10th Circuit Says Consumer Reporting Agency Did Okay By Relying on Accuracy of Lexis’ Reporting of Tax

In Wright v. Experian Information Solutions, Inc., 2015 WL 6941273, at *4-6 (C.A.10 (Colo.),2015), the Court of Appeals for the Tenth Circuit said that the CRAs employed proper procedures to determine the accuracy of public liens.

As noted above, the CRAs relied on LexisNexis to collect information from the Recorder’s office. LexisNexis employs a collector to retrieve information from the Recorder’s office and send it to the CRAs. LexisNexis certifies its collectors on document recognition, certifies them on the process and procedures for collecting public record information, and audits them to assure understanding and compliance with collection requirements. LexisNexis and the CRAs check the information they collect for accuracy. Mr. Wright contends summary judgment should not have been granted to the CRAs because he raised a genuine issue of material fact as to whether the CRAs followed reasonable procedures in reporting the tax lien under § 1681e(b). He asserts reasonable procedures would have required the CRAs to employ individuals trained in American tax law to examine the NFTL and determine whether it applied to him. He offers no authority to support this position. The information LexisNexis collected from the Pitkin County Recorder’s website and sent to the CRAs was not inaccurate on its face, inconsistent with information the CRAs already had on file, or obtained from a source that was known to be unreliable. See Cortez, 617 F.3d at 713; Stewart, 734 F.2d at 51–53; Dennis, 520 F.3d at 1069; Cushman, 115 F.3d at 224–26. The cases that have addressed reasonable procedures show the CRAs acted reasonably here. *5 In Cortez, a jury determined a CRA failed to follow reasonable procedures in erroneously reporting a consumer’s name that appeared on the Treasury Department’s Office of Foreign Assets Control List (“OFAC List”). 617 F.3d at 705. The district court denied the CRA’s motion for judgment as a matter of law. Id. The Third Circuit affirmed, determining there was sufficient evidence for a jury to find the CRA’s procedures were unreasonable. 617 F.3d at 710. The CRA’s records showed the consumer was born in 1944 and her middle name was “Jean.” Id. at 710. The actual person on the OFAC List had the same first name as the consumer, but her middle name was “Quintero,” her last name was spelled “Cortes,” and she was born in 1971. Id. The court upheld the jury’s verdict because these differences supported a determination that the CRA “did not exercise sufficient care” in carrying out its responsibilities under § 1681e(b). Id. Unlike the evidence in Cortez, Mr. Wright has provided no evidence to show the tax lien information taken from the Recorder’s website was inconsistent with the information the CRAs had on file about him.  In Dennis, the Ninth Circuit reversed summary judgment for the CRA because the CRA reported an unlawful detainer judgment had been entered against the consumer. 520 F.3d at 1069. The court docket in the unlawful detainer action actually stated the parties had stipulated to dismissal of the case and that the case was dismissed without prejudice. Id. at 1068. Unlike the consumer in Dennis, Mr. Wright has failed to establish any inaccuracy that was apparent from the face of the Recorder’s website. He has not shown the CRAs knew or should have known that the tax lien information provided to them was inaccurate. See also Stewart, 734 F.2d at 52 (holding a CRA was required to initially verify furnished information because it was inconsistent with the consumer’s credit history).  The pertinent case law also shows that the costs to the CRAs of employing individuals trained in American tax law to examine every NFTL outweighs the potential of harm to consumers like Mr. Wright. See Childress, 790 F.3d at 747; Henson, 29 F.3d at 285. In Childress, the Seventh Circuit upheld a district court’s summary judgment determination that it was reasonable under § 1681e(b) for a CRA to report a bankruptcy petition without later reporting the petition had been withdrawn. 790 F.3d at 747. The court noted that bankruptcy courts are often unclear in reporting withdrawals and that it would be unreasonable to require CRAs to independently verify whether a bankruptcy petition had been dismissed or withdrawn because this would require “a live human being, with at least a little legal training, to review every bankruptcy dismissal and classify it as either voluntary or involuntary.” Id.  In Henson, the Seventh Circuit affirmed dismissal on the ground that it was reasonable under § 1681e(b) for a CRA to report a state court judgment even though the state court had erroneously noted a money judgment against the plaintiff on the Judgment Docket. 29 F.3d at 285. The court held, “as a matter of law, a credit reporting agency is not liable under the FCRA for reporting inaccurate information obtained from a court’s Judgment Docket, absent prior notice from the consumer that the information may be inaccurate.” Id. To hold otherwise would require CRAs “to go beyond the face of numerous court records to determine whether they correctly report the outcome of the underlying action” and “substantially increase the cost of their services.” Id.  *6 The plaintiff-consumers in Childress and Henson argued for procedures similar to those Mr. Wright espouses—requiring CRAs to employ individuals trained in American tax law to examine every NFTL filed in a county recorder’s office. No court has required a CRA to go this far to meet the reasonable procedures requirement of § 1681e(b). The CRAs’ reliance on LexisNexis to report the tax lien on Mr. Wright’s credit report was reasonable. We affirm the district court’s determination that the CRAs employed reasonable procedures under § 1681e(b) and Colo.Rev.Stat. § 12–14.3–103.5 in reporting Mr. Wright’s tax lien.