Timothy Wheeler v. Experian Information Solutions ( 2022 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS MAY 3 2022
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
TIMOTHY WHEELER, No. 21-55585
Plaintiff-Appellant, D.C. No.
2:20-cv-11710-DOC-RAO
v.
EXPERIAN INFORMATION SOLUTIONS, MEMORANDUM*
INC.,
Defendant-Appellee,
and
TRANS UNION, LLC; EQUIFAX
INFORMATION SERVICES, LLC,
Defendants.
Appeal from the United States District Court
for the Central District of California
David O. Carter, District Judge, Presiding
Argued and Submitted March 7, 2022
Phoenix, Arizona
Before: HAWKINS, PAEZ, and WATFORD, Circuit Judges.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Timothy Wheeler appeals the dismissal of his claims under the Fair Credit
Reporting Act (“FCRA”). We have jurisdiction under 28 U.S.C. § 1291, and we
reverse and remand.
1. Wheeler is not collaterally estopped from asserting that Experian’s
post-bankruptcy credit reporting procedures violate 15 U.S.C. § 1681e(b) based on
the settlement order in White v. Experian Info. Sols., No. CV 05-1070-DOC
(MLGx), 2008 WL 11518799 (C.D. Cal. Aug. 19, 2008) (“the White Order”).1 See
Sec. & Exch. Comm’n v. Stein, 906 F.3d 823, 828 (9th Cir. 2018) (noting that the
availability of collateral estoppel is reviewed de novo). Wheeler was not a party in
White, nor a member of the class. None of the other exceptions to nonparty issue
preclusion apply. See Taylor v. Sturgell, 553 U.S. 880, 892–95 (2008).
Nor is Wheeler bound by the White Order’s proclamation that the procedures
it outlines “conclusively” comply with the FCRA in the post-bankruptcy credit
reporting context and that all consumers are barred from asserting otherwise.
Particularly because “[t]he reasonableness of the procedures and whether the agency
followed them [are] jury questions in the overwhelming majority of cases,” Wheeler
is entitled to discovery into Experian’s actual procedures before they can be assessed
as “reasonable . . . to assure maximum possible accuracy” in compliance with §
1681e(b). See Guimond v. Trans Union Credit Info. Co., 45 F.3d 1329, 1332‒33
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On appeal, Experian no longer defends the application of collateral estoppel.
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(9th Cir. 1995) (citation omitted). Reasonableness is not a static issue, and
procedures that met the high bar of § 1681e(b) fourteen years ago may no longer do
so today.
2. Wheeler has stated a claim for a violation of § 1681e(b) by alleging
facts “tending to show that [Experian] prepared a report containing inaccurate
information.” See Guimond, 45 F.3d at 1333 (citation omitted). The complaint
plausibly alleges that Experian was aware of Wheeler’s bankruptcy discharge, that
the account at issue was discharged, and that Experian inaccurately reported the
discharged account on the report it prepared. Wheeler also plausibly alleges that
Experian should have known that the account was discharged because the account
had not been updated in the twenty months since Wheeler filed for bankruptcy.
Experian’s argument that its October 2020 report was accurate because the
account information was dated February 2019 is unavailing. Even if the information
was accurate as of February 2019, continuing to report the account as open after it
was discharged in bankruptcy was “misleading in such a way and to such an extent
that it could be expected to adversely affect credit decisions.” Shaw v. Experian
Info. Sols., Inc., 891 F.3d 749, 757 (9th Cir. 2018) (cleaned up).
Our recent decision in Moran v. Screening Pros, LLC, 25 F.4th 722 (9th Cir.
2022), does not prevent Wheeler from proceeding past the pleading stage. In that
case, we held that the defendant consumer reporting agency could not be liable for
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its violation of the FCRA because its interpretation of § 1681c(a), while incorrect,
was not “objectively unreasonable.” Moran, 25 F.4th at 729; see id. at 728 (noting
that “[t]he FCRA imposes liability for negligent or willful violations of its terms.”)
(citations omitted). By contrast with the seven-year reporting window at issue in
Moran, here Wheeler alleges a violation of the fact-intensive “reasonableness”
standard. See id. It is too soon to decide as a matter of law that Experian’s
interpretation of its obligations under § 1681e(b) was not objectively unreasonable.
Further, assuming White’s procedures remain not objectively unreasonable,
Experian’s compliance with White is inappropriate for resolution at this early stage.
Wheeler’s requests for judicial notice [Docket Entry Nos. 14, 31] are
DENIED.
REVERSED AND REMANDED. Each party shall bear its own costs on
appeal.
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