ORDER DENYING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT
In this сase, plaintiffs are Raffi Sogho-monian (“Raffi”) and Deborah Garabedian (“Deborah”) (collectively “Plaintiffs”). They have sued defendants the United States and the Internal Revenue Service (“IRS”), Fidelity National Title Insurance Company (“Fidelity”), and Trans Union LLC (“Trans Union”) (collectively “Defendants”).
The only remaining defendant in this action, Trans Union, has moved for summary judgment on the only remaining claim — Plaintiffs eighth claim for relief against Trans Union under the federal Fair Credit Reporting Act (“FCRA”), 15 U.S.C. section 1681 et seq. Hearing on Trans Union’s motion was previously set for June 9, 2003. By order filed June 3, 2003, the court vacated the hearing on Trans Union’s motion for summary judgment and took the matter under submission as of that date. See L.R. 78-230(h).
For the reasons set forth below the court now issues this order denying Trans Union’s motion in its entirety. 1
DISCUSSION
The facts and procedural background of this case, as well as the parties’ arguments in connection with the present motion, are well known to the parties and to the court. They will therefore not be recited here except as necessary to rule on the present motion.
The following issues are discussed in the same order as presented in Trans Union’s moving papers.
I. Negligent Violation of the FCRA
Trans Union’s argument that it cannot be held liable for negligent violation of the FCRA is rejected.
Trans Union’s assertion that it cannot be held hable on a theory of negligent FCRA violation is based on two main contentions, each of which contains several sub-arguments. These main arguments are discussed separately below.
A. Failure to investigate tax liens
Trans Union’s first main argument (or set of arguments) centers upon Trans Union’s alleged failure to adequately and nonnegligently investigate the status of the tax liens which had been imposed upon the property of Raffi.
Trans Union contends, first, that it complied with the requirement that it follow “reasonable procedures” with respect to the status of these tax liens as set forth in the caselaw interpreting the FCRA because (1) Plaintiffs submitted only one notice of dispute to Trans Union regarding the tax liens, and this notice of dispute “referenced, but did not identify by number,” the Certificates of Non-Attachment of Federal Tax Liens (“CNAs”) issued by
Under the FCRA, a credit reporting agency is required to maintain reasonable procedures to assure the accuracy of information it disseminates, both with respect to the information contained in credit reports generally and with respect to the reinvestigation the agency is required to perform if a consumer disputes the contents of a report.
See
15 U.S.C. §§ 1681e(b), 1681i;
see also Thomas v. Trans Union LLC,
As can be seеn from the summary of Trans Union’s arguments set forth in the previous paragraph, Trans Union’s main defense in this case is one of “reasonableness”; Trans Union contends that it acted reasonably in its handling of Plaintiffs’ dispute, particularly in light of the allegedly unusual — indeed, almost unheard of according to Trans Union- — -nature and physical appearance of the CNAs that Plaintiffs provided as proof that the tax debts were not theirs. In addition, Trans Union appears to contend that it should not be held liable for continuing to report the tax liens as unsatisfied after receiving Plaintiffs’ notice of dispute because the CNAs were unknown to the company it depended upon to verify disputed information of this type, Hogan Information Services (“Hogan”).
To the extent that Trans Union’s argument is that it should not be held liable for the continuing appearance of the tax hens after Plaintiffs submitted a notice of dispute because Hogan was unfamiliar with CNAs, this argument is contrary to clearly established law. In order for this argument to prevail, Trans Union would have to establish that its reliance on Hogan was itself reasonable; if it was not reasonable, then Trans Union cannot be said to have used reasonable procedures to assure the accuracy of the information it continued to disseminate even after receiving notice of Plaintiffs’ dispute. However, the caselaw is clear that a credit reporting agency does
not
act reasonably under the FCRA by deferring entirely to another source of information. The “grave responsibility” imposed by the FCRA’s reinvestigation requirement “must consist of something more than merely parroting information received from other sources.”
Cushman v. Trans Union Corp.,
Trans Union’s next main contention that even if the tax lien information it reported was technically incorrect, it was not incorrect in any
material
way because at the time Trans Union wrongfully reported the tax hens as unsatisfied even though they actually were satisfied, there were
other
tax liens in the same amounts and concerning the same properties which had not been “nonattached” by the IRS. In other words, as the court understands Trans Union’s argument, the fact that Trans Union continued to misreport the status of Plaintiffs’ tax debt was basically immaterial, because there undisputedly were other tax liens which were identical except for the issuance date and the identification numbers. The court rejects this argument. Under federal law, a CNA cannot issue unless the IRS is satisfied that “because of confusion of names or otherwise, any person (other than the person against whom the tax was assessed) is or may be injured by the appearance that a notice of lien.” 26 U.S.C. § 6825(e).
The filing of a CNA in the office in which the lien was initially filed operates to establish “conclusivefly] that the lien of the United States does not attach to the property of the person referred to in [the tax lien].”
