Harris v. Database Management & Marketing, Inc.

• Citation: 609 F.Supp.2d 509
• Decision Date: 23 April 2009
• Docket Number: Civil No. JFM 06-2017.
• Parties: Jerrod HARRIS, Plaintiff, v. DATABASE MANAGEMENT & MARKETING, INC., et al., Defendants.
• Court: U.S. District Court — District of Maryland

Page 509

609 F.Supp.2d 509

Jerrod HARRIS, Plaintiff, v. DATABASE MANAGEMENT & MARKETING, INC., et al., Defendants.

Civil No. JFM 06-2017.

United States District Court, D. Maryland.

April 23, 2009.

Scott C. Borison, Legg Law Firm LLC, Frederick, MD, Jane Santoni, Williams and Santoni LLP, Towson, MD, Peter S. Lubin, Ditommaso Lubin PC, Oakbrook Terrace, IL, for Plaintiff.

Jon R. Fetterolf, Laurie S. Fulton, Williams and Connolly LLP, Washington, DC, Arthur F. Radke, Dykema Gosset PLLC, Chicago, IL, for Defendants.

MEMORANDUM

J. FREDERICK MOTZ, District Judge.

Seeking to represent a class of similarly situated persons, Jerrod Harris ("Harris" or "Plaintiff") filed a lawsuit against ChoicePoint Services, Inc. ("ChoicePoint") alleging violation of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681 et seq.¹ This claim arises out of the mass mailing of a flier that claimed to offer Harris, and other putative class members, a pre-approved line of credit for the purchase of an automobile from Foreign Motors Suzuki, a car dealership in Maryland.

On September 30, 2008, I denied ChoicePoint's statute of limitations-based summary judgment motion and administratively closed Plaintiffs motion for class certification, subject to being reopened after consideration of the remaining motions for summary judgment. Harris v. DMMI Promotions, Inc., Civil No. JFM-06-2017, 2008 U.S. Dist. LEXIS 80767, at *4 (D.Md. Sept. 30, 2008) (unpublished). I also denied without prejudice Plaintiffs motion for partial summary judgment and ChoicePoint's motion for summary judgment. A further factual record has now been established, and the parties have renewed their motions for summary judgment. As the parties have now fully briefed the motions, no hearing is necessary. See Local Rule 105.6.

For the reasons stated below, Defendant ChoicePoint's renewed motion for summary judgment will be granted, and Plaintiffs renewed motion for partial summary judgment will be denied.²

I.

In May 2005, Harris received a flier that purported to offer him a pre-approved line of credit to purchase an automobile from Foreign Motors Suzuki. (Pl.'s Response in Opp'n to Def.'s Mot. for Summ. J. ("Pl.'s Opp'n") Ex. F; see also Third Am. Compl. ¶ 12; Def.'s Mem. Ex. 20, Harris Dep. 38:14-20, April 24, 2008.) The flier also stated that the recipient is the winner of "one of the following" prizes: a Sony Flatscreen TV, $100 in cash, a Sea-Doo Watercraft, a $1,000 shopping spree, or $4,000 in cash. (Pl.'s Opp'n Ex. F.) The flier stated that it had been issued by "Auto Credit of America." (Id.) However, Auto Credit of America is a fictitious entity. (Third Am. Compl. ¶ 6; Pl.'s Opp'n Ex. I, Teets Dep. 246:12-247:16, 263:1-6, June 24, 2008.)

The following language is found in small print at the bottom of the flier:

Your new vehicle payment cannot exceed 20% of your gross monthly income; vehicle payment totaled with your current monthly payments must not exceed 50% of your gross income. Must be at least 18 years of age. If you accept this offer, we may not extend credit to you if, after you respond, we determine that you do not continue to meet the criteria used for this pre-approved offer. Lender assumes no responsibility for incorrect information supplied by various credit reporting agencies.... Credit severity may affect down payment. Bankruptcies must be discharged. If in compliance with provisions listed above, you are guaranteed to receive a loan for the purchase of a 2003 or newer vehicle from Direct Lending Source. Notice: We used information in a pre-qualifying report from a credit-reporting agency in connection with this firm offer of credit. You have the right to prohibit the use of this information contained in your credit file with any credit-reporting agency for all future credit transactions not initiated by you.

(Pl.'s Opp'n Ex. F (emphasis added).) Direct Lending Source, the only lender identified in the flier, is a trade name of Virtual Lending Source, LLC. (Pl.'s Opp'n Ex. L, Gluckman Aff.) However, according to Plaintiff, Virtual Lending Source, had no involvement with this flier's production or distribution.³ (Id.)

In an effort to pursue these offers, Harris went to Foreign Motors Suzuki and presented the flier. (Defs.'⁴ Mem. Supp. Mot. for Summ. J. [Dkt. 105] Ex. 5 at 5.) Harris was initially told that he would be able to purchase a vehicle. (Id.) He filled out an application and was in fact permitted to leave the dealership with a new Suzuki Verona two days later, but was made to return the vehicle shortly thereafter without explanation from the dealership. (Id. 5-6.)

