Rodriguez v. Experian Information Solutions Inc et al

MOTION for Summary Judgment

W.D. Wash.March 16, 2017

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANT ALLIANCEONE’S MOTION FOR SUMMARY JUDGMENT PAGE 1 OF 30 2:15-cv-01224-RAJ GORDON & REES LLP 121 SW Morrison, Suite 1575 Portland, OR 97204 Ph:(503) 227-8269 Fax: (503) 616-3600 1109936/29779914v.1 THE HONORABLE RICHARD A. JONES UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE JESSE RODRIGUEZ, on behalf of himself and all others similarly situated, Plaintiff, v. EXPERIAN INFORMATION SOLUTIONS, INC. and ALLIANCEONE RECEIVABLES MANAGEMENT, INC., Defendants. No. 2:15-cv-01224-RAJ DEFENDANT ALLIANCEONE’S MOTION FOR SUMMARY JUDGMENT Note on Motion Calendar: Friday, April 7, 2017 Case 2:15-cv-01224-RAJ Document 35 Filed 03/16/17 Page 1 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANT ALLIANCEONE’S MOTION FOR SUMMARY JUDGMENT PAGE 2 OF 30 2:15-cv-01224-RAJ GORDON & REES LLP 121 SW Morrison, Suite 1575 Portland, OR 97204 Ph:(503) 227-8269 Fax: (503) 616-3600 1109936/29779914v.1 TABLE OF CONTENTS Page I. INTRODUCTION .......................................................................................................... 7 II. FACTUAL BACKGROUND ......................................................................................... 7 A. The Parties .......................................................................................................... 7 1. Plaintiff Jesse Rodriguez – a credit repair “mentor” .............................. 7 2. Defendant AllianceOne - pulls credit reports when necessary to collect a judgment ................................................................................. 10 3. Experian, Former Co-Defendant ........................................................... 11 B. Plaintiff accrued numerous parking tickets, which were reduced to judgments and referred to AllianceOne. ........................................................... 11 III. STATEMENT OF ISSUES .......................................................................................... 14 IV. EVIDENCE RELIED UPON ....................................................................................... 15 V. AUTHORITY AND ARGUMENT .............................................................................. 15 A. Fed. R. Civ. P. 56 summary judgment standard. .............................................. 15 B. AllianceOne had a permissible purpose under 15 U.S.C. § 1681a(m) to obtain Plaintiff’s credit report to collect on his judicially adjudicated parking ticket. ................................................................................................... 15 C. Plaintiff cannot prove that AllianceOne “knowingly or recklessly” violated the FCRA. ........................................................................................... 18 1. AllianceOne’s interpretations of Pintos II and Hasbun were reasonable as a matter of law, and therefore any violation of the FCRA cannot be “willful” or “reckless.” .............................................. 18 2. Case law supports AllianceOne’s position that it did not willfully or reckless violate the FCRA in requesting Plaintiff’s credit report. .......................................................................................... 21 D. AllianceOne’s reasonable interpretation of the FCRA and Ninth Circuit precedent preclude a finding of negligent noncompliance with the FCRA. ............................................................................................................... 22 E. Plaintiff cannot prove any “actual damages” that he allegedly sustained from AllianceOne pulling his credit report to collect on his parking ticket judgments. ............................................................................................... 24 1. Pulling Plaintiff’s credit report did not impact his credit. .................... 25 Case 2:15-cv-01224-RAJ Document 35 Filed 03/16/17 Page 2 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANT ALLIANCEONE’S MOTION FOR SUMMARY JUDGMENT PAGE 3 OF 30 2:15-cv-01224-RAJ GORDON & REES LLP 121 SW Morrison, Suite 1575 Portland, OR 97204 Ph:(503) 227-8269 Fax: (503) 616-3600 1109936/29779914v.1 2. Plaintiff is not damaged by having to pay his parking ticket judgments. ............................................................................................. 26 3. Garnishing of a bank account does not give rise to damages. .............. 28 4. Plaintiff cannot prove invasion of privacy damages. ............................ 28 VI. CONCLUSION ............................................................................................................. 29 Case 2:15-cv-01224-RAJ Document 35 Filed 03/16/17 Page 3 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANT ALLIANCEONE’S MOTION FOR SUMMARY JUDGMENT PAGE 4 OF 30 2:15-cv-01224-RAJ GORDON & REES LLP 121 SW Morrison, Suite 1575 Portland, OR 97204 Ph:(503) 227-8269 Fax: (503) 616-3600 1109936/29779914v.1 TABLE OF AUTHORITIES Page(s) Cases Almaraz v. Universal Marine Corp., 472 F.2d 123 (9th Cir. 1972) ................................................................................................ 22 Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) .............................................................................................................. 15 Ashby v. Farmers Ins. Co., 565 F. Supp. 2d 1188 (D. Or. 2008) ..................................................................................... 21 Banga v. Chevron U.S.A., Inc., 2013 U.S. Dist. LEXIS 2271 (N.D. Cal. 2013) .............................................................. 22, 25 Bateman v. American Multi-Cinema, 623 F.3d 708 (9th Cir. 2010) .......................................................................................... 18, 19 Beck v. Prupis, 529 U.S. 494, 120 S. Ct. 1608, 146 L.Ed. 2d 561 (2000) ..................................................... 22 California First Amendment Coalition v. Calderon, 150 F.3d 976 (1998) .............................................................................................................. 19 Celotex Corp. v. Catrett, 477 U.S. 317 (1986) .............................................................................................................. 15 Cousin v. Trans Union Corp., 246 F.3d 359 (5th Cir. 2001) ................................................................................................ 29 Guimond v. Trans Union Credit Info. Co., 45 F.3d 1329 (9th Cir. 1995) .......................................................................................... 22, 28 Hasbun v. County of Los Angeles, 323 F.3d 801 (9th Cir. 2003) ...................................................... 10, 17, 18, 19, 20, 21, 22, 23 Johnson v. Wells Fargo Home Mortg., Inc., 558 F. Supp. 2d 1114 (9th Cir., 2008) .................................................................................. 18 Johnson v. Wells Fargo Home Mortg., Inc., 558 F. Supp. 2d 1114, aff’d in part and rev’d in part, 2011 U.S. App. LEXIS 2908 (9th Cir. Nev. 2011) ............................................................... 24 Levine v. World Fin. Network Nat’l Bank, 554 F.3d 1314 (11th Cir. 2009) ............................................................................................ 21 Marbury v. Madison, 5 U.S. 137 (1803) .................................................................................................................. 20 Case 2:15-cv-01224-RAJ Document 35 Filed 03/16/17 Page 4 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANT ALLIANCEONE’S MOTION FOR SUMMARY JUDGMENT PAGE 5 OF 30 2:15-cv-01224-RAJ GORDON & REES LLP 121 SW Morrison, Suite 1575 Portland, OR 97204 Ph:(503) 227-8269 Fax: (503) 616-3600 1109936/29779914v.1 Myers v. Bennett Law Offices, 238 F. Supp. 2d 1196 (D. Nev. 2002) ................................................................................... 29 Pintos v. Pac. Creditors Ass’n, 504 F.3d 792 (2007) ................................................................................ 10, 17, 19, 20, 22, 30 Pintos v. Pac. Creditors Ass’n, 565 F.3d 1106 (9th Cir. 2009) as amended at Pintos v. Pac. Creditors Ass’n, 605 F.3d 665 (9th Cir. 2010) .................................... 10, 11, 15, 17, 18, 19, 20, 21, 22, 23, 29 Rodriguez v. 99 th Floor, LLC d/b/a Toptradelines, W.D.Wash. Case No. 2:16-cv-00018 ..................................................................................... 8 Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 127 S. Ct. 2201, 167 L. Ed. 2d 1045 (2007) ............................ 18, 19, 20, 21, 22 Soremekun v. Thrifty Payless, Inc., 509 F.3d 978 (9th Cir. 2007) ................................................................................................ 