Dennis v. Experian Information ( 2007 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
JASON DENNIS, 
Plaintiff-Appellant,
v.
BEH-1, LLC, a limited liability No. 04-56230
company in the State of
California,  D.C. No.
CV-03-07064-R
Defendant,
OPINION
and
EXPERIAN INFORMATION SOLUTIONS,
INC., an Ohio corporation,
Defendant-Appellee.

Appeal from the United States District Court
for the Central District of California
Manuel L. Real, District Judge, Presiding
Argued and Submitted
August 17, 2006—Pasadena, California
Filed May 7, 2007
Before: Alex Kozinski, Diarmuid F. O’Scannlain and
Jay S. Bybee, Circuit Judges.
Per Curiam Opinion;
Dissent by Judge Kozinski
5143
5146 DENNIS v. EXPERIAN INFORMATION SOLUTIONS
COUNSEL
Louis P. Dell, Esq., Law Office of Louis P. Dell, Los Ange-
les, California, for the plaintiff-appellant.
Alexander Frid, Jones Day, Los Angeles, California; Meir
Feder, Jones Day, New York, New York, for the defendant-
appellee.
OPINION
PER CURIAM:
We address whether a credit reporting agency is liable
under the Fair Credit Reporting Act (FCRA), Pub. L. No. 90-
321, 84 Stat. 1128 (codified at 15 U.S.C. § 1681), when it
relies on inaccurate information contained in public records.
We also consider the appropriate scope of a reinvestigation of
a disputed report under 15 U.S.C. § 1681i.
Facts
In October of 2002, plaintiff Jason Dennis was served with
an unlawful detainer complaint by his landlord, BEH-1, LLC.
DENNIS v. EXPERIAN INFORMATION SOLUTIONS 5147
BEH-1 eventually agreed to drop the suit, in exchange for
$1,959, to be paid in installments; the parties stipulated that
no judgement would be entered. A written stipulation was
filed with the Los Angeles Superior Court, and someone—
presumably a clerk—made the following entry on the court’s
Register of Civil Actions: “11/25/02 Court Trial Concluded -
Judgment Entered.”
Dennis subsequently received a credit report from defen-
dant Experian Information Solutions, Inc., which indicated
that a “Civil Claim judgment” had been entered against Den-
nis in the amount of $1,959. Dennis called Experian and
advised it that he had settled the matter out of court and that
a judgement was never entered against him.
Experian contacted Hogan Information Services, a third-
party public records vendor, and requested that it verify the
disputed information. Hogan reported back that the informa-
tion was accurate, and Experian advised Dennis that it would
not amend the report.
Dennis sued Experian, alleging violations of the California
Consumer Credit Reporting Agencies Act, Cal. Civ. Code
§ 1785.10, and the FCRA. The district court granted summary
judgment for defendant on all claims. On appeal, Dennis chal-
lenges only the summary judgment ruling on his federal
claims arising from Experian’s duty to maintain “reasonable
procedures” to ensure the accuracy of credit reports under
section 1681e(b), and its duty to reinvestigate the information
Dennis disputed under section 1681i.1
1
As noted above, Dennis pursued a series of claims under state and fed-
eral law. He presumably invites us to consider all of these claims by
broadly framing the question presented to us as “[w]hether it was error for
the trial court to grant summary judgment in favor of Experian.” However,
his brief presents argument only on his section 1681e(b) and 1681i claims.
