Cabebe v. Equifax Information Services, LLC

Filing 215

ORDER granting 148 Motion for Summary Judgment; denying 154 Motion for Partial Summary Judgment; and Denying 150 Motion to Certify Class. FURTHER ORDERED that the Clerk of the Court is instructed to enter judgment in favor of Defendant and close this matter accordingly. Signed by Judge Richard F. Boulware, II on 3/21/2019. (Copies have been distributed pursuant to the NEF - MMM)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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SHARON BARNUM; ROBERT SUSTRIK,
and all similarly situated individuals,

ORDER
Plaintiffs,

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Case No. 2:16-cv-02866-RFB-NJK

v.
EQUIFAX INFORMATION SERVICES,
LLC,

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Defendant.

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I.

INTRODUCTION

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Plaintiffs Sharon Barnum and Robert Sustrik sue Defendant Equifax Information Services,

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LLC for alleged violations of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681 et seq.

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Before the Court are three contested motions: Defendant’s Motion for Summary Judgment, ECF

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No. 148; (2) Plaintiffs’ Motion to Certify Class, ECF No. 150; and (3) Plaintiffs’ Motion for Partial

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Summary Judgment, ECF No. 154.

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As a preliminary note, this matter was originally titled Cabebe v. Equifax Information

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Services, LLC. The original plaintiff has been terminated from this matter and replaced with the

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currently named Plaintiffs. Thus, the Court instructs that the caption in this matter shall now read

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as reflected above.

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II.

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Jerry Cabebe sued Defendant on December 11, 2016. ECF No. 1. Three amended

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complaints were filed, the third of which terminated Cabebe from the matter. ECF Nos. 5, 29, 39.

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Plaintiffs filed the operative complaint, the Fourth Amended Complaint, on March 29, 2018. ECF

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No. 112. In the Fourth Amended Complaint, Plaintiffs assert two claims against Defendant: (1) a

PROCEDURAL BACKGROUND

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violation of the FRCA and (2) a request for declaratory relief under 28 U.S.C. § 2201 that

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Defendant violated FRCA. Id. Plaintiffs bring the claims on behalf of a proposed class of

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consumers. Id.

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Now, Defendant moves for summary judgment, and Plaintiffs move for partial summary

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judgment. ECF Nos. 148, 149, 154, 155, 161. Both parties opposed the competing motion and

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filed corresponding replies. ECF Nos. 174, 175, 173, 185, 187. Defendant also filed a sur-reply

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after obtaining leave to so from the Court. ECF Nos. 213, 214.

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In addition to their Motion for Partial Summary Judgment, Plaintiffs move to certify a

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proposed class under Federal Rule of Civil Procedure (“Rule”) 23. ECF No. 150. Defendant

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opposed, and Plaintiffs replied. ECF Nos. 176, 178, 180, 181, 188, 189.

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III.

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The Court finds the following facts to be undisputed. As defined by the FCRA, Defendant

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UNDISPUTED FACTS

is a credit reporting agency (“CRA”) and Plaintiffs are consumers.
a. Defendant’s Reinvestigation Procedure

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When a consumer disputes information reflected on a credit report, Defendant opens an

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Automated Consumer Interview System (“ACIS”) case to conduct a reinvestigation into the

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information provided by a furnisher. The ACIS case details the process of the reinvestigation.

