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Dixon-Rollins v. Experian Information Solutions

September 23, 2010


The opinion of the court was delivered by: Savage, J.


In its post-trial motion seeking a judgment of acquittal or a new trial, defendant Trans Union, LLC ("Trans Union") challenges the jury verdict finding that it had negligently and willfully violated the Fair Credit Reporting Act, 15 U.S.C. § 1681i ("FCRA"), when it failed to remove an erroneous collection account from the plaintiff Carmen Dixon-Rollins's ("Dixon-Rollins") credit report. It claims that there is insufficient evidence from which a jury could conclude that it negligently failed to reinvestigateDixon-Rollins's disputes regarding the erroneous collection account. It also contends that there is no evidence of a willful violation of the FCRA necessary to support the award of punitive damages. Alternatively, it argues that the punitive damages award should be reduced as unconstitutional.

Any reasonable jury could have concluded that Trans Union negligently and willfully failed to reinvestigate Dixon-Rollins's disputes in violation of the FCRA. Likewise, there is ample evidence of willfulness to support the jury's award of punitive damages. However, because the amount of punitive damages awarded to Dixon-Rollins is not reasonable and proportionate to the harm inflicted, we shall reduce the award from $500,000 to $270,000.


The credit information that was reported arose from a landlord-tenant dispute between Dixon-Rollins and her former landlord. In June 2004, Dixon-Rollins vacated an apartment she leased from Awbury Park Apartments ("Awbury Park") without paying her last month's rent. Awbury Park filed a lawsuit to collect the amount it believed was still owed on the lease. Chancellor Properties ("Chancellor"), the management company for the apartment complex, referred the debt for collection to Associate Credit and Collection Bureau, Inc. ("ACCB"). ACCB, in turn, reported the collection account to Trans Union which listed the account as an outstanding debt on Dixon-Rollins's credit report.*fn1

Through their attorneys, Dixon-Rollins and Awbury Park settled the lawsuit prior to trial in October 2004 for $530. Pursuant to the settlement agreement, Dixon-Rollins paid Awbury Park the agreed amount with a money order. Awbury Park advised neither Chancellor nor ACCB that the debt was satisfied. Trans Union continued to list the debt as an outstanding collection account of $690.

In 2005, Dixon-Rollins was notified by a credit monitoring service that the debt was still listed on her credit report. She disputed the collection account on four separate occasions, submitting written disputes to Trans Union on May 8, 2007, December 12, 2007, May 28, 2008, and July 28, 2008. On each occasion, Trans Union sent an automated customer dispute verification form ("ACDV") to ACCB.*fn2 ACCB responded to each inquiry by checking a box on the ACDV form, which verified that the debt remained outstanding. Relying solely on ACCB's verification without any attempt to corroborate it, Trans Union continued to report the collection account on Dixon-Rollins's credit report until May 2009.

Dixon-Rollins initiated this action, alleging that Trans Union violated the FCRA by negligently and willfully failing to reinvestigate inaccurate information included in her credit report, and to employ reasonable procedures to assure maximum possible credit reporting accuracy. On March 8, 2010, after a two day trial, the jury returned a verdict in favor of Dixon-Rollins. It awarded her $30,000 in actual damages and $500,000 in punitive damages. Trans Union filed a timely post-trial motion seeking judgment as a matter of law, or alternatively, a new trial on damages and a reduction in the punitive damages award.

Standard of Review

Judgment as a matter of law can be granted only where there is no legally sufficient evidentiary basis for a reasonable jury to find in favor of the verdict winner. Foster v. Nat'l Fuel Gas Co., 316 F.3d 424, 428 (3d Cir. 2003) (citing Fed. R. Civ. P. 50(a)(1)). Thus, a jury verdict will not be disturbed unless the record is "'critically deficient of that quantum of evidence from which a jury could have rationally reached its verdict.'" LePage's Inc., v. 3M, 324 F.3d 141, 146 (3d Cir. 2003) (quoting Swineford v. Snyder County, 15 F.3d 1258, 1265 (3d Cir. 1994)). In determining whether a jury's verdict is supported by a sufficient evidentiary basis, the court must draw all reasonable inferences in favor of the verdict winner. Reeves v. Sanderson Plumbing Prod., Inc., 530 U.S. 133, 150 (2000).

At the conclusion of Dixon-Rollins's case in chief, Trans Union moved for judgment as a matter of law. After the motion was denied, Trans Union proceeded to offer evidence in its own defense. Consequently, we consider the record as it stood at the close of all the evidence. See Trs. of Univ. of Pennsylvania v. Lexington Ins. Co., 815 F.2d 890, 903 (3d Cir. 1987).

Only where "the record shows that the jury's verdict resulted in a miscarriage of justice or where the verdict, on the record, cries out to be overturned or shocks [the] conscience" can a new trial be granted for insufficiency of the evidence. Marra v. Phila. Hous. Auth., 497 F.3d 286, 307 n. 18 (3d Cir. 2007) (quoting Williamson v. Consol. Rail Corp., 926 F.2d 1344, 1353 (3d Cir. 1991)). A trial court may not substitute its judgment of the facts and its own credibility determinations for that of the jury. Reeves. 530 U.S. at 150; Fineman v. Armstrong World Indus., Inc., 980 F.2d 171, 211 (3d Cir. 1992).


When a consumer disputes the completeness or accuracy of any information contained in her credit report, the consumer reporting agency must conduct a reinvestigation. If the reinvestigation reveals that the information is inaccurate or cannot be verified, the consumer reporting agency must promptly delete the information. 15 U.S.C. § 1681(i)(a). Failure to conduct a reasonable reinvestigation violates the FCRA. Cushman v. Trans Union Corp., 115 F.3d 220, 223-24 (3d Cir. 1997).

The burden to conduct the reinvestigation is on the credit reporting agency. It cannot be shifted back to the consumer. Id. at 225.

A credit reporting agency's reinvestigation obligation is to verify the accuracy of its original source of information. This duty may include going beyond the original source. Whether the credit reporting agency must go beyond the original source depends on a number of factors, including: (1) whether the consumer has alerted the consumer reporting agency that the original source may be unreliable; (2) whether the consumer reporting agency itself knows or should know that the original source is unreliable; and (3) the comparative costs of verifying the accuracy of the original sources versus the potential harm the inaccurate information may cause the consumer. Id. Whether the credit reporting agency failed to fulfill its duty to reinvestigate is for the jury to decide. Id. at 226.

As part of its reinvestigation, a consumer reporting agency must provide the original source of derogatory information with notice of the consumer's dispute. 15 U.S.C. § 1681i (a)(2). The notice "shall include all relevant information regarding the dispute that the agency has received from the consumer." Id.

The FCRA imposes liability for damages, costs, and attorney's fees against "any person who is negligent in failing to comply with any" of its provisions. 15 U.S.C. § 1681o. Furthermore, willful non-compliance with the FCRA permits an award of punitive damages.

15 U.S.C. § 1681n.

Trans Union argues that there is no evidence from which a jury could conclude that it negligently failed to comply with its reinvestigation duties under ยง 1681i. It claims that the FCRA does not require it to do more than verify a debt with the original source. Thus, according to Trans Union, it satisfied its reinvestigation duties under ...

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