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					           FCRA NEWSLETTER • December 28, 2010 • STRASBURGER & PRICE, LLP


The Strasburger FCRA Newsletter is   11th Circuit Affirms Dismissal of Plaintiff’s Claims for
designed to keep you current on      Failure to Show an Inaccuracy
FCRA-related legal issues and
                                     Nelson v. Experian Info. Solutions, Inc., 2010 U.S.
events. For more frequent updates,
                                     App. LEXIS 22982 (11th Cir. Ala. Nov. 3, 2010)
see our blog at the FCRA Blog.
                                     Facts: Plaintiff sued Experian for violating 15 U.S.C. §§
                                     1681e(b) and 1681i. Plaintiff argued that Experian
          PREPARED BY
                                     inaccurately reported that American Express (“AMEX”)
                                     charged off two accounts. Experian filed a motion for
                                     summary judgment, which the district court granted in its
                                     entirety because: (1) Plaintiff failed to provide any
                                     evidence that Experian issued an inaccurate consumer
                                     report; and (2) Plaintiff admitted in his complaint that
                                     AMEX charged off the two accounts. The 11th Circuit
                                     affirmed the district court’s judgment.
                                            No Evidence. The Court held that at best,
                                            Plaintiff’s evidence showed that AMEX should not
          Erik J. Grohmann                  have charged off the accounts. Plaintiff failed to
  erik.grohmann@strasburger.com             produce any evidence that AMEX did not charge
   2801 Network Blvd., Suite 600            off the accounts. Thus, Plaintiff failed to produce
          Frisco, TX 75034                  any evidence that Experian issued an inaccurate
           (469) 287-3907                   consumer report, and his claims under the FCRA
                                            were dismissed.

            EDITORS                         Admissions. Plaintiff argued that the admission
                                            in his complaint should not be binding because
         Erik J. Grohmann                   the totality of his complaint and his response to
                                            Experian’s summary judgment motion showed his
          Marc F. Kirkland                  true position; that AMEX did not charge off the
       Jennifer E. Hawkinson                accounts and then falsely report that it did so.
                                            Plaintiff further argued that AMEX could not have
         P. Ryan Langston
                                            charged off the accounts because doing so would
           Paul L. Myers                    have violated its own policies as well as federal
                                            law and regulations. The Court held that it was
          M. Kasey Ratliff
                                            not error for the district court to hold Plaintiff to
         Paul W. Sheldon                    the admission he made through his pleadings.
       Martin E. Thornthwaite

                                      Continued on page 2 . . .
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            FCRA NEWSLETTER • December 28, 2010 • STRASBURGER & PRICE, LLP



Screenshots Do Not Qualify as “Printed Receipts” Under FACTA
Kelleher, et al v. Eaglerider, Inc. 2010 U.S. Dist. LEXIS 115279 (N.D. Ill. Oct. 28, 2010)
Facts: Plaintiffs brought an action alleging FACTA violations, claiming that the online booking
confirmations they viewed on their computer screens (the “screenshots”) after making rental
reservations on Defendant Eaglerider's website were "electronically printed" receipts subject to
FACTA's truncation requirements. Defendant moved for summary judgment, arguing that
FACTA did not apply to the screenshots presented by the Plaintiffs because "FACTA expressly
limited the application of its truncation requirements to printed receipts that a vendor provides to
a customer." Plaintiffs argued in response that there was no basis in FACTA for treating the
screenshots differently from ordinary paper receipts. The Court agreed with defendant and
granted the motion, citing a recent 7th Circuit decision that was rendered after the parties
submitted their briefs.
       FACTA Requirements. Section 1681c(g)(1) provides: "[N]o person that accepts credit
       cards or debit cards for the transaction of business shall print more than the last 5 digits
       of the card number or the expiration date upon any receipt provided to the cardholder at
       the point of the sale or transaction." The prohibition applies only to receipts that are
       "electronically printed."
       FACTA Requirements. The statute contemplated only transactions for where receipts
       are physically printed using electronic point of sale devices like electronic cash registers
       or dial-up terminals. Internet confirmations such as those Plaintiffs received do not fall
       within the ambit of FACTA. Accordingly, the Plaintiffs' screenshot claims failed as a
       matter of law. Note: See Romano v. Active Network, Inc. which held that the use of the
       word “print” in § 1681c(g) was merely used to convey the meaning of publishing
       information rather than imprinting ink on a piece of paper generated by a machine or
       electronic device.

