Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_05-cv-00817/USCOURTS-azd-2_05-cv-00817-0/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 following facts are undisputed, except where noted.

WO

NOT FOR PUBLICATION

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Michelle P. Traveler, 

Plaintiff, 

vs.

Glenn Jones Ford Lincoln Mercury 1987,

Inc., an Arizona corporation, 

Defendant. 

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No. CV-05-0817-PHX-SRB

ORDER

In December 2004, Plaintiff Michelle P. Traveler visited Defendant Glenn Jones Ford

Lincoln Mercury, an auto dealership, to look at cars. Plaintiff subsequently filed a Complaint

with this Court alleging that Defendant had unlawfully accessed her credit report after her

visit. Pending before the Court is Defendant's Motion for Summary Judgment presumably

brought pursuant to Rule 56 of the Federal Rules of Civil Procedure (Doc. 19). 

I. BACKGROUND1

Around December 2004, Plaintiff received an offer in the mail from Capital One Auto

Finance ("Capital One") stating that she had been pre-approved for a no-money-down loan

to buy a vehicle from Defendant's auto dealership ("Defendant" or "dealership") for a limited

time that month. Plaintiff visited the dealership on or about December 11 and met with a

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salesman. Plaintiff asked the salesman whether the dealership would need to access her

credit report, as she was aware that credit inquiries could pull down one's credit score, and

the salesman assured her the dealership would not. (Pl.'s Resp. to Def.'s Separate Statement

of Pertinent Facts in Support of its Mot. for Summ. J. and Pl.'s Controverting Statement of

Facts in Opposition ("PSOF"), Ex. A (hereinafter "Traveler Aff."), ¶¶ 4, 13.) When Plaintiff

did not find a vehicle she wanted to buy within Capital One's pre-approval price range, she

left the dealership.

Plaintiff says her next contact with Defendant occurred several weeks later, when the

salesman called to tell her that Capital One had extended its credit offer. (Traveler Aff., ¶

7.) Plaintiff asked about available vehicles within Capital One's price limit, but the car the

salesman told her about did not fit her family's needs and she agreed he could continue

looking for a suitable vehicle. (Traveler Aff., ¶¶ 9-11.) 

In January 2005 Plaintiff began receiving letters from various finance companies

turning her down for financing through the dealership. (Traveler Aff., ¶ 14.) Plaintiff

learned later that in December 2004 Defendant had accessed her credit reports from each of

the three national credit bureaus. (Traveler Aff., ¶ 8.) Plaintiff states that "she did not

instruct [the salesman] to seek alternative financing nor did I in any way authorize him or the

dealership to access my credit report" and that only Capital One had permission to access her

report in December 2004. (Traveler Aff., ¶¶ 11, 19.) Plaintiff says that at the time Defendant

accessed her credit reports, she had not agreed to buy any vehicle from Defendant or

"initiated any transaction with [Defendant] to purchase a vehicle on credit." (Traveler Aff.,

¶¶ 12, 20.) 

Defendant's version of what transpired after Plaintiff's initial visit to the dealership

differs significantly. Defendant agrees that the salesman told Plaintiff at their initial meeting

that the dealership would not need to access Plaintiff's credit report, as long as Capital One

financed the vehicle under the terms of its offer. (Def.'s Separate Statement of Pertinent

Facts in Support of its Mot. for Summ. J. ("DSOF"), affidavit of Michael Mitchell

(hereinafter "Mitchell Aff."), ¶ 4.) Capital One pre-approved Plaintiff for a loan up to

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$20,000, but Plaintiff did not find a car that day within that price range. (Mitchell Aff., ¶ 7.)

