Driscoll v. Experian Information Solutions, Inc.

Background

Jessica Driscoll brought a claim under the Fair Credit Reporting Act against Community Loan Servicing LLC (CLS). The dispute concerned information CLS reported to Experian Information Solutions, Inc., about the status of Driscoll’s mortgage. The court had previously granted CLS’s motion to dismiss Driscoll’s complaint.

CLS moved for sanctions under Federal Rule of Civil Procedure 11. Rule 11 requires an attorney to make a reasonable inquiry into the factual and legal basis for a filing and certifies that the filing is not being used for an improper purpose and that its legal arguments are supported by existing law or by a nonfrivolous argument for changing or extending the law.

Parties’ Positions

CLS argued that Driscoll’s Fair Credit Reporting Act claim was frivolous because the information was accurate when CLS reported it to Experian, CLS had no duty to modify the information in response to Driscoll’s dispute, and CLS satisfied any duty under the Act by deleting the account information, or “tradeline.”

Court’s Analysis

The court explained that a Rule 11 violation turns on whether a reasonable and competent attorney would believe that the argument had merit. The court found little to no appellate authority addressing the issues CLS identified and no controlling authority from the U.S. Court of Appeals for the Eighth Circuit.

The court concluded that Driscoll had a nonfrivolous basis to argue that the information on her Experian report was misleading when she submitted her dispute and that CLS therefore had a duty under 15 U.S.C. § 1681s-2(b) to correct it. She also had a nonfrivolous basis to argue that deleting the tradeline was not an “appropriate” response under the statute.

Disposition

The court denied Community Loan Servicing LLC’s motion for sanctions under Rule 11. The order did not impose sanctions or award CLS attorney’s fees.