In early 2018, Donette Thomas began the process of purchasing a home and was pre-approved for a mortgage though Movement Mortgage for $1,600,000.00, then making an offer to purchase, having the home inspected, and paying earnest and due diligence money, upon which her offer was accepted and with the closing moving forward on May 9, 2018. Pulling her credit report at that time, Ms. Thomas' loan officer found multiple open, negative and collection accounts under the name of "Donnette Thomas".
Ms. Thomas then immediately contact Equifax Information Services, LLC by telephone to dispute these and was informed that her credit file had been split under two related names. Equifax then proceeded to combined the two credit files that were associated with Ms. Thomas' personal identifying information resulting in even more open, negative and collection accounts appearing on her credit report, despite these having been previously disputed and removed. This negative reporting then prevented her from closing on the home.
Ms. Thomas initiated this action against Equifax alleging negligent and willful violations of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681 et seq., and Equifax sought summary judgment.
The district court held that to prevail on a claim for violation of § 1681e(b), a plaintiff must prove that:
(1) his consumer report contains inaccurate information;
(2) the credit reporting agency did not follow reasonable procedures to assure maximum possible accuracy of that consumer report; and
(3) the plaintiff suffered damages.
Equifax argued that additional factors not implicating Equifax lead to the denial of Ms. Thomas' mortgage, as discovery had “unequivocally established” that she was denied financing because Movement Mortgage was unable to obtain her tax transcripts from the IRS. As such, Ms. Thomas did not have a concrete injury sufficient for Article III standing.
Following Spokeo, the district court held that to establish constitutional standing at the summary judgment stage, a plaintiff must set forth specific facts by affidavit or other evidence that she:
(1) suffered an injury in fact;
(2) that is fairly traceable to the defendant’s conduct complained of; and
(3) that is likely to be redressed by a favorable judicial decision.”
Rejecting the strict causal nexus that Equifax urged, the district court held that varying degrees of “some causal nexus” can be sufficient. Since the loan officer had stated that the denial was based, at least in part, on the inaccurate information, taking the facts most in favor of Ms. Thomas in consideration of the MSJ by Equifax, the district court found that there was a genuine dispute as to whether conduct by Equifax resulted in the harm claimed and that a reasonable jury could find that Equifax's actions led to or contributed to it.
Nice job by Shane Perry in this case.
For a copy of the opinion, please see: