Perrill et al v. Equifax Information Services, LLC

Filing 47

MEMORANDUM OF LAW & ORDER. IT IS HEREBY ORDERED: 1. Plaintiffs' Request to Strike Defendant's "Notice of Filing Additional Materials in Support of Motion to Transfer" 44 is DENIED. 2. Defendant's Motion to Transfe r Venue to the United States District of Texas, Austin Division 14 is GRANTED. 3. This case is transferred to the United States District Court for the Western District of Texas. (Written Opinion). Signed by Chief Judge Michael J. Davis on 6/30/14. (GRR) [Transferred from Minnesota on 7/1/2014.]

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA

DAVID A. PERRILL and
GREGORY PERRILL,
Plaintiffs,

v.

MEMORANDUM OF LAW & ORDER
Civil File No. 13-3333 (MJD/JSM)

EQUIFAX INFORMATION
SERVICES, LLC,
Defendant.
Andrew J. Ogilvie and Carol M. Brewer, Anderson Ogilvie & Brewer LLP, and
Mark L. Heaney, Heaney Law Firm, LLC, Counsel for Plaintiffs.
J. Anthony Love and Barry Goheen, King & Spalding, LLP, and Joseph W.
Lawver, Messerli & Kramer, Counsel for Defendant.
I.

INTRODUCTION
This matter is before the Court on Defendant’s Motion to Transfer Venue

to the United States District of Texas, Austin Division [Docket No. 14] and
Plaintiffs’ Request to Strike Defendant’s “Notice of Filing Additional Materials in
Support of Motion to Transfer” [Docket No. 44]. The Court heard oral argument

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on June 27, 2014. For the reasons that follow, the Court denies the motion to
strike and transfers the case to the Western District of Texas.
II.

BACKGROUND
A.

Factual Background
1.

Defendant Equifax

Defendant Equifax Information Services LLC (“Equifax”) and CSC Credit
Services (“CSC”) are consumer reporting agencies as defined by the Fair Credit
Reporting Act (“FCRA”). (Banks Decl. ¶ 5.) They were separate companies until
Equifax acquired CSC’s credit reporting assets in December 2012. (Id. ¶¶ 6, 8.)
CSC was located in Houston, Texas, and Equifax was and is located in Atlanta,
Georgia. (Id. ¶ 7.)
Before Equifax acquired CSC, CSC stored its consumer credit files on
Equifax’s computer database. (Banks Decl. ¶¶ 6, 9.) Otherwise, CSC and
Equifax operated independently and entered their own separate contractual
relationships with third parties that sought to purchase credit reports. (Id. ¶ 10.)
In 2009, CSC entered into a contract to provide credit reports to the Texas
Comptroller. (Fisher Decl. ¶ 7.) Pamela Sneed, an employee of the Texas
Comptroller, dealt with CSC in relation to CSC’s bid to offer credit reporting
services to the Comptroller in Austin, Texas. (Banks Decl. ¶¶ 12-13.)
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The agreement between CSC and the Texas Comptroller was negotiated
and executed in Texas. (Fisher Decl. ¶ 8.) CSC signed the agreement through its
Vice President, Peggy Fisher, who resides in Houston, Texas. (Id. ¶¶ 1, 9.) CSC
former employee, J.R. Brown, primarily managed CSC’s relationship with the
Texas Comptroller. (Id. ¶ 10.) At that time, Brown resided in Austin, Texas, and
Equifax believes that is where he still lives. (Id. ¶ 11.)
2.

