Jason Dennis v. Beh-1, Llc, a Limited Liability Company in the State of California, and Experian Information Solutions, Inc., an Ohio Corporation
485 F.3d 443
9th Cir.
2007
Check Treatment
Docket

*2 Before KOZINSKI, ALEX DIARMUID F. O’SCANNLAIN and JAY BYBEE, S. Judges. Circuit PER CURIAM.

We address whether a credit reporting agency is liable under the Fair Credit Reporting Act (FCRA), Pub.L. 90-321, No. (codified 84 Stat. 1128 at 15 U.S.C. § 1681),when it relies on inaccurate infor- mation contained public records. We also consider the appropriate scope of a viola- alleging Experian, sued disputed aof reinvestigation Consumer the California tions § 1681L Act, Civ.Code Cal. Agencies Reporting district 1785.10, the FCRA. *3 Facts de- for summary judgment granted court Dennis appeal, On claims. on all fendant Den- 2002, Jason plaintiff In October judgment summary only the challenges detainer unlawful an with served nis was from arising claims federal on his ruling BEH-1, LLC. landlord, his by complaint “reasonable maintain duty, to Experian’s suit, drop the to eventually agreed BEH-1 accuracy of to ensure procedures” in- in paid $1,959, to be for exchange in 1681e(b), and under section reports credit stipulated that stallments; parties information reinvestigate to duty its A written entered. would 1681L1 section under disputed Dennis Angeles Los with the filed was presum- Court, and Superior Analysis someone' — entry on following ably clerk—made 1681e(b) claim 1. Section Civil Actions: Register the court’s section, under a claim maintain To Judg- Trial Court Concluded— “11/25/02 merely that not show must plaintiff Entered.” inaccurate, but was disputed information to failed agency credit received subsequently that Dennis in procedures” Informa- Experian maintain “reasonable defendant from report Gui reports. See its accuracy that sure Inc., indicated Solutions, which Union v. Trans mond entered been Information judgment”’had Claim “Civil Cir.1995). (9th Co., F.3d 45 $1,959. amount Dennis against indicat file the court Here, information that it advised and Experian called Dennis entered had been ed and of court out the matter settled he had brought lawsuit Dennis against never entered was that a not trial minutes landlord. his former him. stipula a WRITTEN “pursuant ed that Information Hogan the court contacted Experian tion, applied parties ordered,” ven- records and the public Services, third-party so which was like dis- verify of Actions it dor, Superior Court’s requested and been had back reported Hogan indicated wise information. puted has since Superior accurate, Ex- and entered. information that the entries declaring these an order not it would issued Dennis advised perian erroneous.2 have been report. amend (“We manufac- Cir.1997) not (9th will 1217 above, a series of pursued Dennis noted 1. As a bare appellant, and arguments for ture pre He law. federal state and claims a claim.... preserve does assertion of these all consider us to sumably invites truffles hunting for pigs, like ‘Judges are not pre question framing broadly claims ” v. (quoting Greenwood in briefs.’ buried FAA, "[wjhether it was error us as sented Cir.1994))). (9th F.3d summary grant court trial However, pres his brief Experian.” favor interrogatories, Dennis's response 1681e(b) In its section only on his argument ents been no Experian admitted has therefore Dennis claims. 1681i against Dennis. judgment entered summary judgment appeal right to his waived response to strike amend moved to then argued in his specifically all claims granted admission, court the district Group, Inc. Research Entm’t See brief. motion, and opposed Inc., the motion. 122 F.3d Group, Creative Genesis held that We’ve plaintiff once a 1681i(a)(l)(A). es Although Dennis had tablishes that his credit report was inaccu identified an error in his credit report, we rate, “[t]he reasonableness of the proce cannot say that Experian’s reinvestigation dures whether agency followed was unreasonable. After Dennis alerted jury them questions will be in the over Experian that inaccurate, whelming majority of Guimond, cases.” contacted third-party public 45 F.3d at 1333. But while the FCRA vendor, records Hogan, to verify the accu- requires possible “maximum accuracy,” it racy of the Hogan document. hired a con- subject does not reporting agencies to tractor, whom it regularly audits for relia- liability. strict Commentary on the bility, to go to the courthouse and review *4 Fair Reporting Act, Credit 55 Fed.Reg. the file. The contractor determined that a 18,804, 18,820 1990) (May 4, (“[Section judgment had been entered Den- 1681e(b)] require not does error free con nis. While the stipulation suggested oth- sumer Instead, reports.”). agencies the erwise, weight the evidence, of the consist- obligated are to follow “reasonable proce ing of entry in the Register notation dures” to ensure that reports accurately minutes, the trial supported that de- reflect creditworthiness. termination.

