Ross v. Federal Deposit Insurance
2010 U.S. App. LEXIS 22454
| 4th Cir. | 2010Background
- Ross sued WaMu for false reporting to CRAs and unfair debt collection practices under FCRA and NCUDTPA.
- Ross’s FCRA claims were time-barred by the Act’s two-year statute of limitations (15 U.S.C. § 1681p).
- Ross alleged WaMu’s reporting to CRAs was improper and caused credit injury; WaMu admitted error and later corrected it.
- Ross pursued state-law NCUDTPA claims (Article 1 and Article 2) to circumvent FCRA preemption and limitations.
- Court held NCUDTPA Article 1 preempted by FCRA § 1681t(b)(1)(F) and that § 1681h(e) cannot salvage the NCUDTPA claim absent malice or willful injury, which Ross failed to prove.
- Ross’s remaining NCUDTPA (Article 2) claim failed for lack of proximate causation linking WaMu’s debt-collection calls to damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does FCRA preempt Ross’s NCUDTPA Article 1 claim? | Ross asserts § 75-1.1 regulates matters governed by § 1681s-2. | WaMu argues § 1681t(b)(1)(F) preempts state-law claims about furnishers’ reporting duties. | Yes; Article 1 claim preempted. |
| Can Ross rely on § 1681h(e) to authorize her NCUDTPA claim? | Ross seeks a malice-based exception to the general bar. | WaMu contends § 1681h(e) requires malice or willful injury and may not apply here. | No; Ross cannot satisfy § 1681h(e) as WaMu lacked malice or willful intent. |
| If § 1681h(e) applies, does the record show malice/willful injury by WaMu? | WaMu’s knowledge of falsity and continued reporting show malice. | WaMu acted to correct errors upon notice and had no knowledge of falsity at each reporting moment. | No; the record shows negligence at most, not malice. |
| Does Ross prove proximate causation for her NCUDTPA Article 2 claims? | Debt-collection calls caused emotional and economic injuries. | No evidence ties calls to medical or financial injuries; causation lacking. | No proximate causation; summary judgment for WaMu on Article 2 too. |
Key Cases Cited
- Cushman v. Trans Union Corp., 115 F.3d 223 (3d Cir.1997) (CRAs’ role and potential for error in credit reporting)
- Nelson v. Chase Manhattan Mortgage Corp., 282 F.3d 1057 (9th Cir.2002) (interpretation of FCRA preemption and related provisions)
- Thornton v. Equifax, Inc., 619 F.2d 700 (8th Cir.1980) (malice standard discussions under § 1681h(e))
- New York Times Co. v. Sullivan, 376 U.S. 254 (1964) (definition of actual malice for defamation-like analyses)
- Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147 (9th Cir.2009) (malice standards in § 1681h(e) context)
- Cousin v. Trans Union Corp., 246 F.3d 359 (5th Cir.2001) (negligence versus malice in malice analysis under § 1681h(e))
- Rhodes v. Ford Motor Credit Co., 951 F.2d 905 (8th Cir.1991) (inference standards in proving malice or causation)
- McNamara v. Wilmington Mall Realty Corp., 121 N.C.App. 400 (1996) (proof of damages and reasonable certainty standard in NC law)