973 F. Supp. 2d 707
S.D. Tex.2013Background
- Toliver sued Experian (and others) under the FCRA after allegedly losing a mortgage because her credit score dropped when dispute notations were removed from her Experian report.
- The disputed tradeline was a Sears account charged off in 2006 and later sold to LVNV, which reported the account to Experian using Metro 2 codes ("OC" and "0") and various date fields.
- Toliver disputed the LVNV reporting multiple times (including by counsel); Experian sent ACDVs to LVNV and LVNV repeatedly confirmed its Metro 2 coding and updated dates/statuses.
- When dispute notations were present Toliver’s score rose; after notations were removed her score fell below the lender’s cutoff and she withdrew the mortgage application.
- Experian moved for summary judgment on claims under § 1681e(b) (reasonable procedures/accuracy), § 1681i(a) (reasonable reinvestigation), and § 1681n (willfulness); the court granted summary judgment in part and denied in part.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Accuracy of Metro 2 code "OC" (creditor type) | "OC" misleads; LVNV is a §1692 debt collector and should be coded to reduce scoring impact | "OC" accurately designates Debt Buyer per CDIA/CRRG; it encompasses factoring/debt buyers and is not misleading | Use of "OC" was accurate; summary judgment for Experian granted |
| Accuracy of Metro 2 code "0" (account open vs charged-off) | "0" indicates "open" and makes a 6-year-old charged-off debt look recent, harming score | CRRG defines "0" as account due upon demand; LVNV also reported status code "93" (in collections) — coding is accurate | Use of "0" was accurate; summary judgment for Experian granted |
| "First reported" date (accuracy and §1681e(b) procedures) | Dates (e.g., Aug 2011/Jan 2012) are inconsistent and can make delinquency appear more recent; caused score drop and damages | Experian says it uses extensive procedures and ACDVs; dates are supplied by furnishers | Genuine dispute exists as to accuracy, causation, and reasonableness of procedures; summary judgment denied as to §1681e(b) for "First reported" |
| "Date of status" and reinvestigation (§1681i(a)) | "Date of status" entries (inconsistent/late dates) are misleading; Experian unreasonably relied solely on LVNV's ACDV responses after notice | Experian contends "Date of status" changes legitimately over time and reliance on furnisher responses was reasonable | Summary judgment denied on §1681i(a) for "Date of status" — reasonable reinvestigation is for jury given notice and disputed dates |
| Willfulness (§1681n) | Plaintiff seeks punitive relief for willful FCRA violations | Experian: no evidence of knowing or reckless misconduct | No evidence of willfulness; summary judgment for Experian on §1681n claims |
Key Cases Cited
- Sepulvado v. CSC Credit Servs., Inc., 158 F.3d 890 (5th Cir. 1998) (credit entry misleading if it can be expected to adversely affect credit decisions)
- Pinner v. Schmidt, 805 F.2d 1258 (5th Cir. 1986) (CRA must reasonably investigate when aware of personal dispute)
- Stevenson v. TRW Inc., 987 F.2d 288 (5th Cir. 1993) (CRA bears responsibility to evaluate accuracy of subscriber information)
- DeAndrade v. Trans Union LLC, 523 F.3d 61 (1st Cir. 2008) (§1681i inquiry asks whether CRA could have uncovered inaccuracy with reasonable reinvestigation)
- Cushman v. Trans Union, 115 F.3d 220 (3d Cir. 1997) (CRA may need to verify source beyond furnisher depending on notice and cost-benefit)
- Henson v. CSC Credit Servs., 29 F.3d 280 (7th Cir. 1994) (notice of possible inaccuracy can require CRA to go beyond furnisher)
- Cahlin v. Gen. Motors Acceptance Corp., 936 F.2d 1151 (11th Cir. 1991) (plaintiff must prove inaccuracy as part of §1681e(b) case)
- Philbin v. Trans Union Corp., 101 F.3d 957 (3d Cir. 1996) (discusses burden and evidence for §1681e(b) challenges)
- Crabill v. Trans Union, 259 F.3d 662 (7th Cir. 2001) (actual damages require causal relation between reporting and harm)
- Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (summary judgment standard)
- Anderson v. Liberty Lobby, 477 U.S. 242 (1986) (genuine issue for trial standard)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986) (nonmovant must produce more than metaphysical doubt)
- Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47 (2007) (willfulness requires knowing or reckless violation)