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Summary: Case: 19-11487 Date Filed: 06/19/2020 Page: 1 of 22 [DO NOT PUBLISH] IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT _ Nos. 19-11487 and 19-11940 _ D.C. Docket No. 2:15-cv-00952-SGC SHAUN J YOUNGER, Plaintiff-Appellee, versus EXPERIAN INFORMATION SOLUTIONS, INC. Defendant-Appellant. _ Appeals from the United States District Court for the Northern District of Alabama _ (June 19, 2020) Before WILLIAM PRYOR, Chief Judge, and GRANT, Circuit Judge, and JUNG, * District Judge. JUNG, Dis
Summary: Case: 19-11487 Date Filed: 06/19/2020 Page: 1 of 22 [DO NOT PUBLISH] IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT _ Nos. 19-11487 and 19-11940 _ D.C. Docket No. 2:15-cv-00952-SGC SHAUN J YOUNGER, Plaintiff-Appellee, versus EXPERIAN INFORMATION SOLUTIONS, INC. Defendant-Appellant. _ Appeals from the United States District Court for the Northern District of Alabama _ (June 19, 2020) Before WILLIAM PRYOR, Chief Judge, and GRANT, Circuit Judge, and JUNG, * District Judge. JUNG, Dist..
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Case: 19-11487 Date Filed: 06/19/2020 Page: 1 of 22
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
_________________________
Nos. 19-11487 and 19-11940
_________________________
D.C. Docket No. 2:15-cv-00952-SGC
SHAUN J YOUNGER,
Plaintiff-Appellee,
versus
EXPERIAN INFORMATION SOLUTIONS, INC.
Defendant-Appellant.
___________________________
Appeals from the United States District Court
for the Northern District of Alabama
____________________________
(June 19, 2020)
Before WILLIAM PRYOR, Chief Judge, and GRANT, Circuit Judge, and JUNG, *
District Judge.
JUNG, District Judge:
Appellant Experian Information Solutions, Inc. (“Experian”) brings several
issues on appeal from a two-day jury trial in which Experian was found to have
*The Honorable William F. Jung, District Judge for the Middle District of Florida, sitting
by designation.
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negligently and willfully violated the Fair Credit Reporting Act. With the benefit
of the parties’ briefing and oral argument, we find no competent proof at trial of a
willful violation, vacate the magistrate judge’s final judgment in that regard, and
remand for further proceedings. The remaining issues on appeal are affirmed.
I. BACKGROUND
Plaintiff Shaun Younger brought this lawsuit on June 5, 2015 against
defendant Experian and others. Experian is a credit reporting agency (“CRA”)
regulated by the Fair Credit Reporting Act, 15 U.S.C. § 1681 et. seq. (“FCRA”).
After other defendants and claims were resolved, Younger’s remaining case
against Experian claimed that Experian negligently and willfully violated 15
U.S.C. § 1681i(a)(1)(A) when it did not reinvestigate an item on his credit report
that Younger asserted was in error.
The facts show that a prior small-claims debt of Younger’s was resolved by
a dismissal with prejudice of the debt claim on January 12, 2015, in state district
court in Younger’s home county in Alabama. Younger ran his credit report on
March 30, 2015, with the assistance of his lawyer and they noticed that this debt
was still being reported on his Experian credit report. Younger and his counsel
drafted a letter to Experian and posted it from the lawyer’s office that day. The
letter attached the order of dismissal with prejudice and asked Experian to
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reinvestigate the debt listing and remove it. The letter was typed in the lawyer’s
office by Younger and his counsel. Younger identified himself in the letter by
name, date of birth, address, and last four digits of social security number. He
provided information that could be used to verify the dismissal of the debt lawsuit.
In the letter, Younger stated an incorrect account number when describing the debt.
He also mistakenly asked Experian in the letter to correct his Equifax credit report,
apparently because he and his lawyer also sent a similar letter to the Equifax credit
agency. The lawyer sent the letter from the lawyer’s local office via certified mail,
but it had Younger’s local return address on it. The envelope was typed and
apparently bar coded by an automatic postal machine with printed postage. It did
not bear a stamp or postmark.
