important case indeed it's a case of first impression before this court the seminal question presented by this appeal is when they're under spec kayo and his progeny including str the defendant's willful violation of the fair credit reporting act was a bare procedural rather than a substantive violation that threaten the very protections afforded by the statute for standing purposes how is that issue before properly before this court given that mr freidman granted when he was pro se did not object to the magistrate judge's recommendation that the court discretion of this court to determine whether the underlying claim has substantial merit and whether the magistrate completely committed plain error or there would be a just an injustice accompanied by the failure of this court to object to other things the great judge speculated on the first time yeah well i mean did he forget the second time that he's supposed to object if he doesn't like it well whether or not he forgot and i can't shed any light on that other than to tell you there was great turmoil his attorneys who had represented him in this case had recently withdrawn he wasn't appearing pro se all the time but the attorneys had withdrawn there was a there is an ongoing dispute with those attorneys related to another matter but in that was he was he represented when he filed objections the first time yes your honor and the second time he was present correct his attorneys at herrick feinstein had just withdrawn on that part of the record then would you agree that there's a waiver as to any of the issues that were addressed in the first report and recommendation that were not objected to were you trying to raise those to know your honor what where we're raising on this appeal are some objections to that first recommendation but they were objected to th honor it's the no cognisable damages under the fair credit reporting act issue i thought that though and also the preemption of the state law claims was objected to in the first r and r was only the preemption of the state law claims is that incorrect that is correct john so you are contending that issues beyond the preemption issue that were dressed in the first are and are but not objected by counsel for mr freidman are still before us we have to excuse the waiver for that to yes your honor simply because the underlying appeal has substantial merit it's a important appeal for purposes of determining plaintiff's rights under the fair credit reporting act and the magistrate below and as a result of adopting the one of the judge below we submit committed pla in trying to sort out understanding issue an honor we believe there is and it starts with a case from this court strobel ruble is the is the argument is the argument and part of belies defendants argument defendants argument says cases like bats and felt time you should look at those because those aren't fair credit reporting act cases those are fair debt collection act cases but yet they recognize the struble which is a truth in lending act case not a fair credit reporting act case sets the standard in this circuit to determine whether a violation of a statute and we have the magi es ruling that a reasonable jury could in fact find a willful violation on the failure to reinvestigate and correct an error once it's been pointed out to them willful procedural violation as opposed to a malicious violation aimed at this plaintiffs no well again there's some there's some debate about how to construe willful which complicates the claim of plain air correct but the magistrate below determined that a reasonable jury could conclude that this constituted a willful willful violation of the fair credit reporting act the question is not so much is it a procedural violation because it does violate a procedure set out by the statute but does that violation cause i'm a terrible risk of harm to the very interests that are protected by the statute now what's very interesting  an admonition decades ago where he said the laws should be like clothes they should be made to fit the people they're meant to serve and that's talking about an incorrect zip code that doesn't rise to the level of protecting the interest from which the statute was created but struble which held that the procedural violations threaten the very protections afforded by the truth in lending act said that those allegations without an allegation of additional harm satisfy article three standing requirements and that was from this court struble as it was down in this case the issue is whether the reporting agencies knew that either what the atlantic concrete judgment had been vacated or the po accounting never been charged what's the basis for assigning mens rea if you will to those agencies well what the court what the magistrate below found that there is a duty under and it's very difficult to cite these fair credit reporting act sections at sixteen eighty one little lie a one a if a consumer like mr freidman points out an error in your credit reporting you were under a duty to reinvestigate that report and corrected if i even if it in fact is erroneous now in this case what the record shows is that all the credit reporting agency did was send the inquiry to the same lexis nexis search they had done the first time once an accuracy is reported they didn't do anything more and they continue to report the this judgment was probably the biggest problem that had actually been vacated so was the magistrate's determination in that regard terminations a fact or a determination of law strikes me as it's a determination of law which we're free to review and he didn't agree or not agree with your absolute absolutely  however remember the standing argument not talking about