26 U.S.C. § 6325(f)(1)(D) (emphasis added). Here, the tax liens at issue were initially filed in the Fresno County Recorder’s Office. This fact is apparently not disputed by any party. Later, upon the issuance of the CNAs, Plaintiffs recorded the CNAs with the same office— i.e., the Fresno County Recorder’s Office. This fact is also undisputed. Under section 6325(f)(1)(D), then, the CNAs demonstrated
conclusively
“that the lien of the
If the foregoing facts were not enough — i.e., if the CNAs plus Plaintiffs’ statement of dispute were not sufficient to put Trans Union on notice that the tax hens no longer existed and therefore should not have been reported — there are two other facts which in this court’s view should have permitted Trans Union to perform a more complete investigation and determine that the hens had been removed. These two other fact are as follows. First, the CNA itself states that the tax hens based on the 1990 and 1991 tax years “did not attach, and do[] not now attach, to any separate property of Raffi K. Soghomonian,” (Russ Decl. Ex. A at 11, 15 (emphasis added).) This language— i.e., thаt the CNA eliminated the tax hen for any of Raffi’s property — should have been sufficient to put Trans Union on notice that the liens were eliminated and should not have been reported, even if Hogan had “confirmed” their existence. Second, the statement of dispute included with it a telephone number for Frank Guido, along with a notation stating Guido would verify that the tax liens had been nonattached. (Soghomonian Decl Ex. N at 1.) 4 It appears that neither Trans Union nor Hogan made any reasonable effort whatsoever,-at least at this point in time, to verify with Guido that the tax hens did or did not exist. This failure to verify the status of the tax liens in spite of being provided with very specific contact information to assist in doing so further suggests that Trans Union’s investigation in this matter was not reasonable under the circumstances.
To summarize: the CNAs effectively nonattached all of the hens upon Raffi’s property; Trans Union was specifically informed of this fact in unambiguous terms; and yet Trans Union failed to change the way in which it reported the hens on Plaintiffs’ credit report, and failed to so much as provide a copy of the CNAs to Hogan to assist in its reinvestigation of the status of the tax debt. In these circumstances, a reasonable jury could find that Trans Union unreasonably failed to respond to Plaintiffs’ statement of dispute. The court is therefore unable to grant summary judgment to Trans Union. 5
Trans Union’s next argument is that regardless of whether it was negligent in its handling of Plaintiffs’ dispute, Plaintiffs cannot establish that they suffered any damages as a result. First, Trans Union states that Plaintiffs “have not even alleged that they were denied credit” during the time between the filing of their statement of dispute and the date upon which the tax liens were permanently removed from the credit reports — a period of perhaps five months according to Trans Union, or an “extremely brief time period.” In the absence of a denial of credit, Trans Union appears to argue, there can be no recovery under the FCRA. Second, Trans Union argues that even if the tax liens were incorrectly reported, there were other, still valid tax liens that existed at that time against Raffi, and the inaccuracies contained in the credit reports were therefore “immaterial.” The court rejects both of these arguments.
Regarding the “materiality” of the contents of the credit reports, the court has already observed that a CNA operates to extinguish the government’s lien upon “the property of the person referred to” — i.e., the property of Raffi. Thus, as a matter of federal law, a single CNA with respect to a property would operate to eliminate all tax liens upon that property. At least this would appear to be true absent some unusual circumstance such as tax liens imposed by different taxing authorities, or different tax debtors who are co-owners of the same property (neither of which circumstances is alleged to exist here). Moreover, the CNAs themselves indicated that the government’s tax liens do not and did not attach to any property of Raffi. This should have been sufficient to put Trans Union on notice that all tax liens against the property had been eliminated, and it forеcloses Trans Union’s argument that the error in reporting was immaterial because there were other tax liens that it could have reported anyway if it had wanted to.
The argument that Plaintiffs, have failed to allege a denial of credit, and (apparently) that Plaintiffs therefore cannot demonstrate the existence of any damages “as a result” of the reporting of the tax hens, is contrary to the law of the Ninth Circuit. The Ninth Circuit has clearly stated that an FCRA violation “is actionable even absent a denial of credit,” and “no case has ever held that a denial of credit is a prerequisite to recovery under the FCRA.”
Guimond,
II. Willful Violation of the FCRA
Trans Union next contends that even if it can be held liable for negligent violation of the FCRA, it cannot be held liable on a willful violation theory because (1) Trans Union performed a “good faith investigation” in' response to Plaintiffs’ statement of dispute, and eventually removed the tax liens from Plaintiffs’ credit report in spite of the “enormous complexity” created by the multiple tax liens and the “rare” CNAs; (2) the true'reason for any delay in removing the tax liens from Plaintiffs’ credit report was Hogan’s lack of familiarity with CNA’s, and this is not indicative of bad faith; and (3) there was “so much uncеrtainty” regarding whether the tax liens (or CNAs) were valid that “any finding of willful misconduct is precluded as a matter of law.” The court disagrees.
The foregoing three arguments can be boiled down to one simple contention: that the tax liens and CNAs were unusual and difficult to understand, and Trans Union therefore did not act willfully when it took months to delete them from Plaintiffs’ credit reports. The court finds that the premise upon which this argument rests— that the tax liens and CNAs were “complex” and “rare” — is flawed, and that the conclusion Trans Union reaches does not follow from the premise in any event.
The CNAs were not complex at all. As is relevant here, they stated that (1) the person issuing the CNA is a duly authorized IRS representative; (2) the tax liens associated with Soghomonian Farms and certain other individuals and entities of the same last name “did not attach, and do[ ] not attach, to any separate property of [Raffi]”; (3) the tax liens also did not and do not attach to a certain parcel of property located on Belmont Avenue in Sanger, California; (4) a hen was previously filed in a certain amount and with a certain number, as provided by law; and (5) the “reason for this action [the issuance of the CNA] is that it has been determined that Raffi Soghomonian, is not liable for tax under the above assessment.” (Russ Decl. Ex. A at 11, 15.) The CNA was then signed by the issuing IRS official. Trans Union fails to explain to the court’s satisfaction what was so “complex” about this language as to preclude a finding that Trans Union was acting “willfully” when it failed to delete the derogatory entries on Plaintiffs’ credit reports fоr a period of months after Plaintiffs provided Trans Union with copies of these documents.
