Alston v. Equifax Information Services, LLC
Filing
88
MEMORANDUM OPINION. Signed by Judge Theodore D. Chuang on 11/13/2014. (c/m 11/13/2014 aos, Deputy Clerk)
UNITED STATES DISTRICT COURT
DISTRICT OF MARYLAND
CANDACE E. ALSTON,
Plaintiff,
v.
Civil Action No. TDC-13-1230
EQUIFAX INFORMATION SERVICES,
LLC,
Defendant.
MEMORANDUM
OJ'INION
Before the Court in this Fair Credit Reporting Act ("FCRA") case is Plaintiff Candace
EeF No. 71.
Alston's Motion for a Temporary Restraining Order and Preliminary Injunction.
Alston
seeks to have this Court enjoin Defendant
Equifax
Information
Services,
LLC
("'Equifax") from reporting her Wells fargo mortgage account as 120 days past due. In a July
25.2014 Order, this Court denied the temporary restraining order ("TRQ") and deferred decision
on the preliminary injunction pending briefing by the parties.
2014, the Court heard oral argument on the Motion.
for disposition.
EeF No. 73. On November 3,
'Ibe remainder of the Motion is now ripe
For the reasons outlined below, the Motion for a Preliminary Injunction is
DENIED.
HACKGROUND
In November
2010, Alston obtained
a mortgage
subsequently sold to Wells Fargo Bank. See Am. Compl.'l
from Monarch
Hank that was
9-10, 26(g), ECF No. 29. The
terms of the loan required her to make monthly payments of approximately $812.
A.I, ECF No. 74-2.
Opp'n. Ex.
On June 30, 2011, Alston ordered her credit report from Equifax. and
discovered that it was "erroneously reporting" that she had not made a mortgage payment since
January 2011 and that she was therefore $4,057 in arrears.
Am. Compl.
'16-7.
On July 12,
2011, Alston filed an online dispute with Equifax about the report of a delinquent mortgage.
11.
Id.
On August 11, 2011, Equifax responded and informed Alston that the '''disputed
information hard] bccn verified and/or updated." [d. ~ 12.
At some point in August 2011, "Wells Fargo and Monarch Bank represented" to Alston
that she was now $6,492.24 in arrears on her mortgage.
Mot. at 1. On or before August 22,
2011, Alston sent a cashier's check for $6,492.24 payable to Monarch Bank to bring the account
current.
Id. at 1-2. Monarch endorsed the check and forwarded it to Wells Fargo.
Id at 2.
According to Alston, Wells Fargo then instructed Equifax to report the mortgage account as
"Current with no past due balance as of August 2011." Id.
On or around August 22, 2014, Alston asked Equifax to forward her a copy of its dispute
resolution procedure.
Am. CampI.
13. She included in that correspondence
a copy of the
$6,492.24 payment she sent to Monarch. Id. At some point, after receiving no response to her
letter, Alston sent Equifax a second letter repeating her request for a copy of its dispute
resolution procedure. !d.
14. On November 9, 2011, Equifax scnt Alston a "generic, form
letter" explaining that Equifax "does not perform [its own] investigation but forwards the dispute
for investigation by the furnisher," in this case, Wells Fargo. Id.
15.
In November 2011, the Wells Fargo mortgage was transferred or sold and the account
closed. See Mot., Ex. 1. That month, Alston again ordered her Equifax credit report and saw
that Equifax was still reporting her mortgage as in arrears despite her August 2011 payment.
Am. Compl.
16. As a result, on November 21, 2011, Alston submitted a second dispute letter
to Equifax, enclosing with that correspondence another copy of her $6,492.24 cashier's check to
2
Monarch. ld In a letter dated December 21, 2011, Equifax informed Alston that it had updated
her credit report to reflect that her mortgage account (1) was not late in August 2011; (2) was
180 or more days past due in September 2011; (3) was 180 or more days past due in October
2011; (4) was closed in November 2011; and (5) was "120 days past due and transferred or
sold." /d. II 17(a)-(e).
On February 24, 2012, Alston ordered a third credit report from Equifax. Jd
18. That
report continued to list her mortgage account as 120+ days late for September and October 2011.
