Myers v. Am. Educ. Servs.

ANN MARIE MYERS, Plaintiff, v. AMERICAN EDUCATION SERVICES, Defendant.

No. 1:18-cv-144

United States District Court, S.D. Ohio, Western Division

September 24, 2021

ORDER DENYING DEFENDANT'S MOTION FOR RECONSIDERATION (Doc. 74)

MATTHEW W. McFARLAND, JUDGE

On March 8, 2021, the Court found that AES "willfully" violated the Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq, by failing to conduct "reasonable investigations" into Plaintiff's disputes that AES was incorrectly reporting her credit history. (See Order, Doc. 73.) Accordingly, the Court granted Plaintiff's motion for partial summary judgment (Doc 66), denied AES's motion for summary judgment (Doc. 63) and set a jury trial for October 18, 2021 on the only remaining issue: the calculation of damages. (See Order, Doc. 73; see also Notation Order, 3/08/2021.) AES now moves for reconsideration of that Order under Federal Rule of Civil Procedure 59(e). (Motion for Reconsideration Doc. 74.) This matter is fully briefed (see Docs. 75, 76, 79, 82) and thus ripe for the Court's review. For the reasons below, AES's Motion for Reconsideration (Doc. 74) is DENIED.

THE COURT'S PREVIOUS ORDER GRANTING PARTIAL SUMMARY JUDGMENT FOR PLAINTIFF (Doc. 73)

The Court's previous Order clearly details both the facts of this case and the reasoning supporting this Court's determination as to why AES violated the FCRA (Order, Doc. 73) and is incorporated here in its entirety. Importantly, both parties moved for summary judgment, arguing that there were no genuine issues of material fact. The Court agreed, finding that the facts were largely undisputed. Rather, the only dispute was the legal effect of those facts. Resolution of this case thus turned on two questions: "First, did AES. . . fail to reasonably investigate Plaintiff's disputes? Second, was AES's failure to do so negligent or willful?" (M. at Pg. ID 1529.)

Reasonable Investigation. At the insistence of both parties, the Court considered Eleventh Circuit case law, specifically Hinkle v. Midland Credit Mgmt., Inc., 827 F.3d 1295 (11th Cir. 2016), to analyze whether AES had conducted a "reasonable investigation." Under this standard:

When a furnisher. .. "reports that disputed information has been verified," as AES did here, "the question of whether the furnisher behaved reasonably will turn on whether the furnisher acquired sufficient evidence to support the conclusion that the information was true."

(Order, Doc. 73, Pg, ID 1530-31 (quoting Hinkle, 827 F.3d at 1303)) (emphasis added.) As the Court noted, this standard is entirely consistent with the Sixth Circuit's standard - which turns on the thoroughness of the information reviewed. (Id. at Pg. ID 1529-30, 1533). See also Boggio v. USAA Fed. Sav. Bank, 696 F.3d 611, 616 (6th Cir. 2012) ("[T]he term 'investigation' itself denotes a 'fairly searching inquiry,' or at least something more than a merely cursory review.").

The Court concluded that AES's investigations were "patently unreasonable" under both the Sixth and Eleventh Circuit's standards. (See Order, Doc. 73, Pg. ID 1531.) When responding to the dispute, instead of reaching out to Wells Fargo (to whom AES had returned the account and thus who would have had up-to-date information as to the status of the account), AES chose to rely on its own undisputedly outdated and inaccurate internal records to verify information that AES knew it no longer possessed. Thus, AES failed to "acquire sufficient evidence to support the conclusion that the information was true," Hinkle, 827 F.3d at 1303, and so, AES's investigations were "patently unreasonable." (See Order, Doc. 73, Pg. ID 1531.)

Willfulness. Next, the Court examined whether AES's conduct was willful, because to prevail, Plaintiff also had to demonstrate that AES's violation was either negligent or willful. A willful violation of the FCRA occurs when a person demonstrates "reckless disregard" of a statutory duty. Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 68 (2007). This must entail "an unjustifiably high risk of harm that is either known or so obvious that it should be known." Id. (cleaned up). Importantly, the Court noted that the Eleventh Circuit has held that "a reasonable jury could find that [defendant] willfully violated § 1681s-2(b) when it reported [] accounts as 'verified' without obtaining sufficient documentation." (Order, Doc. 73, Pg. ID 1536.)

