Benjamin v. Experian Info. Solutions, Inc.

Full title: Charlynda BENJAMIN, Plaintiff, v. EXPERIAN INFORMATION SOLUTIONS, INC.…

Court: United States District Court, N.D. Georgia, Atlanta Division.

Date published: Sep 20, 2021

561 F. Supp. 3d 1330 (N.D. Ga. 2021)

Opinion

CIVIL ACTION NO. 1:20-CV-2466-RWS

2021-09-20

Charlynda BENJAMIN, Plaintiff, v. EXPERIAN INFORMATION SOLUTIONS, INC., Defendant.

Jenna Dakroub, Price Law Group, APC, Scottsdale, AZ, for Plaintiff. Christopher Michael Johnson, Pro Hac Vice, Jones Day, San Diego, CA, Eric A. Nicholson, Pro Hac Vice, Jones Day, Detroit, MI, Andrew Mark Ellis, Jones Day, Atlanta, GA, for Defendant.

RICHARD W. STORY, United States District Judge

Jenna Dakroub, Price Law Group, APC, Scottsdale, AZ, for Plaintiff.

Christopher Michael Johnson, Pro Hac Vice, Jones Day, San Diego, CA, Eric A. Nicholson, Pro Hac Vice, Jones Day, Detroit, MI, Andrew Mark Ellis, Jones Day, Atlanta, GA, for Defendant.

OPINION AND ORDER

RICHARD W. STORY, United States District Judge

This matter is before the Court on the August 4, 2021 Final Report & Recommendation ("R&R") of Magistrate Judge Regina D. Cannon [Doc. 72] recommending that the Court deny Plaintiff's Motion for Partial Summary Judgment [Doc. 48] and that Defendant's Motion for Summary Judgment [Doc. 49] be granted in part and denied in part. Also before the Court are Defendant Experian Information Solutions’ Objections to the R&R [Doc. 74], Plaintiff's Partial Objection to the R&R [Doc. 75], Plaintiff's Response in Opposition to Defendant Experian Information Solutions, Inc.’s Objections to the R&R [Doc. 76], and Defendant Experian Information Solutions’ Response to Plaintiff's Partial Objection to the R&R [Doc. 77]. For the reasons set forth herein, the Court overrules the parties’ respective objections and adopts the R&R as the decision of this Court.

I. Background

Plaintiff Charlynda Benjamin ("Plaintiff") alleges in this lawsuit that Defendant Experian Information Solutions, Inc. ("Defendant" or "Experian"), a credit reporting agency ("CRA"), violated 15 U.S.C. § 1681e(b) of the Fair Credit Reporting Act ("FCRA") by not maintaining reasonable procedures to assure maximum possible accuracy of Plaintiff's reported consumer information. Plaintiff specifically contends that Experian failed to maintain reasonable procedures to update debts discharged through Chapter 7 of the Bankruptcy Code.

By way of brief background, Plaintiff opened an account with MoneyLion, Inc. ("MoneyLion") in August 2019 and then filed for Chapter 7 bankruptcy the following month. Plaintiff's bankruptcy was discharged in January 2020. In May 2020, Plaintiff learned that Experian was still reporting an owed balance of $330 on the MoneyLion account and a past-due amount of $139 on that account. Additionally, the MoneyLion account was reporting as 30 days late in December 2019, as 60 days late in March 2020, and as charged off in April 2020. Nonparties Equifax and Trans Union correctly reported the MoneyLion account as discharged through bankruptcy.

Plaintiff likewise alleges that Experian failed to follow procedures to which it had previously agreed in a 2008 class action settlement of White v. Experian Info. Sols., Inc. , Case No. 05-CV-1073, 2008 WL 11518799, at *1 (C.D. Cal. Aug. 19, 2008), a case that concerned the reporting of debts discharged in consumer bankruptcies. The settlement agreement "incorporat[ed] new procedures that make use of assumptions regarding the likely discharged status of certain pre-bankruptcy tradelines." Id. at *3. The specifics of those procedures are set forth in the R&R. (Doc. 72 at 4-6).

Plaintiff commenced this lawsuit on June 9, 2020. Plaintiff alleges that Experian negligently and willfully violated § 1681e(b). She seeks to recover actual damages, statutory damages, and punitive damages as a result of the alleged inaccurate reporting of the MoneyLion account.

Both Plaintiff and Defendant have moved for summary judgment. Plaintiff moves for partial summary judgment, seeking determinations as a matter of law that the information reported about her by Experian was inaccurate and that Experian did not have a reasonable procedure in place to assure maximum possible accuracy of the information reported by Experian. Experian moves for summary judgment on all of Plaintiff's claims. As mentioned above, Magistrate Judge Cannon has issued an R&R, and both parties have filed objections. The R&R and the parties’ objections are ripe for the Court's review.

II. Standard of Review

1 In reviewing a report and recommendation, the district court "shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made." 28 U.S.C. § 636(b)(1) ; see also United States v. Schultz , 565 F.3d 1353, 1361 (11th Cir. 2009). "Parties filing objections to a magistrate's report and recommendation must specifically identify those findings objected to. Frivolous, conclusive, or general objections need not be considered by the district court." Schultz , 565 F.3d at 1361 (quoting Marsden v. Moore , 847 F.2d 1536, 1548 (11th Cir. 1988) ) (internal quotation marks omitted). Absent objection, the district judge "may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge," 28 U.S.C. § 636(b)(1), and "need only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation." Fed. R. Civ. P. 72, advisory committee note, 1983 Edition, Subdivision (b); Macort v. Prem, Inc. , 208 Fed. Appx. 781, 784 (11th Cir. 2006) (quoting Diamond v. Colonial Life & Acc. Ins. Co. , 416 F.3d 310, 315 (4th Cir. 2005) ).

III. Summary of Objections

Objecting to the R&R, Defendant contends that the Magistrate Judge erred in the following four ways: 1) misconstruing Losch v. Nationstar Mortg. LLC , 995 F.3d 937 (11th Cir. 2021) and concluding that Experian had notice of the alleged inaccuracy; 2) finding a fact question as to the reasonableness of Experian's procedures; 3) ignoring Eleventh Circuit precedent requiring a causal connection between an inaccurate consumer report and asserted damages; and 4) concluding that Plaintiff has presented evidence of emotional distress sufficient to create a genuine factual issue regarding actual damages.

Plaintiff objects only to the portion of the R&R in which the Magistrate Judge recommends that summary judgment be granted in favor of Defendant with respect to Plaintiff's claim for willful violation of the FCRA.

IV. Discussion

A. Experian's Notice of the Alleged Inaccuracy

Experian first objects to the Magistrate Judge's conclusion that Experian had sufficient notice that the MoneyLion account had been discharged in bankruptcy. Experian argues that the Magistrate Judge misconstrued the Eleventh Circuit's Losch decision in concluding that Experian's notice of Plaintiff's Chapter 7 bankruptcy discharge order sufficiently provided Experian notice that each of Plaintiff's pre-bankruptcy debts was discharged. Experian further argues that Losch and the out-of-circuit precedent it adopts require more specific notice than that found to be sufficient by Judge Cannon. Experian emphasizes that neither MoneyLion nor Plaintiff informed Experian that the debt was discharged and asserts that it otherwise had no means to "pinpoint" a potential inaccuracy. (Doc. 74 at 4).

Having thoroughly considered Experian's arguments and closely reviewed the applicable authority, the Court is of the opinion that Experian misconstrues the extent of the notice required for a § 1681e(b) claim and is confusing it with that required for a claim under § 1681i, which governs reinvestigations. Experian maintains that " Losch adopts the holdings and reasoning of out-of-circuit precedent establishing that a CRA must have notice of a credit-reporting inaccuracy in order to be held liable under § 1681e(b)." (Doc. 74 at 3). Experian further states that the requisite notice in Losch and the requisite notice contemplated in two decisions that Losch cites is through a consumer dispute. ( Id. at 5) (citing Losch , 995 F.3d at 945, Henson v. CSC Credit Servs. , 29 F.3d 280, 286-87 (7th Cir. 1994), and Cushman v. Trans Union Corp. , 115 F.3d 220, 225 (3d Cir. 1997) ). The Court addresses Experian's contentions below.

23 As an initial matter, there is no requirement that a customer file a dispute with a CRA before bringing a claim against the CRA for a violation of § 1681e(b). Morgan v. Trans Union, LLC , CIVIL ACTION FILE NO. 1:19-cv-1526-CC-JKL, 2019 WL 5490624, at *4 (N.D. Ga. Aug. 26, 2019) ("There is no requirement under § 1681e(b) that a consumer first dispute the accuracy of the information with a third-party before a cause of action accrues."); see also Alsibai v. Experian Info. Sols. , 488 F. Supp. 3d 840, 847 (D. Minn. 2020) ("The provision of the FCRA at issue here, § 1681e, does not require a consumer to report inaccurate information to an agency before filing a lawsuit."); Morris v. Experian Info. Sols. , 478 F. Supp. 3d 765, 769-70 (D. Minn. 2020) ("Notifying the CRA of an inaccuracy is not a prerequisite to asserting a claim under § 1681e(b), however."); Gibson v. Experian Info. Sols. , 494 F. Supp. 3d 613, 616 (E.D. Mo. 2020) (stating that "section 1681e(b) does not require a consumer to notify the CRA of an error"). It is the case, however, that "a reporting agency's procedures will not be deemed unreasonable unless the agency has a reason to believe that the information supplied to it by a data furnisher is unreliable." Losch , 995 F.3d at 945 (citing Sarver v. Experian Info. Sols. , 390 F.3d 969, 972 (7th Cir. 2004) ); Frydman v. Experian Info. Sols. , 14cv9013-PAC-FM, 2016 WL 11483839, at *12 (S.D.N.Y. Aug. 11, 2016) ("Courts have consistently held ... that a CRA does not violate its duty to assure reasonable accuracy pursuant to Section 1681e(b) simply by reporting an inaccurate debt or judgment, absent prior reason to believe that its source was unreliable."); see also Aslani v. Corelogic Credco, LLC , No. 1:13-CV-2635-CC-LTW, 2014 WL 12861199, at *4 (N.D. Ga. Aug. 18, 2014) ("Because Section 1681e(b) contains no notice requirement, the absence of notice is only relevant where a defendant has shown that its procedures are otherwise reasonable as a matter of law."), report and recommendation adopted , 2014 WL 12861361 (N.D. Ga. Sept. 8, 2014).