Here, only the alleged Indeed, defect in weight the evidence is Experian’s initial investigation was that, that it also as a matter of law, California relied on secondary documents, entry namely the Register “entry is of judg trial minutes and Actions, ment.” This reading is supported by Cal. without obtaining copy a of the actual Civ.Proc.Code 668 and California case judgment. Experian no doubt tolerated law. Section 668 reads as follows: “Ex some by risk of error relying cept on provided these 668.5, in Section the clerk documents rather than the primary source. of the superior court, must keep, with the But both documents were official records records court, a book called issued the Superior Court, ‘judgment book,’ while in which judgments must court systems record-keeping are per not be entered.” (em Cal.Civ.Proc.Code 668 fect-as case added). phasis demonstrates-most are Similarly, in Wilson v. Los reasonably accurate. We thus Angeles conclude County Employees Ass’n, that it reasonable, as a law, matter of court stated that entry “[t]he of a judg to base its initial report on ment consists the recording of it in the the secondary documents without doing judgment book, and there can be no record any investigation. additional See Henson of a judgment until so entered. A judg Servs., v. CSC 280, 29 F.3d 285-86 ment is entered when it is actually entered (7th Cir.1994). in the judgment book.” 127 Cal.App.2d 285, 824, 273 (1954) P.2d (citations 827 1681(i) 2. Section claim omitted); also see Menzies v. Watson, 105 When a consumer informs a report 109, Cal. (1894) 38 P. 642 (“[Section] ing agency of alleged inaccuracies in his provides 668[] that judgment shall be en credit report, 1681i(a)(l) section requires tered in judgment-book. There is no that the agency commence a “reasonable other ‘entry’ of judgments mentioned reinvestigation” within 30 days. 15 U.S.C. code.”); Old Settlers Inv. Co. v. cf.

lists this as one of the issues he wishes this thus waived the right appeal the district court to review appeal. pres- But Dennis court's supra. order. See n. 1 ents legal argument no point on this and has