Experian received Younger’s letter on April 7, 2015. An unknown person in
the Experian mail room concluded that the letter qualified for diversion under
Experian’s “suspicious mail policy” and diverted the letter. Precisely why this
sorter in the mailroom determined Younger’s letter qualified under the suspicious
mail policy is unknown because Experian does not maintain a system tracking
which employee marked a letter suspicious or why an employee marked a letter
suspicious. On April 15, 2015, Experian sent to Younger at his home address the
standard letter it sends to queries that are diverted by the suspicious mail policy.
This letter stated:
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Dear SHAUN J YOUNGER
We received a suspicious request in the mail regarding your personal
credit report and determined that it was not sent by you. Suspicious
requests are reviewed by Experian security personnel who work
regularly with law enforcement officials and regulatory agencies to
identify fraudulent and deceptive correspondence purporting to
originate from consumers.
In an effort to safeguard your personal credit information from fraud,
we will not be initiating any disputes based on the suspicious
correspondence. Experian will apply this same policy to any future
suspicious requests that we receive regarding your personal credit
information, but we will not send additional notices to you of suspicious
correspondence.
If you believe that information in your personal credit report is
inaccurate or incomplete, please call us at 1 (855) 435-9429 to speak
directly to an Experian consumer assistance representative.
Experian did nothing further with Younger’s request, and so it did not
reinvestigate within 30 days of receiving his letter. See 15 U.S.C § 1681i(a)(1)(A).
Younger did not phone Experian as suggested in the letter, although his decision
not to call Experian did not affect Experian’s duty to reinvestigate, which attached
when it received his request. See id. Instead, he filed suit against Experian on
June 5, 2015. On June 10, 2015, pursuant to a communication from the debt
holder, Experian deleted from Younger’s credit file and report the information
about which Younger had complained. Very shortly thereafter, Younger served
Experian in this lawsuit.
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The parties stipulated to dispositive jurisdiction before the United States
Magistrate Judge under 28 U.S.C. § 636(c). Prior to trial, the magistrate judge
denied Experian’s motion for summary judgment, but granted Younger’s summary
judgment motion in part. The magistrate judge found that Experian violated its
duty to reinvestigate Younger’s disputed credit data. In other words, the court held
Experian was negligent in not following through with Younger’s letter and
reinvestigating the disputed entry. Based on the magistrate judge’s ruling,
Younger would still have to prove causation and damages at trial on the negligence
claim, but the court found a breach of the statutory duty to reinvestigate under 15
U.S.C. § 1681i(a)(1)(A). The court held “no reasonable factfinder could find the
March 30 letter’s contents presented anything to suggest it was not ‘from’
Plaintiff.” “This [letter] triggered Experian’s duty to conduct a reinvestigation,
which Experian failed to do.”
One week prior to trial Experian moved in limine to preclude mention,
comment, or reference to any other settlements Experian may have executed,
whether in lawsuits or administrative actions. Younger filed no response to this
motion although he was instructed to do so. The magistrate judge granted the
motion. The court held “[s]uch evidence is irrelevant to the instant action and
prejudicial for the purposes of Rule 403. Even if such evidence has some
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probative value, it would likely confuse and mislead the jury from evaluating
[Younger’s] claims in this case.”
In this very short trial the parties selected a jury and rested by 11:00 am the
second morning. During trial, only Younger and Experian’s corporate
representative testified. Our review of this short trial is hampered by the failure to
report or otherwise contemporaneously record the eight mid-trial sidebar
conferences, most of which appear to have discussed substantive case issues and
objections. Off-the-record sidebars or bench conferences concerning case-related
substance in a jury trial are not proper. 28 U.S.C. § 753(b); see also United States
v. Smith, 591 F.2d 1105, 1108–09 (5th Cir. 1979).1
At trial, Younger moved into evidence Experian’s suspicious mail policy.
The policy states that a sorter is to evaluate each piece of mail for certain “listed”
characteristics that might suggest a letter is not from the consumer. For example,
“suspicious” characteristics include envelopes that are “similar” in type or size;
envelopes that contain “similar” ink color or font; letters with a “similar letter
format”; “hand addressed envelopes” with “a typed letter”; and “[u]nique
handwriting.” Other suspicious characteristics include “[a] signature found on [an]
1
In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), this
Court adopted as binding precedent all decisions of the former Fifth Circuit handed down prior
to October 1, 1981.
