Bettcher v. Experian Information Solutions, Inc.

Background

Lisa Bettcher sued Experian under the Fair Credit Reporting Act, a federal law governing consumer-reporting agencies. She alleged that Experian failed to use reasonable procedures to ensure the accuracy of her credit report. Her report listed a Capital One account with a $9,900 balance and a $796 past-due amount, even though the account had been discharged in her Chapter 13 bankruptcy on September 3, 2019. Bettcher alleged that the report damaged her credit file and caused stress, anxiety, embarrassment, and other emotional distress.

The parties filed cross-motions for summary judgment. Bettcher sought partial summary judgment on liability, while Experian sought summary judgment on the entire case. Experian also moved to exclude testimony from Bettcher’s expert, Evan Hendricks. Bettcher separately appealed a magistrate judge’s order requiring her to produce an authorization form she had submitted to obtain her credit report.

Appeal of the Discovery Order

The court reviewed the magistrate judge’s nondispositive discovery ruling under the deferential standard applicable to such orders. It affirmed the order requiring production of the authorization form.

The court held that the form was not protected by the attorney-client privilege because Bettcher had not shown that it was used to seek or provide legal advice. The court also held that the form was not protected by the work-product doctrine, which generally protects materials prepared because of anticipated litigation. Bettcher signed the form before obtaining the credit report, and she did not provide evidence showing that it had been prepared because of the prospect of the specific litigation.

The court further held that the form was relevant to Experian’s defenses, including damages. Because the form was not protected work product, Bettcher did not need to show that Experian had a heightened level of need for it. The court therefore affirmed the magistrate judge’s December 23, 2020 order in full.

Summary Judgment on the Fair Credit Reporting Act Claims

The court explained that Bettcher’s claim required proof that Experian failed to use reasonable procedures, reported inaccurate information, caused harm, and caused that harm through its failure to use reasonable procedures.

The court considered whether the Capital One information was inaccurate. It noted that the account was marked “Closed” but also listed a recent balance of $9,900, a $796 past-due amount, and a $199 monthly payment. The court stated that a reasonable juror could view the report as suggesting that Bettcher still owed money and was making payments. The court also recognized that the Eighth Circuit had not decided whether technically accurate but materially misleading information could support this type of claim. The court assumed without deciding that the report was inaccurate or materially misleading.

The court nevertheless ruled for Experian on other grounds. For Bettcher’s negligence claim, the Fair Credit Reporting Act required proof of actual damages. The court found no evidence that Experian’s reporting of the Capital One account caused a credit denial or other specific adverse action after the bankruptcy discharge. The automobile-loan-related inquiries and loan occurred before the discharge, and Bettcher provided no specific evidence of other consequences caused by the account reporting.

The court also found that Bettcher’s emotional-distress evidence was insufficient to create a genuine factual dispute. The record did not show that she received treatment, suffered physical injury, or had distress observed by another person. Her own testimony, without additional evidentiary support, was insufficient under the cited authority to establish actual damages.

The court granted Experian summary judgment on Bettcher’s negligence claim. It then considered willfulness, which can support statutory damages without proof of actual injury. The court held that the evidence did not permit a reasonable jury to find that Experian knowingly or recklessly violated the statute. Bettcher identified no applicable authority establishing that Experian’s bankruptcy-reporting procedures were willful violations, and the cited federal guidance was conflicting. The court concluded that Experian’s interpretation of that guidance was not objectively unreasonable.

The court did not decide whether Experian’s procedures for reporting Chapter 13 bankruptcies were reasonable because Bettcher’s motion failed on other grounds.

Expert Testimony and Disposition

Because the court granted Experian summary judgment without relying on facts from Hendricks’s expert report, it denied Experian’s motion to exclude his testimony as moot.

The final order affirmed the magistrate judge’s December 23, 2020 order, denied Bettcher’s motion for partial summary judgment, granted Experian’s motion for summary judgment, and denied Experian’s motion to exclude expert testimony as moot. Judge Wilhelmina M. Wright directed that judgment be entered accordingly.