Edward Seamans v. Temple University
2014 U.S. App. LEXIS 3189
| 3rd Cir. | 2014Background
- Seamans, who received a Perkins Loan from Temple in 1989, defaulted in 1992 and the loan was placed for collection in 1992.
- In 2011 Seamans repaid the loan; after repayment, Temple reported loan-related data to TransUnion with limited history and without key delinquency/collection details.
- Seamans disputed the trade line in May 2011; Temple, via ACS, investigated by verifying Temple’s internal records rather than fully signaling disputed status or delinquency history.
- Temple’s post-dispute reporting continued to omit the date of first delinquency and the account’s collection status, potentially creating misleading credit reporting.
- District Court granted Temple summary judgment, holding HEA exempts furnisher reporting; Seamans appeals challenging both FCRA duties and HEA interplay.
- Court vacates and remands, holding HEA does not exempt furnishers from FCRA obligations and genuine issues of material fact exist regarding reasonableness of investigations and punitive damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does HEA § 1087cc(c)(3) exempt furnishers from FCRA aging-off rules? | HEA applies to CRA reporting of education loans, extending reporting; furnisher not exempt. | HEA implicitly compels omit/retain reporting to protect HEA loans from aging-off. | HEA does not exempt furnishers from FCRA aging-off rules. |
| Should Temple’s reporting after Seamans’ dispute include delinquency/collection history and dispute status? | FCRA requires complete and accurate post-dispute reporting; omissions mislead and cause harm. | HEA context and ACS practices justified limited reporting and avoid misclassification. | Genuine issues of material fact exist on completeness/accuracy of post-dispute reporting. |
| Did Temple’s post-dispute investigation meet the reasonable standard under 15 U.S.C. § 1681s-2(b)? | Investigations were inadequate, rushed, and failed to correct misleading reporting. | Investigations aligned with Temple/ACS practices and were reasonable under Cortez. | Material fact questions remain on reasonableness of investigation and corrective actions. |
| Can a furnisher’s failure to flag a dispute as disputed violate § 1681s-2(b) and support a private claim under § 1681o? | Failure to mark disputes properly constitutes inaccuracy under § 1681s-2(b). | CRA-notice framework limits private actions; dispute flagging is separate. | Genuine issues of material fact exist;§ 1681s-2(b) liability premised on failure to report dispute. |
| Is Seamans entitled to punitive damages for willful FCRA violations? | Temple’s unreasonable interpretation and policies show willful conduct. | No willful violation under Safeco given reasonable interpretation of HEA and FCRA. | Punitive damages vacated and remanded for further proceedings due to factual disputes. |
Key Cases Cited
- Cortez v. Trans Union, LLC, 617 F.3d 688 (3d Cir. 2010) (reasonableness balanced against harm to accuracy in reporting)
- Boggio v. USAA Fed. Sav. Bank, 696 F.3d 611 (6th Cir. 2012) (material inaccuracy can arise from omissions even if technically correct)
- Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147 (9th Cir. 2009) (misleading information can be inaccurate under § 1681s-2(b))
- Saunders v. Branch Banking & Trust Co. of Va., 526 F.3d 142 (4th Cir. 2008) (disputed nature can render data incomplete; private action via § 1681s-2(b))
- Van Veen v. Equifax Info. Servs., LLC, 844 F. Supp. 2d 599 (E.D. Pa. 2012) (reasonableness of furnisher procedures; district court opinions treated similarly)