Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-3_07-cv-08032/USCOURTS-azd-3_07-cv-08032-4/pdf.json

Nature of Suit Code: 440
Nature of Suit: Other Civil Rights
Cause of Action: 15:1681 Fair Credit Reporting Act

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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Christine Baker, 

Plaintiff, 

vs.

Trans Union LLC, et al., 

Defendants. 

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CV 07-8032-PCT-JAT

ORDER

Pending before the Court are Defendant Equifax Information Services LLC’s

(Equifax) Motion for Summary Judgment (Doc. #149), Defendant Experian Information

Solutions, Inc.’s (Experian) Motion for Summary Judgment (Doc. #154), and Defendant

Trans Union LLC’s (Trans Union) Motion for Summary Judgment (Doc. #151). Trans

Union also filed a Motion to Strike Plaintiff’s Summary Judgment Evidence (Doc. #168), but

because Local Rule of Civil Procedure 7.1(m)(2) specifically prohibits separate

objections/motions to strike regarding the admission of evidence on written motions, the

Court will deny the Motion. The Court now rules on the Motions for Summary Judgment.

I. BACKGROUND

Plaintiff Christine Baker filed a Complaint on June 15th, 2007, alleging violations of

the Fair Credit Reporting Act (FCRA) against, among others, Defendants Equifax, Experian,

and Trans Union, which are all credit reporting agencies (CRAs) under the FCRA. On April

11, 2008, Ms. Baker sought leave to add new facts and two new causes of action not included

Case 3:07-cv-08032-JAT Document 184 Filed 11/19/09 Page 1 of 9
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in her original Complaint: (1) unjust enrichment and (2) tortious interference with contractual

relations. (Doc. #71). The Court granted Ms. Baker leave to file an Amended Complaint

containing the new facts regarding the FCRA claims and a new cause of action for tortious

interference with contractual relations, but denied her request to add a claim for unjust

enrichment (Doc. #78). 

Ms. Baker filed her First Amended Complaint (“FAC”) on June 16, 2008 (Doc. #80).

In the FAC, she alleges that Defendant Trans Union: 1) willfully and negligently blocked her

myFICO credit reports in violation of FCRA §1681g; 2) willfully and negligently sold her

credit data to persons without permissible purpose in violation of FCRA §1681b; 3) willfully

and negligently failed to maintain reasonable procedures to avoid violations of §1681b in

violation of §1681e; 4) willfully and negligently failed to follow reasonable procedures to

assure maximum possible accuracy when preparing her consumer report in violation of

FCRA §1681e; 5) willfully and negligently failed to provide complete and correct consumer

reports after receiving factual disputes in violation of FCRA§1681i; and 6) tortiously

interfered with her contracts with consumers to analyze and attempt to improve their credit

scores. (Doc. #80, ¶¶66-70 &86-93). 

She also alleges that Defendant Equifax: (1) willfully and negligently sold her credit

data without a permissible purpose in violation of FCRA §1681(b); (2) willfully and

negligently failed to maintain reasonable procedures to avoid violations of §1681b in

violation of FCRA §1681e; and (3) willfully and negligently reported a fictitious fraud alert

in violation of FCRA §1681c-1. With regard to Defendant Experian, Ms. Baker alleges that

Experian: (1) willfully and negligently sold her credit data without a permissible purpose in

violation of FCRA §1681(b) and (2) willfully and negligently failed to maintain reasonable

procedures to avoid violations of §1681b in violation of FCRA §1681e.

On June 26, 2008, Trans Union moved to dismiss the claims against it for failure to

state a claim (Doc. #84). The Court granted the Motion as to Ms. Baker’s claims against

Trans Union for willfully and negligently blocking her myFICO credit score, willfully and

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negligently selling her credit data without permissible purpose, willfully and negligently

failing to maintain reasonable procedures to avoid violations of §1681b, willfully and

negligently failing to provide complete and correct consumer reports after receiving factual

disputes, and for tortious interference; but denied Trans Union’s Motion as to her claim that

Trans Union willfully and negligently failed to follow reasonable procedures to assure

maximum possible accuracy when preparing her consumer report in violation of FCRA

§1681e. (Doc. #113). Equifax, Experian, and Trans Union filed their pending Motions for

Summary Judgment on June 1, 2009.

