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[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 20-10695
________________________
D.C. Docket No. 2:18-cv-00809-PAM-MRM
HENRY LOSCH,
a.k.a. John Losch,
Plaintiff - Appellant,
versus
NATIONSTAR MORTGAGE LLC,
d.b.a. Cooper, Mr.,
Defendant,
EXPERIAN INFORMATION SOLUTIONS, INC.,
Defendant - Appellee.
________________________
Appeal from the United States District Court
for the Middle District of Florida
________________________
(April 28, 2021)
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Before JORDAN, NEWSOM, and TJOFLAT, Circuit Judges.
NEWSOM, Circuit Judge:
In 2017, Henry Losch found himself in dire financial straits, so he filed for
Chapter 7 bankruptcy and discharged his debts—including the mortgage on his
home. Not long thereafter, though, Losch discovered that his credit report still
showed that he was delinquent on the mortgage. Concerned, he contacted the
reporting agency, Experian, to correct the error. But Experian’s own inquiry with
its data furnisher led it to confirm—inaccurately, as it turns out—its previous
reporting. It thus continued to report the outstanding mortgage. Losch filed suit
under the Fair Credit Reporting Act.
On appeal, we must decide whether Experian violated the FCRA’s
requirements that a credit-reporting agency (1) employ “reasonable procedures to
assure maximum possible accuracy of the information concerning the individual”
when preparing a credit report, 15 U.S.C. § 1681e(b), and (2) conduct a
“reasonable reinvestigation” of disputed information when notified of a potential
inaccuracy, id. § 1681i(a). The district court held that Experian didn’t violate the
FRCA and granted it summary judgment. Because we disagree that the measures
that Experian took after Losch notified it of the inaccuracy in his report were
“reasonable” as a matter of law, we vacate the district court’s judgment and
remand.
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I
A
In 2012, Henry Losch took out a mortgage through CitiMortgage on his
home in Apopka, Florida. Five years later, he declared Chapter 7 bankruptcy. In
an attempt to keep his house, however, Losch reaffirmed his mortgage, and thus
retained the debt, instead of allowing the bankruptcy trustee to liquidate it. Even
so, despite the reaffirmation, and for reasons unexplained in this litigation, the
trustee subsequently sold the Apopka property. CitiMortgage then transferred the
servicing of Losch’s mortgage to Nationstar, which began sending Losch past-due
notices.
Those notices prompted Losch—who no longer had any reason to hold onto
the mortgage—to move the bankruptcy court to rescind his reaffirmation.
Although his motion came after the statutory deadline, the bankruptcy court
granted it, and Losch rescinded the reaffirmation.
Believing that he had a “fresh start,” Losch was dismayed when he found
that his Experian credit report still showed that he had a debt with Nationstar for
nearly $140,000, with a past-due balance of more than $10,000. In June 2018, he
wrote to Experian to dispute the report:
I am writing this letter to dispute the Nationstar Mortgage account -
account no. 614148XXXX. This mortgage was discharged in my
chapter 7 bankruptcy that I filed in 2017. We filed a reaffirmation of
this mortgage, but we rescinded the reaffirmation in 2018 and the
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court approved that so I no longer own this debt. Please correct the
information on my credit report.
After receiving Losch’s dispute letter, Experian sent an automated consumer
data verification (ACDV) form to the furnisher, Nationstar, seeking to verify the
alleged debt.1 Nationstar responded that the loan balance was correct and added
past-due amounts that had since accumulated. Experian then relayed the same
information to Losch. Experian took no further steps to verify the debt on Losch’s
account, and it didn’t correct Losch’s credit report until February 2019, after this
litigation had commenced.
B
In December 2018, Losch sued Experian and Nationstar in federal district
court for violating the Fair Credit Reporting Act,
15 U.S.C. § 1681 et seq.
Although Losch brought claims against both Experian and Nationstar, only his
claims against Experian are relevant here.2 In his second amended complaint, he
alleged that Experian violated the FCRA by failing (1) to establish and/or follow
reasonable procedures in preparing his credit report, 15 U.S.C. § 1681e(b); (2) to
1
A comment on FCRA lingo: Losch is a “consumer.” 15 U.S.C. § 1681a(c). Equifax is a
“consumer reporting agency” that creates “consumer reports” (also called “credit reports”). Id.
