Thursday, May 15, 2008

consumer - Fair Credit Reporting Act - degree of accuracy - causation of damages

Krajewski v. American Honda Finance Corp. and Trans Union, LLC - ED Pa. - May 2008

Plaintiff and her ex-husband bought a car, which got repossessed by AHFC after their adult son was arrested and the car, in the son's possession at the time, was seized by the police under the Controlled Substances law. AHFC then reported this to Trans Union, a credit reporting agency (CRA), which in turn marked plaintiff's consumer report as "RPO" meaning repossession.

Plaintiff disputed the characterization of "repossession," alleging that she had never missed any payments and that her credit report should not reflect a repo. Plaintiff tried to get a loan to pay the debt and redeem the car and alleges that she could not because of the "repossession" notation on the credit report. She filed two notices of dispute with the CRA.

Plaintiff sued AHFC and Trans Union on multiple causes of action. AHFC's motion for summary judgment was declined on most claims, because of disputed factual and legal issues, included whether plaintiff "exposed" the car to seizure, as prohibited in the contract.

Plaintiff's claims agains Trans Union included the following issues.

Fair Credit Reporting Act - 15 USC 1681 et seq. - technical accuracy v. maximum possible accuracy
Under sec. 1681e(b) of the FCRA, "[w]henever a consumer reporting agency prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.”

To prevail on a claim of negligent failure to comply with § 1681e(b), a plaintiff must show the following four elements: (1) that “inaccurate information was included in a consumer’s credit report,” (2) that “the inaccuracy was due to defendant’s failure to follow reasonable procedures to assure maximum possible accuracy,” (3) that “the consumer suffered injury,” and (4) that “the consumer’s injury was caused by the inclusion of the inaccurate entry”....Trans Union argues that it is entitled to summary judgment because the information was accurate, meaning that plaintiff cannot show the first element.

A plaintiff cannot sustain a claim to enforce § 1681e(b) without showing an inaccuracy in her credit report. Whether the accuracy requirement of § 1681e(b) merely requires technical accuracy or requires something more has not been clarified by either the United States Supreme Court or the Third Circuit. Plaintiff urges this court to follow the D.C. Circuit’s reasoning in Koropoulos v. The Credit Bureau, Inc., 734 F.2d 37 (D.C. Cir. 1984), which rejected the technical accuracy defense in the context of a consumer reporting agency defendant. The court denied summary judgment for the consumer reporting agency where “there is a genuine issue of fact as to whether the report was sufficiently misleading so as to raise the issue of whether [the defendant’s] procedures for assuring ‘maximum possible accuracy’ were reasonable.” Id. at 42.

In rejecting the technical accuracy defense as applied to consumer reporting agencies, the D.C. Circuit based its conclusion on the FCRA’s requirement that consumer reporting agencies employ reasonable procedures to assure more than mere accuracy....The FCRA provides: “Whenever a consumer reporting agency prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.” 15 U.S.C. § 1681e(b) (emphasis added). District courts in the Eastern District of Pennsylvania have applied Koropoulos....I, too, will follow Koropoulos and deny summary judgment if “there is a genuine issue of material fact as to whether the report was . . . misleading.” 734 F.2d at 42.

Whether the credit report in the instant case is accurate and not misleading depends on the meaning of “repossession” as used in the report. “Repossession” is not defined by federal or Pennsylvania statute. It is defined by the dictionary as “the act of resuming possession of property when the purchaser fails to keep up payments on it.” Webster’s Third New International Dictionary 1926 (1981) (emphasis added). Similarly, one dictionary definition of the verb “repossess” is “to resume possession of (an item purchased on installment) in default of the payment of installments due.” Id. (emphasis added). Given these definitions, and applying the Koropoulos approach, a reasonable jury could conclude that Trans Union’s reporting was so misleading as to be inaccurate. Therefore, I will not grant Trans Union’s motion for summary judgment on the basis of the alleged accuracy of the report.

Trans Union asserts in the alternative that “Trans Union is entitled to summary judgment on [p]laintiff’s claims of damages relating to credit denials in August 2006 because these allegedly occurred prior to her disputes”....Trans Union also asserts that “there is no evidence that an actual recipient of [p]laintiff’s consumer report was misled or would have acted on [p]laintiff’s application for credit differently if the reason why the repossession occurred had been included in [p]laintiff’s report.”