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attachment” that differs from “the signature on the letter”; “[d]ata on an attachment
document [that] appears to have been manipulated”; “[d]ata on an attachment
document [that] does not appear logical”; a “return address [on the letter itself]
which differs from the return address appearing on the envelope”; and “[a] series
of envelop[e]s where the postmark is in the same city but the return address[es] are
in different cities.” When five or more letters from different consumers in a batch
of mail contain the same listed characteristic, the policy counsels that a sorter can
“reasonabl[y] . . . conclude that the[y] . . . may not have been mailed by the
consumer” and mark them suspicious.
Younger twice cross-examined Experian’s corporate representative, once
during his own case-in-chief and once during Experian’s case-in-chief. Younger
elicited testimony from the representative that established Experian misclassified
his letter, the misclassifying of his letter occurred pursuant to Experian’s
suspicious mail policy, and that Experian agreed his letter contained no
characteristics raising suspicion. Indeed, although the representative could not
identify any suspicious characteristic of Younger’s letter at trial, she maintained
that the letter was marked suspicious and not reinvestigated “pursuant to
Experian’s policies and procedures.” She explained that Experian receives
“anywhere from 3,000 to 10,000 pieces of mail every day” but employs only 10 to
14 sorters to review the mail for suspicious characteristics. She testified that
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thousands of letters are marked suspicious each day, and suspicious letters are not
reinvestigated without further action by the consumer even though the duty to
reinvestigate attaches when the consumer reporting agency receives the letter and
nothing in the FCRA requires a consumer to take additional action. 15 U.S.C.
§ 1681i(a)(1)(A). Although the corporate representative agreed Experian’s policy
has led it to misclassify other letters besides Younger’s, neither party presented any
evidence of how often Experian misclassifies genuine consumer-dispute letters.
Younger also questioned the representative about a previous settlement
agreement Experian had executed, contrary to the in limine order. As described,
the court’s in limine order precluded any mention or use of Experian’s legal or
administrative settlements. Younger asked the representative if an ulterior purpose
for the suspicious mail policy is to induce the consumer to phone Experian, so
Experian can sell or market to him during a dispute call. The representative denied
that the dispute agents tried to sell things. At this point, Younger showed the
representative a settlement agreement between several state attorneys general and
several credit reporting agencies, including Experian. Basically, the settlement
agreement imposed “best practices” by agreement. Titled “Assurance of Voluntary
Compliance/Assurance of Voluntary Discontinuance,” the settlement agreement
contained all the formal caveats that it contained no admissions by the CRAs, no
findings of fact or law, and no liability found or admitted by the CRAs; indeed it
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contained a denial of liability by the CRAs. The settlement agreement did mention
the states’ “concerns” that the CRAs were violating the FCRA and stated that the
states had investigated various topics including whether the CRAs “engage in
improper disclosure or marketing practices relating to the sale of direct-to-
consumer products to consumers during credit report dispute phone calls.”
Younger asked a 12-line speaking question to the representative, which
inaccurately stated that the settlement agreement contained,
[a]s a result of the findings of this multistate committee, according to
this document that your lawyer and Experian signed—or your lawyer’s
law firm, rather—it says that y’all shall adopt a script for use in post-
dispute marketing phone calls to communicate to consumers in a clear
and comprehensible language when the dispute portion ends and when
the marketing products and services begins.
The representative then twice denied that Experian marketed to consumers
who called into the dedicated consumer dispute phone line. Younger responded,
“Well, then, based on your own personal knowledge, is it surprising to you that
Experian agreed that they would enter into this compliance order and change their
business practices to make it clear that they were marketing?” At this point the
defense counsel objected on relevance. Neither party reminded the magistrate
judge of the in limine order, and the court overruled the relevance objection. After
this ruling, Younger then repeated the question for seven lines, again premised on
whether the representative would be “surprise[d]” and repeating the insinuation
that the settlement agreement showed “that Experian would enter into this
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assurance of voluntary compliance agreeing that they would not—or they would
delineate and stop marketing to people at the same time . . . ?” The representative
answered “no.” Although Younger stated before the jury “we’ll show the jury [the
document] in a minute,” he never offered the exhibit or marked it for identification.
