Revised February 22, 2000

UNITED STATES COURT OF APPEALS

FIFTH CIRCUIT

____________

No. 98-31209

____________

BERNITA WASHINGTON; KEVIN WASHINGTON; PEGGY

MALBROUGH; ROY MALBROUGH, JR; BERNICE AUGUSTINE

GUICHARD; VERNON GUICHARD, JR,

Plaintiffs - Appellees,

versus

CSC CREDIT SERVICES INC; EQUIFAX CREDIT

INFORMATION SERVICES INC,

Defendants - Appellants.

Appeal from the United States District Court

for the Eastern District of Louisiana

 January 7, 2000

Before KING, ChiefJudge, and REYNALDO G. GARZA and EMILIO M. GARZA, CircuitJudges.

EMILIO M. GARZA, Circuit Judge:

Plaintiffs-appellees Bernita and Kevin Washington (the “Washingtons”), Peggy and Ray

Malbrough (the “Malbroughs”), and Bernice and Vernon Guichard (the “Guichards”) (collectively,

the “consumers”) allege that defendants-appellants CSC Credit Services, Inc. (“CSC”) and Equifax

Inc. (“Equifax”) (collectively, the “reporting agencies”) violated the Fair Credit Reporting Act
1 The final class definition was:

all persons whose credit reports have been furnished to an insurance company

during the period from April 2, 1995 to the present, by computer access, by

defendants CSC Services, Inc., or Equifax, Inc., or any of their subsidiaries, or by

access to databases owned by any of them, where the consumer reporting agency

assembling and/or furnishing the report(s) did not receive:

1) an initial blanket certification from the insurance company stating

i) a permissible purpose for which the credit report is sought,

ii) that the credit report will be used for no other purpose, and

iii) that the insurance company is expressly prohibited from sharing the

credit report or providing it to anyone else, other than the subject of the

report or a joint user having the same purpose, and

2) a separate certification from the insurance company for each credit report

requested stating that the report was only to be used for a permissible purpose.

Washington v. CSC Credit Servs., Inc. 180 F.R.D. 309, 315-16 (E.D. La. 1998).

-2-

(“FCRA” or “the Act”). The district court certified the consumers as class representatives and the

reporting agencies challenge this ruling. We reverse in part, vacate in part, and remand.

I

The consumers brought suit against the reporting agenciesfor failing to “maintain reasonable

procedures” before providing their credit reports to insurance companies. They seek statutory,

compensatory, and punitive damages, as well as attorneyfees and prejudgment interest. Additionally,

they request declaratory and injunctive relief “ordering defendants to desist from providing credit

reports to insurers in connection with claims investigations.” 

The district court initially certified the class under Federal Rule of Civil Procedure 23(b)(2).

See Washington v. CSC Credit Servs., Inc., 178 F.R.D. 95, 103 (E.D. La. 1998). The court

subsequently denied Equifax’s motion for reconsideration, but in doing so, the court amended the

class definition1and alternatively certified the class under Rule 23(b)(3). See Washington v. CSC

Credit Servs., Inc., 180 F.R.D. 309, 312-16 (E.D. La. 1998). 

II
-3-

We have jurisdiction over this interlocutory appeal under 28 U.S.C. § 1292(b). We review

the district court’s decision to certify the class for an abuse of discretion. See Allison v. Citgo

Petroleum Corp., 151 F.3d 402, 408 (5th Cir. 1998). However, we review de novo whether the

district court applied the correct legal standard to grant certification. See id.

To proceed as a class, plaintiffs must first meet the four requirements set forth in Rule 23(a):

“(1) the class is so numerous that joinder of all members is impracticable [numerosity], (2) there are

questions of law or fact common to the class [commonality], (3) the claims or defenses of the

representative parties are typical of the claims or defenses of the class [typicality], and (4) the

representative parties will fairly and adequately protect the interests of the class [adequacy].” Fed.

R. Civ. P. 23(a). Then, the plaintiffs must show that the action is maintainable as a class action under

one of Rule 23(b)’ssubsections. See generally Castano v. American Tobacco Co., 84 F.3d 734, 740

(5th Cir. 1996) (noting that plaintiffs have the burden of showing that certification is appropriate).