Plaintiff argues that, in the context of damages, Trans Union erroneously conflates § 1681i(a)’s reinvestigation requirement with § 1681e(b)’s reasonable procedures requirement. I agree. Section 1681 relates to “reasonable procedures to assure maximum possible accuracy” in reporting generally, 15 U.S.C. § 1681e(b), and so the time at which a consumer disputes the information is irrelevant to the § 1681e(b) analysis.

With respect to causation, a plaintiff need not “satisfy his burden only by introducing direct evidence that consideration of the inaccurate entry was crucial to the decision to deny credit”...Instead, a plaintiff need only “produce evidence from which a reasonable trier of fact could infer that the inaccurate entry was a ‘substantial factor’ that brought about the denial of credit.”

federal courts - 11th Amendment - statute of limitations - continuing violation

Larsen v. State Employee Retirement System - MD Pa. - May 15, 2008

In this § 1983 action by a former state supreme court justice concerning his pension, the court discuss two issues of general interest -- the Eleventh Amendment and the continuing-violations doctrine, as applied to the issue of the statute of limitations.

A. Eleventh Amendment Immunity
The Eleventh Amendment “has been interpreted to make states generally immune from suit by private parties in federal court.”... “This immunity extends to state agencies and departments.”...Eleventh Amendment immunity also extends to state officials sued in their official capacity because in such a case the state is the real party in interest.... Suits against state officials in their personal or individual capacity, however, are not barred by the Eleventh Amendment.

“Eleventh Amendment immunity is, however, subject to three primary exceptions: (1) congressional abrogation, (2) waiver by the state, and (3) suits against individual state officers for prospective injunctive and declaratory relief to end an ongoing violation of federal law.”
Under the third exception, the doctrine of Ex parte Young, 209 U.S. 123 (1908), a suit against a state officer seeking prospective relief designed to end a continuing violation of federal law is not barred by the Eleventh Amendment under the theory that the action is not against the state because the alleged violation of federal law strips the officer of his official authority....Thus, for the doctrine to apply, the plaintiff must allege an ongoing violation of federal law....In addition, “[t]he relief sought must be prospective, declaratory, or injunctive relief governing an officer’s future conduct and cannot be retrospective, such as money damages.”

In determining whether the request relief falls within the Ex parte Young exception, a court must “look to the substance rather than the form of the relief sought.”....The doctrine applies only against state officials sued in their official capacities, not against states or state agencies....Further, “Young does not apply if, although the action is nominally against individual officers, the state is the real, substantial party in interest and the suit in fact is against the state.” ....“In determining whether the Ex parte Young doctrine avoids an Eleventh Amendment bar, the Supreme Court has made it quite clear that ‘a court need only conduct a ‘straightforward inquiry into whether [the] complaint alleges an ongoing violation of federal law and seeks relief properly characterized as prospective.’” The Supreme Court has also recognized, however, that “[f]or Eleventh Amendment purposes, the line between permitted and prohibited suits will often be indistinct.”

B. Statute of Limitations - the continuing-violations doctrine
“Actions brought under 42 U.S.C. § 1983 are governed by the personal injury statute of limitations of the state in which the cause of action accrued.”... The applicable Pennsylvania statute of limitations for personal injury actions is two years....

Although the applicable statute of limitations is borrowed from state law, “the accrual date of a § 1983 cause of action is a question of federal law that is not resolved by reference to state law.” ... Rather, accrual of a § 1983 cause of action is “governed by federal rules conforming in general to common-law tort principles. Under those principles, it is the standard rule that accrual occurs when the plaintiff has a complete and present cause of action, that is, when the plaintiff can file suit and obtain relief.”....Generally, therefore, “[a] section 1983 cause of action accrues when the plaintiff knew or should have known of the injury upon which its action is based.”....

Under Pennsylvania law, the limitations period is computed from the time an action accrues....A cause of action accrues when the plaintiff could have first maintained the action to a successful conclusion, and therefore the statute of limitations begins to run as soon as the right to institute and maintain a suit arises....Generally, this right arises when the plaintiff’s injury is inflicted....

[T]he untimeliness of the [plaintiff's] claims is apparent from the face of the complaint....[Plaintiff] argues, however, that his claims are saved from the statute of limitations by the continuing violations doctrine. This doctrine is an “equitable exception to the timely filing requirement”....Under this doctrine, “when a defendant’s conduct is part of a continuing practice, an action is timely so long as the last act evidencing the continuing practice falls within the limitations period; in such an instance, the court will grant relief for the earlier related acts that would otherwise be time barred”....The doctrine is a narrow exception to the statute of limitations that is frequently invoked but rarely found.