Experian points to a ruling included in a footnote of the Losch decision to argue that a consumer dispute or some other form of notice of an inaccuracy is required for a CRA to be held liable under § 1681e(b). The Eleventh Circuit stated the following in that footnote: "To the extent that any of Losch's claims under § 1681e alleges that Experian acted unreasonably in preparing any credit reports before he informed it of the relevant inaccuracy, the district court properly granted Experian summary judgment for that claim." 995 F.3d at 945 n.6. While this ruling supports Experian's position at first glance, the Eleventh Circuit provided no substantive analysis specific to the § 1681e(b) claims and focused its merits discussion on the reinvestigation claims under § 1681i. The Court does not read Losch to hold broadly that a customer dispute is required for a CRA to be liable for a § 1681e(b) violation, and Losch ’s minimal discussion of the § 1681e(b) claims does not provide meaningful guidance concerning the degree of notice necessary to establish liability under § 1681e(b).

Further, while Losch references a need for claimed inaccuracies to be "pinpointed" to trigger the duty for CRAs to investigate beyond the original source of disputed information, that reference relates only to claims brought pursuant to § 1681i. 995 F.3d at 945. A review of the relevant out-of-circuit decisions that Losch cited in adopting this principle confirms that the courts applied the principle in the context of § 1681i, not § 1681e(b). See Henson , 29 F.3d at 286-87 (discussing a CRA's duty to reinvestigate once it has been notified of potentially inaccurate information); Cushman , 115 F.3d at 225 (same).

4 The issues in the case before this Court, on the other hand, are whether Experian had reasonable procedures in place to assure maximum possible accuracy of Plaintiff's reported consumer information from the outset and whether Experian had reason to believe the information about the MoneyLion account was inaccurate, even without any type of notification of an inaccuracy from Plaintiff. The Court finds that Experian had information already available to it that provided sufficient reason for Experian to doubt the reliability of the information concerning the MoneyLion account in this case.

5 As Judge Cannon mentioned in the R&R, "[w]hen a Chapter 7 debtor receives a discharge, she is discharged from all debts and ‘any liability on a claim’ that arose, or are determined to arise, before the bankruptcy is filed." Medley v. Dish Network, LLC , 958 F.3d 1063, 1067 (11th Cir. 2020). The White settlement likewise informs that CRAs generally know or should know that pre-petition, unsecured consumer debts, such as the MoneyLion account, are typically discharged in Chapter 7 proceedings. See Morris , 478 F. Supp. 3d at 769 ("[A]s the White settlement makes clear, the CRAs knew that unsecured consumer debts such as the Comenity account are typically discharged in Chapter 7 proceedings."). "[T]he White settlement itself provides notice that not updating such accounts after a Chapter 7 bankruptcy may fail to comport with § 1681e(b)." Id.

Here, Experian undoubtedly was aware of Plaintiff's bankruptcy filing and discharge dates, as Experian reported them. At the same time that Experian reported Plaintiff's bankruptcy discharge on her credit report, Experian also reported Plaintiff's pre-petition MoneyLion account as having a balance, being past due, and eventually as charged off. Notably, Experian reported Plaintiff's other pre-petition, unsecured accounts as discharged. Under these circumstances, a reasonable jury could find that Experian had notice that the information concerning the MoneyLion was inaccurate. As such, an inquiry into the reasonableness of Experian's procedures, which resulted in the MoneyLion account still being inaccurately reported, is warranted to determine whether Experian is subject to liability for negligently violating the FCRA.

B. Reasonableness of Experian's Procedures

Experian asserts that Judge Cannon erred in finding a fact issue as to the reasonableness of Experian's procedures. In support of this objection, Experian first argues that Federal Rule of Evidence 407, concerning subsequent remedial measures, precludes consideration of the updates that Experian has made to its procedures since this litigation has been pending. Experian also contends that the procedures it applied to Plaintiff's credit file should be considered on their own terms. Finally, Experian argues that Judge Cannon erred in concluding that Plaintiff's decision not to dispute Experian's reporting is irrelevant to her § 1681e(b) claim.

6 The question of reasonableness of procedures under § 1681e(b) is typically a question for a jury. Cahlin v. Gen. Motors Acceptance Corp. , 936 F.2d 1151, 1156 (11th Cir. 1991) ("The agency can escape liability if it establishes that an inaccurate report was generated by following reasonable procedures, which will be a jury question in the overwhelming majority of cases."). As such, "summary judgment can be granted [to a CRA] only if the [CRA]’s procedures are unquestionably reasonable." Jordan v. Equifax Info. Servs., LLC , 410 F. Supp. 2d 1349, 1357 (N.D. Ga. 2006) (citing Crabill v. Trans Union, L.L.C. , 259 F.3d 662, 664 (7th Cir. 2001) ).

7 Experian argues that the Magistrate Judge erroneously considered Experian's post-litigation update to its procedures in evaluating the reasonableness of the procedures that were in effect at the time Plaintiff's MoneyLion account was inaccurately reported. Experian maintains that evidence of the change in its procedures would be inadmissible at trial as a subsequent remedial measure under Federal Rule of Evidence 407 and thus also is not appropriately considered at the summary judgment stage. Experian failed to make this argument before the Magistrate Judge. As this Court is authorized to do, the Court declines to consider this new argument. Williams v. McNeil , 557 F.3d 1287, 1292 (11th Cir. 2009) ("Thus, we answer the question left open in Stephens and hold that a district court has discretion to decline to consider a party's argument when that argument was not first presented to the magistrate judge."). Even without taking the updates to the procedures in account, however, the Court still finds a genuine issue as to the reasonableness of Experian's procedures.

8 Considering the procedures that Experian applied to Plaintiff's credit file, which Judge Cannon set forth extensively in the R&R and which Experian described fully in its summary judgment papers and its objections, the Court finds that the facts in this case do not establish that Experian's procedures were unquestionably reasonable. The undisputed evidence that Equifax and Trans Union did not inaccurately report the MoneyLion account is sufficient to create a genuine issue regarding the reasonableness of Experian's procedures. See Gibson , 494 F. Supp. 3d at 617 ("Lending further plausibility to Plaintiff's allegation that Experian failed to follow reasonable procedures is the fact that neither of the other dominant CRAs reported the inaccuracy."); Gadomski v. Equifax Info. Servs., LLC , No. 2:17-CV-00670-TLN-AC, 2020 WL 3841041, at *5 (E.D. Cal. July 8, 2020) ("Plaintiff's allegation that Experian and TransUnion did not make the same error also leads to a reasonable inference that Defendant failed to follow reasonable procedures in Plaintiff's case."). The reasonableness of Experian's procedures presents a question that must go to a jury.

C. Causal Connection Between Inaccurate Report and Damages

9 Experian next objects to the Magistrate Judge's finding that Plaintiff has met her burden of presenting evidence of a causal connection between an inaccurate consumer report and Plaintiff's asserted damages. Experian argues that Plaintiff's alleged damages are from a consumer disclosure, provided pursuant to § 1681g, and not a consumer report, which is sent to third parties pursuant to § 1681a(d). Experian maintains that consumer disclosures do not trigger liability under § 1681e(b), as a violation of § 1681e(b) concerns only information communicated about a consumer to a third party. The Court finds Experian's objection on this basis to be without merit.

Experian argued similarly in Losch that the plaintiff had not shown that Experian sent his credit report to third parties, but the Eleventh Circuit found that the credit reports themselves indicated that Experian had sent the report at least 26 times to six different entities. 995 F.3d at 943. Experian also argued that the inquiries were only soft inquiries and that the response to most of those inquiries did not involve supplying the plaintiff's complete report. Id. Given Experian's use of the term "most," the Eleventh Circuit reasoned that there was a possibility that a creditor had received the plaintiff's full report and that information regarding the account in question had been disclosed to a third party. Id. The Eleventh Circuit ultimately determined that "the evidence of inquiries on his credit report [was] sufficient to show that the report was sent to third parties."¹ Id.

1 This determination was made in the context of an Article III standing analysis, but there is no persuasive reason why this analysis would not also apply to the merits of the claim.

In this case, too, there is evidence from which a reasonable inference can be drawn that Experian published the inaccurate information regarding Plaintiff's MoneyLion account to third parties that reviewed Plaintiff's credit report. Plaintiff's credit report contained multiple hard inquiries following her bankruptcy discharge and prior to Experian's updates to correct the account. While Experian represents that it does not maintain records of the actual reports provided and that not every inquiry results in a full report being provided to each potential creditor, this Court is obligated at the summary judgment stage to view the existing evidence in a light most favorable to Plaintiff. Doing so, it is reasonable to infer that the creditors who made hard inquiries saw the inaccurate information reported by Experian.

The Court recognizes that Plaintiff's emotional distress, discussed further below, followed her review of what was a consumer file disclosure and not a consumer report. However, construing Plaintiff's testimony in a light most favorable to her, Plaintiff's distress concerned the impact of inaccurate reporting to third parties. Given that Plaintiff's consumer file disclosure revealed the likelihood of reports having been provided by Experian to third parties, following hard inquiries, there is a sufficient causal connection to Plaintiff's asserted damages for the FCRA claim to go before a jury.

D. Sufficiency of Emotional Distress Evidence

10 Experian next objects to the determination that Plaintiff has presented sufficient evidence to create a fact issue as to actual damages for a negligent violation of the FCRA. Experian first argues that the analysis in the R&R elides the difference between Article III standing and actual damages under the FCRA. Experian also argues that Plaintiff has not presented sufficient evidence to show that Experian's reporting caused any damages. Irrespective of the distinctions between Article III standing and actual damages under the FCRA, this Court's review of the record and the relevant authority concerning actual damages informs that Plaintiff has presented sufficient evidence of actual damages to withstand summary judgment. The Court overrules Experian's objection.

11121314 Actual or compensatory damages under the FCRA may include recovery for humiliation, mental or emotional distress, or injury to reputation and creditworthiness. Smith v. E-Backgroundchecks.com, Inc. , 81 F. Supp. 3d 1342, 1365 (N.D. Ga. 2015). A plaintiff may recover for emotional distress, even in the absence of physical injury or out-of-pocket expenses. Jordan v. Equifax Info. Servs., LLC , 410 F. Supp. 2d 1349, 1356 (N.D. Ga. 2006) ("Actual damages under the FCRA may include damages for humiliation or mental distress, even if the consumer has suffered no out-of-pocket losses."); Moore v. Equifax Info. Servs., LLC , 333 F. Supp. 2d 1360, 1365 & n. 3 (N.D. Ga. 2004) (noting that damages for mental distress are recoverable under FCRA, even if the consumer has suffered no out-of-pocket losses); see also Carlisle v. National Commercial Servs., Inc. , 2017 WL 1075088, at *15 (N.D. Ga. Feb. 22, 2017), report and recommendation adopted , 2017 WL 1049454 (N.D. Ga. March 20, 2017) (citations omitted) ("Many courts have not hesitated to find that mental distress damages were warranted for negligent violations of the FCRA even when the plaintiff has not shown to have obtained medical care or suffered any physical injury."). Moreover, as Judge Cannon noted in the R&R, self-serving and/or uncorroborated, sworn testimony can alone be sufficient to create a genuine dispute concerning an issue of material fact at the summary judgment stage. United States v. Stein , 881 F.3d 853, 858–59 (11th Cir. 2018) (en banc). "In FCRA cases, a plaintiff is not required to produce evidence of emotional distress beyond his own testimony." King v. Asset Acceptance, LLC , 452 F. Supp. 2d 1272, 1281 (N.D. Ga. 2006).

