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Chakejian v. Equifax Information Services LLC

March 24, 2009

RICHARD CHAKEJIAN PLAINTIFF,
v.
EQUIFAX INFORMATION SERVICES LLC DEFENDANT.



The opinion of the court was delivered by: Anita B. Brody, J.

MEMORANDUM AND ORDER

Plaintiff moves, pursuant to Rule 23 of the Federal Rules of Civil Procedure, to certify a class of all consumers in the Commonwealth of Pennsylvania who received a letter from the defendant that allegedly contains misstatements and misrepresentations in violation of the Fair Credit Reporting Act. For the reasons stated below, the Court grants plaintiff's motion.

I. Background

Defendant Equifax Information Services LLC ("Equifax") provides a broad range of services to consumers related to credit data information, including serving as a credit reporting agency ("CRA"). (See Declaration of Alicia Fluellen [hereinafter "Fluellen Decl."] ¶ 3.) The credit information reporting practices of Equifax and other CRAs are regulated by the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq. ("FCRA"). The FCRA was enacted "to insure that consumer reporting agencies exercise their grave responsibilities with fairness, impartiality, and a respect for the consumer's right to privacy." 15 U.S.C. § 1681(a). Section 1681i of the FCRA sets forth the procedures that CRAs must follow if a consumer disputes the completeness or accuracy of the information appearing in his or her credit report. Pursuant to section 1681i(a)(1)(A), when a consumer notifies a CRA of a dispute, the CRA must either "conduct a reasonable reinvestigation of that dispute to determine whether the disputed information is inaccurate and record the current status of the disputed information, or delete the item from the file." 15 U.S.C. § 1681i(a)(1)(A). If the CRA conducts a reinvestigation, it must provide the consumer with written notice of the results of the reinvestigation containing, including:

[A] notice that, if requested by the consumer, a description of the procedure used to determine the accuracy and completeness of the information shall be provided to the consumer by the agency, including the business name and address of any furnisher of information contacted in connection with such information and the telephone number of such furnisher, if reasonably available.

15 U.S.C. § 1681i(a)(6)(B)(iii).

In January 2007, Plaintiff Richard Chakejian ("Mr. Chakejian") obtained a credit report from Equifax and noticed that a record of an involuntary bankruptcy filing appeared in error on his credit report.*fn1 On January 16, 2007, Mr. Chakejian sent Equifax a letter disputing the accuracy of the bankruptcy record in the credit report. (See Pl.'s Mot. for Class Cert. Ex. D, Letter dated January 16th, 2007 [hereinafter, the "Dispute Letter"].)

While Equifax's credit reports include credit data from the public record, such as bankruptcies, liens, and judgments, Equifax is not the primary source of that information.

Instead, Equifax employs an independent public records vendor ("PRV") to gather public records directly from courthouses and court filings and to provide relevant data points to Equifax.*fn2 (See Declaration of Shawn DeGrace [hereinafter "DeGrace Decl."] ¶ 3.) Pursuant to a contract between Equifax and its PRV, when a customer disputes public record information appearing on a credit report, the PRV is also responsible for going to the original source of the information (generally the courthouse or docket), reviewing the information, and reporting the results to Equifax. (DeGrace Decl. ¶ 17; Fluellen Decl. ¶ 11). Upon receiving this information from the PRV, it is Equifax's practice to then provide consumers with the name and address of the courthouse where the disputed public record originated. (Def.'s Opp. to Pl's. Mot. for Class. Cert. 6-7; Fluellen Decl. ¶ 9.) Equifax does not provide the name and address of its PRV to consumers in responding to public record disputes. (DeGrace Decl. ¶ 14.) In accordance with these practices and policies, Equifax responded to Mr. Chakejian's Dispute Letter with the form reinvestigation letter that is the subject of this litigation (the "Reinvestigation Letter"). (See Am. Compl. Ex. A, Letter dated January 26th, 2007 [hereinafter "Reinvestigation Letter"].) The Reinvestigation Letter informed Mr. Chakejian of the following:

Below are the results of your request for Equifax to reinvestigate certain elements of your Equifax credit file. Equifax contacted each source directly and our investigation is now completed. If you have any additional questions or concerns, please contact the source of that information directly.

(Id.) The Reinvestigation Letter further indicates that Equifax reviewed Mr. Chakejian's "bankruptcy information" and "verified" that the bankruptcy item belonged to him.(Id.) The letter directs that Mr. Chakejian should contact the Eastern District of PA, Robert NC NIX Federal Buil., 900 Market St. RM 400, Philadelphia, PA 19107-4233, if he has "any additional questions about this item." (Id.) The letter instructs Mr. Chakejian to contact Equifax if he had any questions regarding "the specific information contained in this letter."*fn3 (Id.)

The Reinvestigation Letter also includes a "Notice to Consumer" that explains Equifax's reinvestigation procedures. The "Notice to Consumers" states in full:

Upon receipt of your dispute, we first review and consider the relevant information you have submitted regarding the nature of your dispute. If the review does not resolve your dispute, and further investigation is required, notification of your dispute, including the relevant information you submitted, is provided to the source that furnished the disputed information, conducts an investigation with respect to the disputed information and reports the results back to us. The credit reporting agency then makes deletions or changes to your credit file as appropriate based on the results of the reinvestigation. The name, address and, if reasonably available, the telephone number of the furnisher(s) of the information contacted while processing your dispute(s) is shown under the "Results of Your Investigation" section on the cover letter that accompanies the copy of your revised credit file.

Mr. Chakejian's claim is that the Reinvestigation Letter misrepresents the source of Equifax's public records information and misstates the results of its reinvestigation and its reinvestigation procedures in violation of section 1681i of the FCRA. As a result, Mr. Chakejian experienced "anxiety, frustration, loss of a few hours of his time and the out-of-pocket expense incurred for a certified record from the bankruptcy court." (Pl.'s Mot. for Class Cert. 6-7).

The FCRA contains two damages provisions. Section 1681n provides liability for willful violations of the statute, and section 1681o provides liability for negligent violations. Mr. Chakejian is pursuing his claims under the willful noncompliance section only. This section applies to "[a]ny person who willfully fails to comply with any requirement of [the FCRA] with respect to any consumer," and provides for "any actual damages sustained by the consumer as a result of the failure or damages of not less than $100 and not more than $1000," as well as punitive damages, costs, and attorney's fees. 15 U.S.C. § 1681n. (emphasis added). Mr. Chakeijian seeks for himself and for the putative class, statutory damages of not less than $100 and not more than $1,000, punitive damages, and reasonable attorney's fees. (Am. Compl. 6-7.)

II. Discussion

Plaintiff seeks to certify a class comprised of: All consumers in the Commonwealth of Pennsylvania to whom, beginning two years prior to the filing of the Amended Complaint and continuing through the resolution of this action, in response to a dispute, Defendant sent a letter substantially similar to the Letter ...


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