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USDC: CIVIL PROCEEDURE - class certification of Fair Cred Reporting Act claims denied

Joan Lockhart Gardner and
Susan Bofferding, on behalf of
themselves and all others
similarly situated,
v. Civil No. 06-3102 ADM/AJB
Equifax Information Services, LLC,
Thomas J. Lyons, Jr., Esq., Consumer Justice Center, P.A., Vadnais Heights, MN, on behalf of
Barry Goheen, Esq., King & Spalding LLP, Atlanta, GA, on behalf of Defendant.
On June 20, 2007, oral argument before the undersigned United States District Judge was
heard on Plaintiffs Joan Lockhart Gardner (Gardner) and Susan Bofferdings (Bofferding)
(collectively, Plaintiffs) Motion for Class Certification [Docket No. 15]. In their Amended
Complaint [Docket No. 27], Plaintiffs, on behalf of themselves and all other individuals similarly
situated, allege a claim for violation of the Fair Credit Reporting Act (FCRA), 15 U.S.C.
1681i, against Defendant Equifax Information Services, LLC (Equifax).
A. Motion for Class Certification
Plaintiffs seek class certification on behalf of themselves and others similarly situated for
a claim based on Equifaxs alleged violations of the FCRA. Am. Compl. 44; Gardner Decl.
[Docket No. 20] 4; Bofferding Decl. [Docket No. 21] 16. Specifically, Plaintiffs allege
Equifax violated the FCRA by failing to fulfill its statutorily imposed duty to reinvestigate
alleged inaccuracies in consumer credit reports upon receipt of a dispute communicated by
Plaintiffs. Am. Compl. 44; Gardner Decl. 3; Bofferding Decl. 15; see 15 U.S.C. 1681i
(2006). Both Bofferding and Gardner seek to represent the proposed class. Gardner Decl. 7;
Bofferding Decl. 19. Plaintiffs request relief in the form of statutory damages, attorney fees,
and costs resulting from the violations alleged. Am. Compl. at 7. The class proposed for
certification by Plaintiffs is defined as follows:
A nationwide class of consumers who (a) live in US Postal zip codes allegedly owned by
Equifaxs affiliate CSC Credit Services, but whose credit files are stored on the Equifax
database; (b) have communicated a dispute pursuant to 15 U.S.C. 1681i directly to
Equifax; (c) within the past two years from the date of filing of this complaint; (d) which
disputes have not been investigated by Equifax.
Id. 31.
B. The Named Plaintiffs
1. Joan Lockhart Gardner
On May 31, 2005, Gardner purchased her credit report from Equifax. Id. 5. On
November 28, 2005, Gardner sent a dispute letter to Equifax, stating she was a victim of identity
theft and disputing several inaccuracies on her credit report. Id. 6. Equifax acknowledged
receipt of Gardners dispute letter in a reply to her, sent December 15, 2005, which further stated
1 Equifax and CSC are consumer reporting agencies. Fluellen Decl. (Def.s Ex. [Docket
No. 38] A) 4, 7. CSC licenses from Equifax the computer system used to manage consumer
credit files. Id. 7. Despite using the same system, Equifax and CSC maintain independent files
for consumers based on the consumers zip codes, and one company cannot access the other
companys files without permission. Id. 15; see generally Morris v. Equifax Info. Servs., LLC,
457 F.3d 460, 466 (5th Cir. 2006) (providing extensive description of the credit reporting
industry and the commercial relationship between Equifax and CSC).
her correspondence was forwarded to CSC Credit Services Inc. (CSC), the company that
researches disputes arising in the zip code in which Gardners address is located.1 Id. 8-9.
The reply instructed Gardner to contact CSC directly should she have any further questions or
issues regarding her credit file. Id. 9. Equifax also sent a letter to Gardner on December 16,
2005, stating a fraud alert had been placed on her credit file. Id. 10. On February 28, 2006,
Gardner sent another dispute letter to Equifax, to which Gardner did not receive a reply. Id.
2. Susan Bofferding
In December 1998, Bofferding leased a car and financed the lease through Wells Fargo
Auto Finance. Id. 17. In July 2003, Bofferding returned the car to the dealership and paid the
lease in full. Id. 18. The dealership was late in making payments on the vehicle lease after the
car was returned, and Wells Fargo reported the car as repossessed. Id. 20-21.
