United States District Court, N.D. Illinois
March 22, 2004.
NICHOLAS QUINN, Plaintiff,
EXPERIAN SOLUTIONS, EQUIFAX INFORMATION SERVICES LLC., GE CARD SERVICES, SPRING PCS, OSI COLLECTION SERVICES, INC., Defendants
The opinion of the court was delivered by: WAYNE ANDERSEN, District Judge
MEMORANDUM, OPINION AND ORDER
Plaintiff, Nicholas Quinn ("Quinn"), brings a three count action
against Equifax Information Services LLC ("Equifax"), alleging multiple
violations of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681 et
seq. (2003). Equifax has filed a motion for summary judgment pursuant to
Federal Rule of Civil Procedure 56. For the following reasons, Equifax's
motion for summary judgment is granted.
This dispute began when an allegedly fraudulent account was opened with
Wal-Mart in Quinn's name sometime in April of 2002. On May 15, 2002,
Quinn contacted Equifax on an unrelated matter regarding an OSI
collection account he claimed was not his. The OST collection account was
an account that Quinn claimed had been fraudulently opened using his
social security number, and Quinn called Equifax to make sure that it was
not reporting the OSI collection account in Quinn's credit reports.
Equifax researched the issue and on May 23, 2002, informed Quinn that
Equifax had never reported an OSI account in his credit report, On June
20, 2002, Quinn contacted Equifax to dispute the Wal-Mart account that
was reported in a credit
report prepared by Equifax, On June 20, 2002, when Quinn first informed
Equifax of the Wal-Mart dispute, the Wal-Mart account was reported as a
current account with a $187.00 balance that was being paid on time,
Equifax reviewed the dispute and prepared a Consumer Dispute
Verification form (CDV) that it forwarded to Wal-Mart on June 25, 2002,
The CDV apprised Wal-Mart that Quinn was disputing the Wal-Mart account.
On June 28, 2002, Wal-Mart advised Equifax that the information regarding
the disputed account was accurate as Equifax had reported it. That same
day, Equifax informed Quinn of the results of the Wal-Mart
reinvestigation and provided him with an updated copy of his credit
On July 1, 2002 Quinn contacted Equifax for a second time to dispute
the Wal-Mart account. Thai same day, Equifax reviewed the dispute and
prepared a second CDV that it forwarded to Wal-Mart to advise Wal-Mart
that Quinn had again disputed the Wal-Mart account opened in his name as
a fraudulent account. Wal-Mart did not respond to Equifax, and on July
29, 2002, Equifax deleted the Wal-Mart account in order to comply with
the FRCA § 1681i thirty day requirement. Under § 1681 i, once a credit
reporting agency is notified of the need to reinvestigate an account, it
has thirty days to complete the reinvestigation and fix the inaccuracy.
After deleting the Wal-Mart account in accordance with § 1681 i, Equifax
notified Quinn that the Wal-Mart account had been deleted and provided
him with another copy of his credit report prepared by Equifax, Quinn
filed this action on September 1, 2002.
Quinn's complaint alleges that multiple defendants including, Experian
Information Solutions, Equifax Information Services, GE Card Services,
Sprint PCS, and, OST Collection Services, Inc., had been "reporting
derogatory and inaccurate statements and information" about
Quinn and his credit history and that the inaccurate information
had been reported to third parties. Quinn alleges that the defendants
were in violation of multiple provisions of the Fair Credit Reporting
Act, Quinn claims damages from loss of credit opportunities, mental
anguish, financial and dignitary harm, statutory damages, punitive
damages, and attorney's fees. Equifax has moved for summary judgment on
all counts. For the following reasons, Equifax's motion for summary
judgment is granted,
A. Summary Judgment
Summary Judgment is appropriate when "the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the
affidavits, if any show that there is no genuine issue as to any material
fact and that the moving party is entitled to summary judgment as a
matter of law.' Fed. R, CIV. P. 56(c). A genuine issue of material fact
exists 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 (1985). Initially, the moving party bears the burden of
showing that the record contains no genuine issue of material fact,
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986), The governing
substantive law establishes which facts are material. Andersen, 477 U.S.
The non moving party must present more than a "metaphysical doubt as
to the material facts" to survive summary judgment, Matsushita Elec.
Indus., Co. v. Zenith Radio Corp., 475 U.S. 574, 596 (1986).
Additionally, "mere conclusory" allegations are not enough, Nowak v. St.
Rita High School, 142 F.3d 999, 1002 (7th Cir. 1998).
