Gary A. WRIGHT, Plaintiff–Appellant, v. EXPERIAN INFORMATION SOLUTIONS, INC.; Trans Union LLC, Defendants–Appellees.
On May 27, 2009, the Internal Revenue Service (“IRS”) filed a notice of federal tax lien (“NFTL”) with the Pitkin County Recorder (the “Recorder”) in Colorado listing as name of taxpayer:
Attorneys Title Insurance Agency of
Wright Gary A Member
On May 8, 2009, Mr. Wright had sent a check to the IRS for the unpaid employment taxes underlying the lien.
The Recorder listed the lien on its indexing website as against Gary A. Wright in his personal capacity. Credit reporting agencies (“CRAs”) Experian Information Services, Inc. (“Experian”) and Trans Union LLC (“Trans Union”) received this information about the lien from their contractor, LexisNexis, and included it in their reports of Mr. Wright's credit history.
In 2011, Mr. Wright learned about the lien appearing in his credit reports. He sent letters to the CRAs disputing the lien, asserting (1) the IRS had withdrawn the lien because the taxes had subsequently been paid, and (2) the NFTL inaccurately stated the lien was assessed against him when it should have been assessed only against Attorneys Title Insurance Agency of Aspen (“ATA”). In response to these letters, the CRAs checked the information provided by Mr. Wright with LexisNexis and listed the lien on his credit report as released because it had been paid in full. The CRAs did not remove the lien entirely from Mr. Wright's credit report because the IRS treated it as released rather than withdrawn.
Mr. Wright brought suit in the district court under the Fair Credit Reporting Act (“FCRA”) and Colorado Consumer Credit Reporting Act (“CCCRA”), claiming the credit reports were inaccurate, the CRAs acted unreasonably in reporting the lien and responding to his letters, and the foregoing caused him to suffer damages.
The district court granted summary judgment to the CRAs, concluding they used reasonable procedures to prepare Mr. Wright's credit report and to reinvestigate in response to Mr. Wright's letters.
Exercising jurisdiction under 28 U.S.C. § 1291, we affirm.
A. Factual History1. The IRS Issued an NFTL Naming Mr. Wright and ATA, and Pitkin County Recorded It
On April 9, 2007, the IRS assessed $726.83 for ATA's nonpayment of its 2004 employment taxes. On May 27, 2009, the IRS filed the following NFTL with the Recorder:
Aplt.App. at 504.
ATA is a Colorado limited liability corporation that provides title insurance for real estate transactions. Mr. Wright is the manager, attorney, and registered agent for ATA.1
The NFTL indicates the lien was for nonpayment of Form 941 employment taxes. Under “Residence,” the NFTL lists ATA's business address. It also lists only ATA's taxpayer identification number. After receiving the NFTL, the Recorder indexed the lien on its website as imposed against Mr. Wright in his individual capacity.
The IRS apparently informed Mr. Wright of the NFTL because on September 10, 2009, Mr. Wright sent a letter and an application to the IRS to withdraw the NFTL. In this letter, Mr. Wright stated he paid the taxes in full by a check dated May 8, 2009, before the NFTL was filed. On December 15, 2010, the IRS released the lien, but it did not withdraw it. A withdrawal would have required the IRS to erase the NFTL, “as if the withdrawn notice had not been filed,” and notify the CRAs of the erasure. 26 U.S.C. § 6323(j); see also 26 C.F.R. § 301.6323(j)–1. A release does not require either. See id.; 15 U.S.C. § 1681c(a)(3); 26 C.F.R. § 301.6325–1.2
2. The CRAs Reported the Tax Lien, Mr. Wright Discovered the Report in 2011 and Disputed it in 2012, and the CRAs Reinvestigated and Revised the Report
On August, 26, 2009, LexisNexis, a contractor employed by CRAs Experian and Trans Union, collected the tax lien information from the Recorder's website and reported it to the CRAs. The CRAs included the lien in their reports of Mr. Wright's credit history.
In 2011, when Mr. Wright tried to refinance his home mortgage, he first became aware that his credit reports included reference to the tax lien. In July 2012, Mr. Wright sent a letter to the CRAs disputing their reports of the lien. He asserted the lien had been paid in full and the CRAs incorrectly attributed the lien to him in his personal capacity and should have attributed it only to ATA. Mr. Wright included with this letter the following documentation: a copy of the NFTL, his September 10, 2009 letter and application to the IRS for withdrawal of the lien, and the IRS's release of the lien.
