ANITA B. BRODY, District Judge.
• Defendant's Motion is
• Defendant's Motion is
Plaintiff Jeffrey D. Shannon ("Plaintiff" or "Shannon") brings suit against Defendant Equifax Information Services, LLC ("Defendant" or "Equifax")
Plaintiff Jeffrey D. Shannon moved from Paoli, Pennsylvania to West Chester, Pennsylvania in 2008, and requested that Verizon transfer service from his old to his new address, effective July 17, 2008. Statement of Undisputed Material Facts ¶ 19, ECF No. 29; Counterstatement of Material Facts ¶ 19; ECF No. 31. In September of 2008, Verizon stated that Plaintiff owed $260.10. Statement ¶ 20; Counterstatement ¶ 20. On October 18, 2008, Plaintiff sent Verizon a check for that amount. Statement ¶ 21; Counterstatement ¶ 21. On October 27, 2008, Plaintiff received a bill from Verizon, stating that Plaintiff owed $161.16. Statement ¶ 22; Counterstatement ¶ 22. On November 27, 2008, Plaintiff received a bill from Verizon, stating that Plaintiff owed $180.76. Statement ¶ 23; Counterstatement ¶ 23. On December 27, 2008, Plaintiff received a bill from Verizon, stating that Plaintiff owed $183.12 ($180.76 plus a $2.36 late fee). Statement ¶ 25; Counterstatement ¶ 25. Verizon representatives advised the Shannons to disregard both the November and December bills. Statement ¶¶ 24, 26; Counterstatement ¶¶ 24, 26.
In March of 2009, Plaintiff received a collection notice from the North Shore Agency, Inc., seeking to collect $183.12 on behalf of Verizon. Statement ¶ 27; Counterstatement ¶ 27. On March 24, 2009, a Verizon representative advised Plaintiff that he was in fact entitled to a refund of $76.98, since he had paid $260.10 in October when only $ 183.12 was due. Statement ¶ 28; Counterstatement ¶ 28. However,
Equifax is a consumer reporting agency. Statement ¶ 1; Counterstatement ¶ 1. It compiles information it receives from creditors, public records, merchants, and other sources and assembles that information into credit reports that are provided to subscribers who have a permissible purpose for obtaining these reports. Statement ¶ 1; Counterstatement ¶ 1. It maintains credit history files on more than 200 million consumers and receives over one billion updates from thousands of data furnishers every month. Statement ¶ 2; Banks Decl. ¶ 4, ECF No. 29. Equifax accepts information regarding a consumer's credit only from those sources that are determined by Equifax to be reasonably reliable. Statement ¶ 3; Banks Decl. ¶ 5.
On May 20, 2009, Equifax received notice of Plaintiff's dispute with Verizon. Statement ¶ 31; Counterstatement ¶ 31. On May 28, 2009, Equifax prepared an Automated Consumer Dispute Verification ("ACDV") concerning Plaintiff's dispute and sent it to Verizon. Statement ¶ 37; Banks Decl. ¶ 23. The form included a box labeled "FCRA Relevant Information," in which Equifax wrote: "Consumer states that the outstanding balance write off noted on this account is derived from an error in Verizon[']s billing and Verizon has indicated that he is overpaid on this account and [will] send him a refund check." Statement ¶ 38; Banks Decl. ¶ 24. Verizon provided an automated response that an unpaid balance of $183.12 had been correctly reported as a loss. Statement ¶ 39; Banks Decl. ¶ 25. Thus, Equifax made no changes to Plaintiff's credit file. Statement ¶ 40; Counterstatement ¶ 40.
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 Kornegay v. Cottingham, 120 F.3d 392, 395 (3d Cir. 1997). A fact is "material" if the dispute "might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A factual dispute is "genuine" if the evidence would permit a reasonable jury to return a verdict for the non-moving party. Id.
