Ladner v. Equifax Credit Information Services

• Decision Date: 30 June 1993
• Docket Number: Civ. A. No. 1:92-CV-161R.
• Citation: 828 F. Supp. 427
• Parties: Linda C. LADNER, Plaintiff, v. EQUIFAX CREDIT INFORMATION SERVICES, INC., Defendant.
• Court: U.S. District Court — Southern District of Mississippi

828 F. Supp. 427

Linda C. LADNER, Plaintiff, v. EQUIFAX CREDIT INFORMATION SERVICES, INC., Defendant.

Civ. A. No. 1:92-CV-161R.

United States District Court, S.D. Mississippi, S.D.

June 30, 1993.

Joe Sam Owen, Gulfport, MS, for plaintiff.

Henry F. Laird, Jr., Gulfport, for defendant.

MEMORANDUM ORDER

DAN M. RUSSELL, Jr., District Judge.

This matter is before this Court on the Motion of the defendant, Equifax Credit Information Services, Inc. (hereinafter "Equifax"), for Summary Judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure.

FACTS

Equifax, a consumer reporting agency, has been engaged in the preparation, offering for sale, sale, and distribution of information on consumers, including consumer reports, through the mail to its customers located in various states throughout the United States at all pertinent times hereto. In February of 1992, Equifax distributed a consumer report that contained inaccurate information listing nonexisting debts owed by the plaintiff, Linda C. Ladner (hereinafter "Ms. Ladner"). Specifically, on February 5, 1992, and February 7, 1992, Equifax distributed a consumer report disclosing that the plaintiff had maintained account No. 61277 with Colonial Mortgage and account No. XXXXXXXXXXXXX with Gayfers. The plaintiff alleges the consumer report contained this adverse information and that both accounts were inaccurate listing nonexisting debts.

The plaintiff alleges that as a result of these inaccuracies, she was denied a consumer loan from Magnolia Federal Savings Bank. However, the defendant brings to this court's attention that Ms. Ladner never actually applied for the loan; hence, she was never denied the loan.

The plaintiff claims that Equifax was "negligent in failing to follow reasonable procedures to assure the maximum accuracy of the information reported, thereby violating Section 607 of the Fair Credit Reporting Act (15 U.S.C. Section 1681e)." As a result of such negligence, Ms. Ladner, in allegedly being denied credit based on the inaccurate information, suffered "financial losses, extreme embarrassment, humiliation, and emotional distress, thereby entitling her to receive actual damages in a sum greater than $50,000 under the Section 617 of the Fair Credit Reporting Act, 15 U.S.C. 1681o." The plaintiff also seeks reasonable attorney's fees and all costs of these proceedings pursuant to the Fair Credit Reporting Act, 15 U.S.C. Section 1681o and "all other general and equitable relief as law and facts may warrant."

DISCUSSION

This Court asserts diversity jurisdiction pursuant to 28 U.S.C. Section 1332. The plaintiff is an adult resident citizen of Harrison County, Mississippi. The defendant, Equifax, is a corporation incorporated under the laws of the State of Georgia and is licensed to do and is doing business in the State of Mississippi. Additionally, this Court has jurisdiction under the Fair Credit Reporting Act, 15 U.S.C. Section 1681p.

Summary judgment is appropriate only if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. In St. Amant v. Benoit, 806 F.2d 1294, 1296-97 (5th Cir. 1987), the Fifth Circuit addressed the law as regards summary judgment and stated that "the mere existence of a factual dispute does not by itself preclude the granting of summary judgment. `The requirement is that there be no genuine issue of material fact.' Anderson v. Liberty Lobby, 477 U.S. 242, 248 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986) (emphasis in original)." (citations omitted).

The Fifth Circuit has addressed when an issue is genuine.

An issue is genuine if the evidence supporting its resolution in favor of the party opposing summary judgment, together with any inferences in such party's favor that the evidence allows, would be sufficient to support a verdict in favor of that party. If, on the other hand, the evidence offered by both the moving and opposing parties would support only one conclusion and, even if all the evidence to the contrary is fully credited, a trial court would be obliged to direct a verdict in favor of the moving party, the issue is not genuine.