Experian sent a description of Mr. Wright's dispute to LexisNexis. LexisNexis responded that the NFTL listed Mr. Wright as one of the taxpayers and updated the lien to “satisfied/released” based on the documentation Mr. Wright provided. Aplee. Supp.App. at 161. Trans Union sent the letter to a different contractor, Intelenet, which determined Mr. Wright's credit report should be updated to reflect a “Paid Federal Tax Lien.” Aplt.App. at 323. Neither CRA removed the lien from its report, but they changed their reports to show the lien had been released. They also sent Mr. Wright summaries of the results of their investigations. The summaries stated that if Mr. Wright disagreed with the results, he could add a statement to his credit report disputing its accuracy or contact the furnisher of the information, apparently the IRS.
In September 2012, Mr. Wright sent a second letter to the CRAs requesting them to remove the lien from his reports. He attached the same documentation as before. Experian did not perform a second investigation. It determined, based on LexisNexis's earlier investigation, that the lien against Mr. Wright was accurately reported. Experian sent a response to Mr. Wright suggesting he contact the furnisher of the information, apparently the IRS.
Trans Union requested LexisNexis to review the documentation. When LexisNexis reported the same result that Intelenet reached, Trans Union sent a summary of the investigation to Mr. Wright.
B. Procedural History
In December 2012, Mr. Wright sued the CRAs in federal district court, alleging negligent and willful violations of the FCRA and CCCRA. Mr. Wright alleged the NFTL showed the IRS imposed the tax lien only against ATA. He asserted claims against the CRAs under 15 U.S.C. § 1681e(b) and Colo.Rev.Stat. § 12–14.3–103.5 for failing to follow reasonable procedures to assure maximum possible accuracy in preparing the credit report that showed the lien was imposed against him. [Aplt.App. at 16.] He also asserted a claim under 15 U .S.C. § 1681i(a)(1) and Colo.Rev.Stat. § 12–14.3–106 for failing to reasonably reinvestigate his dispute.3 The FCRA uses the term “dispute” to describe a consumer's challenge to the accuracy of the information CRAs include in a credit report. See 15 U.S.C. § 1681i(a)(1). Mr. Wright also alleged he suffered economic damages and emotional distress.
The district court granted summary judgment to the CRAs, finding it “was reasonable to interpret the NFTL as extending to Plaintiff” and that the IRS “can issue [a tax lien] against both a business entity and its member.” Aplt.App. at 1397–98. The court held the CRAs' initial reporting of the lien and their reinvestigation into the dispute were both reasonable because “no additional procedure implemented by Defendants would have allowed them to more accurately determine the scope of the NFTL․” Aplt.App. at 1397.
Mr. Wright appeals, contending the district court should not have granted summary judgment to the CRAs because he raised genuine issues of material fact about the accuracy of the tax lien information on the reports and the reasonableness of the CRAs' procedures in reporting and reinvestigating this information. We affirm the district court's determination that Mr. Wright could not establish the CRAs employed unreasonable procedures in reporting and reinvestigating the tax lien information.
A. Standard of Review
“We review a district court's decision to grant summary judgment de novo, applying the same standard as the district court.” Lundstrom v. Romero, 616 F.3d 1108, 1118 (10th Cir.2010) (quotations omitted). Summary judgment is appropriate if “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “When applying this standard, we view the evidence and draw reasonable inferences therefrom in the light most favorable to the nonmoving party.” Doe v. City of Albuquerque, 667 F.3d 1111, 1122 (10th Cir.2012) (quotations omitted).
B. Reasonable Procedures under 15 U.S.C. § 1681e(b) and Colo.Rev.Stat. § 12–14.3–103.5
Mr. Wright's first claim is that the CRAs failed to use reasonable procedures in reporting the tax lien information in the first instance. Based on the legal requirements of the FCRA and CCCRA, we conclude the district court properly granted summary judgment on this issue.
1. Legal Background
The FCRA and the CCCRA require CRAs to employ reasonable procedures in preparing credit reports.
When CRAs initially report information, 15 U.S.C. § 1681e(b) requires:
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.
