Ferrin v. Experian Info. Sols.
| Decision Date | 26 July 2022 |
| Docket Number | 20-CV-841 (NEB/TNL) |
| Parties | BLAKE FERRIN, Plaintiff, v. EXPERIAN INFORMATION SOLUTIONS, INC., Defendant. |
| Court | U.S. District Court — District of Minnesota |
ORDER ON MOTIONS FOR SUMMARY JUDGMENT
After Blake Ferrin petitioned for Chapter 7 bankruptcy, he learned that Experian Information Solutions, Inc. (“Experian”) was reporting two accounts on his credit report inaccurately by failing to report them as discharged in his bankruptcy. Ferrin sued Experian for violations of the Fair Credit Reporting Act (“FCRA”). Experian now moves for summary judgment and to exclude certain expert testimony, and Ferrin moves for partial summary judgment. (ECF Nos. 66, 75.) For the reasons below, the Court grants in part and denies in part Experian's motion and grants in part and denies in part Ferrin's motion.
Experian is a credit reporting agency (“CRA”) that furnishes consumer reports to third parties under 15 U.S.C Section 1681a(d). Experian has a two-step “scrub” procedure it employs when a consumer's debts have been discharged in bankruptcy.[1] (ECF No. 69 (“Cave Decl.”) ¶ 15.) The first step is the “initial” bankruptcy scrub. (Id.) This scrub runs within eight days of a notification from Lexis[2] that a consumer's bankruptcy was discharged. (Id.) Experian's initial scrub excluded accounts that were in a “current” status when the consumer filed for bankruptcy unless those debts were more than 90 days delinquent at the time of the scrub.[3] (Id.)
Experian's second step is a series of “look-back” bankruptcy scrubs. (Id. ¶ 17.) At the time frame relevant to this case, Experian conducted look-back scrubs “on the first Monday of every other month for an 18-month period following [the] bankruptcy discharge.”[4] (Id.) The look-back scrub is intended to catch pre-bankruptcy accounts that were excluded from the initial scrub because they were current, but later progressed to more than 90 days delinquent. (Id. ¶¶ 16-17.)
Ferrin petitioned for Chapter 7 bankruptcy on February 12, 2019, and some of his accounts were discharged a few months later, on May 13, 2019. (Cave Decl. ¶¶ 20, 23.) Experian received notice of Ferrin's bankruptcy petition and discharge the day after each was docketed. (Id.; ECF No. 70-5.) Ferrin's claim relates to two accounts discharged in bankruptcy: (1) Firefly Credit Union FCU partial #9141 (“Firefly”); and (2) TD Bank USA/Target partial #5975 (“Target”). At the time of the bankruptcy filing, both the Firefly and Target accounts were reporting as current. (Cave Decl. ¶ 21.)
Within days of Ferrin's bankruptcy discharge in May, Experian ran its initial scrub on Ferrin's credit file. (Id. ¶ 24.) At that time, the Firefly account reported thirty days past due. (Id.) The Target account reported thirty days past due in April, and current again in May.[5] (Id.) Because the Firefly and Target accounts were current when Ferrin filed for bankruptcy, Experian did not update these accounts to reflect the discharge in bankruptcy. (Id.)
Firefly account. In April-after Ferrin filed his bankruptcy petition, but before the discharge in bankruptcy-Firefly tried to report a CII code of “A,” reflecting that a debt was included in Ferrin's Chapter 7 bankruptcy petition. Experian rejected this update because it did not comply with the Metro-2® format, an industry standard for reporting accounts and bankruptcy information. (Cave Decl. ¶¶ 8, 22; ECF No. 70-2 (“Cave Expert Report”) at 8.) Experian requires data furnishers to report credit information using the Metro-2® format. (Cave Expert Report at 8.) Experian will reject a nonconforming update and advise the data furnisher of the error so that it can be corrected. (Id.) While Firefly acknowledged that “[i]t seems to make sense that [Experian] might reject” its nonconforming updates, (ECF No. 71-3 at 43 (filed under seal)), the parties dispute whether Firefly received notice of Experian's rejection. (Id. at 45 ().)
In June, Firefly tried to report a CII code of “E” to Experian, conveying that Ferrin's debt had been discharged in bankruptcy. (Cave Decl. ¶¶ 11, 27.) Experian again rejected Firefly's update because it failed to comply with the Metro-2® format. (Id. ¶ 27; Cave 2d Decl. ¶ 8.) In July, Firefly reported the update-this time in compliance with the Metro-2® format-that its account was charged off and over ninety days late.[6] (Cave Decl. ¶ 31; see Cave 2d Decl. ¶ 9.) On August 6, Experian ran its look-back scrub on Ferrin's credit file. By that time, the Firefly account was more than 90 days delinquent, so Experian updated the account to report it as discharged in bankruptcy. (Cave Decl. ¶ 32.)
