Harter v. RealPage, Inc.

Filing 30

MEMORANDUM OPINION AND ORDER re 18 MOTION for Summary Judgment and Brief in Support filed by RealPage, Inc.. It is therefore ORDERED that RealPage, Inc.s Motion for Summary Judgment is hereby GRANTED; that Harter take nothing on his claims and causes of action against defendant; and that such claims and causes of action are hereby DISMISSED with prejudice. Signed by Judge Amos L. Mazzant, III on 11/3/16. (cm, )

United States District Court
EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION

ETHAN BROOKS HARTER
v.
REALPAGE, INC.

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Civil Action No. 4:16-CV-100
Judge Mazzant

MEMORANDUM OPINION AND ORDER
Pending before the Court is RealPage, Inc.’s Motion for Summary Judgment (Dkt. #18).
The Court, having considered the relevant pleadings, finds that Plaintiff’s Motion for Summary
Judgment should be granted.
BACKGROUND
Plaintiff Ethan Brooks Harter (“Harter”) visited Denver to secure housing for his
upcoming first term at the University of Denver School of Law. On July 11, 2015, Harter
submitted a lease application with the Legend Oaks Apartments. The rental application asks
whether the applicant has ever “been charged, detained, or arrested for a felony, misdemeanor
involving a controlled substance, violence to another person or destruction of property, or a sex
crime that was resolved by conviction, probation, deferred adjudication, court ordered
community supervision, or pretrial diversion?” (Dkt. #18, Exhibit C-1). The leasing agent ran a
criminal background check using resident screening software owned by Defendant RealPage,
Inc. (“RealPage”). In its screening process, Realpage utilized vendor Genuine Data Services,
LLC, which showed that Harter had a conviction in the North Carolina courts. Specifically, the
report contained a conviction in Montgomery County, North Carolina, Case No. 700487, and
stated the offense was “NOT PROVIDED.” The apartment manager rejected Harter’s application

based on the report. Harter called RealPage to dispute the report, but no action was taken by
RealPage at that time.
The next day, on July 12, 2015, Harter submitted an application with a different
apartment complex called Helios. Helios utilized RealPage as well, which returned a positive
report on Harter. On July 13, 2015, Harter submitted a dispute to RealPage. That day, RealPage
utilized a second vendor, backgroundchecks.com, to confirm the traffic offense was accurate.
But RealPage removed the record from Harter’s file regardless because it was not the type of
record that leasing properties considered in screening its applicants. Following the dispute
resolution, Harter signed a lease with Helios.
In his Original Petition, Plaintiff alleged causes of action against RealPage for
Defamation, Libel Per Se, and Defamation Per Se arising out of information RealPage provided
in connection with background screening reports requested by the apartment complexes using
RealPage software in connection with Plaintiff’s housing applications to those complexes (Dkt.
#2). These claims were all pleaded under state law in the 380th Judicial District Court of Collin
County, Texas. On February 3, 2016, Plaintiff added a cause of action under the Fair Credit
Reporting Act, 15 U.S.C. § 1681 et. seq. (Dkt. #4). On February 8, 2016, RealPage filed a Notice
of Removal in this Court invoking federal question jurisdiction (Dkt. #1).
On June 17, 2016, RealPage filed a Motion for Summary Judgment (Dkt. #18). On July
25, 2016, Harter filed a response (Dkt. #25). On August 1, 2016, RealPage filed a reply (Dkt.
#26).
LEGAL STANDARD
The purpose of summary judgment is to isolate and dispose of factually unsupported
claims or defenses. Celotex Corp. v. Catrett, 477 U.S. 317, 323–24 (1986). Summary judgment

