A District Court judge in Texas has reconsidered his own ruling from earlier this year and granted summary judgment to the defendant on a willfulness claim in a consumer’s Fair Credit Reporting Act lawsuit over a credit file that was mixed with the file of the plaintiff’s son.
The background: The plaintiff alleged that the defendant failed to use reasonable procedures when preparing consumer reports, causing his credit information to be mixed with that of his son, who shares a nearly identical name and had no Social Security number prior to the litigation.
- The plaintiff claimed the inaccuracies caused him to suffer adverse credit decisions, and he sued under the FCRA, alleging both negligent and willful violations.
- Back in February, the judge denied the defendant’s first motion for summary judgment, ruling that genuine issues of material fact remained for a jury.
- The defendant then asked the judge to reconsider, pointing to a ruling issued in March by a District Court judge elsewhere in Texas that granted summary judgment to the same defendant in a case involving nearly identical facts, where a father’s account was mixed into his son’s credit file because the two often used identical names when applying for credit.
The ruling: Judge Amos L. Mazzant of the District Court for the Eastern District of Texas granted the motion to reconsider and dismissed the willfulness claim, leaving only the negligence claim for trial, which is scheduled for next month.
- Judge Mazzant noted that while the other Texas ruling was not binding, he had discretion to reconsider his order for any reason he deemed sufficient, writing that he found “the wisdom of a fellow Texas district court in a similar case against the same Defendant based on the same policies sufficient to warrant reconsideration.”
- The judge found no evidence that the defendant knowingly and intentionally acted in conscious disregard of the plaintiff’s rights, or that it purposely excluded or ignored information in order to mix the files. Under the Supreme Court’s standard, a willful violation requires showing the company ran a risk of violating the law substantially greater than mere carelessness.
- The defendant’s flexible matching procedures create a risk of inaccuracies, the judge wrote, but they are designed to account for changes in a consumer’s information over a lifetime and prevent fragmented files, a tradeoff the Federal Trade Commission has previously acknowledged. Even if the policy was careless, that was not enough to support a willfulness finding.
- The judge also rejected the argument that a 1991 consent order involving the defendant’s predecessor showed knowledge of mixed file problems, since the defendant updated its procedures in 2008 and 2018.
- In a footnote, Judge Mazzant declined the defendant’s suggestion that he also reconsider the negligence claim, writing that while he is not precluded from evaluating the reasonableness of procedures as a matter of law, sufficient facts warrant letting a jury decide that issue.