The district court found that the consumerssatisfied the Rule 23(a) prerequisites and certified

the class under both Rule 23(b)(2) and 23(b)(3). To maintain a class action under Rule 23(b)(3),

plaintiffs must show: (1) that “[c]ommon questions . . . predominate over any questions affecting

only individual members” (“predominance”); and (2) that “class resolution [is] superior to other

available methods for the fair and efficient adjudication of the controversy” (“superiority”). Mullen

v. Treasure Chest Casino, LLC, 186 F.3d 620, 623-24 (5th Cir. 1999) (internal quotations omitted)

(quoting Amchem Products, Inc. v. Windsor, 521 U.S. 591, 615, 117 S. Ct. 2231, 2246, 138 L. Ed.

2d 689, __ (1997)). To maintain a class action under Rule 23(b)(2), plaintiffs must show that the

“predominant relief sought is injunctive or declaratory.” Allison, 151 F.3d at 411.

The reporting agencies argue that the consumers do not have individual standing to bring
2

In its entirety, § 1681e(a) states:

 Every consumer reporting agency shall maintain reasonable procedures designed

to avoid violations of section 1681c of this title and to limit the furnishing of

consumer reports to the purposes listed under section 1681b of this title. These

procedures shall require that prospective users of the information identify

themselves, certify the purposes for which the information is sought, and certify

that the information will be used for no other purpose. Every consumer reporting

-4-

FCRA claims, do not meet the “typicality” and “commonality” requirements of Rule 23(a), cannot

maintain an action under Rule 23(b)(3) because they cannot show “superiority” or “predominance,”

and cannot maintain an action under Rule 23(b)(2) because the FCRA does not allow them to obtain

injunctive relief. Resolution of these arguments depends on whether the district court properly

interpreted the FCRA.

A

Enacted in 1970, the FCRA governs “consumer reporting agencies” like Equifax and CSC

which maintain credit information on consumers and provide it to third parties. See 15 U.S.C. § 1681

(stating the purpose of the FCRA); id. § 1681a(f) (defining “consumer reporting agencies”). A

central purpose ofthe Act isto ensure the “confidentiality, accuracy, relevancy, and proper utilization

of [consumers’ credit] information.” Id. § 1681(b). 

Section 1861b ofthe Act specifiesthe two instancesin which a reporting agencymay provide

consumerreportsto an insurance company: (1) when the consumer consents in writing; and (2) when

the agency “has reason to believe” that the insurance company “intends to use t he information in

connection with the underwriting of insurance involving the consumer.” Id. § 1681b(a). To ensure

that agencies do not provide reports outside these two circumstances, § 1681e(a) requiresreporting

agenciesto “maintain reasonable procedures designed . . . to limit the furnishing of consumer reports

to the purposes listed under section 1681b of this title.” Id. § 1681e(a);2see also 16 C.F.R. pt. 600
agency shall make a reasonable effort to verify the identity of a new prospective

user and the uses certified by such prospective user prior to furnishing such user a

consumer report. No consumer reporting agency may furnish a consumer report

to any person if it has reasonable grounds for believing that the consumer report

will not be used for a purpose listed in section 1681b of this title.

Id. Section 1681c, which is not at issue in this case, mandates that certain material be included in

reports and excludes other material from reports.

-5-

app. § 607 (stating FTC commentary on “reasonable procedures”). 

The crucial issue in this case is whether a plaintiff can bring an action for failure to “maintain

[the] reasonable procedures” required by§ 1681e(a) without firstshowing that a report was disclosed

in violation of § 1681b. The district court found that a plaintiff claiming a violation of § 1861e does

not need to show improper disclosure in violation of § 1681b, but instead only needs to show that

the reporting agency did not maintain the required reasonable procedures and that it released a report

to an insurance company. See Washington, 178 F.R.D. at 99-100.

The only other two courts which have considered this issue disagree with the district court’s

interpretation of § 1861e. In Andrews v. Trans Union Corp., 7 F. Supp. 2d 1056 (C.D. Cal. 1998),

the court found that where a “disclosure was made for a permissible purpose [under § 1681b], then

the inquiry ends, and no investigation of the reasonableness of the consumer reporting agency’s

procedures are necessary.” Id. at 1067. The court reasoned that “[i]t makes no sense for a consumer

whose file was disclosed only for permissible purposes to nevertheless be able to challenge the

reasonableness of the consumer reporting agency’s procedures.” Id. Similarly, in Middlebrooks v.

