Smith v. LexisNexis Risk Solutions, Inc.

Filing 54

OPINION AND ORDER denying Defendant's Oral Motion for Directed Verdict. Signed by District Judge Mark A. Goldsmith. (DTof)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

DAVID ALAN SMITH,
Plaintiff,

Civil Action No. 13-CV-10774
HON. MARK A. GOLDSMITH

vs.
LEXISNEXIS SCREENING
SOLUTIONS, INC.,
Defendant.
_______________________________/

OPINION AND ORDER DENYING DEFENDANT’S RULE 50(a) MOTION FOR
JUDGMENT AS A MATTER OF LAW1
I.

INTRODUCTION

This is a case brought by Plaintiff David Alan Smith against Defendant LexisNexis
Screening Solutions, Inc., pursuant to the Fair Credit Reporting Act (“FCRA”), 15 U.S.C.
§ 1681, et seq. Plaintiff alleged that Defendant both negligently and willfully failed to comply
with FCRA’s mandate that consumer reporting agencies (“CRA”) maintain “reasonable
procedures to assure maximum possible accuracy of the information concerning the individual
about whom the report relates.” Id. § 1681e(b). The parties proceeded to a jury trial, which
resulted in a $375,000 verdict in favor of Plaintiff.
At the close of Plaintiff’s proofs, and then again prior to the submission of the case to the
jury, counsel for Defendant orally moved for judgment as a matter of law, pursuant to Federal
Rule of Civil Procedure 50(a). Defendant argued that Plaintiff had failed to present sufficient
evidence that: (i) Defendant negligently failed to follow reasonable procedures; (ii) Defendant
1

Given that the motion was made orally, there is no corresponding physical filing on the docket.
However, the Court notated the motion on the docket on October 22, 2014. See October 22,
2014 minute entry.
1

willfully failed to follow reasonable procedures; (iii) Defendant’s conduct was a proximate cause
of Plaintiff’s injury; (iv) Plaintiff suffered damages in the form of lost wages; and (v) Plaintiff
suffered emotional distress.
The Court took under advisement Defendant’s Rule 50(a) motion, and submitted the case
to the jury, subject to a later decision on the motion. After deliberating, the jury returned a
$375,000 verdict for Plaintiff, finding that Defendant had negligently and willfully failed to
follow reasonable procedures. After dismissing the jury, the Court solicited briefing on the
parties’ arguments regarding Defendant’s Rule 50(a) motion. Having reviewed the parties’
briefs and the evidence of record, the Court determines that there was sufficient evidence on all
claims to submit the case to the jury.2 Accordingly, the Court denies Defendant’s oral Rule 50(a)
motion.
II.

BACKGROUND

Plaintiff David Alan Smith worked delivering alcoholic beverages in the Upper Peninsula
for Tasson Distributing (“Tasson”) for ten years. Tr. Vol. 2B 45:25-46:6, 46:15-46:17 (Dkt. 47).
In 2012, Tasson was sold to Great Lakes Wine and Spirits (“GLWS”). Id. 48:25-49:4. Tasson
employees were not automatically rehired by GLWS; each worker had to reapply for a position.
Id. 142:14-142:18. Plaintiff applied for a job with GLWS and requested the position of delivery
driver, the same position he had held at Tasson. Id. 49:14-49:23, 50:16-50:20.

2

As a threshold matter, the Court rejects Plaintiff’s argument that, once the case was submitted
to the jury, the Court no longer had authority to rule on the 50(a) motion. Plaintiff offers no case
law adopting that view. See Pl. Supp. Br. in Response to Text-Only Order (Dkt. 51). In fact, the
Advisory Committee Notes to the 1991 amendments to Rule 50 make clear that “the court may
often wisely decline to rule on a motion for judgment as a matter of law made at the close of the
evidence, and it is not inappropriate for the moving party to suggest such a postponement of the
ruling until after the verdict has been rendered.”
2

GLWS emailed Plaintiff an offer of employment for the position of merchandiser, not
delivery driver, on December 12, 2012. See Email, Pl. Ex. 4 to Pl. Resp. (Dkt. 41-5); Offer of
Employment, Pl. Ex. 5 to Pl. Resp. (Dkt. 41-6).

The offer of employment indicated that

“[c]ontinued employment, subsequent to this offer, is conditional based upon your satisfactory
completion of a . . . criminal history check.” Offer of Employment.
Vicki Lynn Strawsine, the human resources director for GLWS, testified that, as part of
the standard hiring process at GLWS, prospective employees were required to undergo a
background check. Tr. Vol. 2B 143:4-143:10. According to Ms. Strawsine, the background
check occurred toward the end of the hiring process, after an applicant submitted an application,
was interviewed for the position, and received an offer of employment. Id. 143:11-143:20.
Plaintiff had authorized Defendant to prepare a background report and provided GLWS with his
full name — including middle name — date of birth, address, and social security number. Id.
51:11-51:24. GLWS contracted with Defendant to compile the background criminal report and
credit check. Id. 150:12-150:17. GLWS provided Defendant with Plaintiff’s first name, last
name, date of birth, and social security number. Id. 151:2-151:23. However, GLWS did not
provide Defendant with Plaintiff’s middle name — a circumstance that turned out to be critical
in this case. Id.
The method by which Defendant prepares a criminal background report for a client
depends upon the background screening package requested by the client. Tr. Vol. 3 136:20136:25 (Dkt. 48). For the criminal history check, GLWS requested that Defendant conduct a
search for records using Defendant’s proprietary national criminal database. Id. 137:1-137:5.
Defendant’s criminal database is composed in part from “bulk data files” containing raw
criminal data that are received from various government agencies. Id. 31:12-32:19. The raw

3

data contains any information regarding the crimes that the agency or other contributing source
chooses to make available. Id. 32:20-32:23.
In the course of preparing the criminal background report, Plaintiff’s information, i.e. his
first name, last name, and date of birth, matched with criminal records received in bulk by
Defendant from two Florida agencies. Id. 32:12-32:16, 139:15-139:21; Tr. Vol. 2B 62:8-62:12;
see also Bulk Data File, Pl. Ex. 16 to Pl. Resp. (Dkt. 41-17). The criminal records evidenced
Florida convictions for fraud committed by an Alabama resident with the name David Oscar
Smith.

