Court Opinion

ID: 4578646
Source: CourtListenerOpinion
Date Created: 2020-10-20 17:00:30.872545+00
Date Added: 2024-06-11T08:47:41.416927
License: Public Domain

FOR PUBLICATION

   UNITED STATES COURT OF APPEALS
        FOR THE NINTH CIRCUIT

 CHRISTOPHER MARINO; JOSHUA E.                     No. 19-15530
 HARDIN; KRISTEN J. HARDIN,
               Plaintiffs-Appellants,                D.C. No.
                                                  3:16-cv-00200-
                     v.                            MMD-WGC

 OCWEN LOAN SERVICING LLC,
              Defendant-Appellee.                    OPINION

        Appeal from the United States District Court
                 for the District of Nevada
       Miranda M. Du, Chief District Judge, Presiding

           Argued and Submitted February 7, 2020
                 San Francisco, California

                     Filed October 20, 2020

Before: Richard A. Paez and Carlos T. Bea, Circuit Judges,
          and Lynn S. Adelman, * District Judge.

                  Opinion by Judge Adelman;
                  Concurrence by Judge Bea

     *
       The Honorable Lynn S. Adelman, United States District Judge for
the Eastern District of Wisconsin, sitting by designation.
2            MARINO V. OCWEN LOAN SERVICING

                          SUMMARY **

                  Fair Credit Reporting Act

    The panel affirmed the district court’s summary
judgment in favor of the defendant in an action alleging a
violation of the Fair Credit Reporting Act’s prohibition
against obtaining a consumer credit report without a
permissible purpose.

    Plaintiffs alleged that defendant Ocwen Loan Servicing,
LLC, willfully violated the FCRA when it obtained credit
reports about consumers whose mortgage loans had been
discharged in bankruptcy. The district court did not consider
whether Ocwen’s conduct amounted to a violation of the
FCRA. Rather, it found that, as a matter of law, any
violation by Ocwen could not have been willful; thus,
plaintiffs could not recover statutory or punitive damages.

    The panel held that, to show that a violation was willful,
a plaintiff must show that the defendant either knowingly
violated the FCRA or recklessly disregarded the Act’s
requirements. Ocwen argued that because the liens on the
plaintiffs’ homes survived their bankruptcies, and because
the plaintiffs continued to hold title to their homes, Ocwen
and the plaintiffs continued to have credit relationships that
justified Ocwen’s periodic review of their credit reports.
Among other FCRA provisions, Ocwen cited 15 U.S.C.
§ 1681b(a)(3)(A), which provides that a consumer report
may be obtained when the user “intends to use the

    **
       This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
           MARINO V. OCWEN LOAN SERVICING                  3

information in connection with a credit transaction involving
the consumer on whom the report is to be furnished and
involving the extension of credit to, or review or collection
of an account of, the consumer.”

    First, for the purpose of preventing the law in the area
from stagnating, the panel considered whether Ocwen
committed violations of the FCRA. Analogizing to the field
of qualified immunity, the panel stressed that courts should
be reluctant to skip the threshold question of whether a
defendant violated the FCRA. The panel concluded that
Ocwen was permitted under § 1681b(a)(3)(A) to review the
plaintiffs’ accounts and credit reports to determine whether
it could offer them alternatives to foreclosure, and it
therefore did not violate the Act.

  Second, the panel agreed with the district court that
Ocwen did not willfully violate the FCRA.

    Judge Bea concurred in the result and in the reasoning on
which that decision was based: to affirm the district court’s
grant of summary judgment because plaintiffs did not raise
a triable issue of fact as to whether Ocwen recklessly or
willfully violated the FCRA. Judge Bea wrote that he would
not include discussion of whether Ocwen’s conduct
constituted a statutory violation.