Colo.Rev.Stat. § 12–14.3–103.5 similarly requires:
Whenever a consumer reporting agency prepares a consumer report, the agency shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the consumer about whom the report relates․
To prevail on a claim under these provisions, a plaintiff must “establish that: (1) [the CRA] failed to follow reasonable procedures to assure the accuracy of its reports; (2) the report in question was, in fact, inaccurate; (3) [the plaintiff] suffered injury; and (4) [the CRA's] failure caused his injury.” Eller v. Trans Union, LLC, 739 F.3d 467, 473 (10th Cir.2013), cert. denied, ––– U.S. ––––, 134 S.Ct. 2158, 188 L.Ed.2d 1126 (2014); see also Cassara v. DAC Servs., Inc., 276 F.3d 1210, 1217 (10th Cir.2002). We resolve this appeal based on Mr. Wright's inability to prove the first element of his claim.
The FCRA does not define “reasonable procedures,” and the Tenth Circuit has not yet addressed this term. Other circuits applying § 1681e(b) have recognized the “reasonableness of the procedures” is a fact-dependent inquiry, “and whether the agency followed them will be jury questions in the overwhelming majority of cases.” Guimond v. Trans Union Credit Info. Co., 45 F.3d 1329, 1333 (9th Cir.1995); see also Cahlin v. Gen. Motors Acceptance Corp., 936 F.2d 1151, 1156 (11th Cir.1991). But in cases where CRAs clearly employ reasonable procedures, the issue may be decided on summary judgment. See Crabill v. Trans Union, L.L.C., 259 F.3d 662, 664 (7th Cir.2001) (stating summary judgment may be appropriate under § 1681e(b) when “the reasonableness or unreasonableness of the procedures is beyond question”).
Courts have held CRAs must look beyond information furnished to them when it is inconsistent with the CRAs' own records, contains a facial inaccuracy, or comes from an unreliable source. See Cortez v. Trans Union, LLC, 617 F.3d 688, 708–11 (3d Cir.2010); Stewart v. Credit Bureau, Inc., 734 F.2d 47, 51–53 (D.C.Cir.1984); Dennis v. BEH–1, LLC, 520 F.3d 1066, 1069 (9th Cir.2008); Cushman v. Trans Union Corp., 115 F.3d 220, 225 (3d Cir.1997). CRAs are not required to research further when “the cost of verifying the accuracy of the source” outweighs the “possible harm inaccurately reported information may cause the consumer.” Henson v. CSC Credit Servs., 29 F.3d 280, 285 (7th Cir.1994); see also Childress v. Experian Info. Sols., Inc., 790 F.3d 745, 747 (7th Cir.2015).
2. The CRAs Used Reasonable Procedures
As noted above, the CRAs relied on LexisNexis to collect information from the Recorder's office. LexisNexis employs a collector to retrieve information from the Recorder's office and send it to the CRAs. LexisNexis certifies its collectors on document recognition, certifies them on the process and procedures for collecting public record information, and audits them to assure understanding and compliance with collection requirements. LexisNexis and the CRAs check the information they collect for accuracy.
Mr. Wright contends summary judgment should not have been granted to the CRAs because he raised a genuine issue of material fact as to whether the CRAs followed reasonable procedures in reporting the tax lien under § 1681e(b). He asserts reasonable procedures would have required the CRAs to employ individuals trained in American tax law to examine the NFTL and determine whether it applied to him. He offers no authority to support this position.
The information LexisNexis collected from the Pitkin County Recorder's website and sent to the CRAs was not inaccurate on its face, inconsistent with information the CRAs already had on file, or obtained from a source that was known to be unreliable. See Cortez, 617 F.3d at 713; Stewart, 734 F.2d at 51–53; Dennis, 520 F.3d at 1069; Cushman, 115 F.3d at 224–26. The cases that have addressed reasonable procedures show the CRAs acted reasonably here.
In Cortez, a jury determined a CRA failed to follow reasonable procedures in erroneously reporting a consumer's name that appeared on the Treasury Department's Office of Foreign Assets Control List (“OFAC List”). 617 F.3d at 705. The district court denied the CRA's motion for judgment as a matter of law. Id. The Third Circuit affirmed, determining there was sufficient evidence for a jury to find the CRA's procedures were unreasonable. 617 F.3d at 710. The CRA's records showed the consumer was born in 1944 and her middle name was “Jean.” Id. at 710. The actual person on the OFAC List had the same first name as the consumer, but her middle name was “Quintero,” her last name was spelled “Cortes,” and she was born in 1971. Id. The court upheld the jury's verdict because these differences supported a determination that the CRA “did not exercise sufficient care” in carrying out its responsibilities under § 1681e(b). Id. Unlike the evidence in Cortez, Mr. Wright has provided no evidence to show the tax lien information taken from the Recorder's website was inconsistent with the information the CRAs had on file about him.