15 United States v. McNeil, 362 F.3d 570 (9th Cir. 2004) ................................................................................................ 20 Statutes 15 United States Code Section 1601 ......................................................................................................................... 17 15 United States Code Section 1681 ......................................................................................................................... 17 15 United States Code Section 1681a ................................................................................................ 15, 16, 17, 18, 29 15 United States Code Section 1681b ..................................................................................................... 16, 17, 23, 29 15 United States Code Section 1681n ................................................................................................................. 14, 18 15 United States Code Section 1681o ........................................................................................................... 14, 18, 22 15 United States Code Section 1691a ........................................................................................................................ 17 Rules Federal Rules of Civil Procedure Rule 56 ........................................................................................................................ 7, 15, 30 Case 2:15-cv-01224-RAJ Document 35 Filed 03/16/17 Page 5 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANT ALLIANCEONE’S MOTION FOR SUMMARY JUDGMENT PAGE 6 OF 30 2:15-cv-01224-RAJ GORDON & REES LLP 121 SW Morrison, Suite 1575 Portland, OR 97204 Ph:(503) 227-8269 Fax: (503) 616-3600 1109936/29779914v.1 Regulations 16 C.F.R. § 600.2 ...................................................................................................................... 19 http://spdblotter.seattle.gov/2011/07/01/seattle-gives-parking-scofflaws-the-boot- starting-july-5-2011/ (Last visited March 8, 2017) ................................................................................................. 12 https://www.seattle.gov/scofflaw-ordinance/frequently-asked-questions (Last visited March 8, 2017) ................................................................................................. 12 Case 2:15-cv-01224-RAJ Document 35 Filed 03/16/17 Page 6 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANT ALLIANCEONE’S MOTION FOR SUMMARY JUDGMENT PAGE 7 OF 30 2:15-cv-01224-RAJ GORDON & REES LLP 121 SW Morrison, Suite 1575 Portland, OR 97204 Ph:(503) 227-8269 Fax: (503) 616-3600 1109936/29779914v.1 Defendant AllianceOne Receivables Management, Inc. (“AllianceOne”) hereby moves for summary judgment under Fed. R. Civ. P. 56. I. INTRODUCTION Plaintiff Jesse Rodriguez, on behalf of himself and others similarly situated, seeks to impose liability on AllianceOne for alleged violations of the Fair Credit Reporting Act (“FCRA”) for the time period of August 4, 2013, through August 4, 2015. 1 Since this court denied AllianceOne’s Motion to Dismiss on July 25, 2016, the parties have undergone discovery, including interrogatories, requests for production, requests for admission, and depositions of Plaintiff and AllianceOne. Following this discovery, Plaintiff remains unable to meet his burden of proof that AllianceOne violated the FCRA and that Plaintiff suffered actual damages. Consequently, AllianceOne moves this court for a ruling as a matter of law that, 1) AllianceOne had a permissible purpose in obtaining Plaintiff’s credit report; 2) AllianceOne did not willfully or recklessly interpret the FCRA; 3) AllianceOne did not negligently interpret the FCRA when it pulled credit reports to collect on Plaintiff’s parking ticket judgments; and 4) Plaintiff has failed to prove any actual damages. II. FACTUAL BACKGROUND2 A. The Parties 1. Plaintiff Jesse Rodriguez – a credit repair “mentor” Plaintiff is a purported credit repair “expert.” 3 4 Since at least 2010, he has been operating Cobalt Credit Services with the website https://www.bettercreditguaranteed.com where he “mentors” “students” (his customers) to repair their credit. 5 Plaintiff publishes blogs 1 Dkt. 1, ¶ 23. 2 AllianceOne incorporates the factual background found at Dkt. #9, section II.A. and B. and the supporting documentation as though fully set forth herein. 3 Declaration of David W. Cramer (“Cramer Dec.”) ¶¶ 2, 3, Exs. A (RFA No. 2), B (Interrogatory No. 3). 4 Plaintiff denied that he is a credit “expert” in his deposition, referring to himself as a “credit mentor.” According to Plaintiff, “expert” is just a marketing term. Deposition of Jesse Rodriguez (“Rodriguez Dep.”) 26:4-7; 48:11-16. 5 Id. at 17:7-21. Case 2:15-cv-01224-RAJ Document 35 Filed 03/16/17 Page 7 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANT ALLIANCEONE’S MOTION FOR SUMMARY JUDGMENT PAGE 8 OF 30 2:15-cv-01224-RAJ GORDON & REES LLP 121 SW Morrison, Suite 1575 Portland, OR 97204 Ph:(503) 227-8269 Fax: (503) 616-3600 1109936/29779914v.1 on issues affecting credit. 6 He has a YouTube channel through his company CreditCEO, where he has published approximately one hundred informational videos on issues pertaining to credit. 7 He has also published three books on credit related topics, at least two of which where he is identified as the author. 8 The vast majority of these blogs, video scripts, and credit help books Plaintiff “repurposed” 9 from Dispute Suite 10 and has not read. 11 In May and June of 2015, Plaintiff obtained three “Online Personal Credit Report from Experian.” 12 Plaintiff admittedly checks his credit report two to three times per month for purported “errors.” 13 Plaintiff then hires a lawyer to file lawsuits against collection agencies; aside from the pending suit, Plaintiff has filed four other lawsuits, 14 one of which was a class action in this court. 15 Plaintiff claims that he sustained the following damages from AllianceOne obtaining his consumer credit report: - Plaintiff suffered an invasion of privacy. - AllianceOne collected amounts from Plaintiff which, but for its unlawful conduct, it would not have collected. - Plaintiff was subject to a judgment obtained by AllianceOne, and to pre-judgment and post-judgment interest as a consequence thereof, all as a consequence of AllianceOne’s unlawful conduct in pulling Plaintiff’s consumer report. - AllianceOne reported Plaintiff as delinquent to consumer reporting agencies for higher balances than it otherwise would have, as a consequence of obtaining a 6 Id. at 46:2-18; 50:4-23. 7 Id. at 38:17-21; 44:3 – 45:13. 8 Id. at 38:3 – 41:1. 9 Plaintiff has the right to publish the content and use his own name as the author. However, Plaintiff testified that of the numerous blogs posted on his website, he does not review them prior to their posting, and he does not know the content. Id. at 52:5-12. He has never checked how many blogs are up on his website. He purports to be the author of these repurposed books, but he has not read most of them. Id. at 39:21 – 40:2. 10 Id. at 38:3-9; 41:17 – 42:4; 51:12 – 52:4. 11 Id. at 52:5-12. 12 Rodriguez Dep. 108:19 – 109:23, Ex. 6. 13 Id. at 110:1-7. 14 This is at least his second lawsuit against a debt collector. The first was against Elliott Bay Adjustment. Id. at 9:10-15. Another lawsuit Plaintiff could not remember anything about, including the defendant or the reason he even sued the defendant. Id. at 11:8 – 12:16. 15 Rodriguez v. 99 th Floor, LLC d/b/a Toptradelines, W.D.Wash. Case No. 2:16-cv-00018, Plaintiff alleged Telephone Consumer Protection Act claims against another credit repair entity and potential competitor with Plaintiff’s credit repair enterprise. That case was unilaterally dismissed in January 2017. Case 2:15-cv-01224-RAJ Document 35 Filed 03/16/17 Page 8 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANT ALLIANCEONE’S MOTION FOR SUMMARY JUDGMENT PAGE 9 OF 30 2:15-cv-01224-RAJ GORDON & REES LLP 121 SW Morrison, Suite 1575 Portland, OR 97204 Ph:(503) 227-8269 Fax: (503) 616-3600 1109936/29779914v.1 judgment against him and charging interest associated therewith, all as a consequence of AllianceOne’s unlawfully obtaining Plaintiff’s consumer report. - Plaintiff was denied credit. - Plaintiff’s bank account was garnished as a consequence of AllianceOne’s unlawfully obtaining his consumer report. - Plaintiff seeks actual damages consisting of: amounts AllianceOne collected from Plaintiff which, but for its unlawful conduct, it would not have collected, statutory damage of $1,000.00, costs and attorney’s fees, and preserves the right to seek punitive damages. 