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is proper under Rule 56(a) of the Federal Rules of Civil Procedure “if the movant shows 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). A dispute about a material fact is genuine when “the
evidence is such that a reasonable jury could return a verdict for the nonmoving party.”
Anderson v. Liberty Lobby Inc., 477 U.S. 242, 248 (1986). Substantive law identifies which
facts are material. Id. The trial court “must resolve all reasonable doubts in favor of the party
opposing the motion for summary judgment.” Casey Enters., Inc. v. Am. Hardware Mut. Ins.
Co., 655 F.2d 598, 602 (5th Cir. 1981).
The party seeking summary judgment bears the initial burden of informing the court of its
motion and identifying “depositions, documents, electronically stored information, affidavits or
declarations, stipulations (including those made for purposes of the motion only), admissions,
interrogatory answers, or other materials” that demonstrate the absence of a genuine issue of
material fact. FED. R. CIV. P. 56(c)(1)(A); Celotex, 477 U.S. at 323. If the movant bears the
burden of proof on a claim or defense for which it is moving for summary judgment, it must
come forward with evidence that establishes “beyond peradventure all of the essential elements
of the claim or defense.” Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir. 1986). Where
the nonmovant bears the burden of proof, the movant may discharge the burden by showing that
there is an absence of evidence to support the nonmovant’s case. Celotex, 477 U.S. at 325; Byers
v. Dall. Morning News, Inc., 209 F.3d 419, 424 (5th Cir. 2000). Once the movant has carried its
burden, the nonmovant must “respond to the motion for summary judgment by setting forth
particular facts indicating there is a genuine issue for trial.” Byers, 209 F.3d at 424 (citing
Anderson, 477 U.S. at 248–49). A nonmovant must present affirmative evidence to defeat a
properly supported motion for summary judgment. Anderson, 477 U.S. at 257. Mere denials of

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material facts, unsworn allegations, or arguments and assertions in briefs or legal memoranda
will not suffice to carry this burden. Rather, the Court requires ‘“significant probative evidence’”
from the nonmovant to dismiss a request for summary judgment. In re Mun. Bond Reporting
Antitrust Litig., 672 F.2d 436, 440 (5th Cir. 1982) (quoting Ferguson v. Nat’l Broad. Co., 584
F.2d 111, 114 (5th Cir. 1978)). The Court must consider all of the evidence but must “refrain
from making any credibility determinations or weighing the evidence.” Turner v. Baylor
Richardson Med. Ctr., 476 F.3d 337, 343 (5th Cir. 2007).
ANALYSIS
Harter alleges causes of action under Texas law against RealPage for defamation, libel
per se, and defamation per se. 1 Harter also alleges a federal cause of action under the Fair Credit
Reporting Act (“FCRA”). RealPage moves for summary judgment asserting: (1) it did not make
any false statements in the report, (2) the statements are protected by qualified privilege and were
made in good faith without actual malice; and (3) the statements are protected by absolute
privilege, as Harter consented to the publication. RealPage also asserts the Fair Credit Reporting
Act claim fails because the report was accurate and Harter suffered no cognizable damages.
To prove an action for defamation under Texas law, the published statement must be
false. Tex. Civ. Prac. & Rem. Code § 73.005(a) (“The truth of the statement in the publication on
which an action for libel is based is a defense to the action.”); Neely v. Wilson, 418 S.W.3d 52,
56 (Tex. 2013) (“Truth is a defense to all defamation actions . . . Statements that are not
verifiable as false cannot form the basis of a defamation action.”). RealPage asserts that the
reports were in fact true because Montgomery County provided public criminal offense
1

Harter also alleges defamation per se, claiming defendant’s statement “imputed a loathsome
disease to plaintiff.” (Dkt. #4). Harter neither introduces evidence on this claim, nor addresses it
in his response. The Court is unable to ascertain why Harter alleges this cause of action and finds
summary judgment appropriate as to this claim.
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information that was associated with Harter. Both background checks reported a conviction in
Montgomery County, North Carolina, Case No. 700487 (Dkts. #18-2, #18-3). Specifically, the
reports read that Harter had a Montgomery County criminal history and stated the offense was
“NOT PROVIDED.” A review of Montgomery County’s Criminal Disposition Inquiry reveals
that Harter did in fact commit two traffic violations on March 10, 2011 (Dkt. #18-11). Harter
does not dispute the existence of such conviction; rather, he alleges that the background check
presented an inaccurate picture of his background.
Harter asserts it “is undisputed that the report of a criminal background was wrong.”
(Dkt. #25 p. 2). Harter claims RealPage’s email to Legend Oaks proves the report was false. The
email reads, “The criminal section of the report provided to you regarding Ethan Arter [sic] on
7/11/2015 was derived from public records from the North Carolina courts. Based upon our
investigation, we have determined that the record should be removed from the consumer’s file.”
(Dkt. #18-7). But this email does not support the notion that RealPage made any false statement.
The report generated a criminal conviction, which in fact existed.
Harter further asserts, “when Defendant stated that Plaintiff had a criminal record, it was
implying, if not stating, that he had been charged with, arrested for or convicted of a sex, drug, or
violent crime.” (Dkt. #25 p. 5). In the same brief, Harter admits, “Plaintiff acknowledges that
Defendant did not state this explicitly . . . the reasonable deduction from the evidence is that the
managers viewed the positive report from Defendant as showing the Plaintiff had been arrested
for, charged with or convicted of a crime of sex, drugs, or violence.” (Dkt. #25 p. 12). Harter
makes this extrapolation based on one leasing application that asked whether he had been
“charged with, arrested for or convicted of a crime involving sex, drugs or violence.” (Dkt. 1813). This question in the leasing application has nothing to do with RealPage’s report. The