In June 2006, Bofferding received letters denying her application for a student loan on
behalf of her son. Id. 22. One of the denial letters stated that the credit decision was based on
information obtained in a credit report from Equifax-CSC Credit Services. Id. 23. The letter
explained her right as a consumer to dispute any inaccuracies contained in her credit report and
to direct any communication regarding such disputes to Equifax. Id. 24. Being apprised of her
rights, Bofferding communicated an alleged inaccuracy in her credit report to Equifax in a
2 The file of a consumer is owned by a credit reporting agency if that consumer lives in
a zip code that is overseen by that credit reporting agency. See Morris, 457 F.3d at 466 n.9.
dispute letter sent on June 30, 2006, to which Bofferding did not receive a reply. Id. 27-28.
C. Equifaxs Policy Upon Receipt of a Dispute Letter
Equifax generally does not perform reinvestigation of disputes initiated by consumers
located in CSCs zip codes.2 Fluellen Decl. 12-15. Equifax does, in certain circumstances,
reinvestigate a dispute on a CSC file, but typically only with the advance permission and at the
direction of CSC. Id. 16-17; Poch Dep. (Def.s Ex. B; Lyons Aff. [Docket No. 44] Ex. A) at
49. Therefore, Equifaxs general policy upon receiving a dispute letter regarding a CSC-owned
file is to forward the dispute to CSC. Fluellen Decl. 19; Poch Dep. at 5.
A. Rule 23 of the Federal Rules of Civil Procedure
The requirements for class certification are set forth in Rule 23 of the Federal Rules of
Civil Procedure (Rule 23). The proposed class must satisfy the four explicit requirements of
Rule 23(a), including: (1) numerosity (the class is so numerous that joinder of all members is
impracticable), (2) commonality (there are questions of law or fact common to the class), (3)
typicality (the claims or defenses of the representative parties are typical of the claims or
defenses of the class), and (4) adequacy (the representative parties will fairly and adequately
protect the interests of the class). Fed. R. Civ. P. 23(a); Donaldson v. Pillsbury Co., 554 F.2d
825, 829 (8th Cir. 1977). Rule 23 also implicitly requires that named parties be members of the
objectively ascertainable class they seek to represent. See Powell v. Natl Football League, 711
F. Supp. 959, 966 (D. Minn. 1989). Additionally, a plaintiff must fulfill the requirements of a
3An additional implicit requirement is that the named parties be members of the proposed
class. See Powell, 711 F. Supp. at 966. Defendant does not appear to challenge that both
Gardner and Bofferding are members of the proposed class.
Rule 23(b) category in order to obtain certification for the proposed class. Fed. R. Civ. P. 23(b);
Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 163 (1974).
The plaintiff bears the burden of proving both the threshold requirements of Rule 23(a)
and fulfillment of one of the three subsections set forth in Rule 23(b). Coleman v. Watt, 40 F.3d
255, 258 (8th Cir. 1994). When considering a motion for class certification, the court takes the
substantive allegations in the plaintiffs complaint as true, as the issue is resolved, not by an
investigation into the merits of the claim, but rather by consideration of the class certification
criteria. Thompson v. Am. Tobacco Co., 189 F.R.D. 544, 549 (D. Minn. 1999); Lockwood
Motors, Inc. v. Gen. Motors Corp., 162 F.R.D. 569, 573 (D. Minn. 1995). Nonetheless, a motion
for class certification generally involves considerations that are enmeshed in the factual and
legal issues comprising the plaintiffs cause of action. Coopers & Lybrand v. Livesay, 437
U.S. 463, 469 (1978) (citation omitted). Only after a rigorous analysis of the proposed class and
the requirements of Rule 23 may a court grant class certification. See Gen. Tel. Co. v. Falcon,
457 U.S. 147, 161 (1982). Furthermore, a district court retains discretion in the decision to
certify a class. See In re St. Jude Med. Inc., 425 F.3d 1116, 1119 (8th Cir. 2005).
