____________________________________

)

on behalf of themselves and all )

others similarly situated, )

)

Plaintiffs, ) C. A. No.

)

v. )

)

) JURY TRIAL DEMANDED

CONSUMER ADVOCATE )

FOUNDATION SERVICE, )

and )

CREDIT COLLECTIONS  DEFENSE )

NETWORK, )

and )

CREDIT COLLECTIONS   )

RECONCILIATION NETWORK, )

and )

BEACON CONSULTING )

SERVICES, LLC )

and )

R.K. LOCK & ASSOCIATES, )

and )

ROBERT K. LOCK, JR., ESQ. )

and )

PHILLIP MANGER )

and )

TRACY WEBSTER )

) CLASS ACTION

Defendants. )

____________________________________)

AMENDED COMPLAINT - CLASS ACTION

I.  INTRODUCTION

1.   This is a consumer class action brought for Defendants’ violations of the Credit Repair Organizations Act, 15 U.S.C. § 1679, et seq. (“CROA”) and Illinois Credit Services Organizations Act, 81 ILCS § 605/1, et seq. (“CSOA”).  This law is designed to protect the public from unfair or deceptive business practices by credit repair organizations.

II.   JURISDICTION AND VENUE

2. Jurisdiction of this Court arises under 28 U.S.C. §§ 1331, 1337, and supplemental jurisdiction exists for the state law claims pursuant to 28 U.S.C. § 1367.

3.   Venue lies in this district pursuant to 28 U.S.C. § 1391(b).

III.   PARTIES

4. Plaintiffs h/w, are natural persons residing at _______________IL 61362.

5. Defendant Consumer Advocate Foundation Service (“CAF”) is a business entity that regularly conducts business in the State of Illinois, with its principal office located at P.O. Box 280686, Columbia, S.C. 29228.

6. Defendant Credit Collections Defense Network (“CCDN”) is a business entity that regularly conducts business in the State of Illinois, with its principal office located at 22 South Franklin Street, Cattaraugus, NY 14719.

7. Defendant Credit Collections Reconciliation Network (“CCRN”) is a business entity that regularly conducts business in the State of Illinois, with its principal office located at 7144 North Harlem Avenue, Suite 323, Chicago, IL 60631.  Based upon information and belief, CCRN is the successor in interest to CCDN, and was opened circa October 2008.

8. Defendant Beacon Consulting Services, LLC (“BCS”) is a business entity that regularly conducts business in the State of Illinois, with its principal office located at 1254 Hunters Bldg E, Hoffman Estates, IL 60192.

9. Defendant R.K. Lock & Associates (“RKL”) is a law firm that regularly conducts business in the State of Illinois with offices located at 7144 North Harlem Avenue, Suite 323, Chicago, IL 60631.

10. Defendant Robert K. Lock, Jr. Esquire (“Lock”) is an Illinois licensed attorney with offices located at 7144 North Harlem Avenue, Suite 323, Chicago, IL 60631.  Lock is a partner of RKL and a founding member of CCDN.

11. Defendant Phillip M. Manger (“Manger”) is an attorney with offices located at 19 Taunton Hill Road, Newtown, CT 06470.  Manger is a founding member of CCDN.

12. Defendant Tracy Webster (“Webster ”) is an individual in the employ of CCDN, which regularly conducts business in the State of Illinois, with his principal office located at 22 South Franklin Street, Cattaraugus, NY 14719.

13. At all times pertinent hereto, Defendants used instrumentalities of interstate commerce or the mails, to sell, provide or perform, or represented that they could or would sell, provide or perform, a service, in return for the payment of money or other valuable consideration, for the express or implied purpose of improving a consumer’s credit record, credit history or credit rating, or providing advice or assistance to a consumer for that purpose.

14. At all times pertinent hereto, Defendants were acting by and through their agents, servants, and/or employees, who were acting under the direct supervision and control of Defendants.

IV.   FACTUAL ALLEGATIONS

A. The Credit Repair Enterprise and Activities Carried Out By All Defendants As to Plaintiff and the Class

15. As with many credit repair operations, Defendants act in concert with one another to perpetuate illegal credit repair activities.  Unsuspecting consumers are lead to believe that Defendants can legally remove inaccurate, derogatory, and otherwise hurtful, tradelines, debts and accounts reporting on their credit reports.

16. Defendants enlist consumers through their websites, www.ccdnlaw.com, www.ccrnlaw.com, www.billsaregone.com and www.creditcardsaregone.com, to pay Defendants for the credit repair services described more fully below.

17. Through their websites, Defendants persuade consumers that they have the ability to eliminate the debts of the consumer through their program.  Defendants further misrepresent themselves to be above the law, stating in their Frequently Asked Questions (“FAQ”) section that attorneys and courts cannot harm Defendants.  (A true and correct copy of Defendants’ FAQ is attached hereto as Exhibit A and incorporated herein).

18. When a consumer enrolls in Defendants’ services, he/she signs a contract (“Contract”), which provides for payment of an initial fee.  With the initial fee comes the inclusion of seven (7) accounts (“Accounts”) to be disputed by Defendants.  Additional accounts can be included within the program for an additional fee of $100.00, which Defendants term a “gift.”  (A true and correct copy of the Contract is attached hereto as Exhibit B and incorporated herein).

19.   Upon enlisting Defendants’ services, consumers are instructed to cease payments on the Accounts and to refrain from making any applications for credit.  Additionally, consumers are warned to not: (1) request copies of their credit reports without permission from Defendants; (2) apply for credit; and/or (3) speak to any government agency, creditor, or third party debt  collector regarding the Accounts.  If any of are taken, the consumer is considered in breach of contract and must pay a $100.00 “reinstatement fee” to continue within the program.  See Contract, Exhibit B.

20. In addition to paying the above fees charged by the Defendants, the consumer agrees to share fifty percent (50%) of all “back-end monies” with Defendants.  These “back-end monies” result from federal lawsuits instituted by Defendants following the dispute process.  See Contract, Exhibit B.

21. Following the dispute process, many of the Accounts may remain on the consumer’s credit reports.  These Accounts become the subject of third party debt collection, which is the exact situation contemplated by the Defendants.  At this point, the consumer is directed to use a provided outline (“Complaint Outline”) to memorialize all contact with the third party debt collectors. Once completed, the consumer forwards the same to the Defendants.  (A true and correct copy of the Complaint Outline supplied by Defendants is attached hereto as Exhibit C and incorporated herein).

22. Following completion of the Complaint Outline, federal actions are instituted through a network of attorneys culled by Defendants RKL, Lock, and Manger to file said actions.  Said network of attorneys include, but are not limited to, Defendants RKL, Lock, and Manger.

23. Defendants, pursuant to the Contract, receive fifty percent (50%) of all monies resulting from the above federal actions.  Consumers are directed to forward said monies to Defendants within seven days of receipt.  See Contract, Exhibit B.

B. Factual Allegations As To The Plaintiff

24. In early 2006, Plaintiffs visited Defendant CAF’s website.

25. Soon thereafter, circa May 2006, Plaintiffs were persuaded to engage Defendants’ credit repair services.

26. On or about May 2006, Plaintiffs signed the Contract and completed the accompanying forms.

27. The Contract did not comply with the contractual requirement provisions of CROA.

28. The Contract provided, inter alia¸ that Plaintiffs would pay to Defendants an initial fee prior to any service by Defendants. Additionally, the Contract provided that Plaintiffs would pay Defendant $100.00 per Account to be disputed over the initial seven Accounts.

29. On or about July 28, 2006, Plaintiffs paid Defendants $1,433.33 (“Initial Payment”).  Thereafter, on or about August 31, 2008, Plaintiffs made an additional payment of $500.00 for the dispute of additional Accounts by Defendants.

30. Defendants did not fully perform any services for Plaintiffs before charging and receiving the Initial Payment.

V.   CLASS ACTION ALLEGATIONS

31. Plaintiffs bring this action individually and as a class action, pursuant to Rules 23(a) and 23(b) of the Federal Rules of Civil Procedure, on behalf of the following Class:  all persons in the United States of America who, beginning five years prior to the filing of this Complaint and continuing through the resolution of this action, paid money which was received by the Defendants and/or for whom Defendants performed any credit repair services.  For purposes of Count Two of this Complaint, Plaintiffs also bring this action solely on behalf of a Illinois Subclass of all such persons residing in the State of Illinois.

32. The Class is so numerous that joinder of all members is impracticable.   The Class numbers in the tens of thousands.  The identities of the Class members may be obtained from Defendants’ records.

33.   There are questions of law and fact common to the Class which predominate over any questions affecting only individual Class members.  The principal common questions are: (1) whether Defendants violated the CROA by charging or receiving payment for services from a consumer before fully performing such services; and (2) whether Defendants made false and misleading statements to Plaintiffs and the Class members.  The principal common questions for the Illinois subclass are: (1) whether Defendants violated the CSOA by charging or receiving payment for services from a consumer before fully performing such services; and (2) whether Defendants made false and misleading statements to Plaintiffs and the Class members.

34. Plaintiffs’ claims are typical of the claims of the Class, which all arise from the same operative facts and are based on the same legal theories.

35. Plaintiffs will fairly and adequately protect the interests of the Class.  Plaintiffs are committed to vigorously litigating this matter and have retained counsel experienced in handling class actions and claims involving unlawful business practices.  Neither Plaintiffs nor their counsel has any interests which might cause them not to vigorously pursue this claim.

36. This action should be maintained as a class action because the prosecution of separate actions by individual members of the Class would create a risk of inconsistent or varying adjudications with respect to individual members which would establish incompatible standards of conduct for the parties opposing the Class, as well as a risk of adjudications with respect to individual members which would as a practical matter be dispositive of the interests of other members not parties to the adjudications or substantially impair or impede their ability to protect their interests.

37. The Defendants have acted on grounds generally applicable to the Class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the Class as a whole.

38. The questions of law or fact common to the members of the Class predominate over any questions affecting only individual members.

39.   A class action is a superior method for the fair and efficient adjudication of this controversy.  The interest of Class members in individually controlling the prosecution of separate claims against Defendants is small because damages under the CROA and CSOA may be small.  Management of the Class claims is likely to present significantly fewer difficulties than those presented in many class claims.

VI.   CLAIMS

COUNT ONE

Credit Repair Organizations Act

40. Plaintiffs repeat and reallege all paragraphs above as if fully set forth herein.

41. At all times pertinent hereto, Plaintiffs were “consumers” as that term is defined by section 1679a(1) of the CROA.

42. At all times pertinent hereto, Defendants were “credit repair organizations” as that term is defined by section 1679a(3) of the CROA.

43. The CROA regulates the business practices of credit repair organizations.

44. During the relevant time period, Defendants violated the CROA in numerous respects, including but not limited to the following.

A. Prohibited Practices – untrue or misleading statements

45. Section 1679b(a) of the CROA prohibits untrue or misleading statements with respect to any consumer’s credit worthiness, credit standing or credit capacity to any consumer reporting agency or any person.

46. Defendants violated this provision by using promotional literature and advertising which contained uniformly false, untrue, deceptive and misleading statements regarding the credit repair services at issue and the Plaintiffs’ rights.

47. Defendants further violated this section by using false pretenses and falsely communicating to consumer reporting agencies that Plaintiffs were victims of fraud when requesting implementations of  fraud alerts.

B. Payment Violations - payment in advance, § 1679b(b)

48. Section 1679b(b) of the CROA states that “No credit repair organization may charge or receive any money order or other valuable consideration for the performance of any service which the credit repair organization has agreed to perform for any consumer before such service is fully performed.”

49. When a consumer retains the services of a credit repair organization, he or she is not required to make any payment for said services until the services have been fully performed, as required by section 1679b(b) of the CROA.

50. Despite this clear and unambiguous requirement, at all times relevant hereto, it was and is the practice and policy of Defendants to require and collect payment from consumers before any work has been fully performed on the consumers’ behalf.

51. Defendants’ payment scheme requires their customers to pay an initial fee which is collected before items are taken off the client’s credit report, and therefore is assessed before full performance of services.

52. At the time Plaintiffs made their $1,433.33 Initial Payment and a $500.00 subsequent payment, Defendants had not fully performed services.

53. As a result of the violations of the CROA, Defendants are liable to Plaintiffs and the Class for the greater of actual damages or the amount paid to Defendants, punitive damages, costs and reasonable attorneys’ fees, pursuant to section 1679g(a) and (b) of the CROA.

COUNT TWO

Illinois Credit Services Organizations Act

54. Plaintiffs hereby incorporate by reference each and every allegation contained in the foregoing paragraphs as if set forth fully herein.

55. The Illinois CSOA regulates all persons who, for money or valuable consideration, provides or performs, or represents that he or she can or will provide or perform, the service of improving a consumer’s credit record.  Persons or entities performing these services are called “credit services organizations.”  81 ILCS § 605/2.

56. At all times pertinent hereto, Defendant was a “credit services organization” as defined in section 605/5(3) of the CSOA.

57. The CSOA prohibits credit services organizations, as well as their salespersons, agents and representatives, from, among other things, charging for or accepting payment in advance of full and complete performance of their services 81 ILCS § 605/5(1); making, counseling or advising any buyer of credit services to make any statement which is untrue or misleading to a consumer credit reporting agency, 81 ILCS § 605/5(3); and from making or using any untrue or misleading representations in the offer or sale of the services which operates or would operate as a fraud or deception upon any person in connection with the offer or sale of the services of a credit services organization, 81 ILCS § 605/5(5).

58.   The provisions of the Illinois CSOA are not inconsistent with the provisions of the CROA and, under section 1679j of the CROA, Defendant is not exempt from the compliance requirements of the CSOA.

59. Defendant is prohibited from engaging in the activities described in sections 605/5 (1), (3), and (5) of the CSOA.  However, Defendant has violated those sections by: accepting payment prior to completion of its services and making uniformly false, untrue, deceptive and misleading statements regarding the credit repair services at issue and the Plaintiffs’ rights.

60. A violation of any provision of the CSOA is deemed by law to be a violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS § 505/2 et seq., which provides for recovery of actual damages and attorneys’ fees and costs.  815 ILCS § 505/10(a) and (c).

61. By virtue of the violations of law as aforesaid, and pursuant to the CSOA, Plaintiffs and the Illinois Subclass are entitled to an award of actual damages in the amount paid by them to Defendant, reasonable attorneys’ fees and costs, and all other relief permissible under Illinois law.  815 ILCS § 505/10(a) and (c).

VII.   JURY TRIAL DEMAND

62. Plaintiffs demand trial by jury as to all issues so triable.

VIII.   PRAYER FOR RELIEF

WHEREFORE, Plaintiffs respectfully pray that relief be granted as follows:

(a) That an order be entered certifying the proposed Class under Rule 23 of the Federal Rules of Civil Procedure and appointing Plaintiff and their counsel to represent the Class;

(b) That an order be entered declaring that Defendants’ actions as described above are in violation of the CROA and the CSOA that the contracts shall be treated as void and may not be enforced by any court or any other person, pursuant to 15 U.S.C. § 1679f(c);

(c) That an order be entered enjoining Defendants from continuing to charge and receive amounts for services that have not been fully performed and from entering into contracts with Plaintiffs and members of the Class in violation of the CROA and CSOA;

(d) That judgment be entered against Defendants for actual damages pursuant to 15 U.S.C. § 1679g(a)(1) and the CROA and CSOA;

(e) That judgment be entered against Defendants for punitive damages pursuant to 15 U.S.C. § 1679g(a)(2) and the CROA and CSOA;

(f) That the Court award costs and reasonable attorney’s fees under the CROA and CSOA; and

(h) That the Court grants such other and further relief as may be just and proper.

Respectfully submitted,

FRANCIS & MAILMAN, P.C.

BY:

Attorneys for Plaintiff and the Class

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

)

)

Plaintiff, )

vs. )

)         Civil Action No.

EQUIFAX INFORMATION SERVICES LLC, )

et al.   )

Defendants. )

)

PLAINTIFF S MEMORANDUM OF LAW IN SUPPORT OF HIS RESPONSE IN OPPOSITION TO DEFENDANT EQUIFAX INFORMATION SERVICES LLC’S MOTION FOR PARTIAL SUMMARY JUDGMENT

Plaintiff, through counsel, respectfully submits this Memorandum of Law in opposition to Equifax Information Services LLC’s (“Equifax”) Motion for Partial Summary Judgment (“Motion”).   For the numerous reasons stated below, Equifax’s Motion should be denied and Plaintiff’s claims must proceed to a jury trial.

I. INTRODUCTION

Plaintiff filed this action against Equifax to recover for the damages that he suffered as a result of Equifax’s unlawful credit reporting practices.  Equifax is one of the country’s three major consumer reporting agencies (“CRAs”).   Plaintiff’s Complaint asserts that Equifax violated the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. §§ 1681 et seq., as amended, both willfully and negligently, and presents several state law claims as well.  As Equifax has only moved for partial summary judgment, and has not challenged Plaintiff’s claim that it negligently violated the FCRA or Plaintiff’s claim for actual damages, Plaintiff confines his memorandum to a discussion of the willfulness and preemption arguments that Equifax has raised.

This case arises from Equifax’s conduct in wrongfully reporting a $37,500 civil judgment (the “judgment”) from the Court of Common Pleas of Philadelphia County (“CCP”) on Plaintiff’s credit report despite having knowledge of its inaccuracy.   There is no dispute that the judgment should not have appeared on Plaintiff’s credit report after February 2005.  The horrendously derogatory judgment prevented Plaintiff from buying a home for his family in the summer of 2005, and not surprisingly, caused Plaintiff to suffer other significant economic and non-economic harm as well.

However careless Equifax’s reporting of the judgment may have been initially, it is Equifax’s actions following Plaintiff’s multiple disputes of the judgment that provide a solid evidentiary foundation for Plaintiff’s willfulness claim.  The factual record demonstrates that on two separate occasions in June and July of 2005, Equifax falsely represented to Plaintiff that in the process of investigating his disputes, it had “contacted” the “source” of the judgment, which it identified as the “Philadelphia County Court.”  These statements were totally false.  Equifax had never contacted anyone, much less the Philadelphia Court of Common Pleas, regarding Plaintiff’s dispute.  Nor were Equifax’s misstatements innocent, as discovery has revealed that Equifax never contacts a court regarding a consumer’s dispute of a public record. Equifax’s deliberate misrepresentations to Plaintiff concerning what it did to investigate his disputes and its concealment of its actual activities alone present genuine issues of material fact that Equifax willfully violated the FCRA according to any application of our Circuit’s well- defined standard for FCRA willfulness claims.

The record also presents additional independent bases to support a jury finding that Equifax willfully violated the FCRA.  In response to another of Mr. Plaintiff’s disputes, Equifax informed Mr. Plaintiff that it had conducted a reinvestigation (again listing the Philadelphia County Court as its source), but this time that it had “verified” the accuracy of the $37,500 judgment against him with the courthouse.  This was also untrue.  What Equifax did was follow its usual policy and simply sent a one-page form to the public records vendor from whom it had originally obtained the judgment and “parrot” the same inaccurate information that it received back from the vendor on Plaintiff’s credit report.  Additionally, while Plaintiff had actually provided Equifax with court records demonstrating its gross error (clearly showing that the judgment had been entered in his favor by this time), Equifax never even bothered to pass these pivotal documents along to the vendor because it never forwards such documents to an information furnisher as a matter of practice.

These specific practices by Equifax — deliberately misrepresenting its activities and systematically failing to investigate a consumer’s dispute and forward the relevant information he has provided to the information furnisher — readily meet the “reckless disregard” standard for willfulness established by the Third Circuit in the seminal case of Cushman v. Trans Union Corp., 115 F.3d 220, 227 (3d. Cir. 1997).   In denying Equifax’s willfulness challenge, this Court will not be carving any new ground or expanding Cushman.  Indeed, each time courts within this Circuit have examined similar practices by a CRA, they have held that such practices presented evidence from which a reasonable jury could reach a finding of willfulness.   This Court may also find Judge Brody’s reasoning in Lawrence v. Trans Union, LLC, 296 F. Supp. 2d 582 (E.D. Pa. 2003) instructive.  Lawrence is an FCRA case involving a disputed judgment in which the court rejected virtually identical arguments concerning willfulness asserted by CRA Trans Union at summary judgment on the basis of similar systemic practices and facts.

In sum, Plaintiff presents solid evidence from which a jury could conclude that Equifax committed a willful violation of the FCRA.  For this reason and the others discussed below, Plaintiff’s state law claims should survive summary judgment as well.   As such, Equifax’s Motion should be denied in its entirety.

II. COUNTER-STATEMENT OF FACTS

A. Equifax Ignores Plaintiff’s Repeated Attempts To Correct The Inaccurate Reporting Of The Judgment

Following a car accident in front of Philadelphia City Hall — where another car crashed into Plaintiff’s car from the rear — it appears that Mr. Plaintiff was sued in the Philadelphia CCP.  (Plaintiff’s Dep. at 72-73, 75-76) (attached hereto as Exhibit A).   Plaintiff never received notice of that action and knew nothing about it until he saw a $37,500 judgment reporting against him on his Equifax credit report in January 2005.  (Plaintiff’s Dep. at 73, 75-76).  Immediately, Plaintiff retained counsel and the judgment was appealed and vacated as of February 2005.  (Plaintiff’s Dep. at 76-78); (see also CCP Notice of Appeal, presented for review January 7, 2005, attached hereto as Exhibit B).  He then won the case and the judgment was entered in his favor.  (See Exhibit E, infra).

Equifax’s Director of Consumer Customer Care Alicia Fluellen conceded that following a Notice of Appeal a judgment should no longer be reporting against a consumer:  “what should have happened was the very first time we received the Notice of Appeal, it should have been removed from the credit file.  But that didn’t happen.”  (Fluellen Dep. at 81; see also id. at 82, conceding Equifax’s reporting post-appeal was erroneous) (attached hereto as Exhibit C).

Plaintiff testified at his deposition that he waited for the order vacating the judgment and contacted Equifax to ask that the judgment be removed from his credit file in February 2005.   (Plaintiff’s Dep. at 74-75).  Plaintiff had started looking to purchase a home in the spring of 2005 and knew that a recent $37,500 judgment against him would be a major obstacle, which in fact it was.  (Plaintiff’s Dep. at 45-51).  Equifax claims that it never received notice of that dispute.  (Def. Mem. at 4-5).

It is uncontested that Equifax received three subsequent disputes from Plaintiff requesting that it cease reporting the $37,500 judgment against him on his file — a June 8, 2005 letter, a July 21, 2005 letter and an August 8, 2005 telephone call.  (See Def. Mem. at 3-4).  Importantly, with the June 8 letter Plaintiff himself sent Equifax a copy of the Notice of Appeal.  (See id.; see also Plaintiff’s 6-8-05 letter to Equifax and supporting documentation, attached hereto as Exhibit D).  With his July 21 dispute letter Plaintiff also included a copy of the Report and Award of Arbitrators from the appeal (entered June 22, 2005), which stated on its face that “We find in favor of Defendant[] Shadee Plaintiff.”  (See id.; see also Plaintiff’s 7-21-05 letter to Equifax and supporting documentation, attached hereto as Exhibit E) (emphasis added).  At no time did Equifax forward these court records to the public records vendor from whom it obtained information about the judgment.  (See Fluellen Dep. at 28-29, 76, 85-94).

Despite Plaintiff’s repeated disputes and his supporting court papers, Equifax continued to report the $37,500 judgment against Plaintiff through the time of this lawsuit, finally supplying Plaintiff with a corrected credit file in December 2005.  (See Fluellen Dep. at 95, 115-16; and also at 103-04).

B. Equifax Falsely Informed Mr. Plaintiff That It Had Contacted The Philadelphia County Court Concerning His Disputes When It Had Not

In connection with Mr. Plaintiff’s June and July 2005 written disputes concerning the judgment, Equifax wrote to Mr. Plaintiff to explain the results of its investigation.    (See Investigation Results dated 6-24-05, attached hereto as Exhibit F); (See Investigation Results dated 7-29-05, attached hereto as Exhibit G).  In its letters, Equifax advised Mr. Plaintiff that its “investigation [was] completed” and that it had “contacted each source [of the disputed judgment] directly.”  Id. (emphasis added). The letters listed the source it contacted as the “Philadelphia Cty Court, Broad & Market STS.”  Id.

However, at her deposition, after several evasive answers, Equifax’s corporate representative admitted that neither Equifax nor anyone acting on its behalf ever contacted the Philadelphia County Court:

19    Q.    Okay.  So this is not true when it says on

20    this letter that the Philadelphia City Court, Broad

21    and Market Street in Philadelphia was contacted by

22    Equifax in connection with this investigation?

23               MR. PERLING:  Objection to form.

24         Misstates evidence.  The best evidence is this

25         exhibit, and it does not say what you just said

1         your question.

2               THE WITNESS:  Yeah, it doesn’t say that.

3    Q.    (By Mr. Soumilas)  What’s the answer to

4    that question, ma’am?  Was that court, the

5    Philadelphia County Court ever contacted by Equifax

6    or any of its vendors or anyone on its behalf in      

7    connection with the investigation of this June 8th,

8    2005 dispute?