A Plaintiff Cannot Bring Suit on a Dispute that was not Provided to a CRA.
Petty v. Equifax Info. Servs., LLC, 2010 U.S. Dist. LEXIS 113159 (D. Md. Oct. 25, 2010)
Facts: Plaintiff sued the consumer reporting agencies (“CRAs”) alleging violations of the FCRA
related to the improper handling of his disputes. Plaintiff had divorced his wife in 2005, and as
part of the divorce decree, his ex-wife agreed to assume liability for three joint accounts and
indemnify and hold Plaintiff harmless for such debts. Several years later, Plaintiff learned that
the debts were reflecting as joint debts on his consumer reports without reference to the
indemnification agreement. Plaintiff disputed the accounts to the CRAs, specifically stating that
he was “not liable for and has no connection with the debts, in that the [divorce decree] made it
crystal clear that [Plaintiff’s] ex-wife… is solely responsible for the debts.” Plaintiff later
conceded that the information included in the consumer reports was not inaccurate and that he
remained liable on the debt. Nonetheless, he alleged that defendants were liable under § 1681i
of the FCRA because they failed to properly reinvestigate the disputed accounts, failed to
modify his consumer reports to include information about his right to indemnification on the debt,



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            FCRA NEWSLETTER • December 28, 2010 • STRASBURGER & PRICE, LLP

and failed to properly notify him of the investigation results. The CRAs filed a 12(b)(6) motion to
dismiss Plaintiff’s complaint, which the Court granted.
       Reinvestigation. A consumer may only sue under § 1681i(a) for violations relating to a
       dispute he actually provided to a CRA. If a consumer alleges an additional claim of
       inaccuracy for the first time in his complaint, it must be dismissed as the CRA was not
       provided notice of the dispute prior to the filing of the lawsuit.
       Inaccuracy. Under § 1681i(a)(5)(A)(i), a CRA may be liable when it fails to modify
       information which is incomplete, not just information that is inaccurate. In such cases, a
       CRA is liable under § 1681i where the omitted information rendered the existing entry
       “misleading in such a way and to such an extent that it can be expected to have an
       adverse effect [on credit decisions].” The alleged incompleteness of the consumer
       reports, however, is irrelevant, because Plaintiff never notified the CRAs that he believed
       the reports were incomplete. Plaintiff’s dispute letters complained that the information
       was inaccurate because his ex-wife was solely responsible for the debts and thus he
       was not liable for same. Accordingly the CRAs were never under the duty to
       reinvestigate whether the report was incomplete based on the omission of a reference to
       the indemnification agreement.

Consumer’s File from Bad Check Database is a “Consumer Report” under the FCRA
Searcy, et al. v. Efunds Corporation, et al., 2010 U.S. Dist. LEXIS 104557 (N.D. Ill. Sep. 30,
2010)
Facts: Plaintiff filed suit against Defendant Deposit Payment Protection Services, Inc. (“DPPS”)
claiming that DPPS willfully violated § 1681g(a)(3)(A)(ii) of the FCRA by failing to include in her
consumer file disclosure report the names of retailers who received the Shared Check
Authorization Network (“SCAN”) data file containing her bank account number. Defendant
DPPS is a CRA that provides the SCAN service to a number of retailers throughout the United
States. SCAN is designed to assist retailers in deciding whether or not to accept a personal
check from a customer. To provide this service, DPPS collects information (driver’s license and
bank account numbers), about individuals who have presented bad checks, compiles the
information into a data file, and then distributes that file electronically to each of its merchant-
subscribers. Retailers could then run a search for a particular consumer's information in the file
and accept or decline a check from that consumer based on the results of that search.
 On February 6, 2006, DPPS first incorporated a bank account number associated with Plaintiff
into the SCAN file sent to all of its retailer customers. Sometime in October 2006, Plaintiff
requested that DPPS provide her with a report disclosing whether DPPS possessed any of her
financial information and, if so, how the company used that information. Sometime after Plaintiff
made her request, DPPS mailed her a consumer file disclosure report. The report did not
include the names of retailers who had received the SCAN data file containing her bank account
number. Defendant DPPS moved for summary judgment claiming that its disclosure report was
not a “consumer report” as defined by the FCRA; or alternatively that it did not willfully violate
the FCRA. The Court was not persuaded and denied DPPS’ motion.