B. Claims under the Act
1. FCRA $1681e (b) Claims
FCRA § 1681e (b) provides that "[w]henever a consumer reporting
agency prepares a consumer report it shall follow reasonable procedures
to assure maximum possible accuracy of the information concerning the
individual about whom the report relates," 15 U.S.C. § 1681e (b). In
order to recover under this Section, a plaintiff must provide that: (1)
there was inaccurate information contained in the consumer report; (2)
the inaccuracy was due to the credit reporting company's failure to
follow reasonable procedures to ensure maximum accuracy; (3) he suffered
actual damages; and (4) those damages were caused by the inaccuracy.
Philbin v. Tram Union Corp., 101 F.3d 957, 963 (3rd Cir. 1996),
Quinn has alleged that the entire Wal-Mart account was inaccurate as to
him and that it was fraudulently opened using his social security number
and a different name. Viewing the facts in Quinn's favor, it is
reasonable to infer that the Wal-Mart account was erroneously contained
in his credit report. However, § 1681e (b) does not establish strict
liability, nor does it require Equifax to conduct independent "background
research." Henson v. CSC Credit Services, 29 F.3d 280, 284 (7th Cir.
a. Reasonable Standards
Once the plaintiff sufficiently alleges "that a credit reporting agency
prepared a report containing inaccurate information," Cahlin v. General
Motors Acceptance Corp., 936 F.2d 1151, 1156 (11th Cir. 1991), the
question turns on whether Equifax maintained "reasonable standards for
assuring maximum accuracy." Henson, 29 F.3d at 289. Reasonable procedures
are "those that a reasonably prudent person would undertake under the
circumstances." Lee v. Experian
Information Solutions, LLC, 2002 WL 22287351, at *3 (N.D. Ill. Oct. 2,
2003). In the vast majority of cases, reasonable procedures should be
determined by a jury. Crabill v. Trans Union, L.L.C., 259 F.3d 662, 664
(7th Cir. 2001). However, there are instances in which reasonable
procedures are reasonable as a matter of law. Crablli v. Tram Union,
L.L.C., 259 F.3d 662, 664; Lee, 2002 WL 22287351, at *4.
Quinn suggests that he can overcome summary judgment based solely on a
showing of inaccuracy in his credit report. Quinn relies heavily on
Parker v, Parker, claiming "that inaccurate reports by themselves can
fairly be read as evidencing unreasonable procedures." 124 F'.Supp.2d
1216, (M.D. Ala. 2000). However, recent decisions have questioned the
Parker Court's reasoning that inaccurate information equals unreasonable
procedures. See Lee v. Experian Information Solutions 2002 WL 22287351
(N.D. Ill, Oct. 2, 2003); Ruffin-Thompkins v. Experian Information
Services, LLC, 2003 U.S. Dist. LEXIS 23647 (M.D. Ill, Dec. 31, 2003).
Parker is not binding on this Court and thus we choose not to follow its
reasoning. Instead, we will follow the binding precedent found in
Crabill, that allows the "reasonableness of an agency's procedure" to be
determined on summary judgment. As this court has recently held, "thus
while the determination of whether a procedure is reasonable is a
question for a jury in most cases, if the reasonableness of the procedure
is beyond question, summary judgment is appropriate." Ruffin-Thompkins,
2003 U.S. Dist. LEXIS 23647, at *9, quoting Crabill, 259 F.3d at 664.
To determine whether Equifax's procedure was reasonable in this case,
we must weigh the "potential harm from inaccuracy against the burden of
safeguarding against such, inaccuracy." Philbin, 101 F.3d at 965, The
Seventh Circuit in Herman ruled that credit agencies are allowed to
rely on information from the furnisher, absent prior information from the
consumer that the information might be inaccurate. Henson, 29 F.3d at
284. Quinn argues that the Henson holding should be read narrowly and
that specifically the holding limits "reliable sources" that a credit
agency can initially rely on to "court judgment dockets," Although the
Henson court ruled that "court judgment documents" were presumptively
reliable sources, the case should not be read to specifically limit
reliable documents to "court judgment documents." Id. at 286, To limit
the case in this manner would require every credit agency to
independently verify each credit line reported to it. The costs
associated with that type of investigation would be astronomical.
Courts have found that the Henson reasoning excuses credit agencies
from independently verifying information provided by credit grantors
unless the credit agency knew or had reason to know that the credit
grantor was unreliable or reporting inaccurate information.
Ruffin-Thompkins, 2003 U.S. Dist. LEXIS 23647, at *11-12 quoting Zahran
v. Trans Union Corp., 2003 U.S. Dist. LEXIS 5089, No. 01 C 1700, at *3
(N.D. Ill. Mar. 21, 2003) and Field v. Trans Union L.L.C., 2002 WL
849589, at *4 (N.D. Ill. May 3, 2002).
