United States District Court, W.D. Wisconsin
OPINION AND ORDER
D. PETERSON, DISTRICT JUDGE.
awarded plaintiff Ian Humphrey $180, 000 in compensatory
damages and $120, 000 in punitive damages on his claim that
defendant Navient Solutions, Inc., (Humphrey's student
loan servicer) violated Humphrey's rights under the Fair
Credit Reporting Act (FCRA) by failing to reasonably
investigate disputed information on his credit report. Two
motions filed by Navient are now before the court: (1) a
motion under Federal Rule of Civil Procedure 50(a) that
Humphrey hasn't met the standard for obtaining punitive
damages, Dkt. 195; and (2) a motion under Rule 59 to either
reduce Humphrey's compensatory and punitive damages or
grant a new trial, Dkt. 210.
court will grant Navient's Rule 50 motion. It was
reasonable for the jury to find that Navient should have done
more to confirm the accuracy of disputed information on
Humphrey's credit reports, but there is no basis for
finding that Navient willfully violated the law, which is the
relevant standard for awarding punitive damages under the
court will deny Navient's Rule 59 without prejudice.
Because the court is granting Navient's Rule 50 motion,
the Rule 59 motion is now moot as to punitive damages. And
the Rule 59 motion is premature as to compensatory damages
because the court hasn't entered judgment yet.
serviced Humphrey's student loans from 2010 to 2014, when
Humphrey received a discharge for being disabled.
Humphrey's claim against Navient arises under 15 U.S.C.
§ 1681s-2(b)(1)(A), which requires a
“furnisher” of credit information to conduct a
reasonable investigation when it receives notice from a
credit reporting agency of a dispute about the accuracy of
information that the furnisher provided. See Westra v.
Credit Control of Pinellas, 409 F.3d 825, 827 (7th Cir.
2005). There is no dispute that Navient qualifies
as a furnisher under the statute.
claim is that Navient violated § 1681s-2(b)(1)(A) by
failing to reasonably investigate notices it received in 2014
and 2015 from credit reporting agencies such as TransUnion
and Equifax that Humphrey was disputing the accuracy of his
credit reports. Humphrey cited multiple reasons for
challenging the accuracy of his credit reports, but the only
one relevant to this case is that Humphrey had filed an
application for a “Total and Permanent Disability
Discharge” in November 2012, and under the version of
34 C.F.R. § 682.402(c)(7)(i) in effect in 2012, a lender
must suspend collections while an application for a
disability discharge is pending. As a result, Humphrey says
that Navient was inaccurately reporting his accounts as
“past due” due in December 2012 and from July
2013 to December 2013.
court granted summary judgment to Navient on two grounds: (1)
Humphrey didn't comply with the requirements for
submitting a disability application, so Navient wasn't
required to suspend collections and the information it
provided was accurate; and (2) Navient didn't have a duty
to investigate the possibility whether Humphrey had a
disability discharge application pending in 2012 or 2013
because the notices Navient received from the credit agencies
didn't say anything about such an application. The Court
of Appeals for the Seventh Circuit disagreed with both of
these conclusions, holding that Humphrey had submitted a
valid application in November 2012 and that a
“reasonable jury could infer that Navient had
sufficient notice of the nature of the dispute, or,
alternatively, that any deficiency of information resulted
from Navient's own failure to conduct a reasonable
investigation.” Dkt. 165-1, at 9.
trial, the jury found that: (1) Navient failed to conduct a
reasonable investigation on seven notices that it received
from credit reporting agencies in 2014 and 2015; (2)
Navient's conduct was a substantial factor in causing
harm to Humphrey; (3) Humphrey is entitled to $180, 000 in
compensatory damages; (4) Navient's violation of
Humphrey's rights was willful; and (5) Humphrey is
entitled to $120, 000 in punitive damages. Dkt. 204.
court denied Navient's motion for a judgment as a matter
of law under Federal Rule of Civil Procedure 50(a) as to
liability and compensatory damages but reserved a ruling on
Navient's contention that Humphrey failed to show that
Navient willfully violated the FCRA. The court deferred entry
of judgment to allow the parties to brief that question. Dkt.
has raised three issues in its post-trial briefs: (1) its
conduct was not willful as a matter of law, so Humphrey
isn't entitled to punitive damages; (2) the jury's
award of compensatory damages was excessive; and (3) the
jury's award of punitive damages was excessive. Navient
raises the first issue under Rule 50(a) and the second two
issues under Rule 59(e). But Rule 59(e) applies to motions to
alter or amend the judgment, which, as noted above,
the court hasn't entered yet. And Navient states in its
motion that it “does not waive its right to seek relief
under Rule 59, after judgment is actually entered.”
Dkt. 211, at 2. There is no point in deciding two Rule 59
motions, so the court will deny the Rule 59 motion without
prejudice to Navient refiling it after judgment is entered.
The court will limit its analysis to the question whether
Humphrey met the legal standard for obtaining punitive
plaintiff bringing a claim under the FCRA may not recover
punitive damages unless he shows that the defendant
“willfully fail[ed] to comply with” the FCRA. 15
U.S.C. § 1681n. The jury instructions described that
standard as follows:
You may assess punitive damages against Navient only if
Humphrey has proved that Navient violated his rights
willfully. A violation is willful if the defendant knowingly
or recklessly violated the plaintiff's rights. In other
words, Humphrey must show that Navient either knew of an
unjustifiably high risk that a ...