In Dennis, the Ninth Circuit reversed summary judgment for the CRA because the CRA reported an unlawful detainer judgment had been entered against the consumer. 520 F.3d at 1069. The court docket in the unlawful detainer action actually stated the parties had stipulated to dismissal of the case and that the case was dismissed without prejudice. Id. at 1068. Unlike the consumer in Dennis, Mr. Wright has failed to establish any inaccuracy that was apparent from the face of the Recorder's website. He has not shown the CRAs knew or should have known that the tax lien information provided to them was inaccurate. See also Stewart, 734 F.2d at 52 (holding a CRA was required to initially verify furnished information because it was inconsistent with the consumer's credit history).
The pertinent case law also shows that the costs to the CRAs of employing individuals trained in American tax law to examine every NFTL outweighs the potential of harm to consumers like Mr. Wright. See Childress, 790 F.3d at 747; Henson, 29 F.3d at 285. In Childress, the Seventh Circuit upheld a district court's summary judgment determination that it was reasonable under § 1681e(b) for a CRA to report a bankruptcy petition without later reporting the petition had been withdrawn. 790 F.3d at 747. The court noted that bankruptcy courts are often unclear in reporting withdrawals and that it would be unreasonable to require CRAs to independently verify whether a bankruptcy petition had been dismissed or withdrawn because this would require “a live human being, with at least a little legal training, to review every bankruptcy dismissal and classify it as either voluntary or involuntary.” Id.
In Henson, the Seventh Circuit affirmed dismissal on the ground that it was reasonable under § 1681e(b) for a CRA to report a state court judgment even though the state court had erroneously noted a money judgment against the plaintiff on the Judgment Docket. 29 F.3d at 285. The court held, “as a matter of law, a credit reporting agency is not liable under the FCRA for reporting inaccurate information obtained from a court's Judgment Docket, absent prior notice from the consumer that the information may be inaccurate.” Id. To hold otherwise would require CRAs “to go beyond the face of numerous court records to determine whether they correctly report the outcome of the underlying action” and “substantially increase the cost of their services.” Id.
The plaintiff-consumers in Childress and Henson argued for procedures similar to those Mr. Wright espouses—requiring CRAs to employ individuals trained in American tax law to examine every NFTL filed in a county recorder's office. No court has required a CRA to go this far to meet the reasonable procedures requirement of § 1681e(b).
The CRAs' reliance on LexisNexis to report the tax lien on Mr. Wright's credit report was reasonable. We affirm the district court's determination that the CRAs employed reasonable procedures under § 1681e(b) and Colo.Rev.Stat. § 12–14.3–103.5 in reporting Mr. Wright's tax lien.
C. Reasonable Reinvestigation under 15 U.S.C. § 1681i(a)(1)(A)
Mr. Wright's second claim is that the CRAs failed to use reasonable procedures in reinvestigating the tax lien information after he disputed his credit report. Based on the FCRA's requirements for reinvestigation, we conclude the district court properly granted summary judgment on this issue.
1. Legal Background
15 U.S.C. § 1681i(a)(1)(A) requires the following from CRAs' reinvestigation of consumer disputes:
[I]f the completeness or accuracy of any item of information contained in a consumer's file at a consumer reporting agency is disputed by the consumer and the consumer notifies the agency directly, or indirectly through a reseller, of such dispute, the agency shall, free of charge, conduct a reasonable reinvestigation to determine whether the disputed information is inaccurate and record the current status of the disputed information, or delete the item from the file ․ before the end of the 30–day period beginning on the date on which the agency receives the notice of the dispute from the consumer or reseller.
Colo.Rev.Stat. § 12–14.3–106 similarly requires:
If the completeness or accuracy of any item of information contained in the consumer's file is disputed by the consumer and the consumer notifies the consumer reporting agency directly of such dispute, the agency shall reinvestigate the item free of charge and record the current status of the disputed information on or before thirty business days after the date the agency receives notice conveyed by the consumer.