The party moving for summary judgment bears the initial burden of demonstrating that there are no material facts supporting the nonmoving party's legal position. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once the moving party carries this initial burden, the nonmoving party must set forth specific facts showing that there is a genuine issue for trial. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). The nonmoving party cannot rely upon "bare assertions, conclusory allegations or suspicions" to support its claim. Fireman's Ins. Co. v. DuFresne, 676 F.2d 965, 969 (3d Cir.1982). Rather, the party opposing summary judgment must go beyond the pleadings and present evidence, through affidavits, depositions, or admissions on file, to show that there is a genuine issue for trial. Celotex, 477 U.S. at 324, 106 S.Ct. 2548.
The threshold inquiry at the summary judgment stage involves determining whether there is the need for a trial, that 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."
Defendant has moved for summary judgment on each of Plaintiff's four claims against it: 1) that Defendant violated the FCRA, 2) that Defendant violated the UTPCPL, 3) that Defendant was negligent, and 4) that Defendant invaded Plaintiff's privacy by casting Plaintiff in a false light. I will deny Defendant's motion on Plaintiff's negligent FCRA claims, but I will grant Defendant's motion on Plaintiff's remaining claims,
In Count IV of his Complaint, Plaintiff alleges that Defendant violated the FCRA by
Compl. ¶ 53, ECF No. 1.
Equifax has primarily countered that it cannot be held in violation of 15 U.S.C. § 1681i(a) or § 1681e(b) because the disputed information on Plaintiff's credit report was, in fact, accurate. Reply 5-6. In the alternative, Equifax contends that it maintains reasonable procedures and conducted a reasonable reinvestigation following Plaintiff's complaint. Reply 7-10.
By way of legal background, the Fair Credit Reporting Act was passed to ensure that "consumer reporting agencies adopt reasonable procedures for meeting the needs of commerce for consumer credit, personnel, insurance, and other information in a manner which is fair and equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization of such information." 15 U.S.C. § 1681(b) (2006). "In the FCRA,
Section 1681e(b) of the Act states; "Whenever a consumer reporting agency prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates." Section 1681i(a)(1)(A) then provides:
Thus, § 1681e(b) governs the behavior of credit reporting agencies when preparing credit reports generally. Section 1681i(a) governs the behavior of credit reporting agencies when reinvestigating consumer credit history upon receiving notice of disputed information.
More specifically, negligent noncompliance with § 1681e(b) consists of four elements: "`(1) inaccurate information was included in a consumer's credit report; (2) the inaccuracy was due to defendant's failure to follow reasonable procedures to assure maximum possible accuracy; (3) the consumer suffered injury; and (4) the consumer's injury was caused by the inclusion of the inaccurate entry.'" Cortez v. Trans Union, LLC, 617 F.3d 688, 708 (3d Cir. 2010) (quoting Philbin, 101 F.3d at 963).
To find a § 1681i(a) violation, the consumer must demonstrate that the consumer reporting agency "had a duty to do so, and that it would have discovered a discrepancy had it undertaken a reasonable investigation." Id. at 713. On what constitutes a reasonable investigation, the Third Circuit has held that "in order to fulfill its obligation under § 1681i(a), `a credit reporting agency may be required, in certain circumstances, to verify the accuracy of its initial source of information,'" and that "`whether the credit reporting agency has a duty to go beyond the original source will depend' on a number of factors." Cushman v. Trans Union Corp., 115 F.3d 220, 225 (3d Cir.1997) (quoting Henson v. CSC Credit Servs., 29 F.3d 280, 287 (7th Cir.1994)). Those factors include "`whether the consumer has alerted the reporting agency to the possibility that the source may be unreliable or the reporting agency itself knows or should know that the source is unreliable,'" as well as "`the cost of verifying the accuracy of the source versus the possible harm inaccurately reported information may cause the consumer.'" Id. (quoting Henson, 29 F.3d at 287).
To show willful noncompliance with either provision, the Third Circuit has held that a plaintiff can "show that defendants knowingly and intentionally committed an act in conscious disregard [of the FCRA], but need not show malice or evil motive." Philbin, 101 F.3d at 970 (internal quotations and citations omitted). More recently, the Supreme Court has clarified that
Defendant's first ground for seeking summary judgment on Plaintiff's FCRA claims is that Plaintiff's credit report was in fact accurate, and that Plaintiff therefore cannot clear the inaccuracy threshold for successfully asserting FCRA violations.