§ 1681a(d), (f). A credit report compiles information provided by “furnishers,”
12 C.F.R.
§ 1022.41(c)—usually, the consumer’s creditors, like Nationstar here, before Losch discharged
the mortgage.
2
Losch settled with Nationstar before summary judgment, but his suit against Experian
proceeded.
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conduct a reasonable reinvestigation after receiving Losch’s dispute letter,
id.
§ 1681i(a)(1); (3) to provide Nationstar with all relevant information regarding the
dispute, id. § 1681i(a)(2)(A); and (4) to correct or delete the disputed information
from Losch’s credit file, id. § 1681i(a)(5)(A). Losch contended that the violations
were willful and that he was entitled to punitive damages, statutory damages, and
attorney’s fees. Id. § 1681n. In the alternative, he alleged that he was entitled to
damages for Experian’s negligent noncompliance with the Act, id. § 1681o.
The district court granted Experian summary judgment, concluding that
under both § 1681e and § 1681i, its actions were reasonable as a matter of law.
The court held that “[c]ontrary to Losch’s argument, the statute does not impose
any duties on the credit-reporting agency other than notifying the furnisher of the
dispute and examining any information the consumer submits.” In its view, Losch
should have provided Experian with “specific information from which it could
have discovered that he no longer owed money on the Nationstar mortgage,” and
his failure to do so was “dispositive.” Finally, the court explained, Losch’s theory
of liability was a “bridge too far” because it would require credit-reporting
agencies to examine court orders and other documents to determine their legal
effect.
Losch timely appealed. 3
3
We review the district court’s grant of summary judgment de novo, viewing all facts and
drawing all inferences in the light most favorable to the nonmoving party. Hinkle v. Midland
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II
Before reaching the merits, a threshold question: Does Losch have Article
III standing? Neither party raised the standing issue, either before the district court
or on appeal. But they vigorously contested whether Losch had shown any
damages sufficient to survive summary judgment 4—which, given Article III’s
“injury in fact” requirement, prompted us to ask for supplemental briefing about
standing. After careful consideration, we conclude that Losch has standing to
pursue his claims under § 1681e(b) and § 1681i.
To have Article III standing, a plaintiff must show that he “(1) suffered an
injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant,
and (3) that is likely to be redressed by a favorable judicial decision.” Spokeo, Inc.
v. Robins,
136 S. Ct. 1540, 1547 (2016). This case primarily involves the injury-
in-fact requirement—and in particular, the sub-requirement of “concrete[ness].”
See
id. at 1548 (“To establish injury in fact, a plaintiff must show that he or she
suffered ‘an invasion of a legally protected interest’ that is ‘concrete and
Credit Mgmt., Inc.,
827 F.3d 1295, 1300 (11th Cir. 2016). Summary judgment is appropriate
where there is no genuine issue of material fact.
Id. A dispute about a material fact is genuine if
the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Id.;
Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986). We may affirm “if there exists any
adequate grounds for doing so, regardless of whether it is the one on which the district court
relied.” Sharp v. Fisher,
532 F.3d 1180, 1183 (11th Cir. 2008).
4
See Nagle v. Experian Info. Sols., Inc.,
297 F.3d 1305, 1307 (11th Cir. 2002) (“[F]ailure to
produce evidence of damage resulting from a FCRA violation mandates summary judgment.”).
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particularized’ and ‘actual or imminent, not conjectural or hypothetical.’” (quoting
Lujan v. Defs. of Wildlife,
504 U.S. 555, 560 (1992)).
An “intangible injury,” such as the alleged violations of the FCRA here, may
nonetheless constitute a concrete injury. See id. at 1549. In deciding whether an
intangible harm is concrete, we consider “both history and the judgment of
Congress.” Muransky v. Godiva Chocolatier, Inc.,
979 F.3d 917, 926 (11th Cir.
2020) (en banc) (quoting Spokeo,
136 S. Ct. at 1549). Although that test can often
be difficult to apply, its application to the FCRA provisions at issue here is made
considerably easier by our decision in Pedro v. Equifax, Inc.,
868 F.3d 1275,
1279–80 (11th Cir. 2017).
