Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_05-cv-00092/USCOURTS-azd-2_05-cv-00092-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 15:1681 Fair Credit Reporting Act

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 The Court will deny the request for oral argument because the parties have submitted

memoranda thoroughly discussing the law and evidence and the Court concludes that oral

argument will not aid its decisional process. See Mahon v. Credit Bur. of Placer County,

Inc., 171 F.3d 1197, 1200 (9th Cir. 1999).

WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Christina Waddell,

Plaintiff, 

vs.

Equifax Information Services, LLC, a

Georgia limited liability company; et al.,

Defendants. 

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No. CV-05-0092-PHX-DGC

ORDER

Plaintiff Christina Waddell alleges that Defendants First North American National

Bank (“FNANB”), First Tennessee Mortgage Services, Inc. (also referred to as First Tier

Bank & Trust) (“First Tier”), and Equifax Information Services LLC (“Equifax”) violated

provisions of the Fair Credit Reporting Act, 15 U.S.C. §§ 1681 et seq. (“FCRA”). First Tier

was dismissed as a Defendant on September 12, 2005, and FNANB was dismissed as a

Defendant on March 14, 2006. Dkt. ##33, 51. Pending before the Court is Defendant

Equifax’s motion for summary judgment. Dkt. #58. Plaintiff has filed a response and

Equifax has filed a reply. Dkt. ##64, 67. For the reasons set forth below, the Court will

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I. Background.

On May 8, 2003, Plaintiff received a copy of her Equifax credit file. The credit file

included one notation of an account review inquiry by FNANB 

. Dkt. #65 Ex. 4. Plaintiff wrote to Equifax on May 19, 2003, noted

the FNANB and First Tier account reviews, and stated that by June 15, 2003 she expected

“to receive written notice of an address where I can contact these companies.” Dkt. #60 ¶ 15.

In response, Equifax deleted its notation of the three account review inquiries in

Plaintiff’s credit file. Dkt. #60 ¶ 17. On May 26, 2003, Equifax sent a letter to Plaintiff

stating that the three account review inquiries had been deleted, but the letter did not include

the addresses for FNANB or First Tier as Plaintiff had requested. Dkt. #65 Ex. 7. The letter

contained a copy of Plaintiff’s credit file dated May 26, 2003, showing the account review

inquiries were removed. Id.

Plaintiff filed a complaint against Defendants on January 10, 2005 seeking actual,

statutory, and punitive damages, and costs and attorney’s fees, for violation of the FCRA.

II. Summary Judgment Standard.

Summary judgment is appropriate if the evidence, viewed in the light most favorable

to the nonmoving party, “show[s] that there is no genuine issue as to any material fact and

that the moving party is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c); see

Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). “Only disputes over facts that might

affect the outcome of the suit . . . will properly preclude the entry of summary judgment.”

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The disputed evidence must be

“such that a reasonable jury could return a verdict for the nonmoving party.” Id. Summary

judgment may be entered against a party who “fails to make a showing sufficient to establish

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

the burden of proof at trial.” Celotex, 477 U.S. at 322.

III. The Fair Credit Reporting Act.

The purpose of the FCRA is “to require that consumer reporting agencies adopt

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reasonable procedures for meeting the needs of commerce for consumer credit . . . in a

manner which is fair and equitable to the consumer, with regard to confidentiality, accuracy,

relevancy, and proper utilization of such information.” 15 U.S.C. § 1681(b). Section 1681g

of the FCRA sets out the requirements that an agency should follow in making disclosures

to consumers. “The FCRA provides for compensation in the form of actual damages and

attorneys’ fees if a consumer reporting agency negligently fails to comply with any provision

of the FCRA.” Guimond v. Trans Union Credit Info. Co., 45 F.3d 1329, 1332 (9th Cir.1995)

(citing 15 U.S.C. § 1681o). A consumer can also recover punitive damages from a defendant

for willful non-compliance with the FCRA. Id. (citing 15 U.S.C. § 1681n).