Relying on Rambarran v. Bank of Am., N.A. , 609 F. Supp. 2d 1253 (S.D. Fla. 2009), Experian maintains in its objections that Plaintiff's uncorroborated testimony should not be sufficient, by itself, to create an issue of material fact as to emotional distress damages. Experian urges that the Court should have some additional basis to conclude that Plaintiff was injured. The Court rejects this argument.

In Losch , discussed supra , the Eleventh Circuit determined that a plaintiff's self-serving statements were sufficient to support a claim for emotional damages at the summary judgment stage. 995 F.3d at 944. In Losch , Experian argued, as it does in this case, that self-serving testimony, standing alone, "can't prove emotional damages sufficiently to survive summary judgment." Id. The Eleventh Circuit found that Experian's argument was contrary to Stein and ruled that the plaintiff's non-conclusory statements concerning stress, anxiety, and lack of sleep must be taken as true on summary judgment and that the affidavit testimony was sufficient "to raise a jury question about damages on the merits."² The same is true in the case before the Court.

2 As Experian points out, there was additional evidence in Losch that the plaintiff spent 400 hours attempting to correct the inaccuracies in his credit report, and the Eleventh Circuit separately found that plaintiff's emotional distress and wasted time constituted a concrete injury, which gave the plaintiff standing to pursue his FCRA claims. 995 F.3d at 943. The Eleventh Circuit's analysis of the sufficiency of the emotional distress evidence on the merits was distinct from the analysis of plaintiff's wasted time, and the Eleventh Circuit expressly rejected Experian's position that the plaintiff's self-serving affidavit, standing alone, was insufficient to prove emotional damages to survive summary judgment.

In this case, Plaintiff testified that seeing the inaccurate reporting of the MoneyLion account on her credit report caused irritation, frustration, anger, and loss of sleep. (Deposition of Charlynda Benjamin "Benjamin Dep." at 33, 40, 64, 65, 67). She thought that Experian should have been reporting the MoneyLion account as discharged under the bankruptcy, and it was stressful for her not to know the impact that the inaccurate reporting would have on what she was trying to do, which was re-build her credit following the bankruptcy. ( Id. at 34, 40, 44-46, 67). The Court finds that this non-conclusory testimony, together with the excerpts of Plaintiff's testimony that Judge Cannon highlighted in the R&R, is sufficient, as a matter of law, for Plaintiff's claim to survive summary judgment and be presented to a jury.

E. Willfulness of Violation

15 Plaintiff objects to the Magistrate Judge's recommendation that summary judgment be granted with respect to Plaintiff's claim for a willful violation of the FCRA and primarily does so "out of an abundance of caution" and "to preserve" the issue. (Doc. 75 at 1, 2). After reviewing the R&R, the parties’ respective arguments, and the evidence of record, the Court agrees that Experian is entitled to judgment as a matter of law on Plaintiff's claim for a willful violation of the FCRA.

16171819 To establish willfulness under the FCRA, a consumer must show a CRA knowingly or recklessly violated the statute. Safeco , 551 U.S. 47, 57-58, 127 S.Ct. 2201 (2007). "[A] willful violation requires that a party's reading of the FCRA is–at minimum—objectively unreasonable." Id. at 69, 127 S.Ct. 2201. A CRA recklessly violates the FCRA if its action "is not only a violation under a reasonable reading of the statute's terms, but shows that the company ran a risk of violating the law substantially greater than the risk associated with a reading that was merely careless." Id. "A violation isn't willful where a defendant ‘followed an interpretation that could reasonably have found support in the courts ....’ " Losch , 995 F.3d at 947 (quoting Safeco , 551 U.S. at 70 n. 20, 127 S.Ct. 2201 ).

Experian maintains that its procedures were authorized by the settlement of the White class action, and the record in this case appears to support Experian's position. The White court concluded that the procedures it approved were "conclusively deemed to comply with the FCRA." 2008 WL 11518799, at *14. As Judge Cannon concluded, White is not binding on this Court and does not necessitate that this Court find in this case that Experian's procedures complied with the FCRA. See Morris , 478 F. Supp. 3d at 771 ("That a report complies with the White settlement does not by itself establish that the report complies with § 1681e(b), however. After all, White is not binding on this Court."). Still, as Judge Cannon also reasoned, Experian's implementation of procedures that were consistent with those approved of in White does support the conclusion, as a matter of law, that Experian did not knowingly or recklessly violate the FCRA.

Contrary to the arguments that Plaintiff makes in her objections, this Court can simultaneously find a genuine dispute regarding the reasonableness of Experian's report-preparation procedures and conclude that Experian followed an interpretation that had or could reasonably have found support in a court. Because Experian's interpretation did have support in a court, Plaintiff's willful violation claim fails as a matter of law.

V. Conclusion

In conclusion, the Court finds that the record and applicable authority support the Magistrate Judge's findings and legal conclusions. Furthermore, after conducting a de novo review of the parties’ respective objections and a careful review of the R&R in its entirety, the Court agrees that Plaintiff's Partial Motion for Summary Judgment is due to be denied and that Defendant's Motion for Summary Judgment is due to be granted in part and denied part. It is hereby ORDERED that Judge Cannon's R&R [Doc. 72] is accepted with approval and ADOPTED for all purposes. Plaintiff's Partial Motion for Summary Judgment [Doc. 48] is DENIED, and Defendant's Motion for Summary Judgment is GRANTED in part and DENIED in part. Plaintiff's claim for a willful violation of the FCRA is DISMISSED with prejudice.

SO ORDERED this 20th day of September, 2021.

ORDER AND FINAL REPORT & RECOMMENDATION

REGINA D. CANNON, United States Magistrate Judge

Before the Court are the parties’ Cross-Motions for Summary Judgment. (Docs. 48, 49). Plaintiff Charlynda Benjamin brings this action pursuant to 15 U.S.C. § 1681e(b) of the Fair Credit Reporting Act ("FCRA"), challenging Defendant Experian Information Solutions, Inc.’s ("Experian") procedures for updating debts discharged through Chapter 7 of the Bankruptcy Code. For the reasons discussed below, the undersigned RECOMMENDS that the District Court DENY Plaintiff's Motion for Partial Summary Judgment (Doc. 48) and GRANT IN PART and DENY IN PART Defendant's Motion for Summary Judgment (Doc. 49).

I. BACKGROUND

A. Procedural History

On November 6, 2020, Plaintiff opened this action by filing the complaint against Experian for one count of violating 15 U.S.C. § 1681e(b) of the FCRA. (Doc. 1). Plaintiff alleged that Experian, a credit reporting agency ("CRA") as defined in 15 U.S.C. § 1681a(f), failed to maintain reasonable procedures in reporting a debt that was discharged in her Chapter 7 bankruptcy.¹ According to the complaint, Plaintiff opened an account with MoneyLion, Inc. (the "Account") in August 2019. She filed for bankruptcy in this district in September 2019. On January 6, 2020, her bankruptcy was discharged, but she discovered in May 2020 that Experian continued to reflect an owed balance of $330 and a past-due amount of $139 on the Account. Particularly relevant to this case, Plaintiff also alleged that Experian failed to follow procedures that it had previously agreed to in a 2008 class action settlement in the Central District of California regarding debts discharged in consumer bankruptcies (the " White Order"). She alleged that the inaccurate reporting prevented her from reestablishing her credit worthiness following bankruptcy, resulted in a denial in obtaining a credit card, and caused her stress and anxiety concerning her past debts and her ability to establish new credit.

Experian filed an answer to the complaint on July 27, 2020, and the case proceeded to discovery in August 2020. (Docs. 11, 15). Discovery concluded in January 2021. (See Docs. 29, 36).

On February 23, 2021, the parties filed cross-motions for summary judgment. (Docs. 48, 49). They have each filed response and reply briefs on the issues before the Court. (Docs. 52, 53, 54, 55). After considering the parties’ arguments, the relevant authority, and the record evidence, the undersigned finds that this matter is ripe for review.

B. Material Facts²

i. The White Order

In 2005, a group of consumers proceeding on behalf of a putative nationwide class sued the three major CRAs—Experian, Equifax Information Services, LLC ("Equifax"), and Trans Union, LLC ("Trans Union")—in the Central District of California, asserting that the defendants had failed to maintain reasonable procedures to ensure the accurate reporting of debts that had been discharged in Chapter 7 bankruptcy. See White v. Experian Info. Sols., Inc. , Case No. 05-CV-1073, 2008 WL 11518799, at *1 (C.D. Cal. Aug. 19, 2008). In August 2008, the parties entered into an approved settlement agreement "incorporating new procedures that make use of assumptions regarding the likely discharged status of certain pre-bankruptcy tradelines." Id. at *3. The White court certified the class of plaintiffs as all consumers who had active credit files with the defendants prior to August 2008. Id. at *7 (defining the "23(b)(2) Settlement Class"). The White Order required the CRAs to update the credit reports for current class members, but it also mandated prospective relief for future consumers who had received a Chapter 7 bankruptcy discharge. See id. at *7–12.

The updated procedures for future consumers included the following. Experian was required to update each "pre-bankruptcy judgment, tradeline, or Collection Account" in a consumer's file "[w]ithin 60 days of adding a public record entry reflecting a Chapter 7 discharge to a Consumer's credit File." Id. at *9. For pre-bankruptcy tradelines that had been reported as open accounts, Experian "shall identify each tradeline ... that is reported with a date opened that predates or is equal either to the month of or to the month prior to the Bankruptcy Date and is not reported in the File as a Closed Account."³ Id. at *10. For those tradelines, Experian agreed to "code the tradeline ... to indicate that the account is discharged in the Consumer's Chapter 7 bankruptcy (e.g., by use of the terminology ‘included in bankruptcy’) and shall update the tradeline ... to reflect a zero-dollar or blank account balance and past due balance as to the Consumer who received the bankruptcy discharge, so as to indicate that no debt is due or owing by the Consumer after the discharge date." Id. at *4, *10.