Moreover, as already observed, the CNAs were themselves accompanied by
There is another reason why the court finds that a reasonable jury could conclude that Trans Union’s violation of the FCRA in this case — assuming the jury finds that the FCRA was in fact violated — was “willful”: the timing of Trans Union’s
eventual
removal of the tax liens from Plaintiffs’ credit report. As one might imagine, Plaintiffs became increasingly frustrated over time with the fact that the tax liens continued to appear on their credit reports, and they eventually filed a small claims court action against Trans Union for its alleged mishandling of their credit reports. At one point the hearing on Plaintiffs’ small claims matter was scheduled for July 19, 1999.
(See
Russ Deck Ex. B at 79.) As the hearing on the small claims action approached, and possibly at the direction of the Trans Union employee who would have appeared in small claims court on that case, another Trans Union employee sent a document referred to in Plaintiffs’ papers as the “eight page fax” to Guido of the IRS, requesting that Guido “review [the] documents” and determine if
Based on the foregoing, a jury might well find that Trans Union was perfectly capable ah along of examining the CNAs and consulting with the IRS, and was also fully able to determine that the tax Hens were invalid. Support for such a finding would come from the fact that Trans Union did exactly this — i.e., investigate the Hens and then delete them — when pressed by litigation to do so. Indeed, in its reply papers, Trans Union admits that its ultimate removаl of the Hens from Plaintiffs’ credit report occurred “as a direct result of’ the communication between Guido and the Trans Union employee who would have appeared at the smaU claims court hearing. In this circumstance a jury might conclude that Trans Union was acting in willful violation — or at least willful disregard — of its statutory duties when it processed Plaintiffs’ statement of dispute. 9
Trans Union’s next argument is that it cannot be held liable under the FCRA for making unauthorized disclosures to the IRS of consumer information other than “identifying information” as permitted by the statute. 15 U.S.C. § 1681f. Under the FCRA, a credit reporting agency “may furnish identifying information respecting any consumer, limited to his name, address, former addresses, places of employment, or former places of employment.” Id. Although this section does not purport to authorize an action for damages, elsewhere the FCRA provides in general terms for the imposition of civil liability for negligent or willful violations of its provisions. See 15 U.S.C. §§ 1681n, 1681o. One of the theories of recovery set forth in Plaintiffs’ complaint is that Trans Union “provid[ed] information to a governmental entity, the IRS, in excess of a name, address, former address, and place of employment.” This occurred, according to Plaintiffs, on two occasions: (1) when the Trans Union employee mentioned above sent the “eight page fax” to Guido of the IRS; and (2) when the employee who would have represented Trans Union in the small claims hearing spoke to Guido about the status of the liens.
Trans Union makes the following discernible (but in some cases brief) arguments in support of its more general contention that it cannot be held liable under section 1681f for unauthorized disclosures to the IRS.
First, Trans Union asserts that the language of section 1681f “is phrased permissively.” Trans Union states that this section “provides that a consumer reporting agency ‘may furnish identifying information respecting any consumer, limited to his name, address, former addresses, places of employments, or former places of employment, to a governmental agency.’ ” (Mot. at 20:22-25 (emphasis added).) By this Trans Union appears to argue that there is no requirement in section 1681f that it not refrain from disclosing identifying information to government agencies, because the word “may” appears near the beginning of the passage just quoted. In addition, Trans Union may be contending that even if it was not permitted under section 1681f to disclose “identifying information,” the only information which can qualify as “identifying” under the statute is information relating to the consumer’s physical characteristics, ethnicity, and the like. Trans Union argues that “[b]y its express terms, the statute applies only to ‘identifying information,’ ie., the disclosure of information (other than that expressly permitted) that would ‘identify’ the consumer, e.g., physical characteristics, ethnicity, etc.” (Mot. at 20:25-29.) This appears to be a contention that the term “identifying” as used in the FCRA should mean only information such race or physical characteristics, and because Trans Union did not disclose any such information to the IRS, it cannot be held liable. Trans Union’s arguments are rejected.
Trans Union’s first argument is creative, but ultimately fails. Contrary to Trans Union’s argument, the use of thе word “may” in the statute does not convert the entire section into a “permissive” one. Such an interpretation would in essence eliminate the need for the entire section; it would render it superfluous. At a minimum, it would nullify the phrase “limited
As to the meaning that Trans Union appears to attribute to the term “identifying,” the court is equally unpersuaded. Trans Union appears to argue that the term should be interpreted to mean only race or physical characteristics, and perhaps also other features of the same general sort. However, it clearly means much more. Identifying means identifying. In the present context — i.e., the context of consumer credit reports — the term identifying must, at a minimum, be construed to include information of a personal nature which pertains or relates to a consumer’s spending habits or creditworthiness, as well as other private facts relating to the person’s financial situation. And, as will be seen below, the allegedly excessive disclosures of which Plaintiffs complain in this case could easily fall within this definition of the word “identifying.”
Having determined that an excessive disclosure claim may indeed be based on a disclosure of information other than the four or five types permitted by section 1681f — i.e., the consumer’s name, address, former address, place of employment, and former place of employment — the question remains: did Trans Union disclose information to the IRS other than information of these four or five types? The court finds that Trans Union did, or at least a reasonable jury could so conclude. Plaintiffs’ excessive disclosure theory in this case is based in part upon a disclosure to the IRS by Trans Union of “disputed accounts other than accounts related to the disputed IRS tax liens.” (Opp. at 19:15-16.) There may be some dispute based on the record as to exactly what the so-called “eight page fax” consisted of. Plaintiffs appear to contend that the facsimile consisted of the documents attached to Exhibit E of the Russ declaration, identified by numbers 120 through 128 stamped in the bottom corner of each page.