As in this case, the plaintiff in Pedro asserted that a credit-reporting agency
had violated § 1681e(b)’s requirement to “follow reasonable procedures to assure
maximum possible accuracy of the information concerning the individual about
whom the report relates.” We explained that “the harm caused by the alleged
violation of the Act—the reporting of inaccurate information about [the plaintiff’s]
credit to a credit monitoring service”—bore a close relationship to the common-
law tort of defamation, which was traditionally actionable per se. Pedro, 868 F.3d
at 1279–80. Losch alleges the same harms here: Experian, he claims, repeatedly
reported a non-existent delinquent mortgage debt on his credit report to third
parties. Under Pedro’s reasoning, Losch needn’t show that the false reporting
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caused his credit score to plummet; the false reporting itself was the injury. See
id.; see also Restatement (First) of Torts § 558 (Am. L. Inst. 1938); Restatement
(Second) of Torts § 558 (Am. L. Inst. 1965). For the same reason, Losch needn’t
show that Experian’s false reporting of the mortgage would be worse for his credit
score than true reporting of a discharged-in-bankruptcy status; the injury isn’t the
one to his credit score, but rather, the false reporting about his debt.
In response, Experian says that Losch hasn’t shown that it sent his credit
report to third parties, as the defamation analogy would require. But as Losch
points out, the reports themselves show otherwise. Losch’s January 3, 2019 report,
for instance, indicates that Experian supplied the report at least 26 times to six
different entities. At oral argument, Experian sought to distinguish those
communications by explaining that they were in response to “soft” inquiries, not
“hard” inquiries—that is, inquiries not tied to a specific credit application, as
opposed to those that are (and can thus affect a person’s credit score). See Oral
Arg. Tr. at 18:24–19:04; see also Brown v. Vivint Solar, Inc.,
2020 WL 1332010,
at *1 n.2 (M.D. Fla. Mar. 23, 2020). For “soft” inquiries, Experian says, “most”
merely involve “prescreen inquiries,” where the creditor receives “only
confirmation that a consumer meets a set of criteria selected by the creditor,” as
opposed to the consumer’s complete report. Oral Arg. Tr. at 18:36–18:45; Doc.
85-1, at 5. But in saying “most,” Experian implicitly acknowledges the possibility
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that a creditor received Losch’s full report, and it admits that it can’t say for certain
whether the Nationstar account was disclosed to third parties in connection with
the prescreen inquiries. Drawing all factual inferences in Losch’s favor at
summary judgment, as we must, the evidence of inquiries on his credit report is
sufficient to show that the report was sent to third parties.
Separately, Losch has shown a concrete injury in the form of the emotional
distress and time he spent contesting the inaccurate information. In his deposition
testimony and affidavit, he testified that he “suffered . . . from stress, anxiety, and
lack of sleep” from the aftermath of his Chapter 7 bankruptcy discharge, and that
he devoted nearly 400 hours to correcting the inaccurate information on his credit
report. See Pedro, 868 F.3d at 1280 (explaining that Pedro also had standing
because she had “lost time . . . attempting to resolve the credit inaccuracies”).
Experian offers two responses, neither of which is availing. First, it says that even
if those injuries are concrete, they aren’t fairly traceable to it. But Experian’s
argument doesn’t go far enough: It says only that most of Losch’s emotional
distress and the time he spent resolving his financial troubles resulted from the
bankruptcy itself. See Appellee’s Supplemental Brief at 10 (“[Losch] testified that
he spent at most an hour dealing with his dispute to Experian . . . .”). Because
there is no question that wasted time is a concrete harm, see Salcedo v. Hanna,
936
F.3d 1162, 1172–73 (11th Cir. 2019), Losch has standing to pursue his claims so
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long as even a small part of the injury is attributable to Experian. And construing
the facts in the light most favorable to Losch, we can’t say that Experian caused
none of Losch’s damage.
Second, Experian challenges the sufficiency of Losch’s evidence showing
emotional damages at all—an argument that also runs to the merits. According to
Experian, a plaintiff’s “self-serving affidavit,” standing alone, can’t prove
emotional damages sufficiently to survive summary judgment. But that argument
runs headlong into our en banc decision in United States v. Stein, in which we held
that “[a] non-conclusory affidavit which complies with Rule 56 can create a
genuine dispute concerning an issue of material fact, even if it is self-serving
and/or uncorroborated.”