In its examination of its representative, Experian asked about the benefits of
the suspicious mail policy. Its representative testified that Experian considers it
“really important to . . . protect the consumer’s privacy.” When Experian
completes a reinvestigation, it must send the consumer “the results of the
reinvestigation” and “a full personal credit report,” which contains “a lot of
information,” such as
phone numbers, addresses that [a consumer] live[s] at now, addresses
[a consumer] used to live at, [a consumer’s] employment information,
all of the different banks that [a consumer] do[es] business with, credit
card companies, partial account numbers, the phone numbers and
addresses to those companies, anybody that’s looked at your credit
report in the last two years.
See id. §§ 1681a(d) (defining “consumer report”), 1681i(a)(6)(B)(ii) (requiring a
credit reporting agency to provide “a consumer report” to the consumer upon
completion of the reinvestigation). Because “potential fraudsters could use [this
kind of information] to do bad things,” Experian attempts to “protect” the
consumer’s privacy by ensuring “the consumer initiated the dispute.” So Experian
created the suspicious mail policy both “to comply with the FCRA” and “to add
that extra layer of protection for the consumer.”
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During closing arguments, Younger stressed both that Experian created an
overbroad policy to screen consumer disputes and that Experian created the policy
to increase its revenue. As to the latter point, Younger again mentioned the
settlement agreement. And Experian again objected, but this time it cited the in
limine order. The magistrate judge overruled the objection because she concluded
Experian had waived this ground by not asserting it when Younger first elicited the
testimony on the settlement agreement. In its rebuttal, Experian told the jury that
this settlement agreement had nothing to do with the suspicious mail policy.
The jury returned a verdict on the trial’s second afternoon, finding that
Experian’s negligent failure to reinvestigate had caused harm to Younger,
awarding $5,000 in compensatory damages. The jury further found Experian’s
violation of the FCRA was willful and assessed $3 million in punitive damages.
Experian brought post-trial motions for a new trial on all jury findings, based
upon Younger’s use of the settlement agreement. Experian also sought judgments
as a matter of law for failure of proof on willfulness and on compensatory injury,
and sought a vacatur or remittitur of punitive damages. The magistrate judge
denied these post-trial motions2 except to remit the punitive damages amount to
$490,000 based upon due process principles.
2
There were other post-trial motions made that are not relevant to this appeal.
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On appeal, Experian seeks a judgment as a matter of law upon the
willfulness claim, asserting there was an insufficient evidentiary basis. Experian
seeks a similar remedy on Younger’s $5,000 compensable damages verdict,
arguing that Younger omitted sufficient proof of personal injury. Also, Experian
seeks a new trial on both the compensatory and remitted punitive damages verdicts
based upon Younger’s use of the settlement agreement stratagem at trial. Finally,
Experian seeks to have the $490,000 punitive damage award vacated for being
constitutionally excessive.
II. STANDARD OF REVIEW
A district court’s denial of a defendant’s motion for judgment as a matter of
law is reviewed de novo, applying the same legal standard as the district court. See
Bianchi v. Roadway Express, Inc., 441 F.3d 1278, 1282 (11th Cir. 2006).
Judgment as a matter of law should be granted when “there is no legally sufficient
evidentiary basis for a reasonable jury to find for that party on that issue.”
Commodores Entm’t Corp. v. McClary,
879 F.3d 1114, 1130 (11th Cir. 2018)
(internal quotation marks omitted). This review draws “all reasonable inferences
most favorable to the party opposed to the motion.” Simon v. Shearson Lehman
Bros., Inc.,
895 F.2d 1304, 1310 (11th Cir. 1990) (internal quotation marks
omitted).
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We review the district court’s denial of a motion for new trial for abuse of
discretion. Bianchi, 441 F.3d at 1282. “A judge should grant a motion for a new
trial when the verdict is against the clear weight of the evidence or will result in a
miscarriage of justice, even though there may be substantial evidence which would
prevent the direction of a verdict.” Lipphardt v. Durango Steakhouse of Brandon,
Inc.,
267 F.3d 1183, 1186 (11th Cir. 2001) (internal quotation marks omitted).
“Because it is critical that a judge does not merely substitute his judgment for that
of the jury, new trials should not be granted on evidentiary grounds unless, at a
minimum, the verdict is against the great—not merely the greater—weight of the
evidence.”
Id. (internal quotation marks omitted).
