District Court (Ala) Says FCRA Plaintiff Cannot Cure Absence of Actual Damages for Negligent Violation by Claiming Willful Violation, But Willful Violation Without Damages Violates Spokeo

In Nelson v. Mortgage, No. 19-01005-WS-B, 2020 U.S. Dist. LEXIS 222396 (S.D. Ala. Nov. 25, 2020), the District Court granted summary judgment to a mortgage company on an FCRA claim.

Nationstar counters, however, that plaintiffs have made no showing that any such emotional distress damages resulted from the alleged FCRA violation, which is a legal requirement of the claim. See, e.g., Nagle v. Experian Information Solutions, Inc., 297 F.3d 1305, 1307 (11th Cir. 2002) (“failure to produce evidence of damage resulting from a FCRAviolation mandates summary judgment”) (emphasis added); 15 U.S.C. § 1681o(a)(1) (“Any person who is negligent in failing to comply with any requirement imposed under this subchapter with respect to any consumer is liable to that consumer [for] … any actual damages sustained by the consumer as a result of the failure.”). Nowhere in their summary judgment briefing do plaintiffs apprise the Court of how they contend their alleged emotional distress damages resulted from the alleged FCRA violations in this case. They leave the Court guessing as to both what that causal link might be, and what evidence might support its existence. As such, plaintiffs’ showing falls well short of that necessary to avoid summary judgment on Count III. Plaintiffs would try to preserve Count III by relying on their claim for punitive damages under 15 U.S.C. § 1681n, which allows an award of punitive damages in case of a willful violation of the FCRA. According to plaintiffs, “Punitive damages under that section are recoverable even in the absence of actual damages.” (Doc. 75, PageID.915.) However, this argument appears irreconcilable with the Supreme Court’s articulation of Article III standing principles, pursuant to which mere procedural violations that do not cause concrete harm are not actionable. See Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1550, 194 L.Ed.2d 635 (2016) (“Robins cannot satisfy the demands of Article III by alleging a bare procedural violation. A violation of one of the FCRA’s procedural requirements may result in no harm.”). Plaintiffs have not explained how they might overcome Spokeo standing defects in the context of their FCRA claim if they have not shown actual damages or concrete harm resulting from the alleged statutory violations. Based on the arguments presented by the parties, then, without judicial supplementation or speculation as to what they could have argued but did not, the Court finds that summary judgment is properly entered in Nationstar’s favor as to Count III.