Mot. at 2. On or about February 28, 2012, Alston resubmitted her dispute to Equifax, this time
providing "substantially more detailed information" about her payment history, including several
mortgage statements from Monarch. Am. CompI. ~ 18. In a letter dated March 27, 2012,
Equifax informed Alston that it had verified the accuracy of the report. Jd.
19. Alston
"quickly" responded with a letter reiterating her request for a description of Equifax's
investigation process and emphasizing that she did not want a '"generic" response, but rather one
explaining exactly how Equifax had resolved her particular disputes. Jd. ~ 20. In response,
Equifax again investigated the mortgage debt and reported to Alston that the account information
had been "verified." ld.
'1 21.
On or near May 29, 2012, Alston reiterated her request for a
specific description of Equifax's investigation policy. Jd'i
22. On June 4, 2012, Equifax
provided Alston with a '"general statement" of its investigations procedure. Jd ~ 23. In a letter
dated June 15,2012, Equifax informed her that a further reinvestigation had verified that the
Wells Fargo mortgage account belonged to Alston. ld '124.
On March 14,2013, Alston filed suit in the Circuit Court for Prince George's County
alleging that Equifax violated the FCRA and certain parts of Maryland's Miscellaneous
Consumer Protection Provisions, Md. Code, Commercial Law, ~ 14-1201, et seq., based on its
3
reporting of her mortgage account and what she characterized as its inadequate investigative
procedures.l The case was removed to this Court on April 25, 2013.
As of June 2014, Equifax was reporting the "status" of the mortgage account as "lo]ver
120 days past due" with "no late payments for [A]ugu,t, [S]eptember, [and] [OJctober 201 I."
Mot. at 2, Ex. 1. It was also reporting that the account had been "lrdIlsferred/sold" in November
2011 and therefore that it had a balance of SO and a past due amount of SO. Id.
On July 24, 2014, Alston filed a Motion for Temporary Restraining Order and
Preliminary Injunction asking this Court to "enjoin the Defendant from reporting inaccurate
information to Plaintiff's credit report." Mot. at 1. Specifically, Alston seeks to enjoin Equifax
from reporting that her mortgage was "over 120 days late." Id. at 4. According to Alston, her
Motion is prompted by the fact that she "has identified a property that she would like to
purchase." Id. at 2. She asserts that the allegedly inaccurate information on her credit report
"will prevent [her] from obtaining a loan to purchase thfatJ property." Id. at 3. Alston concludes
that "[0]nce another buyer purchases the property, [she] will never have the same opportunity to
buy that property again." Id.
On July 25. 2014, this Court denied Alston's motion for a TRO because she had not
satisfactorily established the possibility of imminent harm and deferred her motion for a
preliminary injunction pending additional briefing by the parties. ECF No. 73. In its August 1,
2014 Response to Alston's Motion, Equifax asserts that injunctive relief is not available to
private litigants under the FCRA and that the mortgage account information is accumte. ECF
No. 74. On August 7, 2014, Alston filed a Reply to Equifax's response. ECF No. 77.
The Complaint also makes a claim for inaccurate reporting in regard to a Discover account. See
First Am. Compl. ~ 29-44. On November 26, 2013, the Court (Grimm, J.) denied Alston's
Motion for Partial Summary Judgment relating to that issue. ECF No. 41.
1
4
DISCUSSION
I.
Availability of Injunctin
Relief Under the FCRA
In opposition to the Motion for a Preliminary Injunction, Equifax asserts that injunctive
relief is unavailable to private plaintiffs under the FCRA. Opp'n at 3-5. The FCRA provides
that a consumer can bring a claim "to enforce any liability created under" the FCRA. 15 U.S.C.
~ 1681(p).
Elsewhere in the FCRA, civil liability is discussed in terms of damages and
attorney's fees, with no mention ofinjunetive
relief. See 15 U.S.C.
