Archer-Gift v. Citigroup, Inc. et al
DECISION GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT [DOC. 34] AND DENYING PLAINTIFF'S MOTION TO PERMIT DISCOVERY [DOC. 38]. Signed by District Judge Avern Cohn. (MVer)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
Individually and on behalf of others similarly situated,
Case No. 15-14467
THE HOME DEPOT, INC., and
SEARS, ROEBUCK AND CO.,
HON. AVERN COHN
DECISION GRANTING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT,
(Doc. 34), and DENYING PLAINTIFF’S MOTION TO PERMIT DISCOVERY,
This is an Equal Credit Opportunity Act (ECOA), 15 U.S.C. § 1691, case.
Plaintiff Cynthia Archer-Gift (Archer) seeks damages relating to the denial of her
applications for credit at Defendants Sears, Roebuck and Co. (Sears) and The Home
Depot, Inc. (Home Depot) stores.
The credit was in a credit card for Sears and a credit card for Home Depot.
Archer says each card was valid only at stores affiliated with the brand company,
Although originally scheduled for hearing, the Court deems this matter
appropriate for decision without oral argument. See Fed. R. Civ. P. 78(b);
E.D. Mich. LR 7.1(f)(2).
(Doc. 16 ¶¶ 14, 29). She says each card was operated as a joint venture with
Defendant Citigroup, Inc. (Citigroup), who “administered” cards, (Id. ¶¶ 13-14, 28-29).
Archer says that she never received a written “adverse action” notice of the
reason for the denial of credit from Sears or from Home Depot, and that the notice for
Sears, in the form of a letter, was deficient based on its stated reason “Unable to
comply with consumer statement.”2
Defendants have moved to dismiss, (Doc. 22), on the grounds that a letter from
each company stating the reason for the denial of credit were sent to Archer by
U.S. mail and were specific enough to satisfy the ECOA. In support, defendants
attached a copy of each letter, (Docs. 22-2, 22-3).
In response, Archer reasserted that she never received either letter and the
Sears letter’s language lacked specificity. Archer said that each defendant has not
established a letter was sent because each has not offered proof of mailing.
The Court denied defendants’ motion to dismiss without prejudice, (Doc. 28). It
. . . There is a factual issue of whether Archer received an adverse
action notice from Home Depot and the statement in the Sears notice
“Unable to comply with consumer statement” lacks precision. . . .
Defendants intend to file a motion for summary judgment within
21 days. Archer shall have 14 days to respond.
(Id. at 2). Also, the Court granted Archer time to conduct additional discovery relating to
factual issues identified by the Court. (See Doc. 34-6 at 18-19).
Archer does not explain how she became aware of the Sears letter’s content
given her statement that she did not receive a letter in the mail.
Defendants have filed a motion for summary judgment, (Doc. 34), stating there is
no genuine issue of material fact and that they are entitled to judgment as a matter of
law.3 In support, they attach employee declarations and business records of Citigroup.
Archer responds on the merits and asks the Court to defer ruling on the motion
until she has had an opportunity to conduct additional discovery. She has filed a
“Motion to Permit Discovery” in this regard under Fed. R. Civ. P. 56(d), (Doc. 38).
For the reasons elaborated below, Archer has failed to rebut the presumption
based on defendants’ proofs that she received each letter. Moreover, each letter’s
statement of the reason for the denial of credit pertaining to Archer’s credit report was
specific enough to meet the notice requirements of the ECOA. Defendants’ motion for
summary judgment, (Doc. 34), is GRANTED.4
As discussed below, Archer has been afforded ample opportunity to conduct
discovery in relation to the content and mailing of each letter. For this reason, her
motion to permit additional discovery, (Doc. 38), is DENIED.
Defendants also say that Home Depot and Sears each should be dismissed as
a party as it was not a creditor or involved in the decision to deny Archer credit.
Defendants say Archer lacks constitutional standing because she has failed to
allege an injury-in-fact. The Court is satisfied that Archer has alleged an actual injury, in
the form of a failure to receive a timely and sufficient notice stating the reason for the
denial of credit under the ECOA. Thus, the Court has jurisdiction to rule on the merits.
Summary judgment will be granted if the moving party demonstrates 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). There is no genuine issue of material fact when
“the record taken as a whole could not lead a rational trier of fact to find for the
non-moving party.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,
587 (1986). The Court must decide “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.” In re Dollar Corp., 25 F.3d 1320, 1323 (6th Cir. 1994)
(quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986)). In doing so, the
Court “must view the evidence in the light most favorable to the non-moving party.”
Emp’rs Ins. of Wausau v. Petrol. Specialties, Inc., 69 F.3d 98, 101 (6th Cir. 1995).
On July 5, 2013, Archer went to a Sears store to buy a stove. At the store,
Archer filled out an application5 for a Sears-branded credit card to help pay for the
stove. After a store employee entered Archer’s information into a computer system, the
employee told Archer that she had been denied credit.
A letter dated July 6, 2013 listed the sender as “Sears Card” and gave the reason
for denial of credit as “Unable to comply with consumer statement.” (Doc. 22-3 at 2-3).
The letter said the decision was based on information from Archer’s credit report
There is no copy of either application in the record, nor is there an explanation
of whether the application was paper or electronic.
provided by Equifax Credit Information Service (Equifax), a credit reporting agency, and
that she could obtain a free copy of the report from Equifax.
The letter listed Citibank, N.A. (Citibank), a subsidiary of Citigroup as the
“creditor” for the card.
Home Depot Washing Machine
On February 11, 2014, Archer went to a Home Depot store to buy a washing
machine. At the store, Archer filled out an application for a Home Depot-branded credit
card to help buy the washing machine. After a store employee entered Archer’s
information into a computer system, the employee told Archer that she had been denied
According to Archer, she received a letter from “Home Depot Credit Services”
dated February 24, 2014 saying “the credit center was unable to complete processing of
her application, and that she would receive a written notification within 7-10 days with
the results of the credit review.” (Doc. 16 ¶ 18).
A letter from Home Depot Credit Services dated February 27, 2014 gave the
reason for denial of credit as “Unable to verify credit reference due to security alert.”
(Doc. 22-2 at 2). The letter stated the decision was based on information from Archer’s
credit report provided by Equifax, and that she could obtain a free copy of the report
The letter listed Citibank as the “creditor” for the card.
In substance, defendants’ motion for summary judgment, (Doc. 34), is identical to
their previously-denied motion to dismiss, (see Doc. 22).6 Defendants, however, now
attach two declarations from Citigroup employees and accompanying records as to the
mailing and content of the letters for Sears and Home Depot. (Docs. 34-4, 34-5).
Defendants say these documents establish that letters were sent by Citigroup to Archer,
raising a rebuttable presumption that the letters were received.
Each declarant says his statements are based on either personal knowledge or
review of the relevant business records. (Doc. 34-4 at 3; Doc. 34-5 at 3).
As to the Sears letter, the declarant says that Citigroup “caused a letter to be
mailed via first class U.S. Mail to [Archer] at [her address]” on July 6, 2013. (Doc. 34-4
at 5). The declarant says that Citigroup has a “custom and practice to send such letters
by first class mail, postage prepaid.” (Id.).
The declarant explains that Citigroup reviewed Archer’s credit report and
detected an “Extended Fraud Alert” placed on the file by Archer. (Id. at 4). When
Archer was asked at Sears to verify her identity with a telephone number she had
provided with the fraud alert, which is a type of “consumer statement,” Archer was
Defendants’ explanation of “consumer statement” has evolved from a statement
that Archer submitted about an unresolved dispute on her credit report, (Doc. 34-6
at 12-13; Doc. 22 at 21 n.6), to a fraud alert that Archer placed on her credit report and
was unable to override because she could not verify her identity, (Doc. 34 at 18-21).
unable to do so. (Id.). Citigroup was, thus, “unable to comply with consumer statement”
because Archer did not provide the telephone number needed to proceed. (Id. at 4-5).
Attached are Citigroup records as to Archer’s application notating “TENDED
FRAUD ALERT/VER ALERT/WAS NOT ABLE TO VER PHONE ON AL.” (Id. at 8).
As to the Home Depot letter, the declarant says that Citigroup “caused a letter to
be mailed via first class U.S. Mail to Plaintiff at [her address]” on February 27, 2014.
(Doc. 34-5 at 4). The declarant says that Citigroup has a “custom and practice to send
such letters by first class mail, postage prepaid.” (Id.).
Response and Discovery Motion
Archer asks the Court to defer ruling on the motion until she has had an
opportunity to conduct more discovery. She says that the declarations are deficient as
they do not detail how Citigroup’s mailing process and policies work and which persons
were involved in mailing the letters.
In support, Archer attaches a declaration in which she says that she did not
receive the letter from Sears or Home Depot, (Doc. 37-1).
In the “Motion to Permit Discovery” under Rule 56(d), (Doc. 38), Archer says that
more discovery is needed to elucidate whether the letters were actually sent and, if they
were, to rebut any presumption that the letters were received. Archer states as follows
that additional discovery is needed concerning:
Business practices of Defendants with respect to credit applications
Procedures used to process credit applications
Custom and practices of Defendants with respect to mailing adverse
action notices (where they are mailed from and how they are mailed)
Systems used to mail adverse action notices
Defendants respond that Archer made no effort to conduct discovery in the
3 months following the denial of the motion to dismiss. Defendants say Archer offers
nothing to excuse her failure, and has not identified any specific piece of discoverable
evidence that would rebut defendants’ showing that letters were in fact mailed to her.