IV. Plaintiff’s Section 1681 Claims.

Plaintiff claims that Equifax violated the FCRA by (1) failing to provide Plaintiff with

the addresses for FNANB and First Tier, and (2) unilaterally deleting the three account

review inquiries from Plaintiff’s credit file.

A. Plaintiff’s Claim that Equifax Failed to Provide Information in Violation

of 15 U.S.C. § 1681g

The disclosure requirements of § 1681g are explicit: “Every consumer reporting

agency shall, upon request . . . clearly and accurately disclose to the consumer [the] . . .

[i]dentification of each person . . . that procured a consumer report” during the previous year.

15 U.S.C. § 1681(g)(a). If the consumer requests them, the identification must include the

address and telephone number of the person that procured the consumer report. 15 U.S.C.

§ 1681g(a)(3)(B)(ii).

Equifax does not dispute knowing of its FCRA obligation to respond to a consumer’s

requests for address or contact information regarding inquiries on the consumer’s credit file.

Nor does Equifax claim that it provided Plaintiff with the requested addresses. Dkt. #60

¶ 12. Equifax instead contends that it is not strictly liable for its failure to comply with the

FCRA – that Plaintiff must show that Equifax acted negligently or willfully before

recovering damages under § 1681g. Dkt. #59.

Section 1681e(b) of the FCRA requires a credit reporting agency to follow

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“reasonable procedures to assure maximum possible accuracy of the information” in the

consumer reports it prepares. Because there is no similar provision in § 1681g, the Court

must decide whether the defense of reasonable procedures is available to a consumer

reporting agency accused of violating § 1681g. The Court concludes that the defense is

available.

In Thomas v. Trans Union, LLC., the district court noted that “[c]ourts regularly hold

that FCRA does not impose strict liability on an agency.” 197 F. Supp. 2d 1233, 1237 (D. Or.

2002) (citations omitted). The FCRA contains a general requirement to maintain reasonable

procedures, found in § 1681(b), while § 1681e(b) requires a consumer reporting agency to

follow reasonable procedures to assure the accuracy of consumer credit reports. See 15

U.S.C. § 1681(b), e(b). After examining this structure, Thomas concluded that the

“reasonable procedures defense” applies to alleged violations of § 1681i:

It is logical that a consumer reporting agency should not be liable under FCRA

for an employee’s isolated mistakes in the face of the agency having and

enforcing reasonable procedures to fulfill its FCRA obligations. Indeed, the

reasonable procedures defense “is designed to protect users of credit

information who consistently abide by the law but who, in dealing with

hundreds or thousands of instances, ultimately, by commission or omission,

inadvertently violate the law in isolated instances.”

197 F. Supp. 2d at 1237 (citation omitted). The Court agrees with this view of the FCRA and

concludes that the reasonable procedures defense is available for alleged violations of

§ 1681g.

In this case, Plaintiff’s communication to Equifax clearly indicated that she sought

address information on FNANB and First Tier. Dkt. #60 ¶ 15. As Plaintiff points out,

Equifax could have “simply fulfilled its requirements under the FCRA and provided Plaintiff

with the identification information.” Dkt. #64.

Equifax contends that it followed reasonable procedures in this case. While the

reasonableness of Equifax’s conduct may ultimately be a defense, it is a fact question the jury

must decide. See Thomas, 197 F. Supp. 2d at 1238 (stating that the “reasonable procedures

defense creates a jury question”).; see also Thomas, 214 F. Supp. 2d 1228, 1237 (same);

Guimond, 45 F.3d at 1333 (stating that reasonableness will be a jury question “in the

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overwhelming majority of cases”). The Court will therefore deny Equifax’s motion for

summary judgment regarding Plaintiff’s § 1681g claim.

B. Plaintiff’s Claim that Equifax Deleted Information in Violation of 15

U.S.C. § 1681g.

