in this count. Although there is a provision in the FCRA. that corresponds to the citation 15 U.S.C. § 1681c(b), that provision has nothing to do with "reinvestigation" and, in fact, has no application to this case. Subsection (a) of section 1681c generally prohibits the reporting of certain categories of "obsolete information," such as records of arrest or conviction of a crime that antedate the report by more than seven years. See 15 U.S.C. § 1681c(a)(5). Subsection (b) of section l681c sets forth certain exceptions to this general prohibition on the reporting of obsolete information. See id. § 1681c(b). The criminal conviction reported in this case, although inaccurate, is not "obsolete" within the meaning of this section, and therefore this section has no application.
There is a section of the FCRA that deals with the failure of a reporting agency to "reinvestigate" a consumer's claim that a report contains inaccurate information. However, that section, 15 U.S.C. § l681i, provides the basis for the claim asserted in Count Three of the Complaint, which is discussed below, and cannot provide a basis for Count Two as well.
Because neither the cited section of the FCRA nor the allegation of failure to reinvestigate provides a basis for a cause of action under Count Two of the Complaint, and because no other acceptable basis has been asserted,
Defendants' Motion for Summary Judgment will be granted with respect to Count Two.
3. Count Three.
In Count Three of the Complaint, Mr. Wiggins alleges that ESI violated sections 1681i and 1681n of the Act. Section 1681i, as mentioned above, creates a duty on the part of consumer reporting agencies to "reinvestigate" disputed information contained in a report within a "reasonable period of time." 15 U.S.C. § 1681i(a). If after such reinvestigation the disputed information is found to be inaccurate or cannot be verified, the consumer reporting agency must "promptly delete such information." Id. Section 1681n creates civil liability for "willful noncompliance" with this or any other any provision of the Act.
In this case, it is undisputed that ESI did reinvestigate after being advised that Mr. Wiggins disputed the criminal record information. Thus, plaintiffs' contention must be that ESI failed to conduct this reinvestigation within a "reasonable period of time," or that ESI failed to "promptly delete" the criminal record information after finding it to be inaccurate.
It is undisputed that an employee of ESI at the regional office first became aware that the criminal record information was inaccurate before ESI issued the written report containing the inaccurate information on January 17. It is also undisputed that ESI prepared a corrected report on January 23. However, the parties do dispute the period of time required for this correction to actually reach Mr. Wiggins's employer. It is also disputed whether Mr. Wiggins, in fact, complained about the accuracy of the report directly to ESI, a requirement for liability under § 1681i(a).
See Compl. at P 27; ESI's Mot. Summ. J. and Opp'n Pls.' Mots. Partial Summ. J. at IV.B.
Based upon the record, this Court concludes that ESI's motion for summary judgment on this count must be denied.
A jury should resolve these factual disputes and determine whether ESI willfully violated the obligations imposed by this section of the Act.
4. Count Four.
In Count Four, Mr. Wiggins alleges that ESI willfully violated section 1681(k) of the FCRA. This section requires a credit reporting agency that is furnishing information for employment purposes, where such information is a matter of public record and is likely to have an adverse impact on the candidate, to either notify the consumer of the fact that public record information is being reported along with the name and address of the person who requested the report or maintain "strict procedures" designed to insure that any such reported information is "complete and up to date." 15 U.S.C § 1681k.
The threshold requirements for the application of this section are clearly met in this case-the information was reported for employment purposes, was a matter of public record, and was certainly likely to have an adverse impact on the prospective employee. In addition, it is undisputed that defendants did not notify plaintiff that criminal record information was being reported. ESI therefore relies on the alternative portion of the statutory provision, which allows the reporting agency to avoid notification to the consumer if "strict procedures" are maintained. ESI argues that it is entitled to summary judgment on this count because there is no evidence from which a reasonable jury could find that it failed to maintain "strict procedures" to ensure that the information reported was accurate and up-to-date. Alternatively, ESI argues that (even if a jury could find that it failed to maintain strict procedures) there is no evidence from which a jury could find that its failure to maintain such procedures was willful. Plaintiffs, on the other hand, argue that the undisputed facts demonstrate a willful violation of this section as a matter of law.
