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Dreher v. Experian Information Solutions, Inc.

United States District Court, E.D. Virginia, Richmond Division

December 3, 2014

MICHAEL T. DREHER, on behalf of himself and all others similarly situated, Plaintiffs,

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For Michael T. Dreher, Plaintiff: Kristi Cahoon Kelly, LEAD ATTORNEY, Surovell Isaacs Petersen & Levy PLC, Fairfax, VA; Leonard Anthony Bennett, Susan Mary Rotkis, Consumer Litigation Associates, Newport News, VA; Matthew James Erausquin, Consumer Litgation Associates PC (Alex), Alexandria, VA.

For Experian Information Solutions, Inc., Defendant: David Neal Anthony, LEAD ATTORNEY, Troutman Sanders LLP, Richmond, VA; Joseph William Clark, LEAD ATTORNEY, Jones Day (DC), Washington, DC.

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John A. Gibney, Jr., United States District Judge.

This class action arises principally from the failure of Experian Information Solutions, Inc. (" Experian" ), a consumer reporting agency, to disclose the true source of information on certain credit reports. According to Michael T. Dreher and the class plaintiffs (collectively " Dreher" ), Experian's decision to hide the true source of information for their credit reports was a willful violation of the Fair Credit Reporting Act (" FCRA" or " the Act" ), 15 U.S.C. § 1681 et seq. Dreher also brings individual claims arising from his personal interactions with Experian when he discovered a discrepancy on his credit report.

The matter now comes before the Court on the parties' motions for partial summary judgment. Experian moves the Court to dismiss the class claim because Dreher and the class members lack standing. Both Experian and Dreher seek summary judgment on the class claim on the issue of Experian's liability for a willful violation of the Act. Finally, Dreher seeks summary judgment on the accuracy element of his individual claims.

The Act creates a statutory right to receive the " sources of information" for one's credit report. When a consumer reporting agency fails to disclose the sources, it violates that right, thus creating a sufficient injury-in-fact for constitutional standing. Additionally, the disclosure requirements of the Act create a right to

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access information, the violation of which causes an informational injury that can be redressed in federal court. Because Dreher possesses statutory rights that Experian infringed, he sufficiently states an injury-in-fact that can be redressed by this Court. Accordingly, Dreher and the class plaintiffs have standing to pursue their claims.

In determining whether a defendant willfully violated the Act, a court must determine whether the company's interpretation of the Act is objectively unreasonable. If, in light of statutory, judicial, and agency guidance, the defendant behaved reasonably, it cannot have been reckless. But if context demonstrates that a defendant's violations of the Act were objectively unreasonable, then the defendant was reckless, and thus willful.

Section 1681g(a)(2) requires Experian to " clearly and accurately disclose to the consumer . . . [t]he sources of information" found in the consumer's credit report. Experian listed either " Advanta Bank" or " Advanta Credit Cards" as the only source of information on a disputed line in Dreher's credit report, but Experian's sole supplier of that information was an entity known as CardWorks. The Act clearly requires Experian to disclose at least CardWorks. Experian cannot marshal any facts in the record that overcome this clear and most basic reading of the statute. For that reason, Experian's decision to intentionally omit CardWorks so obviously violated the language of the Act that it cannot be seen as objectively reasonable. Accordingly, the Court finds that Experian willfully violated 15 U.S.C. § 1681g(a)(2). The Court, therefore, will grant Dreher's motion for summary judgment (and deny Experian's motion) on the issue of willfulness.

Finally, despite Dreher's advice that the Court should ignore the inconsistent testimony of his cousin, the person who allegedly took out the Advanta account in Dreher's name, a genuine dispute of material fact remains regarding the accuracy of the Advanta line on Dreher's credit report. Accordingly, the Court denies Dreher's motion for partial summary judgment as it relates to the accuracy element of his individual claims.


Michael Dreher underwent a background check to receive a security clearance in 2010. In November of that year, the federal government advised him that its investigator had discovered a delinquent credit card account listed under the name " Advanta Credit Cards." The listing dumbfounded Dreher.[2] In an effort to save his security clearance, Dreher requested his credit report from Experian. Experian provided a series of credit reports from November 2010 to November 2011, each of which listed a delinquent account under " Advanta Credit Cards."

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As it turned out, Advanta Bank Corp. (" Advanta Bank" ), a Utah-based company, was no more. In early 2010, the Utah Department of Financial Institutions shut Advanta down, and the Federal Deposit Insurance Corporation (" FDIC" ) stepped in to oversee the bank as a receiver. In July 2010, the FDIC approved the appointment of CardWorks, Inc., and CardWorks Servicing, LLC (" CardWorks" ), to service the Advanta accounts. In that role, CardWorks served as a customer-service intermediary for the bank and handled all communications with customers regarding their accounts. Since October 2011, CardWorks has serviced the vast majority of the Advanta accounts.[3]

The FCRA requires that consumer reporting agencies disclose the " sources of information" associated with the content of a credit report. Despite the fact that CardWorks directly supplied the Advanta account information to Experian, CardWorks specifically requested to go unlisted on the credit reports and asked Experian to list only " Advanta Credit Cards." Experian happily obliged.

Dreher brings one class claim.[4] He alleges that Experian willfully violated § 1681g(a)(2) as to him and the class members by failing to clearly and accurately disclose the source of the Advanta trade lines in their respective credit reports. Experian previously sought summary judgment and defended its conduct as objectively reasonable, but the Court denied that motion. Dreher v. Experian Info. Solutions (" Dreher I" ), 2013 WL 2389878 (E.D. Va. May 30, 2013). Earlier this year, the Court certified the following class:

All natural persons who: (1) requested a copy of their consumer disclosure from Experian on or after August 1, 2010; (2) received a document in response that identified " Advanta Bank" or " Advanta Credit Cards" as the only source of information for the trade line; and (3) whose " date of status" or " last reported" field reflected a date of August 2010 or later.

Dreher v. Experian Info. Solutions, Inc. (" Dreher II" ), 2014 WL 2800766, at *6 (E.D. Va. June 19, 2014). Both Dreher and Experian now ask the Court to enter summary judgment on the issue of Experian's liability for willfully violating the Act.

Dreher also brings four individual claims. Count Four alleges Experian violated § 1681i(a)(1) by failing to conduct a reasonable investigation to uncover whether the Advanta trade line was inaccurate and either record the current status of that information or delete it from Dreher's file. Count Five alleges Experian violated § 1681(a)(2) by failing to give CardWorks all the relevant information regarding Dreher's dispute over the Advanta trade line. Count Six alleges Experian violated § 1681(a)(4) by failing to review and consider all the relevant information Dreher submitted in relation to his dispute over the Advanta trade line. Count Seven alleges that Experian violated § 1681i(a)(5)(A) by failing to promptly delete the disputed Advanta trade line from Dreher's credit report after reinvestigating the matter. Each of these claims hinges upon the accuracy of the information reported by Experian.

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A. Standing

The concept of standing " depends not upon the merits, but on whether the plaintiff is the proper party to bring the suit." McBurney v. Cuccinelli, 616 F.3d 393, 401 (4th Cir. 2010) (quoting White Tail Park, Inc. v. Stroube, 413 F.3d 451, 460 (4th Cir. 2005)). Standing must exist in order " [t]o invoke the jurisdiction of an Article III court." Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). To establish Article III standing, also called constitutional standing, a plaintiff must generally satisfy a three-part test: (1) the plaintiff " has suffered an 'injury in fact' that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision." Bishop v. Bartlett, 575 F.3d 419, 423 (4th Cir. 2009) (quoting Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, ...

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