(See
Pl.’s Sep. Stmt. Undisp. Facts at 25:5-8;
see also
Opp. at 19:14.) Among these pages is Plaintiffs’ two-page statement of dispute.
But, as just noted, the eight-page facsimile may not have consisted — or may not have consisted entirely — of the materials just discussed. In one of her depositions in this matter, Deborah identified a copy of a
different
lien-related document that may have been part of the eight-page facsimile. The court finds that
if
it was sent to Guido, this document may аlso have constituted an improper excessive disclosure. Assuming that the eight-page facsimile consisted of the documents which Trans Union says it did, among these documents was a “Universal Data Form” concerning a property lien different from any of the liens mentioned so far.
(See
Russ Decl. Ex. E at 30.) This Universal Data Form is the other lien-related document referred to by Deborah in her deposition. The liens discussed so far have all been in one of three amounts: $57,178.19; $500.00; and $39,100.10. The lien which was the subject of the Universal Data Form that may have been included in the eight-page facsimile was apparently for a different debt altogether; it has a different account number, and it is in the (different) amount of just over $34,000.00. The Universal Data Form just mentioned bears a handwritten notation next the printed word “court”; the notation says, “Fresno Municipal Court,” and the Universal Data Form refers to number 92177570 as the “case number” for whatever proceedings occurred in that court. Assuming the Universal Data form was in fact sent to Guido, these notations on the Universal Data Form may have created the impression that Plaintiffs were involved in some sort of litigation in the state court system when — apparently at least — they were not. The court finds that this separate alleged disclosure constitutes an independent evidentiary basis upon which Trans Union’s motion for sum
Trans Union argues that even if Plaintiffs could prove a violation of section 1681f for excessive disclosure of personal information, they cannot ultimately prevail on this сlaim because they cannot prove that they suffered any damages as a result. This argument is rejected. Although it did not involve section 1681f, the Ninth Circuit’s opinion in Guimond seems clearly contrary to this argument; the Ninth Circuit in Guimond stated that a plaintiff nan recover damages based on an FCRA violation for, among other things, emotional distress.
In short, the court finds that it would be improper to enter judgment in favor of Trans Union on the excessive disclosure claim, and will therefore deny Trans Union’s motion to this extent. 10
IV. “Standing”
Trans Union’s final argument is that because Deborah is Raffi’s wife, and because the credit report at issue here purportedly pertained to Raffi rather than Deborah, Deborah lacks “standing” to recover in this case. Trans Union states that there is a split in the caselaw on the question of “spousal standing” under the FCRA, but argues that the better view is that there is no spousal standing in a case such as this one. The court rejects this argument for the following reasons.
First, Trans Union’s argument is directly contrary to the FCRA itself, at least so far as the facts of this case are concerned. Although Trans Union argues that the credit report at issue here was Raffi’s, it is clear from the evidence that it actually falls within the statutory definition of credit report as to both Raffi and Deborah. Under the FCRA, a “consumer credit report” is
any written, oral, or other communication of any information by a consumer credit reporting agency bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer’s eli- . gibility for (A) credit ....
15 U.S.C. § 1681a(d)(l) (emphasis added). So far as negligent violations of the FCRA are concerned, the FCRA creates a private
The credit report in this case, although ostensibly pertaining to Raffi only, actually contains considerable information pertaining to Deborah as well. For example, it refers to at least three accounts — a mortgage, a credit card, and an auto loan— which are, according to the credit report, “joint accounts.” (Russ Decl. Ex. B at 59-60.) These notations constitute “information [reported] by a consumer credit reporting agency bearing on a consumer’s credit worthiness” which either was used or could reasonably have been expected to be used to “serv[e] as a factor in establishing [Deborah’s] eligibility for ... credit.” 15 U.S.C. § 1681a(d)(l). Thus, even though the credit report at issue here purports to be the credit report of Raffi, it is clear that it also qualifies under the FCRA as a credit report with respect to Deborah. Under the FCRA, then, the only question at this time is whether Deborah is a “consumer” with respect to whom Trans Union has violated “any provision of this sub-ehapter,” and whether Deborah has sustained “any actual damages” as a result. 15 U.S.C. §§ 1681n(a), 1681n(a)(l)(A); see also 15 U.S.C. §§ 1681o(a), 1681o(a)(l). The court finds that Deborah is such a consumer who has sustained compensable damages under the FCRA, or at the very least there are genuine issues of material fact which preclude any other conclusion at this stage of the game.
There appears to be no authority from within the Ninth Circuit considering the question of whether the spouse of an individual named in a credit report may maintain an action in a situation such as this one — i.e., where the spouse seeking to maintain the action is not named in the credit report, but the credit report contains credit-related information regarding the unnamed spouse. Cases from other jurisdictions provide some guidance, however. In general, the rule announced in these cases is that “where a credit report relates to both a husband and wife, both spouses have standing to sue for damages.”
