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Verkuilen v. Business Information Group Inc.

United States District Court, E.D. Wisconsin

April 26, 2016

MAXWELL VERKUILEN, Plaintiff,
v.
BUSINESS INFORMATION GROUP, INC., et al., Defendants.

DECISION AND ORDER

William C. Griesbach, Chief Judge.

Defendant Business Information Group, Inc. (“BIG”) has moved for partial summary judgment under this court’s “fast track” procedure. In its motion, it asserts that the claims alleged in the Plaintiff’s complaint are barred by the applicable two-year statute of limitations. For the reasons given below, the motion will be granted.

BIG is engaged in the business of assembling and providing consumer reports, which businesses use in evaluating potential hires. According to the complaint, Plaintiff applied to be an agent at a number of insurance companies, many or all of which relied partly on a background report provided by BIG. Some of the information on Plaintiff’s report was inaccurate. Specifically, the complaint alleges that the report included criminal charges that had been dismissed, as well as arrest records older than seven years. As a result of this information being on his report, Plaintiff alleges he failed to obtain employment.

The complaint alleges that the Defendants failed to comply with their obligations under the Fair Credit Reporting Act, 15 U.S.C. § 1681e(b), by failing to follow reasonable procedures to assure accuracy, and by violating 15 U.S.C. § 1681k by failing to provide notice to the Plaintiff that it was reporting information about him to third parties. The complaint also alleges BIG failed to comply with its obligations under 15 U.S.C. § 1681i by negligently reinvestigating or correcting the information after Plaintiff disputed it. Finally, Plaintiff alleges BIG failed to timely provide him an adequate Notice of Results of Reinvestigation, as required by 15 U.S.C. § 1681i(a)(6).

BIG argues that most of these claims are time-barred because this lawsuit was not filed until April 7, 2014, long after the violations were discovered. The FCRA contains a two-year statute of limitations, which begins running on “the date of discovery by the plaintiff of the violation that is the basis of such liability.” 15 U.S.C. § 1681p. BIG notes that the Plaintiff himself emailed BIG on two occasions, in August and September 2011, to dispute his background reports, and the emails indicate that he possessed copies of those reports as well. Because he delayed filing this lawsuit until April 7, 2014, BIG argues, any claims based on the 2011 reports must be time-barred. Similarly, any claims based on how BIG handled his disputes in 2011 are also barred. I will address the statute of limitations defense with respect to each of Plaintiff’s claims.

2. Section 1681e(b) Reporting Procedures

The complaint alleges that BIG failed to follow reasonable procedures to assure accuracy of the information it was reporting. Section 1681e(b) provides that “Whenever a consumer reporting agency prepares a consumer report it shall 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). The Plaintiff concedes that he discovered inaccuracies in his report in 2011 and emailed the Defendant about them. Even so, he argues that BIG must demonstrate that Plaintiff discovered the legal basis for a statutory violation-not just an inaccuracy. The FCRA is not a strict liability regime, and so it is not a violation just because a reporting agency reports something erroneous; a plaintiff must also demonstrate, for example, that BIG used “unreasonable” procedures when ensuring its reports’ accuracy. 15 U.S.C. § 1681e(b). Thus, in Plaintiff’s view, the limitations clock did not begin until he discovered both a reporting error and grounds suggestive of unreasonable procedures, and that did not occur until 2013, when he received information about his offense and arrest report from Outagamie County.

Although it is true that the statute of limitations is triggered by discovery of the claim, the Plaintiff takes the concept of “discovery” too far. After all, almost no consumers would ever have information about the reasonableness of a reporting company’s own internal procedures until long after a lawsuit was filed. If the Plaintiff were correct, the two-year limitations period would be almost meaningless because the claim would seldom accrue until after the lawsuit was even filed. “Litigants rarely have all the evidence necessary to prove their claim when they file a lawsuit but they must file the lawsuit anyway based on less-than-perfectly confirmed allegations or risk waiving their right to do so.” Stroud v. Bank of Am., 886 F.Supp.2d 1308, 1321 (S.D. Fla. 2012) (dismissing § 1681i claim on statute of limitations grounds).

Plaintiff relies on Andrews v. Equifax, where the district court appeared to agree with Plaintiff’s position, noting that “Equifax does not explain how, from the information it sent, Plaintiff could discern whether the company's procedures in ensuring accuracy or reinvestigating her dispute were reasonable, indicating a violation of §§ 1681e(b) or 1681i(b).” Andrews v. Equifax Info. Servs. LLC, 700 F.Supp.2d 1276, 1279 (W.D. Wash. 2010). The court found that the FCRA was not a strict liability statute, and thus opined that a Plaintiff might need to uncover more than just an error before discovering the basis of an FCRA claim. Id. The court also noted, however, “[m]ore importantly, Equifax did not adequately support its assertion that Plaintiff received its reports, and thereby ‘discovered’ the alleged violations.” Id. Thus, in Andrews (unlike this case) there was not even evidence that the plaintiff had received the erroneous reports. Accordingly, the court’s observation about the reasonableness of the agency’s practices was dicta.

Even if a plaintiff did need to discover the unreasonableness of the agency’s procedures for ensuring accuracy, 15 U.S.C. § 1681e(b), that occurred here. When a plaintiff alerts the agency, twice, to a relatively simple error (the reporting of a dismissed criminal case), and the company fails to correct it, such a plaintiff will have, ipso facto, reasonable grounds to allege that agency’s procedures are unreasonable. Bringing such a claim does not require discovery or in-depth knowledge about an agency’s internal procedures, but merely a reasonable factual basis-enough information to bring a claim-and that factual basis is supplied here by the Plaintiff’s own interactions with the reporting agency. Accordingly, I find that the 1681e(b) claim is untimely because it accrued more than two years prior to the filing of this lawsuit. Grigoryan v. Experian Info. Sols., Inc., 84 F.Supp. 3d 1044, 1059 (C.D. Cal. 2014) (“The claims arose, at the latest, on July 22, 2010, when Grigoryan admits he discovered the violations by requesting and reviewing the credit reports.”)

3. Section 1681i - Investigation and Reinvestigation

The complaint also alleges that BIG failed to timely perform its investigation and reinvestigation duties, and it also failed to provide Plaintiff with a Notice of Results of Reinvestigation. Section 1681i(a)(1)(A) provides:

if the completeness or accuracy of any item of information contained in a consumer's file at a consumer reporting agency is disputed by the consumer and the consumer notifies the agency directly, or indirectly through a reseller, of such dispute, the agency shall, free of charge, conduct a reasonable reinvestigation to determine whether the disputed information is inaccurate and record the current status of the disputed information, or delete the item from the file in accordance with paragraph (5), before the ...

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