9         A.    No.

(See Fluellen Dep. at 70-71; see generally 65-71, 76-81).  In fact, Equifax never contacted anyone regarding Mr. Plaintiff’s June 8th dispute, including the public records vendor from whom it obtained the judgment in the first place, and did nothing to investigate Mr. Plaintiff’s disputes besides look at Plaintiff’s dispute correspondence.  (Id.); (see also Def. Mem. at 3-4).

Equifax actions regarding the Mr. Plaintiff’s July 2005 dispute were no different.  Even though it informed Mr. Plaintiff that it contacted the Philadelphia County Court, it did not contact anyone.  (See Fluellen Dep. at 76-82); (see also Exhibit G); (see also Def. Mem. at 3-4).   In “investigating” these two disputes Equifax did nothing besides misread Plaintiff’s supporting court papers (see Fluellen Dep. at 65-71, 80-81) and then falsely stated in standard letters that it had investigated the dispute by contacting the Philadelphia CCP.  (See id. at 118-19); (see also Def. Mem. at 3-4).

With respect to Plaintiff’s August 2005 dispute, Equifax sent Plaintiff a similar type of letter with its purported “investigation” results.  (See Investigation Results dated 8-13-05, attached hereto as Exhibit H).  That letter also informed Plaintiff that Equifax had contacted the Philadelphia County Court “directly.”  (Id. at pgs. 1 and 2 of 8).  Again, this was not true:

25       Q.    And then it says, NDR courier will pick

1    up, Philadelphia, Pennsylvania 19107.  Was there ever

2    any communication concerning this dispute by Equifax

3    directly to any court in Philadelphia?

4         A.    Not that I can tell here by looking at the

5    documents, no.

(Fluellen Dep. at  88).  While this time Equifax actually contacted its public records vendor that supplied the judgment to it in connection with the August 2005 dispute, Equifax does not know whether the vendor ever contacted the Philadelphia CCP.  (Fluellen Dep. at 37, 106-07, 121).

In discovery, Plaintiff learned the true reality behind where and how Equifax obtains it public records information and what it really did in terms of responding to Mr. Plaintiff’s disputes.  Equifax does not obtain its public records data from the Philadelphia CCP; it obtains it from an independent vendor.  (Fluellen Dep. at 86).  Likewise, in the instances when it actually contacts anyone in reference to a consumer’s dispute, it only contacts the vendor, never the court.  (See Fluellen Dep. at 31-34, 69-71, 88); (see also id. at 98) (“we will stipulate that NDR is the company that provided the information to Equifax from the courthouse”).  Yet Equifax, as a matter of routine practice, represents to consumers such as Mr. Plaintiff that it has contacted the court directly, and conceals from consumers the true source of the information that it is reporting about them and the actions it takes in response to a dispute, even though it is required to fully disclose this information to consumers by law.   (See generally Fluellen Dep. at 31-34; 82-99).  Equifax’s letters to consumers misinform them that the entity that is supplying the judgment information is really the courthouse, and that Equifax had “contacted” the courthouse “directly” in order to verify the records when a consumer contacts it about a dispute.  (See generally Fluellen Dep. at 31-34, 82-99, 118-19); (see also Exhibits F, G and H).

C. Equifax’s “Parroting” Practices Under The Circumstances Of This Case Further Demonstrate Its Reckless Disregard For Consumer Rights

When Equifax actually looks into a consumer dispute concerning a judgment by doing anything other than looking at its own records and the consumer’s correspondence, it generally contacts the credit furnisher who provided it with the disputed credit information in the first instance.  (Fluellen Dep. at 34-37, and generally at 26-37).  Then Equifax reports on the consumer file what its credit furnisher (in this case, a public records vendor) tells it to report, without conducting any independent investigation or doing anything further besides parroting the word of its credit finisher.  (Fluellen Dep. at 34-37, 94).

Importantly, Equifax does not forward any letter or supporting documentation that a consumer submits with his or her dispute to the credit furnisher that is supplying the disputed information to Equifax in the first instance.  (Arnold Dep. pp. 71-72) ; (see generally Fluellen Dep. at 29, 76).  Thus a consumer’s supporting documentation (such as the Notice of Appeal and the Report and Award of Arbitrators that Plaintiff sent to Equifax) remains archived with Equifax but are not forwarded on to the furnisher as a matter of course.  (Id.).

Despite depriving its credit furnishers of this type of vital information and supporting documentation, Equifax limits its “investigation” to a one-page form called a “CDV” (or “ACDV” when the form is automated or in electronic format) communication with the furnisher and does nothing further.  (See Fluellen Dep. in Sheffer at 85-86, 97-99, 105);  (See Arnold Dep. at 97-104).  Thus, when a furnisher such as a public records vendor responds to a CDV form simply by checking the “verified” as accurate box, Equifax will do nothing other than publicize on the consumer’s credit report the information that the furnisher states.  (Id).  Ms. Fluellen’s deposition testimony concerning Equifax’s parroting procedures, cited above, is the very basis that led Judge Schiller in Sheffer to allow a willfulness claim and punitive damages to be presented to the jury against Equifax in that case.  See Sheffer v. Experian Info. Solutions, Inc., Civ. No. 02-7407, 2003 WL 21710573 at * 3 (E.D. Pa. July 24, 2003) (citing Ms. Fluellen’s deposition testimony).

In this case, Ms. Fluellen confirmed that Equifax’s investigation policies are still the same and that Equifax verified the accuracy of the $37,500 judgment in August 2005 simply because its public records vender so stated, and for no other reason.  (See Fluellen Dep. 8, 93-94).  Indeed, when Equifax actually bothered to contact its public record vendor (National Data Retrieval, now ChoicePoint) concerning Mr. Plaintiff’s dispute in August 2005, Equifax  “verified” that the judgment was accurate as one against Mr. Plaintiff simply because that is what furnisher National Data Retrieval stated in its CDV form response.  Equifax so verified the accuracy of the judgment for no other reasons and despite the clear proof to the contrary that Plaintiff had already supplied to Equifax in June and July 2005 in the form of CCP records.   (See Fluellen Dep. 94, see generally 29-36); (see also National Data Retrieval CDV with response date 8/29/05, attached hereto as Exhibit K).

III. APPLICABLE STANDARD

Pursuant to Federal Rule of Civil Procedure 56(c), a motion for summary judgment will only be granted:

if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law.

Fed. R. Civ. P. 56(c).  In other words, summary judgment may only be granted if the movant shows, by admissible evidence, that there exists no genuine issue of material fact that would permit a reasonable jury to find for the nonmoving party.  Wetzel v. Tucker, 139 F.3d 380, 383 n.2 (3d Cir. 1998); Miller v. Indiana Hosp., 843 F.2d 139, 143 (3d Cir.), cert. denied, 488 U.S. 870 (1988).

The party opposing the motion for summary judgment is entitled to have his/her allegations taken as true, to receive the benefit of the doubt when his/her assertions conflict with those of the movant and to have inferences from the underlying facts drawn in his/her favor.  Big Apple, BMW, Inc. v. BMW of North America, Inc., 974 F.2d 1358, 1362-63 (3d Cir. 1992), cert. denied, 507 U.S. 912 (1993).  In analyzing the moving party’s burden under Rule 56(c), the Third Circuit has stated that “[i]f there is any evidence in the record, from any source, from which a reasonable inference in the respondent’s favor may be drawn, the moving party simply cannot obtain a summary judgment, no matter how many affidavits are filed (citations omitted) . . . .  The ‘burden’ then is insurmountable.”  In re Japanese Electronic Prods. Antitrust Litig., 723 F.2d 238, 258 (3d Cir. 1983), reversed on other grounds, 475 U.S. 574 (1986); see also Boyle v. County of Allegheny, Pennsylvania, 139 F.3d 386, 393 (3d Cir. 1998).

A court may not, at the summary judgment stage, weigh evidence or make credibility decisions.  These tasks are left to the factfinder.  Petruzzi’s IGA Supermarkets, Inc. v. Darling-Delaware Co., Inc., 998 F.2d 1224, 1230 (3d Cir.), cert. denied, 510 U.S. 994 (1993).  To raise a genuine issue of material fact, the respondent need not match, item for item each piece of evidence proffered by the movant.  Big Apple, BMW, Inc., 974 F.2d at 1362-63.  As the Third Circuit has explained:

In practical terms, if the opponent has exceeded the “mere scintilla” threshold and has offered a genuine issue of material fact, then the court cannot credit the movant’s version of events against the opponent, even if the quality of the movant’s evidence far outweighs that of its opponent.  It thus remains the province of the factfinder to ascertain the believability and weight of the evidence.

In re Unisys Savings Plan Litigation, 74 F.3d 420, 433 n. 10 (3d Cir. 1996) (citing Big Apple, BMW).  If there are gaps in the pertinent materials submitted by the movant, without explanation, that justifies denial of the motion.  O’Donnell v. United States, 891 F.2d 1079, 1082 (3d Cir. 1989).   In the case at bar, there exist genuine issues of material fact, and Equifax is not entitled to judgment as a matter of law.  Summary judgment is therefore inappropriate.

IV.         ARGUMENT

Through documents and deposition testimony, Plaintiff clearly has demonstrated that genuine issues of material fact exist as to whether a reasonable jury could find that Equifax’s conduct willfully violated the FCRA, and Equifax is not entitled to judgment as a matter of law.  Accordingly, Equifax’s Motion must be denied.

A. There Are Genuine Issues of Material Fact That Equifax’s Policies And Practices Led To Willful Violations Of The FCRA

Equifax argues that it is entitled to summary judgment as to Plaintiffs’ FCRA section 1681n claim allegedly because no reasonable jury could find that it acted willfully in violation of the FCRA.  (See Def. Mem. at 9).

In order to show “willfulness” under the FCRA (which would justify punitive damages among other things), a plaintiff need not show malice, but only that the credit reporting agency “knowingly and intentionally committed an act in conscious disregard for the rights of others.”  See Cushman v. Trans Union Corp., 115 F. 3d 220, 227  (3d. Cir. 1997).  Although the terms “willful” or “willfully” are not defined in the FCRA, case law has held that neither malice nor evil motive need be established for a finding of a willful violation.  See Stevenson v. TRW, Inc., 987 F.2d 288, 294 (5th Cir.1993) (citing Fischl v. General Motors Acceptance Corp., 708 F.2d 143, 151 (5th Cir.1983)).  Many courts have noted that willful under the Act is demonstrated by a showing of “knowingly and intentionally committed an act in conscious disregard for the rights of others.”  See id. at 293 (citing Pinner v. Schmidt, 805 F.2d 1258, 1263 (5th Cir.1986), cert. denied, 483 U.S. 1022 (1987)); Cushman, 115 F. 3d at 227; see also Reynolds v. Hartford Fin. Servs. Group, 435 F.3d 1081, 1097-99 (9th Cir. 2006) (discussing meaning of “willfully” with CRA and relying on Cushman). Such conscious disregard may be found when a credit reporting agency adopts a policy either knowing it to be in “contravention of the rights possessed by consumers under the FCRA or in reckless disregard for whether the policy contravenes those rights.”  Cushman, 115 F. 3d at 227; see also Reynolds, 435 F.3d at 1097-99.

Multiple cases within this District, examining the willfulness standard within the precise context of a CRA’s duty to investigate consumer duties, have repeatedly found that a CRA shows a reckless disregard for a consumer’s rights when it fails to forward “all relevant information,” including documentation that a consumer sends to the CRA in support of his or her dispute, to the furnisher supplying the credit data, as specifically required 15 U.S.C. § 1681i(a)(2)(A).  Lawrence v. Trans Union, LLC, Civ., 296 F.Supp. 2d. 582, 590, 2003 WL 22992081 at *5 (E.D. Pa. Dec. 11, 2003); Crane v. Trans Union, LLC, 282 F. Supp. 2d 311, 321 (E.D. Pa. 2003).

Moreover, multiple cases within this District have held that a consumer may show a willful violation under the FCRA if the CRA has a policy or practice of merely parroting the responses of credit furnishers, rather than conducting an independent investigation as required by 15 U.S.C. § 1681i.  See Lawrence, Civ. 296 F.Supp. 2d. 582, 590,  2003 WL 22992081 at * 5; Evantash v. G.E. Capital Mortgage Servs., Inc., Civ. No. 02-1188, 2003 WL 22844198 * 8 (E.D. Pa. Nov. 25, 2003); Crane, 282 F. Supp. 2d at 321; Sheffer v. Experian Info. Solutions, Inc., Civ. No. 02-7407, 2003 WL 21710573 at * 3 (E.D. Pa. July 24, 2003) (all claims, including punitive damages, to go to jury in FCRA case against Equifax and other defendants).

Cases from other federal courts have also held that consumers may proceed to trial with their FCRA section 1681n willful claims based upon conduct — by Equifax — similar to what courts within the Third Circuit have found could constitute a willful violation of the law.  See Apodaca v. Discover Fin. Servs. et al., ___ F.Supp. 2d ___, Civ. No. 04-0717, 2006 WL 538667 (D.N.M. Mar. 2, 2006) (denying Equifax’s motion for partial summary judgment and permitting consumer to proceed to trial with willfulness/punitive damages claim stemming from improper investigation procedures); Sampson v. Equifax Info. Servs. LLC, Civ. No. 204-187 (S.D. Ga. Aug. 29, 2005) (denying Equifax’s motion for summary judgment and permitting consumer to proceed to trial with willfulness/punitive damages claim stemming from Equifax’s improper investigation procedures).

Here, Plaintiff has demonstrated Equifax’s “reckless disregard” for consumer rights in several ways.

First, Equifax failed in its duty to conduct an independent investigation by merely parroting its public records vendor’s response to its CDV in August 2005 and doing nothing further.  The testimony of Equifax’s corporate representative Alicia Fluellen has already been the basis for one decision within this District allowing punitive damages against Equifax to proceed to the jury.   See Sheffer v. Experian Info. Solutions, Inc., Civ. No. 02-7407, 2003 WL 21710573 at * 3 (E.D. Pa. July 24, 2003) (citing Ms. Fluellen’s deposition testimony and allowing willfulness claim/punitive damages to be presented to the jury due to Equifax’s practice and policy of parroting furnisher responses despite consumer disputes).  The same testimony, cited herein, is equally applicable to this case as it pertains to Equifax’s general policies and practices.  (See Fluellen Dep. in Sheffer pp. 85-86, 97-99, 105).

In this case Ms. Fluellen corroborated that testimony and confirmed that Equifax has not changed its parroting practices.  (See Fluellen Dep. 4, 36-37, 93-94).   Indeed, in August 2005 Equifax conducted no independent investigation whatsoever, despite having received ample notice from Plaintiff by that time, including actual court records, that the $37,500 judgment should not be reporting against him.  Equifax simply parroted the CDV response of its furnisher — that the judgment should continue to report against Plaintiff, and for only that reason “verified” the judgment’s accuracy.  That is the essence of parroting.  Accordingly, as in Sheffer, the issue of willfulness must go to the jury.  See also Lawrence v. Trans Union, LLC, Civ., 296 F.Supp. 2d. 582, 590, 2003 WL 22992081 at *5 (E.D. Pa. Dec. 11, 2003) (practice or policy of parroting can be willful violation under FCRA); Crane v. Trans Union, LLC, 282 F. Supp. 2d 311, 321 (E.D. Pa. 2003) (same).

Second, Equifax repeatedly misrepresented to Plaintiff in its letters that it had “contacted” the Philadelphia CCP at Broad and Market Streets “directly” in processing his disputes.  (See Exhibit F, G, H).  These communications concealed the truth from Plaintiff regarding what Equifax did in its purported “investigation” into Plaintiff’s disputes and also concealed who the true source of Equifax’s credit data was with respect to judgments (i.e., the public records vendor as opposed to the CCP).    The FCRA requires CRAs to identify to consumers the true source of where they are getting credit information.  See 15 U.S.C. § 1681i(a)(6).  Equifax misrepresented that to Plaintiff and did so with standard letters that demonstrate its practice of doing so with these type of disputes.   (See generally Fluellen dep. at 31-34; 69-71).

Equifax’s Ms. Fluellen testified that as a matter of course Equifax does not identify to consumers the true identity of who furnishes public records data to Equifax, as it did not to Plaintiff in this case.  (See Fluellen Dep. at 31-34, 86-87, 98).  Nor were Equifax’s letters isolated mistakes, or mere human error.  Sheffer v. Experian Info. Solutions, Inc., Civ. No. 02-7407, 2003 WL 21710573 at * 3 (willful claim permitted to go to jury where Equifax’s conduct was “not the result of mere human error  . . . [that] was promptly cured”) (citing Boris v. Choicepoint Servs., 249 F. Supp.2d 851, 862 (W.D. Ky. 2003)).  A reasonable jury could find that Equifax’s practice of telling consumers that it “contacted” the Philadelphia CCP at Broad and Market Streets “directly,” when in fact it had not, as well as its failure to make sure that the true court records concerning the judgment were actually reviewed as part of its investigation, show a “reckless disregard” for consumer rights.

Finally, Equifax’s repeated and systematic failures to stop reporting the judgment as one against Plaintiff after February 2005 is unfathomable when Plaintiff put Equifax on written and oral notice so many times, and when Equifax is supposed to update judgment information with current data almost on a daily basis.   (See Fluellen Dep. at  23 and also generally at 14-15, 17-21).

These facts establish that Equifax knowingly and regularly disregards the FCRA’s requirements.  Thus, Plaintiff may be permitted to proceed with his willfulness claim to trial.

B. Plaintiff’s Common Law Claims Are Not Preempted

Equifax contends that Plaintiff should not be permitted to proceed to trial with his common law claims of defamation, negligence and invasion of privacy/false light.  (See Def. Mem. at 7).  The entire and exclusive basis for Equifax’s preemption argument is that it did not “willfully” violate the FCRA.   For the same reasons that Plaintiff may show willfulness and thus proceed to trial with his FCRA section 1681n claim, discussed above, Equifax’s preemption argument fails.

Further, the limitations to common law liability set forth at FCRA section 1681h(e), on which Equifax relies, impose a “willfulness” threshold only for actions stemming from disclosures to the consumer, but not all FCRA actions.  As one court recently explained:

Section 1681h(e) suggests not that Congress has limited actions brought in all areas regulated by the FCRA but that defendants will have qualified immunity from actions based on information disclosed pursuant to certain provisions of the FCRA. Webb v. Bob Smith Chevrolet, Inc., 2005 WL 2065237 at *5 (W.D.Ky. Aug. 24, 2005). In McAnly v. Middleton & Reutlinger, P.S.C., 77 F.Supp.2d 810, 814-15 (W.D.Ky.1999), the district court explained that, ‘section 1681h(e) is not actually a preemption provision. Rather, it is a quid pro quo grant of protection for statutorily required disclosures. Since various parts of the federal statute require consumer reporting agencies and information users to disclose information to consumers under certain circumstances, this section guarantees that the agencies or users cannot be sued for those required disclosures [under FCRA sections 1681g, 1681h and 1681m] under state tort law.  It makes sense that acts required to be done by the FCRA are immunized from state tort liability.’

Poore v. Sterling Testing Sys., Inc., 410 F.Supp. 2d 557, 573 (E.D. Ky. 2006).

Here, Plaintiff’s common law claims are based on information provided by Equifax to  third parties, such as a prospective mortgage lender and other existing and potential creditors.  It is not based on the disclosures to consumers required under sections 1681g, 1681h and section 1681m.  Nor is it based on information disclosed by a user of a consumer report.  Accordingly, Plaintiff’s state law claims are not prohibited under section 1681h(e).

C.        Plaintiff Withdraws His Claim Under The Pennsylvania Unfair Trade

Practices and Consumer Protection Law

Equifax finally contends that Plaintiff should not be permitted to proceed to trial with his claim under the Pennsylvania Unfair Trade Practices and Consumer Protection Law (“CPL”).  (See Def. Mem. at 8).  Equifax inaccurately claims that there is “no cause of action under the CPL.”  (Id.).  Although at least two federal courts within this District have held that a consumer-plaintiff may bring a Pennsylvania CPL claim along with an FCRA claim alleging that a CRA reported inaccurate credit information about him or her,  Plaintiff hereby withdraws this statutory claim.  Accordingly, that issue is moot for purposes of this Motion.

V. CONCLUSION

For the reasons stated above, this Court should deny Equifax’s Motion for Summary Judgment.

Respectfully submitted,

FRANCIS & MAILMAN, P.C.

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

MALIK HODGE, on behalf of himself and all others similarly situated

Plaintiff,

v.

PREMIER CREDIT OF NORTH AMERICA, LLC

Defendant.

)

)

)

)

)

)

)

)

)

)

)

)

)

Civil Action No. 09-1644

Class Action

______________________________________________________________________________

MEMORANDUM OF LAW IN SUPPORT OF PLAINTIFF’S RESPONSE IN OPPOSITION TO DEFENDANT’S PARTIAL MOTION TO DISMISS OR STRIKE THE CLASS ACTION ALLEGATIONS OF THE AMENDED COMPLAINT

______________________________________________________________________________

FRANCIS & MAILMAN, P.C.

JAMES A. FRANCIS

GREGORY GORSKI

Land Title Building, 19th Floor

100 South Broad Street

Philadelphia, PA 19110

(215) 735-8600

TABLE OF CONTENTS

PAGE

I. PRELIMINARY STATEMENT ……………………………………………………………………1

II. BACKGROUND …………………………………………………………………………………………..3

A. Defendant Has No Permissible Basis To Call A Non-Debtor

And Misrepresent The Reason For Its Call To Coerce Private

Information About A Purported Debtor …………………………………………………………3

B. Defendant Uses A Standardized Telephone Call Script To

Deceive Third Parties ………………………………………………………………………………….4

C. Plaintiff’s Amended Complaint Includes All The Necessary

Elements To Adequately Allege A Class Action …………………………………………….5

III. LEGAL STANDARD …………………………………………………………………………………….6

A. A Well Pled Complaint Need Only Allege Claims That Are

Not “Speculative” To Defeat A Motion To Dismiss Pursuant

To Rule 12(b)(6) 6

B. The Legal Standard When Considering A Motion To Dismiss

Class Action Allegations Pursuant to Rule 12(b)(6) Does Not Change ……………..8

IV. ARGUMENT ……………………………………………………………………………………………….10

I.  PLAINTIFF HAS ADEQUATELY PLED A PLAUSIBLE CLASS ACTION CLAIM AGAINST DEFENDANT 10

A. Plaintiff Amended Complaint Alleges A Class Of Purported Debtors Whose Rights Under The FDCPA Were Violated 10

B. Class Actions Alleging Harm Caused By The Use Of

Standardized Scripts Are Certifiable 12

II.  DEFENDANT’S ARGUMENTS IN OPPOSITION TO CLASS CERTIFICATION ARE PREMATURE 13

V. CONCLUSION ……………………………………………………………………………………………14

TABLE OF AUTHORITIES

PAGE

Ashcroft v. Iqbal,

129 S. Ct. 937 (2009) 8

Baas v. Dollar Tree Stores, Inc.,

2007 WL 2462150 (N.D.Cal. 2007) 13

Beck v. Maximus,

457 F.3D 291(3d. Cir. 2006) 1

Bell Atlantic Corp. v. Twombly,

550 U.S. 554 (2007) 6, 7, 8

Borough of Morrisville v. Delaware River Basin Commission,

382 F. Supp. 543 (E.D.Pa. 1974) 8

Broussard v. Meineke Discount Muffler Shops, Inc.,

155 F.3d 331 (4th Cir. 1998) 12

Buck v. Hampton Twp. Sch. Dist.,

452 F.3d 256 (3d Cir. 2006) 7

Chedwick v. UPMC,

619 F. Supp.2d 172 (W.D.Pa. 2007) 13

Clark v. McDonald’s Corp.,

213 F.R.D. 198 (D.N.J. 2003) 9

Clark v. State Farm Mut. Auto. Ins. Co.,

231 F.R.D. 405 (C.D.Cal. 2005) 14

Costlow v. United States,

552 F.2d 560 (3d Cir. 1977) 7

General Tel. Co. of Southwest v. Falcon,

457 U.S. 147 (1982) 8, 9, 11

Grainger v. State Sec. Life Ins. Co.,

547 F.2d 303 (5th Cir. 1977) 12

Gutierrez v. Johnson & Johnson, Inc.,

2002 U.S. Dist. LEXIS 15418 (D.N.J. Aug. 12, 2002) 9

Huff v. N. D. Cass Co. of Ala.,

485 F.2d 710 (5th Cir. 1973) 8, 9

In re LifeUSA Holding Inc.,

242 F.3d 136 (3d Cir. 2001) 12

In re The Prudential Ins. Co. of Am. Sales Practices Litig.,

962 F. Supp. 450 (D.N.J.1997) 12

Karan v. Nabisco, Inc.,

78 F.R.D. 388 (W.D.Pa. 1978) 9, 10

King v. Gulf Oil Co.,

581 F.2d 1184 (5th Cir. 1978) 8

Korman v. Walking Co.,

503 F. Supp.2d 755 (E.D.Pa. 2007) 13, 14

Miller v. Beneficial Management Corp.,

977 F.2d 834 (3d Cir. 1992) 7

Moore v. PaineWebber, Inc.,

306 F.3d 1247 (2d Cir. 2002) 12

Neitzke v. Williams,

490 U.S. 319 (1989) 7

Newton v. Merrill Lynch, Pierce, Fenner & Smith, Inc.,

259 F.3d 154 (3d Cir. 2001) 8, 9

Palladino ex rel. U.S. v. VNA of Southern New Jersey, Inc.,

68 F. Supp.2d 455 (D.N.J. 1999) 10

Phillips v. County of Allegheny,

515 F.3d 224 (3d Cir. 2008) 7, 8

Pinker v. Roche Holdings Ltd.,

292 F.3d 361 (3d Cir. 2002) 7

Sames v. Gable,

732 F.2d 49 (3d Cir. 1984) 7

Satterwhite v. City of Greenville, Tex.,

578 F.2d 987 (5th Cir. 1978) 9

Scheuer v. Rhodes,

416 U.S. 232 (1974) 7, 8

Shannon v. Hess Oil Virgin Islands Corp.,

96 F.R.D. 236 (D.V.I. 1982) 11

Smith v. Weeks,

2002 WL 31750203 (E.D. Pa. Dec. 9, 2002) 7

South Broward Hosp. Dist. v. MedQuist Inc.,

516 F. Supp.2d 370 (D.N.J. 2007) 9

Swierkiewicz v. Sorema N. A.,

534 U.S. 506 (2002) 6

Umland v. PLANCO Financial Services, Inc.,

542 F.3d 59 (3d Cir. 2008) 7

Unger v. National Residents Matching Program,

928 F.2d 1392 (3d Cir. 1991) 10

Urban v. Breier,

401 F. Supp. 706 (D.Wis. 1975) 11

Weathers v. Peters Realty Corp.,

499 F.2d 1197 (6th Cir. 1974) 8

Williams v. Empire Funding Corp.,

227 F.R.D. 362 (E.D.Pa. 2005) 12

Yaffe v. Powers,

454 F.2d 1362 (1st Cir.1972) 10

STATUTES

15 U.S.C. §1692 1, 3

15 U.S.C. §1692b 1, 3

15 U.S.C. §1692d 4

15 U.S.C. §1692e 3, 4

15 U.S.C. §1692f 4

OTHER AUTHORITY

Wright & Miller, 7A FEDERAL PRACTICE & PROCEDURE. §1785 9, 11

I. PRELIMINARY STATEMENT

Defendant’s Motion to Dismiss (the “Motion”) the Class Allegations in Plaintiff’s Amended Complaint should be denied for the simple reason that Plaintiff has sufficiently pled a plausible class action claim for violation of the Fair Debt Collection Practices Act, 15 U.S.C. §1692 et seq. (“FDCPA”).  The class claim arises from Defendant’s use of a deceptive standardized script whenever its representatives make collection calls to third-party non-debtors.  Among other things, the FDCPA prohibits debt collectors from contacting third parties about a consumer’s debt and communicating information about that consumer’s debt to those third parties, except in several specifically delineated instances.  See, e.g., 15 U.S.C. §1692b & 1692c(b); see also Beck v. Maximus, 457 F.3d 291, 294-295 (3d. Cir. 2006)(discussing limitations on contacts with third parties and non-debtors).