3 The White Order defined "Bankruptcy Date" as "the months during which ... a Consumer filed a bankruptcy petition that later led to a public record in the Consumer's File of the entry of a discharge order pursuant to Chapter 8." see also White , 2008 WL 11518799, at *4. It defined "Closed Account" as "an account is reporting with a zero balance and has a narrative or other code indicating any of the following: (a) that the account has been closed by a consumer or creditor; (b) that the account has a Current Status; (c) that the account has been transferred, sold, lost or stolen; (d) or that the account is an installment loan that has been paid in full." Id. at *5. The order also defined "Current Status" as "an account status or rating indicating that, as of the date of last reporting, there is no outstanding, overdue, and delinquent balance currently due." Id.

The White Order recognized that there was a "statistical likelihood" that "certain categories of pre-bankruptcy consumer debts have been discharged ... without either the affected creditors or Consumers reporting the debt to Defendants." Id. at *13. The Order also recognized that these procedures "will introduce some inaccurate, potentially harmful information onto the credit Files ... of certain Consumers who would be subject to the new procedures on a prospective basis." Id. This information "may impair those Consumers’ creditworthiness, including their ability to use pre-bankruptcy accounts that they may have intended to exclude from the bankruptcy discharge and their ability to obtain post-bankruptcy credit." Id. Despite that risk, the parties and the White court agreed that the updated procedures were reasonable, and the court concluded that they were "conclusively deemed to comply with the FCRA." Id. at *14.⁴

4 Experian presents several filings in the White case that the undersigned has excluded here, such as briefs and argument before the court, to suggest that its procedures are reasonable. (See, e.g. , DSMF ¶ 16; Doc. 55 at 4). The undersigned has referred only to the White Order to determine the facts and considerations that were material to the settlement. Similarly, Plaintiff has attempted to submit pleadings from other cases as evidence to support her position, which the undersigned has excluded as immaterial. (See, e.g. , Doc. 52-9 ¶¶ 23, 25).

ii. Experian's Current Procedures

Experian receives its information on consumer bankruptcies electronically from a third-party vendor, LexisNexis. (Def.’s Statement of Material Facts ("DSMF") ¶ 13, Doc. 49-1). LexisNexis provides information on consumer bankruptcy filings and discharges on either a daily or weekly basis. (Pl.’s Statement of Material Facts ("PSMF") ¶¶ 12–13, Doc. 48-1; see also Rogers Dep. at 9–10, Doc. 48-9; Rogers Decl. ¶ 7, Doc. 49-4).⁵ When Experian receives notice of a bankruptcy discharge for a consumer, it performs an automated "scrub" of the consumer's credit file to clear discharged debts, which then reflect the discharge and a $0 balance. (DSMF ¶ 14). A debt qualifies for the scrub if it (1) it has an opening date before filing of the consumer's bankruptcy petition, (2) its status is not finalized (e.g., closed or paid off), and (3) the account was delinquent by more than 90 days as of the date of the scrub. (DSMF ¶ 15). Experian's stated purpose for the 90-day delinquency threshold is to distinguish "consumers who have fallen behind on a debt but intend to catch up from those who have stopped paying a debt and are treating it as discharged." (Rogers Decl. ¶ 16, Doc. 49-4). If a creditor independently informs Experian that a debt is discharged in bankruptcy, Experian will also update the consumer's file to reflect a $0 balance and the discharge. (Id. ¶ 21).

5 For reference, the undersigned uses the pagination reflected on CM/ECF to refer to non-testimonial evidence before the Court.

Every other month after the discharge, Experian performs a second scrub—which it calls a "look-back scrub"—that updates reported debts from the preceding 18 months that the initial scrub may have missed. (Id. ¶¶ 19-20). For instance, if an account was open at the time of a consumer's discharge but the consumer had made timely payments on the debt, then only the look-back scrub would update the trade line in the consumer's credit file. Sometime after the events of this case, Experian updated its procedures so that the initial scrub includes accounts that are delinquent by only 30 days.⁶ (Doc. 52-7). Experian also changed the look-back scrub to run every month, instead of every two months. (Rogers Decl. ¶ 19, Doc. 49-4).

6 Experian asks the Court to disregard evidence of its updated procedures as "irrelevant and inadmissible" because (1) Plaintiff's counsel attempted to offer it through her own testimony without personal knowledge and (2) Experian may have made this statement through counsel during settlement negotiations. (Doc. 55 at 1 n.1 (citing Fed. R. Evid. 408 )). Experian has not provided any factual basis to assert that this information was learned only through settlement negotiations, and in an e-mail from Experian's own counsel describing the changes, there is nothing for the Court to conclude that it was disclosed in that setting. (Doc. 52-7); see Fed. R. Evid. 408. Experian also does not dispute the factual accuracy of this information, and the evidence would almost certainly be reducible to admissible form at trial through a Rule 30(b)(6) witness. See Rowell v. BellSouth Corp. , 433 F.3d 794, 800 (11th Cir. 2005) (stating that inadmissible evidence may be considered at summary judgment, as long as it can be reduced to an admissible form at trial). Therefore, the undersigned declines to exclude these facts and discusses their relevance below.

iii. The MoneyLion Account & Plaintiff's Chapter 7 Bankruptcy

In August 2019, Plaintiff received a secured loan of $1,000 from MoneyLion, Inc., with $500 provided to her in cash and $500 set aside as collateral for the Account. (DSMF ¶¶ 26–28, Doc. 49-1). On September 27, 2019, Plaintiff filed a petition for voluntary bankruptcy in the U.S. Bankruptcy Court for the Northern District of Georgia, pursuant to Chapter 7 of Title 11 of the Bankruptcy Code. (PSMF ¶ 1, Doc. 48-1); see also In re Charlynda Benjamin , No. 19-65334-lrc (Bankr. N.D. Ga. Sept. 28, 2019) ("Bankr. Dkt."), Doc. 1. The bankruptcy court entered a general discharge order in Plaintiff's case on January 13, 2020. (Bankr. Dkt., Doc. 12).

For September and October 2019, MoneyLion reported to Experian that the Account was current.⁷ (DSMF ¶ 33). MoneyLion's records reflect that Plaintiff's first delinquency on the Account occurred on November 2, 2019, and it reported a delinquency for November 2019, December 2019, and January 2020. (Doc. 52-3). However, Plaintiff made at least one payment on the Account sometime around December 2019 or January 2020. (DSMF ¶ 34; Doc. 52-3 at 2). In March 2020, MoneyLion reported to Experian that the Account was delinquent by 60 days. (DSMF ¶ 35; see Doc. 48-6 at 3). In April 2020, Experian reported that the Account had been placed in collections. (Doc. 48-6 at 3).

7 Plaintiff disputes this fact based on her interpretation of "Current Status" as reflected in the White Order. (See Doc. 52-9 ¶ 33). The White Order defined "Current Status" as "an account status or rating indicating that, as of the date of last reporting, there is no outstanding, overdue, and delinquent balance currently due." White , 2008 WL 11518799, at *5. However, Plaintiff misreads the definition by effectively substituting "or" for "and." A plain reading of the White court's definition means that an account is current if there is not an overdue or delinquent balance. In other words, if a consumer misses a due date for payment of a debt, an account is not current, but if there is an outstanding (but not overdue) payment, then the account is current.

Experian's initial scrub executed on or about January 20, 2020, which updated several tradelines to reflect Plaintiff's bankruptcy and a $0 balance. (Rogers Decl. ¶ 28, Doc. 49-4). Experian's look-back scrub likely executed on June 1, 2020, and updated the Account to reflect that it had been discharged in bankruptcy. (Id. ; Rogers 2d Decl. ¶¶ 12-14; Doc. 53-4; Rogers Dep. at 44–45, Doc. 48-9).

In May 2020, Plaintiff obtained a copy of her credit reports from all three CRAs. (PSMF ¶ 3). Plaintiff's Equifax and Trans Union credit reports showed that the Account had been included in her bankruptcy and did not reflect an outstanding balance. (Doc. 48-7 at 4; Doc. 48-8 at 3). However, her Experian report reflected that the Account was a "Secured Loan" with an outstanding balance of $330 as of April 2020 and a past-due amount of $139. (Doc. 48-6 at 3). It also reflected the delinquencies in payment for December 2019 to March 2020 as well as its collections status in April 2020. Id. Although the report showed that other debs, such as an account with Wakefield & Associates, were discharged in bankruptcy, the report did not indicate anywhere that the instant Account had been discharged. Id. The report also contained a public records line showing her September 2019 bankruptcy filing and January 2020 discharge date. (Id. at 2). Plaintiff obtained a second credit report from Experian on July 10, 2020. (Doc. 49-13). Her July report did not report any balance for the Account and indicated that it was "[d]ischarged through Bankruptcy Chapter 7/Never late." (Id. at 3). The undersigned supplements these facts below, where relevant to the issues before the Court at summary judgment.

II. SUMMARY JUDGMENT STANDARD

Under Federal Rule of Civil Procedure 56(a), the Court "shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A material fact is any fact that "is a legal element of the claim under the applicable substantive law which might affect the outcome of the case." Allen v. Tyson Foods, Inc. , 121 F.3d 642, 646 (11th Cir. 1997). A genuine dispute exists when "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). When evaluating the merits of a motion for summary judgment, the court must "view the evidence and all factual inferences raised by it in the light most favorable to the non-moving party, and resolve all reasonable doubts about the facts in favor of the non-moving party." Comer v. City of Palm Bay, Fla. , 265 F.3d 1186, 1192 (11th Cir. 2001).

A party seeking summary judgment "bears the initial responsibility of informing the district court of the basis for its motion." Celotex Corp v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A moving party meets this burden merely by " ‘showing’— that is, pointing out to the district court—that there is an absence of evidence to support the nonmoving party's case." Id. at 325, 106 S.Ct. 2548.

If the moving party provides a basis for summary judgment, the nonmoving party must respond with record evidence showing a genuine dispute, as mere conclusions and unsupported statements by the nonmoving party are insufficient. Id. at 324, 106 S.Ct. 2548 ; Ellis v. England , 432 F.3d 1321, 1326 (11th Cir. 2005). Similarly, "[s]peculation or conjecture cannot create a genuine issue of material fact." S.E.C. v. Monterosso , 756 F.3d 1326, 1333 (11th Cir. 2014). "[A] plaintiff's failure to support an essential element of her case renders all other facts immaterial and requires the court to grant summary judgment for the defendant." Celotex Corp. , 477 U.S. at 322–23, 106 S.Ct. 2548.