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            FCRA NEWSLETTER • December 28, 2010 • STRASBURGER & PRICE, LLP

       Consumer Report. When an individual consumer requests a file disclosure report from
       a CRA, the report must include the names of all persons that "procured a consumer
       report" regarding the consumer during the one-year period before the request is made.
       Consumer Report. The question of whether DPPS complied with the FCRA depends
       on whether the SCAN electronic data file is characterized as a “consumer report.” The
       FCRA defines a “consumer report” as “any written, oral, or other communication of any
       information by a CRA bearing on a consumer's credit worthiness, credit standing, credit
       capacity, character, general reputation, personal characteristics, or mode of living which
       is used or expected to be used or collected in whole or in part for the purpose of serving
       as a factor in establishing the consumer's eligibility for . . . any other purpose authorized
       under section § 1681b of this title.”
       Consumer Report. Based on the FTC commentary and the FCRA, the Court held that
       the SCAN file fit comfortably within the confines of the FCRA's definition of a “consumer
       report.” Of particular note, the Court emphasized that the driver's license and checking
       account numbers contained in the SCAN file indicated that the individuals associated
       with the numbers had previously presented bad checks. This information is pertinent to
       both the character and general reputation of those consumers. Furthermore, the list was
       distributed to SCAN member retailers with the expectation that it would be used in the
       process of determining whether to complete a business transaction initiated by the
       consumer.
       Willfulness. Whether a violation of the FCRA occurred negligently or recklessly has
       long been held by many courts to be an issue for the jury and is not otherwise a question
       of law. The Court decided to follow this precedent and denied Defendant’s motion as to
       Plaintiff’s willfulness claim.

State Law Claims Prevented Removal of FCRA Action
Smith v. Firstsource Fin. Solutions LLC, 2010 U.S. Dist. LEXIS 108855 (C.D. Cal Sept. 30,
2010)
Facts: Plaintiff, proceeding pro se, brought suit against Firstsource Financial Solutions, LLC
(“Firstsource”) in small claims court, claiming that Firstsource illegally reported a negative trade
line on his consumer report and owed Plaintiff $7,500 for defamation, personal injury and
financial injury. Firstsource removed the case, alleging that it involved a federal question under
the FCRA. The Court issued a sua sponte order to show cause why the action should not be
remanded as improperly removed. Firstsource conceded that claims arising under California
Civil Code § 1785.25(a) were exempt from FCRA preemption under § 1681t(b)(1)(F)(ii),
however argued that removal was proper because Plaintiff’s complaint implicated other, non-
exempt sections of the California Civil Code that were preempted. The Court disagreed and
remanded the matter back to small claims court.
       Removal. The removal statute is strictly construed, and removal jurisdiction must be
       rejected if there is any doubt as to the right of removal in the first instance. Under the
       well-pleaded complaint rule, federal jurisdiction exists only when a federal question is
       presented on the face of the plaintiff’s properly pleaded complaint. Although a plaintiff


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            FCRA NEWSLETTER • December 28, 2010 • STRASBURGER & PRICE, LLP

       may not artfully plead his complaint, omitting necessary federal questions in order to
       defeat removal, a complaint is not artfully pled unless a federal statute has completely
       preempted that particular area of law. The Court held that it was not apparent from the
       face of the complaint that Plaintiff intended to invoke any questions of federal law, the
       FCRA did not completely preempt his state-law action, and remanded it to the state
       court.

