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David Osada and Kimberly Hovenac v. Experian Information Solutions

December 20, 2012

DAVID OSADA AND KIMBERLY HOVENAC, PLAINTIFFS,
v.
EXPERIAN INFORMATION SOLUTIONS, INC., DEFENDANT.



The opinion of the court was delivered by: Hon. Harry D. Leinenweber

MEMORANDUM OPINION AND ORDER

Pending before the Court are Plaintiffs' Amended Motion for Class Certification and Plaintiffs' Motion to Compel Responses from Defendant. For the reasons stated herein, the Motions are granted.

I. BACKGROUND

The Court presumes familiarity with its March 2012 Order [Dkt. 62], and accordingly, provides an abbreviated version of the factual background. See Osada et al. v. Experian, No. 11-C-2856, 2012 WL 1050067 (March 28, 2012).

On March 28, 2012, this Court certified one of the two putative classes Plaintiff David Osada ("Osada") sought to certify for his lawsuit against Experian Information Solutions, Inc. ("Experian") for violations of the Fair Credit Reporting Act (the "FCRA"), 15 U.S.C. § 1681. The Court certified Plaintiff's "One Year" class ("Class A"), but denied the proposed "Does Not Meet Guidelines" class ("Class B"), determining that Osada was not an adequate class representative pursuant to Federal Rule of Civil Procedure 23(a)(3)-(4).

In light of this ruling, Plaintiff filed an Amended Motion to Certify Class B [Dkt. 65], and also filed a Second Amended Complaint adding Kimberly Hovanec ("Hovanec") as an individually named Plaintiff and the proposed class representative for Class B. [Dkt. 68].

Hovanec alleges that in or about June 2009 she noticed accounts on her credit report that did not belong to her. Specifically, Hovanec alleges that she noticed a Capital One Auto account for a car loan in excess of $49,000.00 as well a Capital One credit card account and an AT&T account for a cellular telephone. Subsequently, Hovanec contacted Capital One Auto Finance to dispute the account, and also contacted Experian to request that a block be placed on these accounts.

On July 31, 2010, Plaintiff submitted her Federal Trade Commission ("FTC") Identity Theft Victims' Complaint and Affidavit, a copy of her police report, and proof of residence to Experian. With this submission, Hovanec requested that Experian block the disputed accounts. Rather than blocking the accounts, Hovanec alleges that Experian responded to her request by sending a letter informing Hovanec that her submissions were insufficient.

Experian's letter (the letter which all of the proposed Class B members received) states, in part:

We are responding to your request that information in your personal credit report be blocked due to the alleged fraud. The identity theft report that you sent us does not meet the guidelines established by the federal Fair Credit Reporting Act; therefore, we are unable to honor your request to block information. However, if you provided specific information, we are investigating the information you questioned with the sources. If you still wish to have this information blocked, please send us a valid identity theft report.

Pls.' Second Amend. Comp.; Ex. 2.

The letter continues by listing what Experian looks for in a valid identity theft report, but fails to specify exactly what was missing from the materials Hovanec and other class members submitted. Experian claims this omission is intentional to avoid fraudulent claims. Hovanec alleges that the letter misrepresented that Hovanec's submissions were insufficient and further alleges that the letter did not contain the requisite notice of the business name and address of any furnisher of information that Experian contacted after receiving Hovanec's identity theft report. Hovanec avers that this letter and its lack of notice violated the FCRA. Specifically, Plaintiffs Hovanec and Osada (collectively, the "Plaintiffs") allege that Experian is liable under 15 U.S.C. § 1681c-2(c)(2) because Experian willfully failed to provide the requisite notice after declining requests to block information and failed to specify the additional information or documentation it needed from the consumer upon receiving requests to block pursuant to 16 C.F.R. § 603.3.

Hovanec now seeks to bring a claim on behalf of putative Class B, alleging that Experian willfully failed to block information that class members identified as identity theft related. Hovanec proposes Class B to include:

All persons to whom Experian sent a letter between April 28, 2009 and May 18, 2011 stating at least in part: 'We are responding to your request that information in your personal credit report be blocked due to alleged fraud. The identity theft report that you sent us does not meet the guidelines established by the federal Fair Credit Reporting Act; therefore we are unable to honor your request to block information. However, if you provided specific information, we are investigating the information you question with the sources . . .' Pls.' Amend. Mot. to Certify at 4.

II. LEGAL STANDARD

To certify a class under FED. R. CIV. P. 23 ("Rule 23"), a court must find: (a) that the class is definite enough that its members are identifiable, and (b) that it satisfies not only the requirements of Rule 23(a), but also one of the three subsections of Rule 23(b). Jamie S. v. Milwaukee Pub. Sch., 668 F.3d 481, 493 (7th Cir. 2012). Rule 23(a) requires that class members be so numerous that joining each is impracticable (numerosity); that there be class-wide questions of law or fact (commonality); that the named parties' claims or defenses be typical of the class (typicality); and that the representative be able to protect the class's interests adequately (adequacy). Rule 23(a).

Here, Plaintiffs proceed under Rule 23(b)(3), which provides that certification is appropriate if the common questions of law or fact "predominate over any questions affecting only individual members, and . . . a class action is superior" to other available adjudication methods. Rule 23(b)(3). The Court must conduct a rigorous analysis to determine whether Plaintiffs have shown, by a preponderance of the evidence, that the class meets the Rule 23 criteria. Messner v. Northshore Univ. Health Sys., --- F.3d ----, 2012 WL 129991, at *4 (7th Cir. 2012). In doing so, the Court must resolve material disputed facts. Id.

III. DISCUSSION

In 2003, Congress amended the Fair Credit Reporting Act ("FCRA," 15 U.S.C. 1681 et seq.) to increase protection for victims of identity theft. See Pub. L. 108-159 (December 4, 2003). One new provision generally requires "consumer reporting agencies" ("CRAs") such as Experian to block information in a consumer's credit report if that information resulted from identity theft. The CRA must do so within four days of receiving certain documentation of the identity theft. 15 U.S.C. § 1681c-2(a). That documentation includes: proof of the consumer's identity; a copy of "an identity theft report"; identification of what information should be blocked; and the consumer's statement that the disputed information does not relate to any transaction that she made. Id. Once a CRA receives the necessary information and places the block, it must inform the "furnisher" of the blocked information. 15 U.S.C. § 1681c-2(b).

The FCRA defines "identity theft" and "identity theft report" and authorizes the FTC to add to those definitions by regulation.

15 U.S.C. ยง 1681a(q). Thus, for the FTC's purposes, an "identity theft ...


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