Plaintiffs

Plaintiffs David Perrill and Gregory Perrill are Minnesota residents and
officers of Wand Corporation (“Wand”), which is based in Minnesota. (D. Perrill
Decl. ¶¶ 1-3; G. Perrill Decl. ¶¶ 1-3.)
Wand fell behind in its payments of sales, excise, and use taxes to the
Texas Comptroller. (D. Perrill Decl. ¶ 4; G. Perrill Decl. ¶ 4.) On February 5,
2013, Wand entered into a settlement agreement with the Comptroller to resolve
the outstanding taxes owed by Wand. (Id.) Neither David Perrill nor Gregory
Perrill signed or personally guaranteed the installment payment plan. (D. Perrill
Decl. ¶ 5; G. Perrill Decl. ¶ 5.)
In June 2013, Wand missed a scheduled payment under the settlement
agreement. (D. Perrill Decl. ¶ 6.) In July 2013, shortly after Wand missed its
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payment, the Texas Comptroller obtained consumer credit reports on both
Plaintiffs from Equifax. (D. Perrill Decl. ¶ 7; G. Perrill Decl. ¶ 6.) The
Comptroller obtained the reports so that it could try to collect Wand’s missed
payments under the settlement agreement. (Compl. ¶ 17; D. Perrill Decl. ¶ 8.)
The Comptroller opined that, because the Perrills were officers of Wand, they
were co-guarantors of the payment plan. (Compl. ¶ 11; D. Perrill Decl. ¶ 8.)
Equifax delivered Plaintiffs’ consumer reports to the Comptroller in
Austin, Texas. (Banks Decl. ¶ 12.) Plaintiffs aver that neither has ever asked the
Comptroller for credit or had any other dealings with the Comptroller. (D.
Perrill Decl. ¶¶ 13-14; G. Perrill Decl. ¶¶ 9-10.)
Wand’s tax obligation to the Comptroller is now fully satisfied. (D. Perrill
Decl. ¶ 6.)
B.

Procedural History

On December 4, 2013, Plaintiffs filed a Complaint against Equifax in this
Court. The Complaint alleges: Count 1: willful violation of FCRA pursuant to 15
U.S.C. §§ 1681b, 1681n(a)(1)(A), and 1681n(a)(2).
FCRA authorizes a consumer reporting agency to furnish a consumer
report only if the person requesting the report has a permissible purpose to

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obtain it. 15 U.S.C. § 1681b. Section 1681b(a)(3)(A) authorizes a consumer
reporting agency to furnish a credit report
[t]o a person which it has reason to believe—
intends to use the information in connection with a credit
transaction involving the consumer on whom the information is to
be furnished and involving the extension of credit to, or review or
collection of an account of, the consumer . . . .
Plaintiffs allege that the Comptroller lacked a permissible purpose to
obtain their Equifax credit reports to assist it in collecting the money that Wand
owed. They further assert that Equifax knew or should have known that the
Comptroller did not have a permissible purpose to obtain those reports. (Compl.
¶¶ 13-16.) Plaintiffs seek to certify a nationwide class action representing “[a]ll
consumers whose consumer reports were furnished to the Texas Comptroller by
Equifax in connection with the Texas Comptroller’s efforts to collect on alleged
involuntary tax obligations within the period beginning two years prior to the
filing of this Complaint.” (Compl. ¶ 19.)
Equifax now requests that this Court transfer the case to the Western
District of Texas.
III.

MOTION TO STRIKE

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The Motion to Transfer was filed on February 21, 2014. The Reply was
filed April 2, 2014. On June 24, Defendant filed a Notice of Filing of Additional
Materials in Support of Motion to Transfer. [Docket No. 43] The filing consists
of two exhibits that did not exist at the time Defendant’s Reply was due: Exhibit
1 is the Texas Comptroller’s Response and Objections to Plaintiffs’ subpoena;
Exhibit 2 is Plaintiffs’ Initial Disclosures. Both of these documents were created
in mid-May 2014. Defendant asserts that these two exhibits show recent
developments in the case that bear on the arguments regarding the propriety of
transfer to the Western District of Texas.
Plaintiffs have responded to Defendant’s Notice with a motion to strike.
Plaintiffs assert that Defendant has violated Local Rule 7.1(i), entitled Unsolicited
Memoranda of Law. The rule provides: “Except with the court’s prior
permission, a party must not file a memorandum of law except as expressly
allowed under L.R. 7.1.” Plaintiffs request that the Court strike Defendant’s
Notice and award Plaintiffs the reasonable attorneys’ fees incurred in responding
to the Notice.
The Court denies the motion to strike. The Notice is not a “memorandum
of law” as discussed under the Local Rules. It contains no legal argument; it

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simply describes the exhibits. The exhibits consist of information about the
status of this case that is relevant to the Court’s analysis of the Motion to Transfer
and that did not exist at the time that Defendant filed its Reply. They contain
uncontested information about the documents exchanged in this very case. This
information could have been first raised at oral argument, yet Defendant
provided the information before oral argument to avoid unfair surprise. The
motion to strike is denied.
IV.

MOTION TO TRANSFER
A.

