Simmsparris v. Countrywide Financial Corp.
2011 U.S. App. LEXIS 15530
| 3rd Cir. | 2011Background
- SimmsParris obtained a mortgage from CHL on Feb 22, 2007; CHL reportedly sent late payments information to credit bureaus.
- December 2007 and January 2008 payments were allegedly late per CHL's reporting to CRAs.
- In Feb 2008, SimmsParris learned CHL had reported late payments; she and her law firm notified CHL and CFC but reporting continued.
- She filed suit in the District of New Jersey on May 19, 2008 alleging state-law claims and FCRA claims, and obtained a TRO blocking further reporting of false information.
- District Court granted summary judgment for CHL and CFC, holding private suits under the FCRA require CRA-based notification and a dispute to a CRA first.
- Appeal challenged only the FCRA liability ruling; state-law claims remained unaddressed in the appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether private action under 1681s-2(b) is available to a consumer | SimmsParris: private action is available | CHL/CFC: only government can sue under 1681s-2(a); 2(b) requires CRA procedure | Private action limited by CRA-notice framework |
| Whether notice to a consumer reporting agency is required before liability attaches | SimmsParris asserts no CRA-notice requirement needed for private action | FCRA requires notice to the CRA that reported the information | Notice to the CRA is required before liability arises |
| Whether a private plaintiff may bypass the CRA gatekeeper by suing directly furnisher | SimmsParris argues no such structural requirement | Statute channels liability through CRA notification to furnishers | Private action cannot bypass the CRA framework |
| Whether 1681s-2(a) bars private actions and 1681s-2(b) is the exclusive private remedy | SimmsParris may pursue 1681s-2(b) claims | Only 2(b) is privately enforceable; 2(a) barred to private parties | Private action limited to 1681s-2(b) with CRA-notice prerequisite |
Key Cases Cited
- Cortez v. Trans Union, LLC, 617 F.3d 688 (3d Cir. 2010) (FCRA aims to protect consumers with accurate reporting)
- Chiang v. MBNA, 620 F.3d 30 (1st Cir. 2010) (CRAs act as gatekeepers under the statutory scheme)
- Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147 (9th Cir. 2009) (private action under 1681s-2(b) requires CRA notice)
- Saunders v. Branch Banking & Trust Co. of Va., 526 F.3d 142 (4th Cir. 2008) (private liability contingent on notice framework)