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Safeco Ins. Co. of Am. v. Burr

Supreme Court of the United States

January 16, 2007, Argued ; June 4, 2007, Decided

(No. 06-84), (No. 06-100)

Opinion

 [*52]  [**2205]  Justice Souter delivered the opinion of the Court.1

 [****10]  ] The Fair Credit Reporting Act (FCRA or Act) requires notice to any consumer subjected to "adverse action . . . based in whole or in part on any information contained in a consumer [credit] report." 15 U.S.C. § 1681m(a). Anyone who "willfully fails" to provide notice is civilly liable to the consumer. § 1681n(a). The questions in these consolidated cases are whether willful failure covers a violation committed in reckless disregard of the notice obligation, and, if so, whether petitioners Safeco and GEICO committed reckless violations. We hold that reckless action is covered, that GEICO did not violate the statute, and that while Safeco might have, it did not act recklessly.

Congress enacted FCRA in 1970 to ensure fair and accurate credit reporting, promote efficiency in the banking system, and protect consumer privacy. See 84 Stat. 1128,  [**2206]  15 U.S.C. § 1681;TRW Inc. v. Andrews, 534 U.S. 19, 23, 122 S. Ct. 441, 151 L. Ed. 2d 339 (2001). The Act requires, among other things, that "any person [who] takes any adverse action with respect to any consumer that is based in whole or in part on any information contained in a consumer report" must [****11]  notify the affected consumer.2  15 U.S.C. § 1681m(a) [*53]  . The notice must point out the adverse action, explain how to reach the agency that reported on the consumer's credit, and tell the  [***1056] consumer that he can get a free copy of the report and dispute its accuracy with the agency. Ibid.  As it applies to an insurance company, "adverse action" is "a denial or cancellation of, an increase in any charge for, or a reduction or other adverse or unfavorable change in the terms of coverage or amount of, any insurance, existing or applied for." § 1681a(k)(1)(B)(i).

 [****12]  ] FCRA provides a private right of action against businesses that use consumer reports but fail to comply. If a violation is negligent, the affected consumer is entitled to actual damages. § 1681o(a) (2000 ed., Supp. IV). If willful, however, the consumer may have actual damages, or statutory damages ranging from $100 to $1,000, and even punitive damages. § 1681n(a) (2000 ed.).

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551 U.S. 47 *; 127 S. Ct. 2201 **; 167 L. Ed. 2d 1045 ***; 2007 U.S. LEXIS 6963 ****; 75 U.S.L.W. 4386; 20 A.L.R. Fed. 2d 803; 20 Fla. L. Weekly Fed. S 322

SAFECO INSURANCE COMPANY OF AMERICA, et al., Petitioners v. CHARLES BURR, et al. GEICO GENERAL INSURANCE COMPANY, et al., Petitioners v. AJENE EDO

Subsequent History: On remand at  [****1] Edo v. Geico Cas. Co., 512 F.3d 566, 2008 U.S. App. LEXIS 333 (9th Cir., Jan. 9, 2008)

On remand at Spano v. Safeco Corp., 511 F.3d 1206, 2008 U.S. App. LEXIS 336 (9th Cir., Jan. 9, 2008)

Prior History: ON WRITS OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT.

Spano v. Safeco Corp., 140 Fed. Appx. 746, 2005 U.S. App. LEXIS 16308 (9th Cir. Or., 2005)Reynolds v. Hartford Fin. Servs. Group, Inc., 435 F.3d 1081, 2006 U.S. App. LEXIS 1787 (9th Cir. Or., 2006)

Disposition: Reversed and remanded.

CORE TERMS

consumer, notice, reckless, score, willfully, customers, baseline, first-time, knowingly, usage, join

Banking Law, Consumer Protection, Fair Credit Reporting, Consumer Reports, Liability for Violations, General Overview, Governments, Legislation, Interpretation, Statutory Remedies & Rights, Criminal Law & Procedure, Acts & Mental States, Mens Rea, Willfulness, Torts