                        COUNSEL

Scott C. Borison (argued), Legg Law Firm LLP, San Mateo,
California; Peter A. Holland, Holland Law Firm P.C.,
Annapolis, Maryland; for Plaintiffs-Appellants.
4          MARINO V. OCWEN LOAN SERVICING

John Lynch (argued), Troutman Sanders LLP, Virginia
Beach, Virginia; Harrison S. Kelly and Michael E. Lacy,
Troutman Sanders LLP, Richmond, Virginia; Gary E.
Schnitzer, Kravitz Schnitzer Sloane and Johnson, Las
Vegas, Nevada; for Defendant-Appellee.

                         OPINION

ADELMAN, District Judge:

    The Fair Credit Reporting Act (“FCRA”) forbids a
person from obtaining a consumer credit report without a
permissible purpose. See 15 U.S.C. § 1681b(f)(1). But a
creditor who violates this provision is not necessarily liable
to the consumer. Under the FCRA, only negligent or willful
violations are actionable; a consumer may recover
compensatory damages for negligent violations and
statutory and punitive damages for willful violations. See
15 U.S.C. §§ 1681n, 1681o. In the present case, the plaintiffs
allege that defendant Ocwen Loan Servicing LLC willfully
violated the FCRA when it obtained credit reports about
consumers whose mortgage loans had been discharged in
bankruptcy. The district court granted summary judgment to
Ocwen, finding that, as a matter of law, any violation by
Ocwen could not have been willful. We affirm. However, we
also stress that, to prevent the law in this area from
stagnating, courts should be reluctant to skip to the
negligence or willfulness issue without answering the
threshold question of whether the defendant violated the
FCRA.

                              I.

   Ocwen is a servicer of mortgage loans. Plaintiffs
Christopher Marino and Josh and Kristin Hardin owned
            MARINO V. OCWEN LOAN SERVICING                       5

homes subject to mortgages serviced by Ocwen. Each
plaintiff filed for bankruptcy and received a discharge of his
or her personal liability for the mortgage debt. However, the
liens on the plaintiffs’ homes survived their bankruptcies,
and the plaintiffs continued to hold title to the properties.
Following the discharges, Ocwen obtained the plaintiffs’
credit reports. In the district court, the plaintiffs alleged that,
in light of the discharges, Ocwen could not have had
permissible reasons to obtain their reports. The plaintiffs
further alleged that, by obtaining the reports without
permissible reasons, Ocwen willfully violated the FCRA and
therefore was liable for statutory and punitive damages.

    Under the FCRA, to show that a violation was willful, a
plaintiff must show that the defendant either knowingly
violated the Act or recklessly disregarded the Act’s
requirements. See Safeco Ins. Co. of Am. v. Burr, 551 U.S.
47, 69 (2007). To show that a defendant recklessly
disregarded the Act’s requirements, a plaintiff must show
that the defendant “ran a risk of violating the law
substantially greater than the risk associated with a reading
[of the Act] that was merely careless.” Id.

     Ocwen moved for summary judgment. It argued that
because the liens on the plaintiffs’ homes survived their
bankruptcies, and because the plaintiffs continued to hold
title to their homes, Ocwen and the plaintiffs continued to
have credit relationships that justified Ocwen’s periodic
review of their credit reports. Ocwen cited several provisions
of the FCRA in support of its claim that it had a permissible
purpose to obtain the reports. See 15 U.S.C.
§ 1681b(a)(3)(A), (E) & (F). For purposes of this appeal, we
will focus on only one of these provisions, which appears in
subsection (a)(3)(A). It provides that a consumer report may
be obtained when the user “intends to use the information in
6          MARINO V. OCWEN LOAN SERVICING

connection with a credit transaction involving the consumer
on whom the report is to be furnished and involving the
extension of credit to, or review or collection of an account
of, the consumer.” 15 U.S.C. § 1681b(a)(3)(A).

