A District Court judge in Texas has granted summary judgment to a plaintiff on a defendant’s statute of repose defense in a Fair Credit Reporting Act lawsuit, ruling that the consumer’s claim over a mixed credit file was timely because the disputed reports were not prepared until a third party requested them.
The background: The case stems from an undisputed error in which the defendant mixed the plaintiff’s credit file with that of his son, who shares a nearly identical name.
- The plaintiff alleged the defendant failed to follow reasonable procedures when preparing consumer reports, and that the resulting inaccuracies caused him to suffer adverse credit decisions, leading him to sue under the FCRA.
- Earlier this year, the judge allowed the defendant to amend its answer to assert a defense under the FCRA’s five-year statute of repose, which bars claims brought more than five years after the violation occurs.
- The defendant argued the violation occurred when it internally mixed the two files in 2018 and 2019, more than five years before the plaintiff filed suit in 2024, making the claim untimely.
- The plaintiff moved for summary judgment on that defense, contending the reports were prepared well within the five-year window.
The ruling: Judge Amos L. Mazzant of the District Court for the Eastern District of Texas granted the plaintiff’s motion and dismissed the statute of repose defense, finding no evidence that the defendant prepared the reports five years before the lawsuit was filed.
- Judge Mazzant explained that under the FCRA, the violation occurs when a reporting agency prepares a consumer report without using reasonable procedures, not when it makes an internal error. The statute regulates consumer reports, the judge noted, while it treats a consumer “file” as a separate thing.
- The defendant’s own evidence undercut its position. The judge pointed out that the defendant does not store completed reports; it keeps raw data in a database and assembles a report only after a third party asks for one. Under that system, a consumer report does not exist until it is requested, and the reports here were requested in 2024, the same year the plaintiff sued.
- The judge acknowledged that “prepares” and “furnishes” are distinct statutory terms, but observed that the defendant’s technology may cause the two to happen at the same moment. As he put it, “in ancient times (the 1980s), it was possible for a consumer report to be prepared one day and furnished on a different day,” back when a report could be assembled and mailed out separately.
- Along with dismissing the defense, the judge denied as moot two related motions the plaintiff had filed over the repose issue.