Bulk Data File; see also Tr. Vol. 2B 62:8-62:12.

The bulk file reflecting these

convictions did not contain social security number information. See Bulk Data File. It is
undisputed that these crimes were not committed by Plaintiff David Alan Smith, a Michigan
resident.
On December 17, 2012, after returning from vacation, Plaintiff went to GLWS to inquire
about his employment status.3 Tr. Vol. 2B 53:7-53:24. Plaintiff located a member of GLWS
management, who told Plaintiff to return home to await a letter informing him of his status. Id.
53:14-53:24. Plaintiff subsequently received a letter attaching the background report and stating
that, based on a background investigation, GLWS found it necessary to reject his employment
application. Id. 58:5-59:4. Included within the background report were the records of fraud
convictions associated with David Oscar Smith. Id. 62:3-62:12; see also Background Report, Pl.
Ex. 6 to Pl. Resp. (Dkt. 41-7).
Plaintiff disputed the criminal record on his report with Defendant and faxed Defendant a
copy of his driver’s license as proof of identification. Tr. Vol. 2B 65:8-66:11. On January 11,
2013, Plaintiff received a letter from Defendant indicating that he had a clean report. Id. 69:63

Based on the testimony, it appears that Plaintiff had not seen the email while on vacation. Tr.
Vol. 2B 57:11-57:16.
4

69:20. After being out of work for approximately six weeks, Plaintiff began working for GLWS
on January 31, 2013 as a delivery driver. Id. 70:14-70:22.
This suit followed, with Plaintiff claiming lost wages, non-economic damages, punitive
damages, and attorney fees. The jury’s verdict included $75,000 in compensatory damages and
$300,000 in punitive damages. Jury Verdict at 2 (cm/ecf page) (Dkt. 35).
III.

ANALYSIS

Under Rule 50(a), judgment as a matter of law is appropriate only where “a reasonable
jury would not have a legally sufficient evidentiary basis to find for the [non-moving] party on
that issue.” Fed. R. Civ. P. 50(a)(1). The Sixth Circuit has explained how a court should address
such motions:
The evidence should not be weighed, and the credibility of the
witnesses should not be questioned. The judgment of this court
should not be substituted for that of the jury; instead, the evidence
should be viewed in the light most favorable to the party against
whom the motion is made, and that party given the benefit of all
reasonable inferences.
Parker v. Gen. Extrusions, Inc., 491 F.3d 596, 602 (6th Cir. 2007) (quoting Tisdale v. Fed.
Express Corp., 415 F.3d 516, 531 (6th Cir. 2005)) (internal quotation marks omitted).
Ultimately, the Court must find that “reasonable minds could come to but one conclusion, in
favor of the moving party.” Gray v. Toshiba Am. Consumer Prod. Inc., 263 F.3d 595, 598 (6th
Cir. 2001).
For the reasons that follow, the Court concludes that the record contains legally sufficient
evidence for a reasonable jury to find for Plaintiff on each of the grounds cited by Defendant in
its Rule 50(a) motion.

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A. Negligence
1. Standard
FCRA was enacted “to ensure fair and accurate credit reporting, promote efficiency in the
banking system, and protect consumer privacy.” Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 52
(2007). Courts read its provisions in harmony with the Congressional intent to create effective
remedies for the dissemination of inaccurate consumer information. Cortez v. Trans Union,
LLC, 617 F.3d 688, 721-722 (3d Cir. 2010) (“[T]he breadth and scope of the FCRA is both
evident and extraordinary. . . . [I]t is undeniably a remedial statute that must be read in a liberal
manner in order to effectuate the congressional intent underlying it.”).
FCRA creates a private cause of action when CRAs fail to “follow reasonable procedures
to assure maximum possible accuracy” in preparing a consumer report. 15 U.S.C. § 1681e(b).
The inclusion of erroneous information on a consumer’s report does not automatically trigger
liability; instead, “[l]iability flows only from a ‘failure to follow (1) reasonable procedures (2) to
assure maximum possible accuracy of the information (3) concerning the individual about whom
the information relates.’” Nelski v. Trans Union, LLC, 86 F. App’x 840, 844 (6th Cir. 2004)
(quoting Bryant v. TRW, Inc., 689 F.2d 72, 78 (6th Cir. 1982)).
To succeed on his claim, Plaintiff was required to show that “(1) the defendant reported
inaccurate information about the plaintiff; (2) the defendant either negligently or willfully failed
to follow reasonable procedures to assure maximum possible accuracy of the information about
the plaintiff; (3) the plaintiff was injured; and (4) the defendant’s conduct was the proximate
cause of the plaintiff’s injury.”

Id.

“Reasonableness” is defined in “reference to what a

reasonably prudent person would do under the circumstances.” Id. In demonstrating that

6

Defendant behaved unreasonably, Plaintiff “need not point to specific deficiencies in an agency’s
practices or procedures.” Id. at 845.
2. The evidence at trial
During trial, Plaintiff presented evidence that Plaintiff’s name, David Smith, was
common. Tr. Vol. 2B 45:11-45:24. Matthew Brian O’Connor, who had worked for Defendant
and is now Vice-President of Operations for First Advantage Corporation (corporate successor to
Defendant), testified that Defendant did not have any special procedures in place for dealing with
common names, such as Plaintiff’s. Tr. Vol. 3 163:25-164:4. Although Ms. Strawsine testified
that GLWS failed to provide Defendant with Plaintiff’s middle name in its search request, Tr.
Vol. 2B 152:25-153:4, there was also testimony that a middle name, unlike other information,
was not required information that Defendant demanded to conduct a search in its proprietary
criminal database. Tr. Vol. 3 46:16-46:21, 50:13-50:22.
Notably, Mr. O’Connor testified that Defendant could have required a middle name
before running a search through its criminal database. Id. 46:22-47:1. While Mr. O’Connor
testified that a middle name was not a required field — because many people do not have middle
names — he agreed that Defendant could have implemented a required field asking whether a
legal middle name existed, and, if so, requiring the employer to provide that name. Id. 100:15101:6.
Additionally, Mr. O’Connor testified that GLWS provided Defendant with Plaintiff’s
social security number, which Defendant then used to generate Plaintiff’s credit report from
Equifax. Id. 51:2-51:24. The credit report listed Plaintiff’s middle initial as “A.” Id. 52:652:19. Mr. O’Connor testified that Defendant had possession of the Equifax report containing
Plaintiff’s middle initial at the same time Defendant conducted the criminal background search