Wiggins v. Equifax Serv., Inc.,
In support of its motion for summary judgment, Trans Union argues, as already noted, that there is a split of authority regarding whether a spouse may recover in cases such as this one. Trans Union asserts that the better view is that no such recovery is permitted, and that the contrary caselaw — particularly
Williams v. Equifax Credit Info. Serv.,
Finally, Trans Union appears to argue that even if some of Deborah’s personal credit information appears on the report, and even if Deborah was injured by the incorrect reporting of some information contained in that report, Deborah cannot recover here because she cannot demonstrate that the incorrect information that injured her is the same information that pertained to her directly. In other words, as the court understands Trans Union’s argument, even if the tax liens were incorrectly reported in a credit report that contained Deborah’s credit information, and even if Deborah suffered damages because of the incorrect reporting of the tax liens, she still lacks standing here because the tax liens themselves were not Deborah’s, but Raffi’s. This argument is contrary to the liberal construction of the FCRA mandated by Ninth Circuit. It is also contrary to the language of the FCRA itself. The FCRA imposes civil liability for negligent noncompliance with the FCRA in favor of “any consumer” who can show “any actual damages sustained by the consumer” as a result of the noncompliance. 15 U.S.C. §§ 1681o(a), 1681o(a)(l). The failure that Trans Union is accused of here consists of misreporting credit information of one of the Plaintiffs in a document that qualifies as a credit report as to both of the Plaintiffs. As long as both Plaintiffs can show that they suffered injury as a result, there is no reason under the statute why both should not be able to recover. Both qualify as “consumers” under the FCRA, and both have offered at least some evidence suggesting that they suffered damages as a result of Trans Union’s failure to comply with a provision of the FCRA. 13
V. Remaining Issues
Before concluding, there are a few remaining issues that should be addressed.
First, it is clear that Plaintiffs main theory so far as the incorrect reporting of credit information is concerned is
In their opposition papers, Plaintiffs state that if “liberally construed,” their complaint asserts not only the claims that have already been discussed above, but also a claim for failure to follow reasonable procedures to assure maximum accuracy in violation of 15 U.S.C. section 1681e(b). Trans Union does not appear to respond directly to this assertion in its reply papers; it does, however, refer to subsection e(b) at one point as the “source of the key statutory duty at issue in this litigation.” (Reply at 18:12-13.) Thus, it appears that Trans Union does not dispute that Plaintiffs have alleged a subsection e(b) claim in this case. Neither Trans Union nor Plaintiffs have addressed the state of evidence as it might relate to Plaintiffs’ subsection e(b) claim — assuming one exists — in anything more than the most cursory fashion. Thus, the court must conclude that Plaintiffs’ subsection e(b) “reasonable procedures” claim — the existence of which Trans Union itself does not appear to challenge — must be allowed to proceed to trial. This is the first reason for the court tо conclude that a subsection e(b) claim does indeed exist, and for the court to deny summary judgment on this claim.
The second reason for the court to conclude that a subsection e(b) claim is set forth in the complaint is the complaint itself. The complaint alleges that
[a]s a result of how the credit reporting agencies reported the liens, Raffi Soghomonian and Deborah Garabedian were not previously aware that the May 16, 1995 hens were the source of their constant credit reporting and related problems because the credit reporting agencies do not list sufficient information to have singled out the May 16, 1995 series as the cause [of Plaintiffs’ credit problems]. Specifically, the credit reports which were provided by Trans Union listed the March, 1995 scries which were supposedly effectively non-attached; of course, the credit reporting agencies eventuahy claimed otherwise, holding the position that what they reported was accurate.
(First Am. Compl. at 46:20-47:3.) Later, the complaint alleges that although Trans Union “claims it has followed correct reporting procedures regarding insuring the accuracy of the reports ... in fact, the reports are highly inaccurate [and Trans
Next, there is the question of the status of Plaintiffs’ apparent “permissible
The complaint clearly alleges the improper disclosure by Trans Union of information other than allowable “identifying information” to a government agency — in this case the IRS. 15 U.S.C. § 1681f. However, the complaint cannot be interpreted to assert a claim based on the sometimes-related “permissible purpose” theory of recovery — which could probably more accurately be described, at least in the present case, as the impermissible purpose theory.
See
15 U.S.C. § 1681b.
15
The “permissible purpose” language of the FCRA, and its prohibition against furnishing credit reports for an impermissible purpose, is different from the section 1681f “excessive disclosure” rule in the following way: section 1681f concerns
any identifying information
(other than the consumer’s name, address, and similar information), while section 1681b only prohibits the improper furnishing of a credit report.
See generally
15 U.S.C. § 1681b(a). Here, as already noted, Plaintiffs allege that Trans Union improperly disclosed identifying information to the IRS, but their complaint
does not
allege that Trans Union furnished a credit report to the IRS. Plaintiffs allеge that after they sued Trans Union in small claims court, Trans Union “sent information about an erroneous $10.00 Fresno County Revenue debt to the IRS; and, for reasons still unknown, with Fresno County Municipal Court as an identifying factor.” (First Am. Compl. at 47:15-18 (citation omitted).) This allegation of disclosure to the IRS of the information related to the Fresno court appears to be a reference to the Universal Data Form, mentioned above, that may have been sent as part of the “eight page fax” to Guido of the IRS. This disclosure might appear at first glance to constitute a credit report as defined in the FCRA; the FCRA defines a credit report
in part
as any communication, written or oral, which “bearfs] on a consumer’s credit worthiness, credit standing, credit capacity, character ... [or] personal characteristics.” 15 U.S.C. § 1681a(d)(l). A Universal Data Form suggesting that a consumer has an unpaid debt incurred in connection with a court proceeding certainly qualifies as a communication “bearing on a consumer’s credit worthiness.” However, the FCRA definition of credit report goes on to state that the communication which constitutes the credit report must be “used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer’s eligibility for” credit, insurance, employment, or other permitted purposes.
Plaintiffs now argue that the purpose of the disclosure was not to aid in the verification of the disputed debts, but to assist Trans Union in preparing for the small claims court hearing. However, this theory was not alleged in the complaint. If Plaintiffs wished to proceed on such a theory, they should have sought leave to amend their complaint. However, they have not done so — at least not so far as any section 1681b theory is concerned— and the court therefore concludes that there is no such theory of recovery currently at issue in this case. 16
The third remaining issue that must be considered at this time is this: in their eighth claim for relief, Plaintiffs state that
[i]n the event that it is determined that Trans Union’s conduct was not willful, Raffi Soghomonian and Deborah Gar-abedian would alternatively plead supplemental jurisdiction to recover pain and suffering as part of their actual damages, as permitted under California Civil Code, Section 1785.31, if not otherwise available under 15 U.S.C. 1681, et seq.