Dennis has therefore waived his right to appeal summary judgment on all
claims not specifically argued in his brief. See Entm’t Research Group,
5148 DENNIS v. EXPERIAN INFORMATION SOLUTIONS
Analysis
1. Section 1681e(b) claim
[1] To maintain a claim under this section, plaintiff must
show not merely that the information disputed was inaccurate,
but that the credit reporting agency failed to maintain “reason-
able procedures” to insure the accuracy of its reports. See
Guimond v. Trans Union Credit Information Co., 45 F.3d
1329, 1333 (9th Cir. 1995). Here, information in the court file
indicated that a judgment had been entered against Dennis in
the lawsuit brought by his former landlord. The trial minutes
noted that “pursuant to a WRITTEN stipulation, the parties
applied to the court for judgment, which was so ordered,” and
the Superior Court’s Register of Actions likewise indicated
that a judgment had been entered. But the Superior Court has
since issued an order declaring these entries to have been errone-
ous.2
[2] We’ve held that once a plaintiff establishes that his
credit report was inaccurate, “[t]he reasonableness of the pro-
cedures and whether the agency followed them will be jury
questions in the overwhelming majority of cases.” Guimond,
45 F.3d at 1333. But while the FCRA requires “maximum
possible accuracy,” it does not subject reporting agencies to
Inc. v. Genesis Creative Group, Inc., 122 F.3d 1211, 1217 (9th Cir. 1997)
(“We will not manufacture arguments for an appellant, and a bare asser-
tion does not preserve a claim . . . . ‘Judges are not like pigs, hunting for
truffles buried in briefs.’ ” (quoting Greenwood v. FAA, 28 F.3d 971, 977
(9th Cir. 1994))).
2
In its response to Dennis’s interrogatories, Experian admitted that there
had been no judgment entered against Dennis. Experian then moved to
amend its response to strike that admission, and the district court granted
the motion. Dennis opposed the motion, and lists this as one of the issues
he wishes this court to review on appeal. But Dennis presents no legal
argument on this point and has thus waived the right to appeal the district
court’s order. See n.1 supra.
DENNIS v. EXPERIAN INFORMATION SOLUTIONS 5149
strict liability. See Commentary on the Fair Credit Reporting
Act, 55 Fed. Reg. 18,804, 18,820 (May 4, 1990) (“[Section
1681e(b)] does not require error free consumer reports.”).
Instead, the agencies are obligated to follow “reasonable pro-
cedures” to ensure that reports accurately reflect creditworthi-
ness.
[3] Here, the only alleged defect in Experian’s initial inves-
tigation was that it relied on secondary documents, namely the
trial minutes and the Register of Actions, without obtaining a
copy of the actual judgment. Experian no doubt tolerated
some risk of error by relying on these documents rather than
the primary source. But both documents were official records
issued by the Superior Court, and while court record-keeping
systems are not perfect—as this case demonstrates—most are
reasonably accurate. We thus conclude that it was reasonable,
as a matter of law, for Experian to base its initial report on the
secondary documents without doing any additional investiga-
tion. See Henson v. CSC Credit Servs., 29 F.3d 280, 285-86
(7th Cir. 1994).
2. Section 1681(i) claim
[4] When a consumer informs a reporting agency of alleged
inaccuracies in his credit report, section 1681i(a)(1) requires
that the agency commence a “reasonable reinvestigation”
within 30 days. 15 U.S.C. § 1681i(a)(1)(A). Although Dennis
had identified an error in his credit report, we cannot say that
Experian’s reinvestigation was unreasonable. After Dennis
alerted Experian that his report was inaccurate, Experian con-
tacted a third-party public records vendor, Hogan, to verify
the accuracy of the document. Hogan hired a contractor,
whom it regularly audits for reliability, to go to the court-
house and review the file. The contractor determined that a
judgment had been entered against Dennis. While the stipula-
tion suggested otherwise, the weight of the evidence, consist-
ing of an entry in the Register notation and the trial minutes,
supported that determination.
5150 DENNIS v. EXPERIAN INFORMATION SOLUTIONS
[5] Indeed, the weight of the evidence is also that, as a mat-
ter of California law, entry in the Register is “entry of judg-
ment.” This reading is supported by Cal. Civ. Proc. Code
§ 668 and California case law. Section 668 reads as follows:
“Except as provided in Section 668.5, the clerk of the superior
court, must keep, with the records of the court, a book called
the ‘judgment book,’ in which judgments must be entered.”
