A District Court judge in Alabama has reduced the punitive damages awarded by a jury to a plaintiff whose credit history was mis-reported to $490,000, from $3 million.
A copy of the ruling in Younger v. Experian Information Solutions, Inc., can be accessed by clicking here.
The plaintiff had a debt that had been dismissed by a small claims court on his credit report. He sent a letter to the defendant and attached the dismissal, seeking to have the debt removed from his report. Experian deemed the letter to be “suspicious,” meaning it thought the letter was sent by a third party instead of the individual. The plaintiff filed suit, alleging the defendant violated the Fair Credit Reporting Act. A jury awarded $5,000 in actual damages and $3 million in punitive damages. The defendant filed motions to have the amount altered or amended.
The ratio of the size of the punitive damages award to the size o the actual damages awarded under the FCRA — 600 to one — “suspiciously cocked” “the court’s eyebrows,” Judge Staci Cornelius of the Northern District of Alabama wrote in her ruling. The $3 million had been suggested by the plaintiff’s attorney during closing arguments in the case because it represented approximately one week’s worth of the defendant’s profits during the course of a year.
In looking at another FCRA case — Daugherty v. Ocwen Loan Servicing — in which the punitive damages were lowered to $600,000 from $2.5 million, Judge Cornelius opted to employ the same ratio: 98 to one. That lowered the $3 million to $490,000.
“As Experian would have it, its conduct here was less egregious than that of the defendants in the aforementioned cases because Experian made what it casts as an isolated mistake by classifying Plaintiff’s dispute as suspicious,” Judge Cornelius wrote. “In the end, the cases cited by the parties do not point to a definitive answer regarding the appropriate ratio here. The jury reasonably decided Experian’s conduct warranted punitive damages, the purpose of which is to punish past—and deter future—wrongdoing. A single-digit punitive damage ratio here would be insufficient to deter future similar conduct by Experian. … The court finds this amount serves the purposes of punitive damages by punishing Experian and deterring future wrongdoing, while not running afoul of due process principles.”