Accordingly, the Court found that AES's conduct was willful:

AES fully admits that it failed to conduct any investigation outside of its own internal records, even though it knew the account had been transferred back to Wells Fargo. Yet AES still verified such information without obtaining any documentation from Wells Fargo. Moreover, even after Plaintiff contacted AES directly and AES sent Plaintiff a letter indicating that she had a $0 balance owed, AES continued to verify information without ever obtaining any documentation from Wells Fargo or Plaintiff. Although AES eventually corrected its inaccurate reporting of Plaintiff's balance owed in November 2016, it did not do so because it had "acquired sufficient evidence to support the conclusion that the information was true." Hinkle, 827 F.3d at 1303. The only way AES could have done so would have been to reach out to Wells Fargo or Plaintiff, the only parties that had such evidence. But AES's policy precluded employees from contacting third parties and instead instructed them to verify disputed information based on AES's own internal records, even when AES knew that its records were outdated or that the disputed information was not in their possession. And by doing so here, AES created "an unjustifiably high risk of harm that [was] either known or so obvious that it should [have been] known." Safeco Ins., 551 U.S. at 68.

(Order, Doc. 73, Pg. ID 1536-37.)

LAW

The Court's adjudication of this Motion is guided by two rules of Civil Procedure: Rule 59(e) and Rule 56.

Rule 59(e). To prevail on a motion for reconsideration under Rule 59(e), a party must demonstrate either: (1) a clear error of law, (2) newly discovered evidence, (3) an intervening change in controlling law, or (4) a need to prevent manifest injustice. Intera Corp. v. Henderson, 428 F.3d 605, 620 (6th Cir. 2005). Relief under this rule, however, is an "'extraordinary remedy' reserved for exceptional cases" that fit squarely within one of the four elements above. Hines v. Comm'r of Soc. Sec., 414 F.Supp.3d 1080, 1081 (S.D. Ohio 2019) (Newman, J.) (quoting Foster v. DeLuca, 545 F.3d 582, 584 (7th Cir. 2008)).

Importantly, a Rule 59(e) motion is not an opportunity "to re-hash old arguments or [] advance positions that could have been argued earlier but were not." Gulley v. Cty. of Oakland, 496 Fed.Appx. 603, 612 (6th Cir. 2012) (cleaned up). Indeed, such a motion should be denied if it only "raise[s] arguments which could, and should, have been made before," Sault Ste. Marie Tribe of Chippewa Indians v. Engler, 146 F.3d 367, 374 (6th Cir. 1998), or "is premised on evidence that the party had in its control prior to the original entry of judgment." Emmons v. McLaughlin, 874 F.2d 351, 358 (6th Cir. 1989). "A litigant will not get himself a new judgment simply by making points he already has made or could have made." Fields v. White, No. CV 15-38-ART, 2016 WL 7425291, at *11 (E.D. Ky. Dec. 22, 2016) (Thapar, J.) (cleaned up). "If he simply disagrees with the district court's judgment, he can appeal." Id.

Rule 56. Rule 56 requires a court to grant summary judgment if the record "reveals that there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law." Laster v. City of Kalamazoo, 746 F.3d 714, 726 (6th Cir. 2014) (citing Fed.R.Civ.P. 56(c)). If the movant demonstrates the absence of any genuine issue of material fact, the burden of production shifts to the nonmovant, who is then required to present some type of evidentiary material upon which a jury could return a verdict in its favor. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986); Celotex Corp, v Catrett, 477 U.S. 317, 324 (1986). While the court must "view the facts and any inferences that can be drawn from those facts. . . in the light most favorable to the nonmoving party," Keweenaw Baij Indian Comm. v. Rising, 477 F.3d 881, 886 (6th Cir. 2007), it is not required to do so if the nonmovant's version of events is "blatantly contradicted by the record, [such] that no reasonable jury could believe it." Scott v. Harris, 550 U.S. 372, 380 (2007). If the evidence is merely colorable, Dombrowski v. Eastland, 387 U.S. 82, 84 (1967), or is not significantly probative, First Nat'l Bank of Arizona v. Cities Sew. Co., 391 U.S. 253, 290 (1968), judgment may be granted. Anderson, 477 U.S. at 249.

ANALYSIS

AES essentially argues that reconsideration is appropriate because the Court's conclusions that AES failed to perform a "reasonable investigation" and that this failure was "willful" constitute "clear errors of law" that would create "manifest injustice." (Motion for Reconsideration, Doc. 74.) However, a "clear error of law" occurs where the original ruling "overlooked or disregarded" some "argument or controlling authority" or where the moving party "successfully points out a manifest error." Jackson v. Ford Motor Co., No. 154180 2016 WL 4533028, at *1 (W.D. Tenn. Mar. 21, 2016) (citations omitted). AES fails to clear this hurdle.

I. AES fails to show a "clear error of law" in the Court's determination that AES's investigations were unreasonable as a matter of law.

AES first argues that it was error for the Court to find that its investigations were unreasonable because, according to AES existing regulatory guidance permits furnishers to rely solely on internal records to verify...