Cal. Civ. Proc. Code § 668 (emphasis added). Similarly, in
Wilson v. Los Angeles County Employees Ass’n, the court
stated that “[t]he entry of a judgment consists in the recording
of it in the judgment book, and there can be no record of a
judgment until so entered. A judgment is entered when it is
actually entered in the judgment book.” 273 P.2d 824, 827
(Cal. Ct. App. 1954) (citations omitted); see also Menzies v.
Watson, 38 P. 641, 642 (Cal. 1894) (“[Section] 668[ ] pro-
vides that judgment shall be entered in the judgment-book.
There is no other ‘entry’ of judgments mentioned in the
code.”); cf. Old Settlers Inv. Co. v. White, 110 P. 922, 927
(Cal. 1910) (“[T]here is no judgment under section 997 if the
clerk does not enter any judgment, but merely records in the
judgment docket, in a place where the statute does not provide
for the entry of judgments, a document signed by the parties
to the action and consenting that a judgment may be
entered.”). But see Gossman v. Gossman, 126 P.2d 178, 185
(Cal. Ct. App. 1942) (“The judgment is deemed rendered
when the decision is filed; its rendition is a judicial act, its
entry is ministerial.” (emphasis omitted)). It thus appears that,
under California law, a judgment is entered when the court
clerk records that judgment in the judgment book or, given
§ 668.5, its modern equivalents. As such, Experian correctly
reported that judgment had been entered against Dennis, even
if that judgment had been entered erroneously.3
3
The dissent suggests that a conditional stipulation to the effect that a
judgment shall not be entered if payments are made is somehow evidence
that entry was not made. Dissent at 5152-53. Implausibly, it further sug-
gests that, viewing the stipulation side by side with the very entry the exis-
tence of which the stipulation purports to deny, no reasonable person
DENNIS v. EXPERIAN INFORMATION SOLUTIONS 5151
[6] If anyone was in a position to correct the error, it was
Dennis himself. He knew, or should have known, that the case
file in the unlawful detainer action contained erroneous or
misleading information. He was the only one who could peti-
tion the Superior Court to correct the error. Experian certainly
had no standing to seek correction of the official file in a case
to which it was not a party. Nor would it have known with
certainty what form such a correction should take. Nor does
the duty to reinvestigate under section 1681(i) involve any
more than examination of existing documents; it certainly
does not put on the reporting agency the burden to clean up
errors in a consumer’s credit history that are caused by a third
party. Under the circumstances, we are satisfied that defen-
dant’s investigation was sufficiently rigorous.
AFFIRMED.
“could have concluded that there had been a judgment against Dennis.” Id.
In fact, it is hard to see how a reasonable person could have concluded
otherwise, as a matter of fact or law.
The dissent’s reliance upon Gossman is entirely misplaced. Nowhere do
we suggest that a judgment was actually made—there is no question that
the entry of judgment here was erroneous, nor is there any suggestion that
a clerk’s erroneous entry of judgment somehow created a judgment. The
dissent ignores the importance of the ministerial act of entering judgment,
and the reasonable inferences that flow from it. At the same time, the dis-
sent would apparently add to the ministerial act of entry its own separate
requirement: placement in the file folder of a copy of the rendered judg-
ment. See Dissent at 5152-53. Gossman would only be “entirely disposi-
tive” of our case if our holding in any way depended upon the existence
of a judgment, or more correctly, upon the creation of a judgment by the
ministerial act of a clerk. Rather, we make the modest claim that it was
reasonable for Experian to rely upon the only ministerial act that, under
California law, records the existence of a judgment.
As we note below, Dennis was the only party who could petition the
Superior Court to correct any erroneous entry of judgment in his case.
Faced with an error that he was best, if not exclusively, situated to correct,
Dennis can hardly use the FCRA to hold Experian liable for failing to
unearth this truffle.