Section 1404(a) Standard

Under 28 U.S.C. § 1404(a), “[f]or the convenience of the parties and
witnesses, and in the interest of justice, a district court may transfer any civil
action to any other district or division where it might have been brought.” “In
general, federal courts give considerable deference to a plaintiff’s choice of forum
and thus the party seeking a transfer under section 1404(a) typically bears the
burden of proving that a transfer is warranted.” Terra Int’l, Inc. v. Miss. Chem.
Corp., 119 F.3d 688, 695 (8th Cir. 1997). When considering a motion to transfer,
the Court must consider three factors: “(1) the convenience of the parties, (2) the
convenience of the witnesses, and (3) the interests of justice.” Id. at 691.

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However, “such determinations require a case-by-case evaluation of the
particular circumstances at hand.” Id.
B.

Whether this Case Could Have Been Brought in the Western
District of Texas

A civil action may be brought in-(1) a judicial district in which any defendant resides, if all
defendants are residents of the State in which the district is located;
(2) a judicial district in which a substantial part of the events or
omissions giving rise to the claim occurred, or a substantial part of
property that is the subject of the action is situated; or
(3) if there is no district in which an action may otherwise be
brought as provided in this section, any judicial district in which any
defendant is subject to the court’s personal jurisdiction with respect
to such action.
28 U.S.C. § 1391(b).
Equifax is subject to personal jurisdiction in the Western District of Texas,
and “a substantial part of the events or omissions giving rise to the claim
occurred” in that district. This lawsuit could have been brought in the Western
District of Texas.
C.

Convenience of the Parties and the Witnesses

When analyzing the convenience prong, courts typically consider “(1) the
convenience of the parties, (2) the convenience of the witnesses – including the
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willingness of witnesses to appear, the ability to subpoena witnesses, and the
adequacy of deposition testimony, (3) the accessibility to records and documents,
(4) the location where the conduct complained of occurred, and (5) the
applicability of each forum state’s substantive law.” Terra Int’l, Inc., 119 F.3d at
696.
1.

Convenience of the Parties

The convenience of the named parties weighs against transfer. Plaintiffs
are individuals who reside in Minnesota. Defendant is a large corporation
headquartered in Georgia, not Texas.
2.

Convenience of the Witnesses

The convenience of the witnesses weighs strongly in favor of transfer. In
analyzing this factor, “the Court focuses on non-parties because it is generally
assumed that witnesses within the control of the party calling them, such as
employees, will appear voluntarily in a foreign forum.” Austin v. Nestle USA,
Inc., 677 F. Supp. 2d 1134, 1138 (D. Minn. 2009) (citations omitted).
The Texas Comptroller and its affiliated witnesses are key to this lawsuit.
Plaintiffs’ own putative class definition names the Texas Comptroller twice.
Every member of the putative class has some relationship or connection to the
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Comptroller. And all of the critical events in this case are connected to the Texas
Comptroller, from its agreement with CSC, to Wand’s failure to pay taxes to the
Comptroller and entering the settlement agreement with the Comptroller, to the
Comptroller’s efforts to collect the money owed and procurement of Plaintiffs’
consumer credit reports from Equifax. The vast majority of the relevant
witnesses identified by Plaintiffs are located in Texas; they are either associated
with the State of Texas or were associated with CSC. These witnesses are outside
the trial subpoena power of this Court. Only one potential non-party witness
resides in Minnesota.
3.

Accessibility of the Records

The location of the records weighs in favor of transfer. The records that
would be relevant to this case would be located in Georgia, at Equifax’s
headquarters, and in Texas, in the Comptroller’s office. Plaintiffs allege that the
Comptroller will have the records regarding whether Equifax provided
consumer credit reports to the Comptroller in connection with the Comptroller’s
effort to collect tax debts. Also, the Texas Comptroller’s records will be used to
identify putative class members. Plaintiffs’ attempt to subpoena records from

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the Comptroller is currently the subject of dispute in the Western District of
Texas.
4.

Minnesota Connection

The factor regarding the complained-of conduct weighs towards transfer.
The lawsuit was precipitated by taxes owed to the State of Texas for Wand’s
business in Texas and by the Texas Comptroller’s request for and receipt of
consumer credit reports of corporate officers of Wand. It is also based on the
policies governing the relationship between CSC and the Comptroller, a
relationship created and managed in Texas. As a class action, the lawsuit centers
on Equifax’s provision of reports to the Texas Comptroller based on the
Comptroller’s allegation that those consumers, located across the nation but
likely mostly in Texas, owed taxes to the Texas Comptroller. On the other hand,
Equifax provided the reports from its headquarters in Atlanta; Equifax’s
corporate policies were created in Atlanta; and Plaintiffs were damaged by
Equifax’s conduct in Minnesota.
D.