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question in the leasing application does not indicate that the apartment complex only asks for
RealPage to provide convictions of sex, drugs, or violent crimes. And RealPage does not purport
to only provide reports on such crimes. The evidence indicates the opposite is true. The
disclosure statements in both apartment complexes state, “[s]ome Traffic records are
included . . . In order for you to assure yourself that this report has not produced a ‘false
positive,’ it is important to work with your applicant to confirm or disprove the match of the
criminal record.” (Dkts. #18-9, #18-10). RealPage reported that Montgomery County provided
RealPage with Harter’s criminal history for an offense “NOT PROVIDED.” RealPage never
reported that Harter had been arrested for or convicted of a crime involving sex, drugs or
violence. Harter presented no admissible evidence indicating that the leasing agents interpreted
the report to mean Harter had been arrested for or convicted of a crime involving sex, drugs or
violence. Speculation about what a person might have thought is inadmissible and cannot create
a genuine dispute as to the accuracy of the reports. Fed. R. Civ. P. 56(e); Fed. R. Evid. 602.
Harter’s allegation that RealPage published a false statement is factually unsupported and cannot
serve as a basis for any of his defamation claims. See Celotex Corp. v. Catrett, 477 U.S. 317,
323–24 (1986).
The defamation claims also fail because qualified privilege applies. 2 Qualified privileges
against defamation exist when a statement is made in good faith and the author has an interest
that is sufficiently affected by the statement. Neeley, 418 S.W.3d at 62. The effect of qualified
privilege is to justify the communication when it is made without actual malice. See Dun &
Bradstreet, Inc. v. O’Neil, 456 S.W.2d 896, 899 (Tex. 1970). For purposes of summary
2

Absolute privilege also applies, as Harter consented to the criminal background search and
publication to the apartment complex in his application (Dkt. #18, Exhibit D-1). See Smith v.
Holly, 827 S.W.2d 433, 438 (Tex. App. 1992, writ denied) (“Texas cases say that a publication
made in response to consent is not actionable . . . Consent creates an absolute privilege.”).
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judgment, the burden of proof is on the defendant to show the communication was made without
malice. See Mayfield v. Gleichert, 484 S.W.2d 619, 625 (Tex. App.—Tyler 1972, no writ). The
defendant can negate actual malice by showing it did not publish the statement with knowledge
of its falsity or reckless disregard for its truth. Huckabee, 19 S.W.3d at 420. RealPage has
negated actual malice because it has proven that the statement was true. The plaintiff must raise a
genuine issue of material fact regarding actual malice to survive this motion. Tex. R. Civ. Pro.
166a(c); City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979) (stating a
nonmovant “must present summary judgment proof when necessary to establish a fact issue”).
To establish a fact issue as to actual malice, Harter must show RealPage made a
statement “with knowledge that it was false or with reckless disregard of whether it was true or
not.” Huckabee v. Time Warner Entertainment Co., 19 S.W.3d 413, 420 (Tex. 2000); New York
Times v. Sullivan, 376 U.S. 254, 279–80 (1964). To establish reckless disregard, a plaintiff must
prove the publisher “entertained serious doubts as to the truth of his publication.” Huckabee, 19
S.W.3d at 420; Casso v. Brand, 776 S.W.2d 551, 558 (Tex. 1989). Harter alleges RealPage acted
recklessly because it should have investigated whether the criminal report from Montgomery
County was true. But failure to investigate has been held insufficient to establish actual malice.
See Doubleday & Co., Inc. v. Rogers, 674 S.W.2d 751, 756 (Tex. 1984) (holding reckless
conduct not measured by whether a reasonably prudent person would have investigated before
publishing); El Paso Times, Inc. v. Trexler, 447 S.W.2d 403, 405–06 (Tex. 1969) (holding proof
of failure to investigate does not evidence actual malice). Harter asserts that RealPage acted with
reckless disregard, but case law makes clear failure to research the accuracy of information is not
grounds for a defamation suit absent other evidence of actual malice. The Court finds that Harter
has not set forth summary judgment evidence indicating there is a genuine issue as to defamation