881 F.3d 853, 858–59 (11th Cir. 2018) (en banc).
Losch’s statements regarding “stress, anxiety, and lack of sleep” are not mere
conclusory recitations of a damages element, and at summary judgment we must
take the non-movant’s facts—Losch’s—as true. Accordingly, Losch’s affidavit is
sufficient evidence both to establish injury for Article III standing purposes, and to
raise a jury question about damages on the merits.
III
On, then, to the merits. Section 1681e provides that in preparing a consumer
report, a consumer reporting agency “shall follow reasonable procedures to assure
maximum possible accuracy” about an individual. 15 U.S.C. § 1681e(b) (emphasis
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added). Section 1681i states that “if the completeness or accuracy of any item of
information contained in a consumer’s file . . . is disputed by the consumer . . . , the
agency shall . . . conduct a reasonable reinvestigation to determine whether the
disputed information is accurate.” Id. § 1681i(a)(1)(A) (emphasis added). To state
a claim under § 1681e, the plaintiff must show that the agency’s report contained
factually inaccurate information, that the procedures it took in preparing and
distributing the report weren’t “reasonable,” and that damages followed as a result.
See Cahlin v. General Motors Acceptance Corp.,
936 F.2d 1151, 1157, 1160 (11th
Cir. 1991); Nagle v. Experian Info. Sols., Inc.,
297 F.3d 1305, 1307 (11th Cir.
2002). The elements of a claim under § 1681i—which focuses on the consumer’s
credit “file” rather than his credit “report”—are the same, except that the plaintiff
needn’t show that the agency prepared and distributed a report. Collins v.
Experian Info. Sols., Inc.,
775 F.3d 1330, 1335 (11th Cir. 2015) (“A ‘consumer
report’ requires communication to a third party, while a ‘file’ does not.”). Because
here, Losch challenges Experian’s reinvestigation of an inaccuracy in his report,
the report-file distinction is immaterial.5 Accordingly, we will address together the
reasonableness of Experian’s report-preparation “procedures,” § 1681e(b), and its
“reinvestigation,” § 1681i(a). Whether a credit-reporting agency acted reasonably
5
As already explained, the evidence from Losch’s credit report shows, for our purposes, that his
report was distributed to third parties. See supra at 8–9.
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under the FCRA “will be a jury question in the overwhelming majority of cases.”
Cahlin,
936 F.2d at 1156.
A plaintiff may recover damages for both negligent and willful violations of
§ 1681e and § 1681i. See 15 U.S.C. § 1681o (negligent violations); id. § 1681n
(willful violations). Although Losch insists that all of Experian’s violations were
willful, we’ll begin with his claims for negligence.
A
1
Before addressing whether Experian’s report-preparation procedures and
reinvestigation were reasonable, a prefatory matter: Has Losch shown that his file
contained, or that Experian reported, factually inaccurate information? Experian
says no. Experian agrees that the bankruptcy court discharged Losch’s mortgage
and that, thereafter, he was no longer personally obligated to pay outstanding debts
on it. But, Experian says, a bankruptcy discharge is merely an injunction against
certain means of enforcing a debt, not an expungement of a debt from one’s record.
Thus, Experian contends, it did nothing wrong by reporting a debt that still existed.
Experian’s premise is right, but its conclusion doesn’t follow. Although a
bankruptcy discharge doesn’t “expunge” a debt, Experian’s report was still
factually inaccurate. Experian didn’t just report the existence of a debt but also the
balance that Losch owed, the amount that Losch was past due, and how long Losch
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was past due. For instance, Losch’s May 2018 report stated that as of March 2018,
he (1) had a balance of $139,853, (2) had a past due amount totaling $10,006, and
(3) was more than 180 days late. None of that was true following the bankruptcy-
debt discharge—Losch was no longer liable for the balance nor was he “past due”
on any amount for more than 180 days. Cf. Midland Funding, LLC v. Johnson,
137 S. Ct. 1407, 1414 (2017) (noting, as a general matter, that “discharge means
that the debt (even if unenforceable) will not remain on a credit report”).