(First Am. Compl. at 78:14-20 (underscoring added).) Plaintiffs’ mention of section 1785.31 is presumably a reference to California’s Consumer Credit Reporting Agencies Act (“CCRAA”), California Civil Code section 1875.1
et seq.
The CCRAA provides remedies to consumers who are victims of improper credit reporting; these remedies are, in many respects at least, similar to those available under the FCRA.
See Guimond,
Finally, the court notes that Plaintiffs’ opposition papers assert that Trans Union failed to “flag [a] disputed item of information in [their] credit report” in violation of a provision of the FCRA they describe as section “1681(c).” In fact, there is no section 1681(c). The section that Plaintiffs probably intend to cite is 1681c, which states (as a relevant here) that “[if] a consumer reporting agency is notified pursuant to section 1681s-2(a)(3) of this title that information regarding a consumer
CONCLUSION
For the reasons set forth above,
(1) Trans Union’s motion for summary judgment IS HEREBY DENIED in its entirety;
(2) notwithstanding the foregoing, Plaintiffs may not proceed to trial on any theory based on 15 U.S.C. section 1681c(f), or on the California Consumer Credit Reporting Agencies Act;
(3) Plaintiffs may not proceed to trial on any “permissible purpose” theory under 15 U.S.C. section 1681b(a); and
(4) in light оf this court’s July 23, 2003, order vacating certain dates in this matter, Trans Union’s motion to continue the trial IS HEREBY DENIED AS MOOT.
IT IS SO ORDERED.
Notes
. Although the court denies Trans Union’s motion for summary judgment, this does not mean that Trans Union will obtain no relief whatsoever. Instead, the court will find below that as to certain claims that are arguably contained in the complaint, these claims either fail to state a valid basis for recovery or are not sufficiently pleaded to allow Plaintiffs to proceed to trial. Thus, if nothing else, by the present order the court will narrow to some extent the issues that remain for trial of this matter.
. Trans Union’s fifth argument as set forth in text above refers only to the credit report of Raffi, as opposed to Deborah. One of Trans Union's theories in moving for summary judgment is that Deborah lacks standing to pursue recovery for the allegedly improper conduct at issue here because (1) she is Raffi’s wife; (2) the portions of Raffi’s credit reports currently under discussion did not make specific reference to Deborah; and (3) persons not specifically mentioned in a credit report, and who themselves do not complain of inaccurate reporting of their information (as opposed to the information of a spouse), lack standing to pursue recovery under the FCRA. This argument, as formulated by Trans Union, falls under the general heading of "spousal standing.”
It is not entirely clear whether Plaintiffs contend that any inaccurate information was reported in a credit report belonging to Deborah personally, as opposed to Raffi. At times Plaintiffs appear to assеrt that Deborah's credit reports also contained erroneous information which can form the basis for recovery against Trans Union; at other times they appear to concede that it is only Raffi's report that is at issue here. What is clear, however, is that Plaintiffs do contend that they are entitled to recovery so far as Deborah is concerned based on the inaccurate information contained in Raffi's report because certain joint credit accounts are mentioned there, and the denial of credit due to the incorrect reporting injured both Deborah and Raffi equally. In other words, Plaintiffs argue that even if the credit report at issue did not bear Deborah's name, it nevertheless had a veiy real and disadvantageous effect upon her as well as upon her husband.
The court will ultimately agree with this argument in the materials that follow, and will conclude that Deborah does indeed have standing to seek recovery under the FCRA in this case. Therefore, it appears to make little if any difference whether this order refers to the credit report that is primarily at issue in this case — Raffi's — in the singular or in the plural, or whether the court refers to it as Deborah's or Raffi's (or both). Therefore, the reader of this order should not place any special significance on any reference in the text above to the credit report or reports of Plaintiffs (or of either of them individually), as these terms will be used somewhat interchangeably here.
. As already suggested, none of this is changed by the fact that Trans Union supposedly relied upon Hogan to verify the status of the tax liens. There is no FCRA exception to the reinvestigation requirement that automatically excuses a credit reporting agency from liability simply because the agency relies upon some other company to do the very thing the agency is required by law to do— i.e., reinvestigate and verify the status of the disputed information. Furthermore, the evidence in this case suggests that Trans Union did not even bother to provide a copy of the CNAs to Hogan when it asked Hogan to investigate and verify. If Trans Union had provided a copy of the CNAs to Hogan, Trans Union's alleged reliance on Hogan's "verification” might have been more reasonable, or at least less unreasonable. As it is, however, it appears that Trans Union did literally nothing to verify the status of the tax liens other than to ask Hogan to do so. And it appears that Hogan did literally nothing to verify the status of the liens, at least so far as the CNAs were concerned, other than to report the debts as verified.
Under these circumstances it can hardly be said that Trans Union performed a reinvestigation that was reasonable as a matter of law, regardless of who Trans Union now contends should have performed the reinvestigation— i.e., Trans Union or Hogan.
. Trans Union objects to this evidence as irrelevant; however, it is highly relevant, as it tends to show not only that Trans Union could have investigated the status of the tax debts more carefully and completely, but that it had been provided the very information that would have assisted in performing such an investigation.
. The discussion in text above hаs so far focused on whether Trans Union can be held liable for negligent violation of the FCRA based on Trans Union's alleged failure to perform an adequate investigation of the status of the tax liens after being specifically asked to do so by Plaintiffs. A separate issue, which the parties have touched upon only briefly in their papers, is whether Trans Union can be liable for the related alleged FCRA violation of failing to notify potential creditors of Plaintiffs who had received inaccurate information from Trans Union in the past that the information was incorrect.