447 correct Superior (1910) petition 922, 927 P. White, 158 Cal. standing certainly had error. section under (“[T]here nois ain official file correction to seek any enter not does clerk if the Nor party. a it was not to which dock in the records merely but certainty what known with it have would does the statute where et, place ain Nor take. should correction such form docu judgments, entry of provide sec- under reinvestigate duty to action does parties signed than exami- 1681(i) any more involve may be consenting that documents; certainly it existing Gossman, nation entered.”). But Gossman see agency (1942) put does 184, 126P.2d Cal.App.2d consumer’s up errors to clean burden when rendered deemed (“The is third by are caused history is filed; its rendition is the decision circumstances, arewe (em Under party. entry ministerial.” act, is judicial investigation defendant’s that, satisfied omitted)). appears It thus phasis sufficiently rigorous. en law, California records clerk the court when tered AFFIRMED. *5 or, given book judgment the in judgment such, As equivalents. 668.5, modern its dissenting Judge, KOZINSKI, Circuit judgment that reported correctly Experian part: if Dennis, even entered had been erroneo entered Expe- been for judgment that it was reasonable that agree I com- entry in usly.3 Register rely on the to rian credit on Dennis’s its initial piling to correct position ain anyone was If the disputed once Dennis history. He himself. Dennis error, it was the obli- was record, Experian of that accuracy case known, that the have knew, or should dis- a consumer When more. to do gated con- action detainer unlawful file the the report, item on putes misleading informa- or erroneous tained a reason- “conduct must agency could who only one the He was tion. time, dissent the the same it. At from stip- flow a conditional suggests that dissent 3. The act of the ministerial add to apparently would judgment shall the effect ulation place- requirement: separate is somehow entry made own payments are if entered be at ren- copy of the Dissent not made. entry was folder file in the evidence that, suggests 447-48. further at Implausibly, it Dissent See judgment. 447-48. dered the by side with dispositive” side "entirely viewing only the would Gossman stipula- the of which entry depend- the existence very way any holding in if our our person deny, no reasonable purports more judgment, or aof existence upon the ed had been that there concluded have “could aof upon creation correctly, the fact, it is In Id. against Dennis.” Rather, we clerk. of a act ministerial person could a reasonable how to see hard reasonable it was claim modest make otherwise, of fact matter as a concluded have only ministerial upon the rely Experian law. or law, that, records California act en- upon Gossman reliance dissent’s The judgment. aof existence suggest we Nowhere do misplaced. tirely only party below, was the we note As is no actually made-there to cor- Superior petition who could judgment here entry of that the question in his entry of any erroneous rect that a erroneous, suggestion any there nor is best, if he was an error with Faced case. entry judgment somehow erroneous clerk’s correct, Dennis exclusively, situated ignores the dissent The judgment. created to hold the FCRA hardly use can entering act of ministerial importance truffle. failing unearth liable inferences reasonable reinvestigation able to determine whether ulation was only legally binding docu- the disputed information is inaccurate.” ment in file; the ease the trial minutes and 1681i. As the Register Federal Trade notation merely purported to commented, Commission has summarize what was agreed “reasonable into the stip- reinvestigation” at this stage ulation. No requires person reasonable who re- agency “explain viewed these documents source side [of side could have concluded that information] that original had been a judg- statement ment against has been Dennis. disputed, absence state aof consumer’s judgment in file, the case position, and when then ask whether considered the source in light of the information would contained information, confirm qualify it, stipulation, should have or caused accept explanation.” consumer’s to conclude that there was Commentary the Fair Credit Re- and that Register entry had Act, been porting 55 Fed.Reg. 18,804, 18,823-24 made in error. 4,1990). (May The majority mistakenly relies on a ser The “source” here was the Superior ies of California cases which stand for the Court and the in question “information” tautological proposition that a judgment is was the purported judgment against Den- not entered until “it is actually entered nis. Confirming the accuracy of the infor- the judgment book.” Wilson v. Los Ange mation would have required Experian to les County Employees Ass’n, 127 Cal. find a document in the court file that App.2d 273 P.2d (1954); Maj. up backed notation and the Op. at 446 (citing Wilson cases). and other minutes, trial thereby confirming that a These cases are not point. They say *6 judgment had in fact been rendered. This only that a judgment is not of record until would, document course, of have been the it is actually Wilson, entered. at P.2d judgment itself. Had Experian looked for 827. They provide no support for the a document, such it would have found no converse proposition that an entry in the judgment undermining rather than con- — Register can give life to a judgment firming position the Experian had taken in does not exist. To test this proposition, original report. consider a situation where the clerk of the Experian hired a public records vendor court mistakenly enters a judgment ren to file, review the case and the vendor dered in case A under the Register entry found no judgment confirming Regis- for case B. Nothing in the cases cited ter notation and the trial minutes. The the majority suggests that the erroneous reinvestigation did uncover a piece new entry of in case B somehow creates a valid information: stipulation written judgment the defendant in that expressly contradicted the Register case. entry. The document clearly states: “No ” judg- The majority dismisses with a “But see ment long so as payments made.... En- the only California case directly on point, try judgment stayed.” (Emphasis add- of namely Gossman v. Gossman, 52 Cal. ed). There was nothing ambiguous about App.2d 184, (1942). 