16 On February 23, 2017, Plaintiff was deposed and answered questions regarding his purported “damages:” Q. Do you believe -- do you have any reason to believe that those pulls by AllianceOne affected your credit in any way? A. I can’t confirm or deny whether they affected my credit in any way. Q. I understand that, but do you have any belief that it did for any reason? A. I just really can’t confirm or deny whether that’s true or not. 17 He was then asked about whether his bank account had actually been garnished. Q. So have you ever been garnished any amount by AllianceOne? A. Well, they garnished my account at that -- in that point in time, so… Q. But there wasn’t any money? A. Correct. Q. So have they actually garnished any money? A. Not that I’m aware of. 18 And as to his alleged emotional distress, Plaintiff testified as follows: Q. Have you sought any healthcare providers for your -- for any of these damages you suffered by AllianceOne, like your privacy rights being violated? A. I sought legal advice. 16 Cramer Dec. Ex. B (Supp. Response No. 9.) 17 Rodriguez Dep. 124:24 – 125:7. 18 Id. at 102:13 – 103:5. Case 2:15-cv-01224-RAJ Document 35 Filed 03/16/17 Page 9 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANT ALLIANCEONE’S MOTION FOR SUMMARY JUDGMENT PAGE 10 OF 30 2:15-cv-01224-RAJ GORDON & REES LLP 121 SW Morrison, Suite 1575 Portland, OR 97204 Ph:(503) 227-8269 Fax: (503) 616-3600 1109936/29779914v.1 Q. Okay. What about medical? A. Like… Q. Healthcare professional? A. Usually when I have a legal problem, I go to an attorney. Q. … But I was wondering if there’s any healthcare ramifications you had from this privacy right being violated in some way that you can articulate, like going to a doctor. A. I don’t recall. 19 2. Defendant AllianceOne - pulls credit reports when necessary to collect a judgment At all times material hereto, AllianceOne was the collection agency for Seattle Municipal Court’s unpaid parking ticket judgments. 20 AllianceOne’s general practice when collecting on a judgment is to determine if the judgment debtor will work with AllianceOne voluntarily. 21 If the individual cooperates, AllianceOne does not pull the consumer’s credit report. AllianceOne uses the information provided by the Seattle Municipal Court in its initial attempts to communicate with the debtor. If those means fail and the debtor is unresponsive or uncooperative, AllianceOne will use skip trace services and may request the consumer’s credit report to locate up-to-date contact information and attachable assets. 22 At the times it pulled Plaintiff’s consumer report to collect on the Parking Ticket Debts (as referenced in the Complaint), AllianceOne understood that pursuant to Pintos v. Pac. Creditors Ass’n, 565 F.3d 1106 (9th Cir. 2009) (Pintos II) as amended at Pintos v. Pac. Creditors Ass’n, 605 F.3d 665 (9th Cir. 2010), and Hasbun v. County of Los Angeles, 323 F.3d 801, 803 (9th Cir. 2003) it had a permissible purpose to pull a credit report under the “judgment creditor” rule. 23 Many years earlier, after the opinion in Pintos v. Pac. Creditors Ass’n (Pintos I), 504 F.3d 792 (2007) was delivered, AllianceOne ceased pulling credit reports for any parking 19 Id. at 135:25 – 136:15. 20 Deposition of Timothy Bolden (“Bolden Dep.”) 28:2-14. 21 Bolden Dep. 42:19 – 43:4. 22 Id. at 43:5-9. 23 Id. at 49:8 – 50:16. Case 2:15-cv-01224-RAJ Document 35 Filed 03/16/17 Page 10 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANT ALLIANCEONE’S MOTION FOR SUMMARY JUDGMENT PAGE 11 OF 30 2:15-cv-01224-RAJ GORDON & REES LLP 121 SW Morrison, Suite 1575 Portland, OR 97204 Ph:(503) 227-8269 Fax: (503) 616-3600 1109936/29779914v.1 tickets, even those that were reduced to judgments. 24 However, after Pintos II in 2009, when the Ninth Circuit reaffirmed the “judgment creditor” rule for credit pulls, AllianceOne again started requesting credit reports to help it collect on adjudicated government debts. 25 AllianceOne also understood that Experian and other debt collectors and credit organizations believed this was the correct interpretation of the law. 26 3. Experian, Former Co-Defendant After Pintos II, Experian sent notices to its clients, among them, AllianceOne, stating that credit reports could be accessed and used in collecting on parking ticket debts, provided those parking ticket debts had been “judicially established” i.e. reduced to a judgment. 27 Experian produced a FCRA Permissible Purpose Certification Form completed by AllianceOne on December 9, 2010. In October 2015, Experian contacted AllianceOne to verify what percentage of its data reports were for government fines and fees, to which AllianceOne informed Experian, “most of it.” Experian did not request that AllianceOne cease requesting credit reports to collect on judicially adjudicated parking tickets. 28 B. Plaintiff accrued numerous parking tickets, which were reduced to judgments and referred to AllianceOne. Plaintiff was the registered owner of multiple vehicles that received numerous parking tickets between July 2005 and December 20, 2013, all of which were reduced to judgment prior to being referred by Seattle Municipal Court to AllianceOne. 29 The Seattle Municipal Court rendered judgments 30 on Plaintiff’s parking violations. 24 Declaration of Timothy Bolden (“Bolden Dec.”) ¶ 2. 25 Id. at ¶ 3. 26 Id. at ¶ 4; Cramer Dec. ¶ 6, Ex. C. 27 Id. at ¶ 4; Cramer Dec. ¶ 6, Ex. C. 28 Bolden Dec. ¶ 14, Ex. D. 29 Cramer Dec. ¶¶ 2, 3, at Exs. A (RFA No. 2), B (Interrogatory Resp. No. 3); Bolden Dec. ¶ 5, Ex. A. 30 See Rodriguez Dep. 92:6-17, Ex. 4, p. 2-9. These documents explicitly refer to Plaintiff as a “Judgment Debtor” and identify the dates on which the judgments for his parking violations were rendered; See IRLJ 2.5 (requiring the court to enter an order finding that a non-responsive defendant has admitted the infraction and assessing the penalty for the same); see also IRLJ 1.2(e) (defining a judgment as “any final decision in an infraction case”). Case 2:15-cv-01224-RAJ Document 35 Filed 03/16/17 Page 11 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANT ALLIANCEONE’S MOTION FOR SUMMARY JUDGMENT PAGE 12 OF 30 2:15-cv-01224-RAJ GORDON & REES LLP 121 SW Morrison, Suite 1575 Portland, OR 97204 Ph:(503) 227-8269 Fax: (503) 616-3600 1109936/29779914v.1 The Seattle Municipal Court reduced Plaintiff’s parking citations to judgments, and Plaintiff acknowledged at his deposition that they were judgments. (Dkt. 9, Section II.A. and B.). 31 When Plaintiff did not pay the judgments, the Seattle Municipal Court referred those judgments to AllianceOne for collection. 32 On August 20, 2013, prior to when the four “Parking Ticket Debts” pled in the Complaint were referred to AllianceOne for collection, AllianceOne sent a letter to Plaintiff regarding its collection efforts on earlier similar accounts that Seattle Municipal Court had referred to it. 33 On November 24, 2013, Plaintiff sent a letter that included his home address, to AllianceOne disputing the parking ticket judgment debts; Seattle Municipal Court verified the judgment. 34 AllianceOne was not provided a phone number for Plaintiff with the original packet of information from Seattle Municipal Court. 35 After following its written policies in attempting to locate a good address and telephone number for Plaintiff, to obtain payment, verify place of employment and bank account information, and not receiving cooperation from Plaintiff, on December 14, 2013, AllianceOne requested and received a credit report from Experian to help confirm Plaintiff’s residence, obtain further contact information, and locate potential attachable assets. 36 No such assets came up, and neither did a good phone number. 37 In February of 2014, PayLock placed a boot on Plaintiff’s vehicle, presumably as part of City of Seattle’s “scofflaw” parking violation program. 38 31 Rodriguez Dep. 92:6-17, Ex. 4. 32 Bolden Dep., 14:20 – 15:8, 46:10-14. 33 Id. at 20:12 – 21:5. 34 Rodriguez Dep. 77:10-24, Ex. 1; Bolden Dec. ¶ 6, Ex. B. 35 Bolden Dec. ¶ 7. 36 Bolden Dep. 20:1-6; 21:23 – 22:6. 37 Bolden Dec. ¶ 7. 38 Bolden Dec. ¶ 8. According to the City of Seattle’s website, the “scofflaw” boot program went into effect on July 5, 2011. See, e.g., http://spdblotter.seattle.gov/2011/07/01/seattle-gives-parking-scofflaws-the-boot-starting- july-5-2011/ (Last visited March 8, 2017). See also https://www.seattle.gov/scofflaw-ordinance/frequently- asked-questions (mentioning PayLock as the company placing boots on vehicles) (Last visited March 8, 2017). Case 2:15-cv-01224-RAJ Document 35 Filed 03/16/17 Page 12 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANT ALLIANCEONE’S MOTION FOR SUMMARY JUDGMENT PAGE 13 OF 30 2:15-cv-01224-RAJ GORDON & REES LLP 121 SW Morrison, Suite 1575 Portland, OR 97204 Ph:(503) 227-8269 Fax: (503) 616-3600 1109936/29779914v.1 On February 7, 2014, Plaintiff called the number left on his vehicle to have the boot removed from his car; his call was routed to AllianceOne. 