Reed v. Experian Information Solutions, Inc., CIV.02-3706 DSD/JGL.

• Decision Date: 14 April 2004
• Docket Number: No. CIV.02-3706 DSD/JGL.,CIV.02-3706 DSD/JGL.
• Citation: 321 F.Supp.2d 1109
• Parties: Donel Avion REED, Plaintiff, v. EXPERIAN INFORMATION SOLUTIONS, INC., CSC Credit Services, Inc., Trans Union LLC, and Providian Financial Corporation d/b/a Providian National Bank, Defendants.
• Court: U.S. District Court — District of Minnesota

321 F.Supp.2d 1109

Donel Avion REED, Plaintiff, v. EXPERIAN INFORMATION SOLUTIONS, INC., CSC Credit Services, Inc., Trans Union LLC, and Providian Financial Corporation d/b/a Providian National Bank, Defendants.

No. CIV.02-3706 DSD/JGL.

United States District Court, D. Minnesota.

April 14, 2004.

Thomas J. Lyons, Esq. and Lyons & Associates, Little Canada, MN, for plaintiff.

Angela M. Taylor, Esq., D. Scott Kirkner, Esq. and Jones, Day, Irvine, CA Gregory J. Myers, Esq., William A. Gengler, Esq. and Lockridge, Grindal & Nauen, Minneapolis, MN, Charles F. Webber, Esq., Erik J. Girvan, Esq. Lianne Knych, Esq. and Faegre & Benson, Minneapolis, MN, G. John Cento, Esq. and Katz & Korin, Indianapolis, IN, Michael T. Browne, Esq. and Meagher & Geer, Minneapolis, MN, Monica L. Davies, Esq. Todd A. Noteboom, Esq. and Leonard, Street & Deinard, Minneapolis, MN, for defendants.

ORDER

DOTY, District Judge.

This matter is before the court upon the motions for summary judgment of defendants Experian Information Solutions, Inc. ("Experian"), CSC Credit Services, Inc. ("CSC") and Providian Financial Corporation d/b/a Providian National Bank ("Providian"). For the following reasons, defendants' motions are granted.

BACKGROUND

Experian and CSC are credit reporting agencies ("CRAs") as that phrase is defined in the Fair Credit Reporting Act of 1968 ("FCRA"), 15 U.S.C. §§ 1681, 1681a-1681u. Experian and CSC gather information about consumers from various sources, consolidate the information in a database and provide consumer credit history reports to creditors considering extending credit to a particular consumer. Providian issues consumer credit, primarily through credit cards. It is also a furnisher of credit information as that term is defined in FCRA.

In December 2001, Providian informed plaintiff that it was canceling his Providian Visa credit card because he was in bankruptcy. It is undisputed that plaintiff has never filed for bankruptcy. Plaintiff notified Providian at least three times by telephone and once by letter that he had not declared bankruptcy. (Goolsby Aff. Ex. E.)

Although plaintiff has never filed bankruptcy, his sister has. (Compl.Ex. 3.) It now appears that certain of her consumer credit information, including her bankruptcy, became mixed with plaintiff's account information. Plaintiff's name is Donel Reed. His sister's name is Donela Reed. Donel and Donela shared an address for a period of time. Their social security numbers are similar. Both had Providian credit card accounts at one time. Plaintiff's credit file and his sister's file had become mixed in the past. (Davies Aff. Ex. A., Reed Dep. at 155-57.) Additionally, plaintiff's true credit history, apart from problems with his sister's account, is less than perfect. He has been denied credit on previous occasions for reasons not related to this lawsuit. (Davies Aff. Ex. B at CSC00470; Reed Dep. at 130.)

Relative to this action, plaintiff was denied credit in February, March and July of 2002. In February, CitiFinancial declined plaintiff's application for credit in the amount of $7,500. It relied on a credit report from CSC that reported a bankruptcy relative to plaintiff's account with First National Bank. (Davies Aff. Ex. C, CitiFinancial Dep. Ex. A at 5-7.) The report showed the Providian account as current. In March, CIT Online Bank denied plaintiff's application for $1,100 credit to purchase a computer. (Reed Dep. at 99-104.) It relied on an Experian credit report which incorrectly showed an indication of bankruptcy on a First National Bank account. (Davies Aff. Ex. D, CIT Online Dep. at 21-22.) The credit report showed plaintiff's Providian account as current with no negative information. (Id., Ex. 2 at 004.) Finally, in July 2002, Wells Fargo refused plaintiff's application for a loan. (Davies Aff., Ex. E.) The credit report upon which Wells Fargo relied did not include any reference to the Providian account.

