The question is based on business Law but it falls under economy for assignment.

Question

The question is based on business Law but it falls under economy for assignment.

case concerns the Defendants’ receipt and use of Christine Rodgers’ consumer report. Ms. Rodgers gave birth to a daughter, Meghan, on May 4, 2001. Meghan’s father is Raymond Anthony. Barbara McCullough, an attorney, represented Mr. Anthony in a child custody suit against Ms. Rodgers in which Mr. Anthony sought to obtain custody and child support from Ms. Rodgers. Ms. McCullough received, reviewed, and used Ms. Rodgers’ consumer report in connection with the child custody case.

Ms. McCullough instructed her secretary, to obtain Ms. Rodgers’ consumer report. She reviewed the report in preparation for her examination of Ms. Rodgers during a hearing. She also used the report during the hearing, including attempting to move the document into evidence and possibly handing it to the presiding judge.

The dispute in this case centers around whether Ms. McCullough obtained and used Ms. Rodgers’ consumer report for a purpose permitted under the Fair Credit Reporting Act (the “FCRA”). Plaintiff contends that Ms. McCullough, as well as her law firm, Wilkes, McCullough & Wagner, a partnership, and her partners, Calvin J. McCullough and John C. Wagner, are liable for the unlawful receipt and use of Ms. Rodgers’ consumer report in violation 15 U.S.C. §§ 1681o (negligent failure to comply with the FCRA) and 1681n (willful failure to comply with the FCRA or obtaining a consumer report under false pretenses). Plaintiff has also sued Defendants for the state law tort of unlawful invasion of privacy.

Plaintiff has moved for summary judgment on the questions of whether Defendants failed to comply with the FCRA (i.e. whether Defendants had a permissible purpose to obtain Ms. Rodgers’ credit report), whether Defendants’ alleged failure to comply was willful, and whether Defendants’ actions constituted unlawful invasion of privacy.

The United States Court of Appeals,W.D. Tennessee GRANTED Plaintiff’s motion for partial summary judgment on the question of whether Defendants had a permissible purpose to obtain Ms. Rodger’s credit report. It DENIED Plaintiff’s motion for summary judgment on the question of willfulness under the act. It also DENIED Plaintiff’s motion for summary judgment on the question of whether Ms. McCullough obtained and used Ms. Rodger’s credit report under false pretenses or knowingly without a permissible purpose.

1.Why did the defendant, McCullough, order her secretary to obtain Ms. Rodgers’s credit report? If Ms.McCullough is found liable, why would her law firm partners also be liable?

2.What “permissible purpose” did the defendants contend they had for obtaining the credit report? Why did the court determine that purpose was not permissible?

3.Why did the court deny the plaintiff’s motion for summary judgment on the question of whether the defendant “willfully” failed to comply with the act? Is the plaintiff out of luck on that question, or can it be litigated further?

Explanation / Answer

Why did the defendant, McCullough, order her secretary to obtain Ms. Rodgers’s credit report? If Ms.McCullough is found liable, why would her law firm partners also be liable?

Credit is an important part of the US economy, and there are various laws regulating its availability and disclosure. Usury laws prohibit charging excessive interest rates, though the laws are riddled with exceptions. The disclosure of credit costs is regulated by the Truth in Lending Act of 1969, the Consumer Leasing Act of 1988, the Fair Credit and Charge Card Disclosure Act of 1989, and the Credit Card Accountability, Responsibility, and Disclosure Act of 2009 (these latter three are amendments to the TILA). Some states have adopted the Uniform Consumer Credit Code as well. Two major laws prohibit invidious discrimination in the granting of credit: the Equal Credit Opportunity Act of 1974 and the Home Mortgage Disclosure Act of 1975 (addressing the problem of redlining). The Fair Credit Reporting Act of 1970 governs the collection and use of consumer credit information held by credit bureaus.

Prepaid cards are mainstream financial products, widely used and relied upon by consumers. Consumers Union, the policy and advocacy division of Consumer Reports has tracked the prepaid marketplace as it has matured. Recent changes, most prominently the introduction of prepaid cards by a number of large banks, have prompted a new review

What “permissible purpose” did the defendants contend they had for obtaining the credit report? Why did the court determine that purpose was not permissible?

A recent case decided by the U.S. Court of Appeals for the Ninth Circuit, Pintos v. Pacific Creditors Association, No. 04-17485 (April 30, 2009), has held that the Fair Credit Reporting Act (FCRA)does not give a creditor the right to obtain the credit report of a consumer in determining the likelihood of collecting a debt unless the debt has either arisen out of a transaction for which the consumer actively sought credit or been reduced to judgment. The ruling has been hailed by consumer advocates as a victory for individual privacy rights as much as it has been feared by credit professionals. According to this reader, however, the effect of Pintos is not as far-reaching as it appears at first glance.

The Plaintiff is a consumer residing in California. Her car was towed to an impound lot as a result of her failure to renew her vehicle registration. Subsequently, after the consumer failed to pay the towing fees or retrieve her car, the towing company sold the vehicle at auction. The sale of the vehicle did not satisfy the outstanding balance in full, and as a result, the towing company referred the remaining balance to the Defendant, a collection agency. In determining the likelihood of recovery of the balance, the Defendant obtained a credit report on the Plaintiff from Experian.

The Plaintiff filed suit, alleging that there was no permissible purpose under the FCRA for the Defendant to obtain her credit report. The Defendant contended that it was authorized to do so under 15 U.S.C. 1681b(a)(3)(A), which provides that a consumer reporting agency may provide a consumer credit report to a person it has reason to believe "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."