Court Certifies FACTA Class Against Indiana Gas Station
Rogers v. Khatra Petro, Inc., 2010 U.S. Dist. LEXIS 103599 (N.D. Ind. Sep. 29, 2010)
Facts: Plaintiff alleged that he made a purchase using a VISA card at a Citgo gas station store
and received a receipt for the transaction on which his entire VISA card number was printed in
violation of § 1681c(g) of FACTA. Plaintiff sought certification of a class comprised of all
persons to whom Defendant provided an electronically-printed receipt at the point of sale or
transaction, in any transaction occurring after March 20, 2008, in which receipt displayed more
than the last five digits of the person's credit or debit card number. Plaintiff offered himself as
the class representative, and his suitability for that role was the primary bone of contention
between the parties. Defendant alleged that Plaintiff was not an adequate class representative.
The Court disagreed and granted class certification with the Plaintiff assigned as class
representative.
       Class Action Requirements. Fed. R. Civ. P. 23 establishes two hurdles for class
       certification. First, the action must satisfy all four elements of Rule 23(a): numerosity,
       commonality, typicality, and adequacy of representation. Second, the proposed class
       must satisfy at least one of the three provisions under Rule 23(b). Plaintiff seeks
       certification under Rule 23(b)(3), which requires him to demonstrate that "questions of
       law or fact common to class members predominate over any questions affecting only
       individual members," and that "a class action is superior to other available methods for
       fairly and efficiently adjudicating the controversy."
       Adequacy of Representation Requirement. In order to fulfill this element (which the
       Court pointed out was the only one Defendant contested), a plaintiff must demonstrate
       that "'(1) the representative did not have conflicting or antagonistic interests compared
       with the class as a whole; (2) the representative was sufficiently interested in the case
       outcome to ensure vigorous advocacy; and (3) class counsel was experienced,
       competent, qualified and able to conduct the litigation vigorously.'" The Court found that
       class counsel was sufficiently experienced, competent, qualified, and able to conduct the
       litigation vigorously. The Court further found that all members of the class were issued
       receipts by Defendant that allegedly did not comply with FACTA, and that Plaintiff’s
       interests would appear to be identical to the interests of other customers.
       Sufficient Interest Requirement. To meet the "sufficient interest" requirement, the
       Seventh Circuit required that the "named plaintiff ... have some commitment to the case.
       The burden of showing sufficient interest is fairly modest in that all that is required is an
       understanding of the basic facts underlying the claims, some general knowledge, and a
       willingness and ability to participate in discovery.



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            FCRA NEWSLETTER • December 28, 2010 • STRASBURGER & PRICE, LLP

       Predominance Requirement. Pursuant to the requirements of Rule 23(b)(3), common
       questions of law or fact must predominate, but they need not be exclusive. In
       determining whether common questions predominate, the Court looks to whether there
       is a "common nucleus of operative facts." The Court found that there was a "common
       nucleus of operative facts" due to the following: Defendant's alleged practice of issuing
       receipts to customers with more than the last five digits of the credit or debit card, and
       whether the receipts printed by Defendant violated § 1681c(g). The issues of law and
       fact that flow from Defendant's alleged practice of printing non-compliant receipts
       predominate over any individual issue.
       Superior to Other Available Methods Requirement. A class action must also be
       superior to other available methods for the fair and efficient adjudication of the
       controversy. The Court found this to be so due to the dispute containing a set of legal
       and factual issues that were shared by the members of the class, and class certification
       was more efficient than multiple individual suits dealing with the same issues.

Court Grants Trans Union’s Motion for Summary Judgment and Orders the Patent and
Trademark Office to Cancel Plaintiff’s Trademark
Scandaglia v. TransUnion Interactive, Inc., 2010 U.S. Dist. LEXIS 91763 (N.D. Ill. Sept. 1,
2010)
Facts: Plaintiffs filed suit against Trans Union for infringing on their federally registered
trademark. Trans Union filed a counterclaim asking the Court to order the Patent and
Trademark Office to cancel the Plaintiffs’ trademark because it was descriptive and therefore
not entitled to protection. Plaintiffs owned a federal trademark registration of the phrase
“Always Know Where You Stand” for legal services. Despite this trademark, many other
companies used this phrase in their advertising. Trans Union used the phrase in a television
advertisement to promote its own trademark: “Truecredit.” Trans Union moved for summary
judgment on Plaintiffs’ claim and its counterclaim.
       Trademarks. The Court granted Trans Union’s motion for summary judgment on
       Plaintiffs’ claim because it found that Trans Union did not use the phrase to identify itself
       or to create awareness in the public as to the uniqueness of the service Trans Union
       offered. Instead, the Court held that Trans Union used the phrase to merely describe
       the services Trans Union offers. Trans Union used the phrase to describe a
       characteristic of its product, instead of trying to connect the phrase to Trans Union’s
       product or service. Additionally, the Court found that Trans Union did not use the phrase
       with any intent other than to promote its credit monitoring service. It did not have any
       intent to create confusion as to the source of the trademark.
       Trademarks: The Court also granted Trans Union’s motion for summary judgment on
       its counterclaim, holding that Plaintiffs’ trademark was descriptive and lacked secondary
       meaning. Thus, Plaintiffs’ trademark was not protectable and the Court ordered the
       Director of the Patent and Trademark Office to cancel Plaintiffs’ registration of the
       trademark.




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                FCRA NEWSLETTER • December 28, 2010 • STRASBURGER & PRICE, LLP

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