    In deciding the motion for summary judgment, the
district court relied primarily on this court’s unpublished
opinion in Vanamann v. Nationstar Mortgage, LLC, 735 F.
App’x 260 (9th Cir. 2018). In Vanamann, the plaintiff
alleged that Nationstar, a mortgage servicer, willfully
violated the FCRA by obtaining credit reports about her after
her mortgage debt had been discharged in bankruptcy. For
purposes of the appeal, we “assum[ed] that Nationstar lacked
a permissible purpose for checking [the plaintiff’s] credit”
Id. at 262. But we concluded that the district court had
properly granted Nationstar’s motion for summary judgment
because the plaintiff could not show that any violation was
willful. Id. In this regard, we reasoned that Nationstar could
have reasonably believed that it had a permissible purpose
for obtaining the plaintiff’s credit report. We wrote:

       The Act contains no provision addressing
       bankruptcy discharges for Nationstar to
       interpret, much less interpret recklessly. The
       plain text of the Act does not prohibit a
       mortgage servicer from obtaining a
       consumer’s credit report after a bankruptcy
       court’s discharge of the consumer’s mortgage
       debt. Nor have we interpreted the Act to
       prohibit that practice. And the Act does not
       require that a consumer have personal
       liability on a debt in order for a credit check
       to be authorized. The provision authorizing
       credit checks for “review . . . of an account”
       “in connection with a credit transaction”—
              MARINO V. OCWEN LOAN SERVICING                            7

         however broad or narrow that provision may
         be—permits Nationstar’s interpretation.
Id. Based on Vanamann, the district court concluded that
Ocwen could not have willfully violated the FCRA.

    On appeal, the plaintiffs contend that summary judgment
on the question of willfulness was improper as to them 1
because they “surrendered and vacated” the mortgaged
premises before Ocwen obtained their credit reports. They
contend that, because they no longer lived in the homes and
their personal liability for the mortgage debts had been
discharged, Ocwen couldn’t possibly have had legitimate
reasons to continue reviewing their credit reports. In
response to this argument, Ocwen points to several reasons
for continuing to review the plaintiffs’ credit, including to
determine whether the plaintiffs were eligible for
alternatives to foreclosure or other “loss mitigation
opportunities.” Ocwen also contends that, even if its belief
that it had permissible reasons to check the plaintiffs’ credit
was mistaken, it was not based on a reckless interpretation
of the statute or an intentional misreading of the statute.
Therefore, Ocwen contends, the district court properly
granted summary judgment on the issue of willfulness.

                                   II.

   We review the district court’s grant of summary
judgment de novo. See Carson Harbro Village Ltd. v.

    1
       In the district court, there were eight plaintiffs, and those eight
plaintiffs sought to represent a class of similarly situated mortgagors.
However, only three plaintiffs have appealed, and they no longer seek to
represent a class. Thus, the only issue on appeal is whether the district
court properly granted summary judgment on the claims of the three
plaintiffs-appellants.
8           MARINO V. OCWEN LOAN SERVICING

Unocal Corp., 270 F.3d 863, 870 (9th Cir. 2001). Summary
judgment is appropriate when, based on the evidence in the
record, no reasonable fact finder could return a verdict for
the nonmoving party. Fed. R. Civ. P. 56; Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248–50 (1986).

    Because the plaintiffs seek only statutory and punitive
damages, to avoid summary judgment, they must show that
their evidence permitted a reasonable fact finder to reach two
conclusions: (1) that Ocwen’s post-discharge credit inquiries
violated the FCRA, and (2) that Ocwen’s violations were
willful. The district court addressed only the willfulness
issue. It did not separately consider whether Ocwen’s
conduct amounted to a violation of the FCRA.

