Gillespie, Heather v. Equifax Info Serv ( 2007 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 06-1952
HEATHER GILLESPIE AND ANGELA CINSON,
Plaintiffs-Appellants,
v.
EQUIFAX INFORMATION SERVICES, L.L.C.,
Defendant-Appellee.
____________
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 05 C 138—Matthew F. Kennelly, Judge.
____________
ARGUED NOVEMBER 30, 2006—DECIDED MAY 3, 2007
____________
Before POSNER, KANNE, and EVANS, Circuit Judges.
KANNE, Circuit Judge. Heather Gillespie and Angela
Cinson filed a class action lawsuit alleging violations of
the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq.,
(“FCRA”) against Equifax Information Services, L.L.C. The
district court granted Equifax’s motion for summary
judgment on the plaintiffs’ claims. We reverse.
I. BACKGROUND
Like many Americans, Heather Gillespie and Angela
Cinson each defaulted on a credit account and this fail-
2 No. 06-1952
ure was noted in their respective credit files. Gillespie
opened a credit account with Direct Merchants Bank
in 1999 but the account became delinquent in 2001. Cinson
opened an account with Sears in 1993 with a resulting
delinquency in 1996 or 1997. Merchants and Sears sold the
delinquent accounts to a collection agency, Sherman
Acquisitions Company. And, of course, the delinquency
information also found its way to the credit reporting
agencies including Equifax, and then into Gillespie’s
and Cinson’s credit files.
Gillespie and Cinson requested their respective con-
sumer credit files from Equifax in 2004. Equifax provided
the requisite data they possessed on Gillespie and Cinson
along with accompanying explanatory material. The
explanations included definitions of the terms used,
answers to commonly asked questions, discussion of the
consumer’s legal rights, points of contact within Equifax
as well as consumer and government agencies, and
marketing material promoting Equifax products. Our
case focuses on the “Date of Last Activity” field listed in
the plaintiffs’ credit files, how Equifax uses the Date of
Last Activity field, and the accompanying explanations
provided by Equifax about the Date of Last Activity field.
Outside creditors provide information to Equifax that
Equifax places in the consumer’s credit file. Creditors
report both positive and negative information about the
consumer. Equifax lists the date of the consumer’s last
activity for the reported account in the Date of Last
Activity field. If the account is delinquent, with no sub-
sequent activity, then the Date of Last Activity reflects
the date of delinquency. If the consumer has been paying
the account, the Date of Last Activity reflects the last
payment. In the case of a previously delinquent account
in which the consumer has started to make subsequent
payments, the last payment by the consumer replaces
the delinquency date in the Date of Last Activity field.
No. 06-1952 3
Equifax also provides a secondary disclosure referenc-
ing the Date of Last Activity field entitled “Facts You
Should Know.” The disclosure states:
Payment history on your credit file is supplied by
credit grantors with whom you have credit. This
includes both open accounts and accounts that have
already been closed. Payment in full does not move
your payment history. The length of time informa-
tion remains in your credit file is shown below:
Collection Accounts: Remain for 7 years.
Credit Accounts: Accounts paid as agreed re-
main for up to 10 years. Ac-
counts not paid as agreed re-
main for 7 years.
(The time periods listed above are measured from the
date in your credit file shown in the “date of last
activity” field accompanying the particular credit or
collection account.)
J.A. at 37.
The plaintiffs allege that Equifax’s disclosure is not clear
and accurate as required under § 1681g(a)(1) because
Equifax’s disclosure does not allow them to determine
whether Equifax is properly calculating the seven and one-
half year limitation period as required pursuant to
§ 1681c(a)(4). The plaintiffs imply that Equifax makes
the disclosure confusing to benefit debt collectors who
are trying to collect outstanding debts. Equifax counters
that it clearly and accurately discloses all of the informa-
tion in the consumer’s file. Equifax’s position is that the
consumer can simply take the date reported in the Date
of Last Activity field on a delinquent account and then
add seven years to determine the date that the informa-
tion should be removed from the credit file.
4 No. 06-1952
II. ANALYSIS
“We review grants of summary judgment de novo.”