Professional Managers, Inc. v. Fawer, Brian, Hardy & Zatzkis, 799 F.2d 218, 222 (5th Cir.1986) (footnotes omitted).

The United States Supreme Court further stated in Liberty Lobby that as to materiality, "only disputes over the facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted." Anderson v. Liberty Lobby, 477 U.S. at 248, 106 S.Ct. at 2510.

The Supreme Court has noted that the standard for summary judgment mirrors the standard for a directed verdict, the main difference between the two being when they are used, as the inquiry under each is the same. See Celotex Corporation v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). "Barebones allegations are insufficient to withstand summary judgment because the opposing party `must counter factual allegations by the moving party with specific, factual disputes; mere general allegations are not a sufficient response.'" Howard v. Greenwood, 783 F.2d 1311, 1315 (5th Cir.1986) (citing Nicholas Acoustics & Specialty Co. v. H & M Construction Co., Inc., 695 F.2d 839, 845 (5th Cir.1983)).

The plaintiffs argues it is the duty of the Court to review the factual and legal issues in a light most favorable to the plaintiff in considering the defendant's Motion for Summary Judgment. Dumas v. Pike County, 642 F.Supp. 131 (S.D.Miss.1986). In doing so, the Court should consider both circumstantial and direct evidence. Williamson v. F.W. Woolworth Co., 237 Miss. 141, 112 So.2d 529, 531 (1959).

In 1970 Congress passed the Fair Credit Reporting Act (hereinafter the "Act") for the purpose of legislating a balance between the interest of the consumer public and that of financial institutions. One service offered under the act is the evaluation of credit worthiness of a loan applicant. This is the area of concern in the present case. Pursuant to, 15 U.S.C. Section 1681(b), it is provided that:

(b) 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 the 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.

Further, 15 U.S.C. Section 1681e states:

(a) Every consumer reporting agency shall maintain reasonable procedures designed to avoid violations of Section 1681(c) of this title and to limit the furnishing of consumer reports to the purposes listed under subsection 1681(b) of this title. These procedures shall require that prospective users of the information identify themselves, certify the purposes for which the information is sought, and certify that the information will be used for no other purpose. Every consumer reporting agency shall make a reasonable effort to verify the identity of a new prospective user and the uses certified by such prospective user prior to furnishing such user a consumer report. No consumer reporting agency may furnish a consumer report to any person if it has reasonable grounds for believing that the consumer report will not be used for a purpose listed in section 1681(b) of this title.

(b) Whenever consumer reporting agency prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.

(emphasis added). It is a question of law as to whether a credit reporting agency has complied with the requirement of adopting reasonable procedures to assure maximum possible accuracy, thus the decision by the court may be decided upon motion for summary judgment.

It is not a question as to whether or not the credit report is accurate, but merely that the defendant credit reporting agency complied with the guidelines set forth in 15 U.S.C. Section 1681, et seq., as to prevent inaccurate credit reports. In the case of Thompson v. San Antonio Retail Merchants Assn., 682 F.2d 509 (5th Cir.1982), the court held that "section 1681e(b) does not impose strict liability for any inaccurate credit report, but only a duty of reasonable care in preparation of the report." Therefore, since there is no imposition of strict liability for inaccuracy or incompleteness of a credit report under the Fair Credit Reporting Act, the issue before this Court is restricted to whether or not Equifax followed "reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates" pursuant to 15 U.S.C. Section 1681e(b). A reporting agency is liable for damages only if it has breached its duty to follow reasonable procedures to assure maximum possible accuracy of the information it reports. Austin v. Bankamerica Service Corp., 419 F.Supp. 730, 732-33 (N.D.Ga.1974); Bryant v. T.R.W., Inc., 689 F.2d 72-79 (6th Cir.1982).

Equifax admits to circulating a credit report on the plaintiff; however, Equifax asserts that its report was substantially accurate and that the "defendant complied with the Fair Credit Reporting Act, specifically, in that it maintained and executed reasonable procedures to assure maximum possible accuracy of the credit report in question and that it performed a reasonable and prompt reinvestigation into the alleged inaccuracies about which the plaintiff complained; and that the credit report was published in good faith pursuant to a duty to so report and was therefore privileged." Therefore, the defendant argues that...