To prevail on a § 1681i(a) claim or its nearly identical CCCRA counterpart, plaintiffs must prove essentially the same elements as those for a § 1681e(b) claim—unreasonable procedures in reinvestigating a report, inaccuracy of the report, injury, and causation—in addition to proving they informed the CRA about the inaccuracy. See Cushman, 115 F.3d at 225; Cortez, 617 F.3d at 712–13. As with Mr. Wright's first claim, we resolve the reinvestigation appeal based on his inability to prove the first element of the claim.
Although § 1681i(a) does not define the term “reasonable reinvestigation,” courts have consistently held a reasonable reinvestigation requires more than “making only a cursory investigation into the reliability of information that is reported to potential creditors.” Cortez, 617 F.3d at 713. Thus, “[a] credit reporting agency that has been notified of potentially inaccurate information in a consumer's credit report is in a very different position than one who has no such notice.” Henson, 29 F.3d at 286. “In short, when one goes from the § 1681e(b) investigation to the § 1681i(a) re investigation, the likelihood that the cost-benefit analysis will shift in favor of the consumer increases markedly.” Cushman, 115 F.3d at 225.
A reasonable reinvestigation, however, does not require CRAs to resolve legal disputes about the validity of the underlying debts they report. See Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876, 892 (9th Cir.2010) (“We agree that reinvestigation claims are not the proper vehicle for collaterally attacking the legal validity of consumer debts.”); DeAndrade v. Trans Union LLC, 523 F.3d 61, 68 (1st Cir.2008) (holding a reasonable reinvestigation does not entail resolving “legal issue[s] that a credit agency ․ is neither qualified nor obligated to resolve under the FCRA”).
2. The CRAs' Reinvestigation Was Reasonable
After Mr. Wright disputed the tax lien information, Trans Union sent Mr. Wright's dispute letter and documentation, which included the NFTL and the IRS's release of the NFTL, to Intelenet. Experian sent a description of Mr. Wright's dispute to LexisNexis. LexisNexis and Intelenet considered the information sent to them and reported to the CRAs that the lien was properly recorded against Mr. Wright and had been released but not withdrawn. The CRAs updated their credit reports to reflect that the lien had been released and provided summaries of their reinvestigations to Mr. Wright.
Mr. Wright contends that this reinvestigation was unreasonable. He argues (a) entries on the NFTL showed the tax lien did not apply to him, which would have been apparent to the CRAs if they had employed individuals trained in American tax law to examine the NFTL; (b) the CRAs should have contacted the IRS to inquire whether the tax lien applied to him; and (c) the CRAs should have determined whether the tax lien applied to him. All three arguments fail. We therefore affirm the district court's determination that the CRAs' reinvestigation under § 1681i(a) was reasonable.
a. Entries on the Face of the NFTL
Mr. Wright argues that entries on the NFTL—ATA's address, ATA's taxpayer identification number, and information that the lien was imposed for employment taxes—show it applied only to ATA. He contends the CRAs would have reached this conclusion had they employed individuals trained in American tax law to examine the NFTL. He provides no support to show this is so. The CRAs point to tax expert evidence that the NFTL could and did apply to Mr. Wright. The CRAs also provide authority that the IRS may impose a tax lien against a limited liability company and its single member in certain circumstances.4 Trans Union's expert testified that Mr. Wright's being “named as a Taxpayer on the Wright Lien means that the IRS asserted a Federal Tax Lien interest against his personal assets for the underlying tax debt of Attorney's Title Insurance Agency of Aspen LLC.” Aplt.App. at 334.5
Even if the IRS did not intend to impose a tax lien against Mr. Wright, the NFTL nonetheless reflects on its face that it did because the IRS placed his name on it. Mr. Wright has not shown that hiring tax experts at the CRAs to examine NFTLs on their face would have produced a different result here. Indeed, the only tax expert evidence in the record supports the CRAs.
b. Contact the IRS
Mr. Wright next contends a reasonable reinvestigation of his dispute would require the CRAs to contact the IRS. The only authority Mr. Wright cites is a district court case, later vacated, about a consumer who provided a release to the CRAs to contact the IRS after the consumer disputed the credit report. Soghomonian v. United States, 278 F.Supp.2d 1151, 1158 (E.D.Cal.2003), vacated in 2005 WL 1972594 (E.D.Cal. June 20, 2005). This case is inapposite because Mr. Wright provided no release to the CRAs.
