Lloyd v. FedLoan Servicing

105 F.4th 1020

Chiya C. LLOYD, Plaintiff - Appellant v. FEDLOAN SERVICING, Defendant - AppelleeEquifax Information Services LLC; Trans Union, LLC, DefendantsExperian Information Solutions, Inc., Defendant - Appellee

No. 22-2840

United States Court of Appeals, Eighth Circuit

Submitted: September 21, 2023

Filed: June 21, 2024

Appeal from United States District Court for the Western District of Missouri - Kansas City

Counsel who presented argument on behalf of the appellant and appeared on the brief was Joseph Pace, of New York, NY.

Counsel who presented argument on behalf of appellee Experian Information Solutions and appeared on the brief was Adam W. Wiers, of Chicago, IL.

Counsel who presented argument on behalf of appellee FedLoan Servicing and appeared on the brief was Patrick Jerome McAndrews, of Kansas City, MO. The following attorney(s) appeared on the brief; Shilee T. Mullin, of Omaha, NE.

Before SMITH, Chief Judge,¹ MELLOY and ERICKSON, Circuit Judges.

ERICKSON, Circuit Judge.

Chiya Lloyd filed her initial complaint pursuant to the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. §§ 1681 et seq., against FedLoan Servicing LLC² ("FedLoan"), Equifax Information Services, LLC ("Equifax"), Trans Union, LLC ("Trans Union"), and Experian Information Solutions, Inc. ("Experian"). Equifax and Trans Union settled with Lloyd and were dismissed from the case; after their dismissal, Lloyd filed an amended complaint asserting FCRA violations against FedLoan and Experian. The district court³ granted a motion for summary judgment in favor of Experian, and, later, one in favor of FedLoan. We affirm.

I. BACKGROUND

FedLoan services at least nine federal student loans for Lloyd. As a servicer, FedLoan furnishes information to Experian regarding Lloyd's student loan payment history. In turn, Experian, a consumer reporting agency ("CRA"), regularly issues consumer reports pursuant to the FCRA.

In August 2019, FedLoan submitted three pieces of information to Experian: (1) Lloyd's nine student loan payments from January 2018 were overdue, (2) Lloyd's nine student loan payments from February 2018 were overdue, and (3) seven of Lloyd's student loan payments from June 2019 were overdue. In early September 2019, Lloyd submitted an online dispute⁴ with Experian contesting all the reported delinquencies. To describe her dispute, Lloyd entered a narrative that read: "Any and all late remarks are factually inaccurate. See proof provided." In support, she attached screenshots of her transaction history from FedLoan as of August 16, 2019, and an administrative forbearance letter from FedLoan dated August 2, 2019.

After receiving Lloyd's dispute, Experian sent an Automated Consumer Dispute Verification ("ACDV") to FedLoan, requesting further information on Lloyd's accounts. In response to the ACDV, FedLoan investigated and reported back to Experian that none of Lloyd's nine student loan payments were delinquent in January or February 2018. However, FedLoan confirmed that seven of Lloyd's loan payments for June 2019 were ninety days past due. Experian communicated this update to Lloyd in a credit report dated September 24, 2019.

Lloyd filed a second dispute with Experian contesting the remaining alleged late payments. Experian sent a second ACDV to FedLoan, and FedLoan provided Experian with an update on the seven disputed loan payments. This time FedLoan reported that only one of Lloyd's student loan accounts had an overdue payment from June 2019. Experian communicated this update to Lloyd in a credit report dated October 17, 2019.

Lloyd submitted a third dispute contesting the sole remaining alleged late payment. On December 2, 2019, FedLoan received one ACDV from Experian regarding the reporting on Lloyd's student loan account. FedLoan completed another investigation and informed Experian that the remaining delinquent charge on Lloyd's account was not overdue. By February 2020, Experian removed all delinquent marks from Lloyd's credit report.

Before receiving the results of her first dispute from Experian, Lloyd initiated a civil action against FedLoan, Experian, and a handful of other CRAs. After amending her complaint, Lloyd's lawsuit alleged that FedLoan failed to properly investigate the accuracy of the information that it reported to Experian, and Experian failed to follow its procedures, or have proper procedures in place, to discover FedLoan's mistakes. Lloyd alleged both FedLoan and Experian violated 15 U.S.C. §§ 1681e(b), 1681i(a)(1)(A), and 1681s-2(b).