A. Evidentiary Objections

i. Declaration of Cymone Rogers

Before discussing the merits of Plaintiff's claim, the undersigned addresses two pending evidentiary issues. First, Plaintiff asks the Court to strike the declaration of Cymone Rogers as a "sham affidavit" that is inconsistent with her prior deposition testimony.⁸ (Doc. 52 at 2–4). "The purpose of summary judgment is to separate real, genuine issues from those which are formal or pretended." Tippens v. Celotex Corp. , 805 F.2d 949, 953 (11th Cir. 1986). Because parties may try to escape summary judgment by using affidavits to create disputes on the material facts, the Eleventh Circuit also allows an affidavit to be disregarded as a "sham" if it is inconsistent with earlier deposition testimony in a manner than cannot be explained. Van T. Junkins & Assoc. v. U.S. Indus. , 736 F.2d 656, 657 (11th Cir. 1984) ("When a party has given clear answers to unambiguous questions which negate the existence of any genuine issue of material fact, that party cannot thereafter create such an issue with an affidavit that merely contradicts, without explanation, previously given clear testimony."). However, courts must carefully apply the sham affidavit rule because "every discrepancy contained in an affidavit does not justify a district court's refusal to give credence to such evidence." Tippens , 805 F.2d at 954 (alterations, quotation marks, and citations omitted). "A definite distinction must be made between discrepancies which create transparent shams and discrepancies which create an issue of credibility or go to the weight of the evidence." Id. at 953. Where an affidavit conflicts with these rules, the Court may disregard the improper testimony at summary judgment and consider the remaining statements. Haynes v. Twin Cedars Youth & Family Servs. , No. 5:10-cv-00321 (CAR), 2012 WL 895699, at *5 (M.D. Ga. Mar. 15, 2012) (citing Lee v. Nat'l Life Assurance Co. of Canada , 632 F.2d 524, 529 (5th Cir. 1980) ); Brassfield v. Jack McLendon Furniture, Inc. , 953 F. Supp. 1424, 1430 (M.D. Ala. 1996) ("Only those affidavit statements which are inherently inconsistent with earlier deposition testimony should be stricken." (quotation marks and citations omitted)).

8 Plaintiff also appears to argue that Rogers's declaration should be disregarded because it was "submitted approximately two months after the close of discovery, contains opinions stated as definitive truths, and does not cite to documents, records, etc." (Doc. 52 at 2 n.2). To the extent that Plaintiff challenges the timeliness of the declaration, there is no basis under the Federal Rules of Civil Procedure to strike it. See Pods Enters., Inc. v. U-Haul Int'l, Inc. , No. 8:12-cv-01479-T-27MAP, 2014 WL 12630066, at *1 (M.D. Fla. June 18, 2014) ("There is nothing improper about filing undisclosed affidavits in opposition to a motion for summary judgment as long as the affiants have been disclosed as potential witnesses."); Pac. Atl. Lines, Inc. v. Jah , No. 1:09-cv-96250-TCB, 2011 WL 13175441, at *6 (N.D. Ga. Feb. 11, 2011) (disapproving of a party's submission of declarations after the close of discovery but noting that there was no authority prohibiting the practice).

Here, Plaintiff asserts that there are discrepancies in Rogers's testimony, but the only discrete instance of inconsistencies that Plaintiff identifies are either explained in the record or are immaterial to the parties’ motions for summary judgment. For instance, Plaintiff argues that Rogers's statements in her declaration regarding when the look-back scrub executed for her credit file are inherently inconsistent with her deposition testimony. Rogers testified in her deposition that "We can see that [MoneyLion] was still reporting collections after [ ] April 2020, as well as we can we that the account was included in bankruptcy more than likely on June 1st, 2020." (Rogers Dep. at 44–45, Doc. 49-11). When Plaintiff's counsel asked for clarification on why it was included in bankruptcy in June, Rogers explained that "The June 1st [date] correlates with the same time that the bankruptcy look-back scrub [ ] ran." (Id. at 45). Rogers further explained that, although MoneyLion still reported that the account had been sent to collections, "Experian suppresses the information so that it does not show on the credit report."⁹ Id.

9 When an account is suppressed, it still exists within the consumer's Experian credit file, but the account is not reported to the consumer or third parties. (See Rogers Dep. at 30, Doc. 48-9).

In her declaration, Rogers stated that "MoneyLion reported that the account was in collections" and that "Experian's secondary scrub executed on June 1, 2020 and updated Plaintiff's MoneyLion account based on the Collection status to report as discharged in bankruptcy." (Rogers Decl. ¶¶ 28–29, Doc. 49-4). She added that MoneyLion informed Experian of the Account's discharged status in January 2021. (Id. ¶ 30).

These statements are not so inherently inconsistent that they create a "transparent sham," but instead, they appear to supplement or correct prior testimony. See Croom v. Balkwill , 672 F. Supp. 2d 1280, 1286 (M.D. Fla. 2009) (stating that the court generally will not strike an affidavit if it supplements earlier testimony, presents a variation of testimony, or represents instances of failed memory); see also Tippens , 805 F.2d at 954 ("Variations in a witness's testimony and any failure of memory throughout the course of discovery create an issue of credibility[.]"). That distinction is especially important here, as Rogers testified under Rule 30(b)(6) on behalf of the corporation itself, not directly from her personal knowledge of key events. For instance, Rogers's second affidavit states that she "mistakenly testified that ... LexisNexis [ ] provides information about consumer bankruptcies on a weekly basis," when in fact Experian receives it daily. (Rogers 2d Decl. ¶ 7, Doc. 53-4). She also changed her prior testimony that Experian's automated scrub triggered when it received notice of both a bankruptcy petition filing and the discharge, stating that the scrub occurred only with notice of the latter. (Id. ¶ 8). For the most part, these minor inconsistencies do not change much about the fate of this case. However, even if Rogers's statements were flatly contradictory on material issues, the undersigned would not choose to strike the entire affidavit instead of merely disregarding the directly inconsistent testimony. See Haynes , 2012 WL 895699, at *5 ; Brassfield , 953 F. Supp. at 1430. Accordingly, Plaintiff's objection to Rogers's declaration is OVERRULED .

ii. Motion to Strike

Second, Experian moves to strike the deposition transcript of Joy Allison, an Experian employee that testified in a separate matter. (Doc. 57). As background, Plaintiff attached the testimony as evidence in support of her reply brief, arguing that the testimony establishes that Experian sent information related to the Account to a third party. (See Doc. 54 at 9; Doc. 54-5). However, based on the undersigned's analysis of this issue below, Ms. Allison's testimony is unnecessary because Plaintiff can satisfy the third-party disclosure requirement under Section 1681e(b) without it. Accordingly, the Motion to Strike is DENIED as moot.

III. DISCUSSION

A. Arguments

In support of her motion for partial summary judgment, Plaintiff asserts that the undisputed evidence shows that Experian was negligent in implementing reasonable procedures to ensure the maximum possible accuracy of her credit report under 15 U.S.C. § 1681e(b). (Doc. 48-2). She argues that Experian's procedures fail to ensure that it accurately reports consumers’ discharged debts after a bankruptcy, rendering it liable as a matter of law, and that it did so particularly for the Account. (Id. at 14–19). Plaintiff further argues that this violation damaged her ability to access credit following her bankruptcy and caused emotional distress, mental pain, and anguish, based on her deposition testimony. (Id. at 19–22).

Experian first argues that the White Order precludes Plaintiff's claim under 15 U.S.C. § 1681e(b) because it previously litigated the reasonableness of its bankruptcy-reporting procedures—the same procedures that Plaintiff challenges here—and agreed to a court-approved settlement with the White plaintiffs. (Doc. 49-2 at 11–16). It argues that, regardless of the potential estoppel effect of the White Order, its current procedures exceed the requirements mandated in that case, which establishes their reasonableness. (Id. at 20–21).

As to the facts underlying Plaintiff's particular claim, Experian argues that (1) Plaintiff's credit file was accurate and (2) she cannot establish that any particular discrepancy with the Account was actually sent to a third party, a necessary prerequisite to a Section 1681e(b) claim. (Id. at 23–24; Doc. 53 at 2–7). It further asserts that, even if there was an inaccuracy, its reliance on MoneyLion's reporting of the Account was reasonable, and it did not have sufficient notice that the Account had been discharged in bankruptcy. (Doc. 49-2 at 17–19). Finally, Experian argues that Plaintiff has not presented any evidence of actual damages. (Id. at 21–23; Doc. 53 at 7–12).

First, the undersigned addresses the estoppel effect of the White Order. Then, proceeding to the merits of Plaintiff's Section 1681e(b) claim, the undersigned discusses whether (1) whether Experian disclosed the Account inaccurately to a third party, (2) whether Plaintiff has provided sufficient evidence of damages under the FCRA, and (3) whether Experian's procedures are reasonable as a matter of law.

B. Collateral Estoppel & the White Order

A central issue in this litigation is whether the White settlement precludes Plaintiff's claim under Section 1681e(b). Experian argues that it does, as Experian extensively litigated and negotiated a class-action settlement with plaintiffs in a similar position as Plaintiff here. (Doc. 49-2 at 9–15; Doc. 52 at 7–11). In response, Plaintiff argues, first, that Experian cannot assert a defense of collateral estoppel because it did not include that ground in its answer and, second, that the White Order is not binding upon this Court. (Doc. 52 at 6–10). As to the second argument, Plaintiff asserts that other courts have rejected Experian's identical arguments in similar litigation, that Experian's interpretation of the White Order conflicts with regulations promulgated by the Federal Trade Commission ("FTC"), and that the White Order's terms foreclose Experian's argument. Id.

After the parties concluded briefing in this case, they each submitted supplemental authority to support their positions on the White Order. (Docs. 63, 65). Experian submitted three cases from the Central District of California, in which the same court that approved the White settlement concluded that the Order precluded subsequent litigation in the same district. See Wheeler v. Trans Union LLC , No. 2:20-cv-11710-DOC-RAO, 2021 WL 2290575 (C.D. Cal. June 4, 2021) ; Hernandez v. Experian Info. Sols. , No. 2:20-cv-09908-DOC-RAO, 2021 WL 2325019 (C.D. Cal. June 4, 2021) ; Sunseri v. Experian Info. Sols. , No. 2:20-08932-DOC-RAO, 2021 WL 2327934 (C.D. Cal. June 4, 2021). In turn, Plaintiff submitted a Report and Recommendation from Magistrate Judge Linda Walker in a similar case before this Court as supplemental authority. See Njie v. Experian Info. Sols., Inc. , No. 1:20-cv-04735-JPB-LTW (N.D. Ga. June 25, 2021), Doc. 41, adopted by Doc. 43.

Putting aside Plaintiff's argument that Experian failed to plead collateral estoppel as a defense, the undersigned has reviewed the cases presented and finds Judge Walker's analysis of the White Order persuasive.¹⁰ Without reciting the entirety of Judge Walker's well-reasoned discussion, the undersigned summarizes the relevant considerations here briefly.

