District Court (Cal.) Says Each Report and Dispute Triggers a New SofL under FCRA

In Vasquez v. Bank of America, N.A., 2015 WL 7075628, at *3 (N.D.Cal., 2015), Judge Seeborg found a FCRA Plaintiff’s claims within the applicable statute of limitations.

Federal courts are split on the question of whether each separate notice of dispute triggers a duty to investigate even if the information has been disputed previously. The majority of courts have concluded that “each separate notice of dispute triggers a duty to investigate the disputed information, regardless of whether the information has been previously disputed,” and each time a furnisher fails reasonably to investigate the dispute results in a new FRCA violation. Marcinski v. RBS Citizens Bank, N.A., 36 F. Supp. 3d 286, 290 (S.D.N.Y. 2014); see also, e.g., Maiteki v. Marten Transp. Ltd., 4 F. Supp. 3d 1249, 1253-54 (D. Colo. 2013); Young v. LVNV Funding LLC, No. 12 CV 1180, 2013 WL 4551722, at *3 (E.D.Mo. Aug. 28, 2013); Broccuto v. Experian Info. Solutions, Inc., No. CIV.A. 3:07CV782HEH, 2008 WL 1969222, at *4 (E.D. Va. May 6, 2008); Larson v. Ford Credit, No. 06-CV-1811, 2007 WL 1875989 at *4 (D. Minn. June 28, 2007). Other federal courts have reached the opposite conclusion, reasoning that allowing a second dispute letter to trigger a new statute of limitations would permit plaintiffs “to indefinitely extend the limitations period by simply sending another complaint letter to the credit reporting agency.” Bittick v. Experian Info. Sols., Inc., 419 F. Supp. 2d 917, 919 (N.D. Tex. 2006); see also Hatten v. Experian Info. Sols., Inc., No. 12-12236, 2013 WL 5179190, at *4 (E.D. Mich. Sept. 12, 2013) (same); Blackwell v. Capital One Bank, No. 606CV066, 2008 WL 793476, at *3 (S.D. Ga. Mar. 25, 2008) (same).  The plain language and purpose of the FRCA compel the conclusion that each dispute letter triggers a duty to investigate, regardless of whether the information has been previously disputed. Nothing in the text of 15 U.S.C. § 1681s-2 limits a furnisher’s duty to investigate only to novel disputes. Indeed, the language plainly requires investigation into “a dispute with regard to the completeness or accuracy of any information.” Id. (emphasis added). Moreover, the express “purpose of the FCRA is to ensure consumer reporting procedures that are ‘fair and equitable to the consumer.’ ” Marcinski, 36 F. Supp. 3d at 291 (quoting 15 U.S.C. § 1681(b)). Reading the statute to trigger a duty to investigate even in the case of re-reports comports with that purpose—particularly if the furnisher of information does not correct its past mistakes. Thus, Vasquez’s FCRA claim for relief accrued in the summer of 2015 when BANA supposedly failed reasonably to investigate the dispute, and thus the claim is timely.  In addition, Vasquez argues that a separate claim for relief under the FCRA accrues each time BANA sent an inaccurate report to one of the credit reporting agencies. The Fifth Circuit has held that, under the FCRA, “each transmission of the same credit report is a separate and distinct tort to which a separate statute of limitations applies” because the injury to the plaintiff occurs when the negative credit report is transmitted to an institution, which uses the report to deny credit to the consumer. Hyde v. Hibernia Nat’l Bank in Jefferson Parish, 861 F.2d 446, 449-50 (5th Cir. 1988) (internal quotation marks and alterations omitted); see also Marcinski, 36 F. Supp. 3d at 292; Fleischmann v. Care Credit, No. CV 12-08032 DDP FMOX, 2012 WL 6082893, at *3 (C.D. Cal. Dec. 6, 2012); Cathcart v. Am. Express, No. 4:11CV2125 JAR, 2012 WL 5258820, at *2-3 (E.D. Mo. Oct. 23, 2012). Under the Fifth Circuit’s rule, Vasquez’s FRCA claim is timely because she filed her claim within two years after discovering that BANA had reported inaccurate information to a credit reporting agency. See 15 U.S.C. § 1681p(1). At least two courts have rejected the Hyde theory of liability on the grounds that such a rule would create a perpetual statute of limitations. Bittick, 419 F. Supp. 2d at 918-19; Hancock v. Charter One Mortg., No. 07-15118, 2008 WL 2246042, at *2 (E.D. Mich. May 30, 2008).