5152 DENNIS v. EXPERIAN INFORMATION SOLUTIONS
KOZINSKI, Circuit Judge, dissenting in part:
I agree that it was reasonable for Experian to rely on the
Register entry in compiling its initial report on Dennis’s credit
history. But once Dennis disputed the accuracy of that record,
Experian was obligated to do more. When a consumer dis-
putes an item on his credit report, the reporting agency must
“conduct a reasonable reinvestigation to determine whether
the disputed information is inaccurate.” 15 U.S.C. § 1681i. As
the Federal Trade Commission has commented, a “reasonable
reinvestigation” at this stage requires the agency to “explain
to the source [of the information] that the original statement
has been disputed, state the consumer’s position, and then ask
whether the source would confirm the information, qualify it,
or accept the consumer’s explanation.” See Commentary on
the Fair Credit Reporting Act, 55 Fed. Reg. 18,804, 18,823-24
(May 4, 1990).
The “source” here was the Superior Court and the “infor-
mation” in question was the purported judgment against Den-
nis. Confirming the accuracy of the information would have
required Experian to find a document in the court file that
backed up the Register notation and the trial minutes, thereby
confirming that a judgment had in fact been rendered. This
document would, of course, have been the judgment itself.
Had Experian looked for a such a document, it would have
found no judgment—undermining rather than confirming the
position Experian had taken in the original report.
Experian hired a public records vendor to review the case
file, and the vendor found no judgment confirming the Regis-
ter notation and the trial minutes. The reinvestigation did
uncover a new piece of information: the written stipulation
that expressly contradicted the Register entry. The document
clearly states: “No judgment so long as payments made. . . .
Entry of judgment stayed.” (Emphasis added). There was
nothing ambiguous about this document; it plainly states that
there is “[n]o judgment” as long as payments are made, and
DENNIS v. EXPERIAN INFORMATION SOLUTIONS 5153
that “[e]ntry of judgment [is] stayed.” There is no subsequent
document that purports to be a judgment against Dennis or
lifts the stay. The stipulation was the only legally binding
document in the case file; the trial minutes and the Register
notation merely purported to summarize what was agreed to
in the stipulation. No reasonable person who reviewed these
documents side by side could have concluded that there had
been a judgment against Dennis. The absence of a judgment
in the case file, when considered in light of the information
contained in the stipulation, should have caused Experian to
conclude that there was no judgment and that the Register
entry had been made in error.
The majority mistakenly relies on a series of California
cases which stand for the tautological proposition that a judg-
ment is not entered until “it is actually entered in the judg-
ment book.” Wilson v. Los Angeles County Employees Ass’n,
273 P.2d 824, 827 (Cal. Ct. App. 1954); Maj. Op. at 5150
(citing Wilson and other cases). These cases are not on point.
They say only that a judgment is not of record until it is actu-
ally entered. Wilson, 273 P.2d at 827. They provide no sup-
port for the converse proposition that an entry in the Register
can give life to a judgment that does not exist. To test this
proposition, consider a situation where the clerk of the court
mistakenly enters a judgment rendered in case A under the
Register entry for case B. Nothing in the cases cited by the
majority suggests that the erroneous entry in case B somehow
creates a valid judgment against the defendant in that case.
The majority dismisses with a “But see” the only California
case directly on point, namely Gossman v. Gossman, 126
P.2d 178 (Cal. Ct. App. 1942). Maj. Op. at 5150. The Goss-
man court drew a sharp distinction between the rendition of
the judgment, which is a judicial act, and the entry of the
judgment, which is ministerial. Gossman, 126 P.2d at 185.