B. Rule 23(a) of the Federal Rules of Civil Procedure
1. Implicit requirements of Rule 23(a)
In addition to the explicit requirements enumerated in Rule 23(a), an implicit requirement
is that a proposed class be definable.3 Powell, 711 F. Supp. at 966. Plaintiffs must establish that
the class, as proposed, is objectively ascertainable and a precise definition of the class must be
given. Roman v. ESB, Inc., 550 F.2d 1343, 1348 (4th Cir. 1976).
Equifax challenges Plaintiffs fulfillment of the objectively ascertainable class
requirement, stating the determination of class membership requires individual inquiry and is not
capable of ready identification. Def.s Oppn Mem. [Docket No. 36] at 13 (citing Buford v. H &
R Block, Inc., 168 F.R.D. 340, 346 (S.D. Ga. 1996)). Equifax points to occasions in which it
does investigate CSC-owned files, and the question of whether a class member directly
communicated a dispute to Equifax, as examples of individual assessments that would be
necessary to define the class. Id. at 14-16.
The Court finds the class, as proposed, is objectively ascertainable. Whether or not
Equifax followed its general business practice in a particular instance would likely be readily
determined with a cursory look at the records Equifax purportedly possesses. See Lyons Aff.
Ex. E at 3-5. Also, determining if Equifax directly received a communication from a potential
class member regarding a dispute can be considered objectively. There would be no difficult
determination . . . of who is in the class and who is not, like there was in Foster v. St. Jude
Medical, Inc., 229 F.R.D. 599, 607 (D. Minn. 2005). Because the proposed class is objectively
ascertainable, the Court turns to the enumerated requirements of Rule 23(a).
2. Explicit Requirements of Rule 23(a)
a. Numerosity
The first requirement of Rule 23(a) is that the potential class members be so numerous
that joinder is impracticable. Fed. R. Civ. P. 23(a). Impracticability of joinder is a question to
be determined by the court based upon all the circumstances surrounding a case. Boyd v.
Ozark Air Lines, Inc., 568 F.2d 50, 55 (8th Cir. 1977). Possible considerations include the
nature of the action, number of class members, and the size of the potential individual claims.
Sonmore v. CheckRite Recovery Servs., Inc., 206 F.R.D. 257, 261 (D. Minn. 2001). Equifax
does not challenge Plaintiffs fulfillment of this requirement and the Court finds the requirement
sufficiently satisfied. The potential class members are spread across a wide geographic area
based on the zip codes owned by CSC, ranging from Texas to Minnesota. Poch Dep. at 8. More
important is the large number of potential class members, with an early estimate of potential
class members greater than 100,000. Am. Compl. 32. Given the sizable number and wide
geographic dispersion of potential class members, the Court finds joinder to be impracticable,
fulfilling the numerosity requirement.
b. Commonality
Rule 23(a)(2) requires common questions of law or fact to be present for class
certification to be approved. Fed. R. Civ. P. 23(a)(2). This requirement is fulfilled upon a
showing that the legal question linking the class members is substantially related to the
resolution of the litigation. DeBoer v. Mellon Mortgage Co., 64 F.3d 1171, 1174 (8th Cir.
1995) (citations and quotation marks omitted). This requirement is a relatively easy threshold
inquiry, requiring only some common questions of law or fact amongst the class members. In re
Hartford Sales Practices Litig., 192 F.R.D. 592, 603 (D. Minn. 1999).
Plaintiffs argue the potential class members all have claims stemming from Equifaxs
failure to reinvestigate a communicated dispute. The success of these claims, Plaintiffs argue,
hinges upon the determination of the legality of what is alleged to be Equifaxs common
business practice. Pls. Mem. [Docket No. 17] at 10. The Court finds the commonality
requirement of Rule 23(a)(2) to be satisfied. A determination of the legality of Equifaxs
allegedly regular business practice is necessary to the resolution of the claims all the proposed
class members could bring individually under the FCRA. This common question is the only one
identified by Plaintiffs in their Amended Complaint, but is sufficient to meet the commonality
requirement under standards enunciated by the Eighth Circuit Court of Appeals. See Am.
