District Court Granted Summary Judgment Against Chapter 7 Debtor for Claim Under the Fair Credit Reporting Act

By David Tanabe posted 04-26-2022 08:25 AM


In Beers v. Experian Information Solutions, Inc., No. 20-CV-1797 (WMW/JFD), 2022 WL 891620 (D. Minn. Mar. 25, 2022), the court granted summary judgment to a credit reporting agency on the claim under the Fair Credit Reporting Act (FCRA) given a lack of evidence that (1) the erroneous credit report caused actual damages and (2) the defendant’s procedures for reporting Chapter 7 bankruptcies were willful or reckless.  

The plaintiff received a Chapter 7 bankruptcy discharge. The defendant, a credit reporting agency, issued a credit report which erroneously reported that two accounts discharged in the bankruptcy were still open with amounts due. The plaintiff maintained that the credit report led to her denial of credit by two department stores. In her amended complaint, the plaintiff alleged that the defendant willfully or negligently failed to establish and/or follow reasonable procedures to assure accuracy in its credit reports, thereby harming the plaintiff, in violation of the FCRA, 15 U.S.C. §§ 1681e(b), 1681n, 1681o.

The court recognized that to survive a motion for summary judgment on a negligence claim under the FCRA, the plaintiff must present sufficient evidence of actual damages. Further, to recover statutory damages for willful violations of the FCRA—a claim that does not require proof of injury—the plaintiff must demonstrate that the defendant willfully violated the FCRA. 15 U.S.C. § 1681n.

The plaintiff argued that she presented sufficient evidence that she suffered actual damages as a result of the defendant’s failure to comply with the FCRA requirements. In rejecting the argument, the court found that (1) there was no evidence that the plaintiff was denied credit based on the defendant’s misreporting of the two accounts, (2) nothing in the record showed that any denial or adverse action that occurred after the plaintiff’s bankruptcy discharge was based on the defendant’s credit report, and (3) the plaintiff’s allegations of emotional distress were insufficient and based solely on vague testimony. As such, the court held that the plaintiff failed to establish a negligence claim pursuant to 15 U.S.C. §§ 1681e(b), 1681o.

As to a willful violation of the FCRA, the plaintiff argued that the defendant knew the methodology it used would result in some reporting inaccuracies and that the defendant should have assumed, as a rule, that all debts other than those specifically exempted are discharged in a Chapter 7 bankruptcy. In rejecting the arguments, the court concluded that the defendant’s procedures for reporting Chapter 7 bankruptcies was not willful or reckless, nor did the plaintiff establish than any inaccuracy occurred more than occasionally. Therefore, the court concluded that the plaintiff failed to demonstrate a dispute as to any material fact necessary to establish a claim under the FCRA.

The court granted the defendant’s motion for summary judgment.

Co-Editors in Chief
Karl J. JohnsonTaft Stettinius & Hollister LLP
David M. TanabeWinthrop & Weinstine, P.A.