Gordon v. Greenpoint Credit, 4:02-CV-90607.
| Decision Date | 11 June 2003 |
| Docket Number | No. 4:02-CV-90607.,4:02-CV-90607. |
| Citation | 266 F.Supp.2d 1007 |
| Parties | Donna GORDON and Lovelle Gordon, Plaintiffs, v. GREENPOINT CREDIT; and Bankamerica Housing Services Defendants. |
| Court | U.S. District Court — Southern District of Iowa |
Robert E. McKenny, Waukee, IA, Thomas M. Werner, Des Moines, IA, for Plaintiffs.
Chip J. Lowe, Jeffrey A. Kelso, Des Moines, IA, for Defendants.
In an April 4, 2003 Order, the Court noted that Plaintiffs had incorrectly identified Defendants as "credit reporting institutions" in stating a cause of action under the Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq. (FCRA). As well, the Court expressed concern regarding whether this Court has subject matter jurisdiction over Plaintiffs' claims. Rather than dismiss the case for want of subject matter jurisdiction, however, the Court granted Plaintiffs leave to offer proof of jurisdiction. Plaintiffs responded on April 28 by filing an Amended Complaint stating two claims against Defendants as "furnishers of information to consumer reporting agencies" under § 1681s-2 (b) of the FCRA.1 Plaintiffs' Amended Complaint also states two state common law claims against Defendants for defamation and neglige
Defendants challenge the Amended Complaint on two grounds: that § 1681s-2(b) does not create a private cause of action for consumers against a furnisher of information; and that the FCRA preempts and prohibits state law claims against furnishers of information. Defendants have not filed a specific motion challenging Plaintiffs' Amended Complaint, but Defendants' arguments are akin to a motion for judgment on the pleadings under Fed. R.Civ.P. 12(c), or a challenge for failure to state a claim upon which relief can be granted under Fed.R.Civ.P. 12(b)(6). The Court will, therefore, address Defendants' Resistance to Plaintiffs' Amended Complaint accordingly.
In July 1997, Plaintiffs obtained financing for the purchase of their mobile home from Defendant BankAmerica Housing Services. The finance agreement was subsequently sold to Defendant Greenpoint Credit in 1998. Among its terms, the signed Retail Installment Contract states that the lender can share information about the Plaintiffs and Plaintiffs' account with credit reporting agencies and the lender can sell information about the Plaintiffs to all others who may lawfully receive such information.
In June of 2002, Plaintiffs attempted to purchase a boat from Inland Marine of Polk City, Iowa. After selecting the boat they wished to purchase, Inland Marines's financial manager assisted them in applying for a loan of $10,000. Plaintiffs' financing application was subsequently denied by two banking institutions because Plaintiffs' credit report indicated a poor credit history. After receiving the loan denials from these two institutions, Plaintiffs obtained a copy of their current credit report from Equifax Credit and Trans Union. The Equifax report stated that the Plaintiffs had been delinquent in a number of monthly payments to Defendants Bank-America Housing Services and Greenpoint Credit.
Plaintiffs claim that at all times from the date they obtained their loan from Bank-America to the present date, they have always mailed their monthly loan payments to Defendants in a timely manner, and the payments have always been received before the monthly due date. Even though Plaintiffs claim they were never late with monthly payments, the credit reports obtained by Inland Marine when Plaintiffs attempted to purchase a boat reflected a number of delinquent payments based on information furnished by Defendants. As a result of the credit reports, both of the potential lenders refused Plaintiffs' loan application for the boat. When Plaintiffs were able to obtain a loan for the boat, they paid a higher interest rate as a result of the credit report. Plaintiffs contacted the Defendants to remedy the erroneously reported information, but Defendants offered no assistance or response. Plaintiffs then contacted Equifax to dispute the information. Equifax contacted Defendants to investigate the dispute, but Defendants again took no action to correct the errors.
Plaintiffs' Amended Complaint states two claims alleging non-compliance with the Fair Credit Reporting Act, 15 U.S.C.S. § 1681 et seq., and pendant state law claims alleging defamation and negligence. Specifically, Plaintiffs contend that Defendants reported false or inaccurate information regarding Plaintiffs' account to credit reporting agencies and then failed to conduct an investigation once notified of the disputed information. Plaintiffs request awards for actual damages, compensatory damages, punitive damages, attorney fees, and statutory interest.
In their original complaint, Plaintiffs erroneously identified Defendants as credit reporting institutions and stated causes of actions based on an alleged failure to adopt reasonable procedures to ensure the maximum possible accuracy of reported information pursuant to § 1681e (b). In an earlier Order, the Court noted that Defendants were "furnishers of information" rather than credit reporting institutions and that Plaintiffs could not maintain a cause of action under § 1681e. The Court further noted that Plaintiffs' complaint alleged only facts challenging the accuracy of Defendants' furnished information and nothing suggesting that Defendants had failed to investigate the disputed information. As Plaintiffs had challenged only the accuracy of information furnished by Defendants, Plaintiffs' claim under the FCRA fell under the scope of § 1681s-2 (a). Because Congress left enforcement of this section solely to Federal and State agencies and officials, Plaintiffs could not maintain a private cause of action against Defendants for failing to provide accurate information to credit reporting institutions. The Court, therefore, gave Plaintiffs leave to amend their complaint or to offer some other proof of this Court's subject matter jurisdiction over their claims.