In response to these events, Harris filed suit against Foreign Motors Suzuki in the District Court for Baltimore City for replevin, trover, conversion, breach of contract, deceptive trade practices, unjust enrichment, violation of a retail sales contract statute, and fraud; this suit was unsuccessful. (See Defs.' Mot. for Summ. J. on Statute of Limitations Grounds Ex. 5.) Harris then initiated the instant litigation, alleging that defendants violated the FCRA when they improperly accessed his credit information without a permissible purpose, and that they failed to institute required reasonable procedures meant to prevent such improper accessing of credit reports. (See generally Third Am. Compl.)

Discovery has revealed that ChoicePoint entered into a Prescreening Agency Agreement with Experian Information Solutions, Inc. ("Experian") in July 2001. (Pl.'s Opp'n Ex. A.) Under the agreement, ChoicePoint, as Experian's "Agent," could only sell data from consumer reports maintained by Experian to a customer, such as NameSeeker, if the customer entered into a contractual agreement directly with Experian (a "Prescreening Services Agreement" or "PSA"). (Id. ¶ 3.a.ii.) The agreement also states that ChoicePoint "shall verify and confirm" that a customer "is a valid commercial enterprise with a true business identity" that "will use the Prescreening Services only in connection with the provision of a firm offer of credit or insurance...." (Id. ¶ 3.a.iv.) ChoicePoint agreed to "monitor the Customers on an ongoing basis to assure that each Customer's business has not changed and that the Customers are using Prescreening Services only pursuant to FRCA section 604(c) and as allowed under this Agreement and the applicable PSA." (Id. ¶ 3.a.vi.)

In the Prescreening Services Agreement entered into by NameSeeker and Experian, NameSeeker "certifie[d] to Experian that it will extend a firm offer of credit or firm offer of insurance ... to every Consumer" on the prescreened list delivered to NameSeeker. (Def.'s Mem. Supp. Renewed Mot. for Summ. J. ("Def.'s Mem.") Ex. 6 ¶ 4.D.) NameSeeker also entered into a Marketing Services Agreement with ChoicePoint in which both parties "represent that they shall comply in all respects with all applicable Federal, state and local laws, regulations and rules." (Def.'s Mem. Ex. 7 ¶ 7.)

In connection with its relationship with Experian, NameSeeker requested that any third party processors involved with NameSeeker's use of Experian's data (e.g., marketers and printers) enter into "third-party processor agreements" with Experian. (Def.'s Mem. 6.) In March 2005, DMMI and AccuData⁵ entered into Prescreening Services and Account Monitoring Third-Party Processor Undertakings with Experian, which permitted Experian to provide lists or other data directly or indirectly to the third party processor in connection with the prescreening services provided by Experian to NameSeeker. (Def.'s Mem. Ex. 10, Ex. 11.) These agreements list NameSeeker as the client and state that the "Third Party Processor will not duplicate or compile any data contained in the Media⁶ or provide the same in any form to any third party." (Def.'s Mem. Ex. 10, Ex. 11.) The agreement also prohibits the third party processor from "us[ing] any information it obtains as a result of its handling, processing, or possession of the Media in connection with the creation, testing, promotion, marketing, selling and/or licensing of Third Party Processor's information, products or services," and directs the third party processor "to destroy the Media immediately upon completion of the Undertaking for which the Media was initially provided to Third Party Processor." (Def.'s Mem. Ex. 10, Ex. 11.)

On April 25, 2005, NameSeeker placed an order with ChoicePoint, and the prescreened list provided to NameSeeker by ChoicePoint included information from Plaintiff and other Maryland residents' consumer reports. (Def.'s Mem. 6.) This information was used in the creation and distribution of the Foreign Motors Suzuki flier received by Plaintiff. (Pl.'s Mot. for Partial Summ. J. ("Pl.'s Mot.") 2-3.)

II.

A motion for summary-judgment will be granted when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed. R.Civ.P. 56(c). A material fact is one that may affect the outcome of the suit. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). "When cross-motions for summary judgment are submitted to a district court each motion must be considered individually, and the facts relevant to each must be viewed in the light most favorable to the non-movant." Mellen v. Bunting, 327 F.3d 355, 363 (4th Cir.2003).

III.

A.

Before turning to the pending motions, I will briefly describe the framework of the relevant provisions of the Fair Credit Reporting Act. The FCRA is "designed to preserve the consumer's privacy in the information maintained by consumer reporting agencies." Cole v. U.S. Capital, Inc., 389 F.3d 719, 725 (7th Cir.2004). The FCRA achieves this design by imposing restrictions on access to individuals' credit information. In particular, a credit report can be accessed only for certain statutorily-enumerated "permissible purposes." 15 U.S.C. § 1681b(a). For example, a person's credit information can be accessed by...