7

within its own database, and before the completed report was sold and transmitted to GLWS. Id.
52:24-53:7. The middle initial provided by Equifax did not match the middle name (“Oscar”)
listed on the criminal records generated by Defendant’s search of its own database. Id. 53:853:12. Mr. O’Connor testified that, notwithstanding this discrepancy, Defendant undertook no
steps to determine why the middle initial on the credit report did not match the middle name on
the criminal records. Id. 54:4-54:8. Mr. O’Connor testified that, because the middle initial came
from a third-party source (Equifax), and not from Plaintiff or GLWS, Defendant would not have,
as a matter of policy or procedure, incorporated that middle initial into its “verification or
validation process.” Id. 53:16-53:20, 79:9-79:16. Had GLWS provided Defendant with the
middle name “Alan,” however, Mr. O’Connor testified that Defendant would not have matched
or included David Oscar Smith’s convictions on Plaintiff’s background report. Id. 80:11-80:16.
3. The parties’ arguments
In its supplemental briefing on the oral Rule 50(a) motion, Defendant submits that the
evidence showed that Defendant followed reasonable procedures to assure maximum possible
accuracy of Plaintiff’s report. Def. Supp. Br. at 3-6 (Dkt. 40). Defendant argues that the errors
contained in Plaintiff’s report were the result of limited available data, not unreasonable
procedures. Id. at 6. Defendant notes that GLWS failed to provide Defendant with Plaintiff’s
middle name, and if Defendant had received the middle name then the criminal record would
have been excluded from Plaintiff’s report because the record contained a different middle name.
Id. Along similar lines, Defendant points out that the bulk data file received from the Florida
repositories, which formed the basis for the information in Defendant’s criminal database, did
not contain social security information and, therefore, a match could not be precluded on that
basis. Id. at 7.

8

Lastly, Defendant argues that the evidence did not show that it negligently failed to
follow reasonable procedures that could have avoided the inaccuracy contained in Plaintiff’s
report. Id. Defendant argues that while “Plaintiff suggested a number of alternative procedures
. . . [that] Defendant should have followed[,] . . . the evidence did not show that any of these
alternative procedures were reasonable.” Id. at 7-8. Defendant asserts that the procedures
suggested by Plaintiff — requiring, as opposed to requesting, middle names; using the middle
initial contained in Plaintiff’s credit report to exclude the criminal report as belonging to
someone else; and undertaking an additional manual search of criminal records from the Florida
Department of Law Enforcement — were each considered and rejected because such procedures
“were not reasonable ways to assure maximum possible accuracy in all of its reports.” Id. at 8-9.
Ultimately, according to Defendant, it is incumbent upon Plaintiff “to produce evidence showing
that there was some ‘reasonable procedure to assure maximum possible accuracy’ that Defendant
knew about but negligently failed to follow.” Id. at 9. Defendant submits that Plaintiff has
“failed to produce any such evidence; [but] offered mere conjecture.” Id.
In response, Plaintiff emphasizes the factual nature of the reasonableness inquiry, which
generally renders such questions unsuitable for judgment as a matter of law. Pl. Resp. at 4-5
(Dkt. 41). Plaintiff further submits that the record contains “more than sufficient evidence of
Defendant’s negligent violation.” Id. at 5. Plaintiff points to evidence that: (i) Defendant “failed
to obtain the best public record of the crimes that it placed on Plaintiff’s report,” i.e. the Florida
Department of Law Enforcement record, which would have conclusively established that the
record did not belong to Plaintiff; (ii) Defendant did not require GLWS to provide Plaintiff’s
middle name; (iii) Defendant failed to use a middle initial contained in other portions of
Plaintiff’s report to rule out the criminal background; (iv) Defendant “ha[d] no special accuracy-

9

assuring procedures for consumer background reports involving consumers with very common
names”; (v) Defendant did not use social security numbers in searching its database for criminal
records, even though the database occasionally links crimes with social security numbers; and
(vi) Defendant acknowledged that, had it “obtained either Plaintiff’s date of birth or David Oscar
Lee Smith’s social security number, it would not have placed the inaccurate Florida criminal
records on Plaintiff’s consumer background report.” Id. at 5-6.4
Plaintiff also takes issue with Defendant’s assertion that he was required to demonstrate
alternative procedures that would have both been reasonable for Defendant to undertake and
ensured maximum possible accuracy. Id. at 7. In doing so, Plaintiff reviews three different ways
in which courts have held that plaintiffs can satisfy their burden under FCRA: (i) offering
“evidence beyond an inaccuracy to show that the CRA did not follow reasonable procedures”;
(ii) demonstrating that an inaccuracy occurred, thereby shifting the burden to the CRA to
demonstrate that it used reasonable procedures; and (iii) “when a plaintiff establishes the
existence of an inaccuracy, the jury may, but need not, infer that the defendant failed to follow
reasonable procedures.” Id. Plaintiff argues that none of the above requires the plaintiff “to
produce evidence of some other procedure or identify an alternative procedure that would
maximize the possibility of accuracy.” Id. at 7-8.
4. Discussion
The Court begins with the parties’ last arguments — whether Plaintiff was required to
provide evidence of the reasonableness of alternative procedures that Defendant should have
undertaken — because this issue goes to a fundamental dispute regarding the FCRA-plaintiff’s
burden. The Court agrees with Plaintiff that he need not proffer specific evidence of the
4