Plaintiff’s Amended Complaint alleges that Defendant’s collector employees, as matter of policy and practice, telephone third parties by impersonating a home mortgage company or other fiduciary loan provider.  By surreptitiously calling in connection with a fictitious credit application, these employees seek to elicit improper information about the consumer debtor’s whereabouts and/or his or her financial condition. Class members (the purported debtors) are harmed by such a practice because its results in disclosure of their personal financial information and data, and coerces the contacted third parties into providing private information about the class member that is prohibited by the FDCPA.  A class action of this kind involving uniform or standardize practices, particularly scripts, is eminently certifiable even when the practice involves oral communications as in this case.

Defendant’s Motion does not provide any proper basis for dismissal of the Amended Complaint. The Motion at best does nothing more than point out possible factual disputes between the parties. The existence of a material issue of fact, however, is not grounds to obtain a dismissal on the pleadings.

Defendant’s Motion is also procedurally defective. Much of Defendant’s Motion is dedicated to arguments opposing class certification under the guile of a motion to dismiss. The propriety of a class claim is typically addressed once Plaintiff has been afforded a sufficient amount of class related discovery and files a motion for class certification.  It is for this reason that dismissal of class claims on the pleadings alone is extraordinarily rare. Furthermore, Defendant’s attempt to sneak in the backdoor by arguing class certification points on a motion to dismiss has been roundly criticized by the courts.

II. BACKGROUND

A. Defendant Has No Permissible Basis To Call A Non-Debtor and Misrepresent The Reason For Its Call To Coerce Private Information About A Purported Debtor.

Debt collectors such as Defendant often do not follow the traditional practice of filing a collection lawsuit to obtain a judgment against a purported debtor in Court and then executing on the judgment in order to collect a debt. Debt collectors instead often employ strategies that effectively harass purported debtors into payment.

Once such tactic is calling people who do not owe any debts but who may know the purported debtor. Debt collectors will purchase contact information about the purported debtor’s family, friends, neighbors and co-workers and then make calls to these third-parties to learn more about the debtor and/or pressure him or her into paying the debt. The existence of such practices led Congress to place strict limitations on third-party collection calls in connection with the collection of a consumer debt. See, e.g., 15 U.S.C. §§1692b & 1692c(b).

In this case, the telephone calls in question involve Defendant’s representatives calling third-party non-debtors and misrepresenting that the third-party was named as a reference in connection with a fictitious loan in order to deceive the third-party into providing private information about the purported debtor.  The described conduct is unquestionably prohibited by numerous FDCPA provisions because:

• Defendant misrepresented its identity;

• Defendant contacted a third-party to obtain information unrelated to the purported debtor’s location; and

• Falsely represented that its telephone call was related to a fictitious loan or credit application.

See 15 U.S.C. §§1692(b)(1) & (e)(2)(A).

In addition to these specific violations of the FDCPA, the described conduct also violates general prescriptions in the FDCPA against:

• “engaging in conduct the natural consequence of which is to harass, oppress or abuse any person in connection with the collection of a debt; ”

• using “false representations or deceptive means to collect or attempt to collect any debt or to obtain information” and

• using “unfair or unconscionable means to collect or attempt to collect a debt.”

Id. at §1692(d), (e)(10) & (f).  Accordingly, Defendant has absolutely no permissible basis to engage in the type of conduct described in Plaintiff’s Amended Complaint.

B. Defendant Uses A Standardized Telephone Call Script To Deceive Third-Parties.

In addition to deceiving, harassing and threatening Plaintiff personally,  Defendant took aim at Plaintiff’s father, a third-party non-debtor.  Defendant’s representative contacted Plaintiff’s father, and misrepresented that she was calling from a home mortgage company in order to obtain information about Plaintiff in order to process a home loan. Defendant’s representative further misrepresented to Plaintiff’s father that Plaintiff would be able to obtain the fictitious loan faster if Plaintiff’s father would cooperate and provide additional information about Plaintiff.  Defendant’s representative then began asking Plaintiff’s father questions unrelated to determining the location of Plaintiff in order to surreptitiously gain further private information about Plaintiff.   See Am. Compl., at ¶ 10.

Defendant’s was using a standardized “script” in connection with the call to Plaintiff’s father. The script is used as a matter of course whenever a representative contacts a third-party. Defendant dubs the script described above as the “Reference Script.”  See Ex. A., Reference Script.    As can be gleaned from reviewing this standardized script attached, the script is crafted to deceive any third-party called into giving private information about consumers in violation of the FDCPA.  The script achieves it goal by misrepresenting to the third-parties that they had been named as a reference in connection with a credit application just at the representative did to Plaintiff’s father.

C. Plaintiff’s Amended Complaint  Includes All The Necessary Elements To Adequately Allege A Class Action.

Plaintiff specifically alleged in the Amended Complaint the facts surrounding the misleading and deceptive call that was placed to Plaintiff’s father using the standardized script:

Paragraph 10 - On or about March 6, 2009, Defendant then contacted Plaintiff’s father wherein Defendant’s representative misrepresented that she was calling from a home mortgage company in order to obtain information about Plaintiff in order to process a home loan. Defendant’s representative further misrepresented to Plaintiff’s father that Plaintiff would be able to obtain the fictitious loan faster if Plaintiff’s father would cooperate and provide additional information about Plaintiff. Defendant’s representative then began asking Plaintiff’s father questions, inter alia, about where he worked, how long he had been working, his marital status, and other personal questions unrelated to determining the location of Plaintiff.

See Am. Compl., at ¶ 10.

Plaintiff further specifically alleged that Defendant was using a standardized script to deceive third parties:

Paragraph 9 - Defendant also, as a matter of policy and practice, contacts third-parties whose identities are obtained from skip tracing efforts and uses a script which deceives the third-parties into giving unauthorized information about consumers by misrepresenting to the third-parties that they had been named as a reference in connection with a credit application.

See id. at ¶ 9.

Applying these factual allegations which includes the use of a standardized script in connection with telephone calls to third-parties, Plaintiff provides a plausible statement of the Class’ composition:

All persons in the United States of America for whom Defendant, in attempting to collect an alleged debt from them, contacted a third-party starting one year prior to the filing of this action and through the date of judgment herein.

See id. at ¶ 19.  Plaintiff further specifically pled all the elements required under Rule 23(a) and (b) for a class action including numerosity, commonality, typicality, adequacy and predominance. See id. at ¶¶ 20-27.  Accordingly, Plaintiff has adequately set forth plausible class action allegations and deserves the opportunity to conduct discovery on the claim.

III. LEGAL STANDARD

A. A Well Pled Complaint Need Only Allege Claims That Are Not “Speculative” To Defeat A Motion To Dismiss Pursuant To Rule 12(b)(6).

Universally recognized as a notice pleading standard, Rule 8(a)(2) of the Federal Rules of Civil Procedure calls for a plaintiff filing a complaint in the federal courts to simply provide “a short and plain statement of the claim showing that the pleader is entitled to relief.”  See Bell Atlantic Corp. v. Twombly, 550 U.S. 554, 555 (2007) (“A complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations.”) See also Swierkiewicz v. Sorema N. A., 534 U.S. 506, 513 (2002) (calling Rule 8 a “simplified notice pleading standard.”)

When a federal court reviews the sufficiency of a complaint, before the reception of any evidence either by affidavit or admissions, its task is necessarily a limited one. The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims.

Scheuer v. Rhodes, 416 U.S. 232, 236 (1974).    “[T]he threshold level to be met by a plaintiff to withstand a motion to dismiss is very low.”  Smith v. Weeks, 2002 WL 31750203, at *5 (E.D. Pa. Dec. 9, 2002)

The Third Circuit after Twombly has consistently held that in considering a motion to dismiss pursuant to Rule 12(b)(6) the Court shall:

‘accept all factual allegations in the complaint as true and view them in the light most favorable to the plaintiff’ and  ‘determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief.’

Umland v. PLANCO Financial Services, Inc., 542 F.3d 59, 64 (3d Cir. 2008) (quoting Buck v. Hampton Twp. Sch. Dist., 452 F.3d 256, 260 (3d Cir. 2006) and Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n. 7 (3d Cir. 2002)).  See also Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008) (finding Pinker “remains an acceptable statement of the standard” and “finding [Twombly] confusing”).  “Rule 12(b)(6) does not countenance … dismissals based on a judge’s disbelief of a complaint’s factual allegations.”  Twombly, 550 U.S. at 556 (quoting Neitzke v. Williams, 490 U.S. 319, 327 (1989)). “A well-pleaded complaint may proceed even if it appears ‘that a recovery is very remote and unlikely.’” Id. (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)).

To the extent Twombly or more recently Ashcroft v. Iqbal, 129 S. Ct. 937 (2009), impacts the standard of review of a Rule 12(b)(6) motion, these opinions merely clarify  that a complaint must “raise a right to relief above the speculative level.”  Twombly, 550 U.S. at 555.  The Third Circuit in Phillips noted that Twombly “‘simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence’ of the necessary element.” 515 F.3d 224, 234 (3d Cir. 2008) (quoting Twombly, 550 U.S. at 556).

B. The Legal Standard When Considering A Motion to Dismiss Class Action Allegations Pursuant to Rule 12(b)(6) Does Not Change.

The exact same standard of review that would be applied to an individual claim on a motion to dismiss is applied to the class action allegations. See Legal Standard, Sec. A, supra.  To the extent class action allegations affects the analysis at all, courts are uniformly in agreement that the maintainability of a class action ordinarily should not be decided in connection with a motion to dismiss.

The motion under Rule 12(b) to dismiss the complaint is not the proper vehicle for attacking the validity of plaintiffs’ class action allegation. Such a challenge can properly be made when plaintiff moves for determination of class under Rule 45 of the Local Rules of Civil Procedure.

Borough of Morrisville v. Delaware River Basin Commission, 382 F. Supp. 543, 547 (E.D.Pa. 1974). See also Newton v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 259 F.3d 154, 166 ( 3d Cir. 2001) ( holding that it is ordinarily “necessary for the court to probe behind the pleadings” in analyzing the propriety of class action.) (quoting General Tel. Co. of Southwest v. Falcon, 457 U.S. 147, 160 (1982)); King v. Gulf Oil Co.,  581 F.2d 1184, 1186 (5th Cir. 1978) (“The propriety of class action suits can seldom be determined on the basis of pleadings alone.”); Huff v. N. D. Cass Co. of Ala., 485 F.2d 710, 713 (5th Cir. 1973) (holding that analysis of class action allegations “usually should be predicated on more information than the complaint itself affords.”) (citing Wright & Miller, 7A FEDERAL PRACTICE & PROCEDURE. § 1785); Weathers v. Peters Realty Corp.,  499 F.2d 1197, 1200 (6th Cir. 1974) (“ordinarily the determination [of the propriety of a class action] should be predicated on more information than the pleadings will provide.”).

Defendant’s claim, that courts purportedly “sanction the dismissal of class allegations prior to discovery,” is a gross misstatement. See Def. Br., at 7.  The solitary case that Defendant relies upon for support itself acknowledges that dismissal of a class action claims on the pleadings is appropriate only in “rare cases.” Clark v. McDonald’s Corp., 213 F.R.D. 198, 205 (D.N.J. 2003). See also Satterwhite v. City of Greenville, Tex.,  578 F.2d 987, 998 (5th Cir. 1978) (holding that only in “rare instances, maintainability may be determined on the basis of the pleadings”) (emphasis added); South Broward Hosp. Dist. v. MedQuist Inc., 516 F. Supp.2d 370, 401-02 (D.N.J. 2007) (“Dismissal of class allegations at this stage should be done rarely and that the better course is to deny such a motion because ‘the shape and form of a class action evolves only through the process of discovery.’”) (quoting Gutierrez v. Johnson & Johnson, Inc., 2002 U.S. Dist. LEXIS 15418, *16 (D.N.J. Aug. 12, 2002) (emphasis added)); Wright & Miller, supra § 1785.3 (the practice employed in the overwhelming majority of class actions is to resolve class certification only after an appropriate period of discovery).

Additionally, both the Third Circuit  and the United States Supreme Court precedent refute such a conclusion. See  Newton, 259 F.3d at 166;  General Tel. Co. of Southwest 457 U.S. at 160. See also Karan v. Nabisco, Inc., 78 F.R.D. 388, 408 (W.D.Pa. 1978) (“the preferable course is to permit discovery to continue as to the national class rather than prematurely to exclude the class.”).  The First Circuit perhaps best summarized the impropriety of Defendant’s assertion:

To pronounce finally, prior to allowing any discovery, the non-existence of a class or set of subclasses, when their existence may depend on information wholly within defendants’ ken, seems precipitate and contrary to the pragmatic spirit of Rule 23. Evidence which might be forthcoming might well shed light on a final decision on this issue.

Yaffe v. Powers, 454 F.2d 1362, 1366 (1st Cir. 1972). Defendant has thus taken the “rare” exception to general rule and erroneously pronounced it as the legal standard.

IV. ARGUMENT

I. PLAINTIFF HAS ADEQUATELY PLED A PLAUSIBLE CLASS ACTION CLAIM AGAINST DEFENDANT.

Applying the proper standard of review to Defendant’s Motion, the class action claim in Plaintiff’s Amended Complaint is hardly the “rare” exception that warrants departure from the ordinary standard of permitting Plaintiff to take discovery related to the class allegations.  As an initial matter, Defendant notably takes no issue whatsoever with Plaintiff’s pleading of the individual facts surrounding the calls made to Plaintiff and his father. Indeed, Defendant appears to admit outright that these transgressions occurred and that its conduct violates of the FDCPA’s prohibitions.   Therefore, any suggestion that Plaintiff’s Amended Complaint fails to articulate a claim for relief can be disposed of out of hand.

A. Plaintiff’s Amended Complaint Alleges A Class of Purported Debtors Whose Rights Under The FDCPA Were Violated.

As Defendant should know, the allegations in the pleadings are not meant to be read in isolation.

[W]hen deciding if the plaintiff can prove no set of facts which would entitle it to relief such that a motion to dismiss should be granted, it is this Court’s duty to read the Complaint as a whole and draw any and all reasonable inferences for the plaintiff.

Palladino ex rel. U.S. v. VNA of Southern New Jersey, Inc.  68 F. Supp.2d 455, 463 (D.N.J. 1999) (citing Unger v. National Residents Matching Program, 928 F.2d 1392 (3d Cir. 1991). Defendant, nonetheless, isolates the class definition from the rest of Plaintiff’s averments and erroneously argues that the proposed class would include supposed “permissible” calls to third-parties. See Def. Br., Argument, Sec. I.A. Defendant, however, is ignoring the rest of the pleadings which unambiguously set forth that Plaintiff’s contention that Defendant is using a standardized script as a matter of course whenever a third-party is called, meaning that all calls that Defendant makes to third-parties violate the FDCPA.  Therefore, when one properly reviews the Amended Complaint as a whole, it is obvious that Defendant’s argument is meritless.

Defendant’s argument at best does nothing more than confirm that a question of fact may exist as to the ultimate size of the class. Moreover, the simple fact that the class definition in the pleadings may not ultimately be the definition that Plaintiff uses in moving for class certification, or that the Court chooses to certify, is of no instance. Plaintiff or the Court remains free to revise the class definition consistent with discovery as the litigation proceeds.

Even after a certification order is entered, the judge remains free to modify it in the light of subsequent developments in the litigation. For such an order, particularly during the period before any notice is sent to members of the class, “is inherently tentative.” This flexibility enhances the usefulness of the class-action device.

General Telephone Co. of Southwest, 457 U.S. at 160.  See also Urban v. Breier, 401 F. Supp. 706, 709 (D.Wis. 1975) (“The fact that each of these criteria are not set forth with specificity on the face of the complaint is not a matter of great concern at this time.”) (citing Wright & Miller, supra, §1798); Shannon v. Hess Oil Virgin Islands Corp.,  96 F.R.D. 236, 240 (D.V.I. 1982) (“even imprecisely drafted class action allegations may be readily cured . .  . by a precisely worded class certification order entered upon timely submission of the formal Rule 23 application and the completion of any relevant discovery conducted thereto.”).

B. Class Actions Alleging Harm Caused By The Use of Standardized Scripts Are Certifiable.

Certification of class actions based on a defendant’s employment of a standardized or uniform practice, particularly scripts, in connection with oral communication is well accepted. See, e.g., In re The Prudential Ins. Co. of Am. Sales Practices Litig., 962 F. Supp. 450, 514 (D.N.J. 1997) (certifying class action where “plaintiffs’ allegations and the evidence presented to the Court demonstrate that throughout the country, Prudential agents uniformly misled class members with virtually identical oral misrepresentations.”) aff’d 148 F.3d 283 (3d Cir. 1998); Moore v. PaineWebber, Inc., 306 F.3d 1247, 1255 (2d Cir. 2002) (“evidence of materially uniform misrepresentations is sufficient to demonstrate the nature of the misrepresentation”).

The cases cited by Defendant even confirm that standardize or scripted communications are worthy of class certification.  See In re LifeUSA Holding Inc.  242 F.3d 136, 146 (3d Cir. 2001) (distinguishing classes where oral communications are “uniform or scripted”); Broussard v. Meineke Discount Muffler Shops, Inc., 155 F.3d 331, 341 (4th Cir. 1998) (distinguishing classes where oral communications are “standardized”); Grainger v. State Sec. Life Ins. Co. 547 F.2d 303, 307 (5th Cir. 1977) (distinguishing classes where oral communications are “standardized”).  Indeed, Judge Robreno even confirmed that class certification is appropriate in debt collection cases when the “plaintiff can show that defendant’s oral communications for debt-collection purposes were uniform, such that defendant’s callers strictly adhered to a scripted format for the telephone conversations.” Williams v. Empire Funding Corp. 227 F.R.D. 362, 373 (E.D.Pa. 2005).

Defendant’s argument once again at best does nothing more nothing more than point out that that a factual question may exist as to whether the conduct at issue is standardized.  Although Plaintiff strains to see how Defendant intends to prove that the conduct at issue was not standardized given that a standardize script actually exists (Ex. A), the Court is not required to resolve factual questions at the pleading stage. Therefore, Defendant’s argument as such is similarly meritless.

II. DEFENDANT’S ARGUMENTS IN OPPOSITION TO CLASS CERTIFICATION ARE PREMATURE.

It is well settled that a defendant’s attempt to argue about the propriety of class certification on a motion to dismiss is inappropriate.  See Chedwick v. UPMC, 619 F. Supp.2d 172, 189 (W.D.Pa. 2007) (“It would be premature to dismiss [the plaintiff’s] class action averments at this early stage . . .since the issue of class certification will be more appropriately addressed when the record is more fully developed.”); Baas v. Dollar Tree Stores, Inc.  2007 WL 2462150, *3 (N.D.Cal. 2007) (finding that courts generally “review class allegations through a motion for class certification” and not when “discovery has not yet commenced and Plaintiffs have not yet moved to certify their class pursuant to Rule 23.”)  Defendant’s attempt to bring credence to this procedurally flawed approach by citing Rule 23(d)(1)(D) (formerly Rule 23(d)(4)) is similarly flawed.  As Judge Robreno summarized:

A motion to strike class allegations under Rule 23(d)(4) seems, for all practical purposes, identical to an opposition to a motion for class certification. Several district courts have held that Rule 23(d)(4) motions to strike class allegations are premature and that the proper avenue is to oppose the plaintiff’s motion for class certification. . . . Rule 23(d)(4) is the procedural mechanism for striking class allegations from the complaint once the Court determines that maintenance of the action as a class is inappropriate.

*     *     *

It would be improper to allow Defendants to slip through the backdoor what is essentially an opposition to a motion for class certification before Plaintiffs have made such a motion and when discovery on the issue is still on-going.

Korman v. Walking Co., 503 F. Supp.2d 755, 762-63 (E.D.Pa. 2007) (citations omitted).  See also Clark v. State Farm Mut. Auto. Ins. Co., 231 F.R.D. 405, 407 (C.D.Cal. 2005) (finding defendant’s motion to dismiss premature when the motion is “addressing whether a class should be certified”).  Defendant’s Motion is precisely the backdoor attempt at prematurely raising class certification questions that Judge Robreno warned against.  Accordingly, Defendants arguments in Sections II and III of its brief should be disregarded.

V. CONCLUSION

For the foregoing reasons, Plaintiff respectfully requests that this Court deny Defendant’s Motion to Dismiss in its entirety.

Respectfully Submitted,

FRANCIS & MAILMAN, P.C.

BY: /s/ James A. Francis JAMES A. FRANCIS

GREGORY GORSKI

Land Title Building, 19th Floor

100 South Broad Street

Philadelphia, PA 19110

(215) 735-8600

BY: MARK D. MAILMAN, ESQUIRE ATTORNEYS FOR PLAINTIFF

I.D. No. 77760

BY: JOHN SOUMILAS, ESQUIRE

I.D. No. 84527

Land Title Building, 19th Floor

100 South Broad Street

Philadelphia, PA 19110

(215) 735-8600

________________________________________________________________________

:

SEENA ROSENBERRY : COURT OF COMMON PLEAS

1732 S. Dover Street : OF PHILADELPHIA COUNTY

Philadelphia, PA 19145 :

:

:

vs. : NO.

:

CONSUMER RECOVERY :

ASSOCIATES, INC. :

2697 International Parkway :

Virginia Beach, VA 23452 :

______________________________________________________________________________

COMPLAINT IN CIVIL ACTION

1. Plaintiff Seena Rosenberry is an adult individual residing at 1732 S. Doyer Street, Philadelphia, PA 19145.

2. Defendant Consumer Recovery Associates, LLC is a business entity regularly engaged in the business of collecting debts in this Commonwealth with its principal place of business located at 2697 International Parkway, Virginia Beach, VA 23452. The principal purpose of Defendant is the collection of debts using the mails and telephone, and Defendant regularly attempts to collect debts alleged to be due another.

3. At all times pertinent hereto, Defendant was hired by Fleet to collect a debt relating to consumer purchases that were allegedly originally owed to Fleet (hereafter the “debt”).

4. The debt at issue arises out of an alleged transaction which was primarily for personal, family or household purposes.

5. At all times pertinent, Plaintiff’s sister, Joan Miller (hereafter “Ms. Miller”), was solely responsible for the debt.

6. At all times pertinent, Ms. Miller had filed for bankruptcy which was discharged.  The underlying Fleet debt was among the debts included in said bankruptcy.

7. Notwithstanding both the above and that Defendant knew or should have known that Plaintiff did not have an account or business relation of any kind with it, on or about April 20, 2008, Defendant accessed Plaintiff’s credit files and information, as maintained by Experian Information Solutions, Inc., impermissibly and through the use of false pretenses, without Plaintiff’s consent or knowledge, without legitimate business reason to do so and then never informed Plaintiff of these illegal and impermissible accesses.

8. On or about April 21, 2008, a representative, employee and/or agent from Defendant identifying herself as “Ms. Scott” contacted Ms. Miller at her place of residence in an attempt to coerce Plaintiff’s payment of the debt, with the intent annoy, abuse, and harass such persons contacted.  During a message on Ms. Miller’s voicemail, Ms. Scott indicated she was calling regarding Plaintiff and indicated Plaintiff was in “serious trouble.”  Additionally, Ms. Scott stated that if Ms. Miller was not comfortable returning her call, she should have Plaintiff’s attorney or legal representative return her call.

9. Notwithstanding the above, on or about April 21, 2008, Ms. Scott contacted Plaintiff’s acquaintance, Judy Woodhouse, at her place of residence in an attempt to coerce Plaintiff’s payment of the debt, with the intent annoy, abuse, and harass such persons contacted, as well as Plaintiff.   During the conversation, Ms. Scott warned Ms. Woodhouse that Plaintiff needed to contact her immediately regarding a “serious matter.”  Ms. Scott also contacted Mrs. Woodhouse’s daughter, Tara Woodhouse, seeking to collect the debt from Plaintiff.

10. Notwithstanding the above, on or about April 21, 2008, Ms. Scott contacted Nicole Albert, Plaintiff’s tenant, at her place of residence in an attempt to coerce Plaintiff’s payment of the debt, with the intent annoy, abuse, and harass such persons contacted, as well as Plaintiff.   During a message on Ms. Albert’s voicemail, Ms. Scott warned Plaintiff that Plaintiff needed to contact her immediately regarding a legal matter.

11. Following the above, on or about April 21, 2008, upon receiving messages of the above contacts, Plaintiff contacted Ms. Scott.  During the call, Plaintiff was transferred to a representative, employee and/or agent from Defendant identifying himself as “Mr. Miller.”  Mr. Miller immediately threatened to place Plaintiff in jail for the debt, as well as to confiscate her possessions and place the debt on Plaintiff’s credit reports.  When Plaintiff protested the debt did not belong to her, Mr. Miller implied that unless Plaintiff had sued Ms. Miller for fraud, the debt was Plaintiff’s responsibility.  Mr. Miller then badgered Plaintiff to settle the debt.  When Plaintiff indicated she wished to speak to an attorney first, Mr. Miller stated that an attorney could not help her since she did not sue her sister for fraud.  Mr. Miller then threatened to place a judgment against Plaintiff’s house if she did not pay the debt with her credit card.  Mr. Miller went on to state that “no judge would side” with Plaintiff, and that, following the lawsuit, Plaintiff would also incur Defendant’s legal fees.   Plaintiff again disputed the debt, indicating it was her sister’s and had been included in her sister’s bankruptcy.  Notwithstanding her disputes, Plaintiff, both frightened and pressured, made a payment to Defendant

of $9,000 on her credit card over the telephone.  Mr. Miller indicated that any attempt to stop the payment would result in legal action against her.

12. Notwithstanding the above, on or about April 23, 2008, Defendant charged Plaintiff’s credit card for a total of $9,091.67.

13. The Defendant acted in a false, deceptive, misleading and unfair manner toward Plaintiff by accessing Plaintiff’s Experian credit report without a permissible purpose.

14. Defendant acted in a false, deceptive, misleading and unfair manner toward Plaintiff by falsely representing the amount, character or legal status of a debt.

15. The Defendant acted in a false, deceptive, misleading and unfair manner when it communicated with persons other than the debtor, making such communications on multiple occasions.

16. The Defendant acted in a false, deceptive, misleading and unfair manner by threatening to take action that it could not take or did not intend to take for the purpose of coercing Plaintiff to pay the debt, including but not limited to threatening to: sue Plaintiff; place the debt on Plaintiff’s credit reports; and place Plaintiff in prison.

17. The Defendant acted in a false, deceptive, misleading and unfair manner by charging $9,091.67 to Plaintiff’s credit card notwithstanding the fact that the debt was not her responsibility and had been discharged in Mr. Miller’s bankruptcy.

18. Defendant knew or should have known that its actions violated the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692, et seq. ( “FDCPA”), the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. §§ 1681 et seq., as amended, the Pennsylvania Fair Credit Extension Uniformity Act, 73 P.S. § 2270.1 et seq. (hereafter the “FCEUA”), and the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 P.S. § 201-1, et seq.  (“CPL”). Additionally, Defendant could have taken the steps necessary to bring their actions within compliance with the FDCPA, FCRA, FCEUA and the UTPCPL, but neglected to do so and failed to adequately review their actions to insure compliance with said laws.

19. At all times pertinent hereto, Defendant was acting by and through its agents, servants and/or employees, who were acting within the scope and course of their employment, and under the direct supervision and control of the Defendant herein.

20. At all times pertinent hereto, the conduct of Defendant, as well as that of its agents, servants and/or employees, was malicious, intentional, willful, reckless, negligent and in wanton disregard for federal and state law and the rights of the Plaintiff herein.

21. As a result of Defendant’s conduct, Plaintiff has sustained actual damages including, but not limited to, injury to Plaintiff’s reputation, out-of-pocket expenses, emotional and mental pain and anguish and pecuniary loss, and Plaintiff will continue to suffer same for an indefinite time in the future, all to Plaintiff’s great detriment and loss.

COUNT I - VIOLATION OF THE FDCPA

22. Plaintiff incorporates the foregoing paragraphs as though the same were set forth

at length herein.

23. Defendant is a “debt collector” as defined by 15 U.S.C. § 1692a(6) of the FDCPA.

24. Plaintiff is a “consumer” as defined by 15 U.S.C. § 1692a(3) of the FDCPA.

25. The above contacts made by Plaintiff and Defendant were “communications” relating to a “debt” as defined by 15 U.S.C. § 1692a(2) and 1692a(5) of the FDCPA.

26. Defendant violated the FDCPA.  Defendant’s violations include, but are not limited to, violations of 15 U.S.C. §§ 1692b(2), 1692b(3), 1692c(b), 1692d, 1692d(5), 1692e, 1692e(2)(A), 1692e(4), 1692e(5), 1692e(7), 1692e(8), 1692e(10) and 1692f, as evidenced by the following conduct:

(a) Communicating with persons other than Plaintiff that Plaintiff owes a

debt;

(b) Communicating with persons other than Plaintiff on more than one occasion;

(c) Communicating, in connection with the collection of a debt with persons     other than Plaintiff;

(d) Engaging in conduct the natural consequence of which is to harass,                                           oppress, or abuse any person in connection with the collection of a debt;

(e) Causing a telephone to ring or engaging any person in telephone                               conversation repeatedly or continuously with intent to annoy, abuse, or                   harass any person at the called number;

(f) The false representation of the amount, character or legal status of a debt;

and

(g) The representation or implication that nonpayment of a debt will result in the will result in the seizure, garnishment, attachment or sale of any

property or wages is not lawful and/or that the Defendant did not intend to

take;

(h) Threatening to take action that cannot legally be taken and/or is not

intended to be taken; and

(i) Falsely representing or implying that the consumer has committed a crime;

(j) Communicating or threatening to communicate to any person credit

information which is known or which should be known to be false, including the failure to communicate that a disputed debt is disputed; and

(k) Otherwise using false, deceptive or misleading and unfair or

unconscionable   means to collect or attempt to collect a debt.

27. Defendant’s acts as described above were done with malicious, intentional, willful, reckless, wanton and negligent disregard for Plaintiff’s rights under the law and with the purpose of coercing Plaintiff to pay the alleged debt.

28. As a result of the above violations of the FDCPA, Defendant is liable to Plaintiff in the sum of Plaintiff’s actual damages, statutory damages, and attorney’s fees and costs.

WHEREFORE, Plaintiff respectfully prays that relief be granted as follows:

(a) That judgment be entered against Defendant for actual damages pursuant to 15 U.S.C. § 1692k(a)(1);

(b) That judgment be entered against Defendant for statutory damages pursuant to 15 U.S.C. § 1692k(a)(2)(A);

(c) That the Court award costs and reasonable attorney’s fees pursuant to 15 U.S.C. §1692k(a)(3); and

(d) That the Court grant such other and further relief as may be just and proper.

COUNT II: VIOLATIONS OF THE FCRA

35. Plaintiff incorporates the foregoing paragraphs as though the same were set forth at length herein.

36. Pursuant to section 1681n and 1681o of the FCRA, Defendant willfully and/or negligently violated the FCRA by engaging in the following conduct:

(a) obtaining a consumer report from a consumer reporting agency under false pretenses or knowingly without a permissible purpose in violation of sections 1681n(b) and 1681q; and

(b) falsely certifying to a consumer reporting agency that Defendant had a permissible purpose to obtain a consumer report and impermissibly accessing Plaintiff’s consumer in violation of section 1681b.

37. Defendant’s conduct was a direct and proximate cause, as well as a substantial

factor, in causing the serious injuries, damages and harm to the Plaintiff that are outlined more fully above, and as a result, Defendant is liable to compensate Plaintiff for the full amount of statutory, actual and punitive damages, along with attorneys’ fees and costs, as well as such other relief, permitted by law.

COUNT III: VIOLATIONS OF THE UTPCPL

38. Plaintiff incorporates the foregoing paragraphs as though the same were set forth

at length herein.

39. Defendant is a  “debt collector” as defined by 73 P.S. § 2270.3 of the FCEUA.

40. Plaintiff is a “debtor” as defined by 73 P.S. § 2270.3 of the FCEUA.

41. The above contacts made between the Plaintiff and Defendant were “communications” relating to a “debt” as defined by 73 P.S. § 2270.3 of the FCEUA.

42. Defendant engaged in unfair methods of competition and unfair or deceptive acts or practices, as defined by the UTPCPL, by attempting to collect the alleged debt in violation of the FCEUA.  Defendant’s violations of the FCEUA and UTPCPL include, but are not limited to, violations of 73 P.S. § 2270.4(a), as evidenced by the following conduct:

(a) Communicating with persons other than Plaintiff that Plaintiff owes a debt;

(b) Communicating with persons other than Plaintiff on more than one occasion;

(c) Communicating, in connection with the collection of a debt with persons other than Plaintiff;

(d) Engaging in conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt;

(e) Causing a telephone to ring or engaging any person in telephone                              conversation repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number;

(f) The false representation of the amount, character or legal status of a debt;

(g) The representation or implication that nonpayment of a debt will result in the will result in the seizure, garnishment, attachment or sale of any property or wages is not lawful and/or that the Defendant did not intend to take;

(h) Threatening to take action that cannot legally be taken and/or is not

intended to be taken;

(i) Falsely representing or implying that the consumer has committed a crime;

(j) Communicating or threatening to communicate to any person credit information which is known or which should be known to be false, including the failure to communicate that a disputed debt is disputed; and

(k) Otherwise using false, deceptive or misleading and unfair or

unconscionable   means to collect or attempt to collect a debt.

43. Defendant’s acts as described above were done with malicious, intentional, willful, reckless, wanton and negligent disregard for Plaintiff’s rights under the law and with the purpose of coercing Plaintiff to pay the alleged debt.

44. As a result of the above violations of the FCEUA and UTPCPL, Plaintiff has suffered ascertainable losses entitling Plaintiff to an award of actual, statutory and treble damages and attorney’s fees and costs.

WHEREFORE, Plaintiff respectfully pray that relief be granted as follows:

(a) That judgment be entered against Defendant for actual damages pursuant to 73 P.S. § 201-9.2(a);

(b) That judgment be entered against Defendant for statutory damages pursuant to 73 P.S. § 201-9.2(a);

(c) That judgment be entered against Defendant for treble damages pursuant to 73 P.S. § 201-9.2(a);

(d) That the court award costs and reasonable attorney’s fees pursuant to 73 P.S. § 201-9.2(a); and

(e) That the Court grant such other and further relief as may be just and  proper.

COUNT IV: NEGLIGENCE

45. Plaintiff incorporates the foregoing paragraphs as if the same were set forth at length herein.

45. Defendant’s negligence consists of the following:

(a) Violating the FDCPA as set forth above;

(b) Violating the FCRA as set forth above;

(c) Violating the CPL as set forth above; and

(d) Failing to employ reasonable procedures to ensure that the Plaintiff was the responsible debtor before charging Plaintiff’s account for the debt.

46. As a result of Defendant’s above mentioned conduct, Plaintiff sustained and continues to sustain the losses and damages as set forth above.

47. The conduct of Defendant was a direct and proximate cause, as well as a substantial factor, in bringing about the serious injuries, damages and harm to Plaintiff that are outlined more fully above.

WHEREFORE, Plaintiff claims compensatory and punitive damages against the Defendant and judgment in her favor in an amount in excess of fifty thousand dollars ($50,000.00), plus lawful interest thereon.  The sum sued upon is in excess of that requiring submission to Arbitration.

COUNT V: INTENTIONAL MISREPRESENTATION

48. Plaintiff incorporates the foregoing paragraphs as if the same were set forth at length herein.

49. Defendant falsely represented to Plaintiff: that she owed the debt; that she would be placed in prison if she did not pay the debt; that she would incur additional expenses if she did not pay the debt; and that it would charge exactly $9,000.00 on Plaintiff’s credit card in order for Plaintiff to avoid the above consequences.

50. In making the above representations, it was Defendant’s intention to mislead Plaintiff as to the consequences if she did not pay the debt.

51. Plaintiff was justified in her reliance upon Defendant’s representations when she paid the debt.

52.   Defendant’s representation was the sole reason Plaintiff paid the debt.

53. As a result of Defendant’s above mentioned conduct, Plaintiff sustained and continues to sustain the losses and damages as set forth above.

54. The conduct of Defendant was a direct and proximate cause, as well as a substantial factor, in bringing about the serious injuries, damages and harm to Plaintiff that are outlined more fully above.

WHEREFORE, Plaintiff claims compensatory and punitive damages against the Defendant and judgment in her favor in an amount in excess of fifty thousand dollars ($50,000.00), plus lawful interest thereon.  The sum sued upon is in excess of that requiring submission to Arbitration.

RESPECTFULLY SUBMITTED,

FRANCIS & MAILMAN, P.C.

BY: ____________________________

MARK D. MAILMAN, ESQUIRE

JOHN SOUMILAS, ESQUIRE

ATTORNEYS FOR PLAINTIFF

Dated: September 5, 2008

PLAINTIFF JOHN L. DOHERTY, JR.’S MEMORANDUM OF LAW IN SUPPORT OF HIS RESPONSE IN OPPOSITION TO DEFENDANT DELL FINANCIAL SERVICES’ MOTION FOR PARTIAL SUMMARY JUDGMENT

 Plaintiff John L. Doherty, Jr., through counsel, hereby respectfully submits this Memorandum of Law in opposition to Defendant Dell Financial Services’ (“Dell”) Motion for Partial Summary Judgment (“Motion”) (Docket No. 23).  For the reasons below, the Motion should be denied.
Plaintiff is a victim of identity theft at the hands of his estranged brother, William Doherty.  Defendant Dell is the company that permitted William Doherty to obtain at least two computers (one on a business credit account and a second on a consumer credit account) in Plaintiff’s name using his good credit.  It then proceeded to hold Plaintiff (not William Doherty) accountable for the debts.  Over the course of approximately three and one-half years, Dell demanded payment from Plaintiff, sent debt collectors after him, ruined Plaintiff’s good name and credit, and caused him significant economic and non-economic damages.  Dell did this even though it knew that Plaintiff was a “victim” (according to Dell’s own records) of identity theft. 
The pending Motion involves a single duty under the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. §§ 1681 et seq.   It is the duty of a credit furnisher, such as Dell, to investigate and correct inaccurate credit data upon receipt of a dispute through a consumer reporting agency (“CRA”).  The duty is found at FCRA section 1681s-2(b).
  Here, Dell failed to fulfill its investigative duties under FCRA section 1681s-2(b) at least seven (7) times.  It held, and continues to hold, Plaintiff responsible for a debt that he did not incur, even though Dell’s own records as well as other documents and testimony uniformly confirm that Plaintiff is a victim of fraud.  Dell contends that its investigations have been held up because it did not receive a police report.  Yet this corporate requirement (which Dell applies selectively) simply does not exist in the applicable law, undermines the goals of FCRA investigations, and amounts to an excuse for Dell to collect money from the victim if it cannot collect it from the perpetrator in cases of identity theft or fraud.         
 In the pending Motion, Dell takes aim only at Plaintiff’s claim that Defendant violated FCRA section 1681s-2(b) in a willful manner, but does not contest that it acted negligently.  A willful violation would allow Plaintiff to seek punitive damages from a jury, in addition to statutory and actual damages.  See 15 U.S.C. § 1681n.  For willful conduct, the FCRA also does not limit Plaintiff’s common law claims in any way.   Dell postures that there exist no genuine issues of material fact here and that it is entitled to judgment as a matter of law on Plaintiff’s FCRA willfulness claim.  By inference, Dell also argues that Plaintiff’s common law claims are “preempted.”  Dell is mistaken. 
When the factual record is set forth in full, as it is below by Plaintiff, it becomes evident that Dell’s Motion lacks merit.  The parties disagree about several key factual issues, particularly about what Dell found and did not find during its purported “investigations” into Plaintiff’s repeated disputes.  Moreover, Dell is not entitled to judgment as a matter of law here.  If a victim of identity theft such as Plaintiff cannot proceed to a jury with a willful claim for Dell’s repeated and systemic violations of FCRA section 1681s-2(b) under the facts of this case, it is difficult to imagine the circumstances when such a claim would be possible. 
Finally, it must be noted that Plaintiff’s FCRA willfulness claim does not attempt to reach new ground.  It is a type of claim that multiple courts within this Circuit and other circuits have allowed to go to the jury.    Indeed, Plaintiff’s willfulness claim here is a claim grounded in factual determinations about a defendant’s “reasonableness” or “reckless disregard,” determinations that are typically left for a jury.  Because Defendant’s conduct and violations can reasonably be found to be willful, Plaintiff’s common law claims are not “preempted” or limited by the FCRA in any way. 
In sum, the complete factual record here, when upheld against the well-settled “reckless disregard” standard for willful violations under the FCRA, can only lead to a finding that Dell’s Motion must be denied.    

II. STANDARD

 Pursuant to Federal Rule of Civil Procedure 56(c), a motion for summary judgment will only be granted:
if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law.

Fed. R. Civ. P. 56(c).  In other words, summary judgment may only be granted if the movant shows, by admissible evidence, that there exists no genuine issue of material fact that would permit a reasonable jury to find for the nonmoving party.  Wetzel v. Tucker, 139 F.3d 380, 383 n.2 (3d Cir. 1998); Miller v. Indiana Hosp., 843 F.2d 139, 143 (3d Cir.), cert. denied, 488 U.S. 870 (1988).
 The party opposing the motion for summary judgment is entitled to have his/her allegations taken as true, to receive the benefit of the doubt when his/her assertions conflict with those of the movant and to have inferences from the underlying facts drawn in his/her favor.  Big Apple, BMW, Inc. v. BMW of North America, Inc., 974 F.2d 1358, 1362-63 (3d Cir. 1992), cert. denied, 507 U.S. 912 (1993) (emphasis added).  In analyzing the moving party’s burden under Rule 56(c), the Third Circuit has stated that “[i]f there is any evidence in the record, from any source, from which a reasonable inference in the respondent’s favor may be drawn, the moving party simply cannot obtain a summary judgment, no matter how many affidavits are filed (citations omitted).  …The ‘burden’ then is insurmountable.”  In re Japanese Electronic Prods. Antitrust Litig., 723 F.2d 238, 258 (3d Cir. 1983), reversed on other grounds, 475 U.S. 574 (1986); see also Boyle v. County of Allegheny, Pennsylvania, 139 F.3d 386, 393 (3d Cir. 1998).
 A court may not, at the summary judgment stage, weigh evidence or make credibility decisions.  These tasks are left to the factfinder.  Petruzzi’s IGA Supermarkets, Inc. v. Darling-Delaware Co., Inc., 998 F.2d 1224, 1230 (3d Cir.), cert. denied, 510 U.S. 994 (1993).  To raise a genuine issue of material fact, the respondent need not match, item for item each piece of evidence proffered by the movant.  Big Apple, BMW, Inc., 974 F.2d at 1362-63.  As the Third Circuit has explained:
In practical terms, if the opponent has exceeded the “mere scintilla” threshold and has offered a genuine issue of material fact, then the court cannot credit the movant’s version of events against the opponent, even if the quality of the movant’s evidence far outweighs that of its opponent.  It thus remains the province of the factfinder to ascertain the believability and weight of the evidence.

In re Unisys Savings Plan Litigation, 74 F.3d 420, 433 n. 10 (3d Cir. 1996) (citing Big Apple, BMW).  If there are gaps in the pertinent materials submitted by the movant, without explanation, that justifies denial of the motion.  O’Donnell v. United States, 891 F.2d 1079, 1082 (3d Cir. 1989). 
 In the case at bar, there exist genuine issues of material fact and Dell is not entitled to judgment as a matter of law.  Summary judgment, therefore, is inappropriate.
III. ARGUMENT

A. Dell Failed To Conduct Reasonable Investigations Into Plaintiff’s Repeated Disputes, In Willful Violation Of FCRA Section 1681s-2(b)

The FCRA provides consumers with private causes of action against any person who violates any section of the Act.  FCRA sections 1681n states as follows:
Any person who willfully fails to comply with any requirement imposed under this subchapter with respect to any consumer is liable to that consumer .  .  .  .

15 U.S.C. § 1681n(a). (Emphasis added). 
 
The requirement at issue here pertains to the duty of credit furnishers, such as Dell, to investigate and correct disputed consumer credit data.  15 U.S.C. § 1681s-2(b).   It is well settled that FCRA section 1681s-2(b) “provide[s] a private right of action for a consumer against furnishers of information who have willfully or negligently failed to perform their duties upon notice of a dispute.”  DiMezza v. First USA Bank, Inc., 103 F. Supp.2d 1296, 1300 (D.N.M. 2000).  
 The central issue in the pending Motion is whether Plaintiff can proceed to the jury with his claim that Dell “willfully” (per FCRA section 1681n) violated FCRA section 1681s-2(b).  Courts in this Circuit and in others circuits have had many occasions to examine both a credit furnisher’s duty under FCRA section 1681s-2(b) as well as the FCRA’s standard for willful violations under section 1681n.
1. Dell Failed In Its Duty As A Credit Furnisher To Conduct A Reasonable Investigation Under FCRA Section 1681s-2(b)

FCRA section 1681s-2(b) provides in pertinent part:

(b) Duties of furnishers of information upon notice of dispute
(1) In general
After receiving notice pursuant to section 1681i (a)(2) of this title of a dispute with regard to the completeness or accuracy of any information provided by a person to a consumer reporting agency, the person shall—
(A) conduct an investigation with respect to the disputed information;
(B) review all relevant information provided by the consumer reporting agency pursuant to section 1681i (a)(2) of this title;
(C) report the results of the investigation to the consumer reporting agency;
(D) if the investigation finds that the information is incomplete or inaccurate, report those results to all other consumer reporting agencies to which the person furnished the information and that compile and maintain files on consumers on a nationwide basis; and
(E) if an item of information disputed by a consumer is found to be inaccurate or incomplete or cannot be verified after any reinvestigation under paragraph (1), for purposes of reporting to a consumer reporting agency only, as appropriate, based on the results of the reinvestigation promptly—
(i) modify that item of information;
(ii) delete that item of information; or
(iii) permanently block the reporting of that item of information.

15 U.S.C. § 1681s-2(b). 
 a. Plain Text Reading Of FCRA Section 1681s-2(b)
The text of this statutory provision is clear.  See United States v. Ron Pair Enterprises, Inc., 489 U.S. 235 (1989) (where the statute’s language is plain, the court’s function is to enforce it according to its terms); United States v. Cheryl Schneider, 14 F.3d 876, 879 (3d Cir. 1994) (“The best evidence of Congress’ intent is the text of the statute.”).  Contrary to Dell’s suggestion, there is no requirement for any consumer to provide a “police report” or any particular document or evidence in order to invoke a proper dispute.  Nor is a police report a requirement for any type of a section 1681s-2(b) investigation.   FCRA section 1681s-2(b) merely requires “notice” of a dispute pursuant to “section 1681i(a)(2),” and then shifts the burden to the credit furnisher to take several specific steps in conducting an investigation.  FCRA section 1681i(a)(2), in turn,  provides: 
(2) Prompt notice of dispute to furnisher of information
(A) In general
Before the expiration of the 5-business-day period beginning on the date on which a consumer reporting agency receives notice of a dispute from any consumer or a reseller in accordance with paragraph (1), the agency shall provide notification of the dispute to any person who provided any item of information in dispute, at the address and in the manner established with the person. The notice shall include all relevant information regarding the dispute that the agency has received from the consumer or reseller.  

15 U.S.C. § 1681i(a)(2).  There is absolutely no requirement for a police report in any part of the statute implicated here.
 b. Case Law Interpreting FCRA Section 1681s-2(b)
Nor has any court found such a requirement in an FCRA section 1681s-2(b) case.   Federal courts have construed FCRA section 1681s-2(b) to require furnishers of credit data, such as Dell, not only to conduct an investigation into credit bureau disputes, but also to be qualitatively reasonable in their investigations as the circumstances warrant.  Johnson v. MBNA America Bank, NA, 357 F.3d 426, 431 (4th Cir. 2004); see also Bruce v. First U.S.A. Bank, Nat. Ass’n., 103 F. Supp. 2d 1135, 1143 (E.D. Mo. 2000).  As the Fourth Circuit observed in affirming a denial of a credit finisher’s motion for summary judgment in an FCRA case, a jury may find that a credit furnisher’s investigation was unreasonable if the evidence establishes (such as in this case) that the credit furnisher did not look beyond the information contained in its own computer system and did not consult any underlying documents, such as the original account application.  Johnson v. MBNA America Bank, NA, 357 F.3d 426, 431 (4th Cir. 2004). 
 Moreover, questions of the reasonableness of a company’s investigation under the FCRA are usually left for the jury.  See Cushman v. Trans Union Corp., 115 F. 3d 220, 225-27 (3d. Cir. 1997); Henson v. CSC Credit Servs., 29 F.3d 280 (7th Cir. 1994); see also Johnson v. MBNA, supra; Richardson v. Fleet Bank of Mass., 190 F. Supp.2d 81, 88 (D. Mass. 2001) (noting reasonableness of FCRA investigation is usually a question for a jury); Agosta v. Inovision, Inc., 2003 WL 22999213  (E.D. Pa. Dec. 16, 2003) (denying summary judgment in an FCRA case and allowing reasonableness of credit furnisher’s investigation to be determined by jury); Evantash v. G.E. Capital Mortg. Servs., Inc., 2003 WL 22844198  (E.D. Pa. Nov. 25, 2003) (same); Sheffer v. Experian Info. Solutions, Inc., Civ. No. 02-7407, 2003 WL 21710573 (E.D. Pa. July 24, 2003) (same).
 Dell comes forward with no authority at all in support of its defense that it allegedly had no duty to conduct a reasonable investigation into Plaintiff’s disputes because he did not provide it with a police report.  Nor does Dell cite any authority in support of the proposition that a reasonable investigation could not have been conducted under the circumstances of this case without a police report.  There is no dispute that Plaintiff has proffered evidence of at least seven (7) disputes that put Dell on “notice,” as set forth under the statue at section 1681s-2 and according to the methods for such notice agreed upon by Dell and the major CRAs.  (See Facts at ¶¶ 45, 46).  The burden then shifted to Dell to conduct reasonable investigations.  Defendant simply did not do that.  It rather shifted the burden back to Plaintiff to deliver a police report, which he was neither required nor able to do.
 c. Application To Facts
 Under the applicable standard, the facts of record here and reasonable inferences therefrom can lead a reasonable jury to find for the Plaintiff and against Dell on the issue of the reasonableness of Dell’s alleged “investigations” into Plaintiff’s credit disputes. 
 First, a reasonable jury could find that Dell never investigated the actual dispute — whether the consumer account was fraudulently opened in Plaintiff’s name.  (See Facts at ¶¶ 18, 56, 57).  Defense witnesses admitted under oath that Dell never answered that question because it allegedly was prevented from investigating this matter in the absence of a police report.  (See Facts at ¶¶ 48, 56).  Thus, a reasonable jury could find that Dell never truly “investigated” at all per FCRA section 1681s-2(b). 
 A reasonable jury can also find that Dell’s actions, if they amount to an “investigation,” were not a reasonable investigation, thus in violation of FCRA section 1681s-2(b)(1)(A).  For example, a reasonable jury could conclude that Dell should have examined the underlying application, the delivery address, the phone number or driver’s license information on the credit application, signatures, etc., in order to resolve the dispute of whether the account in question was really a result of fraud.  Dell took none of those actions.  (See Facts at ¶¶ 28, 29, 46, 47, 56, 57).   Certainly, Dell had or could have gathered enough information concerning this dispute to determine that Plaintiff was a victim of fraud; it could have done so despite the fact that it did not have a police report.  If Dell truly needed a police report, it would have tried getting one on its own, but it did not even try.  (See Facts at ¶ 49).   Dell only examined information on its Vision Plus database, which was the very basis of the erroneous reporting.  (See Facts at ¶¶ 16, 28, 49).  It makes little sense to conduct a fraud investigation into data that a consumer is disputing as fraudulent by simply confirming that, in fact, the disputed data matches the same data on Dell’s computers.  There should have been no doubt that there was such as match, since Dell’s computer was the source originator of the data being reported to the CRAs.
 A reasonable jury could also find that if Dell believed that it could not come to a conclusive result, or could not “verify” the fact of the fraud due to a lack of a police report or for any other reason, it should have deleted or blocked the future reporting of the account, as the FCRA provides at section 1681s-2(b)(1)(E).  This would have been an easy solution for Dell.  FCRA section 1681s-2(b) provides that if a furnisher truly cannot get to the bottom of a dispute, or if its investigation is “incomplete” or “inconclusive,” it should err on the side of caution and simply block or delete the disputed account.  Dell, however, even refused to do that.    (See Facts at ¶ 48) (admitting that investigation was never completed).
 In sum, as virtually every other FCRA summary judgment decision in this Circuit has found, these types of considerations present genuine issues of material fact as to the “reasonableness” of a company’s conduct in “investigating.”  These issues are inappropriate for disposition at summary judgment and must go to the jury. 
2. Dell’s Conduct Here May Be Deemed By A Reasonable Jury To Constitute A Willful Violation Of  The FCRA Under Section 1681n

 Under the facts of this case, a reasonable jury may find not only that Dell violated FCRA section 1681s-2(b) by failing to properly investigate Plaintiff’s repeated disputes, but that it did so willfully.  
 a. The Legal Standard:  Reckless or Conscious Disregard
 The standard to show a “willful” violation under the FCRA is not high.  A plaintiff need not show malice, but only that the defendant  recklessly committed an act in conscious disregard for the rights of others.  See Cushman v. Trans Union Corp., 115 F. 3d 220, 227 (3d. Cir. 1997).  This is a lower standard than the standard for willful violations or punitive damages claims under most common law torts.  Although the terms “willful” or “willfully” are not defined in the FCRA, case law has held that neither malice nor evil motive need be established for a finding of a willful violation. Id.; see also Stevenson v. TRW, Inc., 987 F.2d 288, 294 (5th Cir.1993) (citing Fischl v. General Motors Acceptance Corp., 708 F.2d 143, 151 (5th Cir. 1983)). 
Many courts have noted that willfulness under the FCRA is demonstrated by recklessness and not by a knowing violation of the law.  See id. at 293 (citing Pinner v. Schmidt, 805 F.2d 1258, 1263 (5th Cir.1986), cert. denied, 483 U.S. 1022 (1987)); Cushman, 115 F. 3d at 227; see also Reynolds v. Hartford Fin. Servs. Group, 435 F.3d 1081, 1097-99 (9th Cir. 2006) (discussing meaning of “willfully” with CRA and relying on Cushman).  Such reckless or conscious disregard may be found when a defendant adopts a policy either knowing it to be in “contravention of the rights possessed by consumers under the FCRA or in reckless disregard for whether the policy contravenes those rights.”  Cushman, 115 F. 3d at 227; see also Reynolds v. Hartford Fin. Servs. Group, 435 F.3d 1081, 1097-99 (9th Cir. 2006). 
Multiple cases within this District, examining the willfulness standard in FCRA investigation cases for consumer reporting agencies, have found that plaintiffs may proceed to trial with their willfulness claims where the defendant’s conduct is not merely a result of a negligent act that was promptly cured.  See Sheffer v. Experian Info. Solutions, Inc., Civ. No. 02-7407, 2003 WL 21710573 at *3 (E.D. Pa. July 24, 2003) (Schiller, J.) (defendant’s conduct was willful, and not merely an “isolated instance of human error  . . . promptly cure[d]”) (quoting Boris v. Choicepoint Servs., 249 F. Supp.2d 851, 862 (W.D. Ky. 2003)) (emphasis added); see also Lawrence v. Trans Union, LLC, Civ., 296 F.Supp. 2d. 582, 590, 2003 WL 22992081 at *5 (E.D. Pa. Dec. 11, 2003) (Brody, J.); Crane v. Trans Union, LLC, 282 F. Supp. 2d 311, 321 (E.D. Pa. 2003) (Dalzell, J.); Evantash v. G.E. Capital Mortgage Servs., Inc., Civ. No. 02-1188, 2003 WL 22844198 *8 (E.D. Pa. Nov. 25, 2003) (Davis, J.). 
Chief Judge Bartle also agreed with this interpretation of the willfulness standard under the FCRA when he recently permitted punitive damages to go to the jury in an FCRA investigation matter with facts less egregious than the case at bar.  See Abusaab v. Equifax Information Services LLC, Civ. No. 05-5094, 2006 WL 1214782 (E.D. Pa. May 4, 2006). 
FCRA cases involving investigations by credit furnishers such as Dell are no different.  See DiPrinzio v. MBNA America Bank, NA, Civ. No. 04-872, 2004 WL 2039175 (E.D. Pa. Aug. 24, 2005) (Smith, J.).  The DiPrinzio court, for example, denied summary judgment and permitted the plaintiff to proceed to trial with her punitive damages claim because the credit furnisher failed to conduct a reasonable investigation and to clearly disclose that the disputed account had charges that were incurred by the plaintiff’s former husband after separation.  Id.; see also Sheffer v. Experian Info. Solutions, Inc., Civ. No. 02-7407, 2003 WL 21710573 at *3 (E.D. Pa. July 24, 2003) (Schiller, J.) (punitive damages permitted to go to jury against CRAs and credit funisher after multiple failed investigations). 
b. Safeco Only Affirmed The Reckless Disregard Standard
Dell makes much of the U.S. Supreme Court’s 2007 decision in Safeco, but Dell’s  reliance on Safeco is ironic because the Safeco decision, if anything, undermines Dell’s argument.  See Safeco Insurance Co. of America v. Burr, 127 S. Ct. 2201 (2007).  In Safeco, the U.S. Supreme Court was asked to decide which of two conflicting standards governed FCRA willfulness claims, and it adopted the lower and least rigorous “reckless disregard” standard, which this Court has followed for years.  
Prior to Safeco, there was a circuit split as to what level of scienter should be applied in assessing FCRA willfulness claims.  Several circuits had held that a knowing violation of the law (higher standard) was required for a consumer to prove willfulness under the FCRA, while others, including the Third Circuit and the Ninth Circuit, had held that “reckless disregard” (lower standard) was all that was required.  In Safeco, the U.S  Supreme Court endorsed our Circuit’s standard, and held that proof of “reckless disregard” by a defendant (i.e. not a knowing violation of law, as the credit industry argued) is sufficient to establish a willful violation of the FCRA.  Safeco, 127 S.Ct. at 2208-2210. 
“Reckless disregard” is precisely the FCRA willfulness standard that this Court has followed for many years.  See Cushman v. Trans Union Corp., 115 F. 3d 220, 227 (3d. Cir. 1997).  In Safeco, the U.S. Supreme Court cited our Circuit’s decision in Cushman as the correct standard for assessing willfulness claims, not the intentional disregard standard.  Safeco therefore forever disposed of the argument that a consumer-plaintiff must show that a defendant knowingly violated the FCRA. 
Thus, the inquiry now is not the standard for a willfulness claim, but rather when the “reckless disregard” standard is met in an FCRA case brought against a defendant.   Unlike the situation in the circuits which had previously followed the knowing violation standard, this question has been thoroughly investigated and answered by the courts within this Circuit, as discussed and cited above.   These cases also demonstrate that the reckless disregard standard is a fact-bound inquiry, a concept that our Circuit just recently reiterated.  See Whitfield v. Radian Guaranty, Inc., 501 F.3d 262 (3d Cir. 2007).   Indeed, in Whitfield the Third Circuit, in a post-Safeco FCRA decision, reversed a grant for summary judgment on an FCRA willfulness claim and held that the issue of willfulness was for the jury to decide.  Id. at 271.    The Third Circuit stated: 
We do not suggest that a factfinder could not or would not determine that [the defendant] did not act willfully.  Instead, we hold that whether it did so is a factual issue, not a question of law, and it therefore cannot be decided either on appeal or by the District Court as a matter of law.

Id. at 271. ) (Emphasis added).   
 c. Application To Facts
Here, Plaintiff has come forward with more than sufficient evidence to present a genuine issue of material fact as to whether Dell willfully violated the FCRA in connection with the seven (7) section 1681s-2(b) disputes that it allegedly processed.   As in Whitfield, supra, willfulness is a factual issue that must be left for the jury.
The jury can, for example, reasonably determine that Dell’s conduct was in reckless or conscious disregard for Plaintiff’s rights because Dell repeatedly and systemically failed to get to the bottom of no less than seven (7) disputes of fraud.  The jury can reasonably find that Dell’s practice of never going beyond the limited information in its Vision Plus database (to examine the original application or the shipping information) in handling fraud investigations shows a reckless disregard.  The jury could reasonably find that Dell’s selective application of the “police report requirement” (for fraud claims allegedly involving the family or friends of the consumer, or an address match only) shows a reckless disregard for the duties set forth at FCRA section 1681s-2(b). 
Other facts may also support a “reckless disregard” finding by the jury:  the fact, for example, that Dell extends credit freely over the Internet or by telephone only, without ever seeing the purchasers or verifying their true identities (see Facts at ¶ 23); the fact that Dell is aware of a major corporate-wide problem with identity theft (amounting to as many as 60 fraud or identity theft disputes per day), but has still failed to implement any uniform written policies or procedures for dealing with these disputes (see Facts at ¶¶ 24, 25, 26); the fact that Dell added Plaintiff’s address as the person responsible for the disputed debt only after the police advised Dell that Plaintiff was the victim (see Facts at ¶ 37); the fact that Dell failed in so many investigations, despite receiving so much notice (see Facts at ¶¶  7, 8, 9, 18, 28, 39, 42, 45, 46); the fact that, to this day, Dell maintains that Plaintiff owes and must pay a debt which Dell allowed to be fraudulently incurred in his name (see Facts at ¶¶ 35, 54, 55); and the list goes on.
In sum, the record here provides more than sufficient evidence on which a jury may reasonably make a reckless or conscious disregard finding.  Accordingly, Dell’s Motion should be denied.     
3. FCRA Section 1681g(e) Does Not Change The Fact That No Police Reports Are Required For FCRA Section 1681s-2(b) Investigations

 Stretching for any support of its defense, Dell’s counsel (although notably not its witnesses) comes forward and argues that the “police report requirement” that Dell imposes for some disputes of identity theft or credit fraud is actually well grounded in law, citing FCRA section 1681g(e).  This argument lacks all legal and factual support.
 FCRA section 1681g(e) provides:  
(e) Information available to victims
(1) In general
For the purpose of documenting fraudulent transactions resulting from identity theft, not later than 30 days after the date of receipt of a request from a victim in accordance with paragraph (3), and subject to verification of the identity of the victim and the claim of identity theft in accordance with paragraph (2), a business entity that has provided credit to, provided for consideration products, goods, or services to, accepted payment from, or otherwise entered into a commercial transaction for consideration with, a person who has allegedly made unauthorized use of the means of identification of the victim, shall provide a copy of application and business transaction records in the control of the business entity, whether maintained by the business entity or by another person on behalf of the business entity, evidencing any transaction alleged to be a result of identity theft to—
(A) the victim;
(B) any Federal, State, or local government law enforcement agency or officer specified by the victim in such a request; or
(C) any law enforcement agency investigating the identity theft and authorized by the victim to take receipt of records provided under this subsection.

(2) Verification of identity and claim
Before a business entity provides any information under paragraph (1), unless the business entity, at its discretion, otherwise has a high degree of confidence that it knows the identity of the victim making a request under paragraph (1), the victim shall provide to the business entity—
(A) as proof of positive identification of the victim, at the election of the business entity—
(i) the presentation of a government-issued identification card;
(ii) personally identifying information of the same type as was provided to the business entity by the unauthorized person; or
(iii) personally identifying information that the business entity typically requests from new applicants or for new transactions, at the time of the victim’s request for information, including any documentation described in clauses (i) and (ii); and
(B) as proof of a claim of identity theft, at the election of the business entity—
(i) a copy of a police report evidencing the claim of the victim of identity theft; and
(ii) a properly completed—
(I) copy of a standardized affidavit of identity theft developed and made available by the Commission; or
(II) an affidavit of fact that is acceptable to the business entity for that purpose.

See 15 U.S.C. § 1681g(e)(1) & (2). 
  a. Plain Text Reading
  Dell’s counsel somehow reads this provision as allowing Dell to shift the burden back to the consumer in the case of a section 1681s-2(b) dispute and demand a police report.  FCRA section 1681g(e) simply does not say that, or even come close to saying that.  This section places certain burdens on a consumer who seeks documents from a business which opened a fraudulent account in the consumer’s name, and states that when that consumer’s true identity is genuinely in question, the business may require certain proof (including a police report in limited instances) before releasing that information.  The rule in section 1681g(e) is designed to give more rights to consumers, not less, but assures that information about a fraudulent application is provided by a business only to the victim or the appropriate government authority, and not to the thief or another perpetrator.
  b. FCRA Section 1681g(e) Inapplicable To The Case At Bar
      The process outlined in FCRA section 1681g(e) is simply not the one implicated here.  Plaintiff is not claiming that Dell failed to provide him with the original application or other documentation relating to the origination of the fraud.  Dell has never claimed that it could not properly identify Plaintiff.  And FCRA section 1681g(e) is not logically tied in any way to the investigation claims under FCRA section 1681s-2(b) in this case.
  c. Legislative History And Congressional Intent
     The more general notion advanced by Dell’s counsel that the requirements of 1681g(e) must be tied to this case because they relate to identity theft is nonsensical.  It is true that the Fair and Accurate Credit Transactions Act of 2003, Pub. L. No. 108-159 (2003) (“FACTA Amendments”) altered many provisions of the FCRA and added several additional sections to the FCRA related to identity theft.  Overall, the FACTA Amendments tried to give consumers more protection against identify theft.  The fact that the FACTA Amendments added sections to the FCRA, however — some (like section 1681g(e)) requiring police reports — is not tantamount to a conclusion that businesses are entitled to a police report from victims of identity theft in every instance, or that if a victim does not or cannot produce a police report, a credit furnisher can simply abrogate its duties under any section of the FCRA, including section 1681s-2(b).
  It is a basic canon of statutory construction that in construing two or more federal statutory provisions or statutes, a court must give effect to both wherever possible.  See Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1017-1018, 104 S.Ct. 2862, 2881 (1984) (“where two statutes are capable of co-existence, it is the duty of the courts, absent a clearly expressed congressional intention to the contrary, to regard each as effective”).   Contrary to Defendant’s suggestion, there is nothing irreconcilable, superfluous, or onerous about Dell having to comply with both FCRA section 1681s-2(b) when a consumer gives notice of a dispute and also with FCRA section 1681g(e) when a consumer makes an appropriate claim for information or documentation.  Nor does any reasonable reading of the FCRA suggest that credit furnisher investigation duties are in any way affected by FCRA section 1681g(e) or the FACTA Amendments in general.  Further, Dell does not provide any authority to that effect.
  Importantly, the FACTA Amendments altered certain provisions of the investigation duties of consumer reporting agencies (at section 1681i) and also for credit furnishers (at section 1681s-2).  In making those changes to investigation duties, Congress could have provided a “police report requirement” in connection with investigations of identity theft disputes.  It did not. 
  The FACTA Amendments, for example, imposed additional duties on credit furnishers to handle direct disputes from consumers (section 1681s-2(a)(8))  and also certain duties to “block” information from reporting in the future (section 1681s-2(b)(E)(iii)).  If Congress wished to impose a “police report requirement” in certain furnisher investigation cases, it knew how to do it.   The fact that Congress amended the section at issue here (section 1681s-2(b)) through FACTA, but placed police report requirements only in other sections of the FCRA and not in that section, further demonstrates that Congress did not intend to place a police report requirement upon anybody (consumer or credit furnishers) in the context of section 1681s-2(b) dispute investigations.  Dell is simply mistaken in arguing that its practice of requiring police reports from victims of fraud for certain section 1681s-2(b) disputes is unjustified under the FCRA.     
  d. Public Policy                           
  It should also be noted that the FCRA is to be liberally construed in favor of consumers, not the credit industry.  See Philbin v. Trans Union and Equifax Corp., 101 F. 3d 957, 962 (3d. Cir. 1996); Guimond v. Trans Union and Equifax Credit Info. Co., 45 F.3d 1329 (9th Cir. 1995).  Here, Dell seeks a construction of FCRA section 1681s-2(b)   — not recognized by any court or other authority ever before — that places additional burdens on consumers that are victims of fraud or identity theft.  Nothing in either the letter or the spirit of the FCRA supports such a conclusion.
  e. No Objectively Reasonable Application
  Importantly, Dell is way off-base in arguing that a jury cannot reasonably find that its “police report requirement” in handling section 1681s-2(b) disputes is in willful noncompliance with the FCRA, purportedly because Dell relied in good faith on the police report language found in section 1681g(e).  Unlike the FCRA section 1681m requirements at issue in Safeco, there is no objectively reasonable application here of sections 1681g(e) and 1681s-2(b) that would support the arguments of Dell’s counsel.  As discussed above, section 1681g(e) did not change a furnisher’s duty under section 1681s-2(b).  Where a defendant’s conduct is based on an “objectively unreasonable” application of the FCRA, courts have had no difficulty in allowing willful claims to proceed.  See Korman v. Walking Co., 503 F. Supp.2d 755, 2007 WL 2437958 at *5 (E.D. Pa. Aug. 28, 2007) (Robreno, J.) (allowing FCRA willfulness claim to proceed where defendant had no basis in the statutory text on which to make its objective reading argument, discussing FCRA section 1681c(g)).    
  f. No Factual Basis
  Equally as important, there is absolutely no factual basis here to support the good faith reliance argument that Dell’s counsel suggests.  This is not a case where Dell has come forward with evidence that it studied the “police report requirement” or received advice from counsel and fairly concluded that such a requirement was appropriate.   Rather, one of Dell’s 30(b)(6) witnesses, familiar with Dell’s FCRA compliance efforts,  testified that the police report requirement is a Dell practice – and not an FCRA requirement as far as Dell was concerned.   (See Exhibit 1, Reina’s Dep. at 43:23-44:7).  That same witness admitted Dell has never studied, considered nor analyzed whether consumers can obtain police reports in cases of identity theft.  (See Exhibit 1, Reina’s Dep. at 48:2-17).  Importantly, Dell admits that it is not simply seeking police reports, but ones that identify the perpetrator, whom Dell can presumably pursue.  (See Exhibit 1, Reina’s Dep. at 41:6-15, 42:1-6, 43:5-11).  When asked whether Dell has any idea whether police reports routinely identify perpetrators or how many identity theft crimes go unsolved, Dell’s 30(b)(6) witness had no idea.  (See Exhibit 1, Reina’s Dep. at 40:9-10). 
  Thus, despite defense counsel’s suggestion, this is not a case where Dell carefully studied the accessibility, contents and function of police reports in identity theft cases and in good faith, upon an objectively reasonable reading of FCRA section 1681g(e) and with advice from counsel, decided that police reports were necessary for certain FCRA section 1681s-2(b) disputes of identity theft or fraud.  Rather, this is a case were counsel is trying to come up with some explanation in retrospect to justify its client’s reckless actions and practices. 
  In sum, the applicable law here did not require Plaintiff to submit a police report and Dell knew it when it kept on rejecting Plaintiff’s section 1681s-2(b) disputes.  Defendant’s police report requirement is simply not based on applicable law and constitutes one of several practices that show a reckless disregard for the rights of victims of identity theft, such as Plaintiff.  Accordingly, Dell’s Motion should be denied. 

                           
B. Because Dell’s Conduct Was Willful, Plaintiff’s Common Law Claims Are Not “Preempted” By FCRA Section 1681h(e)

Dell contends that Plaintiff should not be permitted to proceed to trial with his common law claims of defamation, negligence and invasion of privacy/false light.  (See Def. Mem. at 14).  The entire and exclusive basis for Dell’s “preemption” argument is that it did not “willfully” violate the FCRA.   For the same reasons that Plaintiff may show willfulness and thus proceed to trial with his FCRA claim, discussed above, Dell’s preemption argument fails.  See DiPrinzio v. MBNA America Bank, N.A., Civ. No. 04-872, 2005 WL 2039175 at *3-5 (E.D. Pa. Aug. 24, 2005) (negligence claim, including relief for punitive damages, not preempted where jury could find that FCRA section 1681s-2(b) violation was willful).    
Further, the limitations to common law liability set forth at FCRA section 1681h(e), on which Dell relies, impose a “willfulness” threshold only for actions stemming from disclosures to the consumer, but not all FCRA actions.  As one court recently explained:
Section 1681h(e) suggests not that Congress has limited actions brought in all areas regulated by the FCRA but that defendants will have qualified immunity from actions based on information disclosed pursuant to certain provisions of the FCRA. Webb v. Bob Smith Chevrolet, Inc., 2005 WL 2065237 at *5 (W.D.Ky. Aug. 24, 2005). In McAnly v. Middleton & Reutlinger, P.S.C., 77 F.Supp.2d 810, 814-15 (W.D.Ky.1999), the district court explained that, ‘section 1681h(e) is not actually a preemption provision. Rather, it is a quid pro quo grant of protection for statutorily required disclosures. Since various parts of the federal statute require consumer reporting agencies and information users to disclose information to consumers under certain circumstances, this section guarantees that the agencies or users cannot be sued for those required disclosures [under FCRA sections 1681g, 1681h and 1681m] under state tort law.  It makes sense that acts required to be done by the FCRA are immunized from state tort liability.’