the first magistrate's report which was based on a summary judgment motion the standing argument in the report and recommendation of the magistrate in the standing case was on a motion to dismiss a motion to dismiss you had to accept the allegations which the magistrate acknowledged as true and they're saying and unfortunately the court below agreed with them despite we submit unanimous law to the contrary that this violation that is alleged and a reasonable jury could find it to be willful was a bare procedural violation the kind of an inaccurate zip code or printing on them or seat of a credit card that goes into someone's pocket and did not excuse me not threaten materially put at risk the very protections afforded this act and there is some debate about this back to judge lynch's original question what's the clear indication how clear that this what is and bats and fell time postdates trouble and what they all say is if you identify the purpose of the statute and here the purposes very very clear it's to prevent an accurate credit reporting and to allow a consumer to object to that credit reporting and then trigger a duty to reinvestigate that's the purpose of the statute if the violation that's alleged goes to the very protections afforded by that statute spic a o answers your question strobel clarifies the answer and bats and fellow hari absolutely mellen you this is goes back to judge lynch's initial question but let's assume that these are important questions that are likely to affect other people which seems to be your premise your client waves the living daylights out of this by selectively objecting the first time in by not objecting the second time and is also in a non practicing attorney under what what's the reason of all cases for us to exercise our discretion overlook the double waiver and allow this to go forward what message does it send to people as to whether to object in another case it how would we ever say to a pro se person who waved under similar circumstances that you waver doesn't bar you  well unfortunately your honor the facts of the waiver exist what would compel this court and its exercise of its discretion to excuse that that waiver in this case is that a very very important consumer protection act enforcement mechanism as it is an issue and my friends of the federal credit reporting agencies would love nothing better to say boy we skated on this one because we had a pro se litigant who didn't object now you know on this one and it's really such an important issue they better know that they're not going to get on the next one where somebody has the wit to object well perhaps an important issue it's going to keep coming up and then we'll get to it in an appropriate case it's not like i should have thought that the issue of prejudice that's important is how mr freidman is harmed not that it's an important issue in the abstract to be a problem somebody else it's not that it's not like we're deciding that the district court we would be deciding the district court was right there's not even a district court opinion really to speak of it's just that it was objected to your honor i understand that part of our argument is that mr freidman was horribly damaged by of and that's another interesting thing i have very interesting interesting theoretical issue that the  i believe that was in the first opinion right so that's not something that fancy lawyers decided not to object to you know what i won't characterize the lawyers as fancy or competent or that they may have overlooked something but your honor the problem with the damages here and again it's an issue that was squirted skirted by mr freidman damages more he had created a single purpose entities which had no credit history at all to do these really state transactions he was either a cosigner personally on those loans or a guarantee on a guarantor on those loans or there is no there's no real business credit reporting agency anymore particularly when these are these are doesn't even the fact they were wading into consumer versus business illustrate the risk that even if we overlook the waiver this case could be a one ticket one train only if the whole point of overlooking the waiver is to come up with this to resolve the overarching question of public importance that for some reason isn't going to come up soon anyway why would this be the right vehicle to do it given that there is a substantial claim as to whether there is a consumer as opposed to a business injury well your honor because that is the alternative argument the seminal argument is that you can make an allegation of substantive violation of a statute that threatens the protections afforded by that statute and you don't have to allege any additional harm to satisfy the article three standing that's but that's true bill right the actual issue here is whether in this particular type of violation you know congress can't ever provide private rights of action the way some people might have feared it means that we have to distinguish procedural trivial things from things that create a great risk of  was trying to protect right but now the issue is as with respect to this particular statute is this particular subsection that was violated here such a substantive provision and seems to me you have a very nice argument that it is but that's not quite as sweeping as well and that's got to do with this particular well the problem is and why i initially stated that it's important for this court to weigh in on this issue strobel is a truth in lending act case and the harm was threatened and  is not the same protections as afforded by the fair credit reporting act and the but the interest their credit reporting act it's not as if this