District Court (Md.) Grants MSJ against Car Buyer Who Complained that No Adverse Action Letter was Sent under the FCRA

In Sterling v. Ourisman Chevrolet of Bowie Inc., 2015 WL 2213708 (D. Md. 2015), Judge Grimm found that the defendants did not violate the FCRA by failing to provide an adverse action letter under the FCRA following declining a car buyer’s credit application.  Plaintiff Monica Sterling went to Defendant Ourisman Chevrolet of Bowie, Inc. where Ourisman employees Henry Hylton, William Taliaferro, and Lewis Gilinsky assisted her in the initial steps of trading in her vehicle and purchasing a new one. While Plaintiff’s finance application was pending with the lender, Defendants accepted her trade-in vehicle, the parties completed all other paperwork, Plaintiff made her down payment, and she took possession of the new vehicle. Weeks later, Defendants demanded that Plaintiff return the new vehicle because her financing did not go through. Plaintiff filed suit against Defendants and Ally Financial, Inc. (“Ally Bank”), alleging that Defendants misled her to believe that the sale was final when she left the lot with the new vehicle.   The District Court found alternative bases for granting the Motion. First, the District Court found that the adverse action, if any, was not taken with regard to the credit report but, instead, was due to the Plaintiff failing to provide the information the creditor required.

Further, Defendants provide evidence in support of their assertion that “Ourisman understood that the lender refused to finance the deal because the Plaintiff did not file the requested tax returns,” Defs.’ Reply 13. See Gilinsky Dep., Defs.’ Reply Ex. G, ECF No. 61–7. Specifically, Gilinsky testified that, when a customer seeks to finance a vehicle, “the application has to be submitted to a lender,” which “reviews it and tells [the dealership] that yes, they are going to give [the customer] a loan, no, they are not going to give … the customer a loan or, yes, if these conditions are met,” and that, in the case of Sterling’s application, it was “a conditional approval,” in that “[t]he lender … said that they would approve the deal with two years’ tax returns as documentation of income and on a Chevrolet Equinox.” Gilinsky Dep. 33:10–17, 37:6–12 (emphasis added). Gilinsky also testified that the lender “refused to fund the contract” because “[t]here was a requirement that the lender had that was not met,” namely, “[t]he lender required two years’ tax returns and a form that the customer signs so that the lender can verify with the IRS that the documentation is accurate,” and in this case, although Plaintiff “provided the tax returns …, the lender requires that those tax returns get filed with the IRS. And they determined that it was not filed.” Id. at 69:1–14 (emphasis added). Thus, there is no genuine dispute that, insofar as Defendants, as opposed to Ally Bank, took an adverse action, they did so based on Plaintiff’s failure to file her tax returns and not based on her credit report. See id. at 33:10–17, 37:6–12, 69:1–14; Sterling Dep. 156:22–162:9; Pl.’s Answers to Interrogs. 5–6. And, although Plaintiff argues that “common sense dictates that Ms. Sterling’s credit score must have been part of Ourisman’s decision, because it was far below average. Ms. Sterling’s credit score was 559, well below the 620 cutoff commonly used to determine creditworthiness,” Pl.’s Opp’n 11, Plaintiff does not offer any evidence in support of her position. Therefore, it cannot create a genuine dispute of material fact. See Cox v. Cnty. of Prince William, 249 F.3d 295, 299 (4th Cir.2001) (noting that wholly speculative assertions do not create “fair doubt”).

The District Court also found that the FCRA affords not private right of action for failure to provide notice of adverse action.

Defendants argue that “no cause of action exists … under the Act for a creditor’s alleged failure to notify their customer if they deny him credit based on his credit report.” . . . Professor De Armond cites twenty cases holding that “FACTA eliminated any private right of action for a violation of § 1681m.” See id. (citing, e.g., Bonner v. CorTrust Bank, N.A., No. 05–137 PS, 2006 WL 1980183, at *3 (N.D.Ind. July 12, 2006) (collecting cases)). She also cites one case to the contrary, the case on which Plaintiff relies in support of her contention that Defendants violated § 1681m (though not to refute this argument which, as previously noted, Plaintiff does not address): Barnette v. Brook Road, Inc., 429 F.Supp.2d 741, 749 (E.D.Va.2006). There, a judge in the Eastern District of Virginia observed:  [S]ection 312(f) of FACTA provides that, “[n]othing in this section, the amendments made by this section, or any other provision of this Act shall be construed to affect any liability under section 616 or 617 of the Fair Credit Reporting Act (15 U.S.C. 1681n, 1681o) that existed on the day before the date of enactment of this Act.” Fair and Accurate Credit Transactions Act of 2003, Pub.L. No. 108–159, § 312(f), 117 Stat.1952, 1993 (codified as amended at 15 U .S.C. § 1681n, Historical and Statutory Notes (2003)).  Id. at 747. On that basis, the court rejected a plain language analysis and concluded that “the use of ‘section’ instead of ‘subsection’ in § 1681m(h)(8) was a drafting error,” reasoning that “[a]n examination of the legislative history reveals no mention of a wholesale withdrawal of a preexisting private right of action,” and that, in § 312(f), “Congress expressly preserved the private right of action in all by the newly enacted subsections.” Id.  Another judge in the Eastern District of Virginia revisited the issue in 2011. See Bourdelais v. J.P. Morgan Chase, No. 10CV670–HEH, 2011 WL 1306311, at *7–8 (E.D.Va. Apr. 1, 2011). The court noted that “[v]ery few courts have adopted Barnette,” and “only one court outside this division has endorsed Barnette’ s analysis over the plain-meaning reading of § 1681m(h) (8).” Id. at *7. It further observed that “[c]ourts have instead continued to give the word ‘section’ its plain meaning, finding that there is no actual conflict between this plain-meaning reading of § 1681m(h)(8) and § 312(f) of FACTA.” Id. The court adopted the Seventh Circuit’s analysis in Perry v. First Nat’l Bank, 459 F.3d 816, 822–23 (7th Cir.2006), to conclude that “ § 312(f) of FACTA does not actually conflict with the plain-meaning reading of § 1681m(h)(8).” Id. at *7–8. . . . I agree with the Eastern District of Virginia’s well-reasoned decision in Bourdelais and relect that articulated by the court in Barnette. Thus, the undisputed evidence shows that Defendants did not base their actions on Plaintiff’s credit report, and there no longer is a private cause of action for a violation of § 1681m. Therefore, Defendants are entitled to judgment as a matter of law on Plaintiff’s FCRA claim. SeeFed.R.Civ.P. 56(a).