Paul v. Experian Info. Solutions Inc.

• Decision Date: 22 June 2011
• Docket Number: Civil No. 09–1102 (DSD/AJB).
• Citation: 793 F.Supp.2d 1098
• Parties: Carla PAUL, Plaintiff,v.EXPERIAN INFORMATION SOLUTIONS, INC., Defendant.
• Court: U.S. District Court — District of Minnesota

793 F.Supp.2d 1098

Carla PAUL, Plaintiff,

v.EXPERIAN INFORMATION SOLUTIONS, INC., Defendant.

Civil No. 09–1102 (DSD/AJB).

United States District Court, D. Minnesota.

June 22, 2011.

Trista M. Roy, Consumer Justice Center PA, and Thomas J. Lyons, Lyons Law Firm P.A., Vadnais Heights, MN, for Plaintiff.Michael S. Poncin, Esq., James R. Bedell, Esq. and Moss & Barnett, P.A., Minneapolis, MN and Seth J. Linnick, Esq. and Jones Day, Cleveland, OH, for Defendant.

ORDER

DAVID S. DOTY, District Judge.

This matter is before the court upon the motion for summary judgment by defendant Experian Information Solutions, Inc. (Experian) and the motion for partial summary judgment by plaintiff Carla Paul. Based on a review of the file, record and proceedings herein, the court grants Experian's motion.

BACKGROUND

This Fair Credit Reporting Act (FCRA) dispute arises out of a credit report issued by Experian, a credit-reporting agency (CRA). Beginning in January 2007, Paul opened “a multitude of accounts with” U.S. Bancorp (U.S. Bank). Paul Dep. 116:4–117:1. In early 2008, Paul decided that she had “too many debit and credit cards,” and went to a U.S. Bank branch to pay outstanding balances and close many of the accounts. Id. at 118:8–20, 121:19–21. Carol Jorgenson, the U.S. Bank representative assisting Paul, informed Paul that she “was totally current, paid up, and the accounts were closed.” Id. at 130:11–13. In fact, one credit account still had a balance but Jorgenson “hadn't brought this outstanding amount to [Paul's] attention.” Id. at 131:3–5.

In April 2008, Paul noticed a negative entry on a credit report generated by Experian based on late payments on the U.S. Bank credit card account. Compl. ¶ 6. According to Paul, she “was not late [with payments] because the bank took responsibility.... If you want to say that the money actually got to [U.S. Bank] late, I guess that would be true. But I think in terms of responsibility, I did not make a late payment.” Paul Dep. 125:15–20. She further stated: “it's a matter of knowledge ... I wasn't aware of this payment being due, so as far as I was concerned, it was never late.” Id. at 126:1–3.

Paul contacted Jorgenson at the U.S. Bank branch to dispute the late payments. Compl. ¶ 8. On May 6, 2008, Damon Laliberte, a U.S. Bank branch manager, sent Paul a letter addressed “To Whom It May Concern” and stating:

Any negative credit bureau reporting made by U.S. Bank N.A. on account [redacted] in the name of Carla A. Paul is the result of bank error. This account should never have been reported as past due. Please remove any late payment reporting.

Hughes Dep. Ex. 2. On May 30, 2008, Paul sent a letter to Experian disputing the negative entry and enclosed the letter from Laliberte. Paul Dep. Ex. 10. At the time of Paul's dispute letter, U.S. Bank was reporting to Experian that Paul's account was past due. Hughes Aff. ¶ 29.

Upon receiving Paul's dispute letter, Experian reviewed the letter from Laliberte to determine if it could “authenticate and use the document on its face.” Hughes Dep. 37:20–22. Experian determined that the letter could not be used on its face to change the status or payment history reported by U.S. Bank. Hughes Second Aff. ¶ 19.¹

When a consumer disputes an item on a credit report, Experian sends the creditor an Automatic Consumer Dispute Verification (ACDV) which identifies the consumer and the basis of the dispute and asks the creditor to verify the information reported. Hughes Aff. ¶ 11. The creditor then returns the ACDV to Experian with instructions to delete, correct or leave the item on the credit report. Id. Experian removes the disputed item if the ACDV is not returned within a reasonable time, does not verify Experian's information or contains unreliable information. Id.

On June 9, 2008, after determining that it could not use Laliberte's letter on its face, Experian sent an ACDV to U.S. Bank. Id. ¶ 17. Under “Dispute Reason,” Experian stated: “106–Disputes/ previous Account Status, History. Verify Accordingly. LTR FROM DAMON LALIBERTE SAYING ACCT SHOULD NEVER HAVE BEEN PAST DUE. CONTACT 651–466–8360.” Id. On June 18, 2008, U.S. Bank responded that the account was paid in full, but that delinquencies reported for August through October 2007 were accurate. Id. ¶ 18. Experian then changed Paul's credit report in accordance with this information, and sent the results to Paul. Id. ¶¶ 19–20. In a November 5, 2008, credit report, Experian listed the U.S. Bank account as “Status: Paid, Closed/Current, was past due 60 days.” Roy Aff. Ex. A. The credit report was shared with several companies. Id.