10 The undersigned notes that Experian presented substantively identical arguments before Judge Walker that it does here. (Compare Njie v. Experian Info. Sols., Inc. , No. 1:20-cv-04735-JPB-LTW, Doc. 20-1 at 12–16 (citing, inter alia, Riddick ex rel. Riddick ex rel. Riddick v. Sch. Bd. of City of Norfolk , 784 F.2d 521 (4th Cir. 1986) ; Blunt v. Lower Merion Sch. Dist. , 767 F.3d 247, 282 n.51 (3d Cir. 2014) ; LeClair v. Mass. Bay Trans. Auth. , 300 F. Supp. 3d 318 (D. Mass. 2018), with Doc. 49-2 at 11–15 (citing the same))).

Collateral estoppel or issue preclusion forecloses relitigation of an issue of fact or law that has been litigated and decided in a prior suit. There are several prerequisites to the application of collateral estoppel: (1) the issue at stake must be identical to the one involved in the prior litigation; (2) the issue must have been actually litigated in the prior suit; (3) the determination of the issue in the prior litigation must have been a critical and necessary part of the judgment in that action; and (4) the party against whom the earlier decision is asserted must have had a full and fair opportunity to litigate the issue in the earlier proceeding.

I.A. Durbin, Inc. v. Jefferson Nat'l Bank , 793 F.2d 1541, 1549 (11th Cir. 1986). "Collateral estoppel ... has the dual purpose of protecting litigants from the burden of relitigating an identical issue with the same party or his privy and of promoting judicial economy be preventing needless litigation." Parklane Hosiery Co., Inc. v. Shore , 439 U.S. 322, 326, 99 S.Ct. 645, 58 L.Ed.2d 552 (1979) (citation omitted).

The Supreme Court has abandoned the requirement of mutuality between the parties with respect to collateral estoppel. See Allen v. McCurry , 449 U.S. 90, 94–95, 101 S.Ct. 411, 66 L.Ed.2d 308 (1980) (citations omitted). "But one general limitation the Court has repeatedly recognized is that the concept of collateral estoppel cannot apply when the party against whom the earlier decision is asserted did not have a ‘full and fair opportunity’ to litigate that issue in the earlier case." Id. at 95, 101 S.Ct. 411. Thus, the Court has emphasized a fundamental rule that "[a] court's judgment binds only the parties to a suit, subject to a handful of discrete and limited exceptions." Smith v. Bayer Corp. , 564 U.S. 299, 313, 131 S.Ct. 2368, 180 L.Ed.2d 341 (2011).

In the class action context, a judgment only binds members of a certified class. Taylor v. Sturgell , 553 U.S. 880, 884, 128 S.Ct. 2161, 171 L.Ed.2d 155 (2008). However, as mentioned, there are several "discrete and limited exceptions" to the general rule, and a plaintiff who is not a member of a class in a previously litigated case may still be bound if she was "adequately represented" by the interests of that class. Id. at 900, 128 S.Ct. 2161. "A party's representation of a nonparty is ‘adequate’ for preclusion purposes only if, at a minimum: (1) The interests of the nonparty and her representative are aligned; and (2) either the party understood herself to be acting in a representative capacity or the original court took care to protect the interests of the nonparty." Id. (citations omitted).

Here, Plaintiff was not a party to the White litigation, and the terms of the White Order excluded Plaintiff as a member of the class. See White , 2008 WL 11518799, at *7. As Judge Walker found, Experian was a party to the White settlement, but Plaintiff was not, foreclosing her ability to litigate the reasonableness of Experian's procedures fully and fairly. See Allen , 449 U.S. at 95, 101 S.Ct. 411. Experian acknowledges Plaintiff's status as a non-member of the White class but argues nonetheless that the class "functionally [ ] also includes consumers like Plaintiff who are discharged from bankruptcies in the future." (Doc. 55 at 9). However, this theory is heavily disfavored under federal common law. See Taylor , 553 U.S. at 896–04, 128 S.Ct. 2161 ; E.E.O.C. v. Pemco Aeroplex, Inc. , 383 F.3d 1280, 1286–90 (11th Cir. 2004) (noting that " ‘privity’ is a flexible legal term" but concluding, in relevant part, that the defendant failed to show that the plaintiff was in privity with prior litigants under a theory of "virtual representation").

To the extent that Experian argues that Plaintiff was adequately represented in the White litigation, the undersigned disagrees for the reasons provided by Judge Walker: mainly, that the White Court explicitly excluded plaintiffs whose bankruptcies were discharged after the settlement was approved. See 2008 WL 11518799, at *7 (defining the class as "all Consumers whose credit Files include a Discharge Date prior to the month of the Approval Date"). Experian cites to subsequent cases in the Central District of California finding that the White Order is binding on future, non-class members, but it does not adequately address the developing authority concluding the opposite. See Morris v. Experian Info. Sols., Inc. , 478 F. Supp. 3d 765, 771 (D. Minn. 2020) ; Alsibai v. Experian Info. Sols. , 488 F. Supp. 3d 840, 847 (D. Minn. 2020) (citing Morris ); Peterson v. Experian Info. Sols., Inc. , 526 F. Supp. 3d 482, 485–86, No. 20-606(DSD/ECW) (D. Minn. Jan. 25, 2021) (citing Morris and Alsibai ); Gibson v. Experian Info. Sols., Inc. , 494 F. Supp. 3d 613, 617 (E.D. Mo. 2020). Accordingly, following other courts’ lead, the undersigned concludes that the White Order does not preclude Plaintiff from challenging the reasonableness of Experian's procedures here. Even so, the White Order "may nevertheless be instructive regarding the reasonableness of Experian's procedures and reporting." Peterson , 526 F. Supp. 3d at 486.

C. 15 U.S.C. § 1681e(b)

Section 1681e(b) of the FCRA requires a CRA preparing a "consumer report" to "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). To establish a prima facie violation of Section 1681e(b), a consumer must present evidence that (1) a credit reporting agency's "consumer report" contained factually inaccurate information, (2) that the procedures it took in preparing and distributing the report were unreasonable, and (3) that damages followed as a result. Losch v. Nationstar Mortg. LLC , 995 F.3d 937, 944 (11th Cir. 2021) (citing Cahlin v. Gen. Motors Acceptance Corp. , 936 F.2d 1151, 1157, 1160 (11th Cir. 1991) ; Nagle v. Experian Info. Sols., Inc. , 297 F.3d 1305, 1307 (11th Cir. 2002) ).

The FCRA defines a "consumer report" as "any written, oral, or other communication of any information by a [CRA] bearing on a consumer's credit worthiness, credit standing, [or] credit capacity ... which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer's eligibility for [credit]." 15 U.S.C. § 1681a(d)(1). Therefore, unlike violations under other provisions of the FCRA, a violation of Section 1681e(b) concerns only information communicated about a consumer to a third party. Collins v. Experian Info. Sols., Inc. , 775 F.3d 1330, 1335 (11th Cir. 2015).

The Eleventh Circuit has recently adopted a definition of "maximum possible accuracy" that requires CRAs’ information to be "factually true and also unlikely to lead to a misunderstanding." Erickson v. First Advantage Background Servs. Corp. , 981 F.3d 1246, 1252 (11th Cir. 2020). This definition requires courts to "look to the objectively reasonable interpretations of the report." Id.

i. Plaintiff's Report Was Inaccurate

Before proceeding to the merits of Experian's procedures, a few preliminary matters must be addressed. First, Plaintiff has not presented direct evidence that a "consumer report," as defined under the FCRA, contained an inaccuracy because the credit report that she relies upon was provided to her, not a third party. (See Doc. 48-6). Experian notes as much to argue that it never disclosed any inaccurate information. (See Doc. 49-2 at 23–24). However, the Court can infer from that credit report and the fact that at least two creditors made hard inquiries on February 5, 2020, and January 31, 2020—which was after Plaintiff's bankruptcy discharge and before Experian updated the Account—that the disputed tradeline may have been sent to a third party. (See Doc. 48-6 at 5); Losch v. Nationstar Mortg. LLC , 995 F.3d 937, 943 (11th Cir. 2021) (concluding that, at summary judgment, "evidence of inquiries on [the plaintiff's] credit report is sufficient to show that the report was sent to third parties"). A reasonable jury could conclude that, for either of these inquiries, Experian's disclosures more likely than not showed the Account.

Next, the parties dispute whether the report was inaccurate as a factual matter, but there is little doubt that it was. Experian argues at various points that there is no way to know whether the Account was discharged as part of Plaintiff's bankruptcy, pointing to the possibility that Plaintiff's debt was non-dischargeable and that the Account was not listed in Plaintiff's bankruptcy petition. (Doc. 49-2 at 18 n.3; Doc. 53 at 5–6). However, the basic principles of bankruptcy suggest otherwise.

In a Chapter 7 bankruptcy, a debtor receives a general discharge from her liabilities and the bankruptcy court's order enjoins creditors from collecting discharged debts, subject to enumerated exceptions.¹¹ See 11 U.S.C. § 727(b) ("[A] discharge ... discharges the debtor from all debts that arose before the date of the order for relief under this chapter[.]"); 11 U.S.C. § 523 (listing the exceptions to discharge); Medley v. Dish Network, LLC , 958 F.3d 1063, 1067 (11th Cir. 2020) ("When a Chapter 7 debtor receives a discharge, she is discharged from all debts and ‘any liability on a claim’ that arose, or are determined to arise, before the bankruptcy is filed." (quoting 11 U.S.C. § 727(b) )); In re St. Laurent , 991 F.2d 672, 680 (11th Cir. 1993) (stating that the bankruptcy code's general policy requires exceptions to discharge to be construed strictly against creditors and in favor of an honest debtor).

11 Historically, a bankruptcy court did not determine the legal effect of a general discharge, leaving the matter to other federal courts who considered complaints implicating the effect of a discharge on particular debts. See In re Wright , 7 B.R. 197, 197 & n.1 (Bankr. N.D. Ala. 1980).

As to whether the Account was actually discharged, Experian argues that Plaintiff's debt may not be dischargeable as a loan for a luxury good,¹² but there is no evidence that Plaintiff used the money related to the Account to purchase any luxury good or service. The only record evidence on this point came from Plaintiff's testimony, and she stated that she did not remember the reason for the debt. (Benjamin Dep. at 24, Doc. 48-11). Therefore, Experian's argument is entirely speculative. See Glasscox v. City of Argo , 903 F.3d 1207, 1213 (11th Cir. 2018) ("Conclusory allegations and speculation are insufficient to create a genuine issue of material fact."). Moreover, there is no "presumption of non-dischargeability" for a debt as Experian claims. (Doc. 53 at 5). If anything, there is a presumption in favor of discharge, not the other way around. See St. Laurent , 991 F.2d at 680.