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for trial. See Byers, 209 F.3d at 424 (citing Anderson, 477 U.S. at 248–49). The Court finds all of
Harter’s defamation claims brought under Texas law, including libel per se and defamation per
se, to be factually unsupported.
As to the federal claims under the FCRA, RealPage is entitled to summary judgment
because it accurately reported the record and there is no evidence of a willful violation. To
establish a prima facie violation of § 1681e(b), a plaintiff must establish that the (1) inaccurate
information was included in defendant’s credit report; (2) inaccuracy was due to defendant’s
failure to follow reasonable procedures to assure maximum possible accuracy; (3) defendant
suffered injury; and (4) defendant’s injury was caused by the inclusion of the inaccurate entry.
Zala v. Trans Union, LLC, No. 3:99-CV-0399, 2001 WL 210693, at *3 (N.D. Tex. Jan.17, 2001).
RealPage asserts, and the Court agrees, that Harter has failed to show that the report was
inaccurate because the report correctly identified that Harter had a public criminal record in
Montgomery County.
The Court finds Harter’s Section 1681e claim fails because there is no genuine factual
dispute regarding an inaccurate statement. 3 However, Harter also asserts the report was
incomplete, triggering liability under Section 1681k. But the completeness requirement is unique
to credit reports in the employment context. See 15 U.S.C. § 1681k (stating a “consumer
reporting agency which furnishes a consumer report for employment purposes . . . shall maintain
strict procedures designed to insure that whenever public record information which is likely to
have an adverse effect on a consumer’s ability to obtain employment is reported it is complete

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Harter’s FCRA claims also fail because there is no evidence that Realpage knowingly or
recklessly published a false statement. Harter fails to demonstrate, at a minimum, Realpage’s
recklessness with proof of “conduct violating an objective standard: action entailing an
unjustifiably high risk of harm that is either known or so obvious that is should be known.”
Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 68 (2007).
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and up to date”); Farmer v. Phillips Agency, Inc., 285 F.R.D. 688, 691–92 (N.D. Ga. 2012)
(explaining that the “completeness provision” of Section 1681(k) applies to any credit reporting
agency “which furnishes a consumer report for employment purposes” (emphasis added)). This
section and the completeness requirement are inapplicable because Harter was applying for
housing, not employment.
Harter also asserts that RealPage violated Section 1681d(d)(3), which requires agencies
conducting “investigative consumer reports” to “verif[y] the accuracy of the information during
the 30-day period ending on the date on which the report is furnished.” But this section only
applies to investigative consumer reports. See 15 U.S.C. § 1681d(d)(3); 15 U.S.C. § 1681a(e)
(defining investigative consumer reports as reports in which “information on a consumer’s
character, general reputation, personal characteristics, or mode of living is obtained through
personal interviews with neighbors, friends, or associates”). The Court finds Harter has failed to
establish a material fact issue on whether RealPage violated the FCRA.
CONCLUSION
Harter has not demonstrated that RealPage defamed him under Texas law or otherwise
violated the FCRA. The statements at issue were truthful and were made in good faith and
without actual malice.
It is therefore ORDERED that RealPage, Inc.’s Motion for Summary Judgment (Dkt.
#18) is hereby GRANTED; that Harter take nothing on his claims and causes of action against
defendant; and that such claims and causes of action are hereby DISMISSED with prejudice.

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SIGNED this 3rd day of November, 2016.

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AMOS L. MAZZANT
UNITED STATES DISTRICT JUDGE

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