The Ninth Circuit held that since the Plaintiff did not initiate the transaction with the Defendants, the transaction did not involve the Plaintiff, and as a result the first part of 1681b(a)(3)(A) was not satisfied. The Court based this decision on several sources of authority:

·                  Mone v. Dranow, 945 F.2d 306 (9th Cir. 1991) The Defendant in this case had obtained a copy of the Plaintiff's credit report prior to initiating a lawsuit against the Plaintiff seeking damages for alleged unfair competition. The court, without discussion, concluded that the Defendant couldn't rely on 1681b(a)(3)(A) because it did not use the credit information in connection with a credit transaction involving the consumer.

·                  Andrews v. TRW, Inc., 225 F.3d 1063 (9th Cir. 2000) The Plaintiff's identity was stolen, and several credit cards were applied for using her social security number. The credit card companies sought credit reports from the Defendant credit bureau. The court found that this scenario does not constitute a credit transaction "involving the consumer" inasmuch as the consumer was not a willing participant in any transaction but an innocent bystander, and as a result the Plaintiff's claims were allowed to proceed to the jury.

·                  Hasbun v. County of Los Angeles, 323 F.3d 801 (9th Cir. 2003) The Defendant, a government child support enforcement body, pulled the Plaintiff's credit reports after determining that the Plaintiff was in violation of a child support order. The Plaintiff filed suit, alleging that this was not a permissible purpose under the FCRA. The Ninth Circuit found that the child support enforcement agency did have a permissible purpose to obtain the credit report, relying on Federal Trade Commission (FTC) commentary found in the Appendix to 16 Code of Federal Regulations (CFR) Part 600, that stated that "[a] judgment creditor has a permissible purpose to receive a consumer report on the judgment debtor for use in connection with collection of the judgment debt, because it is in the same position as any creditor attempting to collect a debt from a consumer who is the subject of a consumer report," as well as authority from the Sixth Circuit in Duncan v. Handmaker, 149 F.3d 424 (6th Cir. 1998), stating that collection of a debt is considered to be the "collection of an account" under the FCRA, and therefore debt collection provides a permissible purpose to pull a consumer report.

Defendants first claim that they are not in violation of the FCRA because they had a permissible purpose for conducting the hard inquiries: namely, the “credit transaction” purpose. Defendants argue that both Plaintiffs initiated credit transactions by requesting loan amounts and loan products. However, the cases Defendants cite in support of this argument involve facts that evidence the plaintiffs’ intent to have their credit pulled, either because the plaintiff specifically requested financing or completed a loan application. See Stergiopoulos v. First Midwest Bancorp, Inc., 427 F.3d 1043, 1047 (7th Cir. 2005) (plaintiffs requested financing at a car dealership; issue was whether the credit transaction applied to the particular defendant lender); Huertas v. Citigroup, Inc., No. 13-2050-RMB/JS, 2015 WL 2226012 at *1 (D.N.J. Aug. 21, 2014) (“[i]t is undisputed that Plaintiff applied for both credit cards”); Baker v. Trans Union LLC, No. 07-8032-PCT-JAT, 2008 WL 4838714 at * (D. Ariz. Nov. 19, 2009) (“[plaintiff] does not dispute that she applied for a mortgage”).  Here, the facts are far from undisputed as to whether Plaintiffs’ actions on Defendants’ website constituted a credit transaction, or whether such action simply constituted “comparison shopping” behavior, which the Federal Trade Commission (“FTC”) has stated is not enough to rise to the level of a credit transaction under the FCRA. See Letter from David Medine to Karen Coffey (Feb. 11, 1998), 1998 WL 34323748 at *1 (FTC Staff Op. Ltr.) (credit transaction initiated by consumer only when the consumer “clearly understands that he or she is initiating the purchase”). Therefore, genuine issues of material fact exist as to whether a permissible purpose for conducting hard inquiries on Plaintiffs’ credit existed.

Why did the court deny the plaintiff’s motion for summary judgment on the question of whether the defendant “willfully” failed to comply with the act? Is the plaintiff out of luck on that question, or can it be litigated further

Get out Your Calendar

This one should sound familiar. Remember when you first got served with the complaint and summons? I told you the first thing you need to do is pull out your calendar and mark when the Answer was due. Same thing with responding to a motion for summary judgment. You need to make sure and mark on your calendar the deadline when it is due. Just like with complaint, if you don’t respond the court will assume you agree with everything that has been alleged and grant judgment against you.

So how long do you have submit a response? Check your local rules of civil procedure, but if your state modeled their rules after the federal rules (and most states have) you can look in Rule 56 and it will tell you. Under federal law (and many states) it is 30 days. Check your local rules to be sure.

See the Big Picture

An important part of responding to a motion for summary judgment is understanding exactly what the document is. A motion for summary judgment is the debt buyer’s way of saying “look judge, the facts of this case are not in dispute. The only thing we need you to do is look at the facts and give us a legal ruling as to who wins”. Basically, the motion for summary judgment is a way to shorten the litigation process. Instead of a trial, the debt buyer is trying to win the case by filing a written motion.

Drafting Your Response

Now for the hard part. What do you actually write in your response? The key to defeating a motion for summary judgment is to show the court that there are still facts in dispute. Summary judgment is only appropriate if none of the facts are disputed. However, if there are facts that are disputed the case should be heard at a trial where each side can present their version of the facts and have the chance to cross-examine each other before the judge makes a decision.

In the debt buyer lawsuits filed by companies like Midland Funding, LVNV, LLC, or Portfolio Recovery there are many facts that are in dispute. Here are a few:

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