Compl. 38; Paxton v. Union Natl Bank, 688 F.2d 552, 561 (8th Cir. 1982); see also
Thompson, 189 F.R.D. at 549. A proposed class may satisfy the commonality requirement but
still fail under the far more demanding predominance requirement of Rule 23(b)(3). Amchem
Prods., Inc. v. Windsor, 521 U.S. 591, 624 (1997). Nonetheless, the Court finds that common
issues of law or fact exist such that the commonality requirement of Rule 23(a)(2) is fulfilled.
c. Typicality
Rule 23(a) further requires the claims or defenses of the representative parties are
typical of the claims or defenses of the class. Fed. R. Civ. P. 23(a)(3). Typicality is present
when the claims of the named plaintiffs emanate from the same event or are based on the same
legal theory as the claims of the class members. In re Potash Antitrust Litig., 159 F.R.D. 682,
690 (D. Minn. 1995) (quotations omitted). So long as other class members have claims similar
to the named plaintiff, typicality is fairly easily established. DeBoer, 64 F.3d at 1174.
Plaintiffs argue typicality is established because the named representatives claims arise
from the same conduct as the claims of other members of the putative class; namely, Equifaxs
alleged failure to reinvestigate consumer disputes. Pls. Mem. at 12. Equifax does not challenge
Plaintiffs fulfillment of the typicality requirement. See Def.s Oppn Mem. at 13-24. The Court
finds that Plaintiffs have fulfilled the burden of establishing the typicality requirement. The
claims of the representative Plaintiffs arise from an alleged violation of the FCRA, 15 U.S.C.
4 Plaintiffs assert their counsel of record is adequate in light of previous experience
litigating class actions as well as individual cases under the FCRA. Pls. Mem. at 13; see Lyons,
Sr. Decl. [Docket No. 18]; Lyons, Jr. Decl. [Docket No. 19]. Equifax does not challenge this
1681i, as do the claims of the potential members of the proposed class. All the claims, therefore,
would necessarily involve proving a violation of a requirement imposed by 1681i. The low bar
for fulfillment of this requirement allows for the existence of some factual differences, and the
Court finds the underlying legal issue in the class members claims similar enough to satisfy the
typicality requirement.
d. Adequacy
The fourth enumerated condition, with its focus on protecting the interests of absent class
members, requires the representative parties [to] fairly and adequately protect the interests of
the class. Fed. R. Civ. P. 23(a)(4). While related to the typicality requirement, adequacy of
representation is distinct and present when (1) the representatives and their attorneys are able
and willing to prosecute the action competently and vigorously and (2) each representatives
interests are sufficiently similar to those of the class that it is unlikely that their goals and
viewpoints will diverge. In re GenesisIntermedia, Inc. Sec. Litig., 232 F.R.D. 321, 330 (D.
Minn. 2005).4 The adequacy requirement inquiry serves to uncover conflicts of interest
between named parties and the class they seek to represent. Amchem, 521 U.S. at 625.
Equifax argues the named Plaintiffs election to forego actual damages or a negligence
claim renders them inadequate representatives of the class. Def.s Oppn Mem. at 18.
Furthermore, Equifax avers that opt-out and notice procedures insufficiently protect absent class
members from the loss of potential claims for actual damages. Id. at 23-24. Plaintiffs, however,
5 In her deposition, Fluellen states: [b]ut I personally view that there is no violation; and
my personal view is that there wouldnt be any damages. Fleullen Dep. at 16.
contend that their failure to pursue actual damages or a negligence claim does not render them
inadequate representatives and that notice and opt-out procedures allow any potential members
to retain claims for actual damages if they so desire. See Pls. Reply Mem. [Docket No. 43] at 7-
11 (citing Murray v. GMAC Mortgage Corp., 434 F.3d 948, 953 (7th Cir. 2006)).
Plaintiffs rely on Murray v. GMAC Mortgage Corp., 434 F.3d 948 (7th Cir. 2006), for
the proposition that failure to pursue actual damages does not preclude a finding of adequacy.