Plaintiff contends that Defendant’s deletion of the three account review inquiries from

her credit file violated FCRA § 1681g(a)(3)(A). Dkt. #1 ¶ 49. But this provision of the

statute describes the requirement to disclose identification information to the consumer; it

does not address the deletion of information from a consumer’s credit file. Thus, under the

plain language of the statute, Plaintiff cannot bring an action under this provision for the

deletion of information from Plaintiff’s credit file. Plaintiff does not allege that the deletion

violated any other sections of the FCRA. The Court therefore will grant Equifax’s motion

for summary judgment regarding the § 1681g claim for deletion of information from

Plaintiff’s credit file.

V. Damages.

“The FCRA provides for compensation in the form of actual damages and attorneys’

fees if a consumer reporting agency negligently fails to comply with any provision of the

FCRA. In addition, a consumer can recover punitive damages for willful non-compliance.”

Guimond, 45 F.3d at 1332 (citations omitted). Plaintiff “has the burden of proving that [her]

damages were caused by the defendant’s violations of the FCRA.” Zala v. Trans Union, No.

99-CV-0399, 2001 WL 210693, at *6 (N.D. Tex. Jan. 17, 2001) (citation omitted).

Plaintiff alleges that Equifax’s failure to provide her the addresses for FNANB and

First Tier resulted in actual damages, including emotional distress and two days of lost work.

Dkt. #65 ¶¶ 31-34. Equifax contends that Plaintiff cannot prove she sustained any damages.

A. Actual Damages for Lost Work.

Plaintiff claims she lost two days of work because she was under emotional distress

after she received Equifax’s correspondence, which did not include the requested addresses

for FNANB and First Tier. Dkt. #65 ¶ 30. Equifax contends that the Plaintiff’s only claim

for economic damages are for lost time at work, and that Plaintiff did not lose any pay during

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that time. Dkt. #60 ¶ 23. Plaintiff admits that she did not lose any wages, asserting that she

utilized two of her sick days instead. Dkt. #65 ¶ 32.

If a violation of the FCRA is established, Plaintiff may be entitled to compensation

for use of her sick-leave entitlement because the use diminished the amount of leave

available for any future sickness. Whether or not Plaintiff suffered financial damage as a

result of losing the two days of leave must be determined on the basis of the evidence

presented at trial. The Court will therefore deny Equifax’s motion for summary judgment

regarding actual damages for lost work.

B. Emotional Distress Damages.

Damages recoverable under the FCRA “include humiliation or mental distress, even

if the consumer has suffered no out-of-pocket losses” due to a denial of credit. Stevenson v.

TRW Inc., 987 F.2d 288, 296 (5th Cir. 1993). “Courts have allowed recoveries where

. . . the plaintiff suffered mental anguish based on events other than a denial of credit.” Zala,

2001 WL 210693, at *7 (citations omitted); see Guimond, 45 F.3d at 1333 (“[N]o case has

held that a denial of credit is a prerequisite to recovery under the FCRA.”).

Plaintiff claims that Equifax’s failure to provide the requested address information

caused her emotional distress severe enough to result in physical symptoms. Dkt. #64.

Plaintiff claims that Equifax’s actions caused her to cry, have her spine tighten up, raise her

blood pressure, and have a panic attack. Id. Plaintiff also claims that her relationships with

her daughter and husband were negatively affected. Id.

Equifax contends that Plaintiff’s allegations are insufficient evidence of emotional

distress. Dkt. #59. “The Ninth Circuit has not addressed the type of evidence necessary to

support an award of emotional distress damages under the FCRA, but has stated in other

contexts that ‘[w]hile objective evidence requirements may exist in other circuits, such a

requirement is not imposed by case law in the Ninth Circuit, or the Supreme Court.’” Acton

v. Bank One Corp., 293 F. Supp. 2d 1092, 1101 (D. Ariz. 2003) (citing Zhang v. Am. Gem

Seafoods, Inc., 339 F.3d 1020, 1040 (9th Cir. 2003) (holding in a discrimination action that

the plaintiff’s “testimony alone is enough to substantiate the jury’s award of emotional

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distress damages”) (ellipsis and citations omitted)); see Johnson v. Hale, 13 F.3d 1351, 1352-

53 (9th Cir. 1994) (recognizing that “compensatory damages may be awarded for humiliation

and emotional distress established by testimony or inferred from the circumstances, whether

or not plaintiffs submit evidence of economic loss or mental or physical symptoms.”). 

