Bryant v. TRW, INC., Civ. No. 78-70896.

• Decision Date: 16 April 1980
• Docket Number: Civ. No. 78-70896.
• Parties: Bennie BRYANT, Plaintiff, v. TRW, INC., an Ohio Corporation, Defendant.
• Court: U.S. District Court — Western District of Michigan

487 F. Supp. 1234

Bennie BRYANT, Plaintiff, v. TRW, INC., an Ohio Corporation, Defendant.

Civ. No. 78-70896.

United States District Court, E. D. Michigan, S. D.

April 16, 1980.

Forrest Walpole, Walpole & Holmes, Caro, Mich., for plaintiff.

Sidney L. Frank, Frank & Stefani, Troy, Mich., for defendant.

OPINION

COHN, District Judge.

I.

Before the Court is defendant's motion for judgment notwithstanding the verdict, or in the alternative, for a new trial seeking to set aside a jury verdict in the amount of $8,000.00 for actual damages for violation of § 607(b) of the Fair Credit Reporting Act (the Act).¹ Plaintiff is a consumer § 603(c); defendant is a consumer reporting agency § 603(f) which issued two consumer reports § 603(d) on plaintiff in May and September of 1976.²

Defendant claimed good faith in preparing the two reports and that any mistakes in the reports were caused by the fact that plaintiff's creditors furnished inaccurate information to defendant.

Defendant says that the Court erred as a matter of law in not holding that so long as it accurately reported the information it received from plaintiff's creditors it was free from liability, and that the Court further erred in allowing the jury to consider allegations of willful violation and future damages.

The motion is denied. To accept defendant's position would diminish the jury's role in assessing the performance of consumer reporting agencies under the Act contrary to Congressional intent.

II.

Plaintiff initially alleged that (1) defendant willfully failed to comply with § 607(b) which requires a consumer reporting agency to follow "reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates," and that defendant willfully failed to comply with § 609(a) which requires certain disclosures upon request of a consumer about the information in a consumer reporting agency's files, (2) that defendant negligently failed to comply with these sections, and (3) that defendant discriminated against plaintiff on account of race.

Section 618 confers jurisdiction on this Court to enforce liability under § 616 which makes a consumer reporting agency liable to a consumer for actual damages, punitive damages and attorney fees for willful noncompliance with provisions of the Act, and to enforce liability under § 617 which makes a consumer reporting agency liable to a consumer for actual damages and attorney fees for negligent non-compliance with provisions of the Act.

In general there is a two year statute of limitations § 618.

III.

Prior to trial the claims under § 609(a) and for racial discrimination were dismissed and the Court declined to exclude evidence of acts or occurrences occurring more than two years prior to the date of suit. The Court also bifurcated defendant's counterclaim for damages alleging conduct on the part of plaintiff intending to harass, embarrass and aggravate, Fed.R.Civ.P. 42.

In declining to exclude evidence of acts or occurrences more than two years old, the Court held that such acts or occurrences could be relevant to a determination of whether defendant either negligently or willfully failed to follow reasonable procedures to assure maximum possible accuracy of information. The procedures used by the defendant may or may not involve a method of operation which extends over a period of time. Plaintiff was required to introduce evidence relating to the way defendant operated before he could introduce evidence regarding acts or occurrences as to himself. At trial the Court allowed evidence relating to the history of plaintiff's relationships with defendant going as far back as 1971, but carefully instructed the jury that plaintiff's claims must be judged on the 1976 reports.

Rule 401 of the Federal Rules of Evidence defines relevancy; Rule 402 provides that relevant evidence is admissible; Rule 403 excludes relevant evidence if in the discretion of the Court it determines its prejudicial effect outweighs its probative value. As will be seen from the discussion of the evidence adduced at trial, the only way a jury could reasonably determine whether the defendant followed reasonable procedures to assure maximum possible accuracy of information furnished about plaintiff was to know the history of the relationship between plaintiff and defendant and assess defendant's conduct in the context of that history. The causes of action created by § 616 and § 617 are personal to a consumer and the obligations imposed on a consumer reporting agency are expressed in terms of the particular consumer alleging violation. Without the history of the relationship the jury could not make the judgment required of it under § 616 and § 617.