“To establish that a claim falls within the continuing violations theory, the plaintiff must do two things. First, he must demonstrate that at least one act occurred within the filing period: The crucial question is whether any present violation exists. Next, the plaintiff must establish that the [alleged wrong] is more than the occurrence of isolated or sporadic acts”....

In examining this second step, “courts should consider at least three factors: (1) subject matter – whether the violations constitute the same type ..., tending to connect them in a continuing violation; (2) frequency – whether the acts are recurring or more in the nature of isolated incidents; and (3) degree of permanence – whether the act had a degree of permanence which should trigger the plaintiff’s awareness of and duty to assert his/her rights”....The third factor, permanence, is the most important....In considering this third factor, the court “must consider the policy rationale behind the statute of limitations. That is, the continuing violations doctrine should not provide a means for relieving plaintiffs from their duty to exercise reasonable diligence in pursuing their claims”....The burden is on the plaintiff to demonstrate that the continuing violations doctrine applies to toll the statute of limitations....

drivers license - refusal to take breath test - jurisidiction to arrest

Taylor v. Penn DOT - Commonwealth Court

In order to suspend a licensee’s operating privileges pursuant to 75 Pa.C.S. §1547(b), DOT has the burden of proving the following:

1) the licensee was arrested for violating Section 3802;
2) by a police officer who had reasonable grounds to believe that the license was operating a vehicle while in violation of Section 3802;
3) that the licensee was requested to submit to a chemical test;
4) that the licensee refused to do so; and
5) that the police officer fulfilled the duty imposed by 75 Pa.C.S. §1547(b)(2) by advising the licensee that his operating privileges would be suspended if he refused to submit to chemical testing…. Quick v. Department of Transportation, Bureau of Driver Licensing, 915 A.2d 1268, 1270 (Pa. Cmwlth. 2007).

In McKinley v. Department of Transportation, Bureau of Driver Licensing, 576 Pa. 85, 838 A.2d 700 (2003), the Pennsylvania Supreme Court rejected this Court’s determination that a person could be considered a police officer, even if he was acting outside of his jurisdiction, as long as he was an “officer in fact,” i.e., authorized with the power to arrest in another jurisdiction. Instead, the Pennsylvania Supreme Court determined that a police officer acting outside of his jurisdiction lacked the ability to act as a police officer and would not be treated as such. McKinley, 576 Pa. at 94, 838 A.2d at 706.

As the arresting officer did not have the authority to act as a police officer, DOT has failed to establish that Licensee was arrested by a police officer who had reasonable grounds to believe Licensee was DUI. Thus, we conclude that the trial court did not err in granting Licensee’s appeal from the suspension of his operating privilege. Accordingly, the order of the trial court is affirmed

Social Security - income - stepparent - deeming

SUMMARY: We are changing the Supplemental Security Income (SSI) parent-to-child deeming rules so that we no longer will consider the income and resources of a stepparent when an eligible child resides in the household with a stepparent, but that child’s natural or adoptive parent has permanently left the household.

These rules respond to a decision by the United States Court of Appeals for the Second Circuit, codified in Social Security Acquiescence Ruling (AR) 99– 1(2), and establish a uniform national policy. Also, we are making uniform the age [22] at which we consider someone to be a ‘‘child’’ in SSI program regulations and are making other minor clarifications to our rules.

The decision of the United States Court of Appeals for the Second Circuit in Florez on Behalf of Wallace v. Callahan, 156 F.3d 438 (2d Cir. 1998), held that 20 CFR 416.1101 creates a two-part test for determining whether a spouse, who lives with a child eligible for SSI, is an ineligible parent for deeming purposes under 20 CFR 416.1160: (1) The spouse must live with the natural or adoptive parent; and (2) the relationship must be as husband or wife, as further defined in 20 CFR 416.1806.

The rule adopts the court’s rationale and changes the SSI parent-to-child deeming rules so that SSA no longer will consider the income and resources of a stepparent when an eligible child resides in the household with a stepparent, but that child’s natural or adoptive parent has permanently left the household.

DATES: This final rule is effective on June 16, 2008.