See
15 U.S.C. § 1681i(d). Trans Union contends that it cannot be held liable on any such theory because Deborah herself insisted that Trans Union
not
notify any such creditors of the results of its reinvestigation or send corrected
The court finds that Plaintiffs may proceed on their section 1681i(d) failure-to-correct (or, perhaps more accurately, failure-to-notify) theory. Trans Union acknowledges in its moving papers that "plaintiffs dispute [the] account” of the Trans Union employee who was supposedly asked by Deborah not to send out corrected copies of the credit report. Moreover, Plaintiffs' statement of dispute asking Trans Union to investigate and correct the credit report specifically requested that Trans Union "correct promptly and forward proof of correction to [Deborаh’s] address and to any subscriber of information within the past four months." (Russ Decl. Ex. A at 8 (emphasis added).) From this it would appear that there is, at a minimum, a disputed issue of fact whether Plaintiffs asked Trans Union not to send out corrected reports or whether they asked that Trans Union do just the opposite— i.e., whether they asked Trans Union to send out corrected reports. Accordingly, the court concludes that to the extent one of Plaintiffs' theories of recovery is a section 1681i(d) failure to correct or notify — and this is one of Plaintiffs' theories of recovery, (see First Am. Compl. at 77:19-28) — Plaintiffs must be allowed to proceed to trial on this theory. Insofar as Trans Union's motion seeks judgment as to this ground for recovery, Trans Union's motion is denied.
. By this comment, the court does not mean to suggest that Plaintiffs have no evidence of financial damages, or that they will be unable to prove the existence of such damages at trial. Indeed, Plaintiffs have offered evidence that they have suffered damages in the form of (among other things) their inability to qualify for mortgages during this approximate time period, and for Trans Union to suggest otherwise is disingenuous. (See, e.g., Sogho-monian Deck Ex. R, and accompanying declaration.)
Trans Union again objects to this evidence as irrelevant, and as hearsay. However, it clearly is relevant, as it tends to make a fact in dispute (i.e., the existence of damages) either more or less likely. See Fed.R.Evid. 402. It probably does not constitute hearsay either, because the denial letters upon which Plaintiffs rely appear to be business records, and Raffi is free in any event to testify to Plaintiffs' inability to obtain financing without relying on any оut-of-court statements. Trans Union's objections are therefore overruled.
. Under the FCRA, a credit reporting agency that receives a statement of dispute from a consumer is generally required to perform a reinvestigation and verification of the disputed item — and if the information cannot be verified, to delete the item — within 30 days of the consumer's notification of dispute. See 15 U.S.C. § 1681 i(a)( 1 )(A). An extension may be granted if the agency “receives information from the consumer during that 30-day period that is relevant to the reinvestigation,” 15 U.S.C. section 168 li(a)(l)(B); however, such an extension cannot exceed 15 days. Here, even if Trans Union was entitled to a 15-day extension, its completion of its reinvestigation and ultimate deletion of the tax lien information from Plaintiffs’ credit report took substantially longer than was allowed by law— some four to five months according to the evidence.
. One might have expected Trans Union to object to the evidence referred to in the foregoing paragraph. At least as to most of it, however, it did not. Of course, most of the facts set forth above come from evidence submitted by Trans Union, and the remainder of these facts come from the Plaintiffs’ own separate statement of disputed facts submitted in opposition to Trans Union’s motion for summary judgment — which in turn is based in considerable part on evidence provided by Trans Union or on the testimony of Trans Union’s own witnesses. As to Plaintiffs’ separate statement of undisputed facts, Trans Union has not filed a response. Thus, the court concludes that for present purpоses at least, the foregoing facts are without substantial dispute.
Even if these facts were in dispute, however, under the well-established principle that the court is required to credit the evidence of the nonmovant (Plaintiffs here), the court would still conclude that the evidence set forth in the text above is sufficient to preclude entry of judgment in favor of Trans Union at this time.
. There is appears to be no Ninth Circuit caselaw addressing the issue of the precise definition of "willful” as that term is used in the FCRA, and little (if any) published district court authority from within the Ninth Circuit that is
directly
on point. One case Plaintiffs rely on,
Mathews v. Gov’t Employees Ins. Co.,
In any event, Trans Union here appears to concede that liability for "willfully” violating the FCRA may be imposed based on a credit reporting agency's
“reckless
[ ] or ...
conscious disregard
of plaintiff’s rights,” (Reply at 13 n. 10 (citation omitted, emphasis original)), and Plaintiffs argue for a substantially similar definition in their opposition papers.
. In making this ruling, the court need not rely (and does not rely) upon a separаte alleged excessive disclosure may arguably have occurred when a Trans Union employee spolce to Guido by phone in advance of the small claims hearing mentioned earlier. This call was apparently initiated by the Trans Union employee, named Reger, who defends Trans Union in small claim court litigation.
Reger testified in deposition that the only identifying information he gave Guido regarding Plaintiffs was their names; however, he also testified that the call lasted 10 minutes. In addition, his notes indicate not that the liens were nonattached, as was apparently the case, but that they were "in dispute.” Furthermore, Reger’s notes indicate that Raffi’s brothers were actually liable for the tax debt. Plaintiffs argue that Reger could not have gotten this much information from Guido without disclosing more to Guido than Plaintiffs’ names, current and former addresses, and current and former places of employment.