Quinn has not presented evidence that Wal-Mart is an unreliable source
of information. Prior to June 20, 2002, Equifax was not aware, nor should
it have reasonably been aware, that there was an error regarding the
Wal-Mart account contained in Quinn's credit report. Thus, as a matter of
law, any § 1681e (b) claim cannot be sustained before this date.
Furthermore, Equifax's post-June 20, 2002, procedures were also
reasonable as a matter of law to ensure maximum possible accuracy.
Additionally, although this will be discussed more fully in the § 1681i
(a) reinvestigation analysis, it is clear that Equifax's reinvestigation
was reasonable as a matter of law. Therefore, because Equifax satisfied
its reinvestigation obligation under § 1681i (a), its
procedures were reasonable to assure maximum possible accuracy under §
1681e (b). Lee, 2002 WL22287351 at* 3.
After receiving a complaint from Quinn, Equifax reviewed the materials
sent by Quinn and sent a CDV to Wal-Mart that described the dispute as
"customer states not mine." On June 28, 2002, Wal-Mart returned the CDV
to Equifax and communicated that the information reported by Equifax was
correct. There is no evidence that Equifax knew that Wal-Mart was an
unreliable source nor is there any reason for Equifax to doubt that
Wal-Mart performed a lull and complete reinvestigation regarding Quinn's
account. That same day, Equifax informed Quinn of the results of the
reinvestigation and provided him with a current copy of his credit report
Additionally, Equifax: placed a fraud alert in Quinn's file as Quinn
requested. Given the terse dispute Quinn sent to Equifax, the procedure
Equifax employed to assure the maximum possible accuracy was reasonable
as a matter of law.
Even if Equifax's procedures were unreasonable, Quinn's claim would
still fail as a matter of law because he has not shown mat there is a
genuine issue of material fact as to whether he suffered any actual
damages. In his complaint, Quinn claims that he; (1) was denied credit by
various entities; (2) suffered excessive or elevated interest rates and
finance charges on his credit card; (3) incurred out of pocket expenses;
(4) financial and dignitary harm; and (5) suffered mental anguish and
emotional distress. However, between June 20, 2002, the date Equifax was
notified of the dispute and July 29, 2002, when the Wal-Mart account was
deleted from Quinn's credit report, Equifax did not publish or
disseminate a single credit report in Quinn's name. Thus, it is difficult
to discern how Quinn was damaged.
Quinn stated in a deposition that the only out of pocket loss he
suffered as a result of Equifax's alleged inaccurate reporting was the
higher interest that he paid on a credit card for "a few months." Fleet
Credit Card Service raised the interest Quinn paid on his Fleet Credit
card from 10.99% to 21.22% for purchases and balance transfers, and from
19.80% to 23.22% for cash advances. However, Fleet Card Services raised
Quinn's interest rates before the Wal-Mart account had even been opened.
Quinn has alleged that Equifax also reported a fraudulent OSI
collection account and that he informed Equifax of this account on May
15, 2002. However, Quinn cannot recall ever seeing the OSI collection
account in an Equifax credit report and all of the evidence indicates
that Equifax: never reported the OSI collection account. The only
evidence Quinn has offered to support his claim that Equifax reported an
OSI collection account in his credit file, is a letter from OSI
Collection Services, Inc. that claims that it reported the OSI collection
account to all of three of the major credit reporting agencies. The
letter is irrelevant because it neither proves nor disproves that Equifax
actually reported the OSI collection account. The letter merely suggests
that Equifax may have received information about an OSI collection
account. Therefore, even if the court considers May 15, 2002, as the date
Equifax first learned of the dispute, Quinn's damages claim would still
fail because there is no evidence that Equifax ever reported an OSI
collection account, Moreover, Quinn has not provided a single shred of
evidence to support the claim that he was denied credit as a result of
Equifax's alleged inaccurate credit file.
Likewise, Quinn has not provided any evidence to support his claim of
emotional distress and mental anguish. "When an injured party provides
the only evidence of any emotional distress or mental anguish, he must
reasonably and sufficiently explain the circumstances of the
injury, and not rely on mere conclusory statements." Ruffin-Thompkins,
2003 U.S. Dist. LEXIS 23647, at * 16 quoting Field, 2002 WL 849589, at
*6. Quinn has not sufficiently explained the circumstances of his
emotional distress, mental anguish, financial and dignitary harm and thus
he can not meet the burden required for this element of the claim.
Because Quinn has failed to support any of his allegations of damages,
he cannot show the causal link between the alleged inaccuracy in his
report and the alleged damages. To prove causation, Quinn must show that
the reporting of inaccurate information in his credit report was a
substantial factor that brought about damages. Philbin, 101 F.3d at 968.
Quinn has not produced evidence that the inaccurate information contained
in his credit report was a significant factor in his alleged damages.
Even if damages are shown, the claimant must still raise a genuine issue
of material fact as to the causation element. Ruffin-Thompkins, 2003
U.S. Dist. LEXIS 23647, at *16. Specifically, Quinn has not raised a
material fact as to the causation element and thus his claim fails as a
matter of law regardless of whether damages had been shown, which in this
case they had not,
In sum, Quinn has failed to raise a genuine issue as to three of the
four tests required to survive summary judgment under a § 1681e (b)
claim. Therefore, we grant summary judgment in favor of Equifax on the
§ 1681e(b) claim.
2. FCRA 1681i (b) Claims
Quinn next claims that Equifax is liable under § 1681i (a) for
failing to conduct a reasonable reinvestigation. § 1681i (a) states:
If the completeness or accuracy of any item of
information contained in a consumer's file at a
consumer reporting agency is disputed by the consumer
and the consumer notifies the agency directly of such
dispute, the agency shall reinvestigate free of charge
and record the current status of the disputed
information, or delete the item from the file in
accordance with paragraph (5), before the end of the
30 day period beginning on the date on which the
agency receives the notice of the dispute from the
Liability under 1681i (a) does not arise until Equifax received
notification from Quinn about the alleged continued reporting of the
inaccurate information. Ruffin-Thompkins, 2003 U.S. Dist. LEXIS 23647, al
* 18. Although not fully clear, Equifax's duty to reinvestigate might
conceivably have arisen al two different points: On June 20, 2002, when
Equifax learned of the potential inaccuracy in Quinn's credit report, and
on July 1, 2002, when Equifax received a second dispute from Quinn.
Equifax is not liable for a failure to reinvestigate until this time.
Furthermore, Equifax's reinvestigation procedures after both dales were
reasonable as a mailer of law.
§ 1681i (a)(1)(A) imposes a duty to reinvestigate any potential
inaccuracy in a consumer's report when the credit agency learns of the
potential error. 15 U.S.C. § 1681i (a)(1)(A). In some circumstances, that
duty may include a duty to go beyond the original source of information
and conduct an independent investigation. Ruffin-Thompkins, 2003 U.S.
Dist. LEXIS 23647, at *18 quoting Henson, 29 F.3d at 287. The Court must
look to two factors to determine whether Equifax had a duty to take
additional steps in its reinvestigation: (1) "Whether the consumer has
alerted the reporting agency to the possibility that the source may be
unreliable or the reporting agency itself knows or should know that the
source may be unreliable", and (2) "the cost of verifying the accuracy of
the source versus the possible harm inaccurately reported
information may cause the consumer." Ruffin-Thompkins, 2003 U.S. Dist,
LEXIS 23647, at *18, quoting Henson, 29 F.3d at 287,
As discussed above, when Equifax first learned of the dispute, Equifax
reviewed the materials Quinn sent and compiled a CDV that it forwarded to
Wal-Mart. Equifax did not make any changes to Quinn's credit report
because Wal-Mart informed Equifax that the account way accurate as
Equifax was reporting it. Equifax informed Quinn of the results of the
reinvestigation and provided him with a current copy of his credit report
that same day. Equifax admits that its reinvestigation stopped there.
Equifax did not contact Quinn to request documents nor did it communicate
with Wal-Mart directly. However, Equifax was not required do either at
this point and its standard reinvestigation procedure was statutorily
sufficient because "the CDV procedure alone is accepted by courts as an
adequate method both for assuring accuracy and for reinvestigation."
Lee, 2003 WL 22287351, at *6 quoting Dickens v. Trans Union Corp., No.
00-5605, 2001 WL 1006259, at *4 (6th Cir. Aug. 23, 2001),
Equifax was not obligated under the Henson factors to conduct further
investigation. Quinn did not alert Equifax to the possibility that
Wal-Mart was an unreliable source of information, and there is no
evidence that Equifax knew or should have known that Wal-Mart was an
unreliable source of information. There was no suggestion from Wal-Mart's
original response that it had not conducted a thorough investigation of
the Quinn account. The evidence suggests that Wal-Mart reviewed the
account, verified that the information was correct and reported as much
to Equifax. Equifax placed a fraud alert in Quinn's credit file, and
Equifax took immediate action to inform Quinn of the results of the
On July 1, 2002, Quinn sent a second dispute to Equifax and requested
another reinvestigation of the Wal-Mart account. That same day, Equifax
generated a CDV that it forwarded to Wal-Mart to advise it that Quinn was
disputing the Wal-Mart account as a fraudulent account, Wal-Mart did not
get back to Equifax, and Equifax deleted the Wal-Mart account to comply
with the 30 day requirement in § 1681i (a). Equifax immediately notified
Quinn that the Wal-Mart account had been deleted from his credit file and
provided him with an updated copy of his credit report.
