Opinion ID: 813176
Heading Depth: 2
Heading Rank: 3

Heading: Safeco’s Applicability Absent a “Reading” of

Text: FCRA Fuges contends that the District Court erred by extending the “reasonable reading” defense articulated in Safeco to Southwest‟s conduct even though Southwest failed 14 Fuges also argues that the District Court erred at the summary judgment stage by failing to consider evidence that Southwest‟s activities come within the ambit of FCRA, and that the District Court was required to consider evidence of willful violations prior to concluding that Southwest was, under Safeco, free from liability for such violations. We disagree. Evidence of knowing violations of FCRA is relevant to a claim of willfulness, see supra note 13, but then Safeco‟s recklessness analysis would not apply. See Safeco, 551 U.S. at 56-57 (noting that knowing violations of FCRA are willful by definition.) When a plaintiff does not allege knowing violations of FCRA, however, the claim must be based on recklessness and Safeco‟s “reasonable interpretation” test applies. In those “recklessness” cases, whether a defendant has actually violated FCRA is simply not the issue. See id. at 68 (noting that, even “if Safeco did violate the statute, the company was not reckless in falling down in its duty”); id. at 69 (noting that “Safeco‟s reading of the statute, albeit erroneous, was not objectively unreasonable”); id. at 70 (“Safeco‟s misreading of the statute was not reckless.”). 17 to read or interpret FCRA in the first instance. The District Court focused its analysis on the interpretation of the terms “consumer reporting agency” and “consumer report.” (See App. at 9 (discussing components of the CRA definition in 15 U.S.C. § 1681a(f)).) The Court did not specifically address the question of whether Southwest had adopted a particular interpretation of those terms prior to preparing the Fuges property report or prior to the commencement of this lawsuit. The timing, however, is not dispositive. In Long v. Tommy Hilfiger U.S.A., 671 F.3d 371 (3d Cir. 2012), we expressly rejected the argument that a defendant is required to have a pre-litigation “reading” of FCRA to avail itself of the Safeco “reasonable interpretation” defense. 671 F.3d at 377. Long involved the interpretation of the phrase “expiration date” in a FCRA provision governing the disclosure of credit card information. Like Fuges, the plaintiff in Long argued that the defendant “did not actually rely on any interpretation of [FCRA] and instead disregarded the statute altogether and is only now seizing upon a post hoc „objectively reasonable‟ interpretation in order to shield itself from liability.” Id. (citation and internal quotation marks omitted). That argument struck us as being, in essence, an assertion about the defendant‟s intent or subjective bad faith, and, as such, it was “expressly foreclosed by Safeco,” because such evidence “is irrelevant when there is an objectively reasonable interpretation of the statute that would allow the conduct in question.” Id. (citing Safeco, 551 U.S. at 70 n.20). Fuges argues that Long and other cases in which defendants were found to have relied on a reasonable interpretation of FCRA may be distinguished from two postSafeco cases in which there was “no evidence whatsoever of a 18 [FCRA] „reading‟ by the defendant,” and in which the Safeco defense did not apply. (See Appellant‟s Opening Br. at 40 (citing Birmingham v. Experian Info. Solutions, Inc., 633 F.3d 1006 (10th Cir. 2011); Saunders v. Branch Banking & Trust Co. of Va., 526 F.3d 142 (4th Cir. 2008)).) However, in neither of those cases was the interpretation of specific FCRA terms at issue.15 Fuges also notes that in most of the post-Safeco cases, such as Long, Shlatichman v. 1-800-Contacts, Inc., 615 F.3d 794 (7th Cir. 2010), and Levine v. World Financial Network National Bank, 554 F.3d 1314 (11th Cir. 2009), the “defendants acknowledged ... FCRA‟s regulatory existence, and attempted to comply with it on some level.” (Appellant‟s Opening Br. at 40.) However, in each of those cases, the defendant also acknowledged that it was subject to FCRA, and the only disputed issue was the interpretation or 15 The dispute in Birmingham was whether a CRA had willfully violated 15 U.S.C. § 1681e(b) by failing to follow reasonable procedures to assure the accuracy of its consumer reports, and whether it had violated 15 U.S.C. § 1681i(a) because it did not adequately address a consumer‟s concerns about the accuracy of his credit file. See Birmingham, 633 F.3d at 1009. However, the defendant‟s reading of the relevant FCRA provisions was not at issue. The Saunders court did not apply the Safeco “reasonable interpretation” test because a jury had already found willful FCRA violations based on a pre-Safeco instruction that the defendant had to have acted “knowingly and intentionally.” See Saunders, 526 F.3d at 151 & n.4 (noting that the jury instruction had placed a greater burden on the plaintiff than the Safeco test, and that he had met that burden). 19 applicability of a particular provision of FCRA. In the present case, based on its interpretation of the definitions of “consumer report” and “consumer reporting agency,” Southwest has urged that it is not subject to FCRA at all. In summary, Southwest does not lose the potential protection of the “reasonable interpretation” defense, even if it never actually interpreted FCRA prior to the commencement of this lawsuit. Safeco requires only that “the company‟s reading of the statute is objectively reasonable,” Safeco, 551 U.S. at 70 n.20 (emphasis added), and that the interpretation that would allow the conduct in question is “an interpretation that could reasonably have found support in the courts,” id. Safeco does not require that the defendant actually have made such an interpretation at any particular point in time.