Whether Reger disclosed more than the information allowed by section 168Ii(f), and whether the inference of more extensive disclosure that Plaintiffs rely on is a reasonable one, are issues the court need not resolve at this time. It is clear based on the materials already discussed that there is sufficient evidence to support Plaintiffs’ section 168 li(f) theory even without consideration of the Guido-Reger conversation, and Plaintiffs must therefore be allowed to proceed to trial on their section 168 li(f) claim regardless of what was or was not said in that conversation.
. The FCRA also provides that if an unsuccessful pleading, motion, or оther paper is filed "in bad faith or for purposes of harassment,” the court shall award attorney’s fees to the prevailing party. 15 U.S.C. § 1681 (o)(b). The Ninth Circuit has stated generally that "only plaintiffs are entitled to recover attorneys' fees” under the FCRA.
Guimond,
. Trans Union contends that the evidence just mentioned should be disregarded as irrelevant, and as containing inadmissible hearsay. These objections have already been overruled above with respect to Exhibit R to the Soghomonian declaration, and are overruled again so far as the other exhibits referred to above are concerned.
Trans Union also contends that even if Plaintiffs were denied some credit opportunities as a result of somebody's incorrect reporting of Plaintiffs’ credit information, there is no evidence that the incorrect reports were those of Trans Union, as opposed to some other credit reporting firm. Thus, Trans Union asserts that there is no direct evidence that Deborah suffered any harm "as a result of” its alleged violations of the FCRA, and summary judgment should be granted. This argument is rejected.
It is true that the credit denial letters do not say, "we now deny your request for credit because of the contents of your Trans Union credit report.” However, a jury could easily infer that this was the reason. The Trans Union report contained inaccuracies regarding the tax liens; the denial letters (or at least one of them) was addressed to Deborah as well as Raffi; the denial letters specifically mentioned the tax liens as a reason for denial; and the denial letters were issued during the time period in which the tax lien status was being incorrectly reported on the Trans Union credit report. In ruling on a summary judgment motion the court must draw all reasonable inferences in favor of the nonmovant — in this case Plaintiffs.
See Matsushita Elec. Indus. v. Zenith Radio Corp.,
. Further statutory support for the conclusion reached in text above is found in the language of section 1681i(a)(l)(A), which imposes a duty on the consumer reporting agency to investigate the accuracy of "any item of information contained in a consumer's file" if the consumer "notifies the agency directly of such dispute.” 15 U.S.C. § 1681i(a)(l)(A) (emphasis added). The requirement that the reporting agency reinvestigate "any item ” found in a consumer’s file — and not just those items that pertain to the consumer directly, or those debts that were incurred by the consumer making the request — is further evidence that the FCRA was intended by Congress to operate not as Trans Union claims it does, but in favor of any consumer whose information appears on a report, whether or not the incorrect information is the information of the complaining consumer оnly.
Moreover, there is evidence in the record suggesting that even if Trans Union believed the liens pertained only to Raffi, the IRS did not share this view, but (apparently) believed that Deborah could be depended upon as a possible source of satisfaction of the debt that the tax liens represented. Plaintiffs' currently-operative pleading (their verified first amended complaint) alleges that an IRS agent visited their home and told Deborah that the IRS would be able to collect the "entire amount[s]” represented by the IRS liens, in part because Deborah had “good future earning potential” since she was or would soon become an attorney. (First Am. Compl. at 20:4-7.)
See Lopez v. Smith,
. Even if the parties had addressed the subsection e(b)-related issues in a more comprehensive manner, and these issues were therefore more sharply focused for the court’s consideration, the court would still conclude based on the evidence that summary judgment should not be granted as to this claim.
The Ninth Circuit follows a burden-shifting approach in determining the propriety of granting summary judgment on a subsection e(b) claim. First, the plaintiff must make out a prima facie case. This is done by offering evidence "tending to show that [the] crеdit reporting agency prepared a report containing inaccurate information.”
Guimond,
Here, Trans Union appears to contend that the procedure it used to avoid the appearance of inaccurate information consisted of contracting with Hogan, a "third party vendor” responsible for collecting public record information for the geographic area which includes Plaintiffs’ place of residence. But it is not at all clear from the record that this "procedure” — which may, based on the evidence, have consisted of nothing more than a wholesale abdication to Hogan of the duty to act reasonably — -was at all reasonable. For example, it appears to be undisputed that Hogan does not check for CNAs when it investigates the status of a consumer's tax lien, or at least that it did not check for CNAs prior to the commencement of this litigation. This is sufficient to preclude a finding by this court that Trans Union acted reasonably as a mаtter of law in obtaining and reporting the information contained in Plaintiffs’ credit report, especially in light of the Ninth Circuit’s clear mandate that the district courts must allow the question of reasonableness to be decided by juries in the “overwhelming majority of cases.” In short, Trans Union has offered nothing which would persuade this court that the current case falls outside of the "overwhelming majority” in which the plaintiff should be allowed to have the reasonableness issue decided by a jury. For this additional reason, summary judgment as to Plaintiffs' subsection e(b) claim must be denied.
. The reason these two theories are sometimes related is that an excessive disclosure to the government of identifying information is, by definition, impermissible. Thus, there are no doubt cases in which an excessive disclosure of personal information may also qualify as a disclosure of a credit report that is not for a permissible purpose under section 1681b. However, as will be explained above in text, not every excessive disclosure constitutes a section 1681b impermissible purpose offense, because not every such disclosure constitutes a disclosure of a credit report.
. By this order the court does not express any opinion on the likely outcome of such a motion to amend if one had been made, nor does the court mean to suggest that such a motion, if Plaintiffs were to make one now, would necessarily succeed.
. In addition, the court notes that the parties have made no arguments whatsoever with respect to the possibility of a CCRAA claim. They simply have not addressed the merits of this claim, even assuming that it exists.