Plaintiff’s last argument contains one erroneous premise, because it is undisputed that
Defendant had Plaintiff’s date of birth. Tr. Vol. 3 46:16-46:19; Tr. Vol. 2B 151:2-151:23.
Presumably, Plaintiff meant middle name, not date of birth.
10

reasonableness of alternative procedures. Although Defendant cites to a district court case,
which found that a plaintiff has “the burden of proving what, at a minimum, would have been
reasonable, under the circumstances, including the business costs of any suggested alternative,”
Perez v. Trans Union, LLC, 526 F. Supp. 2d 504, 509 (E.D. Pa. 2007) abrogated on other
grounds by Cortez v. Trans Union, LLC, 617 F.3d 688 (3d Cir. 2010), such a requirement has no
support in the Sixth Circuit. To the contrary, the Sixth Circuit has specifically held that plaintiffs
under FCRA need not identify particular deficiencies within a defendant’s business practices.
Nelski, 86 F. App’x at 845. If a plaintiff’s burden does not include identifying particular
deficiencies in the defendant’s business practices, then it surely does not include requiring a
plaintiff to analyze the costs or other factors bearing on the reasonableness of alternative
procedures defendants should have undertaken.
Several decisions by courts in this circuit confirm that a FCRA-plaintiff has no such
burden. For instance, in Nelski, the plaintiff sought relief based on the defendant’s failure to
delete an erroneous report from a credit history for several months after being notified of the
error. 86 F. App’x at 845. The Sixth Circuit concluded that such a theory, relying as it did on an
inference of negligence, would probably survive summary judgment, observing that “a plaintiff
need not point to specific deficiencies in an agency’s practices or procedures.” Id. The court’s
opinion in Nelski nowhere states that the plaintiff had the burden of analyzing the cost of
alternative procedures that should have been adopted.
In Morris v. Credit Bureau of Cincinnati, Inc., 563 F. Supp. 962, 963-964 (S.D. Ohio
1983), a case cited approvingly in Nelski, a CRA opened a file on the plaintiff in the name of
“Joe T. Morris” and erroneously reported bad debts that belonged to his wife prior to their
marriage. After receiving several denials of credit on that basis, the plaintiff informed the

11

defendant of the error, and the defendant eventually confirmed the information’s inaccuracy and
deleted the information from the plaintiff’s report. Id. at 964-965. After the defendant received
notice of the error, a third party requested a report from the defendant for the name of “Joseph T.
Morris,” and the defendant opened a new file for the request, apparently in the belief that it did
not have any information on “Joseph T. Morris.” Id. at 965. In gathering the information for this
new file, the defendant, again, erroneously reported the plaintiff’s wife’s prior bad debts. Id.
After the plaintiff contacted the defendant once more about the mistake, the defendant learned
that it had two open reports on the plaintiff; the two accounts were merged and the inaccurate
information was, again, deleted. Id. This error occurred on at least one additional occasion. Id.
at 966. Following a bench trial, the court found that “a reasonably prudent credit reporting
agency would have procedures to detect the similarities in the two files that would have
prevented further reporting of inaccurate information about [the plaintiff].”

Id. at 968.

Specifically, the court commented that “a reasonable investigation would immediately have
indicated that Joe T. Morris and Joseph T. Morris were the same person.” Id. The court did not
require the plaintiff to identify or analyze alternative procedures that the defendant should or
could have taken, finding instead that “it is not plaintiff’s burden to suggest ways in which
defendant might improve its operation.” Id.
Still another case in this circuit is Holmes v. Telecheck International, Inc., 556 F. Supp.
2d 819 (M.D. Tenn. 2008), declined to follow on other grounds by Beaudry v. TeleCheck Serv.,
Inc., 579 F.3d 702 (6th Cir. 2009). In Holmes, the plaintiff introduced evidence that the
defendant used two primary identifiers (driver’s license number and bank account number) in
processing check transactions, but required merchants to provide only one of those two
identifiers in requesting a report. Id. at 835. Where a merchant provided only one identifier (for

12

example, the driver’s license number), the consumer report would be “limited to the information
that [was] stored by [the defendant] based solely on the driver’s license number.” Id. The same
was true if the merchant provided only the bank account number. Id. The plaintiff asserted that,
by segregating data concerning a particular consumer based on either of those two identifiers, the
defendant self-limited the information it provided to merchants, leading to an incomplete
consumer report. Id. The court found this evidence sufficient to create a question of fact as to
the reasonableness of the procedures in place. Id. Notably, the court did not require the plaintiff
to engage in any business analysis of would-be alternatives.
These cases not only undercut Defendant’s effort to inflate Plaintiff’s burden, but they
confirm as well Plaintiff’s view that a FCRA-plaintiff’s burden regarding reasonable procedures
is “minimal.” See Philbin v. Trans Union Corp., 101 F.3d 957, 964 (3d Cir. 1996) (quoting
Stewart v. Credit Bureau, Inc., 734 F.2d 47, 51 (D.C. Cir. 1984)) abrogated on other grounds by
Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47 (2007). This minimalist view is confirmed by the
varying approaches courts have taken to a FCRA-plaintiff’s burden. As explained in Philbin,
there are three leading views: (i) plaintiff must show only “some evidence beyond a mere
inaccuracy,” (ii) the jury may infer failure to follow reasonable procedures from the mere fact of
inaccuracy, and (iii) upon a showing of inaccuracy, the burden shifts to defendant to prove that
reasonable procedures were followed. Id. at 964-965 (citing Stewart, 734 F.2d at 52; Guimond
v. Trans Union Credit Info. Co., 45 F.3d 1329, 1333 (9th Cir. 1995); and Cahlin v. Gen. Motors
Acceptance Corp., 936 F.2d 1151, 1156 (11th Cir. 1991)).
Under any of these approaches, Plaintiff must prevail on the pending motion. If the
second or third approaches are followed, Plaintiff prevails because Defendant agrees that
inaccuracy of the information was established. And if the first approach is used, Plaintiff must

13

also prevail, because he submitted evidence going far beyond mere inaccuracy in, at least, two
ways. First, Plaintiff has introduced evidence that other information Defendant received and
relied upon from a third-party source, Equifax, created a discrepancy in the report. A jury could
find that, with some reasonable review procedure in place, a reasonable CRA would have
discovered the discrepancy between the middle initial in the Equifax credit report (“A.”) and the
full middle name on the criminal record (“Oscar”) and, upon doing so, would have investigated
the issue further. Like in Morris, a reasonable investigation into Plaintiff’s middle name would
have resolved the discrepancy and avoided the error.
Second, Plaintiff introduced evidence that Defendant did not require its purchasers to
submit middle names for a report. A jury could conclude that a reasonable CRA would have
made the middle name a required field when receiving search requests from clients. Like the
CRA in Holmes, which self-limited the information that it sent to merchants, Defendant selflimited the information that it received from employers, thereby reducing the accuracy of the
information it subsequently returned to the employer. Given Mr. O’Connor’s testimony that
Plaintiff’s middle name would have definitively excluded the criminal records as belonging to
someone else, a reasonable CRA might have at least required a client to affirmatively indicate
whether a consumer had provided a middle name and, if there was one, to provide it to the CRA.
Defendant’s arguments to the contrary are not well-taken. Defendant contends that
“there was no evidence to suggest that it would be reasonable for Defendant to use Equifax credit
records as identifiers in a search.” Def. Supp. Br. at 8. Defendant references Mr. O’Connor’s
testimony that “often a credit record will include multiple names, and that searching for records
that match all of those names would increase, rather than decrease, the probability of a report
which contains criminal records that do not match the person whose records are ostensibly being

