Today, I am going to discuss an issue of affirmative defenses and the Fair Credit Reporting Act (“FCRA”). The FCRA covers a lot of ground and imposes a myriad of duties consumer reporting agencies, users of consumer reporters, and furnishers of information. As one appellate court described it, “the breadth and scope of the FCRA is both evident and extraordinary.” Cortez v. Trans Union, LLC, 617 F.3d 688, 721 (3d Cir. 2010). The FCRA, however, does have some potential safe harbors for defendants who are accused of violating the act.
No Strict Liability
First, unlike some other consumer protection statutes, the FCRA is not a strict liability statute, meaning that in order to recover, the plaintiff still has to prove that the defendant’s actions were negligent or willful as set forth in the statute. 15 U.S.C. §§ 1681o, 1681n.
Failure to Follow Reasonable Procedures
Second, an inaccuracy alone does not normally establish a FCRA violation. The statute requires that consumer reporting agencies “follow reasonable procedures to assure maximum possible accuracy” in preparing reports. 15 U.S.C. § 1681e(b). Thus, a jury needs to find that that the report was inaccurate because of the failure to follow reasonable procedures in order for the plaintiff to recover.
Affirmative “Reasonable Procedures” Defenses
Third, in certain sections of the statute, the FCRA specifically provides an affirmative “reasonable procedures” defense for the defendant. For example in § 1681m, which regulates the providing of adverse action notices, Congress provided for a “reasonable procedures” defense in two places: “A person shall not be liable for failure to perform the duties required by this section if, at the time of the failure, the person maintained reasonable policies and procedures to comply with this section.” 15 U.S.C. § 1681m(h)(7); id. § 1681m(c) (“No person shall be held liable for any violation of this section if he shows by a preponderance of the evidence that at the time of the alleged violation he maintained reasonable procedures to assure compliance with the provisions of this section.”) A similar provision appears in § 1681d relating to investigative consumer reports. 15 U.S.C. § 1681d(c) (“No person may be held liable for any violation of subsection (a) or (b) of this section if he shows by a preponderance of the evidence that at the time of the violation he maintained reasonable procedures to assure compliance with subsection (a) or (b).”)
Thomas v. Trans Union, LLC.
A question has arisen in litigation about whether, this “reasonable procedures” defense can apply to other sections of the statute where it is not otherwise specifically provided. In Thomas v. Trans Union, LLC., 197 F. Supp. 2d 1233, 1237 (D. Or. 2002), the plaintiff disputed 14 items on her credit report, and then less than a month later, disputed another 24 items, most of which overlapped with her previous dispute. Thomas, 197 F. Supp. 2d at 1235. The plaintiff, however, asserted that one of the newly disputed items did not overlap, and that the consumer reporting agency failed to reinvestigate the dispute as required by § 1681i. Id. The plaintiff sued and moved for partial summary judgment for the defendant’s failure to reinvestigate.
The court in Thomas, while acknowledging that “§ 1681i does not contain explicit reasonable procedures provisions” and finding “no cases directly holding that the reasonable procedures defense is available to an agency with respect to § 1681i” nevertheless engrafted a reasonable procedures defense into § 1681i out of a concern that finding otherwise would turn the FCRA into a strict liability statute. Id. at 1237. Other courts have followed Thomas’ lead and have allowed “reasonable procedures” defenses where not explicitly provided for in the statute. See Lenox v. Equifax Info. Servs. LLC, No. 05-1501-AA, 2007 WL 1406914, at *6 (D. Or. 2007); Acton v. Bank One Corp., 293 F. Supp. 2d 1092, 1099 (D. Ariz. 2003).
Discussion
I think Thomas was incorrectly decided. First, “[w[here Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion.” Toor v. Lynch, 789 F.3d 1055, 1062 (9th Cir. 2015) (internal quotation marks omitted); see also Transamerica Mortgage Advisors, Inc. v. Lewis, 444 U.S. 11, 19 (1979). (“[W]here a statute expressly provides a particular remedy or remedies, a court must be chary of reading others into it.”) Because Congress knows how to provide a reasonable procedures defense but did not do so with respect to a consumer reporting agencies’ obligations to reinvestigate under §1681i, there is no reasonable procedures defense available for violations of that requirement.
Second, in Thomas, the court’s mixing and matching of disparate portions of the FCRA to create the “reasonable procedures” defense was unsound because the “reasonable procedures” provisions in the FCRA on which the defense is based differ significantly. Section 1681e(b) requires that a consumer reporting agency “follow reasonable procedures,” while the affirmative defenses in §§ 1681m(c), 1681m(h)(7), and 1681d(c) require only that a consumer reporting agency “maintain reasonable procedures.” There is an important and potentially outcome determinative difference between “following” and “maintaining” reasonable procedures, and the differences between the two implicates important policy concerns in the requirements of the FCRA. These concerns further illustrate that the availability of “reasonable procedures” defenses in the FCRA is a task best left for Congress and not for the judiciary.
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