McChriston v. Diversified Consultants

Filing 38

ORDER 37 Report and Recommendations,, 27 Motion for Summary Judgment filed by Diversified Consultants. Because careful review of the Report reveals no clear error, the Court adopts the Report in full and grants Defendant's motion for s ummary judgment. The Clerk of Court is respectfully directed to enter judgment in Defendants favor, terminate all open motions, and close this case. The Report and Recommendation having given the parties adequate warning, see Dkt. 37 (R&R) at 12, t he parties' failure to file written objections to the report precludes appellate review of this decision. See Caidor v. Onondaga Cty., 517 F.3d 601, 604 (2d Cir. 2008). SO ORDERED. (Signed by Judge Valerie E. Caproni on 7/8/2019) (rj) Transmission to Orders and Judgments Clerk for processing. (Main Document 38 replaced on 7/8/2019) (rj).

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
JONATHAN McCHRISTON,

USDC SDNY
DOCUMENT
ELECTRONICALLY FILED
DOC #:
DATE FILED: 7/8/2019

Plaintiff,
18-CV-185 (VEC)
-againstORDER
DIVERSIFIED CONSULTANTS,
Defendant.

VALERIE CAPRONI, United States District Judge:
Pro se Plaintiff Jonathan McChriston filed this lawsuit on January 9, 2018, alleging that
Defendant Diversified Consultants, Inc. violated the Fair Credit Reporting Act (“FCRA”), 15
U.S.C. § 1681 et seq., by twice obtaining his credit report without a permissible purpose. See
Dkt. 2 (Compl.). On February 13, 2018, this Court referred the case to Magistrate Judge Barbara
C. Moses for general pretrial proceedings and for the preparation of reports and
recommendations on any dispositive motions pursuant to 28 U.S.C. § 636(b). See Dkt. 6. On
September 14, 2018, after the parties completed discovery, Defendant moved for summary
judgment. See Dkts. 27-29. On June 7, 2019, Judge Moses recommended that Defendant’s
motion be granted. See Dkt. 37 (Report & Recommendation (“R&R”)). Pursuant to Fed. R. Civ.
P. 72(b)(2) and 6(d), Plaintiff’s deadline to object to the report was June 27, 2019. The Court
has received no objections from either party.
DISCUSSION
In reviewing a Report and Recommendation, a district court “may accept, reject, or
modify, in whole or in part, the findings or recommendations made by the magistrate judge.” 28
U.S.C. § 636(b)(1)(C). When specific objections are made, “[t]he district judge must determine
de novo any part of the magistrate judge’s disposition that has been properly objected to.” Fed.
Page 1 of 4

R. Civ. P. 72(b)(3); see also, e.g., United States v. Male Juvenile, 121 F.3d 34, 38 (2d Cir. 1997).
“Where no timely objection has been made by either party, a district court need only find that
there is no clear error on the face of the record in order to accept the Report and
Recommendation.” Phillips v. Reed Grp., Ltd., 955 F. Supp. 2d 201, 211 (S.D.N.Y. 2013)
(internal quotation marks omitted).
Neither party has objected to Judge Moses’s Report and Recommendation, so the Court
reviews it for clear error. The Court finds none. First, the Report correctly concludes that, by
failing to submit his own statement disputing paragraphs one and four of Defendant’s Local Civil
Rule 56.1 statement—as Local Civil Rule 56.1(b) required Plaintiff to do—Plaintiff has admitted
for purposes of this motion that both Verizon Telecom and Time Warner Cable placed accounts
in Plaintiff’s name with Defendant for collection. 1 See Dkt. 37 (R&R) at 8; Dkt. 28 (Def. 56.1
Statement); see also Local Civ. R. 56.1(c) (“Each numbered paragraph in the statement of
material facts set forth in the statement required to be served by the moving party will be deemed
to be admitted for purposes of the motion unless specifically controverted by a correspondingly
numbered paragraph in the statement required to be served by the opposing party.”). The Court
agrees with the Report’s conclusion that, as a matter of law, each of those account placements
gave Defendant a permissible purpose under 15 U.S.C. § 1681b(a)(3)(A) for obtaining a credit
report on Plaintiff. 2 See, e.g., Stonehart v. Rosenthal, No. 01-CV-651, 2001 WL 910771, at *4