The district court granted Experian's motion for summary judgment, determining that Lloyd could not show Experian failed to follow reasonable procedures or that Experian failed to conduct a reasonable reinvestigation. The district court initially granted FedLoan partial relief, finding that FedLoan did not willfully violate the FCRA. Further briefing ensued from both parties and the court then granted complete summary judgment in favor of FedLoan on the ground that Lloyd did not present sufficient evidence of damage to support her claim. This appeal followed.

II. ANALYSIS

We review a district court's grant of summary judgment de novo, and we may affirm summary judgment for any reason supported by the record. Gareis v. 3M Co., 9 F.4th 812, 818 (8th Cir. 2021).

A. Claims Against Experian

Lloyd challenges on appeal the district court's dismissal of her unreasonable reinvestigation claim under § 1681i(a). In particular, Lloyd asserts Experian should have accepted her documents and should have recognized that FedLoan is an unreliable CRA.

The FCRA requires a consumer reporting agency, like Experian, to "conduct a reasonable reinvestigation" when it receives a dispute from a consumer. 15 U.S.C. § 1681i(a)(1)(A). The FCRA sets forth general requirements for consumer reporting agencies when conducting a reinvestigation: the agency must review all relevant information provided by the consumer, the agency must promptly notify the furnisher of the dispute, the agency must provide the furnisher with all relevant information, the agency must modify or delete inaccurate or unverifiable information, and the agency must notify the consumer of the results of its investigation. Id. § 1681i(a)(2)-(6). If the consumer requests a description of the CRA's reinvestigation procedure, the CRA must provide the consumer with the description within fifteen days. Id. § 1681i(a)(7).

When filing her first consumer dispute with Experian, Lloyd submitted screenshots of her transaction history from FedLoan as of August 16, 2019, and an administrative forbearance letter from FedLoan dated August 2, 2019. Lloyd contends that these documents alone should have proved to Experian that FedLoan falsely reported delinquencies on her account and that FedLoan is an unreliable source of information. Lloyd maintains that all Experian needed to do was compare her documents with FedLoan's invoices and her dispute would have been resolved. However, Lloyd's screenshots are incomplete depictions of the status of her student loan accounts. The screenshots do not identify any payment due dates or any amounts due on specific loans. All transaction information is lumped together as applied to all of Lloyd's loans. Even so, Lloyd's screenshots show that she made no payments during January 2018, November 2018, December 2018, January 2019, February 2019, or June 2019.

More importantly, Experian did not have access to FedLoan's invoices. Upon receiving Lloyd's dispute, Experian sent an ACDV to FedLoan, requesting further information on Lloyd's accounts. Lloyd concedes that an ACDV "typically includes a description of the dispute, information about the disputed account, and any documents and comments provided by the consumer." Lloyd provided no evidence that Experian failed to follow the typical ACDV process during its reinvestigation.

Lloyd also attached an August 2, 2019, letter from FedLoan, which explained that Lloyd's loans had been placed in administrative forbearance between April 26, 2019, and July 25, 2019. Lloyd contends that she did not request this forbearance, and she made payments during March, April, May, and July of 2019. The forbearance letter stated that Lloyd was responsible for the interest that accrued during the forbearance. As this letter only addressed one of the three months at issue, the document also does not resolve her dispute.

Taken together, the screenshots and forbearance letter do not create a clear or comprehensive picture of Lloyd's student loan accounts at the time she filed her dispute. The screenshots of her transaction history lack critical information, including the amount due each month and the due date. The forbearance letter only addressed one of three missed months of payment. Contrary to her assertion, Lloyd's narrative and accompanying documents were insufficient for Experian to resolve the issues FedLoan flagged.

While Lloyd generally argues that Experian failed to follow its procedures and failed to have proper procedures in place to detect inconsistencies in a furnisher's reporting, she did not point to any step in Experian's reinvestigation procedure as insufficient. The record shows Experian followed the steps set forth by the FCRA for conducting a reinvestigation. Once it received Lloyd's first dispute, Experian reviewed Lloyd's statement describing her dispute and the documents she submitted. Experian then provided this information to FedLoan and requested further information from FedLoan through its ACDV process. When it received updated information, Experian modified its report and removed the inaccurate delinquencies. Experian promptly notified Lloyd of the results of its reinvestigation and informed Lloyd of her options if she continued to disagree with the reporting.

Although § 1681(a)(3) allows a CRA to decline to reinvestigate if it reasonably determines a consumer's dispute is "frivolous or irrelevant," Experian repeated this process when it received Lloyd's second dispute. See ...