United States: District Court Dismisses FCRA Claims As Time-Barred

On April 26, in Verkuilen v. Business Info. Group, Inc., No. 14-cv-400, 2016 U.S. Dist. LEXIS 55392 (E.D. Wis. Apr. 26, 2016), the United States District Court for the Eastern District of Wisconsin granted Defendant's motion for partial summary judgment as to Plaintiff's FCRA claims on the basis that they were time-barred.  The FCRA contains a two-year statute of limitations which begins running on the date of discovery by the plaintiff of the violation that is the basis of FCRA liability.   

The relevant facts are that Plaintiff discovered inaccuracies in his background report and emailed Defendant, the credit reporting agency that supplied the report, to dispute those inaccuracies on two occasions in August and September of 2011.  His emails indicate that he possessed copies of his reports at the time he submitted the disputes.  Plaintiff did not file a lawsuit alleging claims based on the 2011 reports until April 2014.  

In his lawsuit, Verkuilen brought FCRA claims against Business Information Group under 15 U.S.C. § 1681e(b) for failing to follow reasonable procedures to assure accuracy, under 15 U.S.C. § 1681i for negligently reinvestigating or correcting disputed information, and under 15 U.S.C. § 1681k for failing to provide notice to him of information reported about him to third parties.  Plaintiff alleged that inaccurate criminal records included in his report resulted in his failure to obtain employment. 

First, with respect to the 15 U.S.C. § 1681e(b) claim, the Court rejected Plaintiff's argument that Defendant must demonstrate that Plaintiff discovered the legal basis for a statutory violation in order to trigger the statute of limitations under the FCRA.  Even though the FCRA is not a strict liability statute (and therefore a mere inaccuracy in a report is not a violation), the Court pointed out that almost no consumers would ever have information about the reasonableness of a reporting company's own internal procedures until long after a lawsuit was filed.  All that is required to trigger the statute of limitations under the FCRA, according to the Court, is that Plaintiff have enough information to bring a claim.  That reasonable factual basis is supplied in this case by Plaintiff's discovery of inaccuracies in his report and correspondence with the Defendant in the form of two emails to dispute those inaccuracies.  Thus, the Court held that any 15 U.S.C. § 1681e(b) claims based on the 2011 reports, and on how Defendant handled Plaintiff's disputes to those reports in 2011, must be time-barred. 

The court notes in dicta that even if the statute of limitations period did begin to run at the time Plaintiff discovered the unreasonableness of an agency's procedures for ensuring accuracy, that standard would be met here because Plaintiff alerted the agency twice to a relatively simple error, and Defendant failed to correct it, giving Plaintiff reasonable grounds to allege that the agency's procedures were unreasonable.   

Second, regarding the 15 U.S.C. § 1681i investigation claim, the Court found that the statute of limitations period began to run as soon as the 30-day investigation period provided under the statute ended.  As a result, the Court found that Plaintiff missed the two-year limitations period and that this claim was also time-barred. 

Finally, on the 15 U.S.C. § 1681k notice claim, the Court found that Plaintiff knew he had not received notice from the Defendant of his report, which he indicated he had received from one of Defendant's customers, at the time he knew of the adverse reports in August and September 2011.  Once again, based on Plaintiff's knowledge of enough information to support a claim, the Court held that this claim arising from the 2011 reports was time-barred. 

This case provides guidance on what events trigger the statute of limitations period for FCRA claims, with the Court dismissing all of Plaintiff's FCRA claims to the extent they were based on reports predating the two years prior to Plaintiff filing his complaint.  Discovering inaccuracies and disputing those inaccuracies were enough to give rise to claims under the FCRA, and a defendant need not show that a plaintiff discovered the legal basis for an FCRA violation – such as the unreasonableness of an agency's procedures for ensuring accuracy of the information it reported – to demonstrate when the claims arose. 

The Troutman Sanders' Consumer Financial Services Law Monitor blog offers timely updates regarding the financial services industry to inform you of recent changes in the law, upcoming regulatory deadlines and significant judicial opinions that may impact your business. To view the blog, click here

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