Accuracy has been held to be a defense to alleged violations of § 1681e(b). In other words, in order to make out a prima facie violation of that section, "the Act implicitly requires that a consumer ... present evidence tending to show that a credit reporting agency prepared a report containing `inaccurate' information." Cahlin v. Gen. Motors Acceptance Corp., 936 F.2d 1151, 1156 (11th Cir.1991); see Philbin, 101 F.3d at 963 (noting that one of the elements of a cause of action under § 1681e(b) is that "inaccurate information was included in a consumer's credit report"). If a plaintiff "fails to satisfy this initial burden, the consumer, as a matter of law, has not established a violation of [§ 1681e(b)], and a court need not inquire further as to the reasonableness of the procedures adopted by the credit reporting agency." Cahlin, 936 F.2d at 1156.
Accuracy has also been held to be a defense to alleged violations of § 1681i(a). See DeAndrade v. Trans Union LLC, 523 F.3d 61, 67 (1st Cir.2008) ("[T]he weight of authority in other circuits indicates that without a showing that the reported information was inaccurate, a claim brought under § 1681i must fail."); see also Cahlin, 936 F.2d at 1160 ("[A § 1681i(a)] claim is properly raised when a particular credit report contains a factual deficiency or error that could have been remedied by uncovering additional facts that provide a more accurate representation about a particular entry."); Klotz v. Trans Union, LLC, 246 F.R.D. 208, 212-13 (E.D.Pa.2007) ("A claim under 1681i will also fail if the consumer cannot show that the information in his or her file was inaccurate.... If the information in a consumer's file was, in fact, correct, then no investigation could have revealed the existence of inaccurate information because there was no inaccurate information to uncover.") (citing Cushman v. Trans Union Corp., 115 F.3d 220, 226-27 (3d Cir.1997)).
What constitutes accuracy thus becomes an important question, and there is currently a circuit split on the issue. The Sixth Circuit, and some district courts, have held that technical accuracy is sufficient and provides a defense to alleged FCRA violations. See Dickens v. Trans Union Corp., 18 Fed.Appx. 315, 318 (6th Cir.2001); see also McPhee v. Chilton Corp., 468 F.Supp. 494 (D.Conn.1978); Todd v. Associated Credit Bureau Servs., Inc., 451 F.Supp. 447 (E.D.Pa.1977). The D.C. Circuit, on the other hand, has rejected the technical accuracy approach, holding instead that "reports containing factually correct information that nonetheless mislead their readers are neither maximally accurate nor fair to the consumer who is the subject of the reports." Koropoulos v. Credit Bureau, Inc., 734 F.2d 37, 40 (D.C.Cir.1984); see also Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147 (9th Cir.2009); Saunders v. Branch Banking & Trust Co., 526 F.3d 142 (4th Cir.2008); Sepulvado v. CSC Credit Servs., Inc., 158 F.3d 890 (5th Cir.1998).
The Third Circuit has not stated outright its position on this particular issue. See Krajewski v. Am. Honda Fin. Corp., 557 F.Supp.2d 596, 614 (E.D.Pa.2008) ("Whether the accuracy requirement of § 1681e(b) merely requires technical accuracy or requires something more has not been clarified by either the United States Supreme Court or the Third Circuit.").