SS
1861(n)-(0). The United
States Court of Appeals for the Fifth Circuit has held that this omission of injunctive relief in the
discussion of civil liability "is significant because the Act elsewhere expressly grants the power
to obtain injunctive relief to the [Federal Trade Commission ("FTC')]:'
Washington v.
esc
Credit Servs. Inc., 199 FJd 263, 268 (5th Cir. 2000). The Washington court accordingly held
that "the affirmative grant of power to the FTC to pursue injunctive relief, coupled with the
absence of a similar grant to private litigants when they are expressly granted the right to obtain
damages and other relief, persuasively demonstrates that Congress vested the power 10 obtain
injunctive relief solely with the FTC." Id
Thus far, the Fifth Circuit is the only circuit court to decide whether private plaintiffs can
obtain injunctive relief under the FCRA. However, in Beaudry v. TeleCheek Services, inc., 579
F.3d 702 (6th Cir. 2009), the United States Court of Appeals for the Sixth Circuit, while
expressly declining to decide this issue, noted that although "Washington may be right," the Fifth
Circuit's conclusion was "far from self-evident."
Jd at 709. The Sixth Circuit noted that based
on Supreme Court precedent, a district court "should start with the assumption that, in actions
over which it has jurisdiction, it has authority to issue injunctive relief' and that in "the absence
of the 'clearest command to the contrary from Congress,'
5
[a] plaintiff may seek injunctive
relief." Id. (quoting Califano v. Yamasaki, 442 U.S. 682, 705 (1979)). Because it did not need to
decide this question in Beaudry. the court left the resolution of the question "for another day."
Id.
Both before Beaudry and after it, the vast majority of district courts, including in this
district and within the Fourth Circuit, have followed the Fifth Circuit's holding in Washington.
See, e.g., Eseni v. RIMSI Corp., No. AW-07-2384 at 7-8 (D. Md. Dec. 6, 2007) (attached as an
Exhibit to Trans Union's Opp'n to Mot. for Prelim. Inj., Alston v. Trans Union, el. al., TDC-14I I 80, ECF No. 52-3); Damonoske v. Bank of America. N.A., 705 F. Supp. 2d 515, 518 (W.O. Va.
2010); Bumg.ard.ner v. Lite Cellular, Inc., 996 F. Supp. 525, 527 (E.D. Va. 1998); Bleynat v.
Trans Union, LLC, No. I:Jlcv218,
2012 WL 2576646 at
'2-3 (W.D.N.C, July 3, 2012);
Freeman v. Equifax, Inc., No. 6:12-845-HMH, 2012 WL 2502693 at '3 (D.S.C. June 28, 2012).
See a/so Owner-Operator
Indep. Driver Ass'n, Inc. v, Usis Commercial Servs., Inc., 410 F.
Supp. 2d 1005, 1007-09 (D. Colo. 2005); White v. First Am. Registry, Inc., 378 F. Supp. 2d 419,
421-24 (S.D.N.Y. 2005). Others, however, have declined to do so. See Engelbrecht v. Experian
i,!!ormation Services, Inc., No. EDCV 12-01547 VAP, 2012 WL 10424896 at '3-'5
(C.D, Cal
Nov. 6, 2012); Harris v. Experian Information Services. Inc., No. 6:06.cv-01808-GRA,
WL 1863025 at .3 (D,S.C. June 26, 2007).
2007
One such court identified the concern that "a
consumer without the right to bring a claim for injunctive relief would be helpless to correct her
credit information." Engelbrecht, 2012 WL 10424896 at .5.
Thus, there is no consensus on this question in the federal courts, and the United States
Court of Appeals for the Fourth Circuit has yet to decide the issue. For the reasons set forth
below, Alston's Motion fails on the merits, and so can be disposed of on that basis alone. Like
6
the Sixth Circuit, therefore, this Court will leave answering the question of whether a private
litigant can seek injunctive relief under the FCRA for another day.
II.
The Motion for a Preliminary
Injunction
The purpose of a TRO or a preliminary injunction is to "protect the status quo and to
prevent irreparable hann during the pendency of a lawsuit ultimately to preserve the court's
ability to render a meaningful judgment on the merits."
In re Microsoft Corp. Antitrust Litig.,
333 F.3d 517, 525 (4th Cir. 2003). A preliminary injunction is distinguished from a TRO only
by the difference in notice to the nonmoving party and by the duration of the injunction.
u.s.
