ORDER
AND NOW, this 26th day of January, 2011, upon consideration of Defendant’s Motion for Summary Judgment (Doc. # 25), Plaintiffs Response (Doc. # 27), Defendant’s Reply (Doc. # 29), and Plaintiffs Statement of Material Facts (Doc. # 31), it *717 is ORDERED that Defendant’s Motion for Summary Judgment (Doc. # 25) is GRANTED in part and DENIED in part as follows:
• Defendant’s Motion is DENIED as to Plaintiffs claims for negligent violations of the Fair Credit Reporting Act;
• Defendant’s Motion is GRANTED as to all other claims.
MEMORANDUM
I. Introduction
Plaintiff Jeffrey D. Shannon (“Plaintiff’ or “Shannon”) brings suit against Defendant Equifax Information Services, LLC (“Defendant” or “Equifax”) 1 under the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq. (2006) (“FCRA”); the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 Pa. Stat. §§ 201-1 et seq. (2008) (“UTPCPL”); and the common law doctrines of negligence and invasion of privacy/false light. This Court has jurisdiction pursuant to 15 U.S.C. § 1681p (2006) and 28 U.S.C. §§ 1331, 1367(2006). Defendant Equifax has filed a motion for summary judgment. For the reasons set forth below, I will grant in part and deny in part that motion.
II. Background 2
Plaintiff Jeffrey D. Shannon moved from Paoli, Pennsylvania to West Chester, Pennsylvania in 2008, and requested that Verizon transfer service from his old to his new address, effective July 17, 2008. Statement of Undisputed Material Facts ¶ 19, ECF No. 29; Counterstatement of Material Facts ¶ 19; ECF No. 31. In September of 2008, Verizon stated that Plaintiff owed $260.10. Statement ¶ 20; Counterstatement ¶ 20. On October 18, 2008, Plaintiff sent Verizon a check for that amount. Statement ¶ 21; Counter-statement ¶21. On October 27, 2008, Plaintiff received a bill from Verizon, stating that Plaintiff owed $161.16. Statement ¶ 22; Counterstatement ¶ 22. On November 27, 2008, Plaintiff received a bill from Verizon, stating that Plaintiff owed $180.76. Statement ¶ 23; Counterstatement ¶ 23. On December 27, 2008, Plaintiff received a bill from Verizon, stating that Plaintiff owed $183.12 ($180.76 plus a $2.36 late fee). Statement ¶ 25; Counter-statement ¶ 25. Verizon representatives advised the Shannons to disregard both the November and December bills. Statement ¶¶24, 26; Counterstatement ¶¶24, 26.
In March of 2009, Plaintiff received a collection notice from the North Shore Agency, Inc., seeking to collect $183.12 on behalf of Verizon. Statement ¶ 27; Counterstatement ¶ 27. On March 24, 2009, a Verizon representative advised Plaintiff that he was in fact entitled to a refund of $76.98, since he had paid $260.10 in October when only $ 183.12 was due. Statement ¶ 28; Counterstatement ¶ 28. How *718 ever, Plaintiff never received a refund check. Statement ¶ 29; Counterstatement ¶ 29. Rather, Verizon never cashed Plaintiffs check for $260.10. Statement ¶ 30; Counterstatement ¶ 30.
Equifax is a consumer reporting agency. Statement ¶ 1; Counterstatement ¶ 1. It compiles information it receives from creditors, public records, merchants, and other sources and assembles that information into credit reports that are provided to subscribers who have a permissible purpose for obtaining these reports. Statement ¶ 1; Counterstatement ¶ 1. It maintains credit history files on more than 200 million consumers and receives over one billion updates from thousands of data furnishers every month. Statement ¶ 2; Banks Decl. ¶4, ECF No. 29. Equifax accepts information regarding a consumer’s credit only from those sources that are determined by Equifax to be reasonably reliable. Statement ¶ 3; Banks Decl. ¶ 5.
On May 20, 2009, Equifax received notice of Plaintiffs dispute with Verizon. Statement ¶ 31; Counterstatement ¶31. On May 28, 2009, Equifax prepared an Automated Consumer Dispute Verification (“ACDV”) concerning Plaintiffs dispute and sent it to Verizon. Statement ¶ 37; Banks Decl. ¶ 23. The form included a box labeled “FCRA Relevant Information,” in which Equifax wrote: “Consumer states that the outstanding balance write off noted on this account is derived from an error in Verizon[’]s billing and Verizon has indicated that he is overpaid on this account and [will] send him a refund check.” Statement ¶ 38; Banks Decl. ¶ 24. Verizon provided an automated response that an unpaid balance of $183.12 had been correctly reported as a loss. Statement ¶ 39; Banks Decl. ¶ 25. Thus, Equifax made no changes to Plaintiffs credit file. Statement ¶ 40; Counterstatement ¶ 40.
III. Legal Standard
Summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a);
see Kornegay v. Cottingham,
The party moving for summary judgment bears the initial burden of demonstrating that there are no material facts supporting the nonmoving party’s legal position.
Celótex Corp. v. Catrett,
The threshold inquiry at the summary judgment stage involves determining whether there is the need for a trial, that is, “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.”
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Anderson,
IV. Discussion
Defendant has moved for summary judgment on each of Plaintiffs four claims against it: 1) that Defendant violated the FCRA, 2) that Defendant violated the UTPCPL, 3) that. Defendant was negligent, and 4) that Defendant invaded Plaintiffs privacy by casting Plaintiff in a false light. I will deny Defendant’s motion on Plaintiffs negligent FCRA claims, but I will grant Defendant’s motion on Plaintiffs remaining claims,
A. FCRA
In Count IV of his Complaint, Plaintiff alleges that Defendant violated the FCRA by
• Willfully and negligently failing to conduct a proper and reasonable investigation concerning the inaccurate information after receiving notice of the dispute from the Plaintiff, in violation of 15 U.S.C. § 1681i(a);
• Willfully and negligently failing to provide prompt notice of the inaccurate information and Plaintiffs dispute to the furnishing entities, in violation of 15 U.S.C. § 1681i(a);
• Willfully and negligently failing to provide all relevant information provided by the Plaintiff regarding the dispute of the inaccurate information to the furnishing entities, in violation of 15 U.S.C. § 1681i(a);
• Willfully and negligently [failing] to review and consider all relevant information submitted by the Plaintiff concerning the dispute of the inaccurate information, in violation of 15 U.S.C. § 16811(a);
• Willfully and negligently failing to note the Plaintiffs dispute of the inaccurate information and in subsequent consumer reports, in violation of 15 U.S.C. § 1681i(a);
• Willfully and negligently failing to timely and properly investigate the inaccurate information after receiving notice of the dispute from the Plaintiff;
• Willfully and negligently failing to employ and follow reasonable procedures to assure maximum possible accuracy of Plaintiffs credit report, information and file, in violation of 15 U.S.C. § 1681e(b);
• Willfully and negligently failing to properly and timely delete the inaccurate information from Plaintiffs credit files despite being unable to verify the accuracy of the information and/or being provided with proof of its inaccuracy; and
• Willfully and negligently continuing to report the inaccurate information despite having knowledge of its inaccuracy and/or inability to be verified.
Compl. ¶ 53, ECF No. 1.
Equifax has primarily countered that it cannot be held in violation of 15 U.S.C. § 1681i(a) or § 1681e(b) because the disputed information on Plaintiffs credit report was, in fact, accurate. Reply 5-6. In the alternative, Equifax contends that it maintains reasonable procedures and conducted a reasonable reinvestigation following Plaintiffs complaint. Reply 7-10.
i. Overview
By way of legal background, the Fair Credit Reporting Act was passed to ensure that “consumer reporting agencies adopt reasonable procedures for meeting the needs of commerce for consumer credit, personnel, insurance, and other information in a manner which is fair and equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization of such information.” 15 U.S.C. § 1681(b) (2006). “In the FCRA,
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Congress has recognized the crucial role that consumer reporting agencies play in collecting and transmitting consumer credit information, and the detrimental effects inaccurate information can visit upon both the individual consumer and the nation’s economy as a whole.”