Lummis v. State Farm Fire & Cas. Co., 469 F.3d 1098,
1099 (7th Cir. 2006) (citing Hrobowski v. Worthington Steel
Co., 358 F.3d 473, 475 (7th Cir. 2004); Rogers v. City of
Chicago, 320 F.3d 748, 752 (7th Cir. 2003)). Summary
judgment is proper “if the pleadings, depositions, answers
to interrogatories, and admissions on file, together with
the affidavits, if any, show that there is no genuine issue
as to any material fact and that the moving party is
entitled to a judgment as a matter of law.” Fed. R. Civ. P.
56(c). In ruling on a motion for summary judgment, the
evidence of the nonmovant must be believed and all
justifiable inferences must be drawn in the nonmovant’s
favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255
(1986).
The FCRA prohibits a consumer reporting agency from
providing a consumer report containing “accounts placed
for collection or charged to profit and loss which antedate
the report by more than seven years.”1 15 U.S.C.
§ 1681c(a)(4). The seven year period begins to run 180
days after the account is placed in collection or charged
off by the creditor so the effective result is a seven and
one-half year period from the original delinquency.2 15
U.S.C. § 1681c(c)(1). Additionally, the FCRA allows the
1
The seven year limitation does not apply to (1) credit transac-
tions involving a principal amount of $150,000 or more, (2)
underwriting of life insurance involving a face amount of
$150,000 or more, or (3) the employment of any individual at
an annual salary which equals or exceeds $75,000. 15 U.S.C.
§ 1681c(b).
2
But the 180 day extension only applies “to items of information
added to the file of a consumer on or after the date that is 455
days after September 30, 1996.” 15 U.S.C. § 1681c(c)(2).
No. 06-1952 5
consumer to check the accuracy of the information pos-
sessed by a consumer reporting agency by requiring that
“[e]very consumer reporting agency shall, upon request . . .
clearly and accurately disclose to the consumer [a]ll
information in the consumer’s file at the time of the
request.” 15 U.S.C. § 1681g(a)(1). We have recently held
that “file” means the information contained in the con-
sumer report produced by the consumer reporting agency.
Gillespie v. Trans Union Corp., ___ F.3d ___, No. 06-2576,
2007 WL 777658, at *3 (7th Cir. Mar. 16, 2007). The
consumer also has the right to dispute the complete-
ness and accuracy of the consumer reporting agency’s
information through a dispute resolution procedure. 15
U.S.C. § 1681i.
This case requires us to determine whether Equifax’s
procedure of using the “Date of Last Activity” complies
with § 1681g(a)(1)’s requirement to “clearly and accurately
disclose . . . all information” in the plaintiffs’ consumer
file. Congress has not defined “clearly and accurately” as
they are used in § 1681g(a)(1) of the FCRA. Additionally,
neither the parties nor the court have been able to iden-
tify a case that directly controls the disposition of this
case. Therefore, we must apply the canons of statutory
interpretation to resolve the question.
“When interpreting statutes, ‘we give words their plain
meaning unless doing so would frustrate the overall
purpose of the statutory scheme, lead to absurd results, or
contravene clearly expressed legislative intent.’ ” United
States v. Davis, 471 F.3d 783, 787 (7th Cir. 2006) (quoting
United States v. Vallery, 437 F.3d 626, 630 (7th Cir.
2006)). “We must ‘construe statutes in the context of the
entire statutory scheme and avoid rendering statutory
provisions ambiguous, extraneous, or redundant; we
favor the more reasonable result; and we avoid constru-
ing statutes contrary to the clear intent of the statutory
scheme.’ ” Cole v. U.S. Capital, 389 F.3d 719, 725 (7th Cir.
6 No. 06-1952
2004) (quoting In re Merchants Grain, Inc., 93 F.3d 1347,
1353-54 (7th Cir. 1996)). “We frequently look to dictionar-
ies to determine the plain meaning of words.” Sanders v.
Jackson, 209 F.3d 998, 1000 (7th Cir. 2000) (citing Molzof
v. United States, 502 U.S. 301, 307 (1992); Newsom v.