     We agree with the district court that the plaintiffs cannot
show that a reasonable fact finder could conclude that
Ocwen’s alleged violations were willful. But before we turn
to the willfulness issue, we pause to consider whether Ocwen
committed violations of the FCRA in the first place. We do
this is to prevent the law in this area from stagnating. As we
noted above, a consumer may succeed on a claim under the
FCRA only if he or she shows that the defendant’s violation
was negligent or willful. See 15 U.S.C. §§ 1681n, 1681o. To
prove a negligent violation, a plaintiff must show that the
defendant acted pursuant to an objectively unreasonable
interpretation of the statute. See Syed v. M-I LLC, 853 F.3d
492, 505 (9th Cir. 2017). To prove a willful violation, a
plaintiff must show not only that the defendant’s
interpretation was objectively unreasonable, but also that the
defendant ran a risk of violating the statute that was
substantially greater than the risk associated with a reading
that was merely careless. Safeco, 551 U.S. at 69. Under
either the negligence or willfulness standard, when the
applicable language of the FCRA is “less than pellucid,” id.
           MARINO V. OCWEN LOAN SERVICING                   9

at 70, a defendant will nearly always avoid liability so long
as an appellate court has not already interpreted that
language. Thus, in nearly every case involving unclear
statutory language, an appellate court may dispose of the
appeal by concluding that the defendant did not negligently
or willfully violate the statute. But if the appellate court
addresses only the negligence or willfulness issue and leaves
the question of statutory interpretation undecided, then the
question of statutory interpretation will likely never be
answered.

    The problem is analogous to the problem in the field of
qualified immunity that led the Supreme Court, for a time,
to require that courts first determine whether a plaintiff had
suffered a violation of a constitutional right before making
the oft-dispositive determination of whether that right was
clearly established at the time of the misconduct. See Saucier
v. Katz, 533 U.S. 194, 201 (2001). Although this two-step
sequence is no longer mandatory, see Pearson v. Callahan,
555 U.S. 223, 232 (2009), the Court continues to recognize
that it is often beneficial because it “promotes the
development of constitutional precedent and is especially
valuable with respect to questions that do not frequently
arise in cases in which a qualified immunity defense is
unavailable,” id. at 236. Similarly, here, addressing whether
the defendant violated the FCRA before turning to the issues
of negligence or willfulness promotes the development of
precedent on questions of statutory interpretation that do not
frequently arise in cases in which issues of negligence or
willfulness are absent. We note that the Supreme Court
implicitly endorsed this approach by following it in Safeco—
the case in which it interpreted the FCRA’s willfulness
standard. The Court first answered the “antecedent question”
of statutory interpretation that applied to the case. 551 U.S.
10           MARINO V. OCWEN LOAN SERVICING

at 60–67. Only then did it address whether the defendants’
alleged violations were willful. Id. at 67–70. 2

    For these reasons, we encourage courts in this circuit to
determine whether the defendant committed a violation of
the FCRA before turning to questions of negligence and
willfulness. However, this is not an ironclad rule, and
circumstances may arise where the issues of negligence or
willfulness should be resolved first. For example, the factual
record might not be sufficiently developed to enable the
court to determine whether the defendant committed an
FCRA violation, but the court might still be able to
determine that any violation that occurred could not have
been negligent or willful. The important point is that, when
feasible, courts should resolve disputed issues of statutory
interpretation before disposing of the case for lack of a
negligent or willful violation.

                                  A.

    We thus turn to the antecedent question of whether the
plaintiffs have demonstrated that Ocwen lacked a
permissible purpose for obtaining their credit reports after
their mortgage debts had been discharged. The plaintiffs
contend that they have shown this (or at least demonstrated
the existence of a genuine factual dispute) because,
following their discharges, Ocwen could do nothing except

     2
       Technically, the Court did not determine whether one of the
defendants, Safeco, violated the FCRA, but instead disposed of the claim
against it on willfulness grounds. However, that was only because the
factual record did not permit the Court to determine whether, under the
Court’s interpretation of the disputed FCRA provision, Safeco
committed a violation. See Safeco, 551 U.S. at 68, 71. The Court still
answered the question of statutory interpretation that was antecedent to
the willfulness inquiry. See id. at 60–67.
            MARINO V. OCWEN LOAN SERVICING                   11

foreclose its liens, and therefore Ocwen had no legitimate
use for the plaintiffs’ credit reports, which were not relevant
to foreclosure.

