Mick v. Level Propane Gases Inc.

• Citation: 183 F.Supp.2d 1014
• Decision Date: 14 February 2000
• Docket Number: No. 2:98-CV-959.,2:98-CV-959.
• Parties: Larry MICK, et al., Plaintiffs, v. LEVEL PROPANE GASES, INC., Defendant.
• Court: U.S. District Court — Southern District of Ohio

183 F.Supp.2d 1014

Larry MICK, et al., Plaintiffs, v. LEVEL PROPANE GASES, INC., Defendant.

No. 2:98-CV-959.

United States District Court, S.D. Ohio, Eastern Division.

February 14, 2000.

COPYRIGHT MATERIAL OMITTED

Joseph F. Murray, Geoffrey J. Moul, Murray Murphy Moul & Basil-2, Kimberly M. Skaggs, Equal Justice Foundation-2, Columbus, OH, Gary Michael Smith, Graham McClelland Ransbottom-2, Dover, OH, for Plaintiffs.

Thomas Brennan Ridgley, Vorys Sater Seymour & Pease-2, John Ryan Gall, Squire Sanders & Dempsey-2, Columbus, OH, Amanda Martinsek, Vorys Sater Seymour & Pease, Cleveland, OH, for Defendant.

OPINION AND ORDER

SARGUS, District Judge.

This matter is before the Court on plaintiffs' motion for partial summary judgment (Doc. # 12) and on defendant's cross-motion for the same. (Doc. # 22). For the reasons that follow, plaintiffs' motion is granted in part and denied in part, and the defendant's motion is denied.

I.

This is a class action brought by consumers of propane gas supplied by the defendant. Plaintiffs claim violations of the Equal Credit Opportunity Act ["ECOA"], 15 U.S.C. § 1691, et seq.; the Fair Credit Reporting Act ["FCRA"], 15 U.S.C. § 1681, et seq.; and the Ohio Consumer Sales Practices Act ["OCSPA"], O.R.C. § 1345.01, et seq, with respect to certain business practices and policies of the defendant. This Court exercises jurisdiction pursuant to 28 U.S.C. § 1331 and § 1367.

The plaintiff class consists of all Ohio residential consumers who, at any time on or after September 1, 1994, are, have been, or will be customers of the defendant. (See Opinion and Order, September 29, 1999). The class also includes the following subclasses: (1) all Ohio residential consumers of propane as to whom, at any time on or after October 1, 1997, the defendant took or participated in adverse action based in whole or in part upon information in a consumer credit report or from a third party, as those terms are defined in 15 U.S.C. § 1681, et seq.; and (2) all Ohio residential consumers of propane who, at any time on or after September 1, 1996, did or will sign a credit application similar to that attached to the complaint, or those consumers who are or will be applicants for credit and/or the subject of adverse action by the defendant. (Id.).

Plaintiffs seek partial summary judgment on three issues. First, plaintiffs contend that there is no genuine issue of material fact that the defendant is a "creditor" for purposes of the ECOA. Second, plaintiffs contend that the defendant is subject to the statutory requirements of the FCRA as a "user" of consumer credit reports. Third, plaintiffs contend that no genuine issue of material fact exists with respect to the defendant's alleged violation of the notice requirements contained in the ECOA and the FCRA. The defendant has filed a cross-motion for partial summary judgment arguing that it is not a "creditor" for purposes of the ECOA and that it did not violate the FCRA notice requirements, at least with respect to those plaintiffs against whom adverse action was taken since November 30, 1997. The Court will address each of the foregoing issues, in turn.

II.

The procedure for considering whether summary judgment is appropriate, is found in Fed.R.Civ.P. 56(c); this section provides:

The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.

The evidence must be viewed in the light most favorable to the nonmoving party. Adickes v. Kress & Co., 398 U.S. 144, 158-59, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). Summary judgment will not lie if the dispute about a material fact is genuine; "that is, if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Summary judgment is appropriate however, if the opposing party fails to make a showing sufficient to establish the existence of an element essential to that party's case and on which that party will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); see also, Matsushita Electronic Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

The United States Court of Appeals for the Sixth Circuit has recognized that Liberty Lobby, Celotex, and Matsushita have effected "a decided change in summary judgment practice," ushering in a "new era" in summary judgments. Street v. J.C Bradford & Co., 886 F.2d 1472, 1476 (6th Cir.1989). The court in Street identifies a number of important principles in new era summary judgment practice. For example, complex cases and cases involving state of mind issues are not necessarily inappropriate for summary judgment. Id. at 1479.