39 During this phone call, Plaintiff agreed to a payment plan, whereby he agreed to pay $210 immediately and the rest over the next few months. 40 Plaintiff made the initial $210 payment with a MasterCard. On February 11, 2014, AllianceOne sent Plaintiff a letter confirming his payment plan for his parking ticket judgment debts. 41 According to the agreed upon payment plan, Plaintiff’s next payment of $150 was due on March 20, 2014. On March 18, 2014, AllianceOne called Plaintiff to remind him of the next payment’s due date. 42 Plaintiff did not make his next payment on March 20, 2014. 43 AllianceOne tried to reach Plaintiff via telephone a few more times in March and early April. 44 Plaintiff did not respond to any telephone calls. 45 Needing to collect payment on the agreed upon payment plan, on April 3, 2014, AllianceOne requested and received a credit report from Experian. 46 This report disclosed that Plaintiff had a bank account with Navy Federal Credit Union. 47 Because the parking tickets had already been reduced to judgments by the Seattle Municipal Court, AllianceOne began working to consolidate those multiple judgments into a single judgment for garnishment purposes. 48 Then, on or about May 2, 2014, nearly three months after his first payment to get the boot removed from his vehicle, Plaintiff challenged the $210 credit transaction as fraudulent with his credit provider. 49 After that fraud challenge, AllianceOne proceeded with garnishing 39 Deposition of Jesse Rodriguez (“Rodriguez Dep.”), 80:18 – 81:18. 40 Id. at 81:12 – 82:2; 83:10-12, Ex. 2. 41 Rodriguez Dep. 83:10-12, Ex. 2. 42 Bolden Dec. ¶ 11. 43 Id. 44 Id. 45 Id. 46 Bolden Dep. 25:18-25. 47 Bolden Dec. ¶ 12. 48 Bolden Dep. 22:1-6. 49 Bolden Dec. ¶¶ 9, 10, Ex. A. Case 2:15-cv-01224-RAJ Document 35 Filed 03/16/17 Page 13 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANT ALLIANCEONE’S MOTION FOR SUMMARY JUDGMENT PAGE 14 OF 30 2:15-cv-01224-RAJ GORDON & REES LLP 121 SW Morrison, Suite 1575 Portland, OR 97204 Ph:(503) 227-8269 Fax: (503) 616-3600 1109936/29779914v.1 Plaintiff’s bank account, but the garnishment was unsuccessful because Plaintiff had no money available for garnishment. 50 On or around May 1, 2015, Plaintiff was denied a credit card from Bank of America. 51 At that time, he searched his Experian credit report and learned that he had collection accounts reporting on his consumer report. 52 He called AllianceOne to discuss paying off the four accounts that were reporting on his credit report as outstanding. 53 On May 15, 2015, Plaintiff paid $341 to AllianceOne. 54 AllianceOne requested that that the Credit Reporting Agencies remove this debt from Plaintiff’s consumer credit report. Plaintiff then filed this lawsuit. III. STATEMENT OF ISSUES 1. Was AllianceOne permitted to obtain Plaintiff’s credit report under the Fair Credit Reporting Act (FCRA)? 2. Under §1681n and existing Ninth Circuit case precedent, did AllianceOne knowingly or recklessly violate FCRA when it pulled credit reports on Plaintiff’s judicially adjudicated parking tickets? 3. Under §1681o and existing Ninth Circuit case precedent, did AllianceOne reasonably interpret the FCRA when it pulled credit reports on Plaintiff’s judicially adjudicated parking tickets? 4. Has Plaintiff put forth sufficient evidence of “actual damage” to pursue his alleged claim of negligent noncompliance under §1681o when 1) his only claim is that he was obligated to pay the municipality where he committed traffic violations and received judgments; 2) Plaintiff cannot prove that the pulls prevented him from obtaining additional credit; and 3) he has provided no independent proof of any damages? 50 Rodriguez Dep. 102:6-23. 51 Id. at 104:9 – 105:1, Ex. 5. 52 Id. at 104:23 – 105:1. 53 Plaintiff testified that believes he had already paid off these judgment debts prior to his May 1, 2015, credit card denial. Id. at 105:13-22. Plaintiff did not call to fully pay off the alleged “Parking Ticket Debts” (as defined in the Complaint) until May 15, 2015. Bolden Dec., ¶ 13. It was at that time that he requested the reporting accounts be deleted, over one year after he failed to complete his payment plan. 54 Bolden Dec. ¶ 13. Case 2:15-cv-01224-RAJ Document 35 Filed 03/16/17 Page 14 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANT ALLIANCEONE’S MOTION FOR SUMMARY JUDGMENT PAGE 15 OF 30 2:15-cv-01224-RAJ GORDON & REES LLP 121 SW Morrison, Suite 1575 Portland, OR 97204 Ph:(503) 227-8269 Fax: (503) 616-3600 1109936/29779914v.1 IV. EVIDENCE RELIED UPON AllianceOne’s motion is supported by the following points and authorities, the declarations of David W. Cramer and Timothy Bolden, the deposition testimony of Jesse Rodriguez and Timothy Bolden, and the Court’s own file. V. AUTHORITY AND ARGUMENT A. Fed. R. Civ. P. 56 summary judgment standard. Summary judgment is appropriate if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). The moving party “always bears the initial responsibility” of demonstrating the “absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the movant has the burden of proof at trial, that party must prove that no reasonable trier of fact could find for the non-moving party. See Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir. 2007). Once the movant meets its initial burden, then, to defeat the motion, the burden shifts to the non-moving party to set forth specific facts showing a genuine issue of material fact for trial. See Celotex, 477 U.S. at 324; Fed. R. Civ. P. 56(e). AllianceOne is the moving party, so the Court must view the evidence in the light most favorable to Plaintiff and draw all reasonable inferences from that evidence in Plaintiff’s favor. See, e.g., Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 254 (1986). Even when those favorable inferences are drawn for Plaintiff, there is no genuine question of material fact and AllianceOne is entitled to summary judgment. B. AllianceOne had a permissible purpose under 15 U.S.C. § 1681a(m) to obtain Plaintiff’s credit report to collect on his judicially adjudicated parking ticket. The current, controlling precedent in the Ninth Circuit on the FCRA as implicated in this case is Pintos v. Pac. Creditors Ass’n, 565 F.3d 1106 (9th Cir. 2009) (Pintos II). Pintos II was later amended at Pintos v. Pac. Creditors Ass’n, 605 F.3d 665 (9th Cir. 2010). 55 In Pintos II (as amended), the Ninth Circuit stated in footnote 2 that the Court did “not opine on the 55 The amended opinion simply added language to footnote 2. Case 2:15-cv-01224-RAJ Document 35 Filed 03/16/17 Page 15 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANT ALLIANCEONE’S MOTION FOR SUMMARY JUDGMENT PAGE 16 OF 30 2:15-cv-01224-RAJ GORDON & REES LLP 121 SW Morrison, Suite 1575 Portland, OR 97204 Ph:(503) 227-8269 Fax: (503) 616-3600 1109936/29779914v.1 meaning or scope of 15 U.S.C. §§ 1681a(m) and 1681b(c).” These provisions were not previously briefed in AllianceOne’s Motion to Dismiss and were not addressed in the Court’s order denying the same. (Dkt 21). These provisions provide an alternative basis for a finding that AllianceOne had a permissible purpose. Under the FCRA, an individual “initiates” and becomes involved in a credit transaction by having an account in collection. Specifically, both 15 U.S.C. §§ 1681a(m) and 1681b(c) contemplate that consumer reports may be used in credit transactions that arise even if the transaction was not initiated 56 by a consumer. 15 U.S.C. § 1681b(a)(3)(A) provides: (a) In general Subject to subsection (c), any consumer reporting agency may furnish a consumer report under the following circumstances and no other: . . . (3) To a person which it has reason to believe— (A) intends to use the information in connection with a credit transaction involving the consumer on whom the information is to be furnished and involving the extension of credit to, or review or collection of an account of, the consumer[.]” (Emphasis added). 15 U.S.C. § 1681b(c) sets forth certain conditions in which a consumer report may be provided in connection with any “credit or insurance transaction that is not initiated by the consumer,” and 15 U.S.C. § 1681a(m) defines precisely what is, or more accurately, what is not, a “credit or insurance transaction that is not initiated by the consumer.” (m) Credit or Insurance Transaction That Is Not Initiated by the Consumer.—The term “credit or insurance transaction that is not initiated by the consumer” does not include the use of a consumer report by a person with which the consumer has an account or insurance policy, for purposes of— (1) reviewing the account or insurance policy; or (2) collecting the account. 