     We think the plaintiffs’ argument falters at the very first
step, for they have not shown that, at the time Ocwen
obtained their credit reports, Ocwen could do nothing except
foreclose its liens. Although the plaintiffs’ personal liability
for the mortgage debts had been discharged, Ocwen was not
prohibited from inquiring whether the plaintiffs wished to
explore alternatives to foreclosure, such as entering into a
new loan on different terms or a payment plan that might
allow the plaintiffs to keep their homes. Indeed, the
discharge provisions of the bankruptcy code state that the
discharge injunction does not apply to a secured creditor’s
efforts to seek “periodic payments associated with a valid
security interest in lieu of pursuit of in rem relief to enforce
the lien.” See 11 U.S.C. § 524(j)(3). Along with its motion
for summary judgment, Ocwen filed a declaration in which
it explained that one of the reasons it reviewed the plaintiffs’
credit reports was to determine whether the plaintiffs were
eligible for one of these alternatives to foreclosure. Ocwen
explained that it sought to evaluate the plaintiffs “for loss
mitigation options, such as loan modification, HAMP [i.e.,
the federal government’s Home Affordable Modification
Program], short sale, deed-in-lieu of foreclosure, second
mortgage, and cash-for keys.” Decl. of Derrick Raleigh ¶ 30.

    The plaintiffs do not contend that evaluating a debtor for
alternatives to foreclosure is not a permissible reason for
obtaining a credit report under § 1681b(a)(3). And it seems
clear to us that using a credit report for this purpose fits
within the scope of § 1681b(a)(3)(A): it is using the
information “in connection with a credit transaction
involving the consumer . . . and involving the extension of
12          MARINO V. OCWEN LOAN SERVICING

credit to, or review or collection of an account of, the
consumer.” Obviously, mortgage debt is the product of a
credit transaction, and that debt survived the plaintiffs’
bankruptcies, at least to the extent of the value of the
collateral. Ocwen’s exploring alternatives to foreclosure
would have been part of a review of, or an attempt to collect,
the account associated with the surviving lien.

    The plaintiffs seem to offer two responses to Ocwen’s
claim that it could permissibly use the information in the
credit reports to evaluate them for alternatives to foreclosure.
First, the plaintiffs assert that, following their discharges,
they never expressed interest in alternatives to foreclosure.
But we fail to see why this should matter. In evaluating the
plaintiffs for eligibility for alternatives to foreclosure,
Ocwen would have been reviewing the plaintiffs’
outstanding accounts and attempting to collect the value of
the collateral, which it was permitted to do even after the
plaintiffs received discharges. Thus, even if the plaintiffs did
not request alternatives to foreclosure, Ocwen could have
explored those options and, if the plaintiffs qualified for an
alternative, presented them with an offer in lieu of
foreclosure. Nothing in § 1681b(a)(3)(A) suggests that a
consumer must request an alternative to foreclosure before
the creditor may review the consumer’s account to determine
whether he or she is eligible.

    Second, the plaintiffs claim that, by the time Ocwen
obtained their credit reports, they had “surrendered and
vacated” their properties. Here, however, we note that the
plaintiffs do not explain what they mean by “surrendered,”
and that they have pointed to no evidence in the record from
which a finder of fact could conclude that the plaintiffs
vacated their properties before Ocwen obtained their credit
reports. In any event, we will assume that the plaintiffs
           MARINO V. OCWEN LOAN SERVICING                  13

vacated their homes. We will also assume that, by
“surrendered,” the plaintiffs mean that they expressed no
interest in contesting or avoiding foreclosure. Still, it does
not follow that Ocwen did not have a reason to review their
accounts to determine if they qualified for alternatives to
foreclosure. Ocwen could have reasonably thought that even
a debtor that moved out of his or her home might be
interested in returning if Ocwen made a sufficiently
attractive offer. Thus, Ocwen was permitted to review the
plaintiffs’ accounts—and their credit reports—to determine
whether it could offer them alternatives to foreclosure.