Upon review of the record, this Court concludes that there are, as described above, disputed issues of material fact rendering summary judgment inappropriate for either side. Tehre are sufficient facts from which a jury could find that ESI failed to maintain "strict procedures" and that such failure was willful; however, the court believes that a reasonable jury could also reject a finding of willfulness. Accordingly, both plaintiffs' and defendants' motions for summary judgment with respect to this count will be denied.
5. Count Six.
Section 1681g of the FCRA requires credit reporting agencies to "clearly and accurately" disclose the "nature and substance of all information (except medical information) in its files" upon consumer request. 15 U.S.C. § 1681g. Mr. Wiggins alleges in Count Six that ESI willfully failed to comply with this provision on January 19, when he appeared at the McLean office and asked to see the information in his file relating to the criminal records check.
It is undisputed that ESI provided Mr. Wiggins with a copy of the January 17 report, which was the only written report in existence at the time of his visit. Mr. Wiggins' argument, therefore, must be that defendants violated this section by failing to disclose the fact that a reinvestigation was in progress an that a hard copy of the alleged conviction-showing that it in fact did not relate to plaintiff-had been obtained. Defendants argue that even if this failure constituted a violation of section 1681g,
there is no evidence from which a jury could find that the violation was willful.
There is no evidence that Mr. Madden was aware at the time of Mr. Wiggins' appearance on January 19 that Mr. Wiggins' file was in the process of a reinvestigation.
The parties dispute, however, whether the Equicenter had been advised by January 19 that a discrepancy had been found. If the Equicenter had been so advised but had nevertheless failed to convey that information to Mr. Madden so that it could be disclosed to plaintiff, the Court believes that a jury could find that ESI's violation of its disclosure obligations was willful. On the other hand, if the Equicenter were not aware of the discrepancy, a jury could reasonably conclude that ESI's failure to disclose "all information." in Mr. Wiggins' file was merely negligent rather than willful. For these reasons, the Court believes that there are genuine factual disputes rendering summary judgment on this count inappropriate.
B. The Defamation Count.
In Count Five, Mr. Wiggins asserts the common-law claims of libel, slander, and defamation. In their motion for partial summary judgment, plaintiffs allege that the mailing of and telephone calls regarding the erroneous consumer employment report to District Cablevision constituted "false, derogatory oral and written statements to third parties." Compl. at P 35. Plaintiffs also allege that defendant Madden "willfully, maliciously and falsely" provided inaccurate and false information to third parties. Compl. at P 37.
Following the telephone report of a March 1989 conviction or possession of cocaine to the regional office and the Equicenter, the Equicenter communicated this information to DCI on or about January 10, 1990. On January 17, ESI ordered reinvestigation of Mr. Wiggins' case, but also sent the initial, erroneous report to DCI. Mr. Wiggins' employment was terminated by DCI on January 18, prompting his visit to the McLean regional office for disclosure of all information in his file relating to the criminal records check on January 19. Defendant Madden, unfamiliar with the Wiggins matter, did not know that a reinvestigation was in progress, could not find Mr. Wiggins' file, and contacted the Equicenter for a telecopy of the criminal records check. Defendant Madden made disclosure of the only written report concerning Mr. Wiggins at that time, providing Mr. Wiggins with a copy of that January 17 report.
The FCRA recognizes that consumer reporting agencies disclose extensive credit information to consumers and to businesses "for meeting the needs of commerce," see e.g., 15 U.S.C. § 1681(b), 1681g, and creates civil liability for failure to comply with its requirements. However, the FCRA expressly limits the potential liability of these consumer reporting agencies
by preempting state common law privacy causes of action.