Poore v. Sterling Testing Sys., Inc., 410 F.Supp. 2d 557, 573 (E.D. Ky. 2006).
     Here, Plaintiff’s common law claims are based on information provided by Dell to the CRAs, and for Dell’s conduct in failing to properly handle Plaintiff’s repeated disputes.  They are not based on the disclosures to consumers required under sections 1681g, 1681h and 1681m.  Nor are they based on information disclosed by a user of a consumer report.  Accordingly, Plaintiff’s state law claims are not prohibited or limited under section 1681h(e) in the case at bar. 

 
IV. CONCLUSION

For all of the reasons set forth above, Defendant Dell’s Motion for Partial Summary Judgment should be denied.
     FRANCIS & MAILMAN, P.C.
               /s/ John Soumilas  
      JOHN SOUMILAS 
      Attorney for Plaintiff
            Land Title Building, 19th Floor
            100 South Broad Street 
             Philadelphia, PA 19110
            (215) 735-8600

DATE:

PLAINTIFF CHRISTOPHER JUNG’S MEMORANDUM OF LAW
IN SUPPORT OF HIS RESPONSE IN OPPOSITION TO DEFENDANT
TRANS UNION, LLC’S MOTION FOR SUMMARY JUDGMENT

 Plaintiff Christopher Jung, through counsel, hereby respectfully submits this Memorandum of Law in opposition to Defendant Trans Union, LLC’s (TU) Motion for Summary Judgment (Motion) (Docket Nos. 53, 54, 55).  For the reasons below, the Motion should be denied.
I. INTRODUCTION
Jung brought this consumer action seeking relief under the Fair Credit Reporting Act, 15 U.S.C. §§ 1681 et seq. (FCRA) and related common law claims against TU, one of the major consumer reporting agencies (CRA) in the world.  The parties stipulated to dismiss the common law claims so that they can streamline this matter for trial.  (See Docket No. 56) (submitted April 24, 2009).  The FCRA claims, therefore, are the only ones at issue.  
  TU seeks to obtain summary judgment and avoid trial as to the FCRA claims by filing a motion which distorts and ignores the factual record — a record which is replete with genuine issues of material fact.  Reading TU’s motion, one may form the impression that this case is about a dispute concerning a single utility account that really did not affect Jung.  When the actual facts are set forth below, it will be evident that this case involves many credit reporting inaccuracies over multiple years, that Jung suffered significant and cognizable harm, that many material facts are contested, and that summary judgment is therefore impossible. 
Significantly, the record shows that the following central issues are in dispute:
• Whether the disputed information that TU reported was in fact “inaccurate” (Plaintiff contends it was “inaccurate” and “not his,” while TU’s witnesses testified that TU only included “accurate” information in Plaintiff’s file and that a frequently disputed account actually belonged to Jung);
• The causes for the alleged inaccuracies and why they were not corrected (which goes to TU’s willful conduct); and
• The harm that TU’s conduct actually caused to Jung.
 
  TU also misstates the applicable legal standards, repeatedly citing non-binding cases from other jurisdictions instead of the multiple decisions from within our Circuit (many against TU itself), which have previously addressed the credit reporting claims at issue here.  Under the proper legal standards, which will be set forth below, it is also evident that TU is not entitled to judgment as a matter of law in this case.
Accordingly, TU’s Motion should be denied.    

II. FACTUAL BACKGROUND
A. Jung Repeatedly Tells TU That Another Consumer’s Information Is Appearing On His Credit Report

From as far back as 2001, when Jung was a teenager, TU had another man’s name, identifying information and accounts on Jung’s credit report.  (PCSF ¶ 35).  The other man is Christopher Seibert, a real person (not a fictitious name used by an identity thief) about whom TU also sells credit reports.  (PCSF ¶¶ 35, 36).  Through the years, some of the information was in good standing but several other accounts (including accounts with NCO, Nicor Gas, Verizon Wireless, and Portfolio Recovery) were in delinquent status, including highly derogatory “charge-off” and “collection” accounts.  (PCSF ¶¶ 37, 51, 61, 65).  Jung himself has never been delinquent on any account and his true credit status is excellent.  (PCSF ¶ 74).
Jung tried to correct the errors with TU from when he was 18 years old, but after TU rejected his disputes he gave up.  (PCSF ¶¶ 39, 40).  After he graduated from college and had a problem obtaining an apartment due to his TU credit report, Jung again took up the task of trying to correct his credit.  (PCSF ¶ 41).  He contacted TU on another 16 different occasions in 2006 and 2007 (according to TU’s own records) about the problem of TU placing Seibert’s information on Jung’s report.  (PCSF ¶ 85) (Exhibit 18 at 135:1-11).  He disputed to TU via telephone, mail, facsimile and the internet, in every way he knew how.  (PCSF ¶ 85).
TU treated many of Jung’s contacts as disputes, purportedly “investigated,” but repeatedly failed to correct the problem.  (PCSF ¶ 73).  TU also misrepresented what it was allegedly doing to correct the problem to the Indiana Attorney General, who contacted TU after Jung filed a complaint with that office.  (PCSF ¶ 71).   Although TU removed the derogatory accounts about which Plaintiff was disputing after this suit was filed, it still has not fully corrected Plaintiff’s credit report.  (PCSF ¶ 75).  
B. TU’s Repeated Systemic Lapses Fail To Correct The Problem
The painstaking, blow-by-blow rendition of all Jung’s contacts with TU and what TU did and failed to do through the years is set forth in Plaintiff’s Counter Statement of Facts.  (PCSF ¶¶ 35-71, 75).   For purposes of this background summary, the following facts are most relevant:
• TU mixed Plaintiff’s file through the years with that of one or more other consumers according to Plaintiff’s expert Evan Hendricks. One of TU’s witnesses, Shontese Norwood, specifically admitted to mixing Plaintiff’s file with that of Seibert during one dispute that she personally handled.  (PCSF ¶¶ 60, 77);
   
• TU has a procedure called “do not merge” for purposes of separating the files of two or more consumers which become mixed, but TU never followed or implemented that procedure as to Jung’s file.  (PCSF ¶ 79);

• TU received a dispute from Jung on August 14, 2006 which it failed to investigate in any way whatsoever according to TU’s witness Marianne Litwa, but instead treated simply as a request for a credit file disclosure.  (PCSF ¶¶ 45, 47);

• After TU’s representatives told Jung that he may be a victim of fraud or identity theft (Exhibit 1, Jung Dep. at 51), Jung sent to TU twice, and TU received twice, on August 14, 2006 and again on December 14, 2006, a police report identifying the Nicor Gas account as a possibly fraudulent account which Jung was disputing.  TU, however, did not “block” that account from reporting to Jung’s report within four days, as required by the FCRA, or at any time.  (PCSF ¶¶ 45, 52, 79-80, 81, 86).  TU’s 30(b)(6) witness, the Director of the Fraud Department, Steve Reger, was virtually clueless about the FCRA mandated procedure of “blocking” during his deposition.  (PCSF ¶ 80);

With respect to the “reinvestigations” that TU purportedly conducted following Jung’s repeated disputes, the evidence shows that:
• As a matter of policy and practice, TU did not forward Jung’s police reports, dispute letters, dispute forms, social security card, W-2 form, or any relevant documentation or information that Jung sent to TU along with his disputes to any credit furnisher of information that Jung was disputing despite TU’s knowledge that under the FCRA it must forward “all relevant information” to any credit furnisher who is the subject of a consumer dispute.  (PCSF ¶ 81); 

• As a matter of policy and practice, TU simply parroted every credit furnisher (such as Nicor Gas and Verizon Wireless) who responded to TU’s automated dispute system (the ACDV system) that a given account disputed by Mr. Jung should stay on his report.  (PCSF ¶ 82);

• TU parroted the credit furnishers’ responses without any independent investigation.  (PCSF ¶ 82).  Specifically, TU never searched for any original applications for any disputed account; did not search for signatures as to who signed to open the disputed accounts or to pay any disputed bills; did not check who lived at the addresses serviced by the disputed gas and/or telephone accounts; never checked who actually lived at any of the addresses that Jung disputed as not his;  did not ever inquire with Seibert about the disputed accounts; did not follow-up in any way with any government agency as to whether Jung ever used the name Seibert  or whether Seibert ever used Jung’s social security number; and did not follow up in any way with the police, even after receiving police reports.  (PCSF ¶ 82); and

• TU hires “investigators” with no investigation experience, and then requires them to conduct each investigation into a consumer dispute in 5 to 10 minutes, or sometimes less time.  (PCSF ¶ 83).

In the present motion, TU’s lawyers argue that “the information on Plaintiff’s consumer reports were a result of an identity thief . . . .”  (TU Mem. at 13).  The “explanation” that TU’s counsel posture, however, is not a defense to this case.  Moreover, that explanation is not supported by the testimony of any of TU’s witnesses, who stated at their depositions that they do not know, and they never determined, whether Jung was a victim of fraud or identity theft.  (PCSF ¶ 77).  By contrast, Jung has offered an unrebutted report of an expert who opines that TU mixed Jung’s file with that of another consumer, Seibert.  (PCSF ¶ 77).
The “mixed file” problem is one that is well known to TU.  (PCSF ¶ 77).  It was the subject of a regulatory enforcement action against TU by the attorneys general of many states during the 1990s, where TU promised in a Consent Order that it would take measures to “avoid” the problem.  (PCSF ¶ 78).  A “mixed file” is defined as a credit report in which some or all of the information pertains to a person other than the person who is the subject of the report, and TU knows that mixed files are unacceptable and must be avoided.  (PCSF ¶ 77).  
Mixed files occur because TU does not use full identifying information (name, address, social security number and date of birth) in compiling and selling credit reports.  (PCSF ¶¶ 77-78).  Thus if there are sufficient similarities in the name and address, TU’s computer system will allow the files of two or more people to mix and become one file.  (PCSF ¶ 77).  In the Consent Order, however, TU stipulated that it would use such full identifying information.  (PCSF ¶ 78).    
The problem of mixed files continues in this decade with numerous complaints and lawsuits, as Plaintiff’s expert, Evan Hendricks, explains in his report.  (PCSF ¶¶ 78-79).  TU continues to compile and sell credit reports using only an imprecise version of a given consumer’s name and address, and without using full identifying information.  (PCSF ¶¶ 77-78, 84).    
TU continues to have a mixed file problem, more than a decade after the Consent Order, because it deliberately chooses not to correct it.  (PCSF ¶ 78).  TU’s “do not merge” procedure is easy to implement and works every time in avoiding the recurrence of mixed files according to TU’s 30(b)(6) witness. (PCSF ¶ 79).  Moreover, TU can require highly precise matching in personal identifying information from its customers before it sells reports.  (PCSF ¶ 84).  Yet according to Plaintiff’s expert, mixed files continue to exist in significant numbers because TU would simply not be able to sell as many credit reports if it eliminated mixed files.  (PCSF ¶ 84).     
The analysis is rather simple:  if TU requires that every buyer of a credit report have the proper name, address, social security number and date of birth of the consumer to whom the report relates, it would not be able to sell reports to those entities who do not have all that information — entities that seek to make a quick sale, collect debts or promote credit to consumers who are not already their customers.  (PCSF ¶ 84).  The tightening of TU’s “file matching” criteria to require full identifying information would greatly reduce or eliminate mixed files, it would greatly improve accuracy, but it would also reduce the number of credit reports that TU can sell.   (PCSF ¶ 84).      
In the case of Jung, TU never followed or implemented the “do not merge” procedure.  (PCSF ¶ 79).    It also sold Jung’s report to third parties using its very loose personal identifying matching criteria of only a version of his name and address.  (PCSF ¶¶ 31, 55, 77-78).  For example, on January 24, 2007, TU sold Jung’s report to Insight Communications even though that company (according to TU’s records) had entered a request on TU’s database for the report of “Chris Seibert” at a “Rockford, Illinois” address.  (PCSF ¶  55).  TU also made sales of Jung’s report for “promotional purposes” to entities which simply wanted to promote their business or credit products with Jung.  (PCSF ¶ 78).  TU also sold Jung’s report to Assetcare on April 11, 2007, a business that sought to collect a debt that Jung did not owe from some unidentified debtor, most probably Seibert.  (PCSF ¶¶ 75, 78).            
C. Jung’s Damages At The Hands Of TU
 As a result of TU’s conduct, Jung: (1) erroneously came to believe that he was a victim of fraud, and thus scrambled around aimlessly to two police stations and to the AG’s office in order to file reports and complaints/fraud alerts (PCSF ¶¶ 81, 86); (2) lost sleep at night (PCSF ¶ 87); (3) wasted very significant periods of time trying to solve this problem through letters, calls, faxes and the internet (PCSF ¶¶ 87, 91); (4) made 16 contacts directly with TU in 2006 and 2007 and additional contacts with other companies in his attempt to solve this problem, waiting on hold during numerous telephone calls, for as long as one hour and twenty minutes (PCSF ¶¶ 85, 87, 91); (5) felt “frustrated,” “afraid” and “angry” when TU continued to advise him that he was the person responsible for the disputed debts (PCSF ¶ 91); (6) found TU’s conduct to be “detestable” and “rude,” advising the AG that after his attempts to correct the problem were repeatedly rejected by TU “something in [him] snapped” (PCSF ¶ 72); (7) felt embarrassed and humiliated when “Trans Union basically called [him] a liar to the Indiana Attorney General” (PCSF ¶ 73); (8) lost the use of his excellent credit and of credit opportunities, explaining that he “didn’t want to apply for any new accounts or any new credit for fear that they would see [the TU report] and reject me” (PCSF ¶¶ 89, 92-93); (9) had to delay the purchase of his first home by a year (PCSF ¶¶ 88, 93); and (10) had his credit score and credit status harmed. (PCSF ¶ 90).
 The factual record is far more detailed than TU suggests.  For example, in his deposition, Jung elaborated on his damages as follows:
15     A.    Well, I mean, I spent tons and
16   tons of time trying to get this issue
17   fixed.   I mean, at times I wasn’t
18   really sure what was going on, if this
19   guy had stolen my identity or not.   I
20   was kind of afraid what that’s — what
21   that meant or what that could mean.
22              I feel like my reputation has
23   been injured to all of my  — all of my
24   creditors, as well as to the attorney
25   general.   I wasn’t able to use my

                                                                    78
 1   credit the way I wanted to because of –
 2   because of this bad information on my
 3   credit report.   I didn’t want to apply
 4   for any new accounts or any new credit
 5   for fear that they would see that and
 6   reject me.
 7              And I mean, it was just, you
 8   know, really frustrating, made me angry
 9   to, you know, do everything I could
10   possibly do to get this cleared up, and
11   it’s like, you know, how do you — how
12   do you prove to someone that an account
13   isn’t yours?

(Exhibit 1, Jung Dep. at 77-78).   Jung explained further:  
25   So, I contacted the Rock Ford

                                                                    52
 1   Police Department directly, and they
 2   referred me to the Beach Grove Police
 3   Department.   I filed a police report
 4   with them.   They basically said that
 5   they couldn’t investigate fraud any more
 6   because it wasn’t under their
 7   jurisdiction.
 8              I did everything I could to
 9   dispute with Nicor, and got to the point
10   where Nicor said they didn’t have the
11   account any more on their records.  Yet
12   when I continued to dispute with Trans
13   Union, Trans Union came back every time
14   and said the account has been verified,
15   it’s yours, basically calling me a liar.
16              And I tried going to the
17   Indiana Attorney General and complaining
18   to them, and Trans Union basically
19   called me a liar to the Indiana Attorney
20   General.
21              I mean, I have spent many
22   hours trying to get this fixed, and it’s
23   been very frustrating.   Then I
24   discovered that Trans Union had two
25   credit reports for me.  I’m not sure if

                                                                    53
 1   they created a second one, or if they
 2   always had a second one that they
 3   weren’t telling me about.
 4              I then tried to fix all of
 5   that mess, and I wrote a letter to Trans
 6   Union’s CEO.   I also investigated other
 7   avenues to get this off of my record.
 8   I found it detestable to have an account
 9   like this on my record, because I
10   consider myself an honorable person, and
11   I always pay my accounts on time.  And
12   none of this worked.   So, I had to
13   resort to following through on my threat
14   for legal action.

(Exhibit 1, Jung Dep. at 51-53). 
In answering a TU interrogatory about his damages, Jung explained:
RESPONSE:  Due to Trans Union’s conduct, Plaintiff was constrained from applying for the credit to which he was entitled as a consumer with an otherwise excellent credit history.  Specifically, Plaintiff was paralyzed in his efforts to purchase his first home, and to apply for credit which would allow him to transfer his debt to credit accounts with lower interest rates.  In March 2007, Plaintiff was very interested in buying his first home in the range of $100,000, but believed that he was unable to secure a desirable mortgage loan due to the numerous inaccuracies on his Trans Union credit report.  Furthermore, at that time, Plaintiff wished to transfer his $6,000 school loan debt with AES and Direct Loan to a credit line with lower interest, but believed he was unable to do so due to Defendant’s actions.  Furthermore, Plaintiff wished to obtain a loan in order to satisfy a loan in the amount of $14,000 lent by his father for Plaintiff’s college education.  Plaintiff also wanted to refinance his automobile loan with an interest rate that he would have qualified for but for Defendant’s inaccurate reporting. 
Plaintiff has also suffered great emotional distress, extreme frustration and anxiety, as well as great humiliation and embarrassment as a result of Trans Union’s conduct.  These damages suffered by Plaintiff are well recognized as cognizable under the FCRA.  There is no computation for such damages other than their valuation by jury.  In addition, see answer to interrogatory number 16, supra.  Furthermore, see documents produced with Plaintiff’s Responses to Defendant Trans Union, LLC’s Requests for Production of Documents to Plaintiff.
(P’s Resp. to TU Inter. No. 16) (PCSF ¶ 93). 
 Jung’s documents and witnesses corroborate these damages.  For example, Jung’s dispute letters to TU clearly show his anger, frustration and anxiety.  (PCSF ¶¶ 37, 45, 49, 52, 55, 59, 91).  Similarly, Plaintiff kept notes for certain of the calls and disputes (so the he could remember names and what people were telling him) which further corroborate his frustration and lost time.  (PCSF ¶ 87); (Exhibit 1 at 149:7-11).   Plaintiff’s father further supported his son’s position, remembering that his son’s credit inaccuracies stemmed back almost a decade and caused a lot of frustration for Jung.  (Deposition transcript not yet available).  Plaintiff’s expert also opined that Jung’s damages are consistent with the type of harm consumers typically suffer due to mixed files and chronic credit inaccuracies.  (PCSF ¶ 85) (Exhibit 11 at pp. 13-14).   

III.  STANDARD

 Pursuant to Federal Rule of Civil Procedure 56(c), a motion for summary judgment will only be granted:
if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law.

Fed. R. Civ. P. 56(c).  In other words, summary judgment may only be granted if the movant shows, by admissible evidence, that there exists no genuine issue of material fact that would permit a reasonable jury to find for the nonmoving party.  Wetzel v. Tucker, 139 F.3d 380, 383 n.2 (3d Cir. 1998); Miller v. Indiana Hosp., 843 F.2d 139, 143 (3d Cir.), cert. denied, 488 U.S. 870 (1988).
 A court may not, at the summary judgment stage, weigh evidence or make credibility decisions.  These tasks are left to the factfinder.  Petruzzi’s IGA Supermarkets, Inc. v. Darling-Delaware Co., Inc., 998 F.2d 1224, 1230 (3d Cir.), cert. denied, 510 U.S. 994 (1993).  To raise a genuine issue of material fact, the respondent need not match, item for item each piece of evidence proffered by the movant.  As the Third Circuit has explained:
In practical terms, if the opponent has exceeded the “mere scintilla” threshold and has offered a genuine issue of material fact, then the court cannot credit the movant’s version of events against the opponent, even if the quality of the movant’s evidence far outweighs that of its opponent.  It thus remains the province of the factfinder to ascertain the believability and weight of the evidence.

In re Unisys Savings Plan Litigation, 74 F.3d 420, 433 n. 10 (3d Cir. 1996).  If there are gaps in the pertinent materials submitted by the movant, without explanation, that justifies denial of the motion.  O’Donnell v. United States, 891 F.2d 1079, 1082 (3d Cir. 1989). 
 In the case at bar, there exist genuine issues of material fact and TU is not entitled to judgment as a matter of law.  Summary judgment, therefore, is inappropriate.
IV. ARGUMENT

A. Plaintiff Has Come Forward With More Than Sufficient Evidence Of Harm Caused By TU To Show A Genuine Issue Of Material Fact As To His FCRA Section 1681e(b) Actual Damages Claim

 One of Jung’s claims is that TU violated the FCRA by failing to prepare his consumer report following procedures that assured “maximum possible accuracy,” as required by FCRA section 1681e(b).  Indeed, Jung’s TU report was not anything close to accurate.  TU first argues that Jung “cannot establish” a section 1681e(b) claim allegedly because “he was not harmed” by TU.  (TU Mem. at 5).  This is an argument that TU has tried and tried again in this Circuit, never with success. Again, this argument must be rejected.   
The Third Circuit has held that for an FCRA section 1681e(b) negligence claim (although not a willfulness claim) a consumer must make a prima facie showing that the credit reporting inaccuracy caused actual damages.  Philbin v. Trans Union Corp., 101 F.3d 957, 963 (3d Cir. 1996).  Here, Plaintiff has alleged that TU violated FCRA section 1681e(b) negligently and/or willfully.  (See Amed. Comp. at ¶¶ 26-31) (Docket No. 32).  Since Plaintiff will show in this case that TU’s FCRA violations were willful, he does not have the burden of showing any actual damages at summary judgment or at trial.  However, since under either a negligence or willfulness theory Jung may recover, and in this case will seek, actual damages, he has come forward with more than sufficient evidence of the type of harm which constitutes “actual damages” under the FCRA.        
 Notably, emotional and mental distress, anxiety, frustration, anger, humiliation, and embarrassment as well as damage to credit reputation are all recognized as “actual damages” under the FCRA.  See Philbin v. Trans Union Corp., 101 F.3d 957, 963 & n.3 (3d Cir. 1996); see also Guimond v. Trans Union Credit Information Co., 45 F.3d 1329, 1333 (9th Cir. 1995); Stevenson v. TRW Inc., 987 F.2d 288, 296 (5th Cir. 1993); Millstone v. O’Hanlon Reports, Inc., 528 F.2d 829, 834-35 (8th Cir. 1976); see generally Cushman v. Trans Union Corp., 115 F. 3d 220 (3d Cir. 1997); Lukens v. Dunphy Nissan, Inc., Civ. No. 03-767, 2004 WL 1661220 at * 5 (E.D. Pa. Jul. 26, 2004) (FCRA plaintiff may recover for having to place fraud alert on his credit report and for time in dealing with and attempting to clear up credit inaccuracies); Lawrence v. Trans Union, LLC, 296 F. Supp. 2d. at 588-89; Evantash v. G.E. Capital Mortgage Servs., Inc., E.D. Pa. Civ. No. 02-1188, 2003 WL 22844198 * 5; Crane v. Trans Union, LLC 282 F. Supp. 2d at 319-321; Sheffer v. Experian Info. Solutions, Inc., E.D. Pa. Civ. No. 02-7407, 2003 WL 21710573 at * 3-4.  Indeed, most of the above holdings were against TU itself in FCRA cases. These cases also demonstrate that a consumer-plaintiff may recover such damages without the need for medical testimony. Id.    
 The Third Circuit has explained that in an FCRA case a plaintiff need not come forward with a mountain of evidence in order to proceed to the jury with his/her emotional damages case.  In Philbin, the Third Circuit found the following interrogatory response to be sufficient for the plaintiff to survive summary judgment:
Plaintiff cannot with specificity outline the actual damages sustained. However, he sustained damages over the past (4) four to (5) five years as a result of the persistent and continual rejections from credit agencies as a result of the false information contained in his credit report. Plus the humiliation and embarrassment following the rejection with the particular vendor whom [sic] he sought credit.