Philbin v. Trans Union Corp.,
Section 1681e(b) of the Act states; “Whenever a consumer reporting agency prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.” Section 1681i(a)(l)(A) then provides:
[I]f the completeness or accuracy of any item of information contained in a consumer’s file at a consumer reporting agency is disputed by the consumer and the consumer notifies the agency directly, or indirectly through a reseller, of such dispute, the agency shall, free of charge, conduct a reasonable reinvestigation to determine whether the disputed information is inaccurate and record the current status of the disputed information, or delete the item from the file ... before the end of the 30-day period beginning on the date on which the agency receives the notice of the dispute from the consumer or reseller.
Thus, § 1681e(b) governs the behavior of credit reporting agencies when preparing credit reports generally. Section 1681i(a) governs the behavior of credit reporting agencies when reinvestigating consumer credit history upon receiving notice of disputed information.
More specifically, negligent noncompliance with § 1681e(b) consists of four elements: “ ‘(1) inaccurate information was included in a consumer’s credit report; (2) the inaccuracy was due to defendant’s failure to follow reasonable procedures to assure maximum possible accuracy; (3) the consumer suffered injury; and (4) the consumer’s injury was caused by the inclusion of the inaccurate entry.’ ”
Cortez v. Trans Union, LLC,
To find a § 1681i(a) violation, the consumer must demonstrate that the consumer reporting agency “had a duty to do so, and that it would have discovered a discrepancy had it undertaken a reasonable investigation.”
Id.
at 713. On what constitutes a reasonable investigation, the Third Circuit has held that “in order to fulfill its obligation under § 1681i(a), ‘a credit reporting agency may be required, in certain circumstances, to verify the accuracy of its initial source of information,’ ” and that “ ‘whether the credit reporting agency has a duty to go beyond the original source will depend’ on a number of factors.”
Cushman v. Trans Union Corp.,
To show willful noncompliance with either provision, the Third Circuit has held that a plaintiff can “show that defendants knowingly and intentionally committed an act in conscious disregard [of the FCRA], but need not show malice or evil motive.”
Philbin,
ii. Accuracy Defense
Defendant’s first ground for seeking summary judgment on Plaintiffs FCRA claims is that Plaintiffs credit report was in fact accurate, and that Plaintiff therefore cannot clear the inaccuracy threshold for successfully asserting FCRA violations.
Accuracy has been held to be a defense to alleged violations of § 1681e(b). In other words, in order to make out a prima facie violation of that section, “the Act implicitly requires that a consumer ... present evidence tending to show that a credit reporting agency prepared a report containing ‘inaccurate’ information.”
Cahlin v. Gen. Motors Acceptance Corp.,
Accuracy has also been held to be a defense to alleged violations of § 1681i(a).
See DeAndrade v. Trans Union LLC,
What constitutes accuracy thus becomes an important question, and there is currently a circuit split on the issue. The Sixth Circuit, and some district courts, have held that technical accuracy is sufficient and provides a defense to alleged FCRA violations.
See Dickens v. Trans Union Corp.,
The Third Circuit has not stated outright its position on this particular issue.
See Krajewski v. Am. Honda Fin. Corp.,
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However, it did recently note in
Cortez v. Trans Union, LLC,
In light of the above, I too will apply the
Koropoulos
approach, and ask whether the Verizon tradeline on Plaintiffs Equifax credit report was “ ‘misleading in such a way and to such an extent that it can be expected to adversely affect credit decisions.’”
Smith,
iii. Reasonableness
Equifax contends in the alternative that its procedures are reasonable as a matter of law and therefore not in violation of the FCRA.
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“Reasonable procedures are those that a reasonably prudent person would undertake under the circumstances.”
Philbin v. Trans Union Corp.,
For § 1681e(b) purposes, I am unable to determine whether Equifax’s procedures are reasonable as a matter of law. In its Statement of Undisputed Material Facts, Equifax provides very little information on what procedures it follows in preparing a credit report in the first instance. See Statement of Undisputed Material Facts ¶¶ 1-4, ECF No. 29. 3 Similarly, the Declaration of Vicki Banks devotes only a few paragraphs to how Equifax first assembles credit information for each consumer. See Banks Decl. ¶¶ 3-6, ECF No. 29. 4 Therefore, there remain genuine issues of material fact on this point, and a jury must be presented with evidence on, and then assess the reasonableness or unreasonableness of, Equifax’s investigation procedures. 5
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I will similarly submit Equifax’s § 1681i(a) claim to a jury. On reasonableness in the § 1681i(a) context, the Third Circuit has stated more specifically, as laid out above, that the consumer must demonstrate that the consumer reporting agency “would have discovered a discrepancy had it undertaken a reasonable investigation.”
Cortez,
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However, while Plaintiff may proceed to trial on his claims that Defendant negligently violated the FCRA, he cannot survive summary judgment on his claims that Defendant willfully violated the FCRA. To show willful noncompliance, a plaintiff must prove that the defendants acted knowingly, intentionally, or recklessly in disregarding the FCRA.
See Safeco Ins. Co. of America v. Burr,
In this case, Plaintiff has furnished no evidence that Defendant knowingly or intentionally disregarded his rights or violated the FCRA. Furthermore, Defendant’s procedures and actions were not in reckless disregard of the FCRA. Although there is very little evidence in the record as to Defendant’s investigation procedures generally and in this instance, Equifax does at least submit that it only reproduces credit information from reliable sources. Third Circuit cases have indicated that, absent notice of inaccuracy, the FCRA does not require an investigation beyond the original source of information.
See Krajewski v. Am. Honda Fin. Corp.,
iv. Conclusion
In sum, Defendant cannot assert the accuracy defense, and 1 do not find its investigation or its reinvestigation procedures reasonable as a matter of law. Thus, Plaintiff survives Defendant’s motion for summary judgment and can proceed to trial on his claims that Defendant negligently violated the FCRA. However, Plaintiff does not survive Defendant’s motion for summary judgment on his claims that Defendant willfully violated the FCRA.
B. Pennsylvania UTPCPL
Plaintiff also alleges that Defendant’s actions constitute unfair and deceptive acts and practices under the UTPCPL. Defendant has countered in the main that Plaintiff cannot establish a claim under the UTPCPL because he did not purchase or lease any goods from Equifax.
The UTPCPL does indeed provide that it is unlawful to engage in “unfair or deceptive acts or practices in the conduct of any trade or commerce.” 73 Pa. Stat. § 201-3 (2008). However, it also provides that private actions be commenced by a “person who purchases or leases goods or services primarily for personal, family or household purposes and thereby suffers any ascertainable loss of money or property.” 73 Pa. Stat. § 201-9.2(a) (2008). Elaborating upon this language, the Third Circuit has held that the statute “ ‘unambiguously permits only persons who have purchased or leased goods or services to sue.’ ”
Balderston v. Medtronic Sofamor Danek, Inc.,
In the facts at hand. Plaintiff has not demonstrated that he purchased or leased goods or services from Equifax, and therefore his UTPCPL claim must fail. The Complaint states that the “above described purchases by Plaintiff from ... Equifax constitute ‘commerce’ and the ‘sale or distribution of any services and any property’ as defined by 73 P.S. § 201.2 of the PA UTPCPL.” Compl. ¶ 57, ECF No. 1. However, there are no purchases by Plaintiff from Equifax described earlier in the Complaint. Moreover, Equifax argues in its reply brief that “[i]t is undisputed that Plaintiff does not allege, or provide evidence, that he purchased or leased any services from Equifax.” Reply 12. Although Plaintiff submitted a counterstatement of material facts subsequent to Defendant’s reply, he did not challenge this assertion that he neither purchased nor leased from Equifax.