Dep', of Labor v. Wolf Run Mining Co., 452 F.3d 275, 281 n. 1 (4th Cir. 2006) (comparing Fed.
R. Civ. P. 65(a) with Fed. R. Civ. P. 65(b)). The substantive standards for granting a TRO or a
preliminary injunction are thus identical.
To obtain a TRO or a preliminary injunction, plaintiffs must establish that (1) they are
likely to succeed on the merits, (2) they are likely to suffer irreparable hann in the absence of
preliminary relief, (3) the balance of equities tips in their favor, and (4) an injunction is in the
public interest.
Winter v. Natural Res. Defense Council, Inc., 555 U.S. 7, 20 (2008); see
Dewhurst v. Century Aluminum Co., 649 F.3d 287, 290 (4th Cir. 2011). Because a preliminary
injunction is "an extraordinary remedy ...
[it] may only be awarded upon a clear showing that
the plaintiff is entitled to such relief." Winter, 555
u.s. at 22.
Prior to 2009, the Fourth Circuit followed a "balance
of hardship"
approach
to
preliminary injunctions, considering all four Winter factors, but "allow[ing] each requirement to
be conditionally redefined" in a "flexible interplay" depending on how the other requirements
were met. See Real Truth About Obama, Inc. v. Fed Election Comm'n, 575 F.3d 342, 347 (4th
Cir. 2009) (citing Blackwelder Furniture Co. o/Statesville
7
v. Sei/ig Manufacturing Co., 550 F.2d
189,196 (4th Cir.1977».
However, Real Truth invalidated this approach, and it "may no longer
be applied" in the Fourth Circuit. ld As a result, a plaintiff must satisfy each requirement as
articulated. Id.
A. Factor 1: Clear Showing of the Likelihood of Success on the Merits
To meet the first requirement. plaintiffs must "clearly demonstrate" that they "will likely
succeed on the merits," rather than present a mere "grave or serious question for litigation." Real
Truth, 575 FJd at 346-347 (emphasis in original). Alston's underlying claim spans a number of
years and a number of credit reports, so to determine if she fulfills this requirement, it is essential
to clarify precisely what credit reporting Alston seeks to enjoin.
The issue presented by her
Motion is whether Equifax is currently inaccurately reporting Alston's mortgage account, and, if
so, whether it should be enjoined from doing so. Even if Equifax inaccurately reported that
account in the past, as Alston alleges, those now outdated, superseded credit reports cannot be
subject to a preliminary injunction. Notably, the specific relief Alston seeks in her Motion is an
injunction "ordering [Equifax] to cease reporting the Plaintiff's mortgage account as over 120
days late."
Mot. at 4.
In order to succeed on her Motion, therefore, Alston must clearly
demonstrate
that she will likely succeed on her claim that Equifax's
current report of her
mortgage account is inaccurate. She fails to carry this burden.
Alston notes that, as of June 2014, Equifax was reporting: (I) that her mortgage had no
late payments for August, September, and October 2011, but also (2) that the "Status" of the
account was "Over 120 Days Past Due." See Mot. at 2, Ex. 1.
"Clearly;'
Alston argues, she
"cannot be Current on all h[er] payments and still be 'Over 120 Days Past Due.'"
Mot. at 2.
Because of this supposed patent discrepancy, Alston concludes that "Equifax must delete the
account information as inaccurate or unverifiable."
8
fd
Alston's argument assumes that the "status" of the account refers to the current state of
her payments. The June 2014 Equifax report, attached to the Motion as Exhibit I, is unhelpful in
this respect, nowhere explaining what "Status" means. However, at the hearing, counsel for
Equifax clarified that the notation "Status-Over
120 days past due" does not refer to the current
status of the account, but rather designates that at a prior time, the account was over 120 days
past due. November 3, 2014 Hearing at 3:28 p.m. and 3:44 p.m., Alslon v. Equifax (TDC-I31230) and Alston v, Trans Union. et aJ. (TDC-14-1180). Considering the report as a whole, this
interpretation is entirely reasonable. Because the report also states that the account had been
"transferred/sold" in November 2011 and that it had a balance of $0 and a "past due" amount of
SO,Mot. at 2, Ex. 1, the report makes clear that Alston is no longer late on payments that she is
currently obligated to make. Thus, it is more likely that the "Status-Over
120 days past due"
reference is intended to alert potential creditors that Alston had been over 120 days past due at
some point during the history of the loan.
