On Appeal from the United States District Court for the District of New Jersey (D.C. No. 93-cv-02360)
BEFORE: SCIRICA and COWEN, Circuit Judges and FEIKENS, District Judge *fn*
Plaintiff James R. Philbin, Jr. appeals two orders of the district court, the first dated November 29, 1994, and the second and final order dated December 8, 1995, granting summary judgment in favor of the defendants. This appeal raises issues regarding the elements of a cause of action pursuant to Section(s) 607(b) of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. Section(s) 1681e(b), and the nature of plaintiff's burden in demonstrating a prima facie case pursuant to such a cause of action, questions we have not yet had occasion to address. For the reasons that follow, the judgment of the district court is affirmed in part, reversed in part, and remanded for further proceedings.
At some unspecified point in time, defendant Trans Union Corp. ("TUC"), a credit reporting service, prepared a credit report regarding Philbin that erroneously stated he was subject to a tax lien in the amount of approximately $9500. Apparently, TUC had him confused with his father, James R. Philbin, Sr. Plaintiff states in an affidavit that he has never been delinquent on any financial obligation. App. at 8. That statement has never been shown to be false, nor has it ever been denied by defendants. Philbin first notified TUC of the error in April of 1990. TUC corrected the error and added a notation to the credit report reading: "Do not confuse with father James Philbin Sr different address different social security number." App. at 14.
Defendant TRW Credentials, Inc. ("TRW") had also apparently prepared a false credit report on Philbin, although there is no evidence of what inaccuracies it contained. In the spring of 1990, Philbin's attorney wrote a letter to TRW demanding that it correct its report. Philbin apparently did not have any further complaints with TRW until approximately two-and-a-half years later.
In July of 1990, Philbin applied for and was denied credit at Macy's department store. The reasons given were that his "credit profile shows delinquent past or present credit obligations with others" and "insufficient favorable credit experience." App. at 15. Macy's relied in whole or in part on the TUC report. Philbin requested and received a copy of his credit report from TUC, which he concedes was wholly accurate.
In February of 1992, Philbin applied for and was denied a $1500 loan by Household International Company. The decision was based in whole or in part on information received from TUC, but Household gave no reasons for its decision. *fn1 That April, Philbin filed a complaint against TUC with the New Jersey Department of Law and Public Safety. That agency forwarded Philbin's complaint to the Federal Trade Commission ("FTC"). Two months later, Philbin was denied a loan of approximately $10,000 from Bayview Marina based in whole or in part on information received from TUC. The reason given was "insufficient credit file." App. at 25.
That November, Philbin was denied credit from four different credit granting agencies. Philbin's application for a credit card from Circuit City electronics store was denied by the First North American National Bank, based in whole or in part on information received from TUC. The reasons given for the denial were "number of other recent credit inquiries" and "high utilization of bankcard credit lines." App. at 31. He applied for a credit card from Sears department store and was denied credit based in whole or in part on information received from both TUC and TRW. The reasons given were "unfavorable credit history," "number of credit bureau inquiries," and "number of open accounts." App. at 27. He was denied a Best Products credit card from Bank One based in whole or in part on information received from TUC. The reasons given were "sufficient pay history not established," and "limited credit experience." App. at 28. Finally, Philbin was denied a credit card by Citibank based in whole or in part on information received from TRW. The reason given was that "a delinquent credit obligation was recorded on [the] credit bureau report." App. at 44.
Fearing that these successive denials of credit were due to inaccuracies in his credit reports, Philbin requested a copy of his report from both TUC and TRW. TRW promptly sent him a copy of his report, which Philbin concedes contained no inaccuracies, indicating no delinquencies and listing six open accounts.
Ten days after the request to TUC was made, TUC informed him that the address he had provided them did not match the address in their records and requested that he send them proof of residence. The address to which he wished the report sent was the same address to which the 1990 report had been sent. However, other evidence in the record reflects that Philbin used two addresses. Philbin complied and, several weeks later, he received a copy of his TUC report. It erroneously stated that he had been released from a $9580 tax lien. Philbin states that he notified TUC about the error immediately.