Quinn has argued that Equifax had a duty to take additional steps in
the reinvestigation of the Wal-Mart account, but this claim is not
supported by the record. Both the original reinvestigation and the second
reinvestigation were completed, and the account was deleted
expeditiously. Additionally, Equifax placed a fraud alert in Quinn's file
and provided him with multiple copies of his credit report during the
reinvestigations. This was not a process that dragged on for months, but
instead was promptly reinvestigated and the account deleted within the
mandatory time required by the statute. Therefore, Equifax's actions were
reasonable as a matter of law. Ruffin-Thompkins, 2003 U.S. Dist. LEXIS
23647, at *18, quoting Lee, 2003 WL 22287351, at *7n.11.
Assuming arguendo that Equifax had an obligation to go beyond the
original source of the information after Quinn disputed the Wal-Mart
account for a second time on July 1, 2002, Quinn's claim is still
defeated because he has not suffered damages. From June 20, 2002 to July
29, 2002, no credit reports were released to any other person or entity
besides Quinn. Therefore, even if Equifax was required to go beyond its
initial source in its second reinvestigation, that requirement would not
have changed the outcome in this case because Quinn's claim fails as a
matter of law as he suffered no damages that were proximately caused by
Equifax, Therefore, Equifax's motion for summary judgment on the §
1681i(a) claim is granted.
3. FCRA 1681i(e) Claims
Quinn claims that Equifax is liable under § 1681i(c) for failing
to note his dispute. § 1681i (c) states:
Whenever a statement of a dispute is filed . . . the
consumer reporting agency shall, in any subsequent
consumer report containing the information in
question, clearly note that it is disputed by the
consumer and provide either the consumer's statement
or a clear and accurate codification or summary
To succeed on this point, Quinn must show that: (1) he disputed
inaccurate information contained in his credit file; (2) Equifax's
reinvestigation did not resolve his dispute; (3) he filed a statement of
dispute with Equifax upon completion of the reinvestigation; and (4) the
statement he filed was not included in subsequent credit reports released
by Equifax. See Guimond v. Trans Union Corp. 45 F.3d 1329
, 1334-35 (9th
Quinn disputed the inaccurate Wal-Mart account contained in his credit
report. The reinvestigation resolved the dispute. Quinn demanded that the
Wal-Mart account be deleted from his credit file and the account was
deleted within the statutorily imposed time period. As of June 28, 2002,
Quinn's credit file contained a fraud alert. Finally, there is no
evidence to suggest that Equifax released Quinn's credit report during
the period of this dispute. All of the evidence suggests that no one
besides Quinn received a copy of his credit file during the dispute.
Thus, Quinn's claim fails as a matter of law, and summary judgment must
be granted in favor of Equifax.
4. Punitive Damages
Quinn's claims under the FRCA have failed and since Quinn's claims
cannot survive summary judgment, we must deny his claim for both
statutory and punitive damages. Section 1681n (a) states that "[a]ny
person who willfully fails to comply with any requirement imposed under
[the Act] with respect to any consumer is liable to that consumer" for
actual or punitive damages. Willful noncompliance can be shown if Quinn
proved that Equifax "knowingly and intentionally committed an act in
conscious disregard for the rights of others." Riiffin-Thompkins, 2003
U.S. Dist. LEXIS 23647, at *22-23, quoting, Philbin, 101 F.3d at 970.
"Willful concealment, misrepresentations, or systematic deprivation of
consumers' rights could justify an award of statutory, or perhaps
punitive damages," Lee, 2003 WL 22287351, at *7, The undisputed facts do
not suggest that Equifax willfully concealed, misrepresented or
systematically deprived Quinn of his rights as consumer. To the
contrary, Equifax reinvestigated both of Quinn's disputes and promptly
released the findings to Quinn. Quinn has not alleged any facts that rise
to the level required for statutory and punitive damages. Hence, Quinn's
claims for statutory arid punitive damages must fail.
For the foregoing reasons, Equifax's motion for summary judgment
(#51-1) is GRANTED.
It is so ordered.
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