After being denied credit in March, plaintiff determined that some CRAs were incorrectly reporting that he was in bankruptcy. On March 29, 2002, plaintiff's attorney disputed plaintiff's credit reports to Experian and CSC, informing them that plaintiff had never declared bankruptcy. (Fogelman Aff. Ex. A.) Both Experian and CSC responded to the dispute by sending Automated Consumer Dispute Verification ("ACDV") forms to Providian. In an apparent miscommunication between Experian and Providian, Experian communicated both that the account was in bankruptcy and that the consumer disputed that the account belonged to him. (Smith Aff. Ex. C.) In response, Providian indicated that the account did belong to plaintiff and confirmed his name and address information. (Goolsby Aff. Ex. H at Part G.) Experian reported back to plaintiff that Providian had confirmed his account information. After further investigation, Experian deleted the bankruptcy notation from the public records portion of his credit report, but did not remove it from the Providian account information. When plaintiff again contacted Experian through his attorney, Experian initiated a second reinvestigation. (Smith Aff. Ex. D; Hughes Aff. ¶ 7.) In response to the second ACDV, Providian notified Experian that plaintiff's account had inadvertently picked up a bankruptcy notation that should be deleted. (Smith Aff. ¶ 6.) Experian immediately removed the bankruptcy notation. Only later did plaintiff's counsel contact counsel for Experian and inform her of plaintiff's sister's bankruptcy and their substantially similar file information. (Taylor Aff. ¶¶ 2, 3 & 8.)

After receiving plaintiff's initial dispute letter, CSC sent an ACDV to Providian on April 8, 2002. (Fogelman Aff. ¶¶ 12-14 & Ex. C.) CSC asked Providian to respond to the ACDV within seven days so that it could complete its reinvestigation in compliance with FCRA. (Id. ¶ 4.) When Providian did not respond within seven days, CSC deleted the Providian account from plaintiff's credit report. (Id. ¶¶ 15-16.) Providian responded soon thereafter, indicating that the "included in bankruptcy" notation should be changed to reflect "pays as agreed." (Id. Ex. C.) However, Providian's response also noted that the account was both "open and in good standing" and "closed at customer's request." (Id.) Therefore, CSC did not reinsert the deleted account in its report after receiving Providian's response. (Id. ¶ 17.)

The complaint alleges that Experian and CSC willfully and negligently failed to implement and follow reasonable reporting procedures as required by 15 U.S.C. § 1681e(b). (Compl. ¶¶ 59-60 & 72.) It also alleges that Experian and CSC negligently and willfully failed to investigate inaccuracies in plaintiff's credit reports in violation of 15 U.S.C. § 1681i.¹ (Compl. ¶¶ 61-62.) The complaint alleges that Providian willfully violated its duties under 15 U.S.C. §§ 1681s-2 and 1681i and impermissibly accessed his credit information in violation of 15 U.S.C. § 1681b(f). (Compl. ¶¶ 104 & 107.) Plaintiff asserts that he was denied credit, lost economic opportunities, suffered severe emotional distress and incurred legal expenses as a result of the alleged violations. He seeks compensatory damages, punitive damages, attorneys' fees, costs and injunctive relief. Defendants now move for summary judgment on all claims.

DISCUSSION

I. Summary Judgment Standard

Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment is appropriate "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 a judgment as a matter of law." In order for the moving party to prevail, it must demonstrate to the court 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." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (quoting Fed.R.Civ.P. 56(c)). 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.

On a motion for summary judgment, all evidence and inferences are to be viewed in a light most favorable to the nonmoving party. See id. at 255, 106 S.Ct. 2505. 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. Moreover, if a plaintiff cannot support each essential element of its claim, summary judgment must be granted because a complete failure of proof regarding an essential element necessarily renders all other facts immaterial. See id. at 322-23, 106 S.Ct. 2548.

II. Fair Credit Reporting Act Claims

A. The Claims

Under FCRA, CRAs are required to maintain reasonable procedures calculated to ensure "maximum possible accuracy" of consumer credit reports. 15 U.S.C. § 1681e(b). For plaintiff's § 1861e(b) claims to survive defendants' motions for summary judgment, he must present evidence that: (1) Experian and CSC negligently or willfully failed to follow reasonable procedures intended to assure the accuracy of their reports, (2) they reported inaccurate credit information about plaintiff, (3) plaintiff suffered harm, and (4) defendants' failure to follow reasonable procedures was the cause of that harm. See Whelan v. Trans Union Credit Reporting Agency, 862 F.Supp. 824, 829 (E.D.N.Y.1994). However, if Experian or CSC has willfully violated the Act, plaintiff may be entitled to statutory damages without a showing of actual damages. 15 U.S.C. § 1681n(a)(1)(A). He may also be entitled to punitive damages. 15 U.S.C. § 1681n(a)(2).

Once...