Viewing the evidence in the light most favorable to Plaintiff, as the Court must do at

this summary judgment stage, the Court concludes that Plaintiff’s evidence of emotional

distress damages is sufficient to create a question of fact for the jury. The Court therefore

will deny Equifax’s motion for summary judgment regarding emotional distress damages.

C. Punitive and Statutory Damages.

Section 1681n provides for the recovery of statutory and punitive damages for willful

noncompliance with the FCRA. See 15 U.S.C. § 1681n(a)(1)-(2). “Willful noncompliance

occurs only when a defendant knowingly and intentionally commits an act in conscious

disregard for the rights of others.” Zala, 2001 WL 210693, at *8 (citations omitted).

“[A]lthough the [willful] act must be intentional, it need not be the product of ‘malice or evil

motive.’” Reynolds v. Hartford Fin. Serv. Group, Inc., 435 F.3d at 1081, 1098 (9th Cir.

2006). “[A]s used in FCRA ‘willfully’ entails ‘a ‘conscious disregard’ of the law, which

means ‘either knowing that policy [or action] to be in contravention of the rights possessed

by consumers pursuant to the FCRA or in reckless disregard of whether the policy [or action]

contravened those rights.’” Id. (citation omitted).

Plaintiff has produced no evidence to show that Equifax’s failure to disclose the

requested addresses was anything other than negligence. Indeed, Plaintiff admitted in her

deposition that she possessed no evidence that Equifax acted with malice or an intent to harm

her, or consciously disregarded her rights. Dkt. #60 ¶ 26 (citing Pl.’s Dep. 112:13-18, Mar.

8, 2006). Although Plaintiff subsequently stated in an affidavit that she “believed”

Equifax’s actions were intended to cover its illegal actions of providing account review credit

reports to companies that did not have a present credit relationship with Plaintiff, she

provided no evidence in support of this assertion. Dkt. #65 ¶ 19 (citing Pl.’s Aff. ¶ 9).

/ / /

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Plaintiff also argues that Equifax had no policy in place to provide the FNANB and

First Tier addresses to Plaintiff, a fact, she contends, from which the jury could find

recklessness sufficient to support an award of punitive damages. But Plaintiff cites only the

deposition of defense witness Christien Sapere in support of this argument (Dkt #65, ¶ 28),

and Ms. Sapere testified that Equifax had such a policy (Dkt. #65, Ex. 1 at 58). Moreover,

Equifax provided additional evidence of such a policy. Dkt. #60, ¶ 12. Plaintiff has

presented no evidence from which a jury could conclude that Equifax lacked the policy.

Plaintiff also suggests that a jury could conclude that Equifax acted recklessly in

permitting FNANB and First Tier to access Plaintiff’s credit file, but Plaintiff has not sued

Equifax for granting such access. Plaintiff’s claim is limited to Equifax’s failure to provide

addresses and its unilateral deletion of the three inquiry notations from her credit file.

Finally, Plaintiff suggests that the jury could award punitive damages for Equifax’s

unilateral deletion of the inquiry notations. As noted above, however, that claim will be

eliminated by summary judgment.

Because Plaintiff has failed to produce evidence showing that Equifax’s action in this

case amounted to willful noncompliance, the Court will grant Equifax’s motion for summary

judgment on punitive and statutory damages. See Celotex, 477 U.S. at 322.

II IS ORDERED:

1. Defendant’s motion for summary judgment (Dkt. #58) is granted in part and

denied in part as set forth in this order.

2. The Court will set a final pretrial conference by separate order.

DATED this 14th day of September, 2006.

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