United States District Court, N.D. California
SERGIO L. RAMIREZ, Plaintiff,
TRANS UNION, LLC, Defendant.
ORDER DENYING DEFENDANT'S MOTION FOR SUMMARY
JUDGMENT RE: DKT. NOS. 218, 221, 227 & 230.
JACQUELINE SCOTT CORLEY United States Magistrate Judge.
contends that between January and July 2011 Trans Union
violated three Fair Credit Reporting Act (FCRA), 15 U.S.C.
1681 et seq., requirements: (1) that credit reporting
agencies establish “reasonable procedures” to
ensure the “maximum possible accuracy” of
information provided about consumers under 15 U.S.C.
§1681e(b); (2) that credit reporting agencies
“clearly and accurately” disclose “all
information in the consumers file at the time of [a]
request” under § 1681g(a), and (3) that credit
reporting agencies provide a statement of consumer rights
with each such disclosure under § 1681g(c). Trans Union
argues that summary judgment is appropriate on all of
Plaintiff's claims because Plaintiff cannot establish
that Trans Union willfully violated the FCRA. Because a
reasonable jury could find otherwise, summary judgment is
inappropriate. The Court declines to reconsider Trans
Union's Article III standing arguments as the Court has
considered-and rejected-these arguments in multiple previous
Willful Violations under the FCRA
FCRA claims are all premised on a “willful”
violation. A willful violation entitles a consumer to
statutory damages ranging from $100 to $1, 000, as well as
punitive damages, and attorney's fees and costs.
See 15 U.S.C. § 1681n. A violation of the FCRA
is willful if it is either knowing or reckless. See
Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 57 (2007).
“[A] company subject to FCRA does not act in reckless
disregard of it unless the action is not only a violation
under a reasonable reading of the statute's terms, but
shows that the company ran a risk of violating the law
substantially greater than the risk associated with a reading
that was merely careless.” Id. at 69.
“That is, the defendant must have taken action
involving ‘an unjustifiably high risk of harm that is
either known or so obvious that it should be
known.'” Bateman v. American Multi-Cinema,
623 F.3d 708, 711 n.1 (9th Cir. 2010) (quoting
Safeco, 551 U.S. at 68). Trans Union contends that
its conduct was not willful as a matter of law and therefore
it is entitled to summary judgment.
Established Law is not Required
Union first insists that the FCRA willfulness analysis
mirrors qualified immunity; that is, to get to a jury a
plaintiff must show that the defendant's conduct violated
“clearly established” law-provided by
“controlling authority within the Circuit, or an
overwhelming body of authority outside the Circuit.”
(Dkt. No. 218-5 at 28:10-13.) Not so.
in Syed v. M-I, LLC, 846 F.3d 1034 (9th Cir. 2017),
opinion amended and superseded on denial of reh'g, No.
14-17186, ___ F.3d ___, 2017 WL 1050586 (9th Cir. Mar. 20,
2017), the Ninth Circuit considered a question of first
impression under the FCRA. In ruling that the defendant's
FCRA violation was willful as a matter of law, the court
squarely rejected defendant's argument that its
“interpretation of the statute [wa]s objectively
reasonable in light of the dearth of guidance from federal
appellate courts and administrative agencies. Id. at
*8. Instead, the court held that “[a] lack of guidance
 does not itself render [defendant's] interpretation
reasonable.” Id. “Notwithstanding that
we are the first federal appellate court to construe Section
1681b(b)(2)(A), this is not a ‘borderline case. An
employer ‘whose conduct is first examined under [a]
section of the act should not receive a pass because the
issue has never been decided.” Id. at *9
(quoting Cortez v. Trans Union, LLC, 617 F.3d 688
(3d Cir. 2010)). It follows, then, that a plaintiff need not
show that a defendant's conduct violated clearly
established law to prove a willful violation of the FCRA.
