Dennis v. Experian Infomation , 520 F.3d 1066 ( 2008 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
JASON DENNIS, 
Plaintiff-Appellant,
No. 04-56230
v.
D.C. No.
BEH-1, LLC, a limited liability
CV-03-07064-R
company in the State of
California,  ORDER
Defendant, AMENDING
OPINION AND
and
AMENDED
EXPERIAN INFORMATION SOLUTIONS, OPINION
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 September 25, 2007
Amended March 27, 2008
Before: Alex Kozinski, Chief Judge,
Diarmuid F. O’Scannlain and Jay S. Bybee, Circuit Judges.
Opinion by Chief Judge Kozinski
3149
DENNIS v. EXPERIAN INFORMATION SOLUTIONS 3151
COUNSEL
Louis P. Dell, Esq., Law Office of Louis P. Dell, Los Ange-
les, California, for the plaintiff-appellant.
Meir Feder, Jones Day, New York, New York; Alexander
Frid, Jones Day, Los Angeles, California, for the defendant-
appellee.
3152 DENNIS v. EXPERIAN INFORMATION SOLUTIONS
ORDER
The previous opinion, 504 F.3d 892 (9th Cir. 2007), is
amended as follows. The petition for rehearing or rehearing
en banc is denied; no further petitions may be filed.
Page 897, Column 1, Line 22
After insert footnote 4, stating:
377 F.3d 1081, 1092 (9th Cir. 2004). But Experian
had ample opportunity to be heard on the reasonable-
ness of its reinvestigation. Our first opinion dis-
cussed the issue at length. 485 F.3d 443, 446-47 (9th
Cir. 2007) (per curiam). Dennis’s petition for rehear-
ing disputed that analysis and pointed out that
Experian’s reinvestigation overlooked the documents
in his court file proving that his landlord’s case
against him was dismissed. Before granting Dennis’s
petition, we ordered Experian to respond. That order
put Experian on notice that it should defend the rea-
sonableness of its reinvestigation, and Experian’s
response engaged just this point.
Experian also complains that it hasn’t had an
opportunity to “introduce evidence” about the “over-
all reasonableness of its reinvestigation procedure.”
This concern is misplaced because there are no facts
that Experian could produce that would alter our
conclusion: A reinvestigation that overlooks docu-
ments in a court file, which expressly state that
no adverse judgment was entered, is negligent as a
matter of law.>
DENNIS v. EXPERIAN INFORMATION SOLUTIONS 3153
Page 897, Column 1, Lines 24-25
Replace with
Page 897, Note 4, Column 1, Line 5 — Column 2, Line 7
Delete
OPINION
KOZINSKI, Chief Judge:
We address whether a credit reporting agency can be liable
under the Fair Credit Reporting Act (FCRA), 15 U.S.C.
§ 1681, when it overlooks or misinterprets documents in a
court file.
Facts
In October 2002, Jason Dennis was sued for unlawful
detainer. Eventually, his landlord agreed to drop the suit, in
exchange for $2,938.50, payable in installments. The parties
agreed that no judgment would be entered against Dennis, and
filed a written stipulation to that effect. The court’s Register
of Civil Actions inaccurately reports this event as:
“11/25/2002 Court Trial Concluded - Judgment Entered.”
Two months later, after Dennis paid the promised sums, the
parties presented a “Request for Dismissal,” which the court
clerk endorsed and filed. The corresponding Register entry
accurately reports how this action resolved the dispute:
“01/28/2003 Dismissal Without Prejudice - Entire Action,
Filed & Entered.”
Defendant Experian Information Solutions, Inc. subse-
quently prepared a credit report on Dennis, which indicated
3154 DENNIS v. EXPERIAN INFORMATION SOLUTIONS
that a “Civil Claim judgment” had been entered against him
in the amount of $1,959. Dennis called Experian and
informed it that the report was wrong, as he had settled the
dispute and no judgment was ever entered against him.
Experian commissioned Hogan Information Services, a
third-party public records vendor, to verify the disputed infor-
mation. Hogan reported that the information Experian had
was accurate and sent Experian a copy of the written stipula-
tion between Dennis and his landlord, presumably as support
for this conclusion. Experian thereupon 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 Experian 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 Because the district
court granted Experian’s motion for summary judgment in a
terse order stating no reasons, we assume that the court
adopted all arguments Experian presented in its motion.
1
As noted, Dennis brought a series of claims under state and federal
law. He presumably invites us to consider all of these 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 claims under sections 1681e(b) and 1681i.
Dennis has therefore waived his right to appeal summary judgment on all
other claims because they were not specifically argued in his brief. See
Greenwood v. FAA, 28 F.3d 971, 977 (9th Cir. 1994) (“We will not manu-
facture arguments for an appellant, and a bare assertion does not preserve
a claim. . . . ‘[J]udges are not like pigs, hunting for truffles buried in
briefs.’ ” (quoting United States v. Dunkel, 927 F.2d 955, 956 (7th Cir.