Further, federal law appears to prohibit the IRS from providing the CRAs with Mr. Wright's tax information. See 26 U.S.C. § 6103; Church of Scientology v. IRS, 484 U.S. 9, 16, 108 S.Ct. 271, 98 L.Ed.2d 228 (1987) (holding the IRS could not release confidential information, even where identifying taxpayer information was redacted, because “[o]ne of the major purposes in revising § 6103 was to tighten the restrictions on the use of return information by entities other than [the IRS]”).6
C. Validity of the NFTL
Mr. Wright argues the CRAs should have determined the validity of the NFTL. The FCRA and relevant case law do not impose such a duty on the CRAs. See Carvalho, 629 F.3d at 892; DeAndrade, 523 F.3d at 68.
The FCRA expects consumers to dispute the validity of a debt with the furnisher of the information or append a note to their credit report to show the claim is disputed. See 15 U.S.C. §§ 1681i(a)(6)(B)(iii), (iv);(b)-(c) (stating that, upon reinvestigation, CRAs must provide consumers two notices, one stating that a consumer may request any reasonably available contact information from the furnisher of the information and the other stating “that the consumer has the right to add a statement to the consumer's file disputing the accuracy or completeness of the information”); Carvalho, 629 F.3d at 892 (construing 15 U.S.C. § 1681i and determining “a consumer who disputes the legal validity of an obligation should do so directly at the furnisher level”). The CRAs informed Mr. Wright of these two avenues of relief, and Mr. Wright pursued neither.
In Carvalho, a consumer thought her insurer should have paid her medical bill. 629 F.3d at 882. When the medical bill appeared on her credit report, she requested it be removed. Id. The CRAs reinvestigated the bill, found it was still unpaid, and refused to remove it. Id. at 882–83. The Ninth Circuit upheld a district court's summary judgment determination that a reasonable reinvestigation would not have discovered the purported inaccuracy. Id. at 892. The court said, “Because CRAs are ill equipped to adjudicate contract disputes, courts have been loath to allow consumers to mount collateral attacks on the legal validity of their debts in the guise of FCRA reinvestigation claims.” Id. at 891.
In DeAndrade, the plaintiff-consumer had financed the purchase of windows for his home. 523 F.3d at 63. He later discovered the bank had mortgaged his home by, he claimed, forging his and his wife's signatures. Id. He refused to make payments on the mortgage. Id. at 64. The bank notified the CRAs of the unpaid mortgage, which the CRAs reported on the consumer's credit report. Id. The consumer then requested a reinvestigation. Id. The First Circuit, construing 15 U.S.C. § 1681i, upheld the district court's determination that the reinvestigation was reasonable because the bank produced documentation of the mortgage and the question of whether the consumer “was entitled to stop making those payments is a question for a court to resolve ․ not a job imposed upon consumer reporting agencies by the FCRA.” Id. at 68.
Like the consumers in Carvalho and DeAndrade, Mr. Wright's argument would require the CRAs to do more than a reasonable reinvestigation requires. As part of their reinvestigation, the CRAs examined the NFTL and determined it applied to Mr. Wright because his name was listed. Mr. Wright insists the CRAs must go further and determine the validity of the tax lien. As the foregoing cases demonstrate, that question is a matter he should take up with the IRS.
We affirm the district court's determination that the CRAs' reinvestigation of Mr. Wright's dispute was reasonable under § 1681i(a) and Colo.Rev.Stat. § 12–14.3–106.
For the foregoing reasons, we affirm.
I agree with the majority's well-reasoned discussion in Parts I and II(A) and (B), but I respectfully disagree with Part II(C). In my view, we should reverse the award of summary judgment on the reinvestigation claim.
As the majority explains, Trans Union and Experian had a duty to conduct a reasonable reinvestigation after learning of Mr. Wright's dispute. The general rule is that the reasonableness of the reinvestigation entails an issue of fact, not of law. See Westra v. Credit Control of Pinellas, 409 F.3d 825, 827 (7th Cir.2005) (stating that the reasonableness of an investigation under the Fair Credit Reporting Act is a factual question normally reserved for trial); Seamans v. Temple Univ., 744 F.3d 853, 864–65 (3d Cir.2014) (stating that the reasonableness of a consumer reporting agency's procedure is normally a question for trial). In my view, we should apply the general rule on the sufficiency of the reinvestigation.