12 Experian mistakenly cites "11 U.S.C. § 523(C)(i)(I)" but the applicable section is 11 U.S.C. § 523(a)(2)(C)(i)(I).

Accordingly, the undersigned finds that—for the period from the bankruptcy court's discharge order until it listed the debt as discharged sometime in or around June 2020—Experian's credit file for Plaintiff was inaccurate as to the Account. See Losch , 995 F.3d at 945 (concluding that a report was inaccurate because it "didn't just report the existence of a debt but also the balance that [the plaintiff] owed, the amount was [ ] was past due, and how long [it] was past due"). But that is not the end of the matter because Section 1681e(b) imposes liability for failing to maintain "reasonable procedures" to ensure maximum possible accuracy, not the inaccuracy itself.

ii. Plaintiff Has Presented Sufficient Evidence of Damages

The FCRA provides separate remedies for negligent and willful violations of its requirements. See 15 U.S.C. §§ 1681n, o. If a plaintiff establishes that the defendant willfully violated the FCRA, she "may elect to receive actual damages or statutory damages, but not both," in addition to punitive damages, costs of the litigation, and reasonable attorney's fees.¹³ Harris v. Mexican Specialty Foods, Inc. , 564 F.3d 1301, 1313 (11th Cir. 2009) (citing 15 U.S.C. § 1681n(a) ) (emphasis in original). However, a plaintiff who establishes a negligent violation of the FCRA is entitled only to actual damages, as well as attorney's fees and costs. 15 U.S.C. § 1681o(a). Therefore, unless the plaintiff shows a willful violation, the "failure to produce evidence of damage resulting from a FCRA violation mandates summary judgment." Nagle v. Experian Info. Solutions, Inc. , 297 F.3d 1305, 1307 (11th Cir. 2002) ; King v. Asset Acceptance, LLC , 452 F. Supp. 2d 1272, 1280 (N.D. Ga. 2006) ("Damages are an element of the claim and without evidence of damages, summary judgment is appropriate.").

13 As explained below, Plaintiff has not presented any evidence suggesting a willful violation of the FCRA, meaning that she cannot pursue statutory damages. Therefore, proof of actual damages is required.

As a general matter, "[a] non-conclusory affidavit which complies with [ Federal Rule of Civil Procedure 56 ] can create a genuine dispute concerning an issue of material fact, even if it is self-serving and/or uncorroborated." United States v. Stein , 881 F.3d 853, 858–59 (11th Cir. 2018) (en banc ); see Fed. R. Civ. P. 56(c)(4) (requiring an affidavit to be "made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant or declarant is competent to testify on the matters stated."). In Losch v. Nationstar Mortgage LLC , the Eleventh Circuit discussed what injury a plaintiff must suffer to have standing to assert an FCRA violation, which, in turn, informs what damages a plaintiff must show under Sections 1681n and 1681o. 995 F.3d 937, 942–44 (11th Cir. 2021). In that case, the plaintiff also asserted a negligent and willful violation of Section 1681e(b) related to the reporting of a debt after his Chapter 7 bankruptcy. Id. at 941. The Eleventh Circuit concluded that the plaintiff need not show that false reporting negatively impacted his credit score to assert an injury-in-fact, because the inaccuracy was an injury in-and-of-itself. Id. at 943 ("[T]he injury isn't the one to his credit score, but rather, the false reporting about his debt."). It went on to find that the plaintiff had shown a "concrete injury in the form of the emotional distress and time he spent contesting the inaccurate information." Id. As to the issue of damages under the FCRA, the court similarly concluded that Stein foreclosed the defendant's argument that the plaintiff's self-serving affidavit could not show emotional damages. Id. at 944. The court found that the plaintiff's statements about "stress, anxiety, and lack of sleep" were not conclusory and were entitled to a presumption of truth at summary judgment, which raised a jury question about damages. Id.

Losch and Stein control here. As in Losch , Plaintiff has provided non-conclusory testimony that she suffered stress, anxiety, and a loss of sleep over the inaccuracy. Plaintiff testified that she was "a little irritated because ... [she] had just paid all this money for the bankruptcy" and she assumed that "everything would be straight" afterwards. (Benjamin Dep. at 33, Doc. 48-11). She stated, "[O]nce everything was discharged, and to see it put back on my credit report, it felt more like a set back. Like, okay, here we go again. You know, I did my part, and now we're back where we started." Id. Plaintiff also testified that she was "angry" and lost a few nights’ worth of sleep because she "didn't know the impact that [the inaccuracy] would have ... on everything that [she] was trying to do." (Id. at 67–68). Following Losch , these allegations are sufficiently detailed to constitute evidence of actual damages under 15 U.S.C. § 1681e(b). Accordingly, the Court need not address whether the inaccurate reporting led directly to the denial of future credit opportunities.

iii. Reasonableness of Experian's Reporting Procedures

Proceeding to the merits of the critical issue before the Court—the reasonableness of Experian's procedures—the parties present several arguments in support of their positions. Plaintiff asserts that Experian's initial scrub uses an unreasonable set of criteria to designate pre-bankruptcy debts that are later discharged, and she asserts that the period of inaccuracy for the Account is evidence that Experian's scrub procedures are inadequate. (Doc. 48-2 at 16; Doc. 52 at 15–21). Plaintiff further notes that Experian accurately reported her other discharged debts, that her Trans Union and Equifax reports did not contain the same inaccuracy, and that Experian subsequently updated its scrub procedures. (Doc. 54 at 11, 15).

She also points to guidance from the FTC, which reflects the general principle that discharged debts should be reported to reflect a bankruptcy and a consumer's non-obligation for each debt.¹⁴ (Doc. 48-2 at 17–18; Doc. 52 at 16–17; Doc. 54 at 11–12). Plaintiff urges the Court to apply a default rule that, in the absence of any explicit notice that a debt is not discharged in a Chapter 7 bankruptcy, all pre-petition debts should be reflected as discharged in a credit report. (Doc. 54 at 12–-13).

14 Plaintiff cites to the Appendix of 16 C.F.R. Pt. 600, which previously contained the FTC's interpretations of the FCRA, but it was rescinded in 2011 after the Congress transferred the authority to issue interpretive guidance under the FCRA to the Consumer Financial Protection Bureau. See Statement of General Policy or Interpretation; Commentary on the Fair Credit Reporting Act, 76 Fed. Reg. 44462 (July 26, 2011). The undersigned has not been able to locate any similar guidance from the Consumer Financial Protection Bureau. See generally Fair Credit Reporting (Regulation V), 12 C.F.R. Pt. 1022. In any event, the cited portions of the rescinded guidance are minimally persuasive, as they recognize only the broad principles pertaining to discharged debts under the FCRA and are not particularly instructive to evaluating the reasonableness of the scrub procedures here.

For its part, Experian relies largely on its compliance with the White Order as the basis for its procedures, and it represents that its look-back scrub procedure exceeds those requirements by continuing to monitor consumers’ credit files for likely-discharged debts that might have been missed. (See Doc. 49-2 at 20–21; Doc. 53 at 13–15). Experian also notes the uncertainty surrounding the Account itself, as Plaintiff made at least one payment after she had filed her bankruptcy petition. (Doc. 53 at 6). In response, Plaintiff argues that her payment on the Account after she had filed for bankruptcy should have no bearing on Experian's reporting because, regardless of her voluntary payment, she was no longer obligated for the debt. (Doc. 54 at 7–8). However, Experian argues that the information is still relevant, as some debtors may continue to maintain pre-petition debts after their bankruptcy—for instance, to establish new credit. (Doc. 55 at 4).

The Eleventh Circuit has not extensively developed the meaning of the term "reasonable" under Section 1981e(b), but it has recently provided some guidance on this issue. Losch , 995 F.3d at 945. As the Eleventh Circuit concluded in Losch , two principles guide the careful balance that courts must strike in applying the FCRA:

First, a reporting agency's procedures will not be deemed unreasonable unless the agency has a reason to believe that the information supplied to it by a data furnisher is unreliable. Because lenders report many millions of accounts to Experian daily, requiring it to examine each report individually for errors would be unduly costly. But on the flip side of the same coin, when a credit reporting agency has been notified of potentially inaccurate information in a consumer's credit report, it is in a very different position than one who has no such notice. That's because once a claimed inaccuracy is pinpointed, a consumer reporting agency conducting further investigation incurs only the cost of reinvestigating that one piece of disputed information.

Id. (citations, quotation marks, and alterations omitted).

As other circuits have noted, errors in a consumer's credit report may appear even if the CRA uses reasonable procedures to ensure maximum possible accuracy. See Sarver v. Experian Info. Sols. , 390 F.3d 969, 972 (7th Cir. 2004) ("One can easily see how, even with safeguards in place, mistakes can happen. But given the complexity of the system and the volume of information involved, a mistake does not render the procedures unreasonable."); Henson v. CSC Credit Servs. , 29 F.3d 280, 285–86 (7th Cir. 1994) (holding that a CRA is not liable for reporting inaccurate information if it relies on official court dockets). Therefore, a key consideration in many cases is whether the CRA has a reason to know that information is incorrect. See Cushman v. Trans Union Corp. , 115 F.3d 220, 225 (3d Cir. 1997) (noting that a CRA is not required to "go beyond the original source of information" under Section 1681e(b) ); Henson , 29 F.3d at 285–86. Regardless of whether the CRA had notice though, the CRA may still "escape liability if it establishes that an inaccurate report was generated by following reasonable procedures, which will be jury question in the overwhelming majority of cases." Cahlin v. Gen. Motors Acceptance Corp. , 936 F.2d 1151, 1156 (11th Cir. 1991).

The undersigned addresses the notice issue first. Experian argues that it did not have notice of any inaccuracy in Plaintiff's report, especially because she did not dispute the accuracy of the Account directly before initiating this suit. (Doc. 59-2 at 18–19). However, Plaintiff correctly argues in response that her failure to dispute the tradeline is not relevant to her claim under Section 1681e(b). (See Doc. 54 at 8). The FCRA creates a separate cause of action if a CRA fails to conduct a reasonable investigation of information if a consumer disputes it. See 15 U.S.C. § 1681i(a)(1)(A). In contrast, Section 1681e(b) regulates a CRA's procedures, regardless of the action or inaction of a consumer. As the Eleventh Circuit has noted, CRAs are required to do a more exacting reinvestigation if a consumer disputes information directly, as the burden of additional procedures is much lower for correcting individual errors. See Losch , 995 F.3d at 945 ; see also Cushman , 115 F.3d at 225 ("In short, when one goes from the § 1681e(b) investigation to the § 1681i(a) reinvestigation, the likelihood that the cost-benefit analysis will shift in favor of the consumer increases markedly."). If Plaintiff had disputed the inaccuracy, then Experian would have a heightened obligation to conduct an individualized assessment of the Account under Section 1681i. No such dispute occurred here, but that does not stop Plaintiff from challenging the reasonableness of Experian's procedures, as long as Experian already had notice of the inaccuracy.