In May of 1993, after having filed the complaint in the instant litigation, Philbin applied for a $5000 loan from Nation's Credit, which informed him that it was inclined to deny him the loan based in whole or in part on information received from TUC and TRW. *fn2 He obtained from Nation's Credit a copy of the TUC report. Like the report he received directly from TUC the previous year, it erroneously stated that he had been released from a $9580 tax lien. Philbin also obtained the TRW report from Nation's Credit. That report, in addition to containing correct information regarding him, erroneously listed twelve open accounts, one currently delinquent account, and four past delinquent accounts. This information apparently pertained to Philbin's father, not to him.
On April 22, 1993, Philbin filed the instant suit in the Superior Court of New Jersey, Camden County, charging TUC and TRW with violations of the FCRA. He claimed that as a result of the inaccurate reporting of his credit history and the subsequent denials of credit, he suffered "deep humiliation and embarrassment . . . and will continue to suffer injury to his credit, reputation and financial standing." App. at 3, 5. He stated in an affidavit that he has suffered the humiliation and embarrassment of not being able to purchase items necessary to his business without the help of his father. App. at 8. Finally, he stated that he "suffered economic injury from the inability to establish credit so that [he] can pursue investment opportunities in real property." App. at 8.
TUC and TRW removed the case to the district court. They subsequently moved for summary judgment dismissing the complaint pursuant to Fed. R. Civ. P. 56 on the grounds that Philbin had not produced sufficient evidence to make out a prima facie case of either willful or negligent noncompliance with Section(s) 1681e(b). On November 29, 1994, the district court granted TRW's motion for summary judgment; granted TUC's motion for summary judgment on the issue of willful noncompliance with Section(s) 1681e(b); and denied TUC's motion for summary judgment on the issue of negligent noncompliance with Section(s) 1681e(b).
In preparation for trial, the parties filed a Joint Pre-Trial Order, paragraph six of which stated: "None of the letters from the creditors . . . mentions a tax lien as a reason for denial of credit." TUC's Mem. of Law at 6. Based on this, TUC moved for reconsideration of the portion of its motion for summary judgment that had been denied. On reconsideration, the district court held that, pursuant to the stipulation contained in the Joint Pre-Trial Order, Philbin would not be able to produce any evidence that the denials of credit by the credit granting agencies were caused by the inaccurate entry on the TUC report. The district court concluded that he would therefore not be capable of sustaining his burden of proof on at least one element of his prima facie case. Accordingly, the district court vacated that portion of its November 29, 1994, order denying summary judgment to TUC, granted TUC's motion for summary judgment, and dismissed the complaint. This appeal followed.
The FCRA was enacted in order to ensure that "consumer reporting agencies adopt reasonable procedures for meeting the needs of commerce for consumer credit, personnel, insurance, and other information in a manner which is fair and equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization of such information." 15 U.S.C. Section(s) 1681(b). The FCRA was prompted by "congressional concern over abuses in the credit reporting industry." Guimond v. Trans Union Credit Information Co., 45 F.3d 1329, 1333 (9th Cir. 1995); see also St. Paul Guardian Ins. Co. v. Johnson, 884 F.2d 881, 883 (5th Cir. 1989). In the FCRA, Congress has recognized the crucial role that consumer reporting agencies play in collecting and transmitting consumer credit information, and the detrimental effects inaccurate information can visit upon both the individual consumer and the nation's economy as a whole. See 15 U.S.C. Section(s) 1681(a)(1), (3).
Title 15 U.S.C. Section(s) 1681e(b) provides: "Whenever a consumer reporting agency prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates." It is undisputed that TUC and TRW are "consumer reporting agenc[ies]" within the terms of 15 U.S.C. Section(s) 1681a(f), the credit reports they produced are "consumer report[s]" within the meaning of Section(s) 1681a(d), and Philbin is a "consumer" for purposes of Section(s) 1681a(c). Sections 1681n and 1681o of Title 15 respectively provide private rights of action for willful and negligent noncompliance with any duty imposed by the FCRA and allow recovery for actual damages and attorneys fees and costs, as well as punitive damages in the case of willful noncompliance. See Casella v. Equifax Credit Information Servs., 56 F.3d 469, 473 ...