14

searched.” Id. However, a reasonable jury could conclude that while it may not be reasonable or
necessary to use identifiers provided by third parties like Equifax as additional search criteria for
criminal records, it is reasonable and necessary for a CRA to investigate obvious discrepancies
that appear on a consumer’s background report resulting from different information contained
within the consumer’s criminal history and credit history. Indeed, Mr. O’Connor testified that
Defendant would not resell third-party data, like Equifax’s, if it thought the data were inaccurate.
Tr. Vol. 3 53:21-54:3. It is reasonable to conclude that, if Defendant thought the data was
reliable enough to sell, then Defendant should have also concluded the data was reliable enough
to cast doubt on the criminal records it was including in Plaintiff’s report.
Defendant also argues that requiring employers to input a middle name would “have
made reports about individuals without middle names impossible to conduct.” Def. Supp. Br. at
8. But Mr. O’Connor testified that Defendant could create a field inquiring whether the subject
consumer had a middle name, and if so, to provide it. Tr. Vol. 3 100:15-101:6. Indeed, common
sense dictates that because the search inquiry screen already requires certain minimum
information, it would not be difficult to modify the middle-name field to require employers to
provide the consumer’s middle name. If the employer did not have a middle name for the
consumer, it could simply alert Defendant to that effect.
Defendant continues that, even if it was to require middle names, inaccuracies would still
occur. Def. Supp. Br. at 8. Defendant posits a hypothetical in which “a consumer and a criminal
defendant had the same date of birth or same partial social security number, and . . . the
consumer’s employer provided Defendant with the consumer’s first, middle, and last name, but a
court record only contained a defendant’s first and last name, which matched the consumer’s
first and last name.” Id. at 8, n.2. Defendant asserts that it would be in the same predicament as

15

it was with Plaintiff — namely whether the two individuals were a match and if the criminal
record should be reported — but the middle name would be of no assistance. Id. This may be
true, but, as Defendant pointed out at trial, FCRA does not require a CRA to eliminate all
inaccuracies; it merely requires CRAs to take reasonable steps to ensure “maximum possible
accuracy.” Requiring employers to provide a middle name may not eliminate all possible
mismatches, or instances where Defendant must make a judgment call about whether to report a
criminal history as described in the hypothetical above, but it would certainly reduce
inaccuracies.5
In sum, Plaintiff presented evidence that there were deficiencies in the procedures that
Defendant implemented.

And given the glaring nature of those deficiencies, a jury could

reasonably conclude that they were easily preventable. This was sufficient for Plaintiff to meet
his burden of showing that Defendant failed to follow reasonable procedures — a conclusion
buttressed by the principle that courts, under FCRA, entrust juries with great latitude in deciding
the negligence issue. Guimond, 45 F.3d at 1333 (“The reasonableness of the procedures and
whether the agency followed them will be jury questions in the overwhelming majority of
cases.”).
Accordingly, Defendant’s argument regarding negligence is without merit.6

5

The Court also observes that this same hypothetical is equally plausible under Defendant’s
current procedures, which accepts and uses middle names when provided, even though they are
not required.
6

Plaintiff has proposed four additional grounds on which a jury could reasonably find that
Defendant behaved negligently. However, as the Court has disposed of Defendant’s motion on
the two stated grounds, the Court finds it unnecessary to reach Plaintiff’s other arguments.
16

B. Willfulness
1. Standard
In addition to recovering actual damages for negligent violations of FCRA, consumers
may be entitled to punitive damages if they can establish that the defendant willfully violated its
obligations under FCRA. 15 U.S.C. § 1681n(a)(2). In interpreting the term “willfully” with
respect to FCRA, the Supreme Court has explained that, “where willfulness is a statutory
condition of civil liability, we have generally taken it to cover not only knowing violations of a
standard, but reckless ones as well.” Safeco, 551 U.S. at 57. The Supreme Court further noted
that “the common law has generally understood [recklessness] in the sphere of civil liability as
conduct violating an objective standard: action entailing ‘an unjustifiably high risk of harm that
is either known or so obvious that it should be known.’” Id. at 68 (quoting Farmer v. Brennan,
511 U.S. 825, 836 (1994)). Seeing “no reason to deviate from the common law understanding in
applying the statute,” the Supreme Court held that “a company subject to FCRA does not act in
reckless disregard of it unless the action is not only a violation under a reasonable reading of the
statute’s terms, but [also] that the company ran a risk of violating the law substantially greater
than the risk associated with a reading that was merely careless.” Id. at 69.
Willfulness can be established when a CRA adopts a general policy or practice that
creates an unjustifiably high risk of violating FCRA. See, e.g., Boggio v. USAA Fed. Sav. Bank,
696 F.3d 611, 620 (6th Cir. 2012) (“policy prohibit[ing] [] employees from performing anything
more than a cursory confirmation of [a consumer’s] status before reporting back to a CRA” was
evidence of recklessness sufficient to create a genuine dispute precluding summary judgment).
A CRA may also act willfully in connection with a particular transaction. Seamans v. Temple

