Norman v. Trans Union, LLC

• Decision Date: 14 August 2020
• Docket Number: CIVIL ACTION No. 18-5225
• Citation: 479 F.Supp.3d 98
• Parties: Duane E. NORMAN, Sr., on behalf of himself and all others similarly situated, Plaintiffs, v. TRANS UNION, LLC, Defendant.
• Court: U.S. District Court — Eastern District of Pennsylvania

479 F.Supp.3d 98

Duane E. NORMAN, Sr., on behalf of himself and all others similarly situated, Plaintiffs,

v.TRANS UNION, LLC, Defendant.

CIVIL ACTION No. 18-5225

United States District Court, E.D. Pennsylvania.

Filed August 14, 2020

Andrew M. Milz, Cary L. Flitter, Flitter Milz, P.C., Jody T. Lopez-Jacobs, Narberth, PA, James A. Francis, Jordan M. Sartell, John Soumilas, Francis Mailman Soumilas, P.C., Philadelphia, PA, for Plaintiffs.

Albert E. Hartmann, Kristen Degrande, Maxwell J. Eichenberger, Michael O'Neil, Reed Smith LLP, Chicago, IL, Thomas P. Reilly, Michael C. Falk, Reed Smith LLP, Philadelphia, PA, for Defendants.

CLASS CERTIFICATION MEMORANDUM

McHugh, United States District Judge

I. Background...108

A. Factual Background...108

B. Procedural Posture...112

II. The Legal Standards Governing Class Certification...112

III. The FCRA's Reasonable Reinvestigation Provision...114

A. How does the consumer satisfy his duty to trigger an agency's reinvestigation obligation?...114

B. The consumer need not first "show" an inaccuracy to trigger the agency's duty to conduct a reasonable reinvestigation...118

C. Trans Union's remaining attempts to evade its reinvestigation duty are unavailing...124

D. The FCRA establishes the options available to a consumer reporting agency in response to a dispute...128

IV. Norman triggered Trans Union's reinvestigation obligation...129

V. The Class's FCRA Claim...130

A. Standards for class certification...130

B. The components of Norman's proposed class...131

C. Norman has satisfied the prerequisites of Rule 23(a)...135

D. Norman has satisfied the prerequisites of Rule 23(b)(3)...137

VI. Conclusion...143

* * * * *

Section 611(a) of the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681i(a), requires a consumer reporting agency to conduct a reasonable reinvestigation of any item of information on a consumer's credit file if the consumer alleges the item to be inaccurate. Plaintiff Duane Norman's credit file reported that a business had accessed his credit, and he disputed the business's right to do so with Trans Union. Trans Union concedes that Norman lodged the dispute, and further concedes it conducted no reinvestigation of his complaint, but contends it was not obligated to do so because Norman's file accurately reflected that an inquiry had been made. Discovery has revealed that Trans Union has taken the same position with numerous consumers, and Norman now seeks to certify a class of others he alleges were wrongly denied reinvestigation of their disputes.

Having carefully analyzed Trans Union's rationale for its position, I have concluded that it has an artificially narrow view of its obligations under § 1681i(a), one that is inconsistent with the text and structure of § 1681i(a), and Third Circuit precedent, particularly Cushman v. Trans Union Corp. , 115 F.3d 220 (3d Cir. 1997), the Court's seminal pronouncement concerning the scope of an agency's reinvestigation obligation under § 1681i(a). I am also satisfied that Norman has identified issues appropriate for resolution on a class-wide basis, and has met the requirements of Rule 23, with the result that I will certify a class.

I. Background

A. Factual Background

1. The Solicitation . In February 2018, a telemarketer for Safe Home Security, which is not a party here, called Duane Norman (Plaintiff) to sell him some home-security paraphernalia. Complaint ¶ 20, ECF 1; Pl.’s Mot. for Class Certification, at 3, ECF 23. Norman initially was interested in Safe Home's offerings. Norman Dep., at 82:12-14, 93:22-23, 95:22-96:9, 98:6-25, ECF 23-2. But his initial interest allegedly dulled when the telemarketer told Norman that, to proceed to a sale, Safe Home would need to obtain Norman's credit report. ECF 1 ¶ 21; ECF 23, at 3-4. According to Norman, he "refused, emphatically stating that he did not authorize Safe Home to obtain his credit report." ECF 1 ¶ 22; ECF 23, at 4; see also ECF 23-2, at 79:13-81:20 ("So I said yo, no, you're definitely not running my credit. I said no, just forget about it."). Safe Home obtained Norman's credit report from Trans Union anyway. Answer ¶ 23, ECF 13.

2. The Hard Inquiry . As a result of Safe Home's request for and acquisition of Norman's credit report, Trans Union recorded on Norman's credit file that Safe Home made a "Regular Inquiry" for Norman's credit. Here is the Safe Home inquiry challenged by Norman:

As shown in the listing, "regular inquiries" are "posted" on a consumer's credit report "when someone accesses your credit information from TransUnion." A regular inquiry "means that the company listed"—like Safe Home here—"received your credit information on the dates specified." Regular inquiries "remain on your credit file for up to 2 years."

