Court Opinion

ID: 9499655
Source: CourtListenerOpinion
Date Created: 2023-08-05 17:53:56.267606+00
Date Added: 2024-06-11T17:59:38.438369
License: Public Domain

KOZINSKI, Circuit Judge,
dissenting in part:
I agree that it was reasonable for Expe-rian to rely on the Register entry in compiling its initial report on Dennis’s credit history. But once Dennis disputed the accuracy of that record, Experian was obligated to do more. When a consumer disputes an item on his credit report, the reporting agency must “conduct a reason*448able reinvestigation to determine whether the disputed information is inaccurate.” 15 U.S.C. § 1681i. As the Federal Trade Commission has commented, a “reasonable reinvestigation” at this stage requires the agency to “explain to the source [of the information] that the original statement has been disputed, state the consumer’s position, and then ask whether the source would confirm the information, qualify it, or accept the consumer’s explanation.” See Commentary on the Fair Credit Reporting Act, 55 Fed.Reg. 18,804, 18,823-24 (May 4,1990).
The “source” here was the Superior Court and the “information” in question was the purported judgment against Dennis. Confirming the accuracy of the information would have required Experian to find a document in the court file that backed up the Register notation and the trial minutes, thereby confirming that a judgment had in fact been rendered. This document would, of course, have been the judgment itself. Had Experian looked for such a document, it would have found no judgment — undermining rather than confirming the position Experian had taken in the original report.
Experian hired a public records vendor to review the case file, and the vendor found no judgment confirming the Register notation and the trial minutes. The reinvestigation did uncover a new piece of information: the written stipulation that expressly contradicted the Register entry. The document clearly states: “No judgment so long as payments made.... Entry of judgment stayed.” (Emphasis added). There was nothing ambiguous about this document; it plainly states that there is “[n]o judgment” as long as payments are made, and that “[e]ntry of judgment [is] stayed.” There is no subsequent document that purports to be a judgment against Dennis or lifts the stay. The stipulation was the only legally binding document in the ease file; the trial minutes and the Register notation merely purported to summarize what was agreed to in the stipulation. No reasonable person who reviewed these documents side by side could have concluded that there had been a judgment against Dennis. The absence of a judgment in the case file, when considered in light of the information contained in the stipulation, should have caused Experian to conclude that there was no judgment and that the Register entry had been made in error.
The majority mistakenly relies on a series of California cases which stand for the tautological proposition that a judgment is not entered until “it is actually entered in the judgment book.” Wilson v. Los Angeles County Employees Ass’n, 127 Cal.App.2d 285, 273 P.2d 824, 827 (1954); Maj. Op. at 446 (citing Wilson and other cases). These cases are not on point. They say only that a judgment is not of record until it is actually entered. Wilson, 273 P.2d at 827. They provide no support for the converse proposition that an entry in the Register can give life to a judgment that does not exist. To test this proposition, consider a situation where the clerk of the court mistakenly enters a judgment rendered in case A under the Register entry for case B. Nothing in the cases cited by the majority suggests that the erroneous entry in case B somehow creates a valid judgment against the defendant in that case.
The majority dismisses with a “But see ” the only California case directly on point, namely Gossman v. Gossman, 52 Cal.App.2d 184, 126 P.2d 178 (1942). Maj. Op. at 447. The Gossman court drew a sharp distinction between the rendition of the judgment, which is a judicial act, and the entry of the judgment, which is ministerial. Gossman, 126 P.2d at 185. The distinction is crucial to our case. A judgment can *449only be rendered as a result of a judicial or statutory process — a trial, a summary judgment order, a court-approved stipulation or the imposition of a default judgment. By contrast, the entry of the judgment is a ministerial function performed by the clerk of court. A ministerial act cannot create a judgment because it is not, in the words of Gossman, “a judicial act.” Because the person making the entry is not a judge, he lacks the authority to render a judgment. (Clerks are authorized to enter default judgments without prior judicial approval if defendant has been served and files no answer. Cal.Civ. Proc.Code § 585. But the judgment itself is authorized by statute, not by the clerk, who acts in a wholly ministerial capacity. See Baske v. Burke, 125 Cal.App.3d 38, 177 Cal.Rptr. 794, 799 (1981).)
Not only is Gossman consistent with the other cases — and hence undeserving of a “But see ” — it is entirely dispositive of our case because it makes clear that an erroneous entry in the Register cannot bring into existence a judgment that does not exist. Here, the judicial act was the stipulation, which was apparently accepted by the court, and the stipulation clearly stated that there was to be no judgment. Nothing that a ministerial employee in the clerk’s office might have done to misrepresent the content of that judicial document can possibly turn something that is not a judgment into a judgment.
Kira Williams, a specialist in Experian’s consumer affairs division, testified that Hogan gave Experian a copy of the stipulation as part of the reinvestigation. Hogan thus did its job of unearthing the “truffle.” See Maj. Op. at 447 n. 3. Williams was shown a copy of the document during her deposition. And, while she could not say whether anyone at Expe-rian had considered the stipulation during the course of the investigation, she opined that it would have made no difference. Williams characterized herself as the person “most knowledgeable” about Experi-an’s reinvestigation processes. It is, therefore, reasonable to infer that, even if Experian had been fully aware of the contents of the stipulation, it would have held fast to its original position.
Viewing these facts in a light most favorable to plaintiff, we must assume that Experian made a deliberate decision not to amend Dennis’s report or take further action, even after it obtained documentary proof that no judgment had been rendered. A decision to ignore relevant information during the course of a reinvestigation goes beyond mere negligence and is at the very least reckless. Whether it rises to the level of a “willful” failure to comply with the FCRA is another question — one that should be resolved by a jury. Compare 15 U.S.C. § 1681n(a) (subjecting persons who “wilfully” fail to comply with the FCRA to both compensatory and punitive damages), with 15 U.S.C. § 1681o(a) (subjecting persons who “negligently” fail to comply to only compensatory damages).
Credit reporting agencies perform a valuable service in our economy. They provide lenders with tools to control credit risks, enabling borrowers to access capital cheaply and quickly. But the consequences of error in this business are significant — as Dennis’s case demonstrates. Dennis had hoped to start a business, and he diligently paid his bills on time for years so that he would have a clean credit history when he sought financing for the venture. The only blemish on his credit report in April of 2003 was the erroneously reported judgment. But that was enough to cause several lenders to decline his applications for credit, dashing his hopes of starting a new business.
Recognizing the vast power credit reporting agencies have over the lives and livelihoods of all Americans, Congress required reporting agencies to reinvestigate *450an individual’s creditworthiness when they have reason to believe that a report is inaccurate. Congress left the precise scope of such investigations to the discretion of these agencies, trusting them to adopt adequate procedures to prevent and correct errors. But if the procedures employed by Experian in this case are representative of prevailing industry practice— and if other courts follow the hands-off approach taken by the majority in this case — Congress may come to regret its decision. The result may well be more intrusive regulation of the industry, increasing the agencies’ cost of doing business, to the detriment of the consumers and lenders who rely on their services.