There is no factual dispute that Experian had notice of Plaintiff's bankruptcy discharge, which in turn provided notice that Plaintiff's pre-petition debts were individually discharged. Although Experian argues forcefully that there is no default rule regarding pre-petition debts for Chapter 7 bankruptcies, it is incorrect, as explained more fully above. See Medley v. Dish Network, LLC , 958 F.3d 1063, 1067 (11th Cir. 2020) ("When a Chapter 7 debtor receives a discharge, she is discharged from all debts and ‘any liability on a claim’ that arose, or are determined to arise, before the bankruptcy is filed."); see also Midland Funding, LLC v. Johnson , ––– U.S. ––––, 137 S. Ct. 1407, 1414, 197 L.Ed.2d 790 (2017) (stating generally that a discharge means that debt will not remain on a credit report). Experian also argues at one point that it did not have notice that the Account was individually discharged because Plaintiff omitted it from her bankruptcy petition. (Doc. 53 at 5). As Experian states repeatedly in its briefs, (Doc. 53 at 15–16; Doc. 55 at 5–6), it is under no obligation to scour a bankruptcy docket or a debtor's particular schedule of debts in a bankruptcy petition, but that argument cuts both ways. Just as Experian cannot be expected to determine the legal status of every debt for a consumer based on bankruptcy proceedings, it cannot rely on an omission in Plaintiff's bankruptcy petition to suggest that it did not have notice of a discharge.

Experian also argues that it cannot be held liable when the effect of a discharge is unclear or requires legal counsel to determine. (Doc. 53 at 15–16). Experian cites, in relevant part, Losch v. Experian Info. Sols. , No. 2:18-809-FtM-PAM-MRM, 2020 WL 728606, at *3 (M.D. Fla. Feb. 12, 2020) ; Hupfauer v. Citibank, N.A. , 2016 WL 4506798, at * 7 (N.D. Ill. Aug. 19, 2016) ; and Cristobal v. Equifax, Inc. , No. 16-cv-06329-JST, 2017 WL 1489274, at *3 n.4 (N.D. Cal. Apr. 26, 2017). However, the court's summary judgment findings in Losch were overturned on appeal. See Losch v. Nationstar Mortgage LLC , 995 F.3d 937 (11th Cir. 2021). Moreover, Hupfauer and Cristobal both involved Chapter 13 bankruptcies, which (unlike Chapter 7) subjects some pre-petition debts to a repayment plan. See Harris v. Viegelahn , 575 U.S. 510, 513–14, 135 S.Ct. 1829, 191 L.Ed.2d 783 (2015). The entire purpose of a Chapter 7 bankruptcy is to liquidate the debtor's assets, distribute the proceeds to creditors, and then discharge the debtor's obligations in a "clean break from [the debtor's] financial past." Id. In short, the burden to determine whether a debt has been discharged in a Chapter 7 case is much lower than a Chapter 13 case. Therefore, Experian's cited authority on this issue is inapposite.

From a legal standpoint, there is nothing particularly complicated about the effect of a Chapter 7 bankruptcy. Experian's own procedures already recognize the consequences of a general discharge in Chapter 7 bankruptcy. Pursuant to the White Order, Experian's initial scrub, which occurs automatically, marks certain accounts as discharged if it meets certain criteria, and Experian's automated procedure does not involve looking into the specifics of bankruptcy proceedings to determine whether a debt was properly discharged. Instead, Experian uses specific codes from furnishers to designate that certain debts may be exempt from discharge, corresponding to the enumerated exceptions of non-dischargeable debts in the bankruptcy code. See White , 2008 WL 11518799, at *11 (requiring Experian to exclude any tradeline reported with a code pertaining to education loans, family support, a government fine, and attorney's fees, among other exceptions). Under these circumstances, Experian cannot claim lack of knowledge of Plaintiff's bankruptcy or the basic distinction of a Chapter 7 bankruptcy from other forms of relief, such as a Chapter 13 bankruptcy. The undisputed evidence shows that Experian received notice of Plaintiff's Chapter 7 bankruptcy, and her credit file reveals that Experian knew the Account predated that bankruptcy. Those facts alone are sufficient notice under the FCRA. See Losch , 995 F.3d at 944–45.¹⁵

15 The undersigned notes that the Eleventh Circuit described its holding in Losch as a "narrow one." 995 F.3d at 947. There, the plaintiff was in an unusual situation because it was unclear whether he had properly rescinded a reaffirmation agreement related to his bankruptcy. Id. at 940–41, 946. Here, the effect of Plaintiff's bankruptcy on the Account is a much simpler matter, and even though the plaintiff in Losch had disputed the inaccurate tradeline, the Eleventh Circuit also concluded that the plaintiff had established a negligent violation of Section 1681e(b). Id. at 945–47. Therefore, despite the narrowness of the ruling, Losch is directly on point for many of the issues here.

As for the reasonableness of the procedures themselves, the undersigned finds that there is a genuine dispute that precludes summary judgment for either party. First, Plaintiff has shown that Trans Union and Equifax did not report the same error related to the Account, which suggests that they have implemented stricter procedures to produce greater accuracy. (See Doc. 48-7 at 4–5; Doc. 48-8 at 3). Moreover, the fact that Experian updated its scrub procedures after the events underlying this case suggests that the change would not have been unduly burdensome. If Experian's initial scrub had included debts that were delinquent by only 30 days, rather than 90 days, then Plaintiff's May 2020 report would have been accurate, and inaccurate information may not have been sent to third parties.

As a general matter, Experian has produced little, if any, specific evidence of the cost or burden of updating its procedures to be more accurate. It has stated that its 90-day threshold for the initial scrub is designed to separate out debts that a consumer may wish to keep after their bankruptcy, (Rogers Decl. ¶ 16, Doc. 49-4), but it has not produced any evidence about how many consumers actually do so or whether its reporting would be more or less accurate if it implemented a procedure with a narrower delinquency threshold. Crediting its unilateral justification for the 90-day threshold—which Experian later changed—would effectively allow it to determine the reasonableness of its own procedures, which the undersigned cannot do at summary judgment.

To be sure, Experian, like the other CRAs, must balance both the burden of implementing additional procedures and the risk that those procedures will produce inaccurate information. If updated procedures are overinclusive of the debts that are updated to reflect a discharge through Chapter 7 bankruptcy, then Experian's reports are less valuable to creditors who rely on them to make informed judgments on extending credit to consumers. However, if Experian's procedures are underinclusive , then it risks reporting inaccurate information about the consumer that may violate the FCRA. Here, though, there is no evidence in the record about those risks. A jury could find that Experian was reasonable in relying on the White Order, using a 90-day delinquency threshold to update debts after a Chapter 7 bankruptcy, and creating a look-back scrub to cover any omissions. But on these facts, it could also find that Experian could have created marginally more accurate procedures at little-to-no cost and to the benefit of consumers like Plaintiff. Thus, this case falls into the "overwhelming majority of cases" where the parties dispute the reasonableness of a CRA's procedures, and the matter should be submitted to a jury. See Cahlin , 936 F.2d at 1156. Accordingly, the undersigned RECOMMENDS that the District Court DENY both parties’ motions for summary judgment, as to Plaintiff's claim for a negligent violation of Section 1681e(b) of the FCRA. See 15 U.S.C. § 1681o.

iv. Plaintiff Has Not Provided Evidence of Willfulness

As a final matter, Plaintiff has asserted that Experian both negligently and willfully violated Section 1681e(b). (Doc. 48-2 at 11); see 15 U.S.C. §§ 1681n, 1681o. Experian argues that, even if Plaintiff can show that its procedures were unreasonable, she cannot show a willful violation. (Doc. 49-2 at 24–25).

To establish a willful violation of Section 1681e(b), a plaintiff must show that the defendant "either knowingly or recklessly violated" the FCRA. Pedro v. Equifax, Inc. , 868 F.3d 1275, (11th Cir. 2017). "A credit-reporting agency recklessly violates the Act if it takes an action that ‘is not only a violation under a reasonable reading of the statute's terms, but shows that the company ran a risk of violating the law substantially greater than the risk associated with a reading that was merely careless.’ " Losch , 995 F.3d at 947 (quoting Safeco Ins. Co. of Am. v. Burr , 551 U.S. 47, 127 S.Ct. 2201, 167 L.Ed.2d 1045 (2007) ). "A violation isn't willful where a defendant ‘followed an interpretation that could reasonably found support in the court ....’ " Id. (quoting Safeco , 551 U.S. at 70 n.20, 127 S.Ct. 2201 ).

Here, Plaintiff has not provided any evidence suggesting that Experian's procedures were a reckless or knowing violation of the law. Experian's prior reliance on the White Order effectively forecloses this claim, as it relied on an interpretation of Section 1681e(b) that a federal court approved. Although Plaintiff's report was inaccurate for several months at a minimum, this case falls into the narrow category of instances where a pre-petition debt was not corrected by the initial scrub, and she retrieved her credit report before the look-back scrub had corrected the error. Under these circumstances, no reasonable jury would find that Experian's procedures were a reckless or knowing violation of the FCRA. Accordingly, the undersigned RECOMMENDS that the District Court GRANT Experian's motion for summary judgment, as to Plaintiff's claim for a willful violation of Section 1681e(b) of the FCRA. See 15 U.S.C. § 1681n.

IV. CONCLUSION

For the reasons stated above, the undersigned RECOMMENDS that the District Court DENY Plaintiff's Motion for Partial Summary Judgment (Doc. 48). As to Defendant's Motion for Summary Judgment (Doc. 49), the undersigned RECOMMENDS that the Court DENY the motion to the extent Experian seeks dismissal of Plaintiff's claim for a negligent violation of 15 U.S.C. § 1681e(b) and GRANT the motion to the extent Experian seeks dismissal of Plaintiff's claim for a willful violation. See 15 U.S.C. §§ 1681n, 1681o. Accordingly, Plaintiff's claim for a willful violation of Section 1681e(b) should be DISMISSED WITH PREJUDICE . Moreover, Experian's Motion to Strike (Doc. 57) is DENIED as moot. All pretrial matters have concluded with the issuance of this Report and Recommendation in accordance with 28 U.S.C. § 636(b)(1), Local Rule 72.1, and Standing Order 18-01. Therefore, the Clerk is DIRECTED to terminate the referral to the undersigned Magistrate Judge.

IT IS SO RECOMMENDED on this 4th day of August 2021.