RetailCreditCo., 416 F. Supp. 1013 (N.D. Ga. 1976), the court endorsed the proposition that, “once

it isshown that the informationwasrelevant and for a permissible purpose, this court need not inquire

into the reasonableness of the underlying procedures adopted by the agency to assure that the

information will be furnished for purposes defined as permissible under the Act.” Id. at 1016. 
3 This reading finds support in cases interpreting a related part of § 1681e. Section

1681e(b) also has a “reasonable procedures” provision, requiring agencies “to assure maximum

possible accuracy of the information concerning the individual about whom the report relates.” 

Id. § 1681e(b). Courts applying § 1681e(b) uniformly limit recovery to cases where the failure to

follow procedures causes actual harm (i.e., release of an inaccurate report) to the consumer. See

Peller v. Retail Credit Co., [1974-1980 Transfer Binder] Consumer Cred. Guide (CCH) ¶ 94,648

(N.D. Ga. Dec. 6, 1973) (“[I]n order to pursue a cause of action based upon a willful or negligent

violation of 15 U.S.C. § 1681e(b), the report sought to be attacked must be inaccurate. ”), aff’d

No. 74-1284 (5th Cir. Dec. 10, 1974); Spence v. TRW, Inc., 92 F.3d 380, 382 (6th Cir. 1996)

(rejecting a claim of failure to follow “reasonable procedures” under 1681e(b) because “[a]

showing of inaccuracy is an essential element of a claim under the Fair Credit Reporting Act”); 

Guimond v. Trans Union Credit Info. Co., 45 F.3d 1329, 1333 (9th Cir. 1995) (“In order to make

out a prima facie violation under § 1681e(b), a consumer must present evidence tending to show

-6-

We find these cases persuasive. Section 1681e(a) requires reporting agencies to “maintain

reasonable procedures designed . . . to limit the furnishing of consumer reports to the purposeslisted

under section 1681b.” 15 U.S.C. § 1681e(a). As the above-cited courts reason, this purpose is not

furthered unless a plaintiff suffers the harm the procedures are meant to prevent. 

Similarly, Congress has stated that it adopted the “reasonable procedures” requirement to

“meet[] the needs of commerce for consumer credit . . . in a manner which is fair and equitable to the

consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization of such

information.” 18 U.S.C. § 1681(b) (emphasis added). Congress identified actual injuries—including

breaches of “confidentiality” and “[im]proper utilization”—which only occur if there is an improper

disclosure, suggesting that a general claim of improper procedures is by itself inadequate. Id. 

In light of the purposes of the FCRA, we find that the actionable harm the FCRA envisions

is improper disclosure, not the mere risk of improper disclosure that arises when “reasonable

procedures” are not followed and disclosures are made. Accordingly, a plaintiff bringing a claim that

a reporting agency violated the “reasonable procedures” requirement of § 1681e must first show that

the reporting agency released the report in violation of § 1681b.3
that a credit reporting agency prepared a report containing inaccurate information.”); Henson v.

CSC Credit Servs., 29 F.3d 280, 284 (7th Cir. 1994) (same); Cahlin v. General Motors

Acceptance Corp., 936 F.2d 1151, 1156 (11th Cir. 1991) (same); Koropoulos v. Credit Bureau,

Inc., 734 F.2d 37, 39 (D.C. Cir. 1984) (same). These cases actually read the “reasonable

procedures” requirement as a limit on liability that might otherwise attach for inaccurate reports,

rather than as an affirmative basis for a claim. See, e.g., Henson, 29 F.3d at 284 (“[T]he credit

reporting agency is not automatically liable even if the consumer proves that it prepared an

inaccurate credit report because the FCRA does not make reporting agencies strictly liable for all

inaccuracies. A credit reporting agency is not liable under the FCRA if it followed ‘reasonable

procedures to assure maximum possible accuracy,’ but nonetheless reported inaccurate

information in the consumer's credit report.”) (quotations and citation omitted).

-7-

The consumers cite no contrary authority interpreting § 1681e. Instead, they make a plain

language argument, quoting language from the civil liability provisions of the FCRA which holds

reporting agenciesliable for “failing to complywith any requirement imposed under thissubchapter.”

15 U.S.C. §§ 1681n, 1681o. The consumers argue that because maintaining reasonable procedures

is a requirement under § 1681e(a), the FCRA imposes liability for a failure to comply with this

requirement. We disagree. The language in § 1681e(a) indicates—by qualifying the purpose of the

procedural requirement—that the “requirement imposed under”§ 1681e(a) is maintaining “reasonable

procedures” in order to prevent improper disclosures. See, e.g., id. § 1681e(a) (“No consumer

reporting agency may furnish a consumer report to any person if it has reasonable grounds for

believing that the consumer report will not be used for a purpose listed in section 1681b of this

title.”).