case raises the question is everything in the fair credit reporting act substantive course it doesn't right this particular reinvestigation claim correct around and similarly even with struble it's not like the truth in lending act is now suddenly everything the truth in lending accounts there are going to be like dozens of these cases with all kinds of wrinkles with respect to different administrative requirements established by these consumer protections they're all narrow in a certain sense well it's a very interesting question your honor because in strobel two out of the four disclosures were determined to be substantive triggering standing two of them were not the the very interesting aspect of this my point is that it's not exactly like these struble it's each and every one of these cases that will ever come to us will present a slightly different case or as in struble itself for different cases for us to evaluate these subtle questions of what counts and what doesn't perhaps your honor but the instructive case from which the argument comes in spoke a zero which is a fair debt a fair credit reporting act case so the only instruction we were given in spokane a o was we knew that the publication of an incorrect zip code was a procedural violation that didn't threaten the protections afforded by the statute what strobel that was and what batched does and what church from the eleventh circuit do is they point out that these reserved for a bottle this government may please the court i represent experience there are three apple is here today and in order to avoid repetition we've divided up the topics so i'll be addressing waiver and preemption counsel for  equifax will be discussing business standards as in counsel for trans union will be discussing the notice of appeal and article three standing the reason i'm addressing waiver in preemption is because if the court agrees with us on those issues they will dispose of the entire case waiver i'll begin with in his briefing mr freidman questioned whether or not there in fact was waiver but he appears to concede at argument today that the facts of waiver exist so instead he's really making two arguments as far as i can tell why waiver should be excused here the first is he says that counsel for mr freidman had had i suppose dropped out of the case right before the objections but i should note there was no counsel at all points mr freidman was in fact pro se there was no to the extent that he had counsel lurking in the background without having filed an appearance that's not really the sort of sympathetic fact that urges excuse all of of waiver and in addition i know he didn't ask for more time the second argument that he's made essentially is that well i think i'm right on the merits and because i'm right on the merits it's in the interest of justice to excuse my waiver but this court has rejected that idea before and davis versus karin the court said no if the underlying prejudice is just the claims you're making in your case that is not a basis for excusing waiver and that is a completely sensible rule because otherwise frankly you've completely undermined the waiver rule mr freidman waived then both his arguments about business damages and his arguments about spokeo article three and the only argument that he preserved in his objections is his argument about preemption but his state law claims here are preempted under fifteen u s c sixteen eighty one  that rule says that any claims that are in the nature of negligence invasion of privacy or defamation are preempted unless they are asked if false information furnished with malice or willful intent to injure the the case congress used different language they used willful intent to injure and malice as opposed to willful violation and malice has never been interpreted that way every court that has interpreted has either applied a common law malice standard or constitutional malice standard the common law malice standard in new york is spite or ill will and fred and points to no proof whatsoever of spite or ill well ill will the constitutional standard is that the defendant in fact entertained serious doubts about the publication again fred and points to nothing in the record that indicates that the that any of the c r a is in fact entertained serious doubts about the publication i think the most important case for the purposes of constitutional malice it's probably same amount which a supreme court case in which the court said that the defendant needs to in fact to entertain serious doubts and further says that depending on a third party source without any information in the record about the parties veracity that is not malice and says the malice argument boils down to a failure to investigate but sane amount says that that is wrong that is frankly all for both waiver and preemption so if you have no questions i'll feed my time to my other apple the litigation in the district court were undisputedly business transactions commercial transactions that are not recognized as damages under the f c r a he claims that due to an accurate credit report entries on his personal credit entities that he created to affect variety of interconnected real estate ventures now the record is complicated with respect to these transactions but it's undisputed that at base they were for commercial consumer damages he claims that these damages are very personal to him and unique in his situation because he was the principal in these entities sometimes he was the sole owner but in many times he was not any case from the supreme court of this court over addressed the question at all of whether a personal credit report that is a consumer credit report that is  mortgage services specifically address