III. DISCUSSION
The statutory reinvestigation procedure for CRAs provides in relevant part:
[I]f the completeness or accuracy of any item of information contained
in a consumer’s file at a consumer reporting agency is disputed by the
consumer and the consumer notifies the agency directly, or indirectly
through a reseller, of such dispute, the agency shall, free of charge,
conduct a reasonable reinvestigation to determine whether the disputed
information is inaccurate and record the current status of the disputed
information, or delete the item from the file … before the end of the 30-
day period beginning on the date on which the agency receives the
notice of the dispute from the consumer or reseller.
15 U.S.C. § 1681i(a)(1)(A). The CRA must promptly notify the data furnisher of
any disputed information, and the CRA’s notice to the furnisher must include “all
relevant information regarding the dispute” that the CRA has received from the
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consumer. Id. § 1681i(a)(2). In conducting the reinvestigation, the CRA “shall
review and consider all relevant information submitted by the consumer . . . with
respect to [such] information.”
Id. § 1681i(a)(4). Information in a consumer’s file
which is found to be inaccurate must be “promptly” deleted or modified, and the
CRA must notify the furnisher of the information.
Id. § 1681i(a)(5). A CRA may
cease reinvestigating if it determines the consumer’s dispute is “frivolous or
irrelevant,” including by reason of the consumer’s failure to provide sufficient
information to investigate the disputed information.
Id. § 1681i(a)(3)(A).
However, the CRA must notify the consumer within five (5) days if it determines
the dispute is frivolous or irrelevant and terminates the reinvestigation.
Id.
§ 1681i(a)(3)(B).
Within five (5) days after completing the reinvestigation, the CRA must
provide the consumer with notice of the results and the consumer’s rights relating
to those results. Id. § 1681i(a)(6). In addition to providing the consumer the results
of the reinvestigation, the CRA “shall provide . . . a consumer report that is based
upon the consumer’s file as that file is revised as a result of the reinvestigation.”
Id.
§ 1681i(a)(6)(B)(ii).
But the furnishing of consumer reports is heavily regulated
under the FCRA. Section 1681b provides a narrow set of circumstances for when
a CRA “may furnish a consumer report,” including “[i]n accordance with the
written instructions of the consumer to whom it relates.” Id § 1681b(a)(2). In
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accordance with this restriction, the FCRA in turn imposes a duty on the CRA to
“maintain reasonable procedures designed . . . to limit the furnishing of consumer
reports to the purposes listed under section 1681b of this title.” Id. § 1681e(a)
(“These procedures shall require that prospective users of the information identify
themselves . . . . No consumer reporting agency may furnish a consumer report to
any person if it has reasonable grounds for believing that the consumer report will
not be used for a [section 1681b] purpose”).
“The FCRA creates a private right of action against [CRAs] for the
negligent, see 15 U.S.C. § 1681o, or willful, see 15 U.S.C. § 1681n, violation of
any duty imposed under the statute.” Collins v. Experian Info. Sols., Inc., 775 F.3d
1330, 1333 (11th Cir. 2015). A negligent violation permits actual damages and
attorneys’ fees. Id.; 15 U.S.C. § 1681o. In order to recover for a negligent
violation, a plaintiff must show actual damages.
Collins, 775 F.3d at 1335. Actual
damages may include mental distress, even in the absence of out-of-pocket
expenses or physical injury. Levine v. World Fin. Network Nat’l Bank (Levine I),
437 F.3d 1118, 1124–25 (11th Cir. 2006); see also Guimond v. Trans Union Credit
Info. Co.,
45 F.3d 1329, 1333 (9th Cir. 1995); Thompson v. San Antonio Retail
Merchs. Ass’n,
682 F.2d 509, 513 (5th Cir. 1982).
Where the violation is willful, the FCRA provides for statutory damages of
$100 - $1,000 per violation, attorneys’ fees, costs, and other forms of relief,
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including punitive damages. 15 U.S.C. § 1681n. Under Safeco Ins. Co. v. Burr,
551 U.S. 47 (2007), the “willfulness” standard set forth in § 1681n encompasses
not only “knowing” violations of the statute but also those committed in “reckless
disregard” of the statute’s requirements.
Id. at 57. In other words, a “reckless
disregard of a requirement of [the] FCRA would qualify as a willful violation
within the meaning of § 1681n(a).”