Philbin, 101 F.3d at 963 n. 3; see also Crane v. Trans Union, LLC 282 F. Supp. 2d at 319 (summary judgment denied on similar evidence).
 “The loss of credit opportunities [also] constitutes compensable harm under the FCRA.”  Lawrence v. Trans Union, LLC, 296 F. Supp. 2d. at 588-89 (citing Philbin, 101 F.3d at 957); Guimond , 45 F.3d at 1333; Bach v. Fist Union Nat’l  Bank, 149 Fed. Appx. 354, 2005 WL 2009272 *7 (6th Cir. Aug. 22, 2005) (FCRA plaintiff offered testimony of lost credit opportunities in the form of second mortgage and credit card); see also Rothery v. Tran Union, Civ. No. 04-312-ST, 2006 WL 1720498 (D. Or. Apr. 6, 2006) (denying TU motion for summary judgment as to lack of damages where consumer-plaintiff has offered her subjective account and declaration from her mother as to loss of credit opportunities); O’Brien v. Equifax, 382 F. Supp. 2d 733, 734-35 (E.D. Pa. 2005) (lost opportunity to refinance mortgage basis of FCRA claim).   
 Here, Jung has proffered sufficient evidence of both emotional damages and lost credit opportunities.  As set forth above, due to TU’s conduct Jung: (1) erroneously came to believe that he was a victim of fraud, and thus scrambled around aimlessly to two police stations and to the AG’s office in order to file reports and complaints/fraud alerts (PCSF ¶¶ 81, 86); (2) lost sleep at night (PCSF ¶ 87); (3) wasted very significant periods of time trying to solve this problem through letters, calls, faxes and though the internet (PCSF ¶¶ 87, 91); (4) made 16 contacts directly to TU in 2006 and 2007 and additional contacts with other companies in his attempt to solve this problem, waiting on hold during numerous telephone calls, for as long as one hour and twenty minutes (PCSF ¶¶ 85, 87, 91); (5) felt “frustrated,” “afraid” and “angry” when TU continued to advise him that he was the person responsible for the disputed debts (PCSF ¶ 91); (6) found TU’s conduct to be “detestable” and “rude,” advising the AG that after his attempts to correct the problem were repeatedly rejected by TU “something in [him] snapped” (PCSF ¶ 72); (7) felt embarrassed and humiliated when “Trans Union basically called [him] a liar to the Indiana Attorney General” (PCSF ¶ 73); (8) lost the use of his excellent credit and of credit opportunities, explaining that he “didn’t want to apply for any new accounts or any new credit for fear that they would see that [the TU report] and reject me” (PCSF ¶¶ 89, 92-93); (9) had to delay the purchase of his first home by a year (PCSF ¶¶ 88, 93); and (10) had his credit score and credit status harmed (PCSF ¶ 90).   This is more than sufficient evidence of cognizable FCRA actual damages with which to go to a jury. 
 TU is further mistaken in arguing that there is no evidence here of any “causal link” between TU’s conduct and Plaintiff’s damages.  TU cites to cases form other jurisdictions (Cousin and Konter) in support of this argument.  (Def. Mem. at 6).  As TU knows, the seminal case on FCRA causation is against TU itself from this Circuit.  Philbin v. Trans Union Corp., 101 F.3d 957, 966-70 (3d Cir. 1996).  In Philbin, our Circuit Court concluded that a consumer may recover actual damages where inaccurate credit reporting was a “substantial factor” (not a “but for” factor) in leading to the damages.  Id.  Philbin made clear that other substantial factors can also be at play, but do not preclude a consumer from recovery.  Id. 
 Here, there can be no doubt that Jung was made to feel like a victim of fraud because TU told him so.  TU’s own records, including Jung’s dispute letters, show that Jung suffered emotion distress.  Jung lost sleep and further lost huge amounts of time trying to solve a serious problem that TU had created.  The only reason Jung was humiliated before the AG is because of TU.  Indeed, TU was a substantial factor in all of the damages that Plaintiff articulates.  Moreover, in comparison to the single interrogatory response that the Philbin court found to be sufficient for that plaintiff to survive summary judgment in an FCRA case, here Jung has come forward with far more detailed and corroborated evidence of emotional harm.         
 With respect to lost credit opportunities, the consumer in Philbin (who was also a victim of a TU mixed file) sometimes offered “no reason for the denial of credit.”  Id. at 968 (as to Household International).  Nevertheless, the Third Circuit found that it was for the trier of fact to decide whether a lost of credit was caused by TU’s inaccurate credit reports by necessary implication, not a legal determination that could be made at summary judgment.  Id.  
 Given the clear case law regarding the recovery of non-economic damages under the FCRA, as well as the causal standard for lost credit opportunities, Plaintiff’s evidence of actual damages is more than sufficient.  TU’s Motion must therefore be denied.         
 B. Plaintiff Has Come Forward With Evidence To Show A Genuine Issue Of Material Fact As To His FCRA Section 1681i Claims, Relating To TU’s Unreasonable Reinvestigations

 Jung has also brought claims under FCRA section 1681i, relating to TU’s duty to “reinvestigate” consumer disputes.  (See Amend. Comp. at ¶¶ 26-31) (Docket No. 32).  FCRA section 1681i places a host of obligations upon a CRA such as TU when it receives a consumer dispute.  TU does not contend in the present Motion that it met any of those obligations.  Rather it argues that Jung cannot show “economic” or “emotional distress” damages, and thus cannot satisfy all of the elements of an FCRA section 1681i negligence claim.  (Def. Mem. at 7-8).   TU separately argues as to Plaintiff’s sub-section 1681i(c) claim that although it did not note Jung’s dispute on his reports for a period of time, that claim is not actionable because it also did not sell Plaintiff’s report during that same time period.  (Def. Mem. at 6-7).  These arguments fail.              
First, there is no doubt in this case that Plaintiff put TU on notice through multiple direct disputes of the inaccuracies on his credit report.  (See PCSF at ¶¶ 35, 39, 43, 45, 49, 52, 57, 59, 67).  Nor is there any dispute that TU failed to correct Jung’s report, or delete the inaccuracies, within 30 days of Plaintiff’s dispute, as require by FCRA section 1681i(a).  (See PCSF at ¶¶ 39, 44, 51, 54, 58, 65, 70, 73). 
 As it did with respect to Plaintiff’ section 1681e(b) claims, TU’s focuses upon what it seeks to characterize as an absence of damages.  As explained in the above discussion under section 1681e(b), however, Jung has come forward with more than sufficient evidence of cognizable FCRA “actual damages.”  (See Section IV(A), supra).  Plaintiff is not strictly required to show an “economic” loss, as TU contends.  Jung has proffered evidence of lost credit opportunities and of a lowering of his credit standing, which are cognizable FCRA actual damages, as discussed above.  (See Id.)  (See also PCSF at ¶ 88). 
 Plaintiff has also come forward with detailed and significant evidence of different types of emotional harm which is cognizable under the FCRA.  (See Id.).   TU presumably clumps all of Plaintiff’s damages claims together as “emotional distress,” and then argues that Plaintiff has failed to show evidence of emotional distress “as a matter of law.”  (Def. Mem. at 8).  Yet there is no FCRA authority for this proposition.  TU cites to non-FCRA cases and ignores the multiple FCRA cases from within this Circuit that allow consumers to proceed to trial with damages claims similar to the ones Jung has here. Philbin, 101 F.3d at 963 n. 3; see also fn. 4, supra.      
 With respect to TU’s contention that a subsection 168i(c) claim cannot stand because it issued no “consumer reports” concerning Plaintiff between November 2006 and March 2007, TU’s own documents plainly contradict that position.  TU focuses upon the “Regular Inquiries” portion of Jung’s report, but ignores the “Account Review Inquiries.”  Those latter inquiries list companies that “obtained information from [Plaintiff’s] consumer report for the purpose of an account review or other business transaction with [Plaintiff].”  (See Exhibit 37).   TU made such sales for account review purposes presumably to Plaintiff’s existing creditors nine times between November 2006 and April 2007, including five sales to Capital One (11/06, 12/06, 1/07, 2/07, 407), two to Bank of America (1/07 and 4/07), one to Discover (4/07) and one to First Marblehead Corp. (11/06).  (See PCSF at ¶ 78) (Exhibit 37 at p. 5 of 7) (Jung’s TU 5/15/07 credit report at 5 or 7, Account Review Inquiries).
 FCRA sub-section 1681i(c) simply required TU to “clearly note” Plaintiff’s consumer statement “in any subsequent consumer report” after receipt of the same.  15 U.S.C. § 1681i(c).  TU acknowledges that Plaintiff offered evidence of having filed such a statement with TU in November 2006.   (Def. Mem at 7).  TU, however, assumes that only “Regular Inquiries,” but not “Account Review Inquiries,” can constitute a subsequent consumer report.   The FCRA, however, makes no such distinction.  Rather, the Act simply defines “consumer report” as:
any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer’s eligibility for . . . [credit]. 

15 U.S.C § 1681a(d) (emphases).  “Any” information can certainly be “some” information that bears upon a “consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living.”  Id.   Thus, even if one assumes that the “information obtained from your consumer report” for account review purpose is not “all” the information in Jung’s TU file, the account review transactions still constitute a “consumer report” for FCRA purposes.  Nor can there be any doubt that TU reports are “used or expected to be used or collected in whole or in part for” credit eligibility purposes.  Id. (emphasis added).
 Plaintiff has thus also set forth sufficient facts for all of his section 1681i claims, including under sub-section 1681i(c).  TU’s Motion should therefore be denied.                       
C. TU’s Conduct Here May Be Deemed By A Reasonable Jury To Constitute One Or More Willful Violations Of  The FCRA

 Under the facts of this case, a reasonable jury may find not only that TU violated the FCRA, but that it did so willfully.  A willful violation allows a jury to award punitive damages.   See 15 U.S.C. § 1681o(a)(3).  
 1. The Legal Standard:  Reckless or Conscious Disregard
 The standard to show a “willful” violation under the FCRA is not high.  A plaintiff need not show malice, but only that the defendant recklessly committed an act in conscious disregard for the rights of others.  See Cushman v. Trans Union Corp., 115 F. 3d 220, 227 (3d. Cir. 1997).  This is a lower standard than the standard for willful violations or punitive damages claims under most common law torts.  Although the terms “willful” or “willfully” are not defined in the FCRA, case law has held that neither malice nor evil motive need be established for a finding of a willful violation. Id.; see also Stevenson v. TRW, Inc., 987 F.2d 288, 294 (5th Cir. 1993) (citing Fischl v. General Motors Acceptance Corp., 708 F.2d 143, 151 (5th Cir. 1983)). 
Many courts have noted that willfulness under the FCRA is demonstrated by recklessness and not by a knowing violation of the law.  See id. at 293 (citing Pinner v. Schmidt, 805 F.2d 1258, 1263 (5th Cir. 1986), cert. denied, 483 U.S. 1022 (1987)); Cushman, 115 F. 3d at 227; see also Reynolds v. Hartford Fin. Servs. Group, 435 F.3d 1081, 1097-99 (9th Cir. 2006) (discussing meaning of “willfully” with CRA and relying on Cushman).  Such reckless or conscious disregard may be found when a defendant adopts a policy either knowing it to be in “contravention of the rights possessed by consumers under the FCRA or in reckless disregard for whether the policy contravenes those rights.”  Cushman, 115 F. 3d at 227; see also Reynolds v. Hartford Fin. Servs. Group, 435 F.3d 1081, 1097-99 (9th Cir. 2006). 
Multiple cases within this District, examining the willfulness standard in FCRA investigation cases against CRAs such as TU, have found that plaintiffs may proceed to trial with their willfulness claims where the defendant’s conduct is not merely a result of a negligent act that was promptly cured.  See Sheffer v. Experian Info. Solutions, Inc., Civ. No. 02-7407, 2003 WL 21710573 at *3 (E.D. Pa. July 24, 2003) (Schiller, J.) (defendant’s conduct was willful, and not merely an “isolated instance of human error  . . . promptly cure[d]”) (quoting Boris v. Choicepoint Servs., 249 F. Supp. 2d 851, 862 (W.D. Ky. 2003)) (emphasis added); see also Lawrence v. Trans Union, LLC, Civ., 296 F. Supp. 2d. 582, at. 590; Crane v. Trans Union, LLC, 282 F. Supp. 2d 311, at 321; Evantash v. G.E. Capital Mortgage Servs., Inc., E.D. Pa. Civ. No. 02-1188, 2003 WL 22844198 *8. 
Chief Judge Bartle also agreed with this interpretation of the willfulness standard under the FCRA when he recently permitted punitive damages to go to the jury in an FCRA investigation matter with facts less egregious than the case at bar.  See Abusaab v. Equifax Information Services LLC, Civ. No. 05-5094, 2006 WL 1214782 (E.D. Pa. May 4, 2006). 
2. Safeco Only Affirmed The Reckless Disregard Standard
TU makes much of the U.S. Supreme Court’s 2007 decision in Safeco, but TU’s  reliance on Safeco is ironic because the Safeco decision, if anything, undermines TU’s argument.  See Safeco Insurance Co. of America v. Burr, 127 S. Ct. 2201 (2007).  In Safeco, the U.S. Supreme Court was asked to decide which of two conflicting standards governed FCRA willfulness claims, and it adopted the lower and least rigorous “reckless disregard” standard, which this Court has followed for years.  
Prior to Safeco, there was a circuit split as to what level of scienter should be applied in assessing FCRA willfulness claims.  Several circuits had held that a knowing violation of the law (higher standard) was required for a consumer to prove willfulness under the FCRA, while others, including the Third Circuit and the Ninth Circuit, had held that “reckless disregard” (lower standard) was all that was required.  In Safeco, the U.S  Supreme Court endorsed our Circuit’s standard, and held that proof of “reckless disregard” by a defendant (i.e. not a knowing violation of law, as the credit industry argued) is sufficient to establish a willful violation of the FCRA.  Safeco, 127 S.Ct. at 2208-2210. 
“Reckless disregard” is precisely the FCRA willfulness standard that this Court has followed for many years.  See Cushman v. Trans Union Corp., 115 F. 3d 220, 227 (3d. Cir. 1997).  In Safeco, the U.S. Supreme Court cited our Circuit’s decision in Cushman as the correct standard for assessing willfulness claims, not the intentional disregard standard.  Safeco therefore forever disposed of the argument that a consumer-plaintiff must show that a defendant knowingly violated the FCRA. 
Thus, the inquiry now is not the standard for a willfulness claim, but rather when the “reckless disregard” standard is met in an FCRA case brought against a defendant.   Unlike the situation in the circuits which had previously followed the knowing violation standard, this question has been thoroughly investigated and answered by the courts within this Circuit, as discussed and cited above.   These cases also demonstrate that the reckless disregard standard is a fact-bound inquiry, a concept that our Circuit just recently reiterated.  See Whitfield v. Radian Guaranty, Inc., 501 F.3d 262 (3d Cir. 2007).   Indeed, in Whitfield the Third Circuit, in a post-Safeco FCRA decision, reversed a grant for summary judgment on an FCRA willfulness claim and held that the issue of willfulness was for the jury to decide.  Id. at 271.    The Third Circuit stated: 
We do not suggest that a factfinder could not or would not determine that [the defendant] did not act willfully.  Instead, we hold that whether it did so is a factual issue, not a question of law, and it therefore cannot be decided either on appeal or by the District Court as a matter of law.

Id. at 271. ) (emphasis added) (vacated on mootness grounds, 2008 WL 2329934 (U.S. 2008)).   
3. Summary Judgment As To The Issue Of FCRA Willfulness Is Not Possible Here Because Key Liability Facts Are Contested 

 As an initial matter, summary judgment is not possible in this case because the factual record presents genuine issues of material fact as to the central questions of liability.  Plaintiff obviously contends that the information and accounts associated with Seibert’s name are not his and have no place on his credit report.  Defense witnesses testified that all of the information that TU reported on Jung’s report was “accurate” and that the much disputed Nicor Gas account “belonged” to Jung.  (PCSF ¶ 76). 
The parties also disagree as to how the alleged inaccuracies happened and why they were not corrected promptly by TU upon notice.  Jung has offered expert testimony explaining he is a victim of a “mixed file,” a recurring problem that TU deliberately refuses to correct, because it would cut into its profits.  TU witnesses either see no pattern in the alleged mistakes on Jung’s file or may believe that this is a case of identity theft. 
These types of disagreements go to the core liability issues in this case, including whether TU’s conduct was willful:  Was the disputed information accurate?  If it was inaccurate, why is that so?  Why didn’t TU promptly correct the alleged inaccuracies upon receipt of Jung’s disputes?  These are jury questions that cannot be resolved at summary judgment because they require credibility determinations.  Thus summary judgment as to liability (whether under a negligence or a willfulness standard) is not possible in the case at bar.           
 
4. Plaintiff Has Come Forward With A Factual Record That Would Easily Permit A Reasonable Jury To Find That TU’s Violations Of The FCRA In This Case Were Willful 

Finally, the factual record that Plaintiff has amassed is more than sufficient evidence to present a genuine issue of material fact as to whether TU willfully violated the FCRA.   The question of willfulness, therefore, must be left for the jury.
The jury can, for example, reasonably determine that TU’s conduct was in reckless or conscious disregard for Plaintiff’s rights because TU repeatedly and systemically failed to get to the bottom of Jung’s disputes.  The jury can reasonably find that TU’s practice of never going beyond the limited information provided on the ACDV forms by its credit furnishers in handling these type of investigations shows a reckless disregard.  This practice, known as “parroting,” has already been deemed by several courts within our Circuit to constitute a basis for FCRA willfulness claims to go to the jury.   Lawrence v. Trans Union, LLC, 296 F. Supp. 2d 582, at 590 (“merely parroting information without verifying its accuracy, could be found by a reasonable jury to be knowing or reckless violations of the FCRA”); Crane v. Trans Union, LLC, 282 F. Supp. 2d 311, at 321; Sheffer v. Experian Info. Solutions, Inc. and Trans Union, Civ. No. 02-7407, 2003 WL 21710573 at * 3 (Schiller, J.).
  Some of these same courts have also found TU’s practice of not forwarding all relevant information to credit furnishers also forms a basis for FCRA willfulness claims to go to the jury.  Lawrence, 296 F. Supp. 2d 582, at 590 ; Crane, 282 F. Supp. 2d 311, at 321; see 15 U.S.C. § 1681i(a)(2)(A) (CRA “shall” provide notice to furnisher with “all relevant information regarding the dispute . . . ”).   Despite this legal guidance, TU has not changed its practices in this respect.  TU now seeks to argue that it was somehow confused about its duties to reinvestigate and that its understanding of those duties was not objectively unreasonable.  Not surprisingly, TU provides no support whatsoever for this argument, because none exists.      
Other facts may also support a “reckless disregard” finding by the jury:  the fact, for example, that TU knows how to avoid its mixed file problem but consistently fails, like it did in this case, to use its “do not merge” procedure or “full identifying information”; the fact that TU failed so many times to properly address Plaintiff’s problem, despite a wealth of notice; the fact that TU failed to “block” the Nicor Gas account despite two police reports that identified that account as a possible fraud; the fact that TU took such liberties and made such significant misrepresentations in responding to Jung’s dispute through the Indiana Attorney General’s Office; the fact that TU did not disclose to Jung that it had two or more files on him; and the list goes on.  
In sum, the record here provides more than sufficient evidence on which a jury may reasonably make a reckless or conscious disregard finding. Accordingly, TU’s Motion should be denied.   
V. CONCLUSION

For all of the reasons set forth above, Defendant TU’s Motion should be denied.
     FRANCIS & MAILMAN, P.C.

               /s/ John Soumilas  
      JOHN SOUMILAS 
      Attorney for Plaintiff
            Land Title Building, 19th Floor
            100 South Broad Street 
             Philadelphia, PA 19110
DATE:  April 27, 2009         (215) 735-8600

PLAINTIFF LARKAY D. WESLEY’S MEMORANDUM OF LAW IN SUPPORT OF HER RESPONSE IN OPPOSITION TO DEFENDANTS CAVALRY INVESTMENTS, LLC AND CAVALRY PORTFOLIO SVCS’S
MOTION FOR JUDGMENT ON THE PLEADINGS

Plaintiff Larkay D. Wesley, through counsel, hereby respectfully submits this Memorandum of Law in opposition to Defendants Cavalry Investments, LLC and Cavalry Portfolio Svcs’s (“Cavalry”) Motion for Judgment on the Pleadings (“Motion”).   For the reasons set forth below, the first part of Defendants’ Motion should be denied.
I. INTRODUCTION
This is a consumer class action brought under the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692, et seq. (“FDCPA”), a federal statute that prohibits debt collectors from engaging in abusive, deceptive and unfair collection practices.  Plaintiff claims that Defendants systematically violate the FDCPA by communicating to third parties credit information which is known or which should be known to be false, “including the failure to communicate that a disputed debt is disputed,” in violation of FDCPA section 1692e(8).  (See Compl. at ¶¶ 8-11, 15-19, 36).  
In their Motion, Defendants contend that they are entitled to judgment on the pleadings because the purportedly “undisputed evidence” shows that Plaintiff cannot set forth a “cognizable claim.”   (See Def. Mem. at 1, 6).  Then Defendants proceed to completely ignore the facts set forth in Plaintiff’s Complaint, and instead predicate their arguments on a different set of facts.  For example, Plaintiff’s Complaint asserts that Defendants failed to mark as “disputed” a Cavalry collection account that Defendants reported to the Trans Union consumer reporting agency (“CRA”), also known as a credit bureau.  (Compl. at ¶¶ 17-19).  Defendants simply ignore those facts and instead discuss a different credit-reporting transaction, taking place on a different date, involving a communication from a different CRA (the Equifax credit bureau).   (See Def. Mem. at 6-7, and Exhibit A to Def. Answer).  This is not a minor mistake, as the very factual basis for Plaintiff’s claim in this case is the Trans Union credit-reporting transaction.  Defendants cannot expect to prevail on a motion on the pleadings when they simply ignore the pleadings.
Moreover, Defendants’ contention that they have no legal duty to mark disputed accounts as disputed when they communicate credit information to a CRAs is completely unsupported by any authority and is simply belied by the face of the FDCPA, federal case-law, as well as Defendants’ own conduct.  Defendants’ untenable belief that their (purported) compliance with section 1681s-2(b) of a different federal statute, the Fair Credit Reporting Act (“FCRA”), makes them immune form liability under FDCPA section 1692e(8) is not grounded in any conventional understanding of statutory construction, or in reality.  Defendants can and must comply with both the FCRA and the FDCPA.  Under the facts pled in this case, Plaintiff has set forth a cognizable claim as to why Defendants fail to comply with the FDCPA.
Accordingly, Defendants’ Motion must be denied.                          
II. FACTS IN THE PLEADINGS
The pleadings in the case consist only of Plaintiff’s Class Action Complaint (“Complaint”) and Defendants’ Answer and Affirmative Defenses (“Answer”).  (See Docket Entry Nos. 1 and 10).   For the sake of brevity, Plaintiff will not recite each averment paragraph- by-paragraph, but will for the convenience of this Court attached the Compliant and Answer hereto as Exhibits 1 and 2, respectively. 
Additionally, Plaintiff believes it is important to underscore certain particular averments, which Defendants seem to completely ignore in their Motion.  Specifically, at paragraphs 17 through 19 of the Complaint, Plaintiff pleads as follows:
17. Plaintiff viewed her consumer report from Trans Union in or about May 2005. After examining her consumer report, Plaintiff learned that Defendants were reporting false and derogatory information about her, namely that Plaintiff had an auto loan that was derogatory which did not belong to her.  Accordingly, she immediately disputed the accuracy of the account.
18. On or about June 6, 2005, Trans Union sent Plaintiff a revised consumer disclosure that described the results of her dispute regarding the account with Defendants.  In that disclosure, Trans Union stated that the Defendants verified the account and made no change as to its status, including the failure to list the account as “disputed.”
 19. Defendants did not mark the debt as “disputed” to Trans Union, nor did Defendants otherwise mark the debt as “disputed.”

(Compl. at ¶¶ 17-19).  Defendants not only deny these allegations (thereby creating issues of material fact), they also ignore them it their Motion.  Defendants answer these averments by a general denial and also by then stating that they received both a telephone dispute and CDV [Consumer Dispute Verification form] dispute from the Equifax credit bureau on June 9, 2005, and responded to that different dispute (which expressly stated that Plaintiff’s account was a product of “fraud”) by immediately marking the account as “disputed.”  (Answer at ¶¶ 17-19).  
 Defendants further deny Plaintiff’s allegation that their “practice and policy, upon completion of their ‘investigation,’ is to report the results to the CRA(s) without updating the tradeline [or account] to report as ‘disputed’ unless the consumer has alleged the account is the result of fraud and/or identity theft.”    (See Compl. at ¶ 15; Answer at ¶ 15).  Indeed, Defendants deny the truthfulness of virtually every paragraph of Plaintiff Complaint.  (See Answer at ¶¶ 1-4; 8-13, 15-30).  One of Defendants’ few admissions in the pleading is that they do, in fact, report credit information to the major CRAs, including Trans Union.  (See Compl. at ¶ 7; Answer at ¶ 7).       
 
III. STANDARD
Under Federal Rule of Civil Procedure 12(c), judgment on the pleadings may not be granted unless “the movant clearly establishes there are no material issues of fact, and he is entitled to judgment as a matter of law.”  Sikirica v. Nationwide Ins. Co., 416 F.3d 214, 220 (3d Cir. 2005).   All “inferences to be drawn therefrom [must be made] in the light most favorable to the nonmoving party.”  Id.    A court “must view the facts presented in the pleadings,” and not facts outside of the pleadings.  Id.; see also Fed. R. Civ. P. 7(a) (defining limits of federal “pleadings”).  Indeed, Rule 12(c) expressly provides that:
If, on a motion for judgment on the pleadings, matters outside the pleadings are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.