15 U.S.C. § 1681a(m) (emphasis added). By the plain language of section 1681a(m), collection of an account is not a “credit transaction that is not initiated by the consumer.” 56 This Court ruled that parking violations are not “credit” transactions or debts “involving the customer.” Case 2:15-cv-01224-RAJ Document 35 Filed 03/16/17 Page 16 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANT ALLIANCEONE’S MOTION FOR SUMMARY JUDGMENT PAGE 17 OF 30 2:15-cv-01224-RAJ GORDON & REES LLP 121 SW Morrison, Suite 1575 Portland, OR 97204 Ph:(503) 227-8269 Fax: (503) 616-3600 1109936/29779914v.1 Stated in the inverse, the FCRA already defines Plaintiff’s parking ticket judgment debts as “credit transactions” that he initiated. Importantly, section 1681a(m) does not use the term “credit” when referencing what kind of “account” is being described, so the new FACTA definition, discussed infra, cannot pertain to that section. Section 1681(a)(3)(A) allows a consumer report to be obtained for “review of collection of an account,” and section 1681a(m) explicitly makes collecting an account a “credit transaction” that is initiated by the consumer. Hasbun v. County of Los Angeles clarifies that “collection of a debt is considered to be the ‘collection of an account.’” 323 F.3d 801, 803 (9th Cir. 2003). Analyzing 15 U.S.C. § 1681b(a)(3)(A) with §§ 1681b(c) and 1681a(m), the following becomes clear: (1) Consumers can be “involved” in credit transactions under section 1681b(a)(3)(A) that they didn’t initiate; (2) section 1681b(c) provides certain restrictions on access to reports under section 1681b(a)(3)(A) when the consumer didn’t initiate the transaction; and (3) those limitations don’t apply here because section 1681a(m) says that [Plaintiff] initiated the transaction. Pintos II, 605 F.3d at 671 (Kozinski, C.J. dissenting). 15 U.S.C. § 1681a(m) expressly excludes debt collection activities from the definition of credit transactions not initiated by the consumer. The statutes cannot be interpreted otherwise. Though the analysis of the added definition of “credit” in the Fair and Accurate Credit Transactions Act of 2003, 15 U.S.C. §§ 1601 et seq. (“FACTA”) by the Pintos I Court is without precedential value, it also does not contradict the foregoing analysis of the FCRA. FACTA incorporates the definition of “credit” 57 from the Equal Credit Opportunity Act (“ECOA”). See 15 U.S.C. § 1691a(d). But that definition does not change the meaning of section 1681a(m), because the term “credit transaction that is not initiated by the consumer” is defined to exclude those situations when collectors of “accounts” access consumer credit reports. 57 “Credit” is defined as the “right granted by a creditor to a debtor to defer payment of debt or to incur debts and defer its payment or to purchase property or services and defer payment therefor.” Case 2:15-cv-01224-RAJ Document 35 Filed 03/16/17 Page 17 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANT ALLIANCEONE’S MOTION FOR SUMMARY JUDGMENT PAGE 18 OF 30 2:15-cv-01224-RAJ GORDON & REES LLP 121 SW Morrison, Suite 1575 Portland, OR 97204 Ph:(503) 227-8269 Fax: (503) 616-3600 1109936/29779914v.1 Importantly, the definition of “credit” imbued into the statute with the passing of FACTA does not impact the interpretation of 15 U.S.C. § 1681a(m), because the term “credit or insurance transaction that is not initiated by the consumer” is already defined. The allegedly new definition of credit does not change what still remains a fully defined term in the statute. A “credit . . . transaction that is not initiated by the consumer,” as defined, does not include those situations where an account is being collected. Thus, AllianceOne had a permissible purpose in obtaining Plaintiff’s credit report. C. Plaintiff cannot prove that AllianceOne “knowingly or recklessly” violated the FCRA. AllianceOne’s interpretation of Pintos II, its understanding of the continuing viability of the “judgment creditor” rule, and the fact that Plaintiff’s parking tickets were judgments when his credit report was pulled, precludes any finding that AllianceOne violated the FCRA “willfully” or “recklessly.” A consumer can assert a private cause of action for willful noncompliance with the FCRA. 15 U.S.C. §§ 1681n. Plaintiff has the burden of proof. Johnson v. Wells Fargo Home Mortg., Inc., 558 F. Supp. 2d 1114, 1122 (9 th Cir., 2008). Plaintiff may recover actual damages for negligent violations, 15 U.S.C. § 1681o(a)(1), and actual or statutory and punitive damages for willful violations of the FCRA. Id. at § 1681n(a)(1)-(2); Safeco, 551 U.S. at 53. AllianceOne did not “willfully” violate the FCRA. 1. AllianceOne’s interpretations of Pintos II and Hasbun were reasonable as a matter of law, and therefore any violation of the FCRA cannot be “willful” or “reckless.” Under the FCRA, a plaintiff may demonstrate "willfulness" by showing a "reckless disregard" of statutory duty. Safeco, 551 U.S. at 56-60. A defendant acts in reckless disregard if the defendant's action "is not only a violation under a reasonable reading of the statute's terms, but shows that the company ran a risk of violating the law substantially greater than the risk associated with a reading that was merely careless." Bateman v. American Multi-Cinema, 623 F.3d 708, 711 n.1 (9th Cir. 2010) (quoting Safeco, 551 U.S. at 69, 127 S.Ct. 2201, 167 Case 2:15-cv-01224-RAJ Document 35 Filed 03/16/17 Page 18 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANT ALLIANCEONE’S MOTION FOR SUMMARY JUDGMENT PAGE 19 OF 30 2:15-cv-01224-RAJ GORDON & REES LLP 121 SW Morrison, Suite 1575 Portland, OR 97204 Ph:(503) 227-8269 Fax: (503) 616-3600 1109936/29779914v.1 L.Ed.2d 1045). That is, the defendant must have taken action involving "an unjustifiably high risk of harm that is either known or so obvious that is should be known." Id. (quoting Safeco, 551 U.S. at 68, 127 S.Ct. 2201, 167 L.Ed.2d 1045). In considering whether AllianceOne’s reading of the FCRA rose to a “willful” or “reckless” level, the court may consider the text of the FCRA, guidance from the federal courts of appeal, or the FTC’s commentary. Safeco, 551 U.S. at 70. Plaintiff cannot prove that AllianceOne’s conduct was a “violation under a reasonable reading of the statute’s terms” or the existing case law. As stated in Section B. supra, AllianceOne’s reading of the FCRA as a whole was not a willful or reckless violation, even in light of FACTA, because the term “credit transaction not initiated by the consumer” remains a fully defined term, regardless of the new definition of “credit.” Additionally, the Ninth Circuit’s opinion in Pintos II, on its face, may reasonably be read as reaffirming Hasbun’s judgment creditor rule. Moreover, the FTC’s decision to rescind its commentary 58 did not invalidate existing Ninth Circuit case law. Had the Pintos II court desired to limit its holding to those factual circumstances that arose prior to FACTA or the FTC’s revised commentary, it could have easily done so. See, e.g., California First Amendment Coalition v. Calderon, 150 F.3d 976, 982 (1998) (“[O]ur holding is limited to the facts of this case.”) Both Pintos I and Pintos II reference FACTA and the FTC’s decision to withdraw its “judgment creditor” commentary. In Pintos I, the Ninth Circuit stated that Hasbun must be “reevalutated in light of the amended FCRA” and further stated that “[p]ost-FACTA, it is apparent that debt collection is not always a permissible purpose for obtaining credit reports.” Pintos I, 504 F.3d at 799-800 and n.3. The opinion does not say debt collection is never a permissible purpose. 58 The FTC’s prior commentary on the FCRA stated: “The interpretations in the Commentary are not trade regulation rules or regulations, and . . . they do not have the force or effect of statutory provisions.” 