whether or not these a credit report that's been taken out on behalf of an individual person's credit to be used for a business very specific better that it is intended to protect consumers which it finds as individuals and for the purposes of primarily household family purposes none of which are covered by the damages asserted  review of the district court's decision dismissing his f c r a willfulness claim against defendant by failing to file the required objections to the magistrate's report and recommendation the court should not set aside that waiver for the reason stated by counsel for experian but if the court were to do so and review whether plaintiff has article three standing to assert his claim for a willful violation of f c r a sixteen eighty one the court only reaffirm the principle that a violation of a statute reporting agency fails to adequately reinvestigate and what is the point of the requirement to re investigation if not to try to make sure that the substantive information is correct the  maximum possible accuracy under the statute and i requires them to conduct a reasonable investigation when the plaintiff makes a dispute spokeo how that e b was a procedural requirement and did not on because it was not at issue in that case i is the provision of the statute that is it issue in this case and plaintiff has proffered the argument that it should be distinguished from me b and that it should be a substantive rather than a procedural right and i think that the terminology gets a little confused here already the premise of the reinvestigation is that false information at least according to the consumer has already been reported and now consumer complains about that and the next thing that's supposed to happen is to do a reasonable re investigation to make sure that the information is accurate if you don't do a reasonable investigation and the result is that the inaccuracy remains at least that's clearly that's the very risk that the reasonable reinvestigation is supposed to prevent is it not well it's has to be a risk that under the statute and in this case plaintive process only damages to his business interests well that it i mean the that's not the spokeo issue that's the issue of whether if they do have standing they actually have any damages actually it's that the risk has to the the increased risk has to  impact a right that's protected in a sense we don't and it just turns out that at the end of the day the only harm that he says he suffered is to his business which may or may not this court has never spoken to that issue be cognizable damage under the act that's a substantive issue that we would get to if there were standing so then we look to see if there is standing and at the moment that the reasonable  reinvestigation allegedly fails we don't know how that's going to harm mr freidman if it's really got harm him somehow if he's got a bed credit report that is inaccurate and maybe it will harm him when he applies for a new consumer credit card or maybe it will harm him when there's he applies for a business loan and one of those may be damages he can sue about and the other may not but either way is it not the very risk that the f c r a is supposed to be guarding against that is risked if you don't do a reasonable re investigation in this case which distinguishes it from cases such as spokeo and other instances the court has already determined the scope of his damages he and the discovery has concluded so we have no standing under spokeo because it's purely a procedural violation and we know that because the court has the substantive issue that you say should never have been reached because he didn't have standing in the first place that's your argument no it's a procedural violation because under spokeo the reasonable it's first and foremost because the statute itself refers to reasonable procedures with regard to the investigation and reagent reason and procedures because it with regard to herbal thing that if there's anything to do with procedures it doesn't matter whether it as a substantive matter of the actual harms and the actual risks that occur that the actual risk is of harm to the consumer in the very way that the statute tries to prevent but that doesn't matter because they say reasonable reinvestigation which inevitably involves what did they do and how did they do it which is their procedures or doing an investigation that's your argument now let's look at struble which i think will be instructive here there were  violations of the statute in that case the defendant failed to provide the required notice in four separate instances to the plaintiff in two of them those instances made a difference because the plaintiff was uninformed about their rights with regard to complaining about charges on their credit card and how to go about following these procedures in the other instances they were also given incorrect information there was a violation of the statute with regard to whether there would be automatic withdrawals in there and automatic payment plan right but that automatic payment plan was not offered in that instance and so there the court held this court held that there was no risk of harm right because that that that program did not exist so notwithstanding that there was a violation notwithstanding the fact that the plaintiff was supposed to receive the information that the statute the truth in lending act the purpose of it is truth in lending provide this information to consumers is that they can proceed you still have to assert you have to tie your risk of harm to what the statute was trying to protect and they weren't able to do that i think in this case  comes to this court asserting only business damages which