See
Counterstatement of Material Facts, ECF No. 31. Finally, although Defendant submitted into
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evidence a portion of Plaintiffs deposition, wherein Plaintiff avers that he went online and asked for his credit report,
see
Shannon Dep. 102:14, EOF No. 29, such averment does not constitute sufficient proof of a purchase or lease. First, free credit reports are made available to consumers every twelve months.
See
15 U.S.C. § 1681j(a) (2006). Given that it is possible to obtain free credit reports, that Defendant has stated that Plaintiff neither purchased nor leased services from Equifax, and that Plaintiff has not challenged this allegedly undisputed fact, I conclude there was no purchase or lease by Plaintiff from Defendant under the facts at hand. Second, as a more general matter, Pennsylvania courts have not applied the UTPCPL to credit reporting agencies.
Abusaab,
C. Negligence
Plaintiff similarly argues that Defendant was negligent, “in failing to provide a proper and reasonable investigation concerning the inaccurate information after Plaintiff disputed the validity, in failing to timely and properly investigate the inaccurate information after the dispute and in failing to delete or correct the inaccurate information from Plaintiffs credit report.” Resp. 8. Defendant has emphasized in response that these allegations are preempted by the FCRA.
In § 1681h(e), the FCRA states:
Except as provided in sections 1681n and 1681o ..., no consumer may bring any action or proceeding in the nature of defamation, invasion of privacy, or negligence with respect to the reporting of information against any consumer reporting agency, any user of information, or any person who furnishes information to a consumer reporting agency, based on information disclosed pursuant to section 1681g, 1681h, or 1681m ... , 8 or based on information disclosed by a user of a consumer report to or for a consumer against whom the user has taken adverse action, based in whole or in part on the report[,] except as to false information furnished with malice or willful intent to injure such consumer.
In other words, unless a plaintiff alleges willfulness in pursuing its common law claims, the FCRA provides the exclusive remedy.
9
By definition, a plaintiff cannot allege willful negligence.
See Johnson v.
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Citimortgage, Inc.,
D. Invasion of Privacy/False Light
Finally, Plaintiff argues that Defendant “violated Plaintiffs right of privacy by impermissibly accessing Plaintiffs most private information and placing the Plaintiff in a false light before the eyes of other[s], including potential credit grantors and creditors as well as family, friends and the general public.” Compl. ¶ 74; see also Resp. at 9. Defendant has again countered primarily that such allegations are preempted by the FCRA.
As outlined above, § 1681h(e) of the FCRA holds that “no consumer may bring any action or proceeding in the nature ... invasion of privacy ... except as to false information furnished with malice or willful intent to injure such consumer.” “Willful” for FCRA purposes can denote knowing, intentional, or reckless disregard of the FCRA.
Safeco Ins. Co. of Am. v. Burr,
In this case, Plaintiff has produced no evidence of “malice or willful intent to injure.” Moreover, Plaintiff does not even specifically allege willful invasion of privacy in his complaint or in his response to Defendant’s motion for summary judgment. Finally, as elaborated above, at no point did Equifax demonstrate a reckless disregard for Plaintiffs rights. Thus, I find Plaintiffs invasion of privacy claim preempted by the FCRA, and grant Defendant’s motion for summary judgment on this count of Plaintiffs complaint.
V. Conclusion
For the reasons set forth above, Defendant’s motion for summary judgment is denied with respect to Plaintiffs negligent FCRA claims, and granted as to all other claims.
Notes
. Plaintiff has settled with Defendants Verizon Pennsylvania, Inc., and Experian Information Solutions, Inc. See Order, July 15, 2010, ECF No. 28.
. On a motion for summary judgment, the facts are interpreted in the light most favorable to the non-moving party.
Hunt v. Cromartie,
. These paragraphs read:
1. Equifax is a consumer reporting agency within the meaning of the FCRA. It compiles information it receives from creditors, public records, merchants, and other sources and assembles that information into credit reports that are provided to subscribers who have a permissible purpose for obtaining these reports.