In light of the above, I too will apply the Koropoulos approach, and ask whether the Verizon tradeline on Plaintiff's Equifax credit report was "`misleading in such a way and to such an extent that it can be expected to adversely affect credit decisions.'" Smith, 711 F.Supp.2d at 433 (quoting Sepulvado v. CSC Credit Servs., Inc., 158 F.3d 890, 895 (5th Cir. 1998)). The undisputed facts reveal that Plaintiff sent a check for $260.10, but that Verizon never cashed it. Thus, the Verizon tradeline on Plaintiffs Equifax credit report may have been technically accurate, but may also have been misleading—for example, a trier of fact could find that the Verizon tradeline could leave the impression that Plaintiff never even attempted to pay his bill, even though Plaintiff had in fact mailed a check to cover the debt. A seeming failure to attempt to pay could, in turn, adversely affect Plaintiff's ability to obtain credit. Thus, there is a genuine issue of material fact as to whether the credit report in question was so misleading as to be inaccurate, and Defendants therefore cannot invoke the accuracy defense to defeat Plaintiff's FCRA claims on summary judgment.
Equifax contends in the alternative that its procedures are reasonable as a matter of law and therefore not in violation of the FCRA.
For § 1681e(b) purposes, I am unable to determine whether Equifax's procedures are reasonable as a matter of law. In its Statement of Undisputed Material Facts, Equifax provides very little information on what procedures it follows in preparing a credit report in the first instance. See Statement of Undisputed Material Facts ¶¶ 1-4, ECF No. 29.
In this case, Plaintiff has furnished no evidence that Defendant knowingly or intentionally disregarded his rights or violated the FCRA. Furthermore, Defendant's procedures and actions were not in reckless disregard of the FCRA. Although there is very little evidence in the record as to Defendant's investigation procedures generally and in this instance, Equifax does at least submit that it only reproduces credit information from reliable sources. Third Circuit cases have indicated that, absent notice of inaccuracy, the FCRA does not require an investigation beyond the original source of information. See Krajewski v. Am. Honda Fin. Corp., 557 F.Supp.2d 596, 618 (E.D.Pa.2008) (citing Cushman, 115 F.3d at 225). With such case law supporting its approach, Equifax was not taking a known or obvious risk in reproducing credit information from Verizon in the first instance. As for Equifax's reinvestigation procedures, all three of the major credit reporting agencies have similar ones, and the ACDV approach has been upheld as a matter of law by other courts. Reply 7 (citing Podell v. Citicorp Diners Club, 112 F.3d 98, 105 (2d Cir.1997); Morris v. Trans Union LLC, 420 F.Supp.2d 733, 756 (S.D.Tex.2006), aff'd 224 Fed.Appx. 415 (5th Cir.2007); Benson v. Trans Union LLC, 387 F.Supp.2d 834, 843 (N.D.Ill.2005); Anderson v. Trans Union LLC, 367 F.Supp.2d 1225, 1233 (W.D.Wis. 2005); Schmitt v. Chase Manhattan Bank, N.A., No 03-3295, 2005 WL 2030483, at *3 (D.Minn. Aug. 23, 2005); Perry v. Experian
In sum, Defendant cannot assert the accuracy defense, and 1 do not find its investigation or its reinvestigation procedures reasonable as a matter of law. Thus, Plaintiff survives Defendant's motion for summary judgment and can proceed to trial on his claims that Defendant negligently violated the FCRA. However, Plaintiff does not survive Defendant's motion for summary judgment on his claims that Defendant willfully violated the FCRA.
Plaintiff also alleges that Defendant's actions constitute unfair and deceptive acts and practices under the UTPCPL. Defendant has countered in the main that Plaintiff cannot establish a claim under the UTPCPL because he did not purchase or lease any goods from Equifax.