Friedman, 76 F.3d 813, 817 (7th Cir. 1996)).
Webster’s Third New International Dictionary (3d ed.
1986), defines “clearly” as: “(1) in a clear manner (that
which is and distinctly conceived as the truth); (2) of
something asserted or observed: without doubt or ques-
tion.” “Accurately” is defined “in an accurate manner.” A
primary purposes of the statutory scheme provided by
the disclosure in § 1681g(a)(1) is to allow consumers to
identify inaccurate information in their credit files and
correct this information via the grievance procedure
established under § 1681i. We conclude that the consumer
reporting agency must do more than simply make an
accurate disclosure of the information in the consumer’s
credit file. The disclosure must be made in a manner
sufficient to allow the consumer to compare the disclosed
information from the credit file against the consumer’s
personal information in order to allow the consumer to
determine the accuracy of the information set forth in her
credit file. In writing § 1681g(a)(1), Congress requires
disclosure that is both “clearly and accurately” made. An
accurate disclosure of unclear information defeats the
consumer’s ability to review the credit file, eliminating a
consumer protection procedure established by Congress
under the FCRA.
In applying this legal standard, and drawing all justifi-
able inferences in the plaintiffs’ favor as we must at this
procedural stage, Anderson, 477 U.S. at 242, we conclude
that Equifax’s disclosure to the plaintiffs may be accurate
but it is not necessarily clear. The recording of multiple
dates in the “Date of Last Activity” can cause significant
confusion and uncertainty for the consumer. The Date of
No. 06-1952 7
Last Activity field is used for different purposes within
Equifax’s file. For one credit account it discloses the
positive credit history of a current payment while in a
second credit account it discloses the negative event of
delinquency. More troubling is the concern that Equifax’s
exclusive use of the Date of Last Activity could effectively
allow Equifax the opportunity to keep delinquent accounts
in the credit file past the seven and one-half year limita-
tion of § 1681c(c)(1). The Date of Last Activity that previ-
ously listed the date of delinquency in the account will be
replaced should the consumer make an intervening
payment on the account. The date of the intervening
payment would become the new Date of Last Activity used
in the seven and one-half year calculation. However, the
negative credit history relating to the prior delinquency
would presumably remain within the consumer’s credit
file despite the fact that the consumer faces a new seven
and one-half year period before the information is re-
moved from her file.
Equifax has not provided an explanation for why it posts
both positive payment information and negative delin-
quency data within the Date of Last Activity field. Even
more damning to Equifax is the fact that the field im-
mediately next to the Date of Last Activity is a field
labeled “Date Maj. Dlqu. Rptd.” Equifax defines the Date
Maj. Dlqu. Rptd. field as “the date the first major delin-
quency was reported.” Although the Date Maj. Dlqu. Rptd.
field appears to be available for use on Equifax’s form, it
remains blank on the disclosures provided to the plain-
tiffs pursuant to § 1681g(a)(1).
In conclusion, we must note the scope of our decision and
the next steps to be taken in this case. The only issue
before us was the district court’s judgment in favor of
Equifax from a motion for summary judgment which we
are reversing today. Should the plaintiffs move for sum-
mary judgment, then of course the procedural posture
8 No. 06-1952
will change and all reasonable inference will be drawn in
Equifax’s favor. Alternatively, if the plaintiffs do not
bring a motion for summary judgment then they will need
to prove their case before a trier of fact. We pause to make
these observations because we recognize that our decision
is critical of Equifax’s disclosures—we are troubled by
these disclosures in light of the requirements of the
FCRA—but we stress that we are not deciding today the
issue of Equifax’s liability. We are only deciding that the
case must continue. The issue of Equifax’s liability,
whether decided through a plaintiffs’ motion for summary
judgment or at trial, is for the district court to decide
in the first instance. Finally, we note that the district
court did not consider the plaintiffs’ motion for class
certification because it granted Equifax’s motion for
summary judgment. The district court should return to
its consideration of the class certification if the plaintiffs
choose to pursue a class action.
III. CONCLUSION
The judgment of the district court is reversed and the
case is remanded for additional proceedings consistent
with this decision.
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—5-3-07