2
Having concluded that Experian reported factually inaccurate information,
we turn to the parties’ primary dispute: whether Experian “reasonabl[y]”
discharged its report-preparation and reinvestigation obligations by forwarding an
ACDV form regarding the contested information to the data furnisher, Nationstar.
Our circuit hasn’t had much occasion to address the meaning of the term
“reasonable” under either § 1681e or § 1681i, so we rely on other courts’ guidance
in resolving this issue.
Our sister circuits have laid out two corollary principles. First, a reporting
agency’s procedures will not be deemed unreasonable unless the agency has a
reason to believe that the information supplied to it by a data furnisher is
unreliable. See Sarver v. Experian Info. Sols.,
390 F.3d 969, 972 (7th Cir. 2004).
Because “lenders report many millions of accounts to Experian daily,” requiring it
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to examine each report individually for errors would be unduly costly.
Id. But on
the flip side of the same coin, when a “credit reporting agency . . . has been
notified of potentially inaccurate information in a consumer’s credit report[,] [it] is
in a very different position than one who has no such notice.” Henson v. CSC
Credit Servs.,
29 F.3d 280, 286–87 (7th Cir. 1994). That’s because “once a
claimed inaccuracy is pinpointed, a consumer reporting agency conducting further
investigation incurs only the cost of reinvestigating that one piece of disputed
information.” Cushman v. Trans Union Corp.,
115 F.3d 220, 225 (3d Cir. 1997).
We think those principles make good sense, and we now adopt them.
Applying them here, we can’t say that Experian’s procedures were
reasonable as a matter of law. Once Losch informed Experian of a factual
inaccuracy in his reports, Experian needed only to investigate that single, alleged
error. Experian was thus in a “very different position” than before Losch contacted
it. Henson,
29 F.3d at 286–87.6
Experian argues in response that this case is unique, given Losch’s
“confusing and unusual bankruptcy”: Losch rescinded the reaffirmation agreement
after the statutory deadline; nothing in the bankruptcy docket indicated that the
debt was transferred from CitiMortgage to Nationstar; and the bankruptcy court’s
6
To the extent that any of Losch’s claims under § 1681e alleges that Experian acted
unreasonably in preparing any credit reports before he informed it of the relevant inaccuracy, the
district court properly granted Experian summary judgment for that claim.
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order discharging the Nationstar mortgage didn’t expressly reference that
mortgage. Determining the legal effects of a discharge order, Experian says, is
precisely the kind of legal question that credit-reporting agencies are “neither
qualified nor obligated to answer.”
In our view, the unique facts of this case don’t support granting Experian
summary judgment but rather cut against it. To be sure, a “reasonable
reinvestigation . . . does not require [credit-reporting agencies] to resolve legal
disputes about the validity of the underlying debts they report.” Wright v.
Experian Info. Sols., Inc.,
805 F.3d 1232, 1242 (10th Cir. 2015); see also Carvalho
v. Equifax Info. Servs., LLC,
629 F.3d 876, 892 (9th Cir. 2010). But Losch hasn’t
asked Experian to do that here. The bankruptcy court’s discharge was unclear, but
there is no doubt that Losch’s mortgage was discharged. Thus, this case doesn’t
involve a legal dispute about the validity of the underlying debt.
This case is more analogous to Collins v. Experian Information Solutions,
Inc.,
775 F.3d 1330 (11th Cir. 2015), and Dennis v. BEH-1, LLC,
520 F.3d 1066
(9th Cir. 2008). Collins involved facts materially indistinguishable from those
here. In response to a consumer dispute, Experian forwarded an ACDV form to its
data furnisher, but didn’t conduct any independent investigation. Collins, 775 F.3d
at 1331–33. When the furnisher inaccurately confirmed the information, the
consumer sued. Id. We agreed with the district court that “an issue of material
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fact remained as to whether Experian’s investigation was reasonable when it
disregarded the . . . information Collins provided and instead relied solely on [the
data furnisher] to verify the debt.” Id. at 1333.