Pls. Reply Mem. at 9. The proposed class in Murray sought statutory damages for violations of
15 U.S.C. 1681b(c)(1)(B)(i) and m(d)(1)(D), resulting from a potential lenders failure to
make a firm offer of credit upon accessing a consumers credit file without the consumers
consent and failure to provide clear disclosure of the consumers right to close her credit
information to parties lacking prior consent. 434 F.3d at 951. In examining the propriety of
seeking only statutory but not compensatory damages, the Murray court stated: Yet individual
losses, if any, are likely to be smalla modest concern about privacy, a slight chance that
information would leak out and lead to identity theft. Id. at 953. Murray is not binding
authority on this Court. But if it were, this Court finds that in the instant case, it is not clear
[t]hat actual loss is small and hard to quantify. Id. Requiring class members to affirmatively
opt-out to preserve actual damage claims is not justified based on the size and quantification
issue of damages in this case.
Plaintiffs argue actual damages are unlikely to be imposed, based on a deposition of an
Equifax employee. Pls. Reply Mem. at 9 (citing Fluellen Dep. (Lyons Aff. Ex. B) at 16).5
However, Plaintiffs offer no other argument for the claim that actual damages are unlikely to
occur as a result of a 15 U.S.C. 1681i violation. Gardner claims to have suffered actual
damages and both representatives will relinquish their respective claims for actual damages in
favor of the class action, despite it being a potential disadvantage to themselves. Gardner Dep.
(Def.s Ex. C) at 33, 37; Bofferding Dep. (Def.s Ex. D) at 65. If the named representatives are
truly representative of the class, as Plaintiffs assert, then absent class members would suffer this
same disadvantage and lose claims for actual damages should they fail to opt-out of the class
The Court finds the Plaintiffs to be inadequate representatives. In order to ensure the
cohesion necessary to avoid conflict within the class, the Plaintiffs seek to place a burden on
members of the potential class to opt-out if they wish to retain their legal claim for actual
damages. This places a burden on too many absent class members who may have a significant
actual damage claim and the Court is unwilling to effectively bar absent class members future
legal claims because of the failure of those parties to opt-out. See Phillips Petroleum Co. v.
Shutts, 472 U.S. 797, 805 (1985) (discussing the effects of res judicata). While the Court
acknowledges the existence of the opt-out mechanism as a viable method to avoid some conflict
within a class, opt-out is not a sufficient cure for the inadequacy of representation in this case.
See Clark v. Experian Info. Solutions, Inc., 2001 WL 1946329, at *4 (D.S.C. Mar. 19, 2001)
(denying class certification motion on adequacy grounds because of named Plaintiffs failure to
pursue actual damages); Thompson, 189 F.R.D. at 551 (This possible prejudice to class
members is simply too great for the Court to conclude that the named Plaintiffs interests are
aligned with those of the class.).
The Plaintiffs rely on the decision in Egge v. Healthspan Services Co., 208 F.R.D. 265
(D. Minn. 2002), in arguing that adequacy of representation is fulfilled. See Pls. Reply Mem. at
7-10. In Egge, a class sought certification for claims resulting from a violation of the Fair Debt
Collection Practices Act. 208 F.R.D. at 266. Both statutory and actual damages were sought by
the class. Id. at 271. An adequacy issue in Egge was whether a named party that had not
suffered actual damages could provide adequate representation of a class seeking to recover
actual damages. Id. at 269. In Egge, there was no concern of absent class members losing future
claims for actual damages, which is the concern regarding the adequacy of the named parties in
the instant case. The Court in Egge states: The possibility that putative class members would
be entitled to greater recovery should they pursue claims on their own arises in every class
action, but it is not grounds for denying class certification, if the other criteria are met. Id. at
272. In the instant case, the other criteria for class certification are not all met, further
distinguishing this case from the Egge case on which Plaintiffs rely. The opt-out mechanism is
not meant to ensure lack of conflict within the class by forcing a large number of individuals to
affirmatively retain their legal rights or lose their claims. If this were the case, any person would
be an adequate representative of a proposed class so long as there was an opt-out procedure, and
there would be no need for an adequacy requirement.
C. Rule 23(b) of the Federal Rules of Civil Procedure
Plaintiffs seek to have the proposed class certified under Rule 23(b)(3), which requires
common questions of law or fact to predominate over individual questions as well as a
determination that the class action mechanism is superior to any alternative form of litigation for
the same claims. Fed. R. Civ. P. 23(b)(3).
