United States: Furnisher’s Reliance On The ACDV Without Supportive Investigation Testimony Not Enough To Win On Summary Judgment

Peter Dickman v. Verizon Communications, Inc. dba Verizon Wireless, 2012 U.S. Dist. LEXIS 90188 (E.D. NY. Jun. 28, 2012)

Facts: Plaintiff Peter Dickman alleged that Defendant Verizon Communications, Inc. ("Verizon") violated 15 U.S.C. §§1681s-2(a) and (b) of the FCRA, by furnishing inaccurate information to the credit reporting agencies ("the CRAs") and failing to delete inaccurate information. Plaintiff also alleged that Verizon engaged in deceptive business practices in violation of New York General Business Law § 349 by failing to maintain reasonable procedures designed to assure maximum possible accuracy of Plaintiff's credit information. Plaintiff filed suit over the negative credit reporting of a Verizon phone/DSL account that he believed had been terminated. Verizon agreed that Plaintiff's old account terminated, but claimed that Plaintiff opened a new account soon thereafter and was sent billing statements which went unpaid. Verizon's representative provided testimony that the documents provided in discovery were not the actual bills, but rather were merely similar in format to the actual bills sent. Plaintiff wrote a letter to Verizon, in which he stated that he had reviewed his credit report, had disputed the information contained therein with the CRAs, and that the results of the CRAs' investigation came back "verified." In the letter, Plaintiff disputed the $200 delinquency amount, denied having opened a new Verizon account, and requested that Verizon send him the proper proof that what Verizon was reporting was true. Plaintiff also sent this letter to the CRAs which resulted in the account being verified as accurately reporting. Plaintiff claimed that he suffered credit denials and mental anguish damages as a result of the inaccurate credit reporting of the Verizon account. Verizon filed its motion for summary judgment which was denied as to Plaintiff's §1681s-2(b) claim. Although not raised by Verizon in its motion, Plaintiff's state law claim was found to be preempted by the FCRA and was appropriately dismissed by the Court.

• Furnisher Investigation. There is "no private right of action" under §1681s-2(a), because the duties imposed under this statute are only enforceable by a governmental agency or official.
• Furnisher Investigation. Although Verizon argued that the existence of the ACDVs showed that Verizon conducted a satisfactory investigation of Plaintiff's dispute in compliance with §1681s-2(b), the Court held that a fact issue exists because Verizon presented no testimony from any of the Verizon employees whose names are listed on the ACDVs nor proffered any testimony from those employees who actually conducted the investigation following the CRAs' notification of a dispute.
• Furnisher Investigation. Verizon argued that it conducted a reasonable investigation of Plaintiff's dispute because a review of Plaintiff's bills revealed that over 100 local telephone calls were made and/or received from Plaintiff's telephone number following the start date of the new account. The Court, however, had no evidence before it that indicated Verizon actually reviewed the bills as part of its statutorily required investigation. Note: Even if there was evidence to that effect, the Court indicated that such evidence alone would not establish as a matter of law that Verizon complied with §1681s-2. The Court pointed to the fact issue that Plaintiff denied receiving any bills from Verizon coupled with Verizon's own witness testimony that the documents proffered by Verizon were not actually "bills," nor did such documents confirm that actual bills were ever sent to Plaintiff's address.
• Preemption. Though §1681t(b)(1)(F) appears to preempt all state law claims against furnishers of information, Congress did not withdraw §1681h(e) -- which preempts certain state law claims, but impliedly permits others -- when it added §1681t(b)(1)(F) to the Code in 1996.
• Preemption. District courts have adopted different approaches in addressing preemption arguments. Some courts have embraced the "statutory approach" - that §1681t(b)(1)(F) "preempts only state statutory claims against furnishers of information." Others have found the "total preemption" approach to be more appropriate - that §1681t(b)(1)(F) "preempts both state statutes and common law causes of action that related to the subject matters listed in Section 1681s-2." Still others have held that the "temporal approach" best addresses the issue - that State law claims based on actions of a furnisher that occurred after the furnisher received notice of inaccuracies are held preempted by §1681t(b)(1)(F), while actions taken before notice has been received may not be preempted. Note: The Court did not need to adopt any one approach as the result would have been the same under all three: Plaintiff's claim under GBL § 349 was a statutory claim which therefore would be clearly preempted under the "statutory approach" and "total preemption approach." Under the temporal approach, the claim would still have been preempted because Plaintiff's claim -- that he notified Verizon of his disputes but Verizon continued to incorrectly report that Plaintiff owed $200 -- "falls squarely within the scope of §1681s-2."

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