Collins, 775 F.3d at 1336 (quoting
Safeco, 551
U.S. at 71). A company’s action is a willful violation if it “shows that the
company ran a risk of violating the law substantially greater than the risk
associated with a reading that was merely careless.”
Id. (internal quotation
marks
omitted). That is, a company acts recklessly when its “‘conduct . . . entail[s] an
unjustifiably high risk of harm that is either known or so obvious that it should be
known.’” Marchisio v. Carrington Mortg. Servs., LLC,
919 F.3d 1288, 1303 (11th
Cir. 2019) (quoting
Safeco, 551 U.S. at 68).
A company violates the FCRA where its action, based on a reading of the
statute’s terms, is more than “merely careless” and, instead, it engages in conduct
which amounts to an “objectively unreasonable” view of the company’s duties
under the statute. Safeco, 551 U.S. at 69. In Safeco, the defendant’s policy
stemmed from a reading of the FCRA that was flawed but “ha[d] a foundation in
the statutory text” and, thus, was not objectively unreasonable.
Id. at 69–70
(explaining that a reading that is not objectively unreasonable “falls well short of
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raising the ‘unjustifiably high risk’ of violating the statute necessary for reckless
liability”).
After drawing “all reasonable inferences” in Younger’s favor, Simon, 895
F.2d at 1310, (internal quotation marks omitted), we conclude that there is an
insufficient evidentiary basis to support the verdict, Commodores
Entm’t, 879 F.3d
at 1130. Although Experian’s corporate representative admitted that, in addition to
misclassifying Younger’s dispute letter, Experian has misclassified other genuine
letters under its policy, nothing in the record suggests that Experian does so often
enough for a jury to permissibly infer that Experian ran an “unjustifiably high risk”
of violating its duty to reinvestigate.
Safeco, 551 U.S. at 68 (internal quotation
marks omitted). Younger offered no evidence of a broad or systemic problem with
Experian’s suspicious mail policy. That the policy contains some broad
characteristics, that Experian employs few persons to sort a large volume of mail,
and that Experian has misclassified an unknown number of letters cannot, on their
own, establish by clear and convincing evidence that Experian ran an unjustifiably
high risk of violating its duties under the FCRA, especially in the light of another
duty imposed by the FCRA. See Eleventh Circuit Pattern Jury Instructions (Civil
Cases) 1.2 (2018) (“[C]lear and convincing evidence . . . is a higher standard of
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proof than proof by a preponderance of the evidence. It means the evidence must
persuade you that the claim or defense is highly probable or reasonably certain.”). 3
The FCRA imposes an additional duty on Experian to adopt reasonable
procedures to guard against the furnishing of a consumer report for an
impermissible purpose. See 15 U.S.C. §§ 1681b(a), 1681e(a); see also Levine v.
World Fin. Network Nat’l Bank (Levine II), 554 F.3d 1314, 1317–18 (11th Cir.
2009). And, in conjunction with its duty to reinvestigate disputes that originate
“directly” with the consumer,
id. § 1681i(a)(1)(A), Experian must provide the
consumer “a consumer report that is based upon the consumer’s file as that file is
revised as a result of the reinvestigation.”
Id. § 1681i(a)(6)(B)(ii).
Experian’s
policy allows it to sort out claims that do not appear to come “directly” from
consumers. With these considerations in mind, we cannot say that Younger
provided sufficient evidence to establish that Experian recklessly disregarded the
reinvestigation duty. See
Safeco, 551 U.S. at 69–70 (concluding Safeco did not act
unreasonably when its actions “ha[d] a foundation in the statutory text”); see also
Levine
II, 554 F.3d at 1317–19 (evaluating whether Experian willfully violated its
duty to ensure consumer reports were not furnished for an impermissible purpose).
Experian’s actions had a foundation in the statutory text, even if the application of
3
Before trial the parties agreed that the standard to establish willfulness was clear and
convincing evidence and the jury was so instructed. This appeal does not present any issues
related to the appropriate burden of proof.
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its policy was negligent as applied to Younger. Safeco, 551 U.S. at 69–70; accord
Collins, 775 F.3d at 1336 (CRA “[t]aking no steps other than contacting only [a
furnisher of data with a form] regarding the disputed entry might have been
negligent, but willfulness or recklessness is a higher standard that has not been met
in this case.”). Thus, Experian’s conduct was not willful within the meaning of
§ 1681n(a).