A few days later the salesman called Plaintiff to see if she was still interested in

buying a vehicle and, if so, her general parameters. (Mitchell Aff., ¶ 8.) The salesman called

Plaintiff again on December 20 to tell her he had found a car within Plaintiff's price range,

a Cadillac Catera. (Mitchell Aff., ¶¶ 9, 11.) Plaintiff told the salesman that the Catera was

too small for her family, and Defendant says Plaintiff then asked whether a Cadillac DTS she

saw on her initial visit was still available. (Mitchell Aff., ¶¶ 11-12.) The salesman told her

it was still available, but reminded Plaintiff that the price on the Cadillac DTS still exceeded

Capital One's $20,000 limit. (Mitchell Aff., ¶ 12.) The salesman then suggested that

Plaintiff could make a down payment, but Plaintiff said she could not afford a down payment

and asked whether Defendant could obtain financing for the Cadillac DTS through a different

lender. (Mitchell Aff., ¶ 13.) Defendant claims that the salesman said he would try to obtain

financing through a different lender, but that the dealership "would need to run her credit in

order to submit the deal to other lenders." (Mitchell Aff., ¶ 13.) Crucially, Defendant alleges

that Plaintiff "said that would be okay." (Mitchell Aff., ¶ 13.) The salesman said that

Plaintiff then provided him with the information he would need in order to pull her credit to

submit to other lenders, including her "full name, previous addresses, date of birth, social

security number, employer, wages, etc." ( Mitchell Aff., ¶ 14.) The salesman recorded this

information on a Purchaser's Statement, accessed Plaintiff's credit report and submitted

"payment calls and/or loan packages to multiple lenders to see if Plaintiff could be approved

for a loan." (Mitchell Aff., ¶¶ 14-15.) 

On December 23, 2004, Defendant's Sales Manager went on Dealertrack.com to see

if any of the lenders had approved Plaintiff for credit and found that the five new lenders had

rejected Plaintiff for credit. (DSOF, Affidavit of Corey Means (hereinafter "Means Aff."),

¶ 6.) The salesman then called Plaintiff to let her know that she did not get approval for a

loan on the Cadillac DTS and that they could go back to the Capital One offer, but that

Plaintiff would have to provide a down payment. (Mitchell Aff., ¶ 17.) Again, Plaintiff said

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Although Plaintiff identified 15 U.S.C. § 1681q in her factual allegations, she failed

to include a claim under § 1681q in her causes of action. Therefore, Plaintiff has waived any

cause of action under § 1681q.

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she could not afford a down payment, and the salesman told Plaintiff he would continue

trying to find a lender and would let her know if he did. (Mitchell Aff., ¶17.) 

After learning that Defendant had accessed her credit report, Plaintiff filed suit

claiming that Defendant violated the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681

et seq., the Arizona Consumer Fraud Act, Ariz. Rev. Stat. § 44-1521 et seq., and committed

common law fraud. Specifically, Plaintiff claims violations of 15 U.S.C. §§ 1681b(f), 1681n,

1681o, 1681q2

 and Ariz. Rev. Stat. § 44-1522. Plaintiff testified during her deposition that

because Defendant accessed her credit report, and because of the inquiries from financing

companies, her credit score was lowered, which she believes prevented her from obtaining

a $40,000 home equity loan. (DSOF, Ex. 2, Deposition of Michelle Traveler (hereinafter

"Traveler Dep.") at 120.) Plaintiff testified that one lender told her that their low score

requirement [presumably for granting a loan request] was 475, and her score was 465.

(Traveler Dep. at 103.) 

Defendant filed the instant Motion for Summary Judgment arguing that no genuine

issue of material fact exists because Defendant accessed Plaintiff's credit report for a

permissible purpose, did not make any false promise or misrepresentations to Plaintiff, and

because Plaintiff has not suffered any damages due to Defendant's actions. (Def.'s Mot. for

Summ. J. at 1.) 

II. LEGAL STANDARDS AND ANALYSIS

The standard for summary judgment is set forth in Rule 56(c) of the Federal Rules of

Civil Procedure. Under this rule, summary judgment is properly granted when: (1) no

genuine issues of material fact remain; and (2) after viewing the evidence most favorably to

the non-moving party, the movant is clearly entitled to prevail as a matter of law. Fed. R.

Civ. P. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S. Ct. 2548, 2552-53 (1986);

Eisenberg v. Ins. Co. of N. Am., 815 F.2d 1285, 1288-89 (9th Cir. 1987). 

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In considering a motion for summary judgment, the court must regard as true the nonmoving party’s evidence, if it is supported by affidavits or other evidentiary material.

Celotex, 477 U.S. at 324, 106 S. Ct. at 2548; Eisenberg, 815 F.2d at 1289. However, the

non-moving party may not merely rest on its pleadings, it must produce some significant

probative evidence tending to contradict the moving party’s allegations, thereby creating a

material question of fact. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256-57, 106 S. Ct.