The UTPCPL does indeed provide that it is unlawful to engage in "unfair or deceptive acts or practices in the conduct of any trade or commerce." 73 Pa. Stat. § 201-3 (2008). However, it also provides that private actions be commenced by a "person who purchases or leases goods or services primarily for personal, family or household purposes and thereby suffers any ascertainable loss of money or property." 73 Pa. Stat. § 201-9.2(a) (2008). Elaborating upon this language, the Third Circuit has held that the statute "`unambiguously permits only persons who have purchased or leased goods or services to sue.'" Balderston v. Medtronic Sofamor Danek, Inc., 285 F.3d 238, 242 (3d Cir. 2002) (quoting Katz v. Aetna Cas. & Sur. Co., 972 F.2d 53, 55 (3d Cir.1992)); see also Lawrence v. Trans Union LLC, 296 F.Supp.2d 582, 592 (E.D.Pa.2003) ("I now hold that consumers cannot sue consumer reporting agencies under the PA CPL who have not sold or leased goods to them.") (Brody, J.); accord Abusaab v. Equifax Info. Servs., LLC, No. 05-5094, 2006 WL 1214782, at *2, 2006 U.S. Dist. LEXIS 26178, at *6 (E.D.Pa. May 4, 2006) ("Even assuming the claim is not preempted, the decisions of the Pennsylvania courts, our Court of Appeals, and this court demonstrate that plaintiff cannot state a claim under the UTPCPL. The Pennsylvania courts have not applied the UTPCPL to credit reporting agencies." (internal citations omitted)).
In the facts at hand. Plaintiff has not demonstrated that he purchased or leased goods or services from Equifax, and therefore his UTPCPL claim must fail. The Complaint states that the "above described purchases by Plaintiff from ... Equifax constitute `commerce' and the `sale or distribution of any services and any property' as defined by 73 P.S. § 201.2 of the PA UTPCPL." Compl. ¶ 57, ECF No. 1. However, there are no purchases by Plaintiff from Equifax described earlier in the Complaint. Moreover, Equifax argues in its reply brief that "[i]t is undisputed that Plaintiff does not allege, or provide evidence, that he purchased or leased any services from Equifax." Reply 12. Although Plaintiff submitted a counterstatement of material facts subsequent to Defendant's reply, he did not challenge this assertion that he neither purchased nor leased from Equifax. See Counterstatement of Material Facts, ECF No. 31. Finally, although Defendant submitted into
Plaintiff similarly argues that Defendant was negligent, "in failing to provide a proper and reasonable investigation concerning the inaccurate information after Plaintiff disputed the validity, in failing to timely and properly investigate the inaccurate information after the dispute and in failing to delete or correct the inaccurate information from Plaintiff's credit report." Resp. 8. Defendant has emphasized in response that these allegations are preempted by the FCRA.
In § 1681h(e), the FCRA states:
In other words, unless a plaintiff alleges willfulness in pursuing its common law claims, the FCRA provides the exclusive remedy.
Finally, Plaintiff argues that Defendant "violated Plaintiff's right of privacy by impermissibly accessing Plaintiff's most private information and placing the Plaintiff in a false light before the eyes of other[s], including potential credit grantors and creditors as well as family, friends and the general public." Compl. ¶ 74; see also Resp. at 9. Defendant has again countered primarily that such allegations are preempted by the FCRA.
As outlined above, § 1681h(e) of the FCRA holds that "no consumer may bring any action or proceeding in the nature ... invasion of privacy ... except as to false information furnished with malice or willful intent to injure such consumer." "Willful" for FCRA purposes can denote knowing, intentional, or reckless disregard of the FCRA. Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 127 S.Ct. 2201, 167 L.Ed.2d 1045 (2007); Cortez v. Trans Union, LLC, 617 F.3d 688, 721 & n. 39 (3d Cir.2010); Cushman v. Trans Union Corp., 115 F.3d 220, 226 (3d Cir.1997); see also supra Part IV.A.
In this case, Plaintiff has produced no evidence of "malice or willful intent to injure." Moreover, Plaintiff does not even specifically allege willful invasion of privacy in his complaint or in his response to Defendant's motion for summary judgment. Finally, as elaborated above, at no point did Equifax demonstrate a reckless disregard for Plaintiff's rights. Thus, I find Plaintiffs invasion of privacy claim preempted by the FCRA, and grant Defendant's motion for summary judgment on this count of Plaintiff's complaint.
For the reasons set forth above, Defendant's motion for summary judgment is denied with respect to Plaintiff's negligent FCRA claims, and granted as to all other claims.
Statement of Undisputed Material Facts ¶¶ 1-4, ECF No. 29.
Banks Decl. ¶¶ 3-6, ECF No. 29.
