Philpot v. Microbilt Corp.

• Decision Date: 09 February 2018
• Docket Number: CIVIL ACTION NO. 3:16-CV-382-TBR-LLK
• Parties: DELMAS PHILPOT, PLAINTIFF v. MICROBILT CORPORATION, DEFENDANT
• Court: U.S. District Court — Western District of Kentucky

DELMAS PHILPOT, PLAINTIFF v. MICROBILT CORPORATION, DEFENDANT

CIVIL ACTION NO. 3:16-CV-382-TBR-LLK

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF KENTUCKY AT LOUISVILLE

February 9, 2018

MEMORANDUM OPINION AND ORDER

This matter comes before the Court on cross motions for summary judgment and a motion for sanctions. Defendant Microbilt Corporation filed a Motion for Summary Judgment pursuant to Federal Rule of Civil Procedure 56. [R. 20.] Plaintiff Delmas Philpot responded, [R. 24], and Microbilt replied, [R. 25]. Plaintiff Philpot also filed a Motion for Summary Judgment pursuant to Rule 56, [R. 21], to which Microbilt responded, [R. 23], and Philpot replied, [R. 26]. Lastly, Microbilt filed a Motion for Sanctions, [R. 29], and Philpot responded, [R. 31]. The deadline for Microbilt to file a reply has passed. This matter is now ripe for adjudication. For the reasons stated herein, Microbilt's Motion for Summary Judgment, [R. 20], is DENIED, Philpot's Motion for Summary Judgment, [R. 21], is DENIED, and Microbilt's Motion for Sanctions, [R. 29], is DENIED.

BACKGROUND

The general facts of this case are described in the Court's prior opinion, Philpot v. Microbilt Corp., No. 3:16-CV-00382-TBR, 2016 WL 7395289 (W.D. Ky. Dec. 21, 2016). Briefly, Philpot filed this action against Microbilt arguing that Microbilt violated 15 U.S.C. § 1681k of the Fair Credit Reporting Act (FCRA), as well as defamed him by providing an inaccurate consumer report to his prospective employer, Fenton & McGarvey. [R. 1-2 at 4 (Complaint).] The Court dismissed Philpot's claim of defamation in the prior opinion. See Philpot, No. 3:16-CV-00382-TBR, 2016 WL 7395289, at *4. However, Philpot's claim for violating § 1681k of the FCRA still stands, which is the subject of the cross motions for summary judgment before the Court.

More recently, Microbilt filed a Motion for Sanctions arising out of Philpot including confidential documents, produced in accordance with the Stipulated Protective Order, [R. 19], in his Motion for Summary Judgment, [R. 21]. The Court will first address the cross motions for summary judgment followed by Microbilt's Motion for Sanctions.

DISCUSSION

I. Motions for Summary Judgment

Summary judgment is appropriate when the record, viewed in the light most favorable to the nonmoving party, reveals "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). A genuine dispute of material fact exists where "there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). The Court "may not make credibility determinations nor weigh the evidence when determining whether an issue of fact remains for trial." Laster v. City of Kalamazoo, 746 F.3d 714, 726 (6th Cir. 2014) (citing Logan v. Denny's, Inc., 259 F.3d 558, 566 (6th Cir. 2001); Ahlers v. Schebil, 188 F.3d 365, 369 (6th Cir. 1999)). "The ultimate question is 'whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.'" Back v. Nestlé USA, Inc., 694 F.3d 571, 575 (6th Cir. 2012) (quoting Anderson, 477 U.S. at 251-52).

As the party moving for summary judgment, the defendant must shoulder the burden of showing the absence of a genuine dispute of material fact as to at least one essential element of Plaintiff's claims. Fed. R. Civ. P. 56(c); see also Laster, 746 F.3d at 726 (citing Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986)). Assuming each defendant satisfies its burden of production, Plaintiff "must—by deposition, answers to interrogatories, affidavits, and admissions on file—show specific facts that reveal a genuine issue for trial." Laster, 746 F.3d at 726 (citing Celotex Corp., 477 U.S. at 324).

The FCRA imposes civil liability on any "consumer reporting agency," or CRA for short, which negligently fails to comply with its obligations under the Act. 15 U.S.C. § 1681o. In fact, any person who is found negligent in failing to comply with its FCRA duties is liable to the consumer for actual damages sustained as a result of the failure. Miller v. Wells Fargo & Co., No. 3:05-CV-42-S, 2008 WL 793683, at *4 (W.D. Ky. Mar. 24, 2008) (citing 15 U.S.C. § 1681o) (Simpson, J.). Of those many obligations, the one pertinent to this action is found in § 1681k(a). Under that provision, a CRA which furnishes a report containing information likely adverse to a consumer's employment prospects must notify the consumer at the time the report is furnished, id. § 1681k(a)(1), unless it maintains strict procedures designed to ensure that the information reported is complete and up-to-date, id. § 1681k(a)(2).