In the industry, "regular" inquiries, which are disclosed to third parties, also are known as "hard" inquiries. See Trans Union Br. Opp. Plaintiff's Mot. for Class Cert., at 2-3, ECF 31 ("Inquiries which are disclosed to third parties are typically called ‘hard’ inquiries."). Hard inquiries are notations on a consumer's credit file that some entity (like Safe Home here) requested and received from Trans Union credit data about a consumer.

A hard inquiry is also defined in reference to its antonym—a "soft" inquiry. Unlike hard inquiries, soft inquiries do not appear on credit reports sent to third parties. ECF 38, at 6. Further, hard inquiries, unlike soft inquiries, lower a consumer's credit score. Trans Union concedes that only hard inquiries can damage a consumer's credit score.¹

3. The First Dispute . Norman immediately discovered that Safe Home had obtained his credit report and that a record indicating as much had appeared on his credit report. ECF 23, at 4. The next morning, Norman contacted Safe Home and then Trans Union. ECF 13 ¶ 25. He demanded that both remove the record from his credit report. ECF 1 ¶ 25. Both refused. Norman advised the Trans Union representative that he told the Safe Home representative not to run his credit. ECF 23-2, at 86:10-16; ECF 23, at 4. Trans Union claimed it could not remove the record and that Norman would have to speak with Safe Home. ECF 23-2, at 86:21-22. Norman did. But Safe Home, like Trans Union, refused to do anything to remove the inquiry.

So Norman sent a letter to Trans Union formally disputing the Safe Home entry on his credit report. ECF 23-3, at 2 (Letter of July 12, 2018). Minus addresses and salutations, the full text of the July Letter is as follows:

                I write to dispute the following inquiry that appears on my credit report [REDACTED\]
                dated May 17, 2018
                           • SAFE HOME SECURITY, 55 Sebethe Drive, Cromwell, CT 06416, (800) 833-3211
                ×1507
                I never gave permission to have my credit run. In fact, I told their representative
                specifically to NOT run my credit. They did anyway. I complained to this company, but they
                still would not remove it. Right after the inquiry, I called TransUnion to dispute this inquiry, but
                they told me to call Safe Home Security. Neither has removed this inquiry to this day. I demand
                the immediate removal of this inquiry from my credit report
                

4. The First Response . Trans Union responded the next month. ECF 23-6 (Letter of August 13, 2018). The response explained how and why inquiries appear on a consumer's credit report and touted an identity protection product it was selling. A member of Trans Union's litigation department explained at a deposition that the letter sent to Norman included the following components. It began with an opening:

                We appreciate you taking the time to contact us at TransUnion. Our goal is to maintain complete and accurate credit
                information. It's our commitment to you
                

This was followed by a paragraph explaining the inquiries on his credit report:

                Ref: Explanation of the Inquiries on Your Credit Report
                The inquiries listed on your credit report are a record of the companies that obtained your credit information. The identify of
                each company by trade name and contact information is provided. All inquiries remain on your credit report for two years
                Credit information may be requested only for the following permissible purposes: credit transactions, employment
                consideration, review or collection of an existing account or other legitimate business need, insurance underwriting
                government licensing, rental dwelling, or pursuant to a court order. Your written authorization may not be required to
                constitute permissible purpose. If you believe that an inquiry on your credit report was made without permissible purpose
                then you may wish to contact the creditor directly, by phone or in writing, regarding its purpose. Please note that your
                specific consent to the release of your credit information is not necessary for a permissible purpose to exist.
                

Next came a paragraph containing an offer to purchase Trans Union's identity protection software:

                Want to Do More to Protect Your Info?
                We take protecting your identity seriously and we want to offer you these helpful tips you can take going forward:
                  — Keep an eye on your credit. Look for signs of suspicious activity, like unfamiliar accounts or credit checks from companies
                you've never done business with.
                  — Be careful on the internet. Use secure passwords on your computer and web accounts. Make sure to change them often.
                  — Lock your credit report. With a service that offers credit lock, you can keep thieves out of your credit report in a matter of
                seconds.
                

Finally, the letter closed as follows:

                We're here to help. Should you have any further questions please contact us at:
                       — www.transunion.com
                       — (800) 916-8800
                       — P.O. Box 2000
                       — Chester, PA 19016-2000
                Please have your file number ready[REDACTED\]
                

Wagner Deposition, ECF 23-4, at 75-78.

The letter sent to Mr. Norman was not tailored to Mr. Norman. It was a form letter, automatically generated from a library of previously constructed form paragraphs. Id. at 75; ECF 23, at 11. In this case, the paragraphs comprising Mr. Norman's letter were four: a ,...