The distinction is crucial to our case. A judgment can only be
rendered as a result of a judicial or statutory process—a trial,
a summary judgment order, a court-approved stipulation or
5154 DENNIS v. EXPERIAN INFORMATION SOLUTIONS
the imposition of a default judgment. By contrast, the entry of
the judgment is a ministerial function performed by the clerk
of court. A ministerial act cannot create a judgment because
it is not, in the words of Gossman, “a judicial act.” Because
the person making the entry is not a judge, he lacks the
authority to render a judgment. (Clerks are authorized to enter
default judgments without prior judicial approval if defendant
has been served and files no answer. Cal. Civ. Proc. Code
§ 585. But the judgment itself is authorized by statute, not by
the clerk, who acts in a wholly ministerial capacity. See Baske
v. Burke, 177 Cal. Rptr. 794, 799 (Ct. App. 1981).)
Not only is Gossman consistent with the other cases—and
hence undeserving of a “But see”—it is entirely dispositive of
our case because it makes clear that an erroneous entry in the
Register cannot bring into existence a judgment that does not
exist. Here, the judicial act was the stipulation, which was
apparently accepted by the court, and the stipulation clearly
stated that there was to be no judgment. Nothing that a minis-
terial employee in the clerk’s office might have done to mis-
represent the content of that judicial document can possibly
turn something that is not a judgment into a judgment.
Kira Williams, a specialist in Experian’s consumer affairs
division, testified that Hogan gave Experian a copy of the
stipulation as part of the reinvestigation. Hogan thus did its
job of unearthing the “truffle.” See Maj. Op. at 5151 n.3. Wil-
liams was shown a copy of the document during her deposi-
tion. And, while she could not say whether anyone at
Experian had considered the stipulation during the course of
the investigation, she opined that it would have made no dif-
ference. Williams characterized herself as the person “most
knowledgeable” about Experian’s reinvestigation processes. It
is, therefore, reasonable to infer that, even if Experian had
been fully aware of the contents of the stipulation, it would
have held fast to its original position.
Viewing these facts in a light most favorable to plaintiff,
we must assume that Experian made a deliberate decision not
DENNIS v. EXPERIAN INFORMATION SOLUTIONS 5155
to amend Dennis’s report or take further action, even after it
obtained documentary proof that no judgment had been ren-
dered. A decision to ignore relevant information during the
course of a reinvestigation goes beyond mere negligence and
is at the very least reckless. Whether it rises to the level of a
“willful” failure to comply with the FCRA is another question
—one that should be resolved by a jury. Compare 15 U.S.C.
§ 1681n(a) (subjecting persons who “wilfully” fail to comply
with the FCRA to both compensatory and punitive damages),
with 15 U.S.C. § 1681o(a) (subjecting persons who “negli-
gently” fail to comply to only compensatory damages).
Credit reporting agencies perform a valuable service in our
economy. They provide lenders with tools to control credit
risks, enabling borrowers to access capital cheaply and
quickly. But the consequences of error in this business are
significant—as Dennis’s case demonstrates. Dennis had
hoped to start a business, and he diligently paid his bills on
time for years so that he would have a clean credit history
when he sought financing for the venture. The only blemish
on his credit report in April of 2003 was the erroneously
reported judgment. But that was enough to cause several lend-
ers to decline his applications for credit, dashing his hopes of
starting a new business.
Recognizing the vast power credit reporting agencies have
over the lives and livelihoods of all Americans, Congress
required reporting agencies to reinvestigate an individual’s
creditworthiness when they have reason to believe that a
report is inaccurate. Congress left the precise scope of such
investigations to the discretion of these agencies, trusting
them to adopt adequate procedures to prevent and correct
errors. But if the procedures employed by Experian in this
case are representative of prevailing industry practice—and if
other courts follow the hands-off approach taken by the
majority in this case—Congress may come to regret its deci-
sion. The result may well be more intrusive regulation of the
industry, increasing the agencies’ cost of doing business, to
5156 DENNIS v. EXPERIAN INFORMATION SOLUTIONS
the detriment of the consumers and lenders who rely on their
services.