B

In sum, the district court erroneously ruled that the consumers need not show that their

reports were improperly disclosed under § 1861b in order to maintain their claims under § 1861e.

This error requires us to vacate in part the certification ruling, as the error formed the basis for the

district court’sfindingsthat the consumers have individualstanding, that they satisfy the prerequisites
-8-

of Rule 23(a), and that they can maintain a class under Rule 23(b)(3). However, we reverse the part

of the district court’s decision certifying the class under Rule 23(b)(2), because we find that the

consumers cannot maintain a class action under this subsection. See Fed. R. Civ. P. 23(b)(2)

(allowing a class action where “final injunctive relief or corresponding declaratory relief with respect

to the class as a whole” is appropriate).

1

The district court certified this action under Rule 23(b)(2) primarily because the consumers

are pursuing injunctive relief. The reporting agencies argue that the FCRA does not allow private

litigants to obtain injunctive relief.

In general, “[a]bsent the clearest command to the contrary from Congress, federal courts

retain their equitable power to issue injunctions in suits over which they have jurisdiction.” Sierra

Club, Lone Star Chapter v. FDIC, 992 F.2d 545, 548 (5th Cir. 1993) (alteration in original) (quoting

Califano v. Yamasaki, 442 U.S. 682, 705, 99 S. Ct. 2545, 2559, 61 L. Ed. 2d 176, __ (1979)). Thus

we must consider whether Congress “clearly and unambiguously limited the court's equity

jurisdiction” under the FCRA. Id.

Section 1681p gives usjurisdiction over “[a]n action to enforce any liability created under this

subchapter.” 15 U.S.C. § 1681p. T he term “liability” is discussed in the FCRA’s civil liability

provisions, both of which expressly refer to damages and attorney fees without mentioning injunctive

relief. See 15 U.S.C. §§ 1861n-1861o. This omission is significant because the Act elsewhere

expressly grants the power to obtain injunctive relief to the FTC. See id. § 1861s(a) (“Compliance

with the requirements imposed under [the FCRA] shall be enforced under the Federal Trade
4 Courts have adopted a similar reading of analogous provisions of the Fair Debt

Collection Practices Act (“FDCPA”). The FDCPA contains a similar civil liability provision to

the FCRA, mentioning money damages but not injunctive relief, see 15 U.S.C. § 1692k, and it

contains a similar provision regarding the FTC’s enforcement authority, see id. § 1692l. Based on

these two sections, courts applying the FDCA have held that it does not allow private actions for

injunctive relief. See Sibley v. Fulton DeKalb Collection Serv., 677 F.2d 830, 834 (11th Cir.

1982) (stating in dictum, without analysis, that “equitable relief is not available to an individual

under the civil liability section of the Act”); Zanni v. Lippold, 119 F.R.D. 32, 33-34 (C.D. Ill.

1988) (finding that the FDCPA did not allow individual litigants to obtain injunctive relief);

-9-

Commission Act . . . by the Federal Trade Commission.”); 15 U.S.C. § 45(b) (stating, in a provision

ofthe FTC Act, that the FTC can compel partiesto “cease and desist” from committing certain acts);

cf. id. § 1861s(b) (allowing other agencies to enforce the FCRA in certain circumstances). 

Lower courts are split as to whether, in light of these provisions, the FCRA allows private

litigants to maintain a claim for injunctive relief. Compare Bumgardner v. Lite Cellular, Inc., 996

F. Supp. 525, 526-27 (E.D. Va. 1998) (holding that it lacked the power to grant a private litigant’s

request for injunctive relief under the FCRA); Ditty v. Checkrite, Ltd., 973 F. Supp. 1320, 1338 (D.

Utah 1997) (same); Mangio v. Equifax, Inc., 887 F. Supp. 283, 284-85 (S.D. Fla. 1995) (same);

Kekich v. Travelers Indem. Co., 64 F.R.D. 660, 668 (W.D. Pa. 1974) (same) with Andrews, 7 F.