are not covered by the statute i think that to argue that he's able to to assert a risk to an interest that's not protected by the statute  blend into the argument that the use of the wrong kinds of damages if these were the right kind of damages then you don't have a spokeo argument is that what you're saying if we were to decide the business damages then you no longer have a spokeo argument well that would present a different set of facts and as we heard earlier i don't we just have to know whether assuming we get past the waiver argument which we may not we have to know whether we're confronting two different arguments or one argument that if it if that one goes against you we don't have to look separately some different theory of spokeo problem here so the question is on these i think that they are very closely tied together because those are the damages that plaintiff is asserting on appeal i would say though in looking it at the application of spokeo to other cases particularly in the case of spokeo the inaccurate information about plaintiff in that case was out in the world it was on the internet it existed the plaintiff did not have to show right that somebody use that information in a way that caused him damage or harm he simply had to show that there was a risk the information was out there there are also cases where data has been stolen or one example is where someone takes a credit report for an impermissible purpose right that in that case there's a violation of the statute the information was disclosed without a permissible purpose that the plaintiff does not there have to also show that that report was used in some way that caused him damage the damage itself is the violation of his right not to have the information you see what i'm saying and i think and i think that that just to just to clarify its point of was talking about whether there was a zip code it's not so much completely limited to what is the information that has or what is the harm directed to write code is is a small thing and a civil judgment is a big thing if it isn't it's not really that comparison that what what we need to do we know what we're supposed to do ninth circuit decided that there actually was in that case a risk of harm so we don't have a supreme court case that tells us what is or is not a risk of harm yes and the ninth circuit did in that case make that determination that there was a risk of harm again because the information was disclosed so as and then and i think that excuse me was nicotine is your time ok struble having alleged a substantive statutory violation that threaten the very protections afforded by that statute was quote not required to want allege any additional harm to demonstrate the concrete injury necessary for standing so the whole discussion about this information was out there and that the harm in spokane all recognized by the ny circuit that's exactly what you have here mr freidman inaccurate information was out there and mr freidman took the steps the procedural steps and perhaps the word procedure is what's tripping us up a little took the procedural steps prescribed by the statute to alert the credit reporting agencies to those in accuracies and to trigger the every investigation obligations we already have a decision on a motion to dismiss that the allegations of the complaint could be determined by a reasonable juror jury to say that those violations were willful also what we haven't talked about and i'll be very brief about that is the casella case which specifically recognized although  to term and that there was no evidence of willfulness in that case it's specifically recognize the right to punitive damages and the event of a willful violation of a substantive right conferred by the fair credit reporting act we here we have at least a jury question as to the willfulness issue which if the jury finds correctly could result in going to damaging that least a jury question is a little bit short of saying it's a manifest injust e not to let the case go forward to manifest injustice because at least leaves stand something that is plainly erroneous given the decision of this court and strobel given the supreme court decision and by the way the mention of a zip code comes right out of the decision and spoke in pointing out example they give it's the only example they get when i think first of all i want to compliment you for an excellent argument and i'm sure there was no intention at all to mislead i can't even imagine how it would help you to say that this fragment was represented by counsel that i'm a fallible person i come here my understanding and i came here this morning was that mr freidman had been pro se all the way through but when a lawyer says to me no he had a lawyer at one point you know i'm perfectly happy to take that as gospels and so lawyer is telling it to me about what difference does it make that he objected in the first one but he didn't object to the second and you say he was represented on the first when in fact at least as far as the official record is concerned he was not and it would seem to be an entirely extra record fact if he had lawyers ghosting what he was submitting as a pro se you know i would appreciate being told what the actual circumstance is the actual circumstances as i've described it however  i don't believe herrick ever made it official appearance in this case representing mr freidman i think he proceeded probably saying all along but there was a lawyer there who to use your word and i'm not saying that suggesting for a moment that it was intentional misleading i'm just saying it's important to be very precise about these things because you know i'm happy to believe that i was mistaken about something