In addition, in responding to a summary judgment motion, the nonmoving party "cannot rely on the hope that the trier of fact will disbelieve the movant's denial of a disputed fact, but must `present affirmative evidence in order to defeat a properly supported motion for summary judgment.'" Id. (quoting Liberty Lobby, 477 U.S. at 257, 106 S.Ct. 2505). The nonmoving party must adduce more than a mere scintilla of evidence in order to overcome the summary judgment motion. Id. It is not sufficient for the nonmoving party to merely "`show that there is some metaphysical doubt as to the material facts.'" Id. (quoting Matsushita, 475 U.S. at 586, 106 S.Ct. 1348). Moreover, "[t]he trial court no longer has the duty to search the entire record to establish that it is bereft of a genuine issue of material fact." Id. That is, the nonmoving party has an affirmative duty to direct the Court's attention to those specific portions of the record upon which it seeks to rely to create a genuine issue of material fact.

When addressing cross-motions for summary judgment, these same rules of review apply. Taft Broadcasting Co. v. United States, 929 F.2d 240, 248 (6th Cir.1991).

III.

A. Creditor Status Pursuant to the ECOA

The ECOA prohibits discrimination against applicants for credit on the basis of race, color, religion, national origin, sex, marital status or age. 15 U.S.C. § 1691(a). The ECOA also requires that creditors notify applicants for credit of "adverse action" within thirty days of such action. 15 U.S.C. § 1691(d). "Adverse action" means "a denial or revocation of credit, a change in the terms of an existing credit arrangement, or a refusal to grant credit in substantially the amount or on substantially the terms requested." 15 U.S.C. § 1691(d)(6). The notification of adverse action must be in writing. 15 U.S.C. § 1691(d)(2).

Plaintiffs in this case argue that the defendant failed to comply with the notice requirements prior to taking adverse action against them. The defendant argues that the ECOA does not apply to the transactions at issue because the defendant is not a creditor. A "creditor" is defined as follows:

[A]ny person who regularly extends, renews, or continues credit; any person who regularly arranges for the extension, renewal, or continuation of credit; or any assignee of an original creditor who participates in the decision to extend, renew, or continue credit.

15 U.S.C. § 1691a(e). Corporations are included within the definition of a "person." 15 U.S.C. § 1691a(f). "Credit" is defined as "the right granted by a creditor to a debtor to defer payment or debt or to incur debts and defer its payment or to purchase property or services and defer payment therefor." 15 U.S.C. § 1691a(d).¹

Plaintiffs in the case at bar argue that there exist no genuine issues of material fact with respect to the defendant's status as a "creditor." Plaintiffs contend that by deferring payment for propane services, the defendant offers and extends "credit" as a regular business practice. Plaintiff points out that the defendant conducts credit checks² on each potential customer in order to determine the method by which that customer will pay for propane service. Individuals whose credit is satisfactory, in defendant's view, are entitled to "courtesy" propane fills or "will call" fills.³ Individuals whose credit is not satisfactory, but who are nonetheless accepted as customers, are classified as "COD" customers and must pay cash upon delivery of propane. (Exhibit 5 attached to Deposition of Swasita Saigal; see also Deposition of Mary Hiatt at 22).

The defendant argues that it is not a "creditor" because potential customers seek propane delivery services, not credit, from the defendant. Defendant emphasizes the fact that potential consumers do not request credit checks; rather, the defendant performs the checks at its own initiative. (See Affidavit of Heather Donovan attached as Exhibit 2 to Defendant's Memorandum contra). Plaintiffs, however, point out that in addition to conducting credit checks, each customer who is accepted for propane delivery service receives a twenty day "credit extension," or deferred payment, for the initial service. (Exhibits 1A, 1B, Id.). Plaintiffs characterize this twenty day extension as an open-end credit arrangement within the purview of the ECOA. Defendant argues that the twenty day extension is simply a "more convenient [way] for Level to do business . . . ." (Defendant's Memorandum contra at 7).

The Court concludes that the defendant in the case at bar is a "creditor" for purposes of the ECOA. The fact that potential consumers do not themselves request credit from the defendant is of no consequence in the Court's view. It is the nature of the service transaction at issue that is determinative. As the United States Court of Appeals for the Sixth Circuit recently observed, the deferral of payment characterizes a "credit" transaction for purposes of the ECOA. Barney v....