Supp. 2d at 1084 & n.33 (concluding that the FCRA “does allow injunctive relief on the plaintiff's

own behalf”); Greenway v. Information Dynamics, Ltd., 399 F. Supp. 1092, 1096-97 (D. Ariz. 1974)

(certifying a class action on a claim for injunctive relief under the FCRA and granting preliminary

injunctive relief), aff’d on other grounds 524 F.2d 1145 (9th Cir. 1975). We hold that the affirmative

grant of power to the FTC to pursue injunctive relief, coupled with the absence of a similar grant to

private litigants when they are expressly granted the right to obtain damages and other relief,

persuasively demonstrates that Congress vested the power to obtain injunctive relief solely with the

FTC.4
Strong v. National Credit Management Co., 600 F. Supp. 46, 46-47 (E.D. Ark. 1984) (same);

Duran v. Credit Bureau of Yuma, 93 F.R.D. 607, 608-09 (D. Ariz. 1982) (same).

5 The district court made a similar argument in support of its contrary ruling by

citing § 1681s-2, which imposes a duty on “furnishers of information” to provide accurate

information to consumer reporting agencies. See id. § 1681s-2(a). Section 1681s-2(d) grants the

FTC exclusive enforcement power over this subsection. The district court apparently relied on

the lack of similar language in § 1681e to argue that Congress could not have intended the FTC to

have exclusive enforcement authority over § 1681e. We agree with this reasoning, but it does not

address the question at issue here, which is not whether the FTC has exclusive enforcement

authority over all of § 1681e (which it plainly does not), but rather whether the FTC has the

exclusive ability to obtain one type of remedy (injunctive relief) available under § 1681e.

-10-

This reading is supported by the subsequently-enacted § 1861u, which requires reporting

agenciesto disclose consumer information to the FBI “for counterintelligence purposes.” 15 U.S.C.

§ 1681u. Section 1861u provides consumers with a damages remedy against the government for

improperly obtaining information, see id. § 1681u(i), and it specifies that, “[i]n addition to any other

[damages or attorney fees] remedy contained in this section, injunctive relief shall be available to

require compliance with the procedures of this section,” id. § 1681u(m). Thus, where Congress

intended to allow private injunctive relief under the FCRA, it expressly stated that this relief was

available. This language would be unnecessary if injunctive relief were otherwise available.5See

Kashanchi v. Texas Commerce Medical Bank, N.A., 703 F.2d 936, 939 (5th Cir. 1983) (noting the

importance of giving effect to all language in a statute). 

2

The district court alternatively found that the consumers could maintain a class action under

Rule 23(b)(2) for declaratory relief because the reporting agencies acted in a way which made

“injunctive relief or corresponding declaratory relief” appropriate. Fed. R. Civ. P. 23(b)(2). The

Advisory Committee states that “[d]eclaratory relief ‘corresponds’ to injunctive relief when as a
-11-

practical matter it affordsinjunctive relief or serves as a basisfor later injunctive relief.” Fed. R. Civ.

P. 23 advisory committee’s note. The district court reasoned that declaratory relief in this case fit

within this definition because it could “serve[] as a basis for later injunctive relief” to the FTC.

Washington, 180 F.R.D. at 312.

This application of Rule 23(b)(2) would frustrate the FCRA’s limitation of injunctive relief

to the FTC. Unable to obtain injunctive relief directly, consumers could attempt to obtain it indirectly

by obtaining declaratory relief solely for the purpose of later prompting the FTC to move for

injunctive relief. 

More importantly, to maintain an action under Rule 23(b)(2), declaratory relief rather than

monetary damages must be the “predominant” form of relief the plaintiffs pursue. See Allison, 151

F.3d at 411. “[M]onetary relief predominates in (b)(2) class actions unless it is incidental to requested

injunctive or declaratory relief.” Id. at 415. This means that monetary damages must “flow directly

from liability to the class as a whole on the claims forming the basis of the injunctive or declaratory

relief” and must not depend “on the intangible, subjective differences of each class member's

circumstances” or “require addit ional hearings to resolve the disparate merits of each individual's

case.” Id. The consumers are seeking actual and punitive damages. It is counterintuitive to say that

in their case, declaratory relief, which might hypothetically be used as the basis for future action by

the FTC, “predominates” over monetary relief, which will directly and immediately benefit them.

Additionally, because the money damages in this case do not flow from the declaratory relief but

require separate adjudication, they predominate under Allison. Accordingly, the district court erred

in finding that the class could be maintained under Rule 23(b)(2).

III
-12-

Because we find that the consumers cannot maintain a class action under Rule 23(b)(2), we

REVERSE the district court’s certification on this grounds. Additionally, because the district court’s

class certification under Rule 23(b)(3) was based on its misreading of the FCRA, we VACATE its

Rule 23(b)(3) certification and REMAND for further proceedings consistent with this opinion.