Section 1681h(e) of the Act provides:
Except as provided in sections 1681n and 1681o of this title, no consumer may bring any action or proceeding in the nature of defamation, invasion of privacy, or negligence with respect to the reporting of information against any consumer reporting agency, any user of information, or any person who furnishes information to a consumer reporting agency, based on information disclosed pursuant to section 1681g, 1681h, or 1681m of this title, except as to false information furnished with malice or willful intent to injure such consumer.
15 U.S.C. § 1681h(e) (emphasis added). This section has been interpreted provide a qualified immunity for consumer reporting agencies except as to false information furnished with malice or with willful intent to injure. Thornton v. Equifax, Inc., 619 F.2d 700 (8th Cir.), cert. denied, 449 U.S. 835, 66 L. Ed. 2d 41, 101 S. Ct. 108 (1980). Thus, in a defamation action pursuant to proper disclosure under the Act,
"malice or willful intent to injure" must be alleged.
This Court agrees with defendants that there is no evidence in the record from which a jury could find that defendants willfully intended to injure Mr. Wiggins by disseminating the false report. However, the statute also allows common law actions if the information is furnished with "malice." Although the term "malice" is not defined in the Act, this Court believes it is appropriate to borrow the meaning given to the term in the related context of libel litigation for summary judgment purposes.
that context, a statement is deemed to have been made with malice when the speaker either knew it was false or acted in reckless disregard of its truth or falsity. See New York Times Co. v. Sullivan, 376 U.S. 254, 279-80, 11 L. Ed. 2d 686, 84 S. Ct. 710 (1964). Reckless disregard, in turn, requires evidence that the speaker entertained actual doubt about the truth of the statement. See St. Amant v. Thompson, 390 U.S. 727, 731, 20 L. Ed. 2d 262, 88 S. Ct. 1323 (1968).
The undisputed evidence is that at least one employee of ESI, Sally Myers, knew that the James R. Wiggins who was the subject of the alleged conviction was not the James R. Wiggins who was the subject of the report at the time that the January 17 report was sent to DCI. In addition, the parties dispute whether this information was communicated to the Equicenter prior to the dissemination of the January 17 report. If this information had been communicated, the Court believes that a jury could find that ESI indeed had actual doubt about the truth of the January 17 report. With respect to defendant ESI, therefore, the Court believes that the record presents a jury question as to whether ESI acted with "malice" under section 1681h(e) . Accordingly, plaintiffs' and ESI's motion for summary judgment with respect to Count Five will be denied.
The defamation claim against defendant Madden, however, is another matter. Mr. Wiggins contends that Mr. Madden defamed him by repeating the allegations contained in the January 17 report during the January 19 meeting. The Court concludes that there is no evidence for a finding of malice with respect to Mr. Madden. There is no evidence that he was personally aware that the Wiggins report was in the process of reinvestigation or that a discrepancy had been found. Mr. Madden's involvement in this case occurred only as a result of his efforts to make disclosure to Mr. Wiggins as required by section 1681g of the Act, and the defamation claim against him would therefore appear to be precisely the type of claim the statute was intended to preempt. See 15 U.S.C.§ 1681h(e) (defamation actions "based on information disclosed pursuant to section 1681g" preempted absent a showing of malice). Accordingly, Mr. Madden's motion for summary judgment with respect to Count Five will be granted.
C. The Civil Rights Count.
In Count Seven of the Complaint, plaintiffs allege civil rights violations, including 42 U.S.C. §§ 1981 and 1983.
Mr. and Mrs. Wiggins, who are African Americans, claim that ESI "intentionally discriminated" against them and violated the civil rights statutes by "fail[ing] to exercise that degree of care and caution in that [sic] would have been afforded to white citizens . . . ." Compl. at PP 45, 45(a).
Plaintiffs' allegation that ESI violated section 1983 is easily dismissed. 42 U.S.C. § 1983 states:
Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress. (emphasis added).