United States District Court, W.D. Virginia, Charlottesville Division
K. MOON, UNITED STATES DISTRICT JUDGE.
case, brought by Plaintiff Lisa Phillips
(“Phillips”), concerns information that Defendant
Specialized Loan Servicing, LLC (“SLS”) provided
to credit reporting agencies, like Defendant Trans Union, LLC
(“Trans Union”), and that these agencies publish
in credit reports. Phillips now seeks summary judgment
against SLS on Counts I and II of the Complaint. (Dkt. 30).
Count I alleges a negligent violation of the Fair Credit
Reporting Act (“FCRA”), and Count II alleges a
willful violation of the FCRA. The two counts allege that SLS
provided inaccurate or incomplete information about Phillips
to Trans Union. SLS opposes summary judgment, arguing that
Phillips lacks Article III standing and ignores evidence that
validates the information it furnished. (Dkt. 35 at 4-5).
explained below, Phillips has standing under Spokeo v.
Robins, 136 S.Ct. 1540 (2016), both because her alleged
injury is analogous to common law causes of action (like
defamation and libel) and because she allegedly has suffered
the type of harm Congress sought to prevent by enacting the
FCRA. On the merits, this Court will deny Phillips'
motion as to the negligent violation of the FCRA because
there is a genuine dispute of material fact over whether
SLS's investigation into any inaccuracies was reasonable.
This Court will also deny Phillips' motion as to the
allegedly willful violation of the FCRA because a reasonable
jury need not find that any of the alleged violations were
Rule of Civil Procedure 56(a) provides that a court should
grant summary judgment “if the movant shows that there
is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986). A fact is “material” if it “might
affect the outcome of the suit under the governing law will
properly preclude the entry of summary judgment.”
Id. In order to preclude summary judgment, the
dispute about that material fact must be
“genuine.” Id. A dispute is
“genuine” if “the evidence is such that a
reasonable jury could return a verdict for the nonmoving
party.” Id.; see also JKC Holding Co. v.
Washington Sports Ventures, Inc., 264 F.3d 459, 465 (4th
Cir. 2001). If, however, the evidence of a genuine issue of
material fact “is merely colorable or is not
significantly probative, summary judgment may be
granted.” Anderson, 477 U.S. at 250. In
considering a motion for summary judgment under Rule 56, a
court must view the record as a whole and draw all reasonable
inferences in the light most favorable to the nonmoving
party. See, e.g., Celotex Corp. v. Catrett, 477 U.S.
317, 322-24 (1986); Shaw v. Stroud, 13 F.3d 791, 798
(4th Cir. 1994).
Phillips owned a home in Las Vegas, Nevada. (Dkt. 30-1 at 3).
In November 2006, Phillips obtained a second mortgage on that
home for $77, 764.80. (Dkt. 30-2 at 1). The original servicer
of this second mortgage transferred it to SLS for servicing
on August 5, 2009. (Dkt. 30-3 at 2). Phillips then defaulted
on this loan. (Dkt. 30-8). She made her last payment on
August 26, 2009, the same month that the loan was transferred
to SLS. (Dkts. 30-5, 30-6, 30-7). Approximately three months
later SLS “charged-off” the loan. (Dkt. 30-4 at
SLS sold the home in a short sale in January 2011. (Dkt.
30-9). SLS and Phillips negotiated a settlement agreement for
the outstanding balance of the loan in May 2011, and Phillips
paid $4, 000 to settle her outstanding debt on June 27, 2011.
(Dkts. 35-1, 35-2). At this point, SLS confirmed that
Phillips no longer owed it any money. (Dkts. 30-4 at 23, 30-3
following years, Phillips disagreed with how credit reporting
agencies were displaying this now-settled debt on her credit
report. She sent Trans Union three letters in 2016 expressing
her concerns. (Dkts. 30-10, 30-14, 30-16). Phillips disputed
when she had first fallen behind on the loan-specifically she
contended that her first delinquency was in September 2009,
but that the credit reports wrongly reported that it was in
June 2011. (Id.). Trans Union, in turn, contacted
SLS to verify the information that Phillips disputed using
Automated Consumer Dispute Verification (“ACDV”)
forms. (Dkts. 30-5, 30-6, 30-7, 30-11 at 68). These forms are
part of the industry standard format for credit reporting
developed by the Consumer Data Industry Association
(“CDIA”). (Dkt. 30-11 at 15). There is “an
industry-wide automated consumer dispute resolution system,
” called e-OSCAR, that allows furnishers and credit
reporting agencies the ability to verify consumer disputes
using these ACDV forms. (Id. at 17).
responded, also using these forms, that it was reporting the
disputed information correctly, contrary to Phillips'
protestations. (Dkts. 30-5, 30-6, 30-7). Trans Union
communicated at least two of SLS's responses back to
Phillips. (Dkts. 30-15, 30-16). Unsatisfied, Phillips filed
this lawsuit. (Dkt. 1).
Phillips has Article III standing.
suggests that Phillips lacks Article III standing. (Dkt. 35
at 6). In particular, SLS notes that Phillips has not put
forward evidence specifying what monetary or emotional
distress damages she has incurred. (Id. at 7). SLS
has not formally brought a motion to dismiss or a
cross-motion for summary judgment based on a lack of
standing, but if jurisdiction “ceases to exist, the
only function remaining to the court is that of announcing
the fact and dismissing the cause.” Steel Co. v.
Citizens for a Better Env't, 523 U.S. 83, 94 (1998)
(quoting Ex parte McCardle, 74 U.S. (7 Wall.) 506,
514 (1868)). Accordingly, a discussion of standing and the
Court's jurisdiction follows.
‘is a threshold jurisdictional question' that
ensures a suit is ‘appropriate for the exercise of the
[federal] courts' judicial powers.'” Dreher
v. Experian Info. Sols., Inc., 856 F.3d 337, 343 (4th
Cir. 2017) (quoting Pye v. United States, 269 F.3d
459, 466 (4th Cir. 2001)) (alteration in Dreher). To
have standing a “plaintiff must have (1) suffered an
injury in fact, (2) that is fairly traceable to the
challenged conduct of the defendant, and (3) that is likely
to be redressed by a favorable judicial decision.”
Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1547 (2016),
as revised (May 24, 2016) (citing Lujan v. Defs.
of Wildlife, 504 U.S. 555, 560 (1992)). An injury in
fact must be both “concrete” and
“particularized.” Id. “A
‘concrete' injury must be ‘de facto';
that is, it must actually exist.” Id. (citing
Black's Law Dictionary 479 (9th ed. 2009)). And
“[f]or an injury to be ‘particularized, ' it
‘must affect the plaintiff in a personal and individual
way.'” Id. (quoting Lujan, 504
U.S. at 560).
about the concreteness of injuries arising from statutory
violations are heightened in the FCRA context. Last year, in
Spokeo, the Supreme Court observed that “[a]
violation of one of the FCRA's procedural requirements
may result in no harm” and so a mere procedural
violation of the FCRA that produces no “concrete and
particular” injury will not be justiciable.
Id. at 1548, 1550. However, the Supreme Court
reiterated that “intangible injuries can nevertheless
be concrete, ” id. at 1549 (citing injuries to
free speech and free exercise rights), and has provided two
tests to guide the concreteness analysis. Id.;
In re Horizon Healthcare Servs. Inc. Data Breach
Litig., 846 F.3d 625, 637 (3d Cir. 2017) (“There
are thus two tests for whether an intangible injury can
(despite the obvious linguistic contradiction) be
“it is instructive to consider whether an alleged
intangible harm has a close relationship to a harm that has
traditionally been regarded as providing a basis for a
lawsuit in English or American courts.”
Spokeo, 136 S.Ct. at 1549. If the “alleged
intangible harm” does have a close relationship to a
traditionally recognized harm, “it is likely to be
sufficient to satisfy the injury-in-fact element of
standing.” In re Horizon, 846 F.3d at 637.
This analogy to the past makes sense “[b]ecause the
doctrine of standing derives from the case-or-controversy
requirement, and because that requirement in turn is grounded
in historical practice.” Spokeo, 136 S.Ct. at
“alleged intangible harm” does not have a close
relationship to a traditionally recognized harm, we move to
the second test. This inquiry asks whether, even in the
absence of a traditional harm, Congress has sought to
“identify and elevat[e] [this] intangible
harm” and make it redressable. Spokeo, 136
S.Ct. at 1549 (“[B]ecause Congress is well positioned
to identify intangible harms that meet minimum Article III
requirements, its judgment is also instructive and
important.”). Of course, Congress cannot outflank
Article III's requirements. See Summers v. Earth
Island Inst., 555 U.S. 488, 496 (2009)
(“[D]eprivation of a procedural right without some
concrete interest that is affected by the deprivation-a
procedural right in vacuo-is insufficient to create
Article III standing.”); Dreher v. Experian Info.
Sols., Inc., 856 F.3d 337, 344 (4th Cir. 2017)
(“[A] plaintiff cannot automatically satisfy the injury
in fact requirement just because ‘a statute grants a
person a statutory right and purports to authorize that
person to sue to vindicate that right.'”). But
Congress may, and frequently does, “accord a
procedural right to protect [a plaintiff's] concrete
interests.” Lujan v. Defs. of Wildlife, 504
U.S. 555, 572 n.7 (1992). The recipient of such a procedural
right can “assert that right without meeting all the
normal standards for redressability and immediacy.”
Id.; see also Strubel v. Comenity Bank, 842