Target account. As with the Firefly account, Ferrin's Target account was current when he filed his bankruptcy petition. In May, Target sent Experian two updates about Ferrin's account. (Cave 2d Decl. ¶ 10.) Experian did not process the first update because it included no CII information. (Id.) The second update added “E” to the CII field, but did not report a required “Date of First Delinquency.” (Id.; Cave Decl. ¶ 25.) Experian rejected this update because it failed to comply with Metro-2® reporting guidelines.[7] (Cave Decl. ¶ 25; Cave 2d Decl. ¶10.) Because the Target account never progressed past a “current” status, it was not scrubbed. (Cave Decl. ¶ 32.)
Ferris's Experian credit report. In July, Ferrin requested his consumer disclosure from Experian. (Cave Decl. ¶ 28.) The July 2, 2019 disclosure inaccurately reported that the Firefly account had a balance of $9,454 thirty days late and $341 past due, and that the Target account had a balance of $427 and was current. (Id. ¶ 29; ECF No. 71 (Ferrin's July 2, 2019 credit report) (filed under seal).) In contrast, two other CRAs had reported that the same accounts were discharged in bankruptcy with no balance owed by June 2019. (See ECF Nos. 87-2 (Trans Union declaration), 87-3 (Equifax declaration).)
Between May 21 and August 6, Ferrin's credit history was viewed several times in “soft inquiries.” (ECF No. 71-4 at 7-8 (); see Cave Decl. ¶ 19 ().)
Ferrin testified that he had not personally looked at any of his Experian credit reports; his law firm found the discrepancies and contacted him. (Ferrin Dep. at 39, 88.) Though his credit report contained a notice that he could dispute any information by contacting Experian, Ferrin did not do so. (Id. at 37-38; ECF No. 71 at 10.)
In March 2020, Ferrin sued Experian for failing to maintain reasonable procedures to assure maximum possible accuracy in preparing Ferrin's credit reports and credit files it published and maintained concerning Ferrin in violation of Section 1681e(b). (ECF No. 1 ¶ 13; ECF No. 57 (“Am. Compl.”) at 7.) Ferrin also alleges that Experian “is reporting [Ferrin] owes debt that he does not actually owe, damaging his revolving debt utilization rate and credit scores.” (Am. Compl. at 5.) When Ferrin brought this action, Experian was reporting the Firefly account correctly (as discharged in bankruptcy with no balance) and the Target account incorrectly (as current). (Cave Decl. ¶ 32.) Once served with the lawsuit, Experian applied its dispute procedures and updated the Target account. (ECF No. 71-4.)
“The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A dispute of fact is “genuine” if a factfinder could reasonably determine the issue in the non-moving party's favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A court considering a motion for summary judgment must view the facts in the light most favorable to the nonmoving party and give that party the benefit of all reasonable inferences supported by the evidence. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
Section 1681e(b) requires CRAs to “follow reasonable procedures to assure maximum possible accuracy of the information” in consumer reports. 15 U.S.C. § 1681e(b). Section 1681e(b) is not a strict liability statute, so inaccurate information in a report is not sufficient for liability. Hauser v. Equifax, Inc., 602 F.2d 811, 814-15 (8th Cir. 1979). To prevail on a Section 1681e(b) claim, a plaintiff must prove that: (1) the CRA reported inaccurate credit information about the plaintiff, (2) the CRA failed to follow reasonable procedures intended to assure the accuracy of its reports, (3) the plaintiff suffered harm, and (4) the CRA's failure to follow reasonable procedures was the cause of that harm.[8] Paul v. Experian Info. Sols., Inc., 793 F.Supp.2d 1098, 1101 (D. Minn. 2011) (citations omitted). As explained below, summary judgment is appropriate for Ferrin on the first element of this claim, and summary judgment is not appropriate for the rest of the elements.
Experian does not dispute that it reported inaccurate credit information about Ferrin, and Ferrin moves for partial summary judgment on this issue. (ECF No. 77 at 13.) Experian was aware of Ferrin's Chapter 7 bankruptcy filing and discharge dates, and inaccurately reported outstanding balances for Ferrin's Firefly and Target accounts and...
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