District Court (Cal.) Says Furnisher’s FCRA Re-Investigation was Reasonable based on What CRA Told It; “Double-Reporting” Was Not Inaccurate

In Gustafson v. Experian Info. Solutions Inc., No. 2:14-CV-01453-ODW EX, 2015 WL 3477071, at *6 (C.D. Cal. June 2, 2015), Judge Wright granted summary judgment to a debt collector on a Plaintiff’s FCRA claim, alleging that the debt was “double-reported”.

“[S]ummary judgment is not precluded altogether on questions of reasonableness,” but “[i]t is only appropriate ‘when only one conclusion about the conduct’s reasonableness is possible.’ “ Id. (quoting In re Software Toolworks Inc., 50 F.3d 615, 622 (9th Cir.1994); see also Hariton v. Chase Auto Fin. Corp., No. CV 08–6767 AHM, 2010 WL 3075609, at *4 (C.D.Cal. Aug. 4, 2010). The burden of showing the investigation was unreasonable is on the plaintiff. See Gorman, 584 F.3d at 1157. Further, the plaintiff must demonstrate some causal relationship between the furnisher’s unreasonable investigation and the failure to discover inaccuracies in his account. Chiang v. Verizon New England, Inc., 595 F.3d 26, 38 (1st Cir.2010). What is a reasonable investigation by a furnisher may vary depending on the circumstances. Id. A CRA’s notice informs a furnisher of the “nature of the consumer’s challenge to the reported debt, and it is the receipt of this notice that gives rise to the furnisher’s obligation to conduct a reasonable investigation.” Gorman, 584 F.3d at 1157. “Accordingly, the central inquiry when assessing a consumer’s claim under § 1681s–2(b) is ‘whether the furnisher’s procedures were reasonable in light of what it learned about the nature of the dispute from the description in the CRA’s notice of dispute.’ “ Chiang, 595 F.3d at 38 (quoting Gorman, 584 F.3d at 1157). Here, SST received notices of a consumer dispute from Experian for both Synovus and CIGPFI tradelines. The notices received for both tradelines on September 20, 2013 stated: “Not his/hers. Provide complete ID.” (SUF 20, 21.) According to this notice, SST investigated the dispute by verifying the identity of Gustafson and the credit card information. (Id.) The investigation confirmed the identity of Gustafson and the information reported up through January 2008 for the Synovus account and currently reported for the CIGPFI account were accurate. (Id.) Again, on January 28, 2014, SST received notices of a consumer dispute for each tradeline from Experian. (SUF 22, 23.) The reasoning for these disputes stated: “Consumer states inaccurate information. Provide or confirm complete ID information.” (Id.) SST investigated the dispute by verifying all data fields, the identity of Gustafson, the account information, and the first date of delinquency. (Id.) With respect to the Synovus tradeline, SST also invested the date the account was closed, charged-off, and sold to CIGPFI. (SUF 22.) Once again, SST confirmed the identity of Gustafson and the information being reported was accurate. (SUF 22, 23.)  Gustafson argues that SST’s investigation was unreasonable because SST’s procedure consisted only of receiving a dispute form from Experian and “comparing it to the computer screen on the account maintained by SST.” (Opp’n 7.) Specifically, Gustafson contends that the investigation only took ten minutes and the credit resolution personnel never took the time to look at both accounts, even though he or she was capable of doing so. Id. In essence, Gustafson does not dispute the facts of SST’s investigation but rather she argues that SST should have done more during its investigation. The law does not require SST to investigate further than what is described in the notice of dispute. Gorman, 584 F.3d at 1157. Both notices questioned the identity and accuracy of the tradelines, therefore according to Gorman SST was only responsible for confirming the information for each tradeline and reporting the verified information to Experian. Id.; see also Westra v. Credit Control of Pinellas, 409 F.3d 825, 827 (7th Cir.2005) (“[The furnisher’s] investigation in this case was reasonable given the scant information it received regarding the nature of [the consumer’s] dispute.”) Nothing in Experian’s notices identified the need for SST to “look back and forth at both the Synovus and CIGPFI accounts while reinvestigating.” (Opp’n 7.) The notices provided no suggestion of the nature of Gustafson’s dispute with the other tradeline and therefore did not require SST to look at the account simultaneously. See Gorman, 584 F.3d at 1158 (finding that a furnisher could not have reasonably been expected to undertake a more thorough investigation of another account based upon the limited information contained in the notice of dispute). Gustafson also argues that she was limited in her ability to create a complete explanation regarding the inaccuracy of SST’s furnishing because Experian’s online dispute resolution tool restricted her to select from a pre-filled set of dispute categories. (Gustafson Decl. ¶ 15.) Gustafson fails to show how the alleged deficiency in Experian’s dispute reporting creates a genuine dispute as to the reasonableness of SST’s investigation. Again, SST’s investigation is based upon what is provided by Experian. Gorman, 584 F.3d at 1157. If a CRA, like Experian, fails to provide relevant or adequate information to a furnisher, then the consumer has a private right of action against the CRA, but not against the furnisher. Chiang, 595 F.3d at 38. Here, Gustafson has already dismissed Experian from the case and therefore no longer has an action based upon this argument. Therefore, any reasonable trier of fact would conclude that SST’s investigation was reasonable based upon the notice provided by Experian.