126 P.2d 178 Maj. Op. document; it plainly states that there at 447. The Gossman court drew a sharp is judgment” “[n]o as long as payments are distinction between the rendition of the made, and that “[e]ntry judgment of [is] judgment, which judicial is a act, and the stayed.” There is no subsequent docu- entry of which is ministerial. purports to a judgment Gossman, 126 P.2d at 185. The distinction against Dennis or lifts the stay. The stip- is crucial to our case. A judgment can per- herself as characterized Williams or judicial of a a result rendered only be Experi- about knowledgeable” “most summary son trial, a statutory process—a is, It processes. reinvestigation an’s stipula court-approved order, a that, if even to infer therefore, reasonable judg a default imposition or tion the con- fully aware been judg entry of the contrast, the By ment. have held it would stipulation, tents performed function ministerial a ment is position. original to its fast act A ministerial of court. clerk by the not, it is fa- most light because in a facts create Viewing cannot these act.” Gossman, judicial “a assume we must plaintiff, words to in the vorable entry is to not making decision person a deliberate made Because to authority ac- further lacks or take he judge, not Dennis’s amend (Clerks author documentary are judgment. it obtained tion, after render even without ren- judgments had been default enter to ized proof that has infor- if defendant approval relevant ignore judicial A decision prior dered. Cal.Civ. reinvestiga- no answer. files the course served during been mation itself is at § negligence beyond Proc.Code mere goes clerk, by the statute, it rises Whether reckless. authorized very least capacity. comply ministerial wholly failure ain “willful” acts of a who the level 38, 177 Cal.App.3d Burke, question is another Baske FCRA with —one (1981).) jury. by a Com- be resolved Cal.Rptr. should 1681n(a) per- (subjecting 15 U.S.C. pare with consistent only is Gossman Not with comply “wilfully” fail who sons undeserving of hence cases—and other punitive compensatory both FCRA our dispositive entirely ”—it is see “But (sub- 1681o(a) with damages), errone- clear that it makes because fail “negligently” who persons jecting bring into cannot in the entry ous damages). compensatory only comply exist. that does existence perform stipulation, agencies act Here, judicial They economy. by the our accepted service valuable apparently which to control clearly stated with tools lenders provide court, and *7 capital to access Noth- borrowers judgment. risks, enabling no towas conse- quickly. employee and cheaply ministerial ing sig- are business misrepre- of error done might quences have office clerk’s demonstrates. Dennis’s document judicial of that nificant —as the content sent business, and start hoped is not had something turn possibly can time on his bills paid diligently he judgment. into a credit a clean have he would years so Experian’s Williams, specialist Kira financing for sought he history when division, testified affairs consumer his credit only blemish venture. stipu- copy of gave Hogan erroneously of 2003 April report Ho- reinvestigation. of part lation enough But that was judgment. reported unearthing the job its did thus gan ap- decline lenders several cause n. 3. at 447 Op. Maj. “truffle.” hopes credit, dashing his plications docu- of the copy was shown Williams business. starting a new And, while deposition. during her re- power vast Recognizing Expe- at anyone say whether could she and lives over have agencies during porting considered rian re- Americans, Congress all livelihoods opined she investigation, course reinvestigate agencies quired difference. made have it would an individual’s creditworthiness when they

have reason believe that

inaccurate. Congress precise left

scope of investigations such to the discre-

tion of agencies, these trusting them to

adopt adequate procedures to prevent and

correct errors. But if procedures em-

ployed by Experian in this case repre- are

sentative of prevailing industry practice— if other

and courts follow hands-off

approach taken the majority in this Congress may come to regret case—

decision. The may result well be more regulation

intrusive industry, in-

creasing agencies’ cost of doing busi-

ness, to the detriment of the consumers

and rely lenders who on their services.

HOLLAND AMERICA INC; LINE

Windstar Sail Ltd, Cruises on behalf

of themselves as agents, former own operators

ers and of the former vessel Song, together Wind

M/S/Y

behalf their subrogated insurers,

Plaintiffs-Appellants,

WÄRTSILÄ NORTH AMERICA,

INC., Defendant, Oy;

Wärtsilä Finland Corpora Wärtsilä

tion; Bureau *8 S.A.; Veritas Bureau (Canada) Inc.; Veritas Bureau Veri America,

tas Inc., North Defendants-

Appellees.

No. 05-35572.

United States Court Appeals,

Ninth Circuit.

Argued and Submitted Dec. 2006. May 7,

Filed