Fed. R. Civ. P. 12(c) (emphasis added).  Here, this Court has already properly decided to defer the summary judgment aspects of the pending Motion until after the close of discovery.  Only the first part of Defendants’ Motion (i.e., the motion for judgment on the pleadings) is presently before the Court.  (See Order entered February 13, 2006; Docket Entry No. 15).  That first part of the Motion fails because, on the face of the pleadings, there exist many genuine issues of material fact and Defendants have failed to show that they are entitled to judgment as a matter of law.   Plaintiff’s Complaint clearly alleges that Defendants failed to communicate to Trans Union that the alleged debt was disputed.  As such, Plaintiff has properly pled a claim under FDCPA section 1692e(8).      
IV. ARGUMENT
Defendants cannot be entitled to a judgment on the pleadings by ignoring the pleadings.  Genuine issues of material fact exist, as Defendants’ own Answer makes abundantly clear.  Moreover, Plaintiff has pled a cognizable claim under the FDCPA.  Defendants, therefore, have also failed to show that they are entitled to judgment as a matter of law.  
A. Judgment On The Pleadings Is Inappropriate In This Case Because There Exist Genuine Issues Of Material Fact

Defendants acknowledge that a judgment on the pleadings is not possible where there exist genuine issues of material fact.  (See Def. Mem. at 3) (citing Rule 12(c) and Soc’y Hill Civic Ass’n v. Harris, 632 F.2d 1045, 1054 (3d Cir. 1980)).  The case at bar is nothing short of a case study on disputed issues of material fact.  Indeed, Defendants have denied virtually every factual averment in Plaintiff’s Complaint.  (See Answer at ¶¶ 1-4; 8-13, 15-30).  Defendants cannot deny virtually all of Plaintiff’s factual allegations and then, with a proverbial straight face, represent to this Court that a judgment on the pleadings is appropriate because the “undisputed evidence” shows that they are entitled to judgment as a matter of law.  (See Def. Mem. at 6).  Even a cursory look at Defendants’ Answer makes it abundantly clear that this case is hotly contested at every factual turn. 
In particular, even the specific facts surrounding the very transaction that gives rise to the claim that Defendants fail to mark disputed debts as disputed — unless the magic words “fraud” or “identity theft” are used in the dispute — are themselves in dispute.  First, Defendants deny that they have a policy or practice of not marking accounts as disputed except in the limited instances where the terms “identity theft” or “fraud” are used.  (See Compl. at ¶ 15; Answer at ¶ 15).   Moreover, Defendants deny that they communicated credit information to the Trans Union credit bureau on or about June 6, 2005 regarding a disputed account and failed to mark that account as “disputed.”  (See Compl. at ¶¶ 18-19; Answer at ¶¶ 18-19).  
Although Defendants deny these allegations in their pleadings (thus creating genuine issues of material facts, and also making any judgment on the pleadings inappropriate), it is worth observing that the record evidence, once fully presented to this Court upon the close of discovery, will sharply contradict the representations that Defendants make in the present Motion.  For example, even though Defendants deny the policy and practice of not marking accounts as disputed except in the limited instances where the terms “identity theft” or “fraud” are used, the very corporate representative who has been designated to give testimony as a 30(b)(6) witness in this case, Mr. Gino Archer, has previously testified under oath to the contrary:
       8      Q         Mr. Archer, focusing on consumer credit
       9      disputes that Cavalry receives through the
      10      bureaus; only those disputes, other than where
      11      the communication clearly advises Cavalry that
      12      the consumer is disputing an item as fraudulent
      13      or the result of identity theft, are there any
      14      other instances in which Cavalry will advise the
      15      bureaus to mark the item as disputed in their
      16      response back to the bureau?

      17      A         Not to my knowledge.

      18      Q         Okay.  So, every other type of dispute
      19      Cavalry will answer, but not advise the bureau
      20      that the item should be listed or marked as
      21      disputed?

      22      A         Correct.

(See Dep. of G. Archer, 3/30/05, at pp. 48, in Baksh v. Experian et al., Civ. No. 04-1088, E.D. Pa.) (emphasis added) (cited pages attached hereto as Exhibit 3). 
The above testimony supports Plaintiff’s theory of the case that Defendants will mark credit accounts as “disputed” only in certain circumstances, but not in all circumstances as required by the FDCPA.   So does Defendants’ admission that they actually marked as disputed the Cavalry account in communicating back to the credit bureaus after Equifax presented them with a CDV [Consumer Dispute Verification] form that claimed that Plaintiff’s account was a product of “fraud.” (See Answer ¶ 18). 
Further, Defendants’ own collection notes, also referenced in their Answer, corroborate Plaintiff’s allegation that there was a communication between Defendants and Trans Union on or about June 6, 2005, where the disputed account was not marked as disputed.  (See Compl. at ¶¶ 18-19; Answer at ¶¶ 18-19) (Answer referring to Cavalry Collection System Notes for June 6 and 10, 2005).  Those collection notes state as follows with respect to June 6, 2005:  “Brenda from Trans union cld ……ver acct not in dispute.”  (See Def. Answer at Exhibit B, p. 2) (emphasis added).
   Thus, despite Defendants’ contention that they have no duty to mark accounts as disputed, at the close of discovery there will be ample evidence presented to show that Cavalry, in fact, marks certain credit accounts as disputed to the CRAs.  In many other instances, however (the ones at issue in this case), where the credit bureau dispute does not use the magic words “fraud” or “identity theft” the dispute will be ignored and the communication back to the CRAs will not mark the account as disputed, as in the case of the June 6, 2006 communication between Cavalry and Trans Union concerning Plaintiff.  (See Def. Answer at Exhibit B, p. 2); (See Compl. at ¶¶ 18-19).  That is precisely Plaintiff’s complaint in this case, and she is ideally suited to both show the absurdity of Cavalry’s policy  and to represent similarly situated consumers for disputes that do not use the magic words of “fraud” or “identity theft.”  
But this foray into the factual record is unnecessary for now, as only the pleadings and Defendants’ Motion for Judgment on the Pleadings is before this Court.   Because there exist many genuine issue of material facts in this case (as plainly demonstrated by Defendants’ Answer to Plaintiff’s Complaint) no judgment on the pleadings can be appropriate.  Defendants’ Motion must therefore be denied on that basis alone. 
B. Judgment On The Pleadings Is Also Inappropriate In This Case Because Defendants Have Failed To Show That Plaintiff Has Not Pled A Legally Cognizable Claim

Defendants also argue that they have no legal obligation to mark an account as disputed under FDCPA section 1692e(8) when contacted by a CRA to conduct an investigation under FCRA section 1681s-2(b).  (See Def. Mem. at 4).   According to Defendants, so long as they fulfill their obligations under section 1681s-2(b) of the FCRA and respond to the dispute, they have no further duties – and certainly no duty to mark a disputed account as disputed.  (See Def. Mem. at 4-6).    That proposition is mistaken, both under the FCRA and the FDCPA. 
As a threshold matter it must be observed that Defendants (despite their bald contentions), in fact, mark certain credit accounts as “disputed” in the course of FCRA 1681s-2(b) investigation; they just do not do it in all instances.  The case of the June 9, 2005 Equifax “fraud” dispute that Defendants reference in their Answer is an instance when Defendants do recognize the obligation to respond back to credit bureau disputes by marking accounts as disputed.  (See Answer ¶ 18).  If they have no such obligation whatsoever, then there would be no practical reason for Defendants to ever mark accounts as disputed, or to have done so in connection with the Equifax dispute.
Separate from the inferences that one may reasonably draw from Defendants’ own conduct, Defendants are simply mistaken in arguing that they have no legal obligation to mark disputed debts as disputed when the dispute comes in the form of an FCRA dispute.  The FCRA itself, provides as follows:
(3) Duty to provide notice of dispute

If the completeness or accuracy of any information furnished by any person to any consumer reporting agency is disputed to such person by a consumer, the person may not furnish the information to any consumer reporting agency without notice that such information is disputed by the consumer.   

15 U.S.C. § 1681s-2(a)(3).  Defendants’ contention that they have no further obligations under the FCRA so long as they investigate and timely respond to a credit bureau dispute (under section 1681s-2(b)) is therefore wrong.  FCRA section 1681s-2(a)(3) clearly imposes an additional obligation to mark disputed accounts as disputed.  Because that duty is set forth under FCRA subsection 1681s-2(a), however, as opposed to FCRA subsection 1681s-2(b), Plaintiff has no private cause of action for the violation of that provision of the law, and thus has not brought such as claim.  See 15 U.S.C. § 1681s-2(c) & (d).  Only the Federal Trade Commission may enforce that duty against credit furnishers.
 Because Cavalry is also a debt collector, however, as well as a credit furnisher, they are also regulated by the FDCPA, in addition to the FCRA. Naturally not all debt collectors also report credit information to the credit bureaus.  Similarly, not all companies that furnish credit data are debt collectors.  In fact, most are not debt collectors.  Companies such as Defendants that engage both in debt collection and credit reporting are, by virtue of that dual role, covered by both the FDCPA and FCRA.
 Importantly, the FDCPA imposes a special set of duties upon debt collectors separate and apart from any duties that they may have under the FCRA or any other law.   One such duty is set forth at FDCPA section 1692e(8):
A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section . . . Communicating or threatening to communicate to any person credit information which is known or which should be known to be false, including the failure to communicate that a disputed debt is disputed. 

15 U.S.C. §§ 1692e(8) (emphasis added).  There is nothing in the FDCPA that ever remotely suggests, as Defendants contend, that debt collectors are relieved of this duty to mark disputed debts as disputed if they (purportedly) comply with section 1681s-2(b) of the FCRA.  Similarly, nothing in the FCRA suggests that compliance with section 1681s-2(b) relieves any party of any duties that it may have under the FDCPA or any other federal statute.  And Defendants cite no authority to that effect.  As with other instances where more than one federal statute governs the conduct of an actor, the actor must comply with both statutes. 
 Indeed, it is a basic cannon of statutory construction that in construing two or more federal statutory provisions or statutes, a court must give effect to both wherever possible.  See Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1017-1018, 104 S.Ct. 2862, 2881 (1984) (“where two statutes are capable of co-existence, it is the duty of the courts, absent a clearly expressed congressional intention to the contrary, to regard each as effective”); Morton v. Mancari, 417 U.S. 535, 551, 94 S.Ct. 2474, 2483 (1974) (quoting United States v. Borden Co., 308 U.S. 188, 198, 60 S.Ct. 182, 188 (1939)) (“The courts are not at liberty to pick and choose among congressional enactments, and when two statutes are capable of co-existence, it is the duty of the court, absent a clearly expressed congressional intention to the contrary, to regard each as effective.  ‘When there are two acts upon the same subject, the rule is to give effect to both if possible.’”); United States v. Menasche, 348 U.S. 528, 538-39, 75 S.Ct. 513, 519-20 (1955) (courts should avoid a construction of a statute that renders any provision superfluous); see generally Cushman v. Trans Union Corp., 115 F.2d 220, 225 (3d Cir. 1997) (in comparing two statutory provisions with different duties, “[w]e strive to avoid a result that would render statutory language superfluous, meaningless or irrelevant”). 
 Contrary to Defendants’ suggestion, there is nothing irreconcilable or onerous about Defendants having to comply with both their duties under FCRA section 1681s-2(b) and FDCPA section 1692e(8).  In fact, according to their own admissions, Defendants manage to comply just fine with respect to fraud disputes by simply adding the one additional word to their communication to the credit bureaus in that context, namely that the account is “disputed.”   (See Answer ¶ 18).  Nor has Congress anywhere expressed its intent, as Defendant may wish, to immunize debt collectors from liability under FDCPA section 1692e(8) if they (purportedly) comply with the requirements of FCRA section 1681s-2(b).     
 Even the single decision that Defendants cite in support of their argument contradicts their absurd reading of the statutes.  (See Def. Mem. at 4 & 6) (citing Farren v. RJM Acquisitions Funding, LLC, Civ. No. 04-995, 2005 WL 1799413 (E.D. Pa. July 26, 2005)).  In Farren, the court did not find that compliance with FCRA section 1681s-2(b) means that a debt collector who was also furnishing credit information need not mark as “disputed,” under the FDCPA, a disputed account.  To the contrary, the Farren court allowed the plaintiff-consumer to proceed to trial both with his claim that a debt collector violated FCRA section 1681s-2(b) by conducting a negligent investigation and also with his claim that the same debt collector violated FDCPA section 1692e(8) by failing to mark the disputed debt as disputed in its communication back to the credit bureaus. Farren, Civ. No. 04-995, 2005 WL 1799413 at * 8 & *10, 11 (denying summary judgment as to both FCRA section 1681s-2(b) and FDCPA section 1692e(8) claims).   At least one other federal court in this District has similarly held that a consumer may proceed to trial against a debt collector who reports credit with both an FCRA section 1681s-2(b) claim and a separate FDCPA section 1692e(8) claim for failing to mark a disputed debt as disputed.  See Agosta v. InoVision, Inc., Civ. No. 02-806, 2003 WL 22999213 at *5 & *7  (E.D. Pa. Dec. 16, 2003) (denying summary judgment as to both FCRA section 1681s-2(b) and FDCPA section 1692e(8) claims); see also Sullivan v. Equifax, Civ. No. 01-4336, 2002 WL 799856 at *2, 4 (E.D. Pa. Apr. 19, 2002) (reporting collection account to credit bureaus is debt collection activity that subjects debt collector to potential liability under FCRA and separately under FDCPA). 
 In sum, the statutory language and case-law makes it abundantly clear that, contrary to Defendants’ contentions, companies such as Cavalry have separate statutory duties under both FCRA section 1681s-2(b) and FDCPA section 1692e(8).  In the case at bar, Plaintiff has set forth a legally cognizable claim under the FDCPA and the facts of this case as they exist in the pleadings.  Accordingly, Defendants’ Motion must therefore be denied.        
V. CONCLUSION
For all of the reasons set forth above, Defendants’ Motion for Judgment on the Pleadings should be denied. 

     Respectfully submitted,
      FRANCIS & MAILMAN, P.C.                  
     BY:  __________________________
      JAMES A. FRANCIS, ESQUIRE
                                                                      MARK D. MAILMAN, ESQUIRE
      JOHN SOUMILAS, ESQUIRE
Land Title Building, 19th Floor
100 South Broad Street
      Philadelphia, PA 19110
      (215) 735-8600    
Dated: February 28, 2006   Attorneys for Plaintiff and the Class

credit-rating-damage-compensable-yet-often-overlooked-damage-in-tort-cases

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

ANNA ELIZABETH PIRES )

)

Plaintiff, ) Civil Action No.

vs. )

)

CHOICEPOINT SERVICES INC. )

)

and )

)

CHOICEPOINT INC. )

)

Defendants. )

)

COMPLAINT

I.     Preliminary Statement

1. This is an action for damages brought by an individual consumer against the Defendants for violations of the Fair Credit Reporting Act (hereafter the “FCRA”), 15 U.S.C. §§ 1681 et seq., as amended, and various other state laws.

II.     Jurisdiction and Venue

2. Jurisdiction of this Court arises under 15 U.S.C. § 1681p, 28 U.S.C. §§ 1331, 1337, and supplemental jurisdiction exists for the state law claims pursuant to 28 U.S.C. § 1367.

3. Venue lies properly in this district pursuant to 28 U.S.C. § 1391(b).

III.     Parties

4. Plaintiff Anna Elizabeth Pires is an adult individual who resides at 445 Stonemill Manor, Lithonia, GA 30058.

5. Defendant ChoicePoint Services Inc. is a business entity that provides background screening services, decisions-making intelligence, and operates as a consumer reporting agency.  Defendants regularly conduct business in Philadelphia County, Pennsylvania, and have places of business concerning the reporting of public records information located at 7 Foster Avenue, Suite 200, Gibbsboro, NJ 08026 and at 300 Phillips Boulevard, Suite 500, Ewing, NJ 08618.

6. Defendant ChoicePoint Inc. is a business entity and/or a credit-reporting agency.  Defendants regularly conduct business in Philadelphia County, Pennsylvania, and have places of business concerning the reporting of public records information located at 7 Foster Avenue, Suite 200, Gibbsboro, NJ 08026 and at 300 Phillips Boulevard, Suite 500, Ewing, NJ 08618.

IV.   Factual Allegations

7. Defendants have been reporting derogatory and inaccurate statements and information relating to Plaintiff and Plaintiff’s credit history to third parties (hereafter the “inaccurate information”).

8. The inaccurate information includes, but is not limited to, a maternity-related judgment and personal identifying information.    

9. The inaccurate information negatively reflects upon the Plaintiff, Plaintiff’s credit repayment history, Plaintiff’s financial responsibility as a debtor and Plaintiff’s credit worthiness.

10. Defendants have been reporting the inaccurate information through the issuance of false and inaccurate credit information and consumer credit reports that it has disseminated to various persons.

11. Plaintiff has disputed the inaccurate information through the national consumer reporting agencies by following established procedure for disputing consumer credit information, including in October 2005.

12. The national consumer reporting agencies gave notice of Plaintiff’s disputes, and per their duties under the FCRA, Defendants purportedly investigated Plaintiff’s disputes.  

13. Despite Plaintiff’s disputes, Defendants have nonetheless deliberately, willfully, intentionally, recklessly and negligently repeatedly failed to perform reasonable investigations and/or reinvestigations of the above disputes as required by the FCRA, have failed to remove the inaccurate information, have failed to report on the results of said investigations and/or reinvestigations to all credit reporting agencies and have continued to cause the reporting of the derogatory inaccurate information about the Plaintiff.

14. Plaintiff has applied for and has been denied various loans and extensions of consumer credit.  The basis for these denials was the inaccurate information that appears on Plaintiff’s credit reports and the inaccurate information was a substantial factor for those denials.

15. As a result of Defendants’ conduct, Plaintiff has suffered actual damages and serious financial and pecuniary harm arising from monetary losses relating to credit denials, loss of credit and loan opportunities, out-of-pocket expenses including, but not limited to, local or long distance telephone calls, postage, faxing and other related costs, all of which will continue into the future to Plaintiff’s great detriment and loss.

16. As a result of Defendants’ conduct, Plaintiff has suffered great emotional distress and mental anguish, and Plaintiff will continue to suffer the same for an indefinite time in the future, all to Plaintiff’s great detriment and loss.

17. As a result of Defendants’ conduct, Plaintiff has suffered a decreased credit score and/or credit standing.

18. At all times pertinent hereto, Defendants were acting by and through their agents, servants and/or employees who were acting within the course and scope of their agency or employment, and under the direct supervision and control of the Defendants herein.

19. At all times pertinent hereto, the conduct of the Defendants, as well as that of their agents, servants and/or employees, was intentional, willful, reckless, and in negligent disregard for federal and state laws and the rights of the Plaintiff herein.

V.     Claims

Count One - FCRA

20. Plaintiff incorporates the foregoing paragraphs as though the same were set forth at length herein.

21. At all times pertinent hereto, each Defendant was a “person” and a “consumer reporting agency” as those terms are defined by 15 U.S.C. § 1681a(b) and (f).

22. At all times pertinent hereto, the Plaintiff was a “consumer” as that term is defined by 15 U.S.C. § 1681a(c).

23. At all times pertinent hereto, the above-mentioned credit reports were “consumer reports” as that term is defined by 15 U.S.C. § 1681a(d).

24.     Pursuant to 15 U.S.C. § 1681n and 15 U.S.C. § 1681o, Defendants are liable to the Plaintiff for engaging in the following conduct:

(a) willfully and negligently failing to conduct a proper and reasonable reinvestigation concerning the inaccurate information after receiving notice of the dispute in violation of 15 U.S.C. § 1681i;

(b) willfully and negligently failing to prepare Plaintiff’s report by following procedures that assure maximum possible accuracy, in violation of 15 U.S.C. § 1681e(b);

(c) willfully and negligently failing to comply with the requirements imposed on furnishers of information pursuant to 15 U.S.C. § 1681s-2(b);

(d) willfully and negligently failing to comply with the FCRA in every other applicable respect, including 15 U.S.C. §§ 1681c and 1681g;

25. The conduct of Defendants was a direct and proximate cause, as well as a substantial factor, in bringing about the serious injuries, actual damages and harm to the Plaintiff that are outlined more fully above and, as a result, Defendants are liable to the Plaintiff for the full amount of statutory, actual and punitive damages, along with the attorneys’ fees and the costs of litigation, as well as such further relief, as may be permitted by law.

Count Two - Defamation

26. Plaintiff incorporates the foregoing paragraphs as though the same were set forth at length herein.

27. Defendants have published statements to various creditors, prospective credit grantors, other credit reporting agencies, and other entities that the above-referenced derogatory inaccurate information belongs to the Plaintiff.

28. Defendants have published these statements each time a credit report on the Plaintiff has been requested from any creditor, prospective credit grantors furnisher or other source.

29. The statements made by Defendants are false in that they inaccurately reflect Plaintiff’s credit information and debt repayment history, and paint the Plaintiff as financially irresponsible and delinquent.

30. Defendants knew that the statements were false when made, and had no factual basis for making the statements, as Plaintiff had notified them repeatedly through writing, telephone communication and extensive documentation that the above inaccurate information was inaccurate for the reasons stated above.

31. Nonetheless, Defendants continue to publish the false and negative statements concerning the Plaintiff’s credit history up through the present time.

32. Defendants’ conduct was a direct and proximate cause, as well as a substantial factor, in bringing about the serious injuries, damages and harm to the Plaintiff that are outlined more fully above and, as a result, Defendants are liable to compensate the Plaintiff for the full amount of actual damages, compensatory damages and punitive damages, as well as such other relief, permitted under the law.

Count Three - Negligence

33. Plaintiff incorporates the foregoing paragraphs as if the same were set forth at length herein.

34. Defendants’ negligence consists of the following:

(a) Violating the FCRA as set forth above;

(b) Failing to conduct a proper and reasonable investigation and/or reinvestigation concerning the inaccurate information after receiving notice of the dispute from the Plaintiff;

(c) Failing to review and consider all relevant information submitted by the Plaintiff concerning the dispute of the inaccurate information;

(d) Failing to delete or correct the inaccurate information from Plaintiff’s credit file after investigation and/or reinvestigation;

(e) Failing to report the results of investigations to the relevant consumer reporting agencies;

(f) Failing to properly and timely delete the inaccurate information from the Plaintiff’s credit files despite being unable to verify the accuracy of the information and/or being provided with proof of its inaccuracy; and

(g) Continuing to report the inaccurate information despite having knowledge of the inaccuracies and/or the inability to be verified.

35. As a result of Defendants’ above-mentioned conduct, Plaintiff has sustained and continues to sustain the losses and damages as set forth above.

36.   The conduct of Defendants was a direct and proximate cause, as well as a substantial factor, in bringing about the serious injuries, damages and harm to Plaintiff that are outlined more fully above and, as a result, Defendants are liable to compensate the Plaintiff for the full amount of actual and compensatory damages, as well as such other relief, permitted under the law.

Count Four – Invasion of Privacy/False Light

37.       Plaintiff incorporates the foregoing paragraphs as though the same were set forth

at length herein.

38. Defendants’ above actions violated Plaintiff’s right of privacy by placing the Plaintiff in a false light before the eyes of others, including potential credit grantors and creditors as well as family, friends and the general public.

39. By such unauthorized publication and circulation of Plaintiff’s name and the inaccurate information, Defendants invaded Plaintiff’s right to privacy, subjected Plaintiff to ridicule and contempt, injured Plaintiff’s personal esteem, reflected disgracefully on Plaintiff’s character, diminished Plaintiff’s high standing, reputation and good name among family, friends, neighbors and business associates, destroyed Plaintiff’s peace of mind, and caused Plaintiff severe mental and emotional distress.

40. The conduct of Defendants was a direct and proximate cause, as well as a substantial factor, in bringing about the serious injuries, damages and harm to Plaintiff that are outlined more fully above and, as a result, Defendants are liable to compensate the Plaintiff for the full amount of actual, compensatory and punitive damages, as well as such other relief, permitted under the law.

VI.     Jury Trial Demand

41.      Plaintiff demands trial by jury on all issues so triable.

VII.     Prayer For Relief

42. WHEREFORE, Plaintiff seeks judgment in Plaintiff’s favor and damages against the Defendants, based on the following requested relief:

(a) Actual damages;

(b) Statutory damages;

(c) Punitive damages;

(d) Costs and reasonable attorney’s fees pursuant to 15 U.S.C. §§ 1681n and 1681o;

(e) An order directing that Defendants send to all persons and entities to whom they have reported Plaintiff’s inaccurate information within the last three years Plaintiff’s updated and corrected credit report information; and

(f) Such other and further relief as may be necessary, just and proper.

Respectfully submitted,

FRANCIS & MAILMAN, P.C.

BY: /s/ James A. Francis _

JAMES A. FRANCIS

Land Title Building, 19th Floor

100 South Broad Street

Philadelphia, PA 19110

(215) 735-8600

Attorneys for Plaintiff

Dated:  October 11, 2007