1. Superiority
Rule 23(b)(3) requires class certification to be ordered only in the event of a finding that
the class action mechanism is superior to alternative forms of litigation. Fed. R. Civ. P. 23(b)(3).
Rule 23(b)(3) offers the following factors for courts to consider in the superiority analysis:
(A) the interest of members of the class in individually controlling the prosecution or
defense of separate actions; (B) the extent and nature of any litigation concerning the
controversy already commenced by or against members of the class; (C) the desirability
or undesirability of concentrating the litigation of the claims in the particular forum; (D)
the difficulties likely to be encountered in the management of a class action.
Plaintiffs contend the interest of class members in controlling individual litigation is
lacking, stating that the expense and burden of individual litigation make it difficult, if not
impossible, for members of the class to redress the wrongs done to them individually, Pls.
Mem. at 21, and [a]bsent a class action it is unlikely that most putative class members would
bring individual suits against the Defendant. Pls. Reply Mem. at 21. However, the costs and
attorneys fees provisions of the FCRA provide sufficient incentive for bringing individual
claims. See 15 U.S.C. 1681n(a)(3). The attorneys fees provision, allowing harmed
individuals to pursue meritorious claims without incurring financial detriment, weighs against a
finding of class action superiority over other litigation mechanisms. See Jones v. CBE Group,
Inc., 215 F.R.D. 558, 570 (D. Minn. 2003) (finding no lack of incentive for individuals to pursue
actions under the Fair Debt Collection Practices Act, which provides for actual damages,
statutory damages of ,000 plus costs and attorneys fees) (citing 15 U.S.C. 1692k); cf.
Alberts v. Nash Finch Co., Civ. No. 05-0887 PJS/JJG, 2007 WL 628388, at *9 (D. Minn. Feb.
15, 2007) (distinguishing mandatory from permissive fee-shifting provisions in finding
superiority of class action mechanism despite presence of permissive fee-shifting provision).
The Court also has manageability concerns regarding the class action as proposed by
Plaintiffs because of the individual nature of the issues involved in this case. Issues such as the
reasonableness of Equifaxs conduct along with a determination of the willfulness of the
violation are of such an individual nature that maintenance of a class action would become
unwieldy. See Fed. R. Civ. P. 23(b)(3)(D).
The Motion for Class Certification fails primarily because the class action mechanism is
not a superior method of resolving the claims at issue. Nonetheless, in the interest of
completeness, a discussion of the predominance requirement will be undertaken as well.
2. Predominance
The Rule 23(b)(3) predominance inquiry tests whether proposed classes are sufficiently
cohesive to warrant adjudication by representation. Amchem, 521 U.S. at 623. In examining
this requirement, the Court is to conduct a limited preliminary inquiry, looking behind the
pleadings . . . to determine whether, given the factual setting of the case, if the plaintiffs general
allegations are true, common evidence could suffice to make out a prima facie case for the
class. Blades v. Monsanto Co., 400 F.3d 562, 566 (8th Cir. 2005) (internal citation omitted).
The nature of the evidence that will suffice to resolve a question determines whether the
question is common or individual. Id.
Plaintiffs assert [t]he legal question of whether Defendants act of failing to investigate
consumer disputes violates the FCRA is common to all class members, and there will be no
individualized legal questions. Pls. Mem. at 16. Plaintiffs also argue the factual evidence
necessary for resolution of the class action is common to all members of the class and declare
that individual determinations of fact are unnecessary for the resolution of the action. Id.
Establishing Equifaxs liability for a violation of 15 U.S.C. 1681i is an inappropriate
question for resolution on a class-wide basis due to the individual nature of the reasonableness
and willfulness standards. Undoubtedly, an issue common to all members of the proposed class
is whether Equifax violated the FCRA by forwarding disputes emanating from CSC-owned zip
codes to CSC rather than reinvestigating the disputes itself. However, the issue cannot be
resolved on class-wide basis without substantial individual inquiry.