When responding to the summary judgment motion, Mr. Wright presented evidence that he had supplied the notice of a tax lien to both Trans Union and Experian. In light of that evidence, a fact finder could legitimately infer that Trans Union and Experian should have consulted the actual notice rather than rely on second-hand accounts. If the agencies had consulted the actual notice, they would have seen this document (without the highlighting):
On its face, the notice is ambiguous. The fact finder could interpret the notice as a lien against Mr. Wright's agency (a limited liability company), against Mr. Wright in his personal capacity, or against both the limited liability company and Mr. Wright. The name of Mr. Wright's agency is “Attorneys Title Insurance Agency of Aspen.” The word “Aspen,” however, does not appear in the notice. And Mr. Wright is listed only with the designation “member.” Under state law, members of a limited liability company (like Attorneys Title Insurance Agency of Aspen) are not subject to personal liability for the company's debts. See Colo.Rev.Stat. Ann. § 7–80–705 (West 2015) (“Members ․ of limited liability companies are not liable under a judgment, decree, or order of a court, or in any other manner, for a debt, obligation, or liability of the limited liability company.”).
Trans Union and Experian point out that they had few opportunities to obtain clarification. For example, Trans Union and Experian state that they could not obtain clarification from the creditor (the Internal Revenue Service). Appellees' Answering Br. at 40, 44. If that is true, Trans Union and Experian might have turned to Mr. and Mrs. Wright, who had insisted that the lien involved only the insurance agency. But Trans Union and Experian could reasonably reject the account of Mr. and Mrs. Wright because of their self-interest. Thus, Trans Union and Experian were left with only the ambiguous notice of a tax lien.
Trans Union and Experian argue that it would be “unnecessary and costly” to require consumer reporting agencies to review the actual notice of a tax lien. Id. at 18. Here, however, Mr. and Mrs. Wright sent the actual notice to both Trans Union and Experian. And both entities represent that they did review the actual notice. Id. at 12–13, 19, 36, 38. With that representation, the fact finder could justifiably infer that Trans Union and Experian should have recognized the ambiguity in the notice, regardless of what others said about the contents. See, e.g., id. at 39, 43–44 (arguments by Trans Union and Experian that they could assess the dispute based on the notice of a tax lien).
The resulting question is whether a fact finder could fault Trans Union and Experian for refusing to delete reference to the personal lien after finding themselves unable to verify who the lien was against. To answer this question, we must turn to federal law, 15 U.S.C. § 1681i(a)(5)(A), which requires deletion from a personal credit report when a personal lien proves impossible to verify:
If, after any reinvestigation ․ of any information disputed by a consumer, an item of the information is found to be ․ incomplete or cannot be verified, the consumer reporting agency shall—
(i) promptly delete that item of information from the file of the consumer, or modify that item of information, as appropriate, based on the results of the reinvestigation․
15 U.S.C. § 1681i(a)(5)(A) (2012).
The majority states that Mr. Wright waived reliance on § 1681i(a)(5) by failing to cite this provision in district court. For the sake of argument, let's assume that the majority is correct about waiver. But “[w]aiver ․ binds only the party, not the court.” Planned Parenthood of Kan. and Mid–Mo. v. Moser, 747 F.3d 814, 837 (10th Cir.2014). Even if Mr. Wright waived reliance on § 1681i(a)(5), we would retain discretion to address the issue. Id . In my view, there are two strong reasons for us to consider § 1681i(a)(5) even if Mr. Wright had waived reliance on this provision in district court.
First, Trans Union and Experian “waived the waiver” by failing to argue on appeal that Mr. Wright had failed to preserve reliance on § 1681i(a)(5). See United States v. Heckenliable, 446 F.3d 1048, 1049 n. 3 (10th Cir.2006) (explaining that the government had “waived the waiver” by failing to argue that the defendant had forfeited his appeal point).
Second, Mr. Wright argued in district court that Trans Union and Experian had failed to verify the existence of a personal lien. Appellant's App., vol. 2, at 663. To evaluate this argument, we must decide whether the law required the defendants to verify the existence of a personal lien. See U.S. Nat 