On May 11, 2009, Paul filed this action, alleging that Experian ² willfully and/or negligently violated 15 U.S.C. §§ 1681e(b) and 1681i(a) by failing to employ reasonable procedures to assure accuracy in Paul's consumer credit report and failing to conduct a reasonable investigation and remove inaccurate information from Plaintiff's credit file. Experian moves for summary judgment and Paul moves for partial summary judgment with respect to liability. The court now considers the motions.

DISCUSSION

Summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); see Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A fact is material only when its resolution affects the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A dispute is genuine if the evidence is such that it could cause a reasonable jury to return a verdict for either party. See id. at 252, 106 S.Ct. 2505. “Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge.” Torgerson v. City of Rochester, 643 F.3d 1031, 1042 (8th Cir.2011) (quoting Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000)).

On a motion for summary judgment, the court views all evidence and inferences as to which there is a genuine dispute in a light most favorable to the nonmoving party. See Ricci v. DeStefano, ––– U.S. ––––, 129 S.Ct. 2658, 2677, 174 L.Ed.2d 490 (2009). The nonmoving party, however, may not rest upon mere denials or allegations in the pleadings but must set forth specific facts sufficient to raise a genuine issue for trial. See Celotex, 477 U.S. at 324, 106 S.Ct. 2548. “Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial.” Torgerson, 643 F.3d at 1042. Moreover, if a plaintiff cannot support each essential element of her claim, the court must grant summary judgment because a complete failure of proof regarding an essential element necessarily renders all other facts immaterial. Celotex, 477 U.S. at 322–23, 106 S.Ct. 2548.

I. The FCRA

Congress enacted the FCRA in 1970 to “ensure fair and accurate credit reporting, promote efficiency in the banking system and protect consumer privacy.” Poehl v. Countrywide Home Loans, Inc., 528 F.3d 1093, 1096 (8th Cir.2008) (citation and internal quotation marks omitted). CRAs are not strictly liable for inaccuracies contained in credit reports. Hauser v. Equifax, Inc., 602 F.2d 811, 814–15 (8th Cir.1979).

A. Section 1681e(b)

A CRA must “follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.” 15 U.S.C. § 1681e(b). To prevail on a claim under § 1681e(b), Paul must present evidence that (1) Experian failed to follow reasonable procedures intended to assure the accuracy of its reports, (2) reported inaccurate credit information about her, (3) she suffered harm and (4) Experian's failure to follow reasonable procedures was the cause of her harm. See Gohman v. Equifax Info. Servs., LLC, 395 F.Supp.2d 822, 826 (D.Minn.2005); Reed v. Experian Info. Solutions, Inc., 321 F.Supp.2d 1109, 1113 (D.Minn.2004); Cf. Hauser, 602 F.2d at 815–16; Schmitt v. Chase Manhattan Bank, N.A., No. 03–3295, 2005 WL 2030483, at *3 (D.Minn. Aug. 23, 2005).

As an initial matter, Paul cannot meet her prima facie burden to show that Experian failed to follow reasonable procedures to assure maximum accuracy. Paul argues that Experian's summary of the three-sentence Laliberte letter “completely fails to do the U.S. [sic] Bank letter justice.” The court disagrees. Experian responded to Paul's dispute by notifying U.S. Bank and telling U.S. Bank “LTR FROM DAMON LALIBERTE SAYING ACCT SHOULD NEVER HAVE BEEN PAST DUE. CONTACT 651–466–8360.” U.S. Bank conducted an investigation and responded to Experian. Experian conformed the report to U.S. Bank's response. Paul's unsupported conjecture that sending the letter to U.S. Bank would have led to greater report accuracy has no basis. Moreover, no reasonable jury could find that Experian failed to follow reasonable procedures by requesting that U.S. Bank investigate the dispute. Therefore summary judgment in favor of Experian is warranted on this basis alone.

Even if Paul had shown that Experian failed to follow reasonable procedures to assure maximum accuracy, Paul fails to show that Experian reported inaccurate credit information. Paul first argues that she has no duty to show that inaccurate information was included in the consumer report and that Experian's “myopic focus on technical accuracy is misplaced.” Pl.'s Mem. 6. The court disagrees. The Eighth Circuit has held that mere inaccuracy is not sufficient to create liability under § 1681e(b); instead, a plaintiff must show that the inaccuracy resulted from the CRA's failure to “follow reasonable procedures to assure maximum possible accuracy.” Hauser, 602 F.2d at 814–15. Implicit in this holding is the requirement that the information is inaccurate. Moreover, courts in this...