Plaintiffs allege Equifax violated 1681i, which requires a consumer reporting agency,
upon receipt of notice from a consumer, to conduct a reasonable reinvestigation to determine
whether the disputed information is inaccurate. 15 U.S.C. 1681i(a)(1)(A). In order to recover
the statutory damages sought, Plaintiffs would have to prove Equifax acted willfully in
violating the reasonable reinvestigation requirement of 1681i. See 15 U.S.C. 1681n(a);
Safeco Ins. Co. of Am. v. Burr, 127 S. Ct. 2201, 2206 (2007). The Eighth Circuit has stated: To
show willful noncompliance with the FCRA, the plaintiff must show that the defendant
knowingly and intentionally committed an act in conscious disregard for the rights of others.
Bakker v. McKinnon, 152 F.3d 1007, 1013 (8th Cir. 1998) (quoting Cushman v. Trans Union
Corp., 115 F.3d 220, 226 (3d Cir. 1997) (citations omitted)). Furthermore, the Supreme Court
has recently interpreted willfully in 15 U.S.C. 1681n(a) to include violations resulting from a
reckless disregard of a statutory duty imposed by the FCRA. Safeco, 127 S. Ct. at 2216.
Determination on the reasonableness or willfulness of Equifaxs actions requires
examination of each particular dispute letter, Equifaxs response, and subsequent communication
and actions taken in response to that individual dispute. The forwarding of a consumer dispute
to another consumer reporting agency may be considered reasonable in some instances and not
6 After oral argument was heard on this matter, Plaintiffs submitted a letter [Docket No.
49] calling attention to the recent decision of Jancik v. Calvary Portfolio Services, LLC, Civ. No.
06-3104 MJD/AJB, 2007 WL 1994026 (D. Minn. July 3, 2007). The Jancik case, however, is
not particularly instructive given its factual and legal differences. The plaintiff in Jancik sought
both statutory and actual damages for violations of the Fair Debt Collection Practices Act on
in others, depending upon the nature of the communicated dispute and the type of inquiry
necessary to sufficiently investigate that dispute. Also, an inquiry into the willfulness of
Equifaxs behavior examines the totality of the circumstances involved in a consumers
interaction with a credit reporting agency. Barnett v. Experian Info. Solutions, No. Civ. A.
2:00CV175, 2004 WL 4032909, at *5 (E.D. Tex. Sept. 30, 2004). Accordingly, any willfulness
investigation will inherently involve individualized issues. A totality of the circumstances
inquiry necessary to determine the reasonableness and willfulness of Equifaxs behavior cannot
occur on a class-wide basis.
Plaintiffs argue the possibility of subclasses remedies the problem of individualized
issues. Pls. Reply Mem. at 20. The creation of subclasses is an inappropriate remedy for this
problem. See Smith v. Brown & Williamson Tobacco Corp., 174 F.R.D. 90, 98 (W.D. Mo.
1997). In order to properly place the class members into subclasses, an in-depth inquiry into the
dispute letters and what they communicated, in addition to Equifaxs response, would have to be
undertaken. Such an in-depth inquiry to properly develop subclasses removes one of the benefits
of the class action mechanism in the first place, which is the avoidance of individual inquiry.
The issues demanding individualized inquiry predominate over common legal and factual
issues in this case. Although a class-wide common question exists, the issues of liability and
damages are questions that are individual in nature and therefore, not suitable for resolution as a
class action. Therefore, the Motion for Class Certification fails on these additional grounds.6
behalf of 9,697 putative class members. Jancik, 2007 WL 1994026 at *1. The Court also finds
that in the instant case, the attorneys fees provision provides sufficient incentive for individual
plaintiffs to bring suit, should they feel aggrieved by a violation of the FCRA.
Based upon the foregoing, and all the files, records, and proceedings herein, IT IS
HEREBY ORDERED that Plaintiffs Motion for Class Certification [Docket No. 15] is
s/Ann D. Montgomery
Dated: August 6, 2007.


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        Not File a Police Report



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Copyright © Michael E. Douglas, Attorney at Law, Saint Paul MN. All Rights Reserved.
Minnesota Law Firm representing Personal Injury, Car / Auto Accident, Workers Compensation, Medical Malpractice, Social Security Disability claims.
Dedicated to Injured Workers, Victims of Negligence, Car Accidents, Victims of Fraud, and those in need of legal assistance.