Boris v. Choicepoint Services, Inc.

Page 851

249 F.Supp.2d 851

Mary L. BORIS, Plaintiff, v. CHOICEPOINT SERVICES, INC. d/b/a ChoicePoint Consumer Center, and/or C.L.U.E., Defendant.

No. CIV.A.3:01CV-342-H.

United States District Court, W.D. Kentucky, At Louisville.

March 14, 2003.

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Bernard D. Leachman, Jr., Louisville, KY, for Plaintiff.

R. Van Young, Lisa H. Thomas, Greenebaum Doll & McDonald, Louisville, KY, and Meredith L. Sidewater, Alpharetta, GA, for Defendant.

MEMORANDUM OPINION

HEYBURN, Chief Judge.

Defendant, Choicepoint Services, Inc. ("Choicepoint"), has moved for relief from the jury's verdict that Choicepoint violated the Fair Credit Reporting Act ("FCRA") and its award of $197,000 in compensatory damages and $250,000 in punitive damages. Choicepoint raises a number of issues to support a judgment notwithstanding the verdict, a new trial or remittitur. Plaintiff, Mary L. Boris, has filed a detailed defense of the verdict. The motions do not raise complex legal issues, but rather concern the sufficiency of the proof.

Judgment notwithstanding the verdict is appropriate only when there is a complete absence of fact to support the verdict, so that no reasonable juror could have found for the nonmoving party. K & T Enterprises, Inc. v. Zurich Ins. Co., 97 F.3d 171, 175-76 (6th Cir.1996). Similarly, Choicepoint is entitled to a new trial only if the jury reached "a seriously erroneous result" as indicated by a verdict that was against the weight of the evidence, excessive in damages, or the product of an unfair trial. Holmes v. City of Massillon, 78 F.3d 1041, 1045-46 (6th Cir.1996). With the exception of the compensatory damages award, the Court does not believe Choicepoint's arguments justify altering the jury's verdict. This was a sound and thoughtful jury. The Court reluctantly concludes the compensatory damages award should be reduced to $100,000. The Court makes the following observations in support of that conclusion.¹

I.

Choicepoint is a nationwide credit reporting agency which circulates what it terms a "C.L.U.E. report" ("Choicepoint" or "claims" report) which provides information to potential insurers on an individual's claim history. In February 2000, Plaintiff first learned about her claims report when her current home and automobile insurer, Encompass/CNA/Continental Insurance ("CNA"), sent her a nonrenewal notice. Plaintiff subsequently obtained a copy of her claims report which, incorrectly, showed that she had made four fire claims and an "extended loss" claim over a short period of time. As it turns out, Plaintiff had made prior claims resulting from hail damage that caused her roof to leak, as well as a leaky washing machine; she had never made claims that fell under these cause of loss codes. Upon learning about this information, Plaintiff contacted Choicepoint, who told her CNA caused the problem. She then contacted the Kentucky Department of Insurance. After being notified by the Kentucky Department of Insurance, Choicepoint worked with CNA to correct these inaccurate cause of loss codes. Plaintiffs August 8, 2000 claims report reflects this change.

Several months later, however, when Plaintiff was researching insurance rates through her agent, Lynn Whobrey, she learned that her latest claims report listed four fire claims, an "extended loss" claim, as well as the four claims she had made for water damage. Intensely frustrated by her inability to obtain affordable coverage because she was considered by the insurance industry to be a high risk, she contacted her brother who is also a local attorney who filed this suit on her behalf. Tellingly, the suit was filed on May 23, 2001 in Jefferson County Circuit Court, but the false information remained on her claims report: Plaintiffs December 20, 2001 report still showed nine claims. There appears to be no dispute that at least five of these claims were completely erroneous. The false claims information remained on her report as late as March 2002, causing Plaintiff much mental anguish and anxiety and forcing her to pay higher insurance rates.

II.

Congress enacted the FCRA "to require 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. § 1681(b). To guard against abuse of consumer credit rights, the FCRA creates a private right of action against credit reporting agencies for negligent violations of any responsibility the statute imposes. 15 U.S.C. § 1681o. Choicepoint argues that Plaintiff failed to prove (1) Choicepoint was negligently noncompliant, (2) that its noncompliance caused her injury, and (3) that she is entitled to her $197,000 compensatory damages award. The Court now addresses each of those claims.

