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Heather Lancaster v. Trans Union

August 16, 2011

HEATHER LANCASTER, PLAINTIFF,
v.
TRANS UNION, LLC, DEFENDANT.



The opinion of the court was delivered by: John F. Grady, United States District Judge

09-1698.111-JCD August 16, 2011

MEMORANDUM OPINION

Defendant has filed three motions for sanctions. For the reasons explained below, defendant's motion for attorneys' fees and costs pursuant to 28 U.S.C. § 1927 and 15 U.S.C. §§ 1681n and 1681o is granted in part and denied in part, and defendants' remaining motions are denied as moot.

BACKGROUND

Heather Lancaster brought this action against Trans Union, LLC ("Trans Union"), alleging violations of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681 et seq. Plaintiff alleged that Trans Union reported inaccurate information on her credit report regarding her boyfriend's credit card account with Discover Financial Services ("Discover"). Early in the pendency of this case, Trans Union took the position that plaintiff's claims were frivolous and sought sanctions on the basis that plaintiff was supporting her claims with fraudulently-altered documents. We denied the sanctions motion as premature. Trans Union also had difficulty obtaining plaintiff's full compliance with her discovery obligations; in March 2010, we granted a motion to compel full document production. Trans Union then filed a motion for summary judgment, which we granted. We assumed, without deciding, that Trans Union had reported inaccurate information and found that plaintiff had failed to come forward with evidence that the appearance of the Discover account on her credit report caused her any damage. We found it unnecessary to reach Trans Union's other arguments for the entry of summary judgment (among which was its argument that plaintiff fraudulently created and produced the documents that allegedly demonstrated her correspondence with Trans Union).

Trans Union has now brought three motions for sanctions, two of which are renewed motions for sanctions under Rule 37 and Rule

11. The third motion, which we will discuss, is for attorneys' fees and costs under 28 U.S.C. § 1927 and 15 U.S.C. §§ 1681n and 1681o.

DISCUSSION

A. 28 U.S.C. § 1927

28 U.S.C. § 1927 provides that "[a]ny attorney . . . who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys' fees reasonably incurred because of such conduct." "If a lawyer pursues a path that a reasonably careful attorney would have known, after appropriate inquiry, to be unsound, the conduct is objectively unreasonable and vexatious." In re TCI Ltd., 769 F.2d 441, 445 (7th Cir. 1985). In the Seventh Circuit, the moving party must show subjective bad faith "only if the conduct under consideration had an objectively colorable basis." Dal Pozzo v. Basic Mach. Co., 463 F.3d 609, 614 (7th Cir. 2006). Otherwise, objective bad faith is the standard, and it does not require a finding of malice or ill will; reckless indifference to the law is sufficient. Id.

Trans Union argues that the filing of this suit was frivolous because it should have been clear to plaintiff's counsel from the outset that the case was frivolous in that there was no evidence of causation or damages. Trans Union also contends that plaintiff's counsel wrongfully continued to pursue the case up through summary judgment and failed to dismiss the frivolous claims even after plaintiff made several fatal admissions at her deposition sessions.

Were plaintiff's claims objectively colorable? We think not. First, let us review the complaint. It contains one count for violations of § 1681e(b), § 1681i(a), and § 1681i(c) of the FCRA, and alleges that plaintiff was damaged in the following ways:

a. Out of pocket expenses associated with disputing the information only to find the information to ...


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