1

Similarly, the Report correctly rejects Plaintiff’s contention that Defendant has failed to “provide[] any
proof” that it is “collecting debts for Verizon and [T]ime [W]arner.” Dkt. 31 (Memo. in Opp. to MSJ) at 1; see also
Dkt. 37 (R&R) at 9-10. The affidavit from David Goodwin, Defendant’s chief operations officer and chief
compliance officer, is admissible evidence that Verizon and Time Warner referred accounts to Defendant for
collection. See Dkt. 29 ex. 1 ¶¶ 6, 9; see also Fed. R. Civ. P. 56(c)(1), (4) (permitting a party to support a factual
assertion with, among other things, affidavits that are “made on personal knowledge, set out facts that would be
admissible in evidence, and show that the affiant or declarant is competent to testify on the matters stated”).

2

This is so even if, as Plaintiff contends, “Plaintiff never had any accounts with [D]efendant.” Dkt. 31
(Mem. in Opp. to MSJ) at 1. As the Report points out, by its terms, Section 1681b(a)(3)(A) does not require that a

Page 2 of 4

(S.D.N.Y. Aug. 13, 2001) (“The referral of [plaintiff’s] debt for collection gave [defendant debt
collector] a permissible purpose for obtaining [plaintiff’s] credit report pursuant to section
1681b.”).
Furthermore, the Report correctly concludes that, under 15 U.S.C. § 1681b(f)(1),
Defendant is entitled to the protection of Section 1681b(a)(3)(A) even though it is not a
“consumer reporting agency.” See Dkt. 37 (R&R) at 10; see also 15 U.S.C. § 1681b(f)(1)
(prohibiting any “person” from obtaining a consumer credit report unless, in relevant part, the
report “is obtained for a purpose for which the consumer report is authorized to be furnished
under this section,” which includes Section 1681b(a)(3)(A)); Trikas v. Universal Card Servs.
Corp., 351 F. Supp. 2d 37, 42 n.7 (E.D.N.Y. 2005) (holding that Section 1681b(f) extends
Section 1681b(a)(3)(A)’s language to persons, not just consumer reporting agencies).
Next, the Court agrees with the Report that, because Defendant undisputedly had a
permissible purpose to obtain Plaintiff’s credit reports, it is immaterial whether Section
1981b(a)(3)(A)’s “reason to believe” language extends to “persons” who obtain such reports
under Section 1681b(f): to avoid FCRA liability, a person with an objectively permissible
purpose for obtaining a credit report need not also have a reasonable, subjective belief that his
purpose was permissible. See Dkt. 37 (R&R) at 11; see also Dkt. 31 (Mem. in Opp. to MSJ) at
3-4.
Finally, the Court sees no clear error in the Report’s election to treat as abandoned the
Complaint’s suggestion that Section 1681b(a)(3)(A) is inapplicable because 15 U.S.C.
§ 1693a(2) defines “account” to mean a “demand deposit, savings deposit, or other asset

consumer hold an account with a debt collector in order for the debt collector lawfully to obtain a credit report on
the consumer. See Dkt. 37 (R&R) at 8-9.

Page 3 of 4

account.” See Dkt. 2 (Compl.) ¶¶ 19-20; see also Dkt. 37 (R&R) at 11 n.2. Plaintiff failed to
marshal that argument in opposing summary judgment. 3
CONCLUSION
Because careful review of the Report reveals no clear error, the Court adopts the Report
in full and grants Defendant’s motion for summary judgment. The Clerk of Court is respectfully
directed to enter judgment in Defendant’s favor, terminate all open motions, and close this case.
The Report and Recommendation having given the parties adequate warning, see Dkt. 37
(R&R) at 12, the parties’ failure to file written objections to the report precludes appellate review
of this decision. See Caidor v. Onondaga Cty., 517 F.3d 601, 604 (2d Cir. 2008).

SO ORDERED.
Date: July 8, 2019
New York, New York

_________________________________
VALERIE CAPRONI
United States District Judge

3
Even if the argument has not been abandoned, the Report correctly noted that it is meritless. See Dkt. 37
(R&R) at 11 n.2.

The Report also properly rejects Plaintiff’s irrelevant musings on the propriety of the credit-reporting and
debt-collection industries generally. See Dkt. 37 (R&R) at 10-11; see also Dkt. 31 (Mem. in Opp. to MSJ) at 2-3.
Plaintiff’s criticisms of the system as a whole have no bearing on this case.

Page 4 of 4