    In reaching this conclusion, we do not mean to suggest
that there is never a point at which a mortgage servicer or
lender will lack a permissible purpose to review the credit
report of a consumer whose mortgage debt has been
discharged. We imagine that if a consumer clearly informs
the servicer or lender that he or she has no interest in
avoiding foreclosure, then the servicer or lender might lack
a permissible purpose for continuing to review the
consumer’s credit. But to resolve this case, we do not need
to identify the precise point at which review of the
consumer’s credit must stop. All we hold is that, based on
the evidence in the summary judgment record, a reasonable
finder of fact could not conclude that Ocwen lacked a
permissible purpose for obtaining the plaintiff’s credit
reports.

                             B.

    Because we conclude that the plaintiffs have not shown
that Ocwen violated the FCRA, the issue of willfulness is
essentially moot. However, for the sake of completeness,
and at the risk of stating the obvious, we note our agreement
with the district court that Ocwen did not willfully violate
the FCRA. Because we have interpreted the FCRA to mean
14            MARINO V. OCWEN LOAN SERVICING

what Ocwen thought it means, Ocwen could not have
intentionally or recklessly misinterpreted the Act.

                                  III.

  The district court’s grant of summary judgment to
Ocwen is AFFIRMED.

BEA, Circuit Judge, concurring:

    I concur in the result and in the reasoning on which that
decision is based: to affirm the district court’s grant of
summary judgment because Plaintiffs, who seek statutory
and punitive, but not compensatory, damages, did not
adduce evidence sufficient to raise a triable issue of fact as
to the material issue—whether Ocwen recklessly or willfully
violated the FCRA.

    I concur separately because I would not include
discussion of two matters not essential to the determination
of this case. First, the majority decides that under two set of
facts Plaintiffs—one supported by the record and one
Plaintiffs argued but did not prove—Ocwen’s conduct did
not constitute a statutory violation of the FCRA, a question
which is not relevant to the decision of the case before us. 1

     1
      The majority discusses Plaintiffs’ two arguments: that Ocwen was
not permitted to pull their credit reports because it had no need to
evaluate their credit since (i) Plaintiffs never expressed interest in
alternatives to foreclosure; and (ii) Plaintiffs “surrendered and vacated”
their properties before Ocwen obtained their credit reports, though
Plaintiffs did not provide any record evidence to support this argument.
Op. at 12–13. The majority decides “Ocwen was permitted to review the
             MARINO V. OCWEN LOAN SERVICING                         15

Second, the majority imagines a hypothetical, which
Plaintiffs did not plead nor prove, that the majority states
may constitute a statutory violation of the FCRA. 2

    First, the issue of whether there may have been a
statutory violation of the FCRA is not necessary or relevant
to the decision of the case before us. So, none of the
scenarios, neither the two argued by Plaintiffs nor the one
imagined by the majority, are related to the basis on which
this case was decided, whether Ocwen’s conduct constituted
a reckless or willful violation of the FCRA.

    Second, the majority states that “when the applicable
language of the FCRA is less than pellucid, a defendant will
nearly always avoid liability so long as an appellate court has
not already interpreted that language.” Op. at 8–9 (internal
quotation marks and citation omitted). However, the
majority has not identified what precise language of the
FCRA is not “pellucid” but needs an appellate court’s
statutory interpretation. Neither has the majority explained
how the language could be made “pellucid.” Further, when
the majority describes a hypothetical scenario and suggests
a possible conclusion about whether the conduct in that
hypothetical would violate the FCRA, it is not an exercise in
statutory interpretation in this case. It seems a roadmap for
plaintiff counsel in a hoped-for future lawsuit. It is the
application of the statute in the present case to a hypothetical
case. Ironically, the majority’s confidence in suggesting a

plaintiffs’ accounts—and their credit reports—to determine whether it
could offer them alternatives to foreclosure.” Op. at 13.