II. LEGAL STANDARD

Summary judgment is appropriate when “the pleadings, depositions, answers to

interrogatories, and admissions on file, together with affidavits, if any, show that there is no

genuine issue as to any material fact and that the moving party is entitled to summary

judgment as a matter of law.” Fed.R.Civ.P. 56(c). Thus, summary judgment is mandated,

“. . . against a party who fails to make a showing sufficient to establish evidence of an

element essential to that party’s case, and on which that party will bear the burden of proof

at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).

Initially, the movant bears the burden of pointing out to the Court the basis for the

motion and the elements of the causes of action upon which the non-movant will be unable

to establish a genuine issue of material fact. Id. at 323. The burden then shifts to the nonmovant to establish the existence of material fact. Id. The non-movant “must do more than

simply show that there is some metaphysical doubt as to the material facts” by “com[ing]

forward with ‘specific facts showing that there is a genuine issue for trial.’” Matsushita Elec.

Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986) (quoting Fed.R.Civ.P. 56(e)).

A dispute about a fact is “genuine” if the evidence is such that a reasonable jury could return

a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248

(1986). The non-movant’s bare assertions, standing alone, are insufficient to create a

material issue of fact and defeat a motion for summary judgment. Id. at 247-48. However,

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in the summary judgment context, the Court construes all disputed facts in the light most

favorable to the non-moving party. Ellison v. Robertson, 357 F.3d 1072, 1075 (9th Cir.

2004).

III. ANALYSIS

A. Equifax’s Motion

Defendant Equifax is a CRA that maintains a database that includes a credit file for

Ms. Baker. Ms. Baker alleges that Equifax sold her credit information to third parties

without permissible purpose, failed to maintain reasonable procedures to avoid selling credit

information without permissible purpose, and reported a false fraud alert on her credit file,

which she claims violated FCRA §1681c-1.

1. Section 1681(b)

The FCRA limits the purposes for which a CRA may furnish credit reports. A CRA

may provide reports:

(1) In response to the order of a court . . .

(2) In accordance with the written instructions of the consumer to

whom it relates.

(3) To a person which it has reason to believe –

(A) intends to use the information in connection with a credit

transaction involving the consumer on whom the information is

to be furnished and involving the extension of credit to, or

review or collection of an account of, the consumer; or

(B) intends to use the information for employment purposes; or

(C) intends to use the information in connection with the

underwriting of insurance involving the consumer; or

D) intends to use the information in connection with a

determination of the consumer's eligibility for a license or other

benefit granted by a governmental instrumentality required by

law to consider an applicant's financial responsibility or status;

or

(E) intends to use the information, as a potential investor or

servicer, or current insurer, in connection with a valuation of, or

an assessment of the credit or prepayment risks associated with,

an existing credit obligation; or

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(F) otherwise has a legitimate business need for the

information--

(I) in connection with a business transaction that is initiated

by the consumer; or

(ii) to review an account to determine whether the consumer

continues to meet the terms of the account. . . . 

15 U.S.C. §1681b(a). 

Ms. Baker alleges that Equifax willfully and negligently sold her credit data to persons

without permissible purpose in violation of FCRA §1681b. (Doc. #80 ¶67). Her §1681b

allegations against Equifax involve a transaction in March of 2007. Ms. Baker undisputedly

applied for a mortgage on March 5, 2007. She alleges that after her application, Equifax

improperly issued her credit data to Dana Capital, through NCO Financial Systems. 

As long as a permissible purpose exits, it does not matter whether the creditor itself

or the creditor’s agent obtains the credit report. Weidman v. Federal Home Loan Mortg.

Corp. 338 F.Supp.2d 571, 577 (E.D. Pa. 2004)(citing Federal Trade Commission

Commentary on the FCRA, 16 C.F.R. Part 600, Appendix, §604, p. 511(2005)). And when

a permissible purpose exists, “parties may obtain, and consumer reporting agencies may

furnish, consumer reports without the consumers’ permission or over their objection.”