2505, 2513-14 (1986) (holding that the plaintiff must present affirmative evidence in order

to defeat a properly supported motion for summary judgment); First Nat'l Bank v. Cities

Serv. Co., 391 U.S. 253, 289, 88 S. Ct. 1575, 1592 (1968).

A. Fair Credit Reporting Act Claim

Under the FCRA, a consumer reporting agency may only furnish a consumer report

under certain specified circumstances. See 15 U.S.C. § 1681b(a). For instance, a consumer

reporting agency may furnish a consumer report "[i]n accordance with the written

instructions of the consumer to whom it relates." Id. § 1681b(a)(2). Also, a person who

"intends to use the information in connection with a credit transaction involving the

consumer on whom the information is to be furnished" may have access to a consumer's

report. Id. § 1681b(a)(3)(A). Or, a person who "has a legitimate business need for the

information . . . in connection with a business transaction that is initiated by the consumer"

may access that consumer's report. Id. § 1681b(a)(3)(F)(i). In the latter two instances, a

consumer's permission is not required to access the consumer's report. See 16 C.F.R. Pt. 600,

App. (2005) ("When permissible purposes exist, parties may obtain, and consumer reporting

agencies may furnish, consumer reports without the consumers' permission or over their

objection."). In all cases, though, a person may not use or obtain a consumer report unless

the report is obtained "for a purpose for which the consumer report is authorized to be

furnished under this section . . . ." Id. § 1681b(f)(1).

Plaintiff claims that Defendant violated § 1681b(f) of the FCRA when it accessed and

used Plaintiff's credit report, and that Defendant's failure to comply with FCRA was

negligent and/or willful under §§ 1681n and 1681o. (Compl. ¶¶ 42-45, 48-50.) Defendant

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acknowledges that it accessed Plaintiff's credit report on December 21, 2004. (Def.'s Mot.

for Summ. J. at 5 n. 3; Means Aff., ¶ 5.) Defendant claims, however, that it had a permissible

purpose under either15 U.S.C. § 1681b(a)(3)(A) or § 1681b(a)(3)(F)(i). (Def.'s Mot. for

Summ. J. at 5.)

Plaintiff agrees that it would be permissible for a person to obtain a credit report for

the purpose of attempting to extend credit for the purchase of a vehicle. (Traveler Dep. at

116.) What Plaintiff disputes is that she authorized Defendant to seek alternative financing

or to access her credit report. (Traveler Aff., ¶ 11.) Plaintiff states that except for Capital

One, "[a]t no time did I ever sign any authorization or give verbal authorization for

[Defendant] or anyone else to pull my credit report." (Traveler Aff., ¶¶ 18-19.) In her

affidavit, Plaintiff states that "[d]uring this time, I had not initiated any transaction with

[Defendant] to purchase a vehicle on credit." (Traveler Aff., ¶ 20.) 

In opposing Defendant's Motion for Summary Judgment, Plaintiff directs the Court's

attention to two Federal Trade Commission informal staff opinion letters construing the

provisions of 15 U.S.C. § 1681b. While not binding on the courts, "courts should give some

weight to such [opinion letters] . . . . " Swanson v. S. Oregon Credit Serv., Inc., 869 F.2d

1222, 1230 (9th Cir. 1988). One of those letters is particularly instructive in this case. See

Letter from David Medine to Karen Coffey (Feb. 11, 1998), FTC Informal Staff Letter

("Coffey letter"). In the Coffey letter, the agency discusses the propriety of an auto

dealership obtaining a consumer report on an individual who visits the showroom and

requests information from a salesman about one or more automobiles. The agency opines

that such "a request for general information about products and prices offered does not

involve a business transaction initiated by the consumer" allowing access to a consumer

report under 15 U.S.C. § 1681b(a)(3)(F). Id. The letter goes on to say that "an automobile

dealer may obtain a report only in those circumstances in which the consumer clearly

understands that he or she is initiating the purchase or lease of a vehicle and the seller has a

legitimate business need for the consumer report information in order to complete the

transaction." Id. (emphasis in original). If the consumer is merely comparison shopping, for