17

Univ., 744 F.3d 853, 868 (3d Cir. 2014) (“A furnisher’s objectively unreasonable actions with
respect to a particular consumer’s account can support a jury finding of willfulness.”).
The latter category is illustrated in Adams v. National Engineering Service Corporation,
620 F. Supp. 2d 319, 323-325 (D. Conn. 2009), where the subject report included criminal
records belonging to “Debra Adams” and “Debra Jean Adams” for a background investigation
concerning “Deborah Adams.” The court noted that “a reasonable jury could find that, in
preparing a background investigation report for [plaintiff] which included convictions pertaining
to an individual with a different first name from a different state, [defendant] created ‘an
unjustifiably high risk of harm . . . so obvious that it should [have been] known.’” Id. at 330 n.7
(alteration in original) (quoting Safeco, 551 U.S. at 68).
2. The evidence at trial
Much of the evidence that Plaintiff presented at trial regarding Defendant’s negligence is
applicable to Plaintiff’s claim for willfulness. As discussed in detail, supra, Plaintiff put forth
evidence showing that Defendant required certain, minimal information before it would prepare
a background report or run a search for criminal records in its database, but that it had a policy of
not requiring employers to provide a middle name, because not every individual has a middle
name. The evidence also demonstrated that the provision of middle names, where they exist,
could be important in ruling out erroneous criminal records, and that Defendant could implement
a system by which it required employers to address the existence of a middle name.
3. The parties’ arguments
Defendant claims that Plaintiff did not demonstrate that Defendant had the required
mental state for recklessness. Def. Supp. Br. at 11. Specifically, Defendant argues that: (i) the
evidence showed that it belongs to industry groups working toward improving the amount and

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quality of data available in the industry; (ii) that Defendant’s accuracy rate was on par with or
higher than its industry competitors; (iii) that Defendant has a number of incentives to make sure
reports are accurate in the first instance; and (iv) that Defendant was not aware of any other
reasonable procedures that would make its reports more accurate. Id.
Defendant further claims that Plaintiff’s only evidence on the issue of recklessness was
that “during a five year period in which Defendant created some 24 million consumer reports,
more than 1,000 consumers contacted Defendant and alleged that their reports contained
information about crimes that another person committed, which led Defendant to correct those
reports,” and that “some of those consumers filed lawsuits against Defendant.” Id. Defendant
argues that the evidence did not show that those purportedly inaccurate reports would have been
made more accurate by any of Plaintiff’s suggested alternative procedures. Id. at 12. Moreover,
Defendant argues, Plaintiff’s evidence did not actually establish that the disputed reports were, in
fact, inaccurate, and Defendant’s witness, Mr. O’Connor, testified to a number of reasons, other
than inaccuracy, as to why the disputed items would have been removed. Id.
Finally, Defendant argues that Plaintiff failed to show that Defendant knew or should
have known that its existing procedures exposed consumers to an unjustifiably high risk of harm.
Id. at 13. Defendant contends that approximately 1,000 disputes out of 24 million reports, and an
overall dispute rate of .2%, is not evidence of a high risk of harm, let alone an unjustifiably high
risk. Id.
In response, Plaintiff notes that willfulness is a fact-bound inquiry that courts generally
consign for the jury’s determination. Pl. Resp. at 10-11. In support of his claim for willfulness,
Plaintiff points to Defendant’s policies of: (i) never requiring middle names before preparing a
consumer background report; (ii) never using middle names or initials provided by Equifax to

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investigate whether the name of the employment candidate actually matches the middle name for
any hits returned from Defendant’s database; (iii) never using social security numbers to search
for criminal records within its criminal database; and (iv) never obtaining full criminal records
from the Florida Department of Law Enforcement absent a specific request by an employer. Id.
at 11-12.
Plaintiff further submits that Defendant’s low-dispute-rate defense is a factual one that
must be evaluated by a jury, not an argument that entitles it to judgment as a matter of law. Id. at
12. Plaintiff continues, however, that the registered disputes Defendant revealed put it on
“robust notice of the exact inaccuracy at issue in this case.” Id. at 13.
4. Discussion
In its motion, Defendant places a great deal of weight on Plaintiff’s purported failure to
demonstrate that Defendant was on notice that its existing procedures, or failure to use additional
procedures, exposed Plaintiff and other consumers to an unjustifiably high risk of harm.
However, the Safeco standard of recklessness encompasses an unjustifiably high risk of harm
that is either known, or is so obvious that it should have been known. Safeco, 551 U.S. at 68.
Thus, Defendant need not be on actual notice of the risk of harm if the risk is so obvious that
Defendant should have been aware of the unjustifiably high risk.
Here, a jury could reasonably conclude that Defendant’s practice of not ever requiring
employers to provide consumers’ middle names, even where middle names are available, could
pose an unjustifiably high risk of harm that was so obvious that Defendant should have been
aware of it. Testimonial evidence established that Plaintiff’s name was a common one, and yet
Defendant employed no practice or policy to address such an obvious issue. And when faced
with glaring evidence of a mismatch between the credit report — listing a Dave Smith with

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middle initial “A” from Michigan — and the criminal records — reflecting Florida convictions
for Alabamian David Oscar Smith — Defendant did nothing to clear up this obvious
discrepancy. A jury could reasonably find that these deficiencies were not merely “careless,” but
a disregard of a risk of inaccurate information so obvious that the actions amount to recklessness.
Further, given how easily preventable the injury in this case would have been — by requiring a
middle name field and/or requiring even minimal follow-up for record discrepancies — a jury
could readily find that the risk here was unjustifiably high.
Defendant’s arguments about its subjective state of mind are irrelevant. Plaintiff’s theory
of willfulness was sustainable based on the unjustifiably high risk of inaccuracy of which
Defendant should have been aware — not an intentional violation of the law. Thus, Defendant’s
alleged efforts to improve data accuracy generally by joining industry-wide groups, Defendant’s
incentives for accuracy, its lack of knowledge of additional reasonable procedures that would
have made its reports more accurate, and its relatively low complaint rate are all beside the point.
Furthermore, even if Defendant’s arguments were relevant, they do not invalidate, as a matter of
law, the evidence of willfulness that Plaintiff presented and upon which the jury could base its
verdict. A mix of evidence pointing in different directions is precisely the reason the issue of
willfulness is generally entrusted to the jury. See, e.g., Edwards v. Toys “R” Us, 527 F. Supp. 2d
1197, 1210 (C.D. Cal. 2007) (“Willfulness under the FCRA is generally a question of fact for the
jury.”); Hammer v. JP’s Sw. Foods, LLC, 739 F. Supp. 2d 1155, 1167 (W.D. Mo. 2010) (same).
Here, the jury was entitled to consider the entire mix of evidence in deciding the willfulness
issue.