16 C.F.R. § 600.2. Case 2:15-cv-01224-RAJ Document 35 Filed 03/16/17 Page 19 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANT ALLIANCEONE’S MOTION FOR SUMMARY JUDGMENT PAGE 20 OF 30 2:15-cv-01224-RAJ GORDON & REES LLP 121 SW Morrison, Suite 1575 Portland, OR 97204 Ph:(503) 227-8269 Fax: (503) 616-3600 1109936/29779914v.1 Rather than limiting its holding in Pintos II, the Ninth Circuit reaffirmed and clarified its holding in Hasbun, and the opinion is replete with indications that the “judgment creditor” rule remains good law in the Ninth Circuit, including repeatedly emphasizing judgment: The holding of Hasbun is properly understood to be that a judgment creditor is authorized under the statute to obtain a credit report in connection with collection efforts. Pintos II, 565 F.3d at 1113 (emphasis in original). Additionally, this sentence uses “is,” the present indicative form of “to be,” first to reflect the current understanding of Hasbun, and then to reflect the current authorization of the FCRA in 2009. We explicitly adopted and quoted extensively from a Federal Trade Commission commentary which made repeated reference to the permissible purpose of a “judgment creditor” to obtain a credit report. [Hasbun, 323 F.3d] at 803 (“[a] judgment creditor has a permissible purpose to receive a consumer report on the judgment debtor for use in connection with the collection of a judgment debt.) Pintos II, 565 F.3d at 1113 (emphasis in original). Though Pintos II references the Ninth Circuit’s adoption of the FTC’s commentary, Pintos II contains no footnote, no comment, nor any other indication that the Ninth Circuit was prospectively disavowing that adoption. Indeed, withdrawing Pintos I and replacing it with Pintos II strongly suggests the opposite. Moreover, Pintos II gives no indication that the Pintos I opinion was being withdrawn because the facts of the case predated the 2003 amendments to the FCRA. While acts of Congress may require courts to “reevaluate” prior holdings, see United States v. McNeil, 362 F.3d 570, 574 (9th Cir. 2004), a change to a definition does not automatically render prior case law invalid. The courts are responsible for interpreting the laws Congress passes. See, e.g, Marbury v. Madison, 5 U.S. 137 (1803). Even less impactful is the rescission of nonbinding FTC commentary. 59 The FTC, an executive agency without delegated rulemaking authority, cannot rescind, alter, or replace the established precedents of Article III courts. 59 See Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 70, 127 S. Ct. 2201, 167 L. Ed. 2d 1045 (2007) (FTC, in this area, “has only enforcement responsibility, not substantive rulemaking authority).” Case 2:15-cv-01224-RAJ Document 35 Filed 03/16/17 Page 20 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANT ALLIANCEONE’S MOTION FOR SUMMARY JUDGMENT PAGE 21 OF 30 2:15-cv-01224-RAJ GORDON & REES LLP 121 SW Morrison, Suite 1575 Portland, OR 97204 Ph:(503) 227-8269 Fax: (503) 616-3600 1109936/29779914v.1 Pintos II provides every indication that Hasbun’s “judgment creditor” rule is alive and applicable: If a debt has been judicially established, there is a “credit transaction involving the consumer” no matter how it arose. The obligation is established as a matter of law, and the statute is satisfied. Pintos II, 565 F.3d at 1113 (emphasis in original). The Court could have used “was” rather than “is,” but it chose not to do so. Nothing about the foregoing paragraph indicates that Hasbun or Pintos II lack precedential value in a post-FACTA world, and the term judgment “creditor” gives the reasonable impression that a credit transaction is involved. 2. Case law supports AllianceOne’s position that it did not willfully or reckless violate the FCRA in requesting Plaintiff’s credit report. If AllianceOne’s interpretation of the FCRA, in light of Ninth Circuit precedent, was “objectively reasonable as a matter of law, the case ends.” Ashby v. Farmers Ins. Co., 565 F. Supp. 2d 1188, 1205 (D. Or. 2008). In cases like Ashby, where courts have determined that a question of fact exists as to “willfulness,” those cases typically turn on a facially incorrect reading of the FCRA when there is a “dearth of guidance.” See id. at 1206. Here, AllianceOne’s interpretation of the FCRA was reasonable. 60 Such a view is supported by case law. For example, in Levine v. World Fin. Network Nat’l Bank, 554 F.3d 1314 (11th Cir. 2009), the plaintiff argued that Experian recklessly violated the FCRA because it sold the plaintiff’s consumer report to a company with whom the plaintiff had a closed account. Id. at 1318. The plaintiff further argued that Experian’s internal documents suggested that Experian believed it was a violation of the FCRA to sell a consumer reports for closed accounts. Id. at 1319. The Eleventh Circuit found that, despite Experian’s internal documents suggesting that Experian failed to comply with its own reading of the FCRA, Experian’s actual conduct was not an unreasonable interpretation of the FCRA. Id. 60 Reasonableness may preclude a finding of a negligent violation of the FCRA under Safeco, as discussed in Section D. Case 2:15-cv-01224-RAJ Document 35 Filed 03/16/17 Page 21 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANT ALLIANCEONE’S MOTION FOR SUMMARY JUDGMENT PAGE 22 OF 30 2:15-cv-01224-RAJ GORDON & REES LLP 121 SW Morrison, Suite 1575 Portland, OR 97204 Ph:(503) 227-8269 Fax: (503) 616-3600 1109936/29779914v.1 D. AllianceOne’s reasonable interpretation of the FCRA and Ninth Circuit precedent preclude a finding of negligent noncompliance with the FCRA. “The FCRA does not impose strict liability.” See Guimond v. Trans Union Credit Info. Co., 45 F.3d 1329, 1333 (9th Cir. 1995). 15 U.S.C. § 1681o states that “[a]ny person who is negligent in failing to comply with any requirement imposed” by the FCRA is liable to the offended consumer. “Negligence” is a common law term, and the Supreme Court has said that the “general rule [is] that a common law term in a statute comes with a common law meaning, absent anything pointing another way[.]” Safeco, 551 U.S. at 58 citing Beck v. Prupis, 529 U.S. 494, 500-501, 120 S. Ct. 1608, 146 L.Ed. 2d 561 (2000). The “standard of conduct required to avoid negligence is that of a reasonably prudent person under similar circumstances.” Banga v. Chevron U.S.A., Inc., 2013 U.S. Dist. LEXIS 2271 *33 (N.D. Cal. 2013) citing Almaraz v. Universal Marine Corp., 472 F.2d 123, 124 (9th Cir. 1972). Thus, the question for liability under 15 U.S.C. § 1681o is: Would a reasonably prudent company in the business of collecting judgment debts within the Ninth Circuit have known, in the relevant time period, that the FCRA prohibited obtaining credit reports to collect judgment debts arising from parking tickets? See, e.g., Banga v. Chevron, 2013 U.S. Dist. LEXIS 2271 *33. The answer to that question is “no,” and the evidence supporting that answer is overwhelming. First, AllianceOne acted reasonably following the Ninth Circuit’s Pintos I opinion. After Pintos I was released in 2007, AllianceOne ceased its practice of obtaining consumer credit reports for collecting judgments arising from parking tickets. 61 When Pintos II was released, AllianceOne reasonably understood 62 that Pintos I was invalid as legal precedent. Moreover, based on the language of the opinion, AllianceOne reasonably understood Pintos II to expressly reaffirm and reinstate Hasbun’s judgment creditor rule: “A judgment creditor is authorized under the [Fair Credit Reporting Act] to obtain a credit report in connection with collection efforts.” Pintos II, 565 F.3d at 1113 (emphasis in original). Experian sent notices to its clients, among them, AllianceOne, stating that credit reports could 61 Bolden Dec. ¶ 2. 62 Id. at ¶ 3. Case 2:15-cv-01224-RAJ Document 35 Filed 03/16/17 Page 22 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANT ALLIANCEONE’S MOTION FOR SUMMARY JUDGMENT PAGE 23 OF 30 2:15-cv-01224-RAJ GORDON & REES LLP 121 SW Morrison, Suite 1575 Portland, OR 97204 Ph:(503) 227-8269 Fax: (503) 616-3600 1109936/29779914v.1 be accessed and used in collecting on parking ticket debts, provided those parking ticket debts had been “judicially established” i.e. reduced to a judgment. 63 Moreover, in October 2015, Experian contacted AllianceOne to verify what percentage of its data reports were for government fines and fees, to which AllianceOne informed Experian, “most of it.” After that conversation, Experian still did not request that AllianceOne cease requesting credit reports to collect debts on government fines and fees. 64 As a matter of law, AllianceOne was not negligent in the foregoing understanding of Pintos II. The Pintos II Court expressly held: PCA was not a judgment creditor. Its claim against Pintos did not result from a transaction initiated by Pintos. We conclude, therefore, that § 1681b(a)(3)(A) did not authorize PCA to obtain the credit report on Pintos. Id. at 1114. The implication of this holding is that if PCA was either a judgment creditor or Pintos had initiated the transaction, PCA would have been authorized to obtain the report. If § 1681b(a)(3)(A) did not authorize judgment creditors to obtain a credit report, then the sentence about judgment creditors is meaningless and superfluous. AllianceOne relied upon the Court’s emphasis of “judgment creditor” in Pintos II and the lack of contrary interpretations among the legal community when it decided to pull credit reports on judicially adjudciated parking tickets. 65 Plaintiff has no evidence to support a finding that AllianceOne acted negligently in obtaining his credit report. Based on the language of the FCRA, Pintos II, and Hasbun, AllianceOne did not, as a matter of law, act unreasonably, so it cannot have acted negligently. The FCRA is not a strict liability statute. Plaintiff must present some proof of negligence associated with requesting Plaintiff’s credit report. 