Lynch v. Experian Information Solutions, Inc.

Background

The plaintiffs brought claims under the Fair Credit Reporting Act, alleging that Experian negligently or willfully failed to use reasonable procedures to ensure that information in its credit reports was accurate. They alleged that Experian continued reporting a particular account as owing for more than one year after the account had been discharged in bankruptcy. The complaint identified Experian’s procedures for checking bankruptcy information, called “bankruptcy scrubs,” as central to the dispute.

The plaintiffs moved to compel discovery. After other issues were resolved or became moot, seven requests remained: Requests for Production Nos. 15, 16, 17, 22, 26, and 32, and Interrogatory No. 15. The requests sought information about bankruptcy-scrub procedures, post-bankruptcy credit reports, public-record vendors, changes made after a prior settlement order, communications about changes to the scrub procedures, and information provided in response to certain credit-report inquiries. Experian objected that the requests were burdensome, irrelevant, or duplicative.

Magistrate Judge’s Discovery Order

Magistrate Judge John F. Docherty granted the motion to compel in part and denied it in part. For Requests for Production Nos. 15, 16, and 32, he limited the required production to documents and communications from May 1, 2019, through October 5, 2020, that would allow someone experienced in consumer-credit reporting to understand how Experian’s bankruptcy scrub worked. For Request for Production No. 22, he required production of communications and documents from third-party data providers containing warnings or similar language about the reliability of the information provided, including any such warnings from LexisNexis. He denied the motion to compel entirely as to Requests for Production Nos. 17 and 26 and Interrogatory No. 15.

District Court Review

Experian filed an objection under Federal Rule of Civil Procedure 72. The district court could overrule the magistrate judge’s nondispositive discovery order only if it was clearly erroneous or contrary to law, meaning that the order reflected a definite mistake or failed to apply the relevant law.

The court rejected Experian’s argument that the discovery allowed under Request for Production No. 22 was irrelevant. It explained that documents warning Experian that data used in its reports might be unreliable could tend to show whether Experian followed reasonable procedures to ensure accuracy, an issue relevant to the plaintiffs’ Fair Credit Reporting Act claim.

The court also rejected Experian’s proportionality argument concerning Requests for Production Nos. 15, 16, and 32. The court concluded that Judge Docherty had considered the burden of production and had limited the requests to the relevant time period and to information about how Experian conducted its bankruptcy scrubs. The court stated that no single factor, including the potential amount of damages, automatically controls whether discovery is proportional to the needs of the case.

Experian alternatively proposed that the court adopt a narrower discovery compromise based on production required in another case. The court declined to consider that proposal because the opinion stated there was no indication that Experian had made it before Judge Docherty. The court characterized an appeal of a magistrate judge’s discovery order as an improper place to present a new proposal for resolving the dispute.

Disposition

The court overruled Experian’s Rule 72 objection and affirmed Judge Docherty’s November 3, 2021, order. The court also stated that its order did not restrict Judge Docherty’s discretion to supervise later discovery matters or prevent the parties from pursuing possible resolutions or compromises.