IV.

The evidence at trial was relatively straightforward and in sufficient detail to enable the jury to clearly understand the way defendant operated its business and its relationship with plaintiff. In summary the evidence showed:

A.

Beginning sometime in the early 1970's defendant, one of the largest consumer reporting agencies in Michigan, issued consumer reports on plaintiff. On a number of occasions these consumer reports were inaccurate and on a number of occasions plaintiff discussed in person with representatives of defendant his concerns and also went to his creditors, principally retail merchants, in an endeavor to straighten out information sent to defendant on his accounts.

In May of 1976 defendant issued a consumer report in the form of a mortgage report on plaintiff in connection with a mortgage application on a house purchase. This consumer report contained inaccurate information on plaintiff's account with a retail merchant. Plaintiff went to defendant and called its attention to the inaccuracy. The mortgage loan did not close for unrelated reasons.

In August, 1976 plaintiff again signed a mortgage loan application for a home purchase. On September 7 the mortgage company ordered a consumer report in the form of a mortgage report. On September 28 an employee of defendant called the mortgage company to advise that the mortgage report would contain four items of derogatory information on plaintiff. The mortgage company immediately advised plaintiff. Plaintiff the same day went to defendant's office and discussed in detail the four items. Three of these items did not appear in the May report even though at least one of these items related to events prior to May, 1976 and logically should have been part of the May report. Subsequent to September 28 the creditors involved advised defendant the information they previously furnished was erroneous.

At the September 28 personal meeting between plaintiff and a representative of defendant, a memorandum was placed in plaintiff's file which reads:

"9-28-76 Cus' wanted us to re-check Ford Mtr Credit.—showed 616 late charges on most recent clearing (read to mortg. company —file not typed yet). Re-cleared thru adjuster ± FMC.—wanted it shown as pd. acc't.—Gone to Mabel. Told cus. I would review file before it was sent. Also gave him copy of Mgr. attention which is read to creditors. JJW."

The mortgage report was sent to the mortgage company on September 30 in its original form without any further attempt on defendant's part to verify the derogatory items.

The mortgage loan was initially denied on the basis of the mortgage report. Subsequently, with a revision in the mortgage report and through plaintiff's personal efforts the mortgage loan closed.

Plaintiff testified as to the embarrassment, anxiety, humiliation and emotional stress he suffered as a consequence of his difficulties over the two reports. No out-of-pocket expenses or actual dollar losses were proven.

B.

Defendant's witnesses testified in detail to the procedures it followed in preparing consumer reports and the effort it makes to assure that the information it receives from subscribers is accurately reflected in the consumer reports it issues.

The testimony also showed:

a) defendant did not maintain records showing the relative accuracy of the information furnished by its subscribers;

b) employees of defendant could not say which of its subscribers had the best or worst record for accuracy;

c) no record is kept of the number of times a particular subscriber is the subject of claimed errors;

d) defendant has no uniform definition for the word "delinquency", a term frequently used in its consumer reports but rather it depends on the subscriber's definition, i. e., for one subscriber it could mean ninety days late, for another one day late;

e) defendant does not advise its subscribers that if they are having a dispute with a customer over an account that should be noted in the information it furnishes to defendant.

C.

There was no claim that the information contained in the two mortgage reports was different than the information furnished by its subscribers. Plaintiff argued to the jury that under the particular circumstances of the history of his relationship with defendant the jury should conclude that defendant failed to follow reasonable procedures to assure maximum possible accuracy of the information concerning plaintiff. Plaintiff pointed to the September 28 personal meeting and the failure of the defendant to re-check the information he furnished them at that time. Plaintiff emphasized the fact that on their face, the May and September mortgage reports were contradictory.³ All of this, plaintiff suggested, demonstrated a willfulness on the part of defendant in its actions and caused emotional damage to plaintiff which would extend beyond the date of trial.

D.

Defendant argued to the jury that plaintiff suffered no out-of-pocket loss; that his failure to purchase the first house was unrelated to anything he did; that he ultimately purchased the second house; that it did everything reasonably possible to accurately transmit the information it received from its subscribers; that it should not be...