63 Id. at ¶ 4; Cramer Dec. ¶ 6, Ex. C. 64 Bolden Dec. ¶ 14, Ex. D. 65 Id. at ¶ 4. Case 2:15-cv-01224-RAJ Document 35 Filed 03/16/17 Page 23 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANT ALLIANCEONE’S MOTION FOR SUMMARY JUDGMENT PAGE 24 OF 30 2:15-cv-01224-RAJ GORDON & REES LLP 121 SW Morrison, Suite 1575 Portland, OR 97204 Ph:(503) 227-8269 Fax: (503) 616-3600 1109936/29779914v.1 E. Plaintiff cannot prove any “actual damages” that he allegedly sustained from AllianceOne pulling his credit report to collect on his parking ticket judgments. The FCRA does not presume actual damages for a failure to comply, whether willful or negligent. See Johnson v. Wells Fargo Home Mortg., Inc., 558 F. Supp. 2d 1114, 1122, aff’d in part and rev’d in part, 2011 U.S. App. LEXIS 2908 (9th Cir. Nev. 2011). Even if this Court finds that AllianceOne negligently violated FCRA, Plaintiff’s claims fail as a matter of law because he has failed to prove he suffered any actual damages. Plaintiff’s Complaint alleges “actual damages” to include “collection of amounts owed, or alleged to be owed, for vehicle parking violations which would not have been collected but for the violations of the FCRA alleged.” 66 In his discovery responses, Plaintiff specified that claims that he sustained the following “actual” damages: “his credit report being negatively impacted which adversely impacting [sic] his ability to obtain credit, denial of a credit card, and the collection of amounts of money that Plaintiff would otherwise not have necessarily paid. [AllianceOne]’s unlawful pull of Plaintiff’s credit report proximately caused [AllianceOne] to seek a judgement [sic] against Plaintiff and execution thereupon, specifically by garnishing Plaintiff’s bank account. Plaintiff’s privacy was invaded by [AllianceOne]’s unlawfully accessing and reviewing confidential information about Plaintiff contained in his credit report.” 67 This cavalcade of damages can be broken down into four categories, none of which Plaintiff has evidence to support. First, Plaintiff claims his credit was negatively impacted. Second, Plaintiff claims he paid Parking Ticket Debts he would not have otherwise paid. Third, Plaintiff claims his bank account was garnished. And finally, Plaintiff claims that his privacy was invaded. Plaintiff has not produced any evidence of any of these alleged damages. 66 Dkt. 1, ¶ 47 67 Cramer Dec. ¶ 3, Ex. B. (Plaintiff’s Supp. Rog Responses No. 9). Case 2:15-cv-01224-RAJ Document 35 Filed 03/16/17 Page 24 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANT ALLIANCEONE’S MOTION FOR SUMMARY JUDGMENT PAGE 25 OF 30 2:15-cv-01224-RAJ GORDON & REES LLP 121 SW Morrison, Suite 1575 Portland, OR 97204 Ph:(503) 227-8269 Fax: (503) 616-3600 1109936/29779914v.1 1. Pulling Plaintiff’s credit report did not impact his credit. Plaintiff received a letter from Bank of America dated May 1, 2015, wherein his application for an “Alaska Airlines Visa Signature card” was denied “because [he has] current or past delinquency, derogatory public record(s), or collection account(s) appearing on [his] credit file.” 68 Facially, this letter makes no mention of “credit inquiries” impacting the bank’s decision. Plaintiff provided no evidence that Bank of America ever saw that AllianceOne had pulled his credit report or that, if Bank of America had seen it, it impacted their decision. 69 Despite repurposing a blog post on soft pull v. hard pull and making a YouTube video on the same topic, Plaintiff claims not to know the difference between the two, and therefore is not fully aware of what he was alleging as damages, nor can he offer the requisite proof. During his deposition, Plaintiff was asked to explain the difference between a “hard” credit pull and a “soft” credit pull. 70 Though he represents to the public that he is a credit repair expert and mentor, Plaintiff either feigned ignorance or displayed remarkably little knowledge about credit pulls in general. Nonetheless, statements in YouTube videos, 71 a book he published, and blog posts on his company’s website detail the differences between “hard” and “soft” credit inquiries. 72 A “hard” credit inquiry is done when an individual is applying for credit from a would-be lender. 73 A hard inquiry might lower an individual’s credit score, depending on a variety of factors, potentially impacting whether an individual would be approved for a future credit application. A “soft” credit inquiry is one which would not be made available to lenders, so it does not impact an individual’s credit score. See, e.g., Banga 68 Rodriguez Dep. Ex. 5. 69 Rodriguez Dep. 104:9 – 107:23. Plaintiff, after providing evasive answers, conceded that he doesn’t know whether Bank of America sees the “soft” credit pulls from AllianceOne, both of which occurred over one year before his credit card application was denied. 70 The FCRA makes no mention of a “hard” credit inquiry or “soft” credit inquiry, so these categories are not relevant to the issue of whether AllianceOne complied with the FCRA. However, the categories are directly relevant to the issue of damages. 71 See https://youtu.be/eMR_HH8dPM “Credit Inquiries - Hard vs Soft Inquiries.” Last visited: March 2, 2017. Plaintiff is the presenter in this video. 72 Statements published by Plaintiff’s company, bearing Plaintiff’s image, or published with Plaintiff being listed as the author, are statements by a party opponent. 73 See https://youtu.be/eMR_HH8dPM “Credit Inquiries - Hard vs Soft Inquiries.” Last visited: March 2, 2017. Case 2:15-cv-01224-RAJ Document 35 Filed 03/16/17 Page 25 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANT ALLIANCEONE’S MOTION FOR SUMMARY JUDGMENT PAGE 26 OF 30 2:15-cv-01224-RAJ GORDON & REES LLP 121 SW Morrison, Suite 1575 Portland, OR 97204 Ph:(503) 227-8269 Fax: (503) 616-3600 1109936/29779914v.1 v. Experian Info. Solutions, Inc., 2013 U.S. Dist. LEXIS 144999, *2 - *4 (N.D. Cal. 2013) (explaining the difference between “hard” and “soft” inquiries). Plaintiff obtained three “Online Personal Credit Report from Experian,” the first of which has a date stamp of “5/21/15, 1:45 PM.” 74 Beginning on page 25 of that report 75 is a section called “Inquiries Shared With Others,” i.e. “hard” credit inquiries. None of those inquiries are from AllianceOne. Beginning on page 27 of that report are inquiries that are, according to the document “not include[d] . . . on credit reports to others.” The document explicitly states that the inquiries listed below “do not affect your credit score.” AllianceOne’s inquiries are listed below as inquiries that do not affect Plaintiff’s credit score. Plaintiff had no information to dispute the information listed in his Experian report. 76 In fact, Plaintiff recommends that people should frequently pull their own credit report, i.e., a soft inquiry, to monitor their credit. Plaintiff has presented no evidence that his credit was negatively impacted by the credit inquiry itself. He was asked, after reviewing the dates of the AllianceOne credit inquiries on December 14, 2013, and April 3, 2014: Q. Do you believe -- do you have any reason to believe that those pulls by AllianceOne affected your credit in any way? A. I can’t confirm or deny whether they affected my credit in any way. Q. I understand that, but do you have any belief that it did for any reason? A. I just really can’t confirm or deny whether that’s true or not. 77 Plaintiff has no evidence to support this claim of damages. 2. Plaintiff is not damaged by having to pay his parking ticket judgments. Plaintiff’s pleaded damages theory is contrary to common sense and the law. The essence of his pleaded damages claim is as follows: 74 Rodriguez Dep. 108:19 – 109:23, Ex. 6. 75 Id. at p. 27 (“Rodriguez000029”). 76 Rodriguez Dep. 123:15 – 125:7. 