Plaintiffs filed an Amended Complaint alleging that Defendants failed to investigate the accuracy of the furnished information after being notified of the dispute by a credit reporting agency. As such, Plaintiffs now assert claims for willful and negligent noncompliance with § 1681s-2 (b) of the FCRA. Defendants, however, have challenged the amendments, arguing that § 1681s-2(b) does not provide a private cause of action for consumers against furnishers of information. The Court disagrees.
The FCRA imposes civil Uability on any person who willfully or negligently fails to comply with any of the Act's requirements with respect to any consumer. 15 U.S.C. § 1681n (willful noncompliance), § 1681o (negligent noncompliance). As it relates to furnishers of information to consumer reporting agencies, the FCRA sets forth two general requirements: the duty to provide accurate information (15 U.S.C. § 1681s-2 (a)); and the duty to investigate the accuracy of reported information upon receiving notice of a dispute (§ 1681s-2 (b)). Without more, the terms of §§ 1681n and 1681o would allow a consumer to recover from a furnisher of information for any willful or negligent failure to meet these duties. The FCRA, however, expressly excludes § 1681s-2(a) from the purview of §§ 1681n and 1681o, instead leaving enforcement of § 1681s-2 (a) to the Federal and State agencies and officials identified in § 1681s. 15 U.S.C. §§ 1681s-2 (c), 1681s-2(d). This express limitation on liability makes no mention of § 1681s-2 (b). As the FCRA imparts civil liability to any person who willfully or negligently fails to comply with any of the Act's requirements, and Congress has not expressly excluded § 1681s-2 (b) or furnishers of information from this potential liability, the Court holds that a consumer can maintain a private cause of action against a furnisher of information for willful or negligent noncompliance with § 1681s-2 (b).
In reaching its conclusion, the Court notes that the Eighth Circuit has not yet addressed this question. The majority of courts that have considered the issue, however, concur with this Court's holding. See. e.g. Nelson v. Chase Manhattan Mortgage Corp., 282 F.3d 1057 (9th Cir.2002); Yutesler v. Sears Roebuck & Co., 263 F.Supp.2d 1209 (D.Minn.2003). Vazquez-Garcia v. Trans Union De Puerto Rico, 222 F.Supp.2d 150, 155 (D.Puerto Rico 2002); Hawthorne v. Citicorp Data Systems, Inc., 216 F.Supp.2d 45 (E.D.N.Y. 2002); Thomasson v. Bank One, Louisiana, N.A, 137 F.Supp.2d 721, 723 (E.D.La.2001); McMillan v. Experian Information Services, Inc., 119 F.Supp.2d 84, 86 (D.Conn.2000); DiMezza v. First USA Bank, Inc., 103 F.Supp.2d 1296, 1300 (D.N.M.2000); Dornhecker v. Ameritech Corp., 99 F.Supp.2d 918 (N.D.Ill.2000); Campbell v. Baldwin, 90 F.Supp.2d 754, 756 (E.D.Tex.2000). Defendants, however, rely on Carney v. Experian Information Solutions, Inc., 57 F.Supp.2d 496, (W.D.Tenn.1999), the one case in which a court found otherwise.2 In Carney, the District Court reasoned that the duties described in § 1681s-2 (b) "appear to exist solely for the benefit of consumer reporting agencies," and a furnisher of information's duty under § 1681s-2 (b) "is owed only to the consumer reporting agency not to the consumer." Carney, 57 F.Supp.2d at 502. As such, the Carney court concluded that a consumer cannot state a claim under § 1681s-2(b). Id. This Court can agree with some of the Carney court's reasoning, but not its conclusion.
Congress enacted the FCRA, not because of some over-arching sympathy for credit reporting agencies, but to protect the rights of individual consumers and the integrity of the banking system as a whole. As the Act states from the outset, "inaccurate credit reports directly impair the efficiency of the banking system, and unfair credit reporting methods undermine the public...
To continue reading
Request your trial
-
Reed v. Experian Information Solutions, Inc., CIV.02-3706 DSD/JGL.
...of information except in cases of malice or willful intent to injure the consumer.4 15 U.S.C. § 1681h(e); Gordon v. Greenpoint Credit, 266 F.Supp.2d 1007, 1012 (S.D.Iowa 2003); Yutesler v. Sears Roebuck & Co., 263 F.Supp.2d 1209, 1211 (D.Minn.2003).5 The malice or willful intent to injure c......
-
Islam v. Option One Mortgage Corp.
...Instead, Subsection (a) is to be enforced by federal and state officials. Id. § 1681s-2(d); Gordon v. Greenpoint Credit, 266 F.Supp.2d 1007, 1009-10 (S.D.Iowa 2003) (Pratt, J.).3 So far, so good. But the Islams do not bring a claim under the FCRA. Instead they bring only state-law claims, i......
-
Saint Torrance v. Firstar, 1:06cv437.
...approach." Wolfe, 485 F.Supp2d at 885; McCloud v. Homeside Lending, 309 F.Supp.2d 1335, 1342(N.D.Ala.2004); Gordon v. Greenpoint Credit, 266 F.Supp.2d 1007, 1012-13 (S.D.Iowa 2003); Jeffrey v. Trans Union, LLC, 273 F.Supp.2d 725, 727-28 (E.D.Va. 2003). Under the third approach, the district......
-
Sites v. Nationstar Mortg. LLC
...and, relatedly, curtails private rights of action for violations of the act, id. § 1681h(e), 1681t. See Gordon v. Greenpoint Credit, 266 F.Supp.2d 1007, 1011 (S.D.Iowa 2003) ("To prevent the glut of cases in the federal courts that would result if every consumer could sue anytime he or she ......