Judge Wright found that the Furnisher’s “double-reporting” was not inaccurate, anyway.

SST argues that simultaneously reporting the historic Synovus tradeline and active CIGPFI tradeline is not “inaccurate” because such reporting is permitted and required by the FCRA. (Reply 5, citing Statement of General Policy or Interpretation; Commentary on the Fair Credit Reporting Act, 55 FR 18804–01, 18817–18 (May 4, 1990) (“[A]ccounts placed for collection or charged to profit and loss … and the reporting of other delinquent accounts … even if discharged in bankruptcy, may be reported separately for the applicable seven year period, while the existence of the bankruptcy filing may be reported for ten years.”)) Further, SST argues that it closed-out and ceased furnishing the Synovus tradeline when the account was sold to CIGPFI, stating in its report to Experian that the account was “closed” and “purchased by another lender.” (SUF 8–10; Gustafson Depo. Ex. 12.)  Gustafson does not dispute the accuracy of what was reported by SST, only that both tradelines should not have been simultaneously reported or “double-reported.”⁴ (Opp’n 4–6.) Gustafson points to the declaration of her expert witness, Thomas A. Tarter, for the proposition that double-reporting falls beneath the industry standard of “one debt, one tradeline.” (Tarter Decl. ¶¶ 7–9.) SST argues that Tarter’s Declaration should not be considered at summary judgment because it consists of improper legal conclusions and fails to specify what information he relied on in reaching his conclusions. (ECF No. 61 at 3–4.) The Court agrees. “Conclusory expert assertions cannot raise triable issues of material fact on summary judgment.” Sitrick v. Dreamworks, LLC, 516 F.3d 993, 1001 (Fed.Cir.2008).  Regardless of whether Experian was allowed to report both tradelines, Gustafson does not point to any evidence that shows what SST reported to Experian was inaccurate. None of the credit reports submitted by Gustafson report any inaccurate or misleading information. (See Brennan Decl., Exs. 11, 13, 14, 15, 16, and 17.) Importantly, the Synovus account always indicates that (1) the date the tradeline was opened is June 2006; (2) the recent balance is $0; (3) the status of the account is “Closed”; and (4) the account was charged-off and purchased by another lender. (Id.) All of this information is accurate with respect to the Synovus tradeline.  In light of Gustafson’s numerous other delinquent debts, the addition of one “closed” account on her report does not exacerbate her tenuous credit situation. See Lewis v. Trans Union, LLC, No. 1:13–CV–00229–LJO, 2013 WL 1680639, at *4 (E.D.Cal. Apr. 17, 2013) (finding that enough information was listed for each account such that “[n]o lender reviewing this document with due care could reasonably interpret these entries as representing two different debts [plaintiff] accrued to two different lenders in identical amounts such that it can be expected to adversely affect credit decisions”) (internal quotations omitted). Gustafson can only point to Tarter’s conclusory statements and her own, unsupported assumptions, that her credit would be adversly affected. It is clear from the information reported that another lender owns the debt and Gustafson is no longer obligated to pay Synovus. Any unfavorable credit decision is likely due to the fact that the debt is still delinquent and the additional unrelated delinquent debts in Gustafson’s credit report. Therefore, summary judgment is appropriate because no reasonable jury could find the reported tradelines patently incorrect or misleading.

Judge Wright found, in a footnote, that the Plaintiff’s expert that the double-reporting fell beneath the standard of care was unsupported.

For example, Tarter states that with “virtual certainty” the double-reporting resulted in a substantial reduction of Gustafson’s credit score (Tarter Decl. ¶ 11), but offers no explanation how he came to that conclusion, and even admits that he does not know the scoring models used by the credit bureaus (see id ). Sears Sav. Bank v. Ins. Co. of N. Am., 45 F.3d 437 (9th Cir.1994) (“Because the declaration offers conclusory legal opinion rather than personal knowledge, the district court’s order excluding it is not manifestly erroneous.”) Further, Tarter does not provide any materials, besides generally referencing the FCRA, to support his statement that double-reporting falls beneath the industry standard for maximum possible accuracy. See Samuels v. Holland American Line–USA Inc., 656 F.3d 948, 953 (9th Cir.2011.) (upholding the district court’s exclusion of an expert declaration because the expert failed to specify what information he relied on in reaching his conclusion).