A.

Choicepoint first argues that Plaintiff failed to meet her burden of proving a negligent violation of the FCRA. Two FCRA provisions are at issue in this case, 15 U.S.C. § 1681e(b) and 15 U.S.C. § 1681i(a). The Court discusses the proof relating to each of these requirements independently, although a negligent failure to comply with either part of the law constitutes a § I6810 violation.

1.

In preparing Plaintiffs claims report, Choicepoint must comply with 15 U.S.C. § 1681e(b), which states, "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." 15 U.S.C. § 1681e(b). Choicepoint's argument as to why there was insufficient evidence to create a triable fact on this point is two-fold. First, it argues that a consumer reporting agency ("CRA") acts reasonably so long as it accurately transcribes information from a reputable third party. Second, it claims that because it did this and because Plaintiff testified that CNA was circulating the same false information to other CRA's, it is absolved from liability. The Court does not read the § 1681e(b) requirements so narrowly.

As the Sixth Circuit stated in the seminal case on this subject, Bryant v. TRW, Inc., 689 F.2d 72, 78 (6th Cir.1982), "the standard of conduct by which the trier of fact must judge the adequacy of [consumer reporting] agency procedures is what a reasonably prudent person would do under the circumstances." The question of whether an agency followed "reasonable procedures" is typically a fact question reserved for the jury. Cousin v. Trans Union Corp., 246 F.3d 359 (5th Cir.2001); Cahlin v. General Motors Acceptance Corp., 936 F.2d 1151, 1156 (11th Cir.1991). Choicepoint now claims that Plaintiff did not meet her burden under § 1681e(b) because she failed to show what a reasonably prudent company would do under similar circumstances. But under this reasonableness standard, Plaintiff is clearly not required to present specific evidence about how other companies respond in similar circumstances. See Morris v. Credit Bureau of Cincinnati, Inc., 563 F.Supp. 962, 968 (S.D.Ohio 1983) (holding that "it is not plaintiffs burden to suggest ways in which defendant might improve its operation"). Instead she must prove that, through its own actions and inactions Choicepoint acted unreasonably. Certainly, Choicepoint could have brought in representatives from other CRAs to show that its actions were reasonable. But as part of its litigation strategy, Choicepoint chose not to do so. Instead it contends Plaintiff has provided no evidence that Choicepoint acted unreasonably.

The Court disagrees for several reasons. First, the series of facts Plaintiff laid out, on their face, create sufficient proof that Choicepoint did not follow reasonable procedures to assure maximum possible accuracy. One could infer from the evidence that Choicepoint included incorrect data on Plaintiffs claims report; that Plaintiff complained about this false information; and that after the original mistakes were corrected, more incorrect claims data reappeared on her report and remained well after the suit was filed. Based on this series of events, a jury could certainly conclude that a reasonably prudent company would have prevented a similar outcome.

Second, Choicepoint's witnesses made particularly negative impressions upon the jury. They repeatedly denied making any mistakes, and, instead, seemed to blame all defective data on others. Furthermore, Choicepoint employees appeared slow to recognize problems even once they were put on notice and disclaimed all responsibility. No Choicepoint witness, for instance, ever took responsibility for assuring that its data was accurate. Most notably, they seemed annoyed at even having to appear at trial.

Third, Choicepoint never really explained the computer glitches which apparently caused this problem.² To this day, the Court is still unclear what procedures, if any, Choicepoint uses to insure the accuracy of its mass circulated reports. Choicepoint now claims, for instance, that it clearly showed that it was CNA's responsibility to ensure all of the coding was accurate. But the evidence showed that Choicepoint may have had requirements which CNA was required to comply with but were never enforced. There can be little doubt that all of these factors weighed heavily against Choicepoint when the jury sought to assess the reasonableness of its procedures.

In short, all along Choicepoint seemed to assume that it could not be blamed for the incorrect data translations. But at trial, the evidence appeared to this observer far more muddled than Choicepoint is willing to concede. Certainly, if nothing else, the facts were subject to sufficiently different interpretations that a reasonable jury could reach different conclusions from those Choicepoint believes are so clear. See Morris, 563 F.Supp. at...