Opinion ID: 452183
Heading Depth: 2
Heading Rank: 2

Heading: FCRA Statute of Limitations

Text: 22 The statute of limitations for actions under the FCRA is contained in 15 U.S.C. Sec. 1681p: 23 An action to enforce any liability created under this subchapter may be brought in any appropriate United States district court without regard to the amount in controversy, or in any other court of competent jurisdiction, within two years from the date on which the liability arises, except that where a defendant has materially and willfully misrepresented any information required under this subchapter to be disclosed to an individual and the information so misrepresented is material to the establishment of the defendant's liability to that individual under this subchapter, the action may be brought at any time within two years after discovery by the individual of the misrepresentation. 24 Under the statute an action is timely if filed within two years from the date on which the liability arose or within two years from the plaintiff's discovery of a material and willful misrepresentation on the part of the defendant. Accordingly, for the purposes of the FCRA statute of limitations, Clay's claims may be divided into two groups--claims arising from Equifax's 1981 mailing and claims arising from other prior acts of the defendants. Of the wrongs that Clay alleges the defendants committed, only the 1981 mailing occurred within two years of his filing suit. For all other claims, therefore, Clay must show a material and willful misrepresentation on the part of the defendants. We will consider separately each group of claims.
25 On May 15, 1981, Equifax sent to Clay copies of certain reports it had prepared over the previous two and one-half years. Equifax's transmittal letter to Nationwide stated: 26 This confirms telephone conversation the morning of 5-14-81 where Mr. Clark [of Nationwide] requested a clearer copy of our interview with Mr. Clay. The carbon on our handwritten responses was dim in places for us to see, so it was necessary for us to overprint and this is to a true copy. Possibly another machine could get a better copy, but this is the best ours could do. 27 In addition, we have photocopies of the investigation we submitted to other customers since last reporting to you, as per your request, and these are attached. 28 Clay contends that by this 1981 mailing Equifax violated sections 1681e (failure to maintain reasonable compliance procedures), 1681 l (failure to verify adverse information), and 1681r (unauthorized disclosure by officer or employee of a credit reporting agency) of the FCRA. Accordingly, he argues that, at least as to these claims, summary judgment was inappropriate. Clay contends also that in requesting and receiving the 1981 mailing Nationwide violated section 1681q (obtaining information under false pretenses). Viewing the record in the light most favorable to Clay, we conclude that all of these claims are either groundless or waived. Section 1681e of the FCRA provides: 29 (a) 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.... 30 (b) 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. 31 Clay contends that Equifax violated this provision when it mailed to Nationwide copies of the old reports. However, no facts alleged in the complaint or otherwise stated in the record can be viewed as establishing such a claim. In his complaint Clay makes merely a broad, conclusory allegation that Equifax failed to maintain reasonable compliance procedures. Such an allegation without more is not sufficient to withstand a motion for summary judgment. 32 Moreover, we note that section 1681e(b) requires that consumer reporting agencies maintain reasonable compliance procedures when preparing reports. In 1981 Equifax prepared no new reports on Clay; it merely mailed copies of previously prepared reports. The 1981 mailing, therefore, could not be a violation of section 1681e(b). 33 Clay contends also that by its 1981 mailing Equifax violated section 1681 l. That statute provides: 34 Whenever a consumer reporting agency prepares an investigative consumer report, no adverse information in the consumer report ... may be included in a subsequent consumer report unless such adverse information has been verified in the process of making such subsequent consumer report, or the adverse information was received within the three-month period preceding the date the subsequent consumer report is furnished. 35 It is clear that this provision is not applicable to the facts of this case. Again, Equifax prepared no new or subsequent report in 1981; it merely mailed copies of previously prepared reports. Section 1681 l prohibits the inclusion of stale and unverified information in new consumer reports. It does not address, however, the reproduction of existing reports. The copies that Equifax sent to Nationwide each indicated the date and circumstances of the reports and could not be confused as providing new or fresh information. 36 Clay's contentions regarding section 1681r, which prohibits an officer or employee of a credit reporting agency from making any unauthorized disclosures, are likewise meritless. Clay failed to plead or argue any section 1681r claims in the district court. Moreover, no Equifax officer or employee has been named as a defendant in this action. 37 Finally, Clay contends that Nationwide violated section 1681q when it requested and received the 1981 mailing. Section 1681q provides: 38 Any person who knowingly and willfully obtains information on a consumer from a consumer reporting agency under false pretenses shall be fined not more than $5,000 or imprisoned not more than one year, or both. 39 We are at a loss, however, to find where Clay raised this issue prior to appeal. In his supplemental brief Clay states that his complaint fails to mention the 1981 mailing because he was unaware of it at the time he brought suit. He asserts that he became aware of the mailing during discovery. Although it would have been a simple matter for Clay to amend his pleadings to conform with this new information, he failed to do so before the district court entered summary judgment. Furthermore, we find nothing in the record that would raise a significant question concerning Nationwide's pretenses in obtaining the report copies.
40 The remainder of Clay's FCRA claims are based on acts of the defendants that occurred more than two years prior to Clay filing suit. The two-year FCRA statute of limitations may be tolled only where a defendant has materially and willfully misrepresented any information required under this subchapter to be disclosed to an individual and the information so misrepresented is material to the establishment of the defendant's liability to that individual under this subchapter. 15 U.S.C. Sec. 1681p. Since Clay has failed to establish, and the record does not show, any willful misrepresentation on the part of any of the defendants, we find that the remainder of Clay's FCRA claims are barred. We address briefly Clay's arguments to the contrary. 41 Clay contends that Equifax failed to comply with the disclosure requirements of section 1681g and that such failure constituted a material and willful misrepresentation within the meaning of section 1681p. Section 1681g provides in pertinent part: 42 Every consumer reporting agency shall, upon request and proper identification of any consumer, clearly and accurately disclose to the consumer: the nature and substance of all information ... in its files on the consumer at the time of the request. 43 (emphasis ours). Clay contends that his phone conversation with Equifax's receptionist constituted a request for disclosure within the meaning of section 1681g. 5 In deposition Clay described his phone call to the receptionist at Equifax: 44 Also, at the time, seeing this person [Equifax investigator] out around my house when I called Equifax, I just called and talked to the receptionist over there and I wanted to find out what was going on. And she said she didn't have any way of knowing, but she would have somebody get in touch with me. So, you know, that might have been a request to find out about it, but nobody ever called me back. 45 We hold that Clay's phone conversation does not constitute a request for disclosure within the meaning of section 1681g. We emphasize that a disclosure under section 1681g is required only upon proper request and identification of the consumer. Moreover, section 1681h(b) provides in pertinent part: 46 The disclosures required under section 1681g of this title shall be made to the consumer--... by telephone if he has made a written request, with proper identification, for telephone disclosure and the toll charge, if any, for the telephone call is prepaid by or charged directly to the consumer. 47 Clearly, Clay did not comply with the prerequisites for telephone disclosure. His casual and undocumented request was not sufficient to trigger section 1681g. 48 Clay also contends that his cause of action did not accrue until he knew of the alleged failure of Equifax to follow the requirements of the FCRA and the causal relationship between such failure and the subsequent injury. We find this argument wholly unpersuasive. Clay would have us interpret section 1681p to mean that even in the absence of any willful misrepresentation on the part of the defendant liability does not arise under the FCRA until the plaintiff has discovered the defendant's violation. That we will not do. 49 Finally, Clay contends that because the insurance companies had a special duty to him as their insured, the statute of limitations would not begin to run until Clay discovered they had violated the FCRA. Section 1681p, however, leaves no room for such an interpretation.