Lynch v. Experian Information Solutions, Inc.

Background

Thomas Lynch and Rosemary Nelson alleged that Experian violated the Fair Credit Reporting Act (FCRA) by reporting that they owed several thousand dollars to their former landlord, Dominium Management Services, LLC. The debt had been included in the plaintiffs’ Chapter 7 bankruptcy and discharged on August 27, 2019. Dominium nevertheless sent Experian information on September 21, 2020, stating that the account was in collections with a balance of $5,538.

Experian’s reporting showed the account as being in collections for fourteen days. Its automated “look-back scrub” corrected the account on October 5, 2020, to show that it had been discharged in bankruptcy. During that period, the plaintiffs’ credit scores fell. They did not apply for credit, were not denied credit or housing, and received no medical or psychological treatment for emotional distress connected to the reporting.

Summary Judgment on the Negligence Claim

The plaintiffs alleged that Experian negligently failed to use reasonable procedures to ensure accurate credit reporting under 15 U.S.C. § 1681e(b). The court explained that this claim required evidence that Experian used unreasonable procedures, reported inaccurate information, that the plaintiffs suffered harm, and that Experian’s procedures caused that harm.

The court granted summary judgment because the plaintiffs did not provide evidence of actual damages. It rejected their arguments based on several claimed forms of harm:

- The plaintiffs had no credit denials or housing denials during the fourteen-day period. - The temporary drop in their credit scores, standing alone, was not actual damages. - The inaccurate reporting itself did not establish damages. - The plaintiffs did not show that a third party actually received a credit report containing the inaccurate information through the recorded “soft inquiries.” - Thomas Lynch’s evidence about missed work did not connect the missed work to the relevant reporting period. Rosemary Nelson’s testimony about stress, panic, frustration, humiliation, and sleeplessness did not establish the concrete emotional distress required for actual damages. The court also found that the evidence did not sufficiently connect her sleeplessness to Experian’s fourteen days of inaccurate reporting.

Summary Judgment on the Willfulness Claim

The plaintiffs also alleged that Experian willfully violated the FCRA. A willful violation requires evidence of a knowing or reckless violation. The court held that a reasonable jury could not find willfulness on this record.

Experian presented evidence that it obtained bankruptcy information from LexisNexis, required data furnishers to undergo screening and follow an industry reporting format, relied on consumers to report inaccuracies, and used an initial bankruptcy scrub and later look-back scrubs to identify accounts that should be marked as discharged. The court concluded that the plaintiffs had not shown that these procedures created an unjustifiably high risk of harm or that Experian’s interpretation of its FCRA obligations was objectively unreasonable. The court also noted that the look-back scrub corrected this account within two weeks and that the plaintiffs offered no evidence of an unusually high error rate or systemic problems with Experian’s procedures.

Expert Testimony and Disposition

Experian separately moved to exclude testimony from the plaintiffs’ expert, Douglas Hollon. Because the court granted summary judgment without relying on Hollon’s report, it denied the motion to exclude as moot. The court stated that it might not allow all of Hollon’s opinions if it later became necessary to address their admissibility.

The order granted Experian’s motion for summary judgment, denied its motion to exclude expert testimony as moot, directed that judgment be entered, and dismissed the action with prejudice.