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Therefore, the Court finds that Plaintiff presented sufficient evidence on the issue of
recklessness to send the claim for willfulness to the jury.7
C. Causation
In its oral Rule 50(a) motion, Defendant requested that judgment be entered in its favor as
a matter of law because Plaintiff had failed to demonstrate that Defendant’s error was the
proximate cause of Plaintiff’s harm. Tr. Vol. 3 114:16-115:24. Defendant does not address this
argument in its supplemental brief, but as it has not been formally withdrawn, the Court
addresses it in full.
In its oral motion, Defendant argued that Ms. Strawsine testified that she was aware that
Plaintiff’s middle name was “Alan,” and that the criminal report contained a middle name of
“Oscar.” Id. 114:22-114:24. Defendant reasoned that, despite her knowledge of the discrepancy,
Ms. Strawsine made the decision to not hire Plaintiff at the time, although she testified that she
could have made a different determination. Id. 114:24-115:3. Defendant characterized Ms.
Strawsine’s decision to “err on the side of caution” and not hire Plaintiff, notwithstanding her
uncertainty that the criminal records belonged to him, as a “separate, independent act.” Id.
115:15-115:24.
Plaintiff responded that the standard for causation asks only whether the noncompliance
was a substantial factor in the claimed damages; it need not be the only factor or a predominant
or prevailing one. Id. 118:16-118:20. Plaintiff argued that there was sufficient evidence for the
causation question to go to the jury, as Ms. Strawsine testified that felonious convictions for
fraud are an outright prohibition for employment with GLWS. Id. 118:20-119:4; Pl. Resp. at 1819.
7

Although Plaintiff submits that there are additional policies that could support a jury finding of
willfulness, the Court declines to address those policies given the decision above.
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In a FCRA case, the plaintiff must demonstrate that “‘the alleged FCRA violation was
[a] substantial factor in causing the asserted actual damages.’” Khoury v. Ford Motor Credit
Co., LLC, No. 13-11149, 2013 WL 6631471, at *6 (E.D. Mich. Dec. 17, 2013) (alteration in
original) (quoting Moore v. First Advantage Enter. Screening Corp., No. 4:12 CV00792, 2013
WL 1662959, at *4 (N.D. Ohio Apr. 17, 2013)). The fact that some other party made a decision
that contributed to a FCRA-plaintiff’s harm does not, as a matter of law, eliminate a CRA’s
liability. See, e.g., Philbin, 101 F.3d at 969 (holding that credit denial based on multiple reasons
does not bar recovery by FCRA-plaintiff, reasoning that “[c]ourts have recognized that where a
decision-making process implicates a wide range of considerations, all of which factor into the
ultimate decision, it is inappropriate to saddle a plaintiff with the burden of proving that one of
those factors was the cause of the decision.” (emphasis in original)).
Given Ms. Strawsine’s testimony that fraud-related convictions are a bar to employment
with GLWS, Tr. Vol. 2B 146:9-146:18, 155:1-155:2, the Court finds that a jury could reasonably
conclude that Defendant’s error was a substantial factor in causing Plaintiff’s injury,
notwithstanding Ms. Strawsine’s suspicions regarding the accuracy of Defendant’s information,
id. 153:22-154:4. Ms. Strawsine specifically testified that she did not consider hiring Plaintiff
because of the report, despite the discrepancy, and that Plaintiff would have to contact Defendant
to correct the record and reapply before she would reconsider him. Id. 145:13-145:16, 159:4159:10.

Because Defendant’s actions played a significant role, it is irrelevant that Ms.

Strawsine’s decision to ignore the discrepancies in the report also played a role in Plaintiff’s
damages. Therefore, Defendant’s Rule 50(a) motion as to causation is denied.

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D. Actual Damages
Plaintiff sought actual damages for economic loss, emotional distress, mental anguish,
and embarrassment. The parties stipulated that the amount of the claimed economic loss was
$2,640.00, which was based on six weeks of lost pay at the GLWS merchandiser position. Joint
Final Pretrial Order at 5 (Dkt. 38). The parties’ agreed-upon jury instruction regarding actual
damages identifies three types of damages: economic loss, harm to reputation, and emotional
distress. Jury Instructions at 20 (cm/ecf page) (Dkt. 37). The jury ultimately awarded Plaintiff
$75,000 in compensatory damages, as well as $300,000 in punitive damages. Jury Verdict at 2
(cm/ecf page).
In its oral Rule 50(a) motion, Defendant pressed an argument that Plaintiff did not show
legally sufficient evidence of damages arising out of wage loss and emotional distress. Tr. Vol.
3 113:9-114:14; Def. Supp. Br. at 13-17. In response, Plaintiff argues that, as Defendant’s oral
Rule 50(a) motion did not request judgment as a matter of law on the issue of damages for
reputational harm, Defendant has effectively waived its argument as to all categories of damages.
Pl. Resp. at 14, 16. Specifically, Plaintiff asserts that the evidence as to reputational harm was
sufficient to submit the entire question of damages to the jury, making Defendant’s arguments
regarding wage loss and emotional distress irrelevant. Id. at 14, 17. Putting aside the issue of
whether the question of damages could be submitted to the jury on the basis of reputational harm
alone, the Court determines that there was sufficient evidence in the record on wage loss and
emotional distress for a reasonable jury to award damages on those grounds.