1991) (per curiam))).
DENNIS v. EXPERIAN INFORMATION SOLUTIONS 3155
Analysis
[1] 1. The district court erred insofar as it held that Dennis
couldn’t make the prima facie showing of inaccurate reporting
required by sections 1681e and 1681i. See Guimond v. Trans
Union Credit Info. Co., 45 F.3d 1329, 1333 (9th Cir. 1995)
(section 1681e); Williams v. Colonial Bank, 826 F. Supp. 415,
418 (M.D. Ala. 1993) (section 1681i creates no duty to rein-
vestigate where “the credit report accurately reflect[s] the sta-
tus of the information contained in the public records”).
Experian’s credit report on Dennis is inaccurate. Because the
case against Dennis was dismissed, there could have been no
“Civil claim judgment” against him: “A dismissal without
prejudice . . . has the effect of a final judgment in favor of the
defendant . . . .” Gagnon Co. v. Nev. Desert Inn, 289 P.2d
466, 472 (Cal. 1955) (emphasis added). Dennis has made the
prima facie showing of inaccuracy required by sections 1681e
and 1681i.2
[2] The district court also seems to have awarded summary
judgment to Experian because Dennis didn’t offer evidence of
“actual damages” as required by section 1681o(a)(1). Here,
too, the district court erred. Dennis testified that he hoped to
start a business and that 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 2003 was the erroneously reported judg-
ment. According to Dennis, that was enough to cause several
lenders to decline his applications for credit, dashing his
hopes of starting a new business. Dennis also claims that
Experian’s error caused his next landlord to demand that Den-
2
It is true that Dennis was required to pay money to the landlord as a
condition for obtaining the dismissal, and Experian’s report would have
been accurate had it reported that Dennis settled a lawsuit against him, and
on what terms. (The parties have not briefed and we do not consider
whether being sued and settling are events that may be included in a credit
report under federal or state law.) But the report was certainly not accurate
in identifying the settlement as a “Civil claim judgment” against Dennis.
3156 DENNIS v. EXPERIAN INFORMATION SOLUTIONS
nis pay a greater security deposit. In addition to those tangible
harms, Dennis claims that Experian’s inaccurate report caused
him emotional distress, which we’ve held to be “actual dam-
ages.” See Guimond, 45 F.3d at 1332-33.
[3] Dennis has shown that Experian’s credit report was
inaccurate and he has offered credible evidence of actual
damages. We therefore reverse the summary judgment for
Experian. This doesn’t mean that Experian is strictly liable for
the inaccuracy of its reports. At trial on the section 1681e(b)
claim, Experian remains free to argue (based, perhaps, on the
inaccurate Register entry of November 25, 2002) that it
should be exonerated because it followed “reasonable proce-
dures to assure maximum possible accuracy.” 15 U.S.C.
§ 1681e(b); see Sarver v. Experian Info. Solutions, Inc., 390
F.3d 969, 971-72 (7th Cir. 2004).
[4] 2. After Dennis notified Experian of the error, Experian
had a duty to “conduct a reasonable reinvestigation to deter-
mine whether the disputed information [was] inaccurate.” 15
U.S.C. § 1681i(a)(1)(A). By granting summary judgment to
Experian, the district court held that the company complied
with its reinvestigation obligations. Here again, the district
court erred.
Experian asked Hogan Information Services to review Den-
nis’s court file. That file contained exactly what Dennis and
the court Register said that it contained: the “Request for Dis-
missal,” which resulted in the dismissal of the entire action.
Hogan’s investigator seems to have overlooked this docu-
ment, or failed to understand its legal significance, because he
reported back that judgment had been entered against Dennis.
[5] Experian could have caught Hogan’s error if it had con-
sulted the Civil Register in Dennis’s case, which can be
viewed free of charge on the Los Angeles Superior Court’s
excellent website.3 As described above, the Register clearly
3
Superior Court of California—County of Los Angeles,
http://www.lasuperiorcourt.org. To view the Register of Actions in Den-
DENNIS v. EXPERIAN INFORMATION SOLUTIONS 3157
indicates that the case against Dennis was dismissed.
Experian apparently never looked at the Register.