77 Rodriguez Dep. 124:24 – 125:7. Case 2:15-cv-01224-RAJ Document 35 Filed 03/16/17 Page 26 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANT ALLIANCEONE’S MOTION FOR SUMMARY JUDGMENT PAGE 27 OF 30 2:15-cv-01224-RAJ GORDON & REES LLP 121 SW Morrison, Suite 1575 Portland, OR 97204 Ph:(503) 227-8269 Fax: (503) 616-3600 1109936/29779914v.1 a. Plaintiff owes debts arising from judgments entered on his parking tickets; b. Plaintiff had been successfully avoiding paying Seattle Municipal Court on those judgments; c. But AllianceOne pulled his credit report, and he was damaged because he had to pay the judgments. Plaintiff is asking this Court to rule that swindling a municipality out of validly issued and adjudicated parking ticket judgments is a protectable right, and anytime a person is (allegedly) wrongfully prevented from avoiding payment, the debtor has been damaged. This is not the law; it cannot be the law. The undersigned found no case that states that “the payment of debts a person legally owes cannot also constitute actual damages to that person.” The lack of case law is expected, because the statement is axiomatic. Further driving this point home is that the facts simply do not support Plaintiff’s claim that the pulling of the credit report caused him to pay his adjudicated parking ticket debts. Seattle Municipal Court verified the parking ticket judgments at Plaintiff’s request. Most importantly, it was Plaintiff who called AllianceOne on February 7, 2014, to pay the parking ticket judgments, because a third-party, PayLock, had placed a boot on his vehicle due to his outstanding parking tickets. Plaintiff has not provided any evidence that the December 13, 2013, credit report pull caused an independent third-party to place a boot on Plaintiff’s car. During the February 7, 2014 phone call, Plaintiff disclosed his name, address, and phone number to AllianceOne, and agreed upon a payment plan to pay off his balance. He paid $210 toward his account balance, 78 and then failed to make any subsequent payments on this plan. There is no evidence tying any credit report pulls to payment of any money to AllianceOne. 78 He later contested this charge on his MasterCard as fraudulent. Bolden Dec. ¶ 10, Ex. C. Case 2:15-cv-01224-RAJ Document 35 Filed 03/16/17 Page 27 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANT ALLIANCEONE’S MOTION FOR SUMMARY JUDGMENT PAGE 28 OF 30 2:15-cv-01224-RAJ GORDON & REES LLP 121 SW Morrison, Suite 1575 Portland, OR 97204 Ph:(503) 227-8269 Fax: (503) 616-3600 1109936/29779914v.1 3. Garnishing of a bank account does not give rise to damages. Plaintiff has intimated that a garnishment is somehow an abusive practice. However, a garnishment is a legally authorized mechanism for collecting judgments. 79 Following a legislatively enacted process to collect on outstanding judgments cannot form the basis for a willful violation of the FCRA. Plaintiff admits that his bank account was not successfully garnished. 80 Nonetheless, garnishing an account is a legal and valid way to collect outstanding judgments. 81 The evidence in the record shows that AllianceOne worked with Plaintiff initially to set up a payment plan to allow him to pay his judgment debts. Plaintiff made one payment, which he later fraudulently disputed as fraudulent, and then ceased paying his judgment debts all together. AllianceOne attempted to reach him regarding the payment of the rest of the outstanding amounts, but was unsuccessful. In short, AllianceOne utilized garnishment as a last resort to collect on parking ticket judgments that Plaintiff initially agreed to pay, and then later challenged as fraudulent. Plaintiff admitted no money was garnished and there were no financial consequences to him from the garnishment. 82 AllianceOne used legal processes to collect Plaintiff’s parking ticket judgments, and Plaintiff testified that he is aware of no monetary consequences resulting from AllianceOne’s garnishing of his account. He can prove no damages stemming from the garnishment, nor can he prove damages related to AllianceOne accessing his consumer report. 4. Plaintiff cannot prove invasion of privacy damages. While Ninth Circuit case law does include “emotional distress” damages within “actual damages,” there must be a legally cognizable basis for awarding damages for the emotional distress. See Guimond, 45 F.3d at 1333. Plaintiff must also prove his emotional distress for “invasion of privacy” with “a degree of specificity which may include corroborating testimony or medical and psychological evidence in support of the damage 79 See RCW 6.27.005 et seq. 80 Rodriguez Dep. 102:6-23. 81 See RCW 6.27.005 et seq. 82 Id. at 102:13 – 103:5. Case 2:15-cv-01224-RAJ Document 35 Filed 03/16/17 Page 28 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANT ALLIANCEONE’S MOTION FOR SUMMARY JUDGMENT PAGE 29 OF 30 2:15-cv-01224-RAJ GORDON & REES LLP 121 SW Morrison, Suite 1575 Portland, OR 97204 Ph:(503) 227-8269 Fax: (503) 616-3600 1109936/29779914v.1 award.” Myers v. Bennett Law Offices, 238 F. Supp. 2d 1196, 1206 (D. Nev. 2002) (internal citations omitted). Plaintiff must also prove causation. Plaintiff has no evidence of his emotional distress other than his own self-serving testimony. A plaintiff “must support a claim for damages based on emotional distress with something more than his or her own conclusory allegations.” Id. citing Cousin v. Trans Union Corp., 246 F.3d 359, 371 (5th Cir. 2001). Plaintiff has no evidence that he sought a healthcare provider for any emotional distress arising from his privacy rights being allegedly violated. When asked if there were any “healthcare ramifications” arising from his alleged invasion of privacy, Plaintiff testified: “I don’t recall.” 83 Plaintiff did not learn that his credit report had been accessed until he obtained his Experian report in late May of 2015. Therefore, no emotional distress that he mentions as occurring before that date is directly attributable to AllianceOne accessing his credit report. And without some evidence beyond his own testimony that he sought medical treatment or suffered some emotional distress, Plaintiff cannot legally prevail on this claim. Plaintiff has no such evidence; AllianceOne is entitled to summary judgment. VI. CONCLUSION AllianceOne did not violate the FCRA, because 15 U.S.C. § 1681a(m), coupled with §§ 1681b(c) and (a)(3)(A) work together to provide AllianceOne a permissible purpose to access Plaintiff’s credit report. Moreover, AllianceOne’s interpretation of Pintos II, its understanding of the continuing viability of the “judgment creditor” rule; the lack of an alternative interpretation within the legal community; and the fact that Plaintiff’s parking tickets were judgments when his credit report was pulled, precludes any finding that AllianceOne violated the FCRA “willfully” or “negligently. AllianceOne reasonably and properly relied upon Pintos II’s explicit language, including the interpretation of that case by Experian, in making its decision to reinstate its practice of utilizing credit reports as a tool in debt collection that it had suspended after Pintos 83 Id. at 135:25 – 136:15. Case 2:15-cv-01224-RAJ Document 35 Filed 03/16/17 Page 29 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANT ALLIANCEONE’S MOTION FOR SUMMARY JUDGMENT PAGE 30 OF 30 2:15-cv-01224-RAJ GORDON & REES LLP 121 SW Morrison, Suite 1575 Portland, OR 97204 Ph:(503) 227-8269 Fax: (503) 616-3600 1109936/29779914v.1 I. Finally, Plaintiff has no evidence to support a reckless or unreasonable interpretation of FCRA. Moreover, he has not offered any proof of his claims for damages. For the reasons stated herein, AllianceOne is entitled to judgment in its favor under Fed. R. Civ. P. 56. Dated: March 16, 2017. GORDON & REES LLP By: /s/ Christopher E. Hawk Christopher E. Hawk, WSBA No. 43307 chawk@gordonrees.com David W. Cramer, WSBA No. 49566 dcramer@gordonrees.com 1109936/32042439v.1 Case 2:15-cv-01224-RAJ Document 35 Filed 03/16/17 Page 30 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ORDER ON DEFENDANT ALLIANCEONE’SMOTION FOR SUMMARY JUDGMENT [PROPOSED] PAGE 1 OF 1 2:15-cv-01224-RAJ GORDON & REES LLP 121 SW Morrison, Suite 1575 Portland, OR 97204 Ph:(503) 227-8269 Fax: (503) 616-3600 THE HONORABLE RICHARD A. JONES UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE JESSE RODRIGUEZ, on behalf of himself and all others similarly situated, Plaintiff, v. EXPERIAN INFORMATION SOLUTIONS, INC. and ALLIANCEONE RECEIVABLES MANAGEMENT, INC., Defendants. No. 2:15-cv-01224-RAJ ORDER ON DEFENDANT DEFENDANT ALLIANCEONE’S SUMMARY JUDGMENT [PROPOSED] THIS MATTER, having come before the Court on Defendant AllianceOne Receivables Management, Inc.’s (“AllianceOne”) Motion for Summary Judgment, the Court having reviewed the records and files herein, and specifically: 1. Defendant AllianceOne’s Motion for Summary Judgment; 2. Declaration of David W. Cramer on Summary Judgment, with attached exhibits; 3. Declaration of Tim Bolden on Summary Judgment, with attached exhibits; and the Court being fully advised in the premises, now, therefore, it is ORDERED that 1. Defendant AllianceOne’s Motion for Summary Judgment is hereby GRANTED. 2. All claims against Defendant AllianceOne is hereby dismissed with prejudice. 3. Defendant AllianceOne is hereby dismissed for all purposes as a party to this litigation. ENTERED this ___ day of ___________, 2017. By:__________________________________ Hon. Richard A. Jones U.S. District Court Judge 1109936/32042439v.1 MOTION FOR Case 2:15-cv-01224-RAJ Document 35-1 Filed 03/16/17 Page 1 of 1