on how closely the other identifying information matches.In the instant case, as will be described in more detail below, both Defendants' computers released Plaintiff's information based on an exact match of her social security number, last name, and first initial.

Consumer reporting agencies are regulated by the FCRA, 15 U.S.C. § 1681 et seq.The FCRA imposes a number of specific requirements on consumer reporting agencies, several of which Plaintiff alleges that Defendants violated.These will be discussed in detail below.

In enacting the FCRA, Congress made several findings, and enunciated a statement of purpose.These are as follows:

The Congress makes the following findings:

(1) The banking system is dependent upon fair and accurate credit reporting.Inaccurate credit reports directly impair the efficiency of the banking system. ...

(2) An elaborate mechanism has been developed for investigating and evaluating the credit worthiness, credit standing, credit capacity, character, and general reputation of consumers.

(3) Consumer reporting agencies have assumed a vital role in assembling and evaluating consumer credit and other information on consumers.

(4) There is a need to insure that consumer reporting agencies exercise their grave responsibilities with fairness, impartiality, and a respect for the consumer's right to privacy.

It is the purpose of this subchapter to require that consumer reporting agencies adopt reasonable procedures for meeting the needs of commerce for consumer credit, personnel, insurance, and other information in a manner which is fair and equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization of such information in accordance with the requirements of this subchapter.

15 U.S.C. § 1681.Having described the general functioning of consumer reporting agencies such as Defendants and the purpose of the FCRA, the Court next turns to a description of the relevant transactions in this case.

B.Plaintiff and the Imposter

There is little dispute about the underlying factual events which transpired in this case.The differences between the parties are in their interpretation of the legal effect of those events.

Plaintiff's name...