Date: 02-02-2006

Case Style: Stephen G. Levine v. World Financial Network National Bank, Structure, Inc., Experian Information Solutions, Inc.

Case Number: 04-16428

Judge: Brich

Court: United States Court of Appeals for the Eleventh Circuit on appeal from the Northern District of Georgia, Fulton County

Plaintiff's Attorney: Unknown

Defendant's Attorney: Unknown

Description:

In this case, we must decide whether Steven Levine is entitled to offer evidence in support of his claim that Experian Information Solutions, Inc., ("Experian"), a consumer reporting agency, violated the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681 et seq. On appeal, Levine challenges the district court's order, which granted Experian's motion to dismiss his complaint for failure to state a claim. Levine's complaint alleged that Experian violated FCRA when it provided his credit report to a former creditor with whom Levine no longer had an open or active account. Levine claims that Experian did not make a reasonable effort to safeguard his confidential information and that it had reasonable grounds to believe that the request was for an impermissible purpose under the FCRA, notwithstanding the fact that the former creditor stated the report was for "account review." Concluding that Levine has made out a prima facie claim under 15 U.S.C. § 1681n, we REVERSE the district court's order and REMAND for proceedings consistent with this opinion.

I. Background

The rather brief factual background to this action is as follows: Structure, Inc., ("Structure") is a clothing retailer that issued a store credit card account to Levine. This account was operated through a financial affiliate of Structure, World Financial National Network Bank ("WFNNB"). Levine paid the account in full and closed it sometime in 1998. The fact that the account was paid in full and voluntarily closed by Levine was shown on his Experian credit report.

In May 2002 and again in August 2002, despite the fact that the Structure account had been closed for several years, Experian sold Levine's credit report to Structure. Structure had informed Experian that it wanted the report for "account review" purposes. Structure reported no changes in Levine's account to Experian, and Levine made no communications to Experian or Structure regarding the closed account.

On 10 May 2004, Levine filed a complaint in the United States District Court for the Northern District of Georgia against Experian, Structure, and WFNNB. On 8 November 2004, the district court granted Experian's motion to dismiss and Structure and WFNNB's motion to dismiss. In granting Experian's motion, the district court stated that "FCRA does not suggest that a credit report may only be permissibly obtained for account review during particular points in the parties' relationship" and further commented that Experian had no duty to investigate a facially valid request for a consumer report. R2-26 at 10. The court ultimately held that Levine's "stand alone claim of emotional distress" was too "amorphous to support his demand for damages" and that he had not alleged "any objectively verifiable harm." Id. at 15. The court also concluded that Levine had not sought statutory damages. On 8 December 2004, Levine filed a notice of appeal seeking a reversal of the district court's order granting the motions to dismiss. While Levine later settled his claims against Structure and WFNNB, the appeal continued for his claim against Experian.

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Outcome: The district court dismissed Levine’s complaint for failure to state a claim under FCRA. We conclude that a question of fact remains as to whether Experian had reasonable grounds to know that the request for Levine’s credit report was for an impermissible purpose or whether Experian made reasonable efforts to verify the request. We further conclude that Levine has made a prima facie claim for a willful violation of FCRA pursuant to 15 U.S.C. § 1681n, which provides for compensatory, statutory, and punitive damages. Levine is therefore entitled to proceed with discovery. REVERSED and REMANDED.

Plaintiff's Experts: Unknown

Defendant's Experts: Unknown

Comments: None