summary judgment, the court must view the record and any inferences to be drawn
from it in the light most favorable to the party opposing summary judgment. See
Griffin v. Thomas, 929 F.2d 1210, 1212 (7th Cir. 1991). The party moving for summary
judgment bears the initial burden of demonstrating the absence of a genuine issue of
material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The party opposing
summary judgment may not rest upon the pleadings, but “must set forth specific facts
showing that there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986). There is no genuine issue for trial unless there is “sufficient
evidence favoring the non-moving party for a jury to return a verdict for that party.”
Id.

Though AT&T makes several valid arguments for why it should prevail on
summary judgment, the court need address only one: that AT&T is not liable for
defamation because its statement that plaintiff owed $40.61 on her account was true.
To prove defamation, plaintiff must show (1) a false statement by AT&T, (2) an
unprivileged publication of the defamatory statement; and (3) damages. Haywood v.
Lucent Technologies, Inc., 323 F.3d 524, 533 (7th Cir. 2003). An allegedly defamatory
statement is not actionable if it is true. Thus, a plaintiff must prove “that the
defendant either knew the statement to be false, or believing it to be true, lacked
reasonable grounds for that belief.” Klug v. Chicago School Reform Bd. of Trustees,
197 F.3d 853, 860 (7th Cir. 1999). A defendant invoking the truth defense need only

establish the “substantial truth” of the allegedly defamatory statement, that the “gist”

4.


III. CONCLUSION

Defendant AT&T's motion for summary judgment on plaintiff's defamation claim

is granted.
ENTER ORDER: ©
fli —
ieited States District Judge
DATED: September 2, 2004

-1-


contacted Gulf State to dispute the debt, and on May 24, 2002, Gulf State sent plaintiff
a letter stating that her account had been closed and reference to it would be deleted
from Gulf State’s next credit bureau reporting cycle.

On September 25, 2002, plaintiff obtained a copy of her credit report from
Equifax which contains an entry stating that her AT&T account was delinquent. The
credit report names Palisades Collection (aka Gulf State) as the reporting company,
the amount due as $41, the status as more than 120 days past due, and the date
reported as May 2002. Plaintiff at no time paid AT&T, Gulf State, or any other entity
any amount of money in satisfaction the $40.61 debt.

II. DISCUSSION

Plaintiff claims that she has been defamed by AT&T's disclosure of her debt to
collection agencies and credit companies because AT&T at all times knew that she did
not owe the $40.61 and yet persisted in reporting to third parties that she did. AT&T
maintains that it is entitled to summary judgment because AT&T did not make a false
statement about plaintiffs account, did not publish the allegedly false statements
which plaintiff complains of, and did not act with reckless disregard of plaintiff's rights,
as is required to bring a defamation claim independent of the relief available under the
Fair Credit Reporting Act (“FCRA").

Summary judgment is appropriate “if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, show that
there is no genuine issue as to any material fact and that the moving party is entitled
to a judgment as a matter of law.” Fed. R. Civ. P. 56(c). When considering a motion for

-3-


or “sting” of the statement is true. Harrison v. Chicago Sun-Times, 793 N.E.2d 760, 767
(Il. App. Ct. 2003).

Here, AT&T maintains that plaintiff actually owed $40.61 on her account and
presents unrebutted evidence establishing its reasonable grounds for that belief. AT&T
submits the affidavit of Mark Farinella, an attorney in AT&T’s Law & Government
Affairs department, whose job is to manage AT&T’s compliance with collection laws.
Farinella avers that AT&T conducted an internal review of plaintiffs debt upon
receiving notice that plaintiff disputed the charge and concluded that the amount was
actually owed. AT&T then complied with its three-part procedure for collecting debts
by placing plaintiff's account with two separate collection agencies, and when those
efforts failed, by selling plaintiff's account to a third agency, OPI. After the sale of
plaintiffs account, AT&T no longer retained control of plaintiffs account. AT&T's
internal reports of plaintiffs account confirm that these procedures were followed, and
plaintiff offers no evidence showing that AT&T's accounting reports were flawed or its
collection procedures were not followed.

Plaintiffs only evidence in support of her contention that AT&T knew its
allegedly defamatory statement about her account was false is her own affidavit and
deposition testimony stating that AT&T knew she did not owe any money to the

company,' In her affidavit, plaintiff avers that after she disputed the charge by

1 AT&T argues that plaintiffs affidavit must be stricken because it is
improperly executed and contains material, i.e., reference to a letter which plaintiff
refuses to produce, deemed inadmissible under Fed. R. Evid. 1002. The court notes
that after AT&T’s motion to strike was filed, plaintiff filed with the court her

5.


‘Minute Order Form (0697)

K 4 United States District Court, Northern District of Mlinois

Nameot sized ee | Joan B.Gottschall | kiae eave

CASE NUMBER 03 C 1541 DATE 9/2/2004
CASE Cohn vs. AT&T
TITLE

{In the following box (a) indicate the party filing the motion, ¢.¢., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
of the motion being presented. }

MOTION:
Defendant’s motion for summary judgment and motion to strike
DOCKET ENTRY:
69) Q Filed motion of [ use listing in “Motion” box above.]
(2) oO Brief in support of motion due__.
@) oa Answer brief to motion due__. Reply to answer briefdue__.
(4) Qa Ruling/Hearingon___setfor____at
(5) Oo Status hearing[held/continued to} [set for/re-set for] on setfor at
(6) Q Pretrial conference[held/continued to] {set for/re-set for]on set for_ at
(o) Qa Trial{set for/re-set for] on___at
(8) 0 [Bench/Jury trial} [Hearing] held/continuedto___at
(9) a) This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]

DFRCP4(m) (Local Rule 41.1 OOFRCP41(a)(1}) 0 FRCP41(a)(2).

(10) MW [Otherdocketentry} Enter Order. For the reasons stated in the attached memorandum opinion and
order, defendant AT&T’s motion for summary judgment on Count II [20-1] is granted. Defendant's
motion to strike [27-1] is denied. There being no other claims remaining against defendant AT&T, and
no remaining defendants (on 3/18/04 the court dismissed with prejudice the other defendant in this case,
Gulf State Credit d/b/a Palisades Collections, by motion of plaintiff), this case is hereby terminated.

ai) @ [For further detail see order attached to the original minute order.]

‘No notices required, advised in open cour. | Document
Number

ie red.
No notices requires number of notices,

Notices mailed by judge's staff
Notified counsel by telephone.
X | Docketing to mail notices.
| Mail 40.450 form. te
i aiyisia “$1
Copy to judge/magistrate judge. 1un03 4 vey
r a ‘
RIKB deputy’s
initials
Datelimelcecaivad ih ,
LL. ‘central Clerk's Office railing deputy initials



contacting AT&T, she “received correspondence from AT&T indicating the settlement
of the alleged delinquent payment.” In her deposition testimony, plaintiff again asserts
that she received a “letter of settlement” from AT&T stating that the company would
delete the charge from her account. When pressed on the details of this letter, plaintiff
admitted that she could not remember exactly what the letter said and that “[mly
lawyer has the letter.” Plaintiff failed to produce the letter when requested by AT&T
during discovery and has offered no additional explanation about its contents.
In light of AT&T's evidence establishing that it had a reasonable basis for its
- belief that plaintiff in fact owed $40.61 on her account, plaintiffs conclusory and self-
serving statements to the contrary are insufficient to defeat summary judgment on her
defamation claim. Even if plaintiffs affidavit and deposition testimony were credited,
plaintiff offers no evidence for the court to find that AT&T lacked a reasonable basis
for believing that plaintiffs debt was owed. Plaintiff has simply not come forth with
enough evidence to provide a basis for a jury verdict in her favor. Because plaintiff
cannot prove that AT&T's allegedly defamatory statement about her past due account

was false, she cannot establish the elements of her defamation claim.

signature page for the affidavit which she claims was inadvertently omitted from
her response to AT&T's motion for summary judgment. The court finds that this
submission rectifies any execution flaws in the affidavit. The court also finds that,
while Rule 1002 states that a content of a writing must be proved by producing the
original, plaintiff may avail herself of an exception to that rule which allows
admission of the letter's contents through testimony when the document has been
lost or destroyed. Fed; R. Evid. 1004. AT&T's motion to strike is therefore denied.

-6-


~

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

Lisa Cohn,

Plaintiff,
Case No. 03 C 1541

Honorable Joan B. Gottschall

Gulf State Credit, L.L.C.,
d/b/a Palisades Corporation,

DOCKETED

AT&T Corporation, SEP 0 3 2008

Defendants.

wee eee eres SS Se

MEMORANDUM OPINION AND ORDER
Plaintiff Lisa Cohn brought this two-count action against AT&T Corp. for

defamation (Count II) and Gulf State Credit LLC, d/b/a Palisades Collection (“Gulf
State”) for violations of the Fair Debt Collection Practices Act (““FDCPA’), 15 U.S.C.
§ 1692 (Count I). On plaintiff's motion, on March 18, 2004, the court dismissed Gulf
State with prejudice as a defendant in this case; plaintiffs FDCPA claim against Gulf
State is accordingly dismissed with prejudice. Thus, the only items remaining before
the court are defendant AT&T’s motion for summary judgment on plaintiffs
defamation claim and motion to strike plaintiff's affidavit.
I. BACKGROUND

Plaintiffs defamation claim against AT&T asserts that AT&T published

inaccurate statements about an unpaid balance of $40.61 on her AT&T account to

“1

| 3)-


various creditors, prospective grantors, and other credit-reporting agencies which
caused her to suffer serious injury, namely, personal humiliation, embarrassment,
mental anguish, and emotional distress. The following facts are undisputed.

In April 2000 plaintiff learned that AT&T sought to collect an unpaid balance
of $40.61 on her account. At some later time plaintiff disputed this debt by contacting
AT&T. On January 13, 2000, AT&T referred plaintiff's account to its internal review
staff to assess whether the charge was valid after a notation appeared on her account
that she disputed owing the $40.61. On January 18, 2000, AT&T concluded that
plaintiffs $40.61 charge was actually owed.

Pursuant to AT&T procedures, plaintiffs debt was then placed with a collection
agency while AT&T retained control over her account. This initial placement proved
unsuccessful and plaintiffs debt was returned to AT&T. Plaintiffs debt was then
placed with a second collection agency while AT&T retained control over her account.
The second placement was also unsuccessful and plaintiffs debt was returned to
AT&T. Finally, on January 17, 2002, in accordance with AT&T collection procedures,
plaintiff's debt was sold outright to a third collection agency, OSI Portfolio Services
(“OSI”). After this sale AT&T no longer owned the debt nor controlled nor directed any
of OSI's collection efforts.

On April 4, 2002, plaintiff received a dunning letter from Gulf State which
indicated that her $40.61 debt was unpaid, due, and owing and that she must repay
it immediately. The letter clearly stated that Gulf State was collecting the debt on
behalf of OSI, which had purchased plaintiff's past-due account from AT&T. Plaintiff

2