Steven Lang v. JP Morgan Chase Bank, NA ( 2009 )

NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with
Fed. R. App. P. 32.1
United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Submitted July 15, 2009*
Decided July 24, 2009
Before
RICHARD D. CUDAHY, Circuit Judge
DIANE P. WOOD, Circuit Judge
JOHN DANIEL TINDER, Circuit Judge
No. 08-4295
Appeal from the United States District
STEVEN LANG, Court for the Northern District of
Plaintiff-Appellant, Illinois, Eastern Division.
v. No. 06 C 1058
TCF NATIONAL BANK & JP Matthew F. Kennelly,
MORGAN CHASE BANK, Judge.
Defendants-Appellees.
ORDER
Steven Lang sued TCF National Bank and Washington Mutual Bank (now JP
Morgan Chase Bank) for violating the Fair Credit Reporting Act by failing to correct credit
*
After examining the briefs and the record, we have concluded that oral argument is
unnecessary. Thus, the appeal is submitted on the briefs and the record. See FED. R. A PP.
P. 34(a)(2).
No. 08-4295 Page 2
information that he deemed inaccurate. See 15 U.S.C. §§ 1681n, 1681o, & 1681s-2. The
district court granted the defendants’ motions for summary judgment, and we affirm.
Lang once had personal checking accounts at both banks. In October 2003 Lang
opened an account at Washington Mutual Bank. The bank closed that account one year
later when Lang had an overdraft balance of $1,224.97. The next day, Washington Mutual
reported Lang to ChexSystems, a consumer reporting agency, for “overdrafts,” but it did
not report any outstanding debt. Washington Mutual then hired a collection agency to
recover the outstanding debt, and in September 2005 Lang settled that debt. Lang also had
a checking account at TCF, and in 2003 he incurred forty overdraft fees for non-sufficient
funds and wrote eight checks that were returned unpaid. In December 2003, TCF closed
that account—which was overdrawn by $124—and absorbed the loss. TCF reported the
account to ChexSystems for “Non-Sufficient funds (NSF) activity” without mentioning any
current debt.
In September 2005, Lang submitted a “Request for Reinvestigation” to ChexSystems.
He disputed a report from ChexSystems in which the two banks describe him as having
had “overdrafts” and “Non-Sufficient funds.” Lang complained to ChexSystems, “The
information on your report is inaccurate and should be removed. I owe no monies to any
of the institutions listed above. Please correct your information.” ChexSystems sent a
“Request for Reinvestigation” to both banks. The request from ChexSystems did not
include Lang’s denial of outstanding debt. Instead, the request stated only that the banks
had reported overdraft or non-sufficient fund activities, and that Lang disputed these
reports as “inaccurate.” Washington Mutual responded to ChexSystems and confirmed
Lang’s overdrafts, stating also that “the report is correct.” TCF confirmed the information
as well, advising that when Lang’s account was closed, it was reported for non-sufficient
funds activity.
Lang sued TCF, Washington Mutual, and ChexSystems (with whom he later
settled). He alleged that because he owed no money to the banks, they provided inaccurate
information to ChexSystems and failed to correct their errors, in violation of the Fair Credit
Reporting Act. After extensive discovery, the district judge granted the defendants’
motions for summary judgment. The judge analyzed two provisions of the FCRA:
§ 1681s-2(b) (obligating banks to investigate requests from credit reporting agencies) and
§ 1681s-2(a) (obligating banks to furnish accurate information). The district court found
that Washington Mutual and TCF met their obligations under § 1681s-2(b) to conduct an
investigation and report to ChexSystems any discovered inaccuracies. The court also
concluded that Lang could not sue the banks under § 1681s-2(a) because that provision
allows for no private right of action. See 15 U.S.C. § 1681s-2(c).
No. 08-4295 Page 3
On appeal Lang argues that the district court erred in concluding that the
defendants had met their obligations to investigate the disputed credit information. Lang
maintains that had the defendants displayed due diligence, they would have discovered
that all debts had been paid. We review the district court’s grant of summary judgment de
novo, construing the evidence in Lang’s favor. Autozone, Inc. v. Strick, 543 F.3d 923, 929 (7th
Cir. 2008).
As relevant here, under 15 U.S.C. § 1681s-2(b) once the banks received notice of a
dispute from ChexSystems, they were required to (a) investigate the disputed information;
(b) review the relevant information “provided by” ChexSystems; and (c) report the results
to ChexSystems. TCF and Washington Mutual’s obligations to investigate were thus
limited to the disputed information “provided by” ChexSystems. And, according to that
information, Lang disputed only historical information: that he previously had
“overdrafts” and account closures for “insufficient funds.” The defendants investigated
these disputes and confirmed to ChexSystems that these historical reports were accurate.
Even Lang acknowledges that he had had overdraft and insufficient fund activities at the
banks, and this concession demonstrates that the reports were accurate. The banks are not
liable for the failure to address Lang’s other dispute (that he had no current debt to the
banks) because ChexSystems did not provide that dispute to the banks in its request for
investigation. See Westra v. Credit Control of Pinellas, 409 F.3d 825, 827 (7th Cir. 2005). Lang
counters that he communicated the true nature of his dispute with the ChexSystems
report—that the report misrepresented him as having outstanding debt to the
banks—directly to the banks, and they ignored it. But as the district court correctly pointed
out, Lang presents no evidence to support this contention. And even if the banks had
become aware of Lang’s dispute by other means, they were required to investigate only the
information reported by ChexSystems. See id. § 1681s-2(b) .
Lang next argues that the district court erred in concluding that there was no private
right of action to enforce the banks’ duties under § 1681s-2(a) to furnish accurate
information to the reporting agency. Lang argues that the statute is silent on whether there
is a private right of action, but he is wrong. Section 1681s-2(c) specifically exempts
violations of § 1681s-2(a) from private civil liability; only the Federal Trade Commission
can initiate a suit under that section. See Perry v. First Nat. Bank, 459 F.3d 816, 822 (7th Cir.
2006); see also Gorman v. Wolpoff & Abramson, LLP, 552 F.3d 1008, 1020 n. 13 (9th Cir. 2009);
Saunders v. Branch Banking And Trust Co. Of VA, 526 F.3d 142, 149 (4th Cir. 2008).
Finally, Lang argues that Washington Mutual breached its contract with him by
considering his payment on his debt as a partial payment as opposed to a settlement of an
outstanding debt. Because Lang raises this issue only in his reply brief, we do not consider
No. 08-4295 Page 4
the issue here. See Simpson v. Office of Chief Judge of Circuit Court of Will County
559 F.3d 706, 719 (7th Cir. 2009).
A FFIRMED.