Henderson et al v. Trans Union, LLC et al
MEMORANDUM OPINION. See Opinion for details. re: 118 Order. Signed by District Judge John A. Gibney, Jr. on 5/2/2017. (sbea, )
Case 3:14-cv-00679-JAG Document 124 Filed 05/02/17 Page 1 of 7 PageID# 1813
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
JOSEPH L. BUCKLEY,
and JONATHAN HARRIS,
on behalfofthemselves and all others
Civil Action No. 3:14-cv-00679-JAG
TRANS UNION, LLC,
and TRANS UNION RENTAL
SCREENING SOLUTIONS, INC.,
As partof its business. Trans Union LLC ("Trans Union") furnishes consumer reports for
The Fair Credit Reporting Act (the "FCRA") requires consumer
reporting agencies like Trans Union to follow certain procedures when it furnishes such reports if
the reports contain public record information about the subject consumers, such as criminal
convictions. 15 U.S.C. § 1681k. Trans Union satisfies this requirement by sending notices—
nicknamed "PEER Letters"— to the affected consumers. In this case. Trans Union furnished
consumer reports for employment purposes about the class members. The plaintiffs, on behalfof
the class, challenge the process Trans Union follows for sending PEER Letters, saying that the
process willfully violates § 1681kof the FCRA. Trans Union has moved for summary judgment.
Because Trans Union's process for sending PEER Letters is not an objectively unreasonable
interpretation of the statutory text. Trans Union did not willfully violate § 1681k. Accordingly,
the Court will grant summary judgment to Trans Union on the plaintiffs' class claim.
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Trans Union is a consumer reporting agency (a "CRA") subject to the FCRA. One of its
available products is a consumer report for employment purposes, called an Employment Credit
Report. When a customer requests an Employment Credit Report on a specific consumer, Trans
Union searches its database and locates its file on that consumer. Trans Union then reports
certain information from the file on the Employment Credit Report. If the Employment Credit
Report will include public record information, then Trans Union will send a notice to the
consumer. As a step in the process of preparing the Employment Credit Report, Trans Union
flags the file to indicate that Trans Union needs to send the consumer a PEER Letter.*
Every day, sometime after midnight. Trans Union extracts the information needed to
generate a PEER Letter for each file flagged the prior day (the "PEER Letter Data"), and
electronically sends the data to its vendor, SourceHOV. Every day, except for Sundays and
federal holidays, SourceHOV uses the information to prepare, print, and mail PEER Letters to
consumers using the template provided by Trans Union.
For PEER Letter Data received on
*At the motion hearing held on March 3, 2017, the plaintiffs challenged when Trans Union
actually starts this process, saying that a manager in Trans Union's Contact Center Services,
Tran Union's corporate designee, said in his deposition that the mechanical process of sending
PEER Letters starts when Trans Union creates a batch file sometime after midnight, not at the
time Trans Union generates the Employment Credit Reports. As an initial matter, the plaintiffs
did not object to the paragraph of Trans Union's list of undisputed facts, which said: "If any
public record will be included on an Employment Credit Report, then as a step in the process
prior to delivering the report, Trans Union captures and saves certain information into an online
file . . . ." (Def's Mem. Supp. Mot. Summ. J. 5, at II 6 (emphasis in original); see Pis.' Mem.
Opp'n 2-3.) A declaration from a director in Trans Union's Data and Technology Engineering
Department, presumably the department responsible for programming the process, supported this
paragraph. Local Civil Rule 56 permits the Court to assume facts in the moving party's list as
admitted unless the non-moving party challenges it. Regardless, this dispute is not material to
the Court's holding that Trans Union's interpretation of 1681k(a)(l) was not objectively
^Trans Union has used the same template throughout the relevant class period. The PEER Letter
template includes the name and address of the company who requested the Employment Credit
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Sundays and federal holidays, SourceHOV prepares, prints, and mails the PEER Letters the next
business day. SourceHOV coordinates with the United States Postal Service to expedite the
Two plaintiffs—^Joseph L. Buckley and Jonathan Harris—brought a class claim against
Trans Union for violating § 1681k ofthe FCRA based on its process for sending PEER Letters.^
For the relevant class period, this process has remained the same. On May 3, 2016, the Court
certified a class. Trans Union has now moved for summary judgment on this class claim.
The plaintiffs allege a class claim against Trans Union for willfully violating § 1681k of
the FCRA. Trans Union moves for summary judgment, arguing that it did not violate § 1681k
and that, even if it did, the violation was not willful. Because the plaintiffs only seek statutory
and punitive damages, they must prove willfulness to ultimately succeed on their claim. See 15
U.S.C. § 1681n.
Willful violations of the FCRA include not only knowing and intentional violations, but
also reckless violations. Safeco Ins. Co. v. Burr, 551 U.S. 47, 52 (2007). A company recklessly
violates the FCRA when its interpretation of the language is "objectively unreasonable," raising
Report, the fact that the report will include public record information, the public record
information itself, and the contact information for Trans Union.
^ The amended complaint also includes an additional plaintiff, Tyrone Henderson, and an
additional defendant. Trans Union Rental Screening Solutions, Inc., both involved in two
individual claims. These parties and the individual claims are not at issue in the current motion.
^Trans Union moves for summary judgment on Count II of the amended complaint. Rule 56 of
the Federal Rules of Civil Procedure directs the court to grant summary judgment "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). In deciding a summary judgment motion,
the court must draw all reasonable inferences in favor of the non-moving party. Anderson v.
Liberty Lobby, Inc., All U.S. 242, 255 (1986). Nevertheless, if the non-moving party fails to
sufficiently establish the existence of an essential element to its claim on which it bears the
ultimate burden of proof, the court should enter summary judgment against that party. Celotex
Corp. V. Catrett, All U.S 317, 322 (1986).
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an "unjustifiably high risk" of a statutory violation. Id. at 69-70. To determine whether the
company acted reasonably, courts should consider the clarity of the statutory text itself, as well
as any guidance from authoritative sources interpreting the statutory text, such as courts of
appeals, the Federal Trade Commission (the "FTC"), or the Consumer Financial Protection
Bureau (the "CFPB"). Dreher v. Experian Info. Solutions, Inc., 71 F. Supp. 3d 572, 579 (E.D.
Va. 2014). Without the help of clear text or authoritative guidance, courts then evaluate whether
the company's interpretation of the statutory text has a foundation in the text and a "sufficiently
convincing justification." Id.\ see Burr, 551 U.S. at 69-70. If so, the company did not act
objectively unreasonably, even if it interpreted the statute wrongly. Id.
The plaintiffs in this case allege a willful violation of § 1681k, a section that focuses on
consumer reports in the employment context. Specifically, a CRA must take one of two possible
precautionary measures if it furnishes a consumer report for employment purposes that contains
potentially adverse public record information about the consumer, such as a criminal conviction
or an outstanding tax lien. Relevant in this case, a CRA can satisfy its obligation by "notify[ing]
the consumer of the fact that public record information is being reported by the consumer
reporting agency" "at the time such public record information is reported to the user of such
consumer report." 15 U.S.C. § 1681k(a)(l).
The parties narrow the issue in this case to the mechanics of a § 1681k(a)(l) notice,
focusing specifically on when a CRA must send the notice to the consumer in relation to when it
sends the report to the user, and on when the Court should consider the notice and the report
actually sent. The statutory text does not provide clear guidance on these mechanics. Neither
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has any court of appeals reached this specific issue.^ The FTC has provided the guidance that
CRAs may use first class mail to provide the required notice,^ but does not go into any further
detail. Accordingly, the Court turns to whether Trans Union's interpretation of § 1681k(a)(l)
has a foundation in the statutory text.
The process that Trans Union set up to generate and send PEER Letters is an objectively
reasonable interpretation of § 1681k(a)(l).
The undisputed facts show, and the plaintiffs
concede, that the content of the PEER Letter complies with the statutory requirements. The
undisputed facts also show that once Trans Union receives a request for an Employment Credit
Report, it searches its database for information on the specific consumer. If the information
retrieved includes public record information, Trans Union captures the information needed to
send a PEER Letter, beginning the process of notifying the consumer. In other words. Trans
^ While no courts of appeals have reached this issue, the plaintiffs cite multiple district court
cases in support of their position. Two of these cases actually grant summary judgment to the
CRA on claims of willful violations of § 1681k. See infra note 7. Two present at different
procedural postures, unhelpful at the summary judgment stage. Smith v. HireRight Solutions,
Inc., 711 F. Supp. 2d 426 (E.D. Pa. 2010) (denying a motion to dismiss); Williams v. LexisNexis
RiskMgmt. Inc., No. 3:06cv241, 2007 WL 2439463 (E.D. Va. Aug. 23, 2007) (granting a motion
for class certification). The other two explicitly did not need to reach the parties' timing
arguments, so do not provide analysis on the issue. Adams v. Nat'/ Engineering Serv. Corp., 620
F. Supp. 2d 319, 331 (D, Conn. 2009) (denying summary judgment to the CRA where the CRA
notified the consumer only after the consumer happened to call to discuss her application); Poore
V. Sterling Testing Sys., Inc. 410 F. Supp. 2d 557, 572 (E.D. Ky. 2006) (denying summary
judgment to the CRA where the CRA did not send notice at all).
^The FTC originally held the role of interpreting and enforcing the FCRA. In 1990, the FTC
issued commentary on § 1681k. 55 Fed. Reg. 18804, 1990 WL 342991 (May 4, 1990). Under
the heading "Method of Providing Notice," the commentary stated, in fiill, "A consumer
reporting agency may use first class mail to provide the notice required by [§ 1681k(a)(l)]." Id.
In 2010, Congress shifted the role of interpreting the FCRA from the FTC to the CFPB. Fed.
Trade Comm'n, 40 Years of Experience with the Fair Credit Reporting Act: An FTC
Staff Report With Summary of Interpretations 1-2 (2011), available at
As part of the
transition, the FTC withdrew its commentary, but issued a staff summary of its interpretations.
Id. at 2, 8. This summary reiterated the commentary as it related to § 1681k verbatim. Id. at 8182. As far as the Court knows, the CFPB has not issued any guidance on § 1681k.
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Union starts the process of notifying the consumer pursuant to § 1681k ar the time it realizes that
the Employment Credit Report will include public record information. This interpretation (i.e.,
starting the mailing process at the time it realizes that the FCRA may require notice) has a clear
foundation in the statutory text.
The interpretation also has a sufficiently convincing
justification, especially in light of FTC guidance that permits mailing the required notice to
consumers. Thus, Trans Union's interpretation of § 1681k is not objectively unreasonable.^
Consequently, even if Trans Union violated § 1681k, it did not recklessly violate the statute.
Without a reckless violation, the plaintiffs' claim fails because they cannot prove willfulness.
For the reasons stated, Trans Union did not willfully violate § 1681k through its process
of sending PEER Letters to the plaintiffs. Accordingly, the Court GRANTS Trans Union's
motion for summary judgment.
The plaintiffs' true complaint in this case seems to be that Trans Union should send
notice to the consumer by the same method that it sends the consumer report to users. In other
words, if Trans Union electronically transmits the consumer report to the user, it should
electronically transmit the required notice to the consumer. If it mails notice to the consumer, it
should mail the report to the user. This sort of technological symmetry would effectuate the
spirit of § 1681k—giving consumers the chance to correct any inaccuracies or discrepancies, or
at least to know what the prospective employer knows. Section 1681k(a)(l), however, does not
require such technological symmetry. Such a reading would impermissibly add language to the
^ Indeed, two other district courts have found similar processes objectively reasonable, granting
summary judgment to the CRA defendant on the issue of willfulness.
Smith v. EBackgroundChecks.com, Inc., 81 F. Supp. 3d 1342, 1363 (N.D. Ga. 2015); Rodriguez v. Equifax
Info, Servs., LLC, No. 1:14-cv-01142, 2015 WL 4417285, at *5 (E.D. Va. July 17, 2015).
Case 3:14-cv-00679-JAG Document 124 Filed 05/02/17 Page 7 of 7 PageID# 1819
statutory text. Nevertheless, as the plaintiffs point out, the avenue for changing the law is the
legislature, not the courts.
The Court issued a corresponding order on March 13, 2017.
Let the Clerk send a copy of this Opinion to all counsel of record.
John A. Gibney, Jr.
United States District Ki
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