2. Equifax maintains credit history files on more than 200 million consumers and receives over one billion updates from thousands of data furnishers every month.
3. Equifax accepts information regarding a consumer's credit only from those sources that — either on the basis of Equifax's prior experience, or because of the particular source’s reputation — are determined by Equifax to be reasonably reliable sources.
4. Equifax maintains reasonable procedures designed to assure maximum possible accuracy of the information reported to its subscribers regarding consumers and to correct errors that are brought to its attention.
Statement of Undisputed Material Facts ¶¶ 1-4, ECF No. 29.
. These paragraphs read:
1. Equifax is a consumer reporting agency within the meaning of the FCRA. It compiles information it receives from creditors, public records, merchants, and other sources and assembles that information into credit reports that are provided to subscribers who have a permissible purpose for obtaining these reports.
2. Equifax maintains credit history files on more than 200 million consumers and receives over one billion updates from thousands of data furnishers every month.
3. Equifax accepts information regarding a consumer's credit only from those sources that — either on the basis of Equifax’s prior experience, or because of the particular source's reputation — are determined by Equifax to be reasonably reliable sources.
4. Equifax maintains reasonable procedures designed to assure maximum possible accuracy of the information reported to its subscribers regarding consumers and to correct errors that are brought to its attention.
Banks Decl. ¶¶ 3-6, ECF No. 29.
. The Third Circuit has not yet stated what exactly is required of a plaintiff to survive a motion for summary judgment on a § 1681e(b) claim. In
Philbin,
it "listed three different approaches that various courts have taken in determining if a plaintiff has introduced sufficient evidence to reach the jury under § 168le(b) ...: 'that a plaintiff must
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produce some evidence beyond a mere inaccuracy in order to demonstrate the failure to follow reasonable procedures; that the jury may infer the failure to follow reasonable procedures from the mere fact of an inaccuracy; or that upon demonstrating an inaccuracy, the burden shifts to the defendant to prove that reasonable procedures were followed.' "
Cortez,
. Defendant also submits on the reasonableness issue that "credit reporting agencies are not in a position to resolve complex disputes between creditors and consumers, and that consumers should not be permitted to use lawsuits against consumer reporting agencies to collaterally attack their creditors.” Defendant then cites
Saunders v. Branch Banking & Trust Co.,
. More fully, the Supreme Court wrote: "While the term recklessness is not self-defining, the common law has generally understood it in the sphere of civil liability as conduct violating an objective standard: action entailing an unjustifiably high risk of harm that is either known or so obvious that it should be known.... It is this high risk of harm, objectively assessed, that is the essence of recklessness at common law.... There being no indication that Congress had something different in mind, we have no reason to deviate from the common law understanding in applying the [FCRA]. Thus, a company subject to [the] FCRA does not act in reckless disregard of it unless the action is not only a violation under a reasonable reading of the statute's terms, but shows that the company ran a risk of violating the law substantially greater than the risk associated with a reading that was merely careless.”
Safeco,
. These provisions govern disclosures to consumers and the duties of users of consumer reports.
. The FCRA contains an additional preemption provision in § 1681t(b)(l)(F), stating, "No requirement or prohibition may be imposed under the laws of any State ... with respect to any subject matter regulated under ... section 1681s-2 of this title, relating to the responsibilities of persons who furnish information to consumer reporting agencies.” Section 1681s-2 provides in the main that "[a] person shall not furnish any information relating to a consumer to any consumer reporting agency if the person knows or has reasonable cause to believe that the information is inaccurate.” 15 U.S.C. § 1681s-2(a)(1)(A) (2006). Elsewhere § 1681s-2 "sets forth the duties of furnishers to investigate inaccurate information upon notice of a consumer dispute, delegates responsibility for enforcement of the various provisions of 1681s-2, and authorizes certain federal agencies to promulgate regulations implementing 1681s-2.”
Manno v. Am. Gen. Fin. Co.,