Here, Philpot argues he is entitled to summary judgment due to Microbilt's failure to maintain "strict procedures" as required by § 1681k(a)(2).¹ In contrast, Microbilt argues summary judgment should be granted in its favor due to evidence that it maintained such "strict procedures." Furthermore, Microbilt argues that it is also entitled to summary judgment due toPhilpot's failure to prove that its alleged violation of the FCRA caused him to suffer actual damages. See 15 U.S.C. § 1681o. The Court will address both issues in turn.

A. Damages Under §1681o

Section 1681o states that any person who negligently fails to comply with the FCRA with respect to a consumer, is liable to that consumer for "any actual damages sustained by the consumer as a result of the failure." 15 U.S.C. § 1681o. "To prevail on claims under this section, Plaintiff must establish (1) actual damages, and (2) a causal relationship between the damage and [defendant's] alleged violations of the FCRA." Moore v. First Advantage Enter. Screening Corp., No. 4:12-CV-00792, 2013 WL 1662959, at *4 (N.D. Ohio Apr. 17, 2013) (citing Elsady v. Rapid Global Bus. Solutions, Inc., No. 09-11649, 2010 WL 742852, at *3 (E.D. Mich. Feb. 26, 2010). "The burden of proving causation remains with Plaintiff at all times to prove that the alleged FCRA violation was [a] substantial factor in causing the asserted actual damages." Id. (citing Garrett v. Trans Union, LLC, No. 2:04-CV-00582, 2006 WL 2850499, at *11 n. 5 (S.D. Ohio Sept. 29, 2006)).

Here, Philpot claims actual damages of lost wages and benefits of prospective employment with Fenton and McGarvey, emotional distress, and injury to his professional reputation. [R. 1-2 at 5.] In its Motion for Summary Judgment, Microbilt argues that Philpot has failed to prove that Microbilt's alleged violation of the FCRA caused his damages and has offered no evidence of damages from emotional distress "beyond his own self-serving testimony." [R. 20-1 at 7-8 (Microbilt Motion for Summary Judgment).]

1. Lost Wages and Benefits

In arguing that Philpot has failed to prove the causation factor of §1681o, Microbilt cites three different cases from the Sixth Circuit. [See R. 20-1 at 7.] All are distinguishable from thematter at hand because the plaintiffs therein failed at the summary judgment stage due to a total lack of evidence. See Winchester v. City of Hopkinsville, 93 F. Supp. 3d 752, 772 (W.D. Ky. 2015) ("Winchester cannot demonstrate that the City's hiring decision was based upon inaccurate information or that he was otherwise harmed by the violation. This lack of evidence of damages proves fatal to his claim.") (Russell, J.); McComas v. Experian Info. Sols., Inc., No. 5:14-371-DCR, 2015 WL 4603233, at *5 (E.D. Ky. July 29, 2015) (granting summary judgment in favor of defendant when plaintiff failed to provide evidence of harm or impact to her credit as a result of incorrect data beyond the general claim that she was harmed); Garrett, No. 2:04-CV-00582, 2006 WL 2850499, at *3 (holding that the plaintiff was never actually denied credit based on an alleged inaccurate report nor was that credit report distributed to a third party).

In contrast to these cases, Philpot has presented evidence to support his claim of lost wages. First, Philpot argues that there was a substantial likelihood that he was to be hired because he advanced to the background check phase of Fenton & McGarvey's hiring procedure. In her deposition, Fenton & McGarvey's corporate representative, LeShana Percell, stated: "There has to be some level of confidence from that hiring manager that's conducting the interview for them to even want to push that person through the [background check] process." [R. 20-3 at 7 (34:12-15) (Percell Depo.).] Secondly, Philpot testified that he was told after his interview at Fenton & McGarvey that he would be hired as long as his background check did not reveal any problems, [R. 21-5 at 14 (50:5-8) (Philpot Depo.).], and, thereafter, he was told over the phone by an unknown employee of Fenton & McGarvey that he would not be hired due to "something to do with your background check, something you did in North Carolina." [Id. (53:12-13).] In rebuttal, Microbilt provides further testimony from Percell that she was not aware of any such phone calls to Philpot regarding his background check, and she stated that "it's not anormal practice to give verbal responses over the phone regarding backgrounds." [R. 20-3 at 8 (46:12-16).] Lastly, Philpot provided a letter from Fenton & McGarvey addressed to Philpot informing him that he would not be considered for employment due "in part from information [they] received from a consumer report furnished by" Microbilt. [R. 21-4 at 2 (Letter to Philpot).] Microbilt concedes that this letter is credible evidence of "Philpot becoming aware that he was no longer being considered for employment," but it emphasizes that this only leaves a period of two weeks of unemployment before Philpot obtained a job with another firm. [R. 25 at 3 (Microbilt Summary Judgment Reply).]

After viewing the record in the light most favorable to the nonmoving party, here Philpot, it is clear that a genuine dispute...