Dennis is similar. There, Experian reported on the consumer’s credit report
that a “Civil Claim judgment” had been entered against him when, in fact, the case
had been dismissed. Dennis, 520 F.3d at 1068–69. Rather than conducting its own
investigation of the disputed information, Experian commissioned a third-party
public-records vendor to verify the dispute. Id. at 1069. That vendor didn’t correct
the information, but rather confirmed it. Id. The Ninth Circuit held that the
reasonableness of Experian’s procedures was a jury question, where “Experian
could have caught [the vendor’s] error if it had consulted the Civil Register in
Dennis’s case.” Id. at 1070. It’s true that the error in Dennis was clearer than the
one here. The “Civil Register” there “clearly indicate[d] that the case against
Dennis was dismissed,” while there is no similarly clear indication here. Id. But
the result in hindsight—we know that had Experian looked in Dennis, it would
have found, but not necessarily so here—can’t dictate the reasonableness of
Experian’s procedures ex ante. Experian couldn’t have known whether it would
have found any information unless it had done even a minimal investigation—for
instance, by reviewing the bankruptcy docket. It did nothing, although it easily
could have done something with the information that Losch provided—an account
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number, a discharge in bankruptcy, and an explanation of his recission of the
reaffirmation. On those facts—where Experian didn’t even check the bankruptcy
docket—a jury could find that it was negligent in discharging its obligations to
conduct a reasonable investigation and reinvestigation into the disputed
information.
To be clear, our holding is a narrow one. Just as we cannot hold that
Experian’s procedures were per se reasonable, we do not hold that they were per
se unreasonable. Nor do we hold that in every circumstance where a plaintiff
informs a credit-reporting agency of an inaccuracy, the agency must examine court
records to independently discern the status of a debt. Even when a consumer has
informed the agency about inaccurate information, there may be circumstances—
say, when the consumer supplies insufficient detail—in which there is no jury
question about the reasonableness of the agency’s investigation or reinvestigation.
Or the facts may show that the agency took alternative steps to verify information,
such as contacting the consumer. Again, on the facts of this case—where (1)
Losch provided a sufficiently detailed notice to Experian for it to investigate the
inaccuracy and (2) Experian did nothing other than forward the letter to its data
furnisher—we cannot say that Experian’s procedures were reasonable as a matter
of law, such that it was entitled to summary judgment.
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B
Although Losch’s negligence claims may proceed, the same cannot be said
for his claims that Experian’s violations were willful. To establish a willful
violation, Losch must show that Experian “either knowingly or recklessly violated”
the FCRA. Pedro, 868 F.3d at 1280. A credit-reporting agency recklessly violates
the Act if it takes an action that “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.” Safeco Ins. Co. of Am. v. Burr,
551 U.S. 47, 69 (2007). A violation isn’t
willful where a defendant “followed an interpretation that could reasonably have
found support in the courts . . . .”
Id. at 70 n.20.
Here, Experian’s interpretation could “reasonably have found support in the
courts.” As other circuits have noted, the reporting agency’s “‘reasonable
reinvestigation’ consists largely of triggering the investigation by the furnisher.”
Gorman v. Wolpoff & Abramson, LLP,
584 F.3d 1147, 1156 (9th Cir. 2009). And
in Collins, we rejected a willfulness challenge on facts nearly identical to those
here: “Taking no steps other than contacting only [the data furnisher] with an
ACDV form regarding the disputed entry might have been negligent, but
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willfulness or recklessness is a higher standard that has not been met in this case.”
Collins, 775 F.3d at 1336.7
IV
In sum, we conclude that Losch’s claims that Experian negligently violated
§ 1681e and § 1681i by failing to undertake reasonable procedures to ensure
maximal accuracy in its credit reports, and to conduct a reasonable reinvestigation
of disputed information, survive summary judgment. Thus, we VACATE IN
PART, AFFIRM IN PART, and REMAND for further proceedings consistent
with this opinion.
7
Before us, Losch has focused on his argument that Experian willfully violated the Act.
Experian thus contends that we should grant it summary judgment once we conclude that
Losch’s claims for willfulness are deficient. But Losch has consistently requested relief for
Experian’s negligent violations under § 1681o too. And Experian acknowledges that “[t]he
District Court did not reach the distinction between a negligent violation of the FCRA under
§ 1681o and a willful violation under § 1681n.” Thus, Losch’s failure to show willfulness does
not defeat his suit altogether.
19