Interests of Justice

When analyzing the interest of justice, courts typically consider “(1)
judicial economy, (2) the plaintiff’s choice of forum, (3) the comparative costs to

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the parties of litigating in each forum, (4) each party’s ability to enforce a
judgment, (5) obstacles to a fair trial, (6) conflict of law issues, and (7) the
advantages of having a local court determine questions of local law.” Terra Int’l,
Inc., 119 F.3d at 696.
1.

Judicial Economy

The judicial economy factor is neutral. At this time, the difference in case
load between the Western District of Texas and the District of Minnesota is not
material. This case has not yet progressed far in this District, so the Court has
not yet expended significant time or effort on this lawsuit. The disagreement
regarding Plaintiffs’ subpoena served on the Texas Comptroller is already likely
to be heard in the Western District of Texas.
2.

Plaintiffs’ Choice of Forum

Normally, considerable deference is given to the plaintiffs’ choice of
forum, particularly when the plaintiffs are residents of the chosen forum, as is
true in this case. However, Plaintiffs propose a nationwide class action with a
class defined by putative class members who allegedly owed money to the Texas
Comptroller. Thus, the deference given to Plaintiffs’ choice of forum is greatly
reduced. See, e.g., Wald v. Bank of Am. Corp., 856 F. Supp. 2d 545, 549 (E.D.N.Y.
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2012); Smith v. HireRight Solutions, Inc., Civil Action No. 09–6007, 2010 WL
2270541, at *3-4 (E.D. Pa. June 7, 2010).
At this point, there is no evidence regarding the geographic makeup of
such a class, but, logically, it would seem that the largest concentration of class
members would reside in Texas because most of the persons who are affiliated
with companies that did business in the State of Texas and owed money to the
Texas Comptroller or who, themselves, owed money to the Comptroller would
reside in Texas. The class is highly unlikely to contain a large number of
Minnesotans. Thus, Plaintiffs’ choice of forum is entitled to little weight in this
case.
3.

Comparative Costs to the Parties

The comparative costs to the parties factor weighs slightly against transfer
because Plaintiffs are individuals who live in Minnesota, so transfer to Texas
would increase their costs, while Equifax is a large corporation headquartered in
Georgia. However, Plaintiffs plead a nationwide class action, and the class
members are unlikely to be centered in Minnesota and likely to be centered in
Texas.

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4.

Ability to Enforce a Judgment, Obstacles to a Fair Trial, and
Conflicts of Law Issues

The ability to enforce a judgment, obstacles to a fair trial, and conflicts of
law issues all are neutral.
5.

The Advantages of Having a Local Court Determine
Questions of Local Law

Plaintiffs’ Complaint is predicated upon federal law. However, the
determination of whether Plaintiffs were personally liable for Wand’s tax liability
depends on the application of Texas law: § 111.016 of the Texas Tax Code. See
also In re Tex. Pig Stands, 610 F.3d 937, 942 (5th Cir. 2010); Dixon v. State, 808
S.W.2d 721, 723-24 (Tex. Ct. App. 1991). Thus, Defendant’s liability may hinge
on the interpretation of Texas tax law.
E.

Conclusion

Weighing all of the above factors, the Court concludes that transfer to the
Western District of Texas is appropriate. Plaintiffs have pled a nationwide class
action in which the class members are likely concentrated in Texas. The putative
class members are defined by having allegedly owed taxes to the State of Texas
and having had the Texas Comptroller request their consumer credit reports
from Equifax in order to attempt to collect on those taxes. The vast majority of
non-party witnesses are located in Texas, outside the trial subpoena party of this
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Court. Critical events underlying Plaintiffs’ Complaint occurred in Texas.
Interpretation of Texas law may be a critical component of this litigation. This
case is closely tied to the Western District of Texas.
Accordingly, based upon the files, records, and proceedings herein, IT IS
HEREBY ORDERED:
1.

Plaintiffs’ Request to Strike Defendant’s “Notice of Filing
Additional Materials in Support of Motion to Transfer”
[Docket No. 44] is DENIED.

2.

Defendant’s Motion to Transfer Venue to the United States
District of Texas, Austin Division [Docket No. 14] is
GRANTED.

3.

This case is transferred to the United States District Court for
the Western District of Texas.

Dated: June 30, 2014

s/ Michael J. Davis
Michael J. Davis
Chief Judge
United States District Court

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