Alston effectively admits as much, because she acknowledged that in August 2011, Wells
Fargo and Monarch both informed her that she was $6,492.24 arrears on her mortgage, a balance
indicating that she was eight months behind on her payments. Mot. at I.
She further
acknowledged that in that same month, she submitted a cashier's check to Monarch for that
entire amount. Id. at 1-2. One can reasonably infer from the fact that Alston submitted a check
for that lump swn balance that she was indeed S6,492.24-0r
8 months-in
arrears on her
mortgage in August 2011.2 Thus, there is a strong likelihood that the "Status" section of the
2 The record developed in another of Alston's cases--one against Trans Union and Experian for
their reporting of this same Wells Fargo account-supports this conclusion and also raises a
question whether that $6,492.24 payment was validly made. See Memorandum Opinion, Alston
v. Trans Union. el al., No. TDC-14-1180 (D. Md. Nov. 13,2014).
9
report records the prior payment history of the account, not the current account status, and that
the report is therefore accurate.
Alston thus cannot show that she is clearly likely to succeed on the merits of her claim
that Equifax continues to report that account inaccurately.
Because Alston fails to establish her
likelihood of success on the merits, she is not entitled to a preliminary injunction.
See Real
Truth, 575 F.3d at 347. The Court thus touches on the remaining factors only brielly.
n,
Factor 2: Likelihood of Irreparable Uarm
To establish irreparable harm. plaintiffs must show that they are "Iikely to be irreparably
hanned," not just that they face a mere possibility of harm. United Slates v. 5iollih Carolina. 720
F.3d 518, 533 (4th Cif. 2013). Thus the "irreparable harm" to be suffered must be "neither
remote nor speculative, but actual and imminent."
Direx Israel. LId. v. Breaklhroll~h Med.
Corp., 952 F.2d 802, 812 (4th Cir. 1991) (quoting Tucker Anthony Realty Corp. v. Schlesinger,
888 F.2d 969, 975 (2d Cir. 1989»). liere, Alston argues that she faces irreparable harm because
the allegedly inaccurate information on her credit report will prevent her from securing a
mortgage on a property she has identified for purchase.
Alston may well be unable to secure a
mortgage as a result of her credit report, but she has not demonstrated that any such denial would
be the consequence specifically of Equifax's alleged inaccurate reporting.
The record instead
strongly suggests that the derogatory information reported about the Wells Fargo account is
accurate, and therefore that any denial of credit would be the consequence of Alston's ov.n
financial dealings. Alston therefore fails to establish that she is at risk of"actual and imminent"
harm as a result ofEquifax's
alleged inaccurate reporting. Id.
10
c.
Factors 3 and 4: The Balancing of Equities and the Public Interest
The remedy Alston seeks is for this Court to require Equifax to "cease reporting the
Plaintiffs mortgage account as over 120 days late." Mot. at 2. The FCRA was designed to
ensure the continued and optimal functioning of the banking system, which depends on "fair and
accurate credit reporting" that will enable financial institutions to detennine the creditworthiness
of consumers. 15 U.S.C. 9 1681(a)(1). Given that a reasonable interpretation of the record is
that Alston was at one point at least 120 days late in paying her mortgage, Equifax's report to
that effect is certainly infonnation that speaks to Alston's creditworthiness. By asking this Court
to have Equifax delete this infonnation at this stage of the proceedings, which would leave the
report without any record of that extended period of non-payment, Alston would frustrate the
purpose of the FCRA. Thus, the equities and the public interest weigh against a preliminary
injunction.
CONCLUSION
For the foregoing reasons, Alston's Motion for a Preliminary Injunction is denied. A
separate order follows.
Date: November 13,2014
THEODORE D, C
United States Distric
11
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