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1. Lost wages
Defendant states that Plaintiff’s evidence of lost wages is premised on the wages he
would have earned as a GLWS merchandiser, the job he was offered prior to GLWS receiving
the erroneous criminal report. Def. Supp. Br. at 14. However, Defendant argues that Plaintiff’s
testimony during trial that he would have accepted the merchandiser position is inconsistent with
his deposition testimony on the same subject. Id. Defendant cites to Plaintiff’s deposition
testimony in which Plaintiff stated that he would not have accepted the merchandiser position
because he believed that one could not perform the job requirements and still make a living at the
offered wage. Id. Defendant dismisses Plaintiff’s trial testimony that he would have accepted
the merchandiser position as not credible and unsupported by the evidence. Id. at 15.
In response, Plaintiff points to trial testimony that he could not afford to be out of work,
and that he would have accepted the merchandiser position had no driver position been available.
Pl. Resp. at 19.
Plaintiff did testify that he would have accepted the merchandiser position had no driver
position been available. Tr. Vol. 2B 50:25-51:5. Far from not being supported by the evidence,
as Defendant asserts, Plaintiff’s testimony is evidence. Furthermore, when evaluating a Rule
50(a) motion, it is not the province of the court to judge the credibility of the witnesses or weigh
the evidence. Parker v. Gen. Extrusions, Inc., 491 F.3d 596, 602 (6th Cir. 2007). Accordingly,
the Court finds that there was sufficient evidence to submit the issue of wage loss to the jury.
2. Emotional Distress
Defendant argues that Plaintiff’s emotional distress claim should not have been submitted
to the jury for two reasons. First, Plaintiff’s purported emotional distress stemmed not from
being mistaken for a criminal, but from his financial difficulties; in Defendant’s view, Plaintiff

25

and his wife would have experienced the same difficulties — even if the report had not been
erroneous — because the merchandiser position paid far less than what they needed in order to
make ends meet. Def. Supp. Br. at 15-16. Second, Defendant argues that Plaintiff’s testimony
concerning his emotional distress consisted solely of conclusory statements that render a claim
for emotional distress insufficient as a matter of law. Id. at 16.
Plaintiff responds that he “needed only to present sufficient evidence to allow a
reasonable jury to conclude that a causal link existed between Defendant’s FCRA violation and
his emotional distress.” Pl. Resp. at 20. Plaintiff further argues that his testimony and his wife’s
testimony were legally sufficient for a jury to award damages on the basis of emotional distress.
Id. at 21.
As to Defendant’s first argument — whether Plaintiff would have experienced the same
emotional distress concerning his financial situation absent Defendant’s error — such a question
involves weighing the evidence and evaluating the credibility of witnesses. The Rule 50(a)
standard prohibits the Court from engaging in such an evaluative inquiry. Plaintiff testified that
his inability to work, because of the erroneous background report, caused Plaintiff emotional
distress. Tr. Vol. 2B 69:4-69:5, 109:4-109:11. What weight should be given to that testimony,
in light of the Smith family’s financial considerations and the pay rate for the merchandiser
position, is a task for the jury, not this Court.
As to Defendant’s second argument, the Sixth Circuit has explained the standard for
awarding damages on the basis of emotional distress:
An injured person’s testimony alone may suffice to establish
damages for emotional distress provided that she reasonably and
sufficiently explains the circumstances surrounding the injury and
does not rely on mere conclusory statements.

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Bach v. First Union Nat’l Bank, 149 F. App’x 354, 361 (6th Cir. 2005). In Bach, the plaintiff
testified that the denial of her mortgage application (the alleged injury) “made her feel
‘desperate,’ ‘ashamed,’ ‘embarrassed,’ and ‘damn mad.’” Id. The court also found that the
plaintiff was particularly vulnerable at the time of her injury because she had recently suffered a
stroke and, consequently, had limited ability to function and care for herself. Id. at 361-362.
Ultimately, the Sixth Circuit concluded that the plaintiff had “presented sufficient evidence from
which the jury could reasonably conclude that [she] was entitled to actual damages in the form of
pain and suffering.” Id. at 362.
In the present case, Plaintiff testified that he was unsure whether the error regarding his
criminal background would be corrected and whether GLWS would even hold an offer of
employment open while Defendant looked into the error. Tr. Vol. 2B 67:3-67:17. Plaintiff also
stated that he had a number of bills due at the end of the month, including heating costs for the
coldest months of the year; Plaintiff also referenced a concern that the electricity could be shut
off if it was not paid. Id. 67:22-68:4. Plaintiff testified that he had to borrow money from his
parents and his sister in order to make those payments, and that he felt ashamed for having to do
so. Id. 68:5-68:11. Plaintiff also stated that he came from a small town and people were aware
of his situation; one person referred to Plaintiff as his “favorite felon,” in front of a crowd of
people. Id. 74:12-75:1. Plaintiff also testified that he did not know how he was going to make a
living, and that he was depressed. Id. 109:4-109:11.
Plaintiff’s wife testified that the family missed a mortgage payment, and that they were
unsure if they would have to pay penalties associated with the missed payment. Id. 131:15132:2, 132:23-133:7. The Smiths also were unsure whether they could make their car payment
and whether their car would be repossessed. Id. 132:23-133:7. Mrs. Smith testified that these

27

concerns made this period the most stressful of their marriage. Id. 133:8-133:11. Mrs. Smith
also testified that her husband was angry about being unable to pay the bills, short with her, and
depressed. Id. 132:8-132:10. The record also established that the Smith family was financially
vulnerable and could not afford to be out of work, id. 51:6-51:10, 125:4-125:19, and that
Plaintiff struggled to find another job, id. 68:12-69:5. Given this evidence, the Court concludes
that the testimony from Plaintiff and his wife “reasonably and sufficiently explains the
circumstances surrounding the injury.” See Bach, 149 F. App’x at 361.
Defendant’s reference to Moore v. First Advantage Enterprise Screening Corporation,
another case within this circuit concerning emotional damages, is not persuasive. First, Moore
does not cite Bach, or any other Sixth Circuit case regarding the standard for emotional damages.
See Moore, No. 4:12 CV00792, 2013 WL 1662959, at *4-5 (N.D. Ohio Apr. 17, 2013).
Furthermore, Moore finds that testimonial evidence, in the absence of other tangible proof, such
as medical treatment or counseling, is insufficient to establish emotional distress. Id. This
appears to be in tension with existing Sixth Circuit precedent as articulated in Bach, and
therefore the Court declines to follow its reasoning. Consequently, the Court finds that Plaintiff
presented sufficient evidence to submit his claim for emotional distress to a jury.
IV.

CONCLUSION

For the foregoing reasons, Defendant’s Rule 50(a) motion is denied.
s/Mark A. Goldsmith
MARK A. GOLDSMITH
UNITED STATES DISTRICT JUDGE
Dated: December 30, 2014

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CERTIFICATE OF SERVICE
The undersigned certifies that a copy of the foregoing order was served upon each
attorney or party of record herein by electronic means or first class U.S. mail on December 30,
2014.
s/Deborah Tofil
Deborah Tofil
Case Manager

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