    2
      “We imagine that if a consumer clearly informs the servicer or
lender that he or she has no interest in avoiding foreclosure, then the
servicer or lender might lack a permissible purpose for continuing to
review the consumer’s credit.” Op. at 13.
16          MARINO V. OCWEN LOAN SERVICING

conclusion to a hypothetical illustrates quite plainly that it
does find the statute’s language “pellucid”; clear enough that
a court would be able to determine whether a plaintiff may
recover in that different factual scenario.

     Third, the majority notes that the statute does not give
plaintiffs many opportunities to recover, so defendants “will
nearly always avoid liability”. This is not an indication of a
“stagnant” statute, but rather one with clear requirements
that may be difficult for a plaintiff to meet and establish by
proof. The majority may think the drafters of the statute did
an incomplete job or should state a better policy, but courts
should resist the temptation to publish unrequested advice to
Congress. I do not think it is the task of the court to give
guidance to the industry or the Bar or to ensure the law does
not “stagnate” by way of dicta. Nor is it a particularly good
idea. Congress is elected to do so. We are appointed to
decide “Cases” or “Controversies.” U.S. Const. art. III, § 2,
cl. 1. “[I]f it is not necessary to decide more, it is necessary
not to decide more.” PDK Labs., Inc. v. Drug Enforcement
Admin., 362 F.3d 786, 799 (C.A.D.C. 2004) (Roberts, J.,
concurring in part and concurring in judgment).

     Fourth, the majority cites Vanamann v. Nationstar
Mortgage, LLC, 735 F. App’x 260 (9th Cir. 2018), and
decides this case with similar reasoning, but it does not
follow Vanamann’s short, direct path from issue to statute to
application to conclusion. Instead, the majority discusses
and decides what it terms “the antecedent question” of
statutory violation for award of compensable damages—a
question not necessary to decide in this case because
Plaintiffs sought only statutory and punitive damages—and
it encourages other courts in this circuit to do the same. Op.
at 9–10. It cites the Supreme Court’s decisions in Saucier v.
           MARINO V. OCWEN LOAN SERVICING                  17

Katz, 533 U.S. 194 (2001) and Safeco Ins. Co. of Am. v. Burr,
551 U.S. 47 (2007) to support this approach. Op. at 9–10.

    In Saucier, the Court employed a two-step approach to
decide the qualified immunity issue, first deciding whether
an official’s conduct violated a constitutional right and then
whether that right was clearly established. Saucier, 533 U.S.
at 201. The Court’s approach in Saucier does not provide
support for the majority’s approach in this case for two
reasons: analysis of the first question may have assisted the
Court in deciding the second question; and the Court
analyzed provisions of the Constitution, not statutory
language such as the FCRA.

     The Court stated one reason for its approach in Saucier
is that analysis of the first question may inform the analysis
of the second question. Saucier, 533 U.S. at 201 (“In the
course of determining whether a constitutional right was
violated on the premises alleged, a court might find it
necessary to set forth principles which will become the basis
for a holding that a right is clearly established.”). The
majority here does not contend that analysis of statutory
violation of the FCRA will ever inform analysis of whether
the violation was done recklessly or willfully. Vanamann
provides a useful model and assumes the conduct violated
the FCRA and then decides the case, as we have here, based
on lack of evidence of recklessness or willfulness.

    The majority notes the Court applied a similar approach
interpreting the FCRA in Safeco. The text of the statute the
Court found “less-than-pellucid” in Safeco was quite
different from the text involved here. In Safeco, the text
involved whether a customer must be notified when the rate
an insurance company quoted the customer was adversely
affected by the contents of the customer’s credit report.
Safeco, 551 U.S. at 53 (discussing 15 U.S.C. § 1681m (a),
18          MARINO V. OCWEN LOAN SERVICING

which requires notice of an adverse action based on
information in a credit report; and 15 U.S.C.
§ 1681a(k)(1)(B)(i), which defines “adverse action”). In
contrast, here the issue is whether Ocwen is permitted to
obtain a customer’s credit report pursuant to 15 U.S.C.
§ 1681b(a)(3)(A), not what the entity must do if the credit
report adversely affects the rate it quotes the customer. The
Safeco Court did not find this language regarding obtaining
a credit report to be “less than pellucid” and in need of any
type of interpretation, simply because the statutory language
involved here was not involved in Safeco.