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After completion of the reinvestigation, Defendant generates an electronic file containing

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a reinvestigation results letter and transmits the file to nonparty Fidelity National Card Services

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Inc. Defendant contracts with Fidelity National to complete the mailing of reinvestigation results

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letters to consumers. Under the contract, Fidelity National prints and mails the reinvestigation

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results letter to the consumer.1 The contract governing Fidelity National’s services has been

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In relation to the mailing process, the Court notes that Plaintiffs list the following as
disputed facts: (1) Defendant automatically processes, transmits, and logs the transmission of
reinvestigation results letters transmitted to Fidelity National; (2) Defendant receives data
confirming that it successfully transmitted the files to Fidelity National; (3) Defendant’s process
allows it to confirm that the reinvestigation results letters are transmitted, printed, and mailed. But
Plaintiffs do not actually dispute Defendant’s characterization of its processes as summarized in
deposition testimony. Plaintiffs instead challenge the sufficiency of Defendant’s evidence given
that Defendant purges its records after sixty days if no issue is reported during the processes and
that the manuals do not outline the manner in which Defendant oversees Fidelity National’s
activities. The Court finds that the deposition testimony sufficiently describes Defendant’s typical
process absent any contrary evidence introduced by Plaintiffs to create a genuine issue of material
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amended multiple times. Defendant, however, has been unable to provide all the amendments and

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exhibits to the amendments.

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Further, while Defendant’s procedure for responding to mailed-in consumer disputes is

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memorialized in its manuals, the manuals do not outline the processes or the policies in place that

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allow Defendant to oversee Fidelity National to ensure that the FCRA obligations are satisfied.

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But Defendant typically sends reinvestigation results letters to consumers automatically except in

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certain circumstances, e.g., when a consumer’s address cannot be verified or when a consumer

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reported fraud. If a processing error occurs during the typical process, Defendant receives notice

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from support personnel.

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b. Plaintiffs’ Disputes

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Plaintiff Barnum filed Chapter 13 Bankruptcy in January 2011, receiving a discharge on

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May 23, 2016. In July 2016, Plaintiff Barnum received a consumer disclosure from Defendant.

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On August 2, 2016, she sent Defendant a letter to dispute five items on the July 2016 disclosure.

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Defendant received the letter on August 8, 2016 and began conducting a reinvestigation on

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Plaintiff Barnum’s five disputes. Per Defendant’s internal database, Defendant completed the

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investigation on August 31, 2016 at 2:45 pm. Defendant automatically generated a letter to

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summarize the reinvestigation results. No records indicate that the reinvestigation results were

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withheld based on an unverified address or a report of fraud. But Plaintiff Barnum did not receive

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the results letter. Plaintiff Barnum thus sent a second dispute letter to Defendant in October 2016.

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After completion of a second reinvestigation, Plaintiff Barnum received a results letter from

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Defendant. One month later, Plaintiff Barnum was extended a line of credit for which she applied

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for in August 2016—the same month in which she disputed the information reported by Defendant.

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Like Plaintiff Barnum, Plaintiff Sustrik also filed for Chapter 13 Bankruptcy. He filed his

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petition in July 2010 and received a discharge on November 23, 2015. After receiving a consumer

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disclosure from Defendant on July 2, 2016, Plaintiff Sustrik sent Defendant a letter to dispute four

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items on August 2, 2016. Defendant completed a reinvestigation and automatically generated a

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fact. But even more, for the reasons discussed herein, the Court finds that the process of printing
and mailing is not material to the decision of this Court.
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reinvestigation results letter on August 29, 2016 at 11:45 pm. Again, no records indicate that the

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reinvestigation results were withheld. But Plaintiff Sustrik did not receive the results letter.

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Both Plaintiffs spent funds to make their disputes with Defendant. Both Plaintiffs also

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experienced damages (e.g., uncertainty, anguish, and anxiety) as a result of not receiving notice

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regarding their disputes.
However—and importantly—neither Plaintiff disputes that the information challenged and

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reinvestigated was in fact accurate.

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IV.

DISPUTED FACTS

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The parties dispute whether: Defendant has reasonable policies and procedures in place to

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satisfy its statutory duties of providing notice to consumers after conducting a reinvestigation

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under the FCRA; the reinvestigation results letters regarding Plaintiffs’ disputes were printed and

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mailed, and; Plaintiffs suffered harm at the result of Defendant’s actions or inactions.

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V.