[6] Experian also could have detected Hogan’s mistake by
examining the document Hogan retrieved from Dennis’s court
file. Hogan mistakenly believed that this document proved
that judgment had been entered against Dennis; in fact, the
document confirms Dennis’s account of what happened. The
document is a written stipulation between Dennis and his
landlord that no judgment would be entered against Dennis so
long as Dennis complied with the payment schedule. The par-
ties couldn’t have been clearer on this point: “If paid, case
dismissed. If not paid, judgment to enter upon [landlord’s]
declaration of non-payment . . . .” The parties altered the pre-
printed form accordingly. They crossed out part of the docu-
ment’s title (“STIPULATION FOR JUDGMENT”); wrote
“NO JUDGMENT SO LONG AS PAYMENTS MADE” over
“Judgment shall be entered in favor of plaintiff”; and struck
the final line, “Judgment is hereby ordered,” replacing it with
“Stipulation Approved.” Experian incorrectly interpreted this
document as an entry of judgment against Dennis.
[7] Ordinarily we would remand Dennis’s claim for trial so
that a jury could determine whether Experian’s failure to rein-
vestigate was negligent. Here, however, a remand would be
pointless. Even accepting as true everything Experian has
claimed, no rational jury could find that the company wasn’t
negligent. The stipulation Hogan retrieved from Dennis’s
court file may be unusual, but it’s also unambiguous, and
Experian was negligent in mis-interpreting it as an entry of
judgment. Experian is also responsible for the negligence of
Hogan, the investigation service it hired to review Dennis’s
court file. Hogan appears to have overlooked the legal signifi-
cance of the Request for Dismissal and the Register entry
nis’s case, one would click on the “Case Summaries” link beneath the
“Civil” heading, and enter the case number, 02U17296.
3158 DENNIS v. EXPERIAN INFORMATION SOLUTIONS
showing that the case against Dennis was dismissed. See
again Gagnon, 289 P.2d at 472 (“A dismissal without preju-
dice . . . has the effect of a final judgment in favor of the
defendant . . . .”).
[8] When conducting a reinvestigation pursuant to 15
U.S.C. § 1681i, a credit reporting agency must exercise rea-
sonable diligence in examining the court file to determine
whether an adverse judgment has, in fact, been entered
against the consumer. A reinvestigation that overlooks docu-
ments in the court file expressly stating that no adverse judg-
ment was entered falls far short of this standard. On our own
motion, therefore, we grant summary judgment to Dennis on
his claim that Experian negligently failed to conduct a reason-
able reinvestigation in violation of section 1681i. See Bird v.
Glacier Elec. Coop., Inc., 255 F.3d 1136, 1152 (9th Cir.
2001) (authority to grant summary judgment to a non-moving
party).4 Whether Experian’s failure was also willful, in viola-
tion of section 1681n, is a question to be taken up on remand.
4
In its petition for rehearing, Experian complains that we didn’t give it
an opportunity to be heard before entering summary judgment against it.
See Verizon Delaware, Inc. v. Covad Comm’cns Co., 377 F.3d 1081, 1092
(9th Cir. 2004). But Experian had ample opportunity to be heard on the
reasonableness of its reinvestigation. Our first opinion discussed the issue
at length. 485 F.3d 443, 446-47 (9th Cir. 2007) (per curiam). Dennis’s
petition for rehearing disputed that analysis and pointed out that Experi-
an’s reinvestigation overlooked the documents in his court file proving
that his landlord’s case against him was dismissed. Before granting Den-
nis’s petition, we ordered Experian to respond. That order put Experian on
notice that it should defend the reasonableness of its reinvestigation, and
Experian’s response engaged just this point.
Experian also complains that it hasn’t had an opportunity to “introduce
evidence” about the “overall reasonableness of its reinvestigation proce-
dure.” This concern is misplaced because there are no facts that Experian
could produce that would alter our conclusion: A reinvestigation that over-
looks documents in a court file, which expressly state that no adverse
judgment was entered, is negligent as a matter of law.
DENNIS v. EXPERIAN INFORMATION SOLUTIONS 3159
***
This case illustrates how important it is for Experian, a
company that traffics in the reputations of ordinary people, to
train its employees to understand the legal significance of the
documents they rely on. See generally Rudy Kleysteuber,
Note, Tenant Screening Thirty Years Later: A Statutory Pro-
posal To Protect Public Records, 116 Yale L.J. 1344, 1356-64
(2007). Because Experian negligently failed to conduct a rea-
sonable reinvestigation, we grant summary judgment to Den-
nis on this claim. We remand only so that the district court
may calculate damages and award attorney’s fees.5 As to all
other claims under the Fair Credit Reporting Act, we reverse
summary judgment for Experian and remand for trial. Dennis
is also entitled to attorney’s fees for an entirely successful
appeal. 15 U.S.C. § 1681o(a)(2). We refer the case to the
Appellate Commissioner for determination of the amount of
fees.
REVERSED and REMANDED. REFERRED TO THE
APPELLATE COMMISSIONER FOR DETERMINA-
TION OF ATTORNEY’S FEES.
5
Because we grant summary judgment to Dennis on his claim that
Experian negligently failed to reinvestigate, the district court shall award
Dennis fees for that claim under section 1681o(a)(2).