After receiving a completed credit application, a creditor must notify the applicant
within 30 days of any “adverse action” with respect to the application. 15 U.S.C.
§ 1691(d)(1). Adverse action includes the denial of credit. Id. § 1691(d)(6). When
adverse action is taken, the applicant is entitled to a written “statement of reasons” from
the creditor containing “specific reasons” to support the decision. Id. § 1691(d)(2)-(3).
The ECOA permits an “aggrieved applicant” for credit to recover against a
creditor “who fails to comply with any requirement” of the ECOA. Id. § 1691e(a).
Damages are limited to “any actual damages sustained by such applicant.” Id.
Implementing regulations of the ECOA provide:
The statement of reasons . . . must be specific and indicate the principal
reason(s) for the adverse action. Statements that the adverse action was
based on the creditor’s internal standards or policies or that the applicant,
joint applicant, or similar party failed to achieve a qualifying score on the
creditor’s credit scoring system are insufficient.
12 C.F.R. § 202.9(b)(2). Additionally,
A creditor need not describe how or why a factor adversely affected
an applicant. For example, the notice may say “length of residence” rather
than “too short a period of residence.” . . .
For example, if the applicant’s credit history reveals delinquent
credit obligations and the application is denied for that reason, to satisfy
§ 202.9(b)(2) the creditor must disclose that the application was denied
because of the applicant’s delinquent credit obligations.
12 C.F.R. Pt. 202, Supp. I.
A defendant may establish mailing with “proof of a business system of preparing
and mailing letters, and compliance with such a custom in the particular instance.”
Simpson v. Jefferson Standard Life Ins. Co., 465 F.2d 1320, 1324 (6th Cir. 1972).
“Under the common law mailbox rule, the proper and timely mailing of a
document raises a rebuttable presumption that the document has been received by the
addressee in the usual time.” Aetna Life Ins. Co. v. Montgomery, 286 F. Supp. 2d 832,
839 (E.D. Mich. 2003) (citations omitted). “If the sender shows enough evidence to
raise the presumption, then the other party bears the burden of showing that the
document never arrived.” Id. (citation omitted). “Merely stating that the document is not
in the addressee’s files or records . . . is insufficient to defeat the presumption of
receipt.” Id. (citation omitted).
Mailing and Receipt of Letters
With respect to Archer’s receipt of the letters, defendants are entitled to a
presumption that the letters were received. The declarations from two different
employees at Citigroup, the party who sent the letters, confirm that the letters were
mailed to Archer at her home address by first class U.S. mail, postage prepaid. The
declarants indicate this is based on personal knowledge and/or review of the relevant
business records. This is sufficient evidence of proper and timely mailing.
Archer has not rebutted the presumption of receipt by mailing. Specifically, she
offers only a declaration stating that she did not receive either letter in the mail. This
bald statement falls short of proving the letters never arrived, and does not explain how
or why the letters did not reach Archer when mailed to her address. Notably, Archer
has acknowledged receipt of a letter pertaining to the Home Depot card that was sent to
her by Citigroup via the same mailing system.
Content of Sears Notice
At first glance, the meaning of “Unable to comply with consumer statement” may
not be apparent. In context, however, this statement by Citigroup of the reason for the
denial of credit was specific enough to meet the ECOA’s notice requirements.
The “consumer statement” referenced in the letter refers to an extended fraud
alert that Archer placed on her credit report. When Archer was asked at Sears to verify
the telephone number listed on the fraud alert, she was unable to do so. Because
Archer was unable to confirm her identity in this manner, credit was denied.
The letter stated that the decision was based on Archer’s credit report and told
her how to obtain a free copy. Citigroup was not required to “describe how or why” it
was denying credit, only to state the factor that was the basis for the decision.
Given that Archer was the one who placed the fraud alert on her credit report in
the first place and who was asked to verify her telephone number at the store, the
statement “Unable to comply with consumer statement,” combined with the disclaimer
that the decision was based on Archer’s credit report, was enough to put Archer on
notice of the reason for credit denial. Specifically, Archer did not give the information
needed to comply with a “consumer statement” she had placed on her credit report.
Archer seeks more time for discovery so she may respond to defendants’ proof
of mailing. However, Archer has been given ample opportunity for discovery as to
mailing and content of the letters. This included a 3-month period following the Court’s
previous denial of the motion to dismiss. Archer does not give any reason to excuse
her failure to conduct discovery during the time allowed, nor does she point to any
evidence that would rebut the presumption she received the letters mailed to her.
UNITED STATES DISTRICT JUDGE
Dated: January 30, 2017
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