LEGAL STANDARD

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Summary judgment is appropriate when the pleadings, depositions, answers to

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interrogatories, and admissions on file, together with the affidavits, if any, show “that there is no

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genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”

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Fed. R. Civ. P. 56(a); accord Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). When considering

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the propriety of summary judgment, the court views all facts and draws all inferences in the light

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most favorable to the nonmoving party. Gonzalez v. City of Anaheim, 747 F.3d 789, 793 (9th Cir.

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2014). If the movant has carried its burden, the non-moving party “must do more than simply

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show that there is some metaphysical doubt as to the material facts…. Where the record taken as

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a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine

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issue for trial.” Scott v. Harris, 550 U.S. 372, 380 (2007) (alteration in original) (internal quotation

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marks omitted). It is improper for the Court to resolve genuine factual disputes or make credibility

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determinations at the summary judgment stage. Zetwick v. Cty. of Yolo, 850 F.3d 436, 441 (9th

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Cir. 2017) (citations omitted).

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VI.

DISCUSSION

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To begin, the Court considers the parties’ motions for summary judgment. Plaintiffs do

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not dispute the reasonableness of Defendant’s reinvestigation into Plaintiffs’ disputes or the

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accuracy of the information disputed by each Plaintiff. Plaintiffs instead bring their claim based

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on the allegedly unreasonable or insufficient policies and procedures governing the oversight of

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Fidelity National by Defendant to ensure the FCRA mandates are satisfied.
A. The Fair Credit Reporting Act

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“Congress enacted the [FCRA] in 1970 ‘to ensure fair and accurate credit reporting,

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promote efficiency in the banking system, and protect consumer privacy.’” Gorman v. Wolpoff

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& Abramson, LLP, 584 F.3d 1147, 1153 (9th Cir. 2009) (quoting Safeco Ins. Co. of Am. v. Burr,

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551 U.S. 47 (2007)). “As an important means to this end, the Act sought to make ‘consumer

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reporting agencies exercise their grave responsibilities [in assembling and evaluating consumers’

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credit, and disseminating information about consumers' credit] with fairness, impartiality, and a

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respect for the consumer's right to privacy.’” Id. (alteration in original) (quoting 15 U.S.C. §

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1681(a)(4)).
In relation to the duties of CRAs in the event a consumer disputes reported information as

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inaccurate, Section 1681i provides:
[I]f the completeness or accuracy of any item of information contained in a
consumer’s file at a [CRA] is disputed by the consumer and the consumer notifies
the [CRA] directly, or indirectly through a reseller, of such dispute, the [CRA] shall,
free of charge, conduct a reasonable reinvestigation to determine whether the
disputed information is inaccurate and record the current status of the disputed
information, or delete the item from the file in accordance with [the FCRA], before
the end of the 30-day period beginning on the date on which the agency receives
the notice of the dispute from the consumer or reseller.

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15 U.S.C. § 1681i(a)(1)(A). Thus, the CRA must conduct a reinvestigation of information
provided by furnishers or creditors within thirty days of receiving notice of the consumer dispute.
Id.
Additionally, Section 1681i mandates that the CRA provide notice of its decision on an
investigation in one of two ways. First, Section 1681i provides:
Upon making any determination in accordance with subparagraph (A) that a dispute
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is frivolous or irrelevant, a consumer reporting agency shall notify the consumer of
such determination not later than 5 business days after making such determination,
by mail or, if authorized by the consumer for that purpose, by any other means
available to the agency.

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15 U.S.C. § 1681i(a)(3)(B). Alternatively, Section 1681i provides:

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A consumer reporting agency shall provide written notice to a consumer of the
results of a reinvestigation under this subsection not later than 5 business days after
the completion of the reinvestigation, by mail or, if authorized by the consumer for
that purpose, by other means available to the agency.