even apart from Syed's controlling holding, no
court has held that a defendant can be found to have
willfully violated the FCRA only when its conduct violates
clearly established law. Safeco did not so hold;
instead, after reviewing the FCRA statutory language at
issue, the Supreme Court held that given the lack of prior
authority interpreting the statute contrary to defendant
Safeco's interpretation, and given the statute's
ambiguity, Safeco's interpretation of the statute was not
reckless as a matter of law. 551 U.S. at 70-71. In other
words, an FCRA defendant's conduct cannot be willful if
it involves an objectively reasonable interpretation of the
statute and there is no prior authority to the
contrary. Such a conclusion is a far cry from holding that
the law must first be clearly established that the
defendant's conduct violates the FCRA before it can be
found willful. See Heaton v. Soc. Fin., Inc., No.
14-CV-05191-TEH, 2015 WL 6744525, at *6 (N.D. Cal. Nov. 4,
2015) (rejecting defendants' contention “that if a
statute is unclear and there is no precedential guidance as
to what a valid interpretation may be, a violation may not be
considered willful” as an overstatement of
Safeco's holding). The cases Trans Union relies
on are similar to Safeco. For example, in Redman
v. RadioShack Corp., 768 F.3d 622 (7th Cir. 2014), the
court described the violation there as not “willful
because it consisted of a permissible interpretation of an
ambiguous statute” and there were no previous cases to
alert the company of its erroneous interpretation.
Id. at 639 (citing Safeco, 551 U.S. at 68).
The Section 1681g Disclosure Claims
makes two 1681g claims. First, that when Plaintiff requested
his consumer file, that is, his credit report, Trans Union
unlawfully failed to disclose that Plaintiff was identified
as a potential OFAC match, even though that information was
communicated to customers who asked for Plaintiff's
credit report. (Dkt. No. 221-25.) Second, that when Trans
Union did disclose to Plaintiff that he is identified as a
potential match, Trans Union did not provide Plaintiff with a
summary of rights as required by section 1681g(c). (Dkt. No
221-24.) Trans Union contends that no reasonable trier of
fact could find that it willfully violated either FCRA
FCRA, 15 U.S.C. § 1681g(a), provides in part that
“[e]very consumer reporting agency shall, upon request,
... clearly and accurately disclose to the consumer: (1)
All information in the consumer's file at the
time of the request.” (emphasis added). Trans Union
argues that its conduct was not willful as a matter of law
because the FCRA did not require Trans Union to disclose the
OFAC Alert to a consumer and, even if it did apply, Trans
Union did disclose the information in compliance, or arguable
compliance, with the FCRA.
The FCRA Applies to the OFAC Alert Trans Union
advances two arguments in support of its theory that the FCRA
does not apply to OFAC information or its OFAC Alert product.
Neither is availing.
Trans Union's interpretation of “consumer
file” as not including information about a consumer
having an OFAC Alert is not objectively reasonable for the
reasons explained by the Third Circuit in Cortez.
The FCRA defines “consumer file” as “all of
the information on that consumer recorded and retained by a
consumer reporting agency regardless of how the information
is stored.” 15 U.S.C. § 1681a(g). Trans Union
argues that because the OFAC Alert information was not part
of its own database, and was instead maintained by Accuity,
it was not part of Plaintiff's “consumer file,
” or at least its interpretation of consumer file as
not including information so maintained was not unreasonable.
As the Cortez court explained, however, Trans
Union's interpretation ignores that the FCRA expressly
provides that a credit reporting agency has a duty of
disclosure to a consumer of all “information on [a]
consumer . . . regardless of how the information is
stored.” 617 F.3d at 711 (quoting 15 U.S.C. §
1681a(g)). Congress did not “intend to allow credit
reporting companies to escape the disclosure requirement in
§ 1681a(g) by simply contracting with a third party to
store and maintain information that would otherwise clearly
be part of the consumer's file and is included in a
consumer report.” Id. “Congress clearly
intended the protections of the FCRA to apply to all
information furnished or that might be furnished in a