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example, or asking questions about prices and financing, then "the dealer must obtain written

permission from the consumer before obtaining a consumer report." Id. A dealer may obtain

a report without written permission "only in circumstances where it is clear both to the

consumer and to the dealer that the consumer is actually initiating the purchase or lease of

a specific vehicle and, in addition, the dealer has a legitimate business need for consumer

report information . . . ." Id. This was also the view of one Arizona district court which held

that "[i]nformation on a particular consumer may only be provided to a third party who

requires it in connection with a specific transaction between that party and that particular

consumer." Greenway v. Info. Dynamics, Ltd., 399 F. Supp. 1092, 1096 (D. Ariz. 1974),

aff'd, 524 F.2d 1145 (9th Cir. 1975), cert. denied, 424 U.S. 936, 96 S. Ct. 1153 (1976)

(rejecting the defendant's argument that it had a legitimate business need for obtaining a list

with check cashing information about hundreds of individuals with whom it may do business

in the future).

Defendant claims that it had Plaintiff's permission to access her credit report.

Alternatively, Defendant claims that it did not need Plaintiff's permission because it had a

permissible purpose either under 15 U.S.C. § 1681b(a)(3)(A) (involving a credit transaction)

or § 1681b(a)(3)(F)(i) (involving a business transaction initiated by the consumer). 

Two issues of material fact arise from the varying accounts of the parties. The first

is whether Plaintiff actually gave Defendant permission to access her credit report. The

second is whether Plaintiff and Defendant were ever involved together in a "credit

transaction" or a "business transaction" as contemplated by 15 U.S.C. § 1681b(a)(3)(A) or

§ 1681b(a)(3)(F)(i), in which case Defendant would not have needed Plaintiff's permission.

Even if Plaintiff had not given express permission to access her credit report, Defendant's

version of events would support the conclusion that there was a business transaction and/or

a credit transaction, thus obviating the need for Plaintiff's permission. Plaintiff's version,

however, would support the opposite conclusion–that there was neither a business transaction

nor a credit transaction, and that she had never given Defendant permission to access her

report. These differing versions of events create a genuine issue of material fact. In this

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3

Because this case will proceed on the federal law claim, the Court need not address

Defendant's request for attorney's fees at this time.

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situation, summary judgment is inappropriate, and Defendant's motion on Plaintiff's FCRA

claim is denied.

B. State Law Claims

In addition to the federal law claim, the Complaint states claims under the Arizona

Consumer Fraud Act and common law fraud. Defendant's Motion for Summary Judgment

addresses both state law claims and requests summary judgment on these claims. Plaintiff's

Response to Defendant's Motion for Summary Judgment completely fails to address

Defendant's arguments and does not even mention the state law claims. 

Fed. R. Civ. P. 56(e) requires that a party opposing a motion for summary judgment

must "by affidavits or as otherwise provided in this rule . . . set forth specific facts showing

that there is a genuine issue for trial. If the adverse party does not so respond, summary

judgment, if appropriate shall be entered against the adverse party." 

Local Rule 7.2(i) allows the Court to summarily grant those motions where the

adverse party fails to respond. D. Ariz. R. 7.2(i); see also Brydges v. Lewis, 18 F.3d 651, 652

(9th Cir. 1994) (discussing former Local Rule 11(i) which was later re-codified as Local Rule

1.10(i) and then 7.2(i)). The rule states in relevant part: "[I]f the opposing party does not

serve and file the required answering memoranda . . . such non-compliance may be deemed

a consent to the denial or granting of the motion and the Court may dispose of the motion

summarily." Rule 7.2(i). The Court deems Plaintiff's failure to respond to Defendant's

request for summary judgment on the state law claims a consent to the Court's granting of

Defendant's request. Therefore, the Court grants Defendant summary judgment on the state

law claims under the Arizona Consumer Fraud Act and common law fraud.3

 

IT IS ORDERED granting in part and denying in part Defendant's Motion for

Summary Judgment (Doc. 19). The motion is denied with respect to Plaintiff's federal law

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claim under the Fair Credit Reporting Act. The motion is granted with respect to all other

claims against Defendant. 

DATED this 24th day of January, 2006.

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