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15 U.S.C. § 1681i(a)(6)(A). A CRA therefore must provide either a notice that the dispute was

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frivolous or irrelevant within five days of such a determination or a notice of the reinvestigation

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results within five days of the conclusion of the reinvestigation.

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“Although the FCRA’s reinvestigation provision … does not on its face require that an

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actual inaccuracy exist for a plaintiff to state a claim, many courts, including [the Ninth Circuit

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Court of Appeals], have imposed such a requirement.” Carvalho v. Equifax Info. Servs., LLC,

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629 F.3d 876, 890 (9th Cir. 2010). Thus, a plaintiff “must make a prima facie showing of

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inaccurate reporting” to file suit under Section 1681i. Id. (citing Dennis v. BEH-1, LLC, 520 F.3d

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1066, 1069 (9th Cir. 2008).

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B. Analysis

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Both parties move for summary judgment. Defendant moves for summary judgment,

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contending that Plaintiffs’ claims fail for three reasons: (1) Plaintiffs cannot show that their

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disputes contained inaccurate information; (2) Plaintiffs cannot show that Defendant failed to

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institute reasonable processes by which consumers are provided reinvestigation results letters; and

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(3) Plaintiffs cannot establish willfulness, limiting Plaintiffs’ recovery to actual damages and

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attorney’s fees. Plaintiffs move for partial summary judgment, seeking a decision that Defendant

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is liable under the FCRA for failing to provide reinvestigation results letters within the statutory

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deadline. Plaintiffs argue that the evidence shows that Defendant failed to enact satisfactory

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procedures, controls, or oversights to ensure that Fidelity National printed and mailed the

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reinvestigation results letters within five days of concluding the reinvestigations.

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This matter is resolved by Defendant’s first argument; Plaintiffs do not dispute that any

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inaccuracies were actually reported by Defendant. Plaintiffs thus fail to satisfy the prima facie

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element of inaccuracy as required by the Ninth Circuit for the FCRA claims arising under Section

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1681i. Carvalho, 629 F.3d at 890; see also Dennis, 520 F.3d at 1069. While Plaintiffs argue that

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the FCRA does not require inaccuracy as an element for a Section 1681i claim on its face and such

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a requirement renders other provisions of the FCRA superfluous, the Ninth Circuit disposed of

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Plaintiffs’ arguments in Dennis. 520 F.3d at 1069. The Ninth Circuit explicitly held that a suit

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under Section 1681i indeed requires a “prima facie showing of inaccurate reporting.” Id. The Ninth

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Circuit has explained that “[t]he inaccuracy requirement comports with the purpose of the FCRA,

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which is ‘to protect consumers from the transmission of inaccurate information about them.’”

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Carvalho, 629 F.3d at 890 (quoting Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147, 1157

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(9th Cir. 2009)). Because Plaintiffs do not challenge that the disputed information was in fact

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accurate, the Court grants Defendant’s Motion for Summary Judgment and denies Plaintiffs’

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Motion for Partial Summary Judgment accordingly.

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Further, as a result of the grant of summary judgment in favor of Defendant, the Court does

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not need to reach the arguments regarding class certification in Plaintiffs’ Motion to Certify the

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Class as Plaintiffs have not established a prima facie the FCRA claim for which a class may be

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certified. The Motion to Certify is therefore also denied.

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VII.

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IT IS ORDERED that Defendant’s Motion for Summary Judgment (ECF No. 148) is

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GRANTED.
IT IS ORDERED that Plaintiffs’ Motion for Partial Summary Judgment (ECF No. 154)

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CONCLUSION

is DENIED.
IT IS ORDERED that Plaintiffs’ Motion to Certify Class (ECF No. 150) is DENIED.

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IT IS ORDERED that the Clerk of the Court is instructed to enter judgment in favor of
Defendant and close this matter accordingly.

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DATED: March 21, 2019.

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__________________________________
RICHARD F. BOULWARE, II
UNITED STATES DISTRICT JUDGE

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