The verdict of willfulness cannot stand on this record. The magistrate judge
should have granted Experian’s Rule 50 motions for judgment as a matter of law at
trial, or upon Experian’s post-trial motion. The magistrate judge on remand shall
enter judgment for Experian on the willfulness claim, pursuant to Fed. R. Civ. P.
50(e). This eliminates the remitted punitive damages judgment, as punitive
damages are only available for willful violations. 15 U.S.C. § 1681n(a)(2). Our
ruling will likely require the magistrate judge to revisit the attorneys’ fees award
upon remand.
We now turn to Experian’s other grounds on appeal. Experian next contends
that Younger’s use of the settlement agreement was improper and requires a new
trial on the negligence claim. Younger argues that defense counsel did not
preserve this error by sufficient contemporaneous objections. Based upon our
ordering a judgment as a matter of law on the willfulness claim, we deny this point
on appeal. Considering all matters in a light favoring the verdict, even assuming
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that contemporaneous objections sufficiently preserved this point, we do not
believe that the trial stratagem using this settlement agreement contributed
materially to the $5,000 personal injury judgment for negligence or rendered it
suspect. As noted, the magistrate judge entered summary judgment for Younger,
finding that the breach element of Younger’s negligence claim was not a contested
issue of fact and directing the jury that Experian breached its duty to reinvestigate
upon receipt of Younger’s letter. Experian does not contest this ruling on appeal.
Experian further asserts concerning the negligence claim that Younger’s
compensatory damages case failed for indefiniteness. Experian argues that the
negligence claim failed at trial because damages as to pain and suffering were
generalized and illusory; thus judgment as a matter of law is appropriate on this
claim. Experian argues that Younger’s proof of actual injury causation for mental
distress and pain was insufficient to support the $5,000 jury award to him for these
damages.
Although this is a closer call, we conclude that the admitted evidence
supports Younger’s relatively modest damages verdict. A plaintiff asserting claims
for negligent compliance with the FCRA must show actual damages. 15 U.S.C.
§ 1681o; see Levine, 437 F.3d at 1123. At trial, Younger testified that a previous
spinal surgery left him with permanent nerve damage, which caused severe pain
when he got upset or stressed. He testified that Experian’s refusal to acknowledge
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his complaint, and the letter they sent him, exacerbated his preexisting injuries by
generating additional stress which caused loss of sleep and greater nerve pain. He
testified as to definite, albeit impalpable, injuries directly caused by Experian.
To consider the jury’s outcome in this regard we look to how they were
instructed, under the agreed-upon jury instructions. The instructions required
Younger to prove damages proximately flowing from Experian’s negligent
noncompliance. The instructions informed the jury that present damages for
mental anguish, emotional distress, and pain and suffering were recoverable both
for past injury and prospectively. The court instructed the jury that:
If any item of damage is of a continuing nature, you must decide how
long it may continue. You must decide which, if any, of these items of
damage has been proved by Mr. Younger based upon the evidence and
not upon speculation, guess, or conjecture. The amount of money to be
awarded for certain of these items of damages such as mental anguish
cannot be proved in a precise dollar amount. That law leaves such
amounts to your sound judgment.
Actual damages under the Fair Credit Reporting Act can include
recovery for physical injury, personal humiliation, embarrassment,
mental anguish, and emotional distress.
...
Damages for mental anguish and emotional distress are not presumed
to have occurred.
...
In order to be recoverable, the emotional distress must be significant,
that is, beyond generalized stress, and must be proximately caused by
the defendant’s conduct that violated the act, that is, Experian’s failure
to reinvestigate.
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On these agreed-upon jury instructions, we think the jury could rationally have
credited Younger’s testimony and found that he proved more than generalized
stress caused by Experian’s negligent handling of his dispute and its mistaken
letter to him.
IV. CONCLUSION
The proof of a willful violation under 15 U.S.C. § 1681n was plainly not
established by clear and convincing evidence at trial. We vacate the magistrate
judge’s final judgment in this regard, and remand to that court for entry of
judgment under Fed. R. Civ. P. 50(e) for Experian on Younger’s willfulness claim.
We affirm the magistrate judge’s final judgment as to the Younger’s negligence
claim.
VACATED IN PART AND AFFIRMED IN PART AND REMANDED.
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