Lopez v. Experian Information Solutions, Inc.

Background

Jose Alfredo Munoz Lopez and Jose Merced Munoz Lopez are brothers with similar names, Social Security numbers differing only in their final two digits, and, at some points, the same address. Merced applied for a credit card with Coast Central Credit Union on March 3, 2018. Because Merced had no credit history, but Alfredo had nine open credit accounts reported under several name variations, Experian’s matching system provided Alfredo’s credit history to Coast Central instead of reporting that Merced had no credit history. Merced withdrew his application and did not reapply.

The brothers later used BR Fix Restoration Services, operated by Brenda Rivera, to submit disputes to Experian. During the following months, Experian sometimes disclosed the wrong brother’s credit information to creditors. The brothers had what the opinion calls a “mixed file,” meaning a credit file containing information about more than one person.

The plaintiffs initially sued Experian, TransUnion LLC, and Equifax Information Services LLC. TransUnion and Equifax were later dismissed after settling. The claims remaining against Experian arose under the federal Fair Credit Reporting Act and California’s Consumer Credit Reporting Agencies Act. The claims alleged that Experian failed to use reasonable procedures to ensure accuracy, failed to provide Merced with his report, failed to conduct reasonable reinvestigations, and provided Alfredo’s report without a permissible purpose. The plaintiffs also alleged willful and negligent conduct.

Summary-judgment standard

Summary judgment is appropriate when there is no genuine dispute about a material fact and the moving party is entitled to judgment as a matter of law. A material fact is one that could affect the outcome under the governing law. The court must draw reasonable inferences in favor of the party opposing summary judgment.

The court explained that the California statute is substantially based on the federal statute and that courts generally interpret the two consistently. The court therefore analyzed the federal statute’s requirements because neither side identified a California-law difference relevant to the motion.

Reasonable reinvestigation claim

The plaintiffs claimed that Experian failed to conduct reasonable reinvestigations after they disputed inaccurate information. The court granted summary judgment to Experian on this claim.

For Alfredo, the court found no genuine factual dispute because he testified that Experian fixed the issues identified in his March 2018 dispute. Experian also removed the information Alfredo identified in his May 31, 2018 dispute and deleted the Capital One information challenged in his June 2018 online dispute.

For Merced, the court found that his March dispute did not identify information in his report because Rivera had not seen the report. The court also found that Merced offered no proof that his June dispute had been sent to Experian and had not established that his July dispute concerned inaccurate information. The court treated the later reappearance of disputed information as an issue concerning Experian’s general procedures for accuracy, rather than the reinvestigation claim, because the plaintiffs had not submitted new disputes about that reappearance.

Reasonable procedures claim

The plaintiffs alleged that Experian failed to use reasonable procedures to ensure the maximum possible accuracy of its reports. They argued that Experian should have automatically used a “Do Not Combine” option, used stricter full-identifying-information matching, and used procedures that would recognize and prevent mixed files from recurring.

The court rejected the plaintiffs’ arguments about automatic use of the Do Not Combine option because they offered no evidence that not applying the stricter matching criteria to every file produced less accurate results. The court also rejected the full-identifying-information argument because the evidence showed Experian was using the procedures required by an earlier consent order, which did not require an exact match for every listed identifier.

The court nevertheless found a genuine dispute of material fact about whether Experian’s procedures appropriately recognized mixed files. The brothers had differences in birth dates, middle names, and Social Security numbers, yet their files remained mixed for some time even after Experian was alerted to problems. The court therefore denied summary judgment on the reasonable procedures claim.

Permissible-purpose claim

Alfredo claimed Experian provided his credit report to third parties when those parties had actually requested Merced’s report, without a permissible purpose under the federal statute and California law. Experian argued that any disclosures resulted from a good-faith mistake.

The court held that a mistaken disclosure could still be lawful if Experian reasonably believed at the time that the report was being requested for a permissible purpose. The court found no genuine dispute about the reasonableness of Experian’s belief for requests made before Alfredo’s May 31, 2018 dispute, because Experian might reasonably have believed creditors were requesting Alfredo’s information. After that dispute, however, Experian was on notice that certain identifiers belonged to Merced. The court found a genuine dispute about whether Experian reasonably believed the 2019 requests sought Alfredo’s report when they included Merced’s identifying information. The court therefore denied summary judgment on this claim.

File disclosure claim

Merced claimed Experian failed to provide his credit file after three requests. In discovery, however, Merced admitted that Experian had never failed to provide him with a credit disclosure in response to any request.

Merced moved to withdraw or amend that admission the day before the summary-judgment hearing. The court denied that motion, finding that although withdrawal would likely help present the merits, allowing it would significantly prejudice Experian because Merced waited more than two years and gave no adequate reason for the delay. Because the admission remained effective and conclusively established that Experian had not failed to provide Merced’s file, the court granted summary judgment to Experian on the file disclosure claim.

Willfulness and negligence

The court denied summary judgment on willfulness and negligence. For willfulness, the court found a genuine factual dispute about whether Experian recklessly disregarded its legal duties on the reasonable-procedures and permissible-purpose claims after being alerted to inaccuracies.

For negligence, Experian argued that the plaintiffs had not shown damages. The plaintiffs identified alleged lost access to credit, costs of addressing the credit problems, and emotional injury. The court found at least a factual dispute about whether the alleged violations caused emotional injury, and therefore held that summary judgment on negligence was inappropriate.

Other motions and disposition

The court granted the plaintiffs’ motion for leave to file a separate statement of facts but admonished them to follow the local rules in future filings. It denied the plaintiffs’ motion to strike affidavits attached to Experian’s reply and granted the plaintiffs’ motion for leave to file a sur-reply.

The court’s conclusion states that Experian’s motion for summary judgment was granted as to the reasonable reinvestigation and file disclosure claims, denied as to the permissible purpose and reasonable procedures claims, and denied as to willfulness and negligence. The opinion also addresses a motion to seal, but its footnote is internally inconsistent: it states that the motion was granted as to Exhibit 19 and then states that it was denied as to Exhibit 19, while the surrounding text refers to the expert report of Evan Hendricks and possible refiling in partially redacted form.