    The majority cites Safeco for the proposition that the
Court first answered the “antecedent question” of violation
of the Act before it went to the issue of whether there was
willfulness. In Safeco, the Court found that GEICO had not
violated the FCRA because it had not taken adverse action
and so had not been required to give notice. Safeco, 551 U.S.
at 67–68. The Court found that SAFECO had probably
violated the FCRA by a mistaken reading of the Act, but that
this mistaken reading was at worst careless, and certainly not
willful, as those concepts were developed at common law
and incorporated in the FCRA. Id. In neither case, did the
Court concern itself with whether the law was “stagnating”,
as the Opinion puts it, if plaintiffs’ claims were denied, as
does the Opinion. Op. at 9 (“Thus, in nearly every case
involving unclear statutory language, an appellate court may
dispose of the appeal by concluding the defendant did not
negligently or willfully violate the statute.”). In neither case
did the Court lay out a hypothetical, through an effort of
“development of precedent”, (Op. at 9), to provide a
roadmap to potential plaintiffs.

    The citation of Saucier v. Katz is inapposite as a basis for
the “development of precedent” on questions of statutory
            MARINO V. OCWEN LOAN SERVICING                  19

interpretation. Saucier was dealing with what constitutional
rights existed and were clearly established enough to deprive
state actors of Qualified Immunity as a defense. Saucier,
533 U.S. at 197. What are constitutional rights in concrete
situations, based on such indeterminate concepts as Due
Process and Equal Protection, are apt for development by
precedent. What are statutory rights should be determined
by Congress.

    But Saucier v. Katz is inapposite for a different reason:
it has been modified by Pearson v. Callaghan so that most,
if not all, claims of violations of constitutional rights are
these days determined by application of Qualified Immunity,
inhibiting somewhat the creation of novel constitutional
rights.

    The majority states its purpose in employing this
approach is to “promote[] the development of precedent on
questions of statutory interpretation.” Op. at 9. There are
two reasons to reject the majority’s approach. First, I fail to
see how the majority opinion develops precedent on how to
accomplish statutory interpretation. Beside no citation to the
language of the statute which is claimed to be “less than
pellucid” there is no mention of which, if any, canons of
statutory interpretation are to be used. Chevron, U.S.A., Inc.
v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 843 n.9, 104 S.
Ct. 2778, 2782 n.9, 81 L. Ed. 2d 694 (1984) (“If a court,
employing traditional tools of statutory construction,
ascertains that Congress had an intention on the precise
question at issue, that intention is the law and must be given
effect.”). Second, laying out a roadmap of how plaintiffs
might prevail in a hypothetical case, not yet decided, is not
precedent on how the FRCA should be interpreted.

    It is particularly inadvisable to decide an unrelated issue
or a hypothetical case not presently before the court in the
20           MARINO V. OCWEN LOAN SERVICING

Ninth Circuit, where dicta in panel opinions may become the
binding law of the circuit. See United States v. Johnson,
256 F.3d 895, 914 (9th Cir. 2001) (“We hold, instead, that
where a panel confronts an issue germane to the eventual
resolution of the case, and resolves it after reasoned
consideration in a published opinion, that ruling becomes the
law of the circuit, regardless of whether doing so is
necessary in some strict logical sense.”). Perhaps the
Johnson rule as to adoption of dicta as precedent given
“reasoned consideration” does not apply to the hypothetical
suggested by the majority as a possible occasion of plaintiff
recovery, because the majority was not “confront[ing] an
issue germane to the eventual resolution of the case.” But
rather than foment claims and arguments as to whether the
majority’s dicta gave “reasoned consideration” to an issue,
or whether the posited hypothetical was “germane” to
eventual resolution of this case, it would be better to edit out
that hypothetical.

     Reticence to expatiate in dicta is always advisable.