Sloane v. Equifax Info. Servs. - 510 F.3d 495 (4th Cir. 2007)

Rule:

The Fair Credit Reporting Act (FCRA), 15 U.S.C.S. § 1681 et seq., provides a private cause of action for those damaged by violations of the statute. 15 U.S.C.S. §§ 1681n, 1681o. A successful plaintiff can recover both actual and punitive damages for willful violations of the FCRA, 15 U.S.C.S. § 1681n(a), and actual damages for negligent violations, 15 U.S.C.S. § 1681o(a). Actual damages may include not only economic damages, but also damages for humiliation and mental distress. The statute also provides that a successful plaintiff suing under the FCRA may recover reasonable attorney's fees. 15 U.S.C.S. §§ 1681n(a)(3), 1681o(a)(2).

Facts:

After Suzanne Sloane discovered that a thief had stolen her identity and ruined her credit, she notified the police and sought to have Equifax Information Services, LLC, a credit reporting service, correct the resulting errors in her credit report. The police promptly arrested and jailed the thief. But twenty-one months later, Equifax still had not corrected the errors in Suzanne's credit report. Accordingly, Suzanne brought the present action against Equifax for violations of the Fair Credit Reporting Act (FCRA), 15 U.S.C.A. § 1681 et seq. A jury found that Equifax had violated the Act in numerous respects and awarded Suzanne $ 351,000 in actual damages ($ 106,000 for economic losses and $ 245,000 for mental anguish, humiliation, and emotional distress). The district court entered judgment in the amount of $ 351,000. In addition, without permitting Equifax to file a written opposition, the court also awarded Suzanne attorney's fees in the amount of $ 181,083. On appeal, Equifax challenges the award of damages and attorney's fees.

Issue:

Did the district court correctly award damages and attorney’s fees to the plaintiff? 

Answer:

Yes, with respect to damages, but with modifications. No, with respect to attorney’s fees.

Conclusion:

The court affirmed the district court's judgment to the extent it denied the agency's motion for judgment as a matter of law with respect to the award for economic losses. The jury found that the agency negligently (1) failed to follow reasonable procedures designed to assure maximum accuracy on the consumer's credit report; (2) failed to conduct a reasonable investigation to determine whether disputed information was inaccurate; (3) failed to delete information that it found after reinvestigation to be inaccurate, incomplete, or unverified; and (4) reinserted information into the consumer's credit file that it had previously deleted. The agency's argument that the consumer's recovery should be reduced to account for settlements with other defendants was rejected by the court because inaccuracies in the reports produced by the agency caused discrete injuries independent of those caused by other defendants. Evidence showing that the consumer was denied credit or offered credit on less advantageous terms by financial institutions that relied on erroneous credit information provided by the agency supported the finding that the agency's conduct resulted in economic losses. However, the court noted that although the consumer suffered many months of emotional distress, the emotional distress award should be less than amounts awarded for actual defamation. Hence, the court reduced the emotional distress award to $ 150,000 and granted a new trial nisi remittitur at the consumer's option. The court vacated the attorney's fee award and remanded the case to permit the agency to submit a written opposition to the motion for attorney's fees.