Federal Trade Commission Commentary on the FCRA, 16 C.F.R. Part 600, Appendix, §604,

p. 512 (2005); see also Sterigopoulos & Castro v. First Midwest Bancorp., 427 F.3d 1043,

1046-47 (7th Cir. 2005)(“[T]he statute does not require that consumers expressly approve

each request for a report.”).

Supplying credit reports to persons who intend to use the information in connection

with the application for a mortgage, a credit transaction, is permissible. See 15 U.S.C.

§1681b(a)(3)(A). Because Equifax shared Ms. Baker’s credit information in connection with

a permissible use, and Equifax therefore did not need her permission to share her credit

report, her §1681b claim relating to the mortgage application fails. The Court therefore

grants summary judgment to Equifax on Ms. Baker’s §1681b claim.

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2. FCRA §1681e(a)

Ms. Baker also makes an FCRA §1681e(a) claim based on Equifax’s alleged §1681b

violation. Section 1681e(a) directs CRAs to “maintain reasonable procedures designed to

. . . limit the furnishing of consumer reports to the purposes listed under section 1681b of this

title.” The Court has held that Ms. Baker’s §1681b claim fails as a matter of law, and Ms.

Baker has introduced no other evidence that would create an issue of fact regarding the

reasonableness of Equifax’s procedures for avoiding the impermissible sharing of credit

information. The Court therefore grants summary judgment to Equifax on Ms. Baker’s

§1681e(a) claim.

3. FCRA §1681c-1

Ms. Baker alleges that Equifax violated §1681c-1 by placing a fraud alert on her credit

file against her wishes. On October 25, 2005, Equifax received a dispute from Ms. Baker

regarding her Target and Capital One accounts. Equifax concedes that it investigated the

dispute, but argues that its records clearly show it did not place a fraud alert on her credit file

in response. Ms. Baker has never seen a copy of her credit report showing a fraud alert, but

produced the Declaration of Kimberly Hughes, an Experian employee, from another lawsuit,

which states that “On October 26, 2005, Experian received a notification that . . . Equifax .

. . had added a fraud alert to Plaintiff’s credit file.” (Doc. #165-3, p. 88, ¶33.)

Section 1681c-1 provides:

Upon the direct request of a consumer, or an individual action

on behalf of or as a personal representative of a consumer, who

asserts in good faith a suspicion that the consumer has been or

is about to become a victim of fraud or related crime, including

identity theft, a consumer reporting agency . . . that maintains a

file on the consumer and has received appropriate proof of the

identity of the requester shall include a fraud alert in the file of

that consumer, and also provide that alert along with any credit

score generated in using that file, for a period of not less than 90

days, beginning on the date of such request, unless the consumer

or such representative requests that such fraud alert be removed

before the end of such period, and the agency has received

appropriate proof of the identity of the requester for such

purpose.

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§1681c-1(a)(1)(A). 

Section 1681c-1 addresses the failure to add a fraud alert upon an appropriate request

to do so. By its terms, it does not regulate a CRA’s placement of a fraud alert on a

consumer’s account without the consumer’s permission. Ms. Baker has not provided the

Court with any authority that would support a violation of §1681c-1 under the circumstances

of this case. The Court therefore will grant summary judgment to Equifax on Ms. Baker’s

§1681c-1 claim. 

Ms. Baker alleged that Equifax violated three sections of the FCRA. Because the

Court has held that her claims under all three sections fail as a matter of law, the Court will

grant summary judgment to Equifax.

B. Experian’s Motion

Ms. Baker’s two claims against Experian arise from her mortgage application of

March 5, 2007. Experian also provided credit information to Dana Capital, through NCO

Financial Systems, in response to the application. Ms. Baker alleges that by providing credit

data to Dana Capital, Experian willfully and negligently sold her credit data to persons

without permissible purpose in violation of FCRA §1681b and failed to maintain reasonable

procedures to prevent impermissible uses of credit information in violation of FCRA

§1681e(a). For the same reasons outlined in the section above, namely that providing credit

information for use with a mortgage application is permissible, Ms. Baker’s §§1681b &

1681e(a) claims fail as a matter of law. Because Ms. Baker had only those two claims

against Experian, the Court will grant summary judgment to Experian.

C. Trans Union’s Motion

After the Court’s November 6, 2008 Order (Doc. #113) on the Motion to Dismiss,

only Ms. Baker’s FCRA §1681e(b) claim against Trans Union remains. Ms. Baker alleges

that Trans Union split her credit file into two files; that one of those files did not contain her

bankruptcy; and that Chase pre-approved her at some point in July or August of 2005 for a

credit card based on a credit report that did not contain the bankruptcy, then declined her

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Trans Union did maintain two separate internal credit files on Ms. Baker that it

shared with her, but Trans Union merged the two files on May 6, 2005 – more than two years

before she filed her suit, which is the relevant time period for statute of limitation purposes.

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after Chase’s August 17, 2005 review of the report with the bankruptcy. She argues that

Trans Union’s maintenance of two credit reports violated section 1681e(b).

Section 1681e(b) of the FCRA provides: “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.” To

prevail on her §1681e(b) claim, Ms. Baker must “present evidence tending to show that a

credit reporting agency prepared a report containing inaccurate information.” Guimond v.

Trans Union Credit Info. Co., 45 F.3d 1329, 1333 (9th Cir. 1995). 

In its earlier Order, the Court held that if Trans Union actually provided a separate

credit report on Ms. Baker that did not contain the bankruptcy, that report could be

misleading, which could constitute an inaccurate report under §1681e(b). See, e.g.,

Koropoulos v. Credit Bureau, Inc., 734 F.2d 37, 40 (D.C. Cir. 1984). At the motion to

dismiss stage, the Court had to accept as true Ms. Banker’s allegations that Trans Union

provided Chase with an incomplete or misleading credit report. At the summary judgment

stage, Ms. Baker must produce proof sufficient to create a material issue of fact as to whether

Trans Union actually provided an inaccurate credit report to Chase.

Ms. Baker makes several unsubstantiated claims in her Response to Trans Union’s

Motion for Summery Judgment (Doc. #163), but has produced no affirmative evidence that

Trans Union provided a credit report to Chase in the relevant time period, let alone that she

provided an inaccurate report. Ms. Baker uses words like “apparently” and “must have,” but

has not demonstrated that Trans Union sold inaccurate credit reports regarding Ms. Baker to

any of Trans Union’s customers.1

 

Because Ms. Baker has not met her burden of creating a legitimate, material issue of

fact regarding whether Trans Union provided inaccurate credit reports to Chase or other

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customers, her §1681e(b) claim fails as a matter of law. The Court therefore will grant

summary judgment to Trans Union on Ms. Baker’s one remaining claim against Trans Union.

Accordingly,

IT IS ORDERED Granting the Motions for Summary Judgment of Defendants

Equifax (Doc. #149), Experian (Doc. #154), and Trans Union (Doc. #151).

IT IS FURTHER ORDERED Denying Trans Union’s Motion to Strike Plaintiff’s

Summary Judgment Evidence (Doc. #168).

IT IS FURTHER ORDERED that this Order terminates the case because no claims

remain after Plaintiff’s voluntary dismissal of Defendants Paduano, Sanfilippo, Dana Smith,

Dana Capital Group, and Mutual Benefit Funding on January 22, 2008 (Doc. #51), Plaintiff’s

acceptance of the Offer of Judgment from Defendant NCO Financial Systems, Inc. (Doc.

#145), and the Court’s granting of the summary judgment motions.

IT IS FURTHER ORDERED that the Clerk shall enter judgment for Plaintiff

Christine Baker against Defendant NCO financial Systems, Inc. in the amount of two

thousand dollars ($2000) pursuant to her acceptance of the Offer of Judgment (Doc. #145-2)

and the that Clerk shall enter judgment for Defendants Equifax Information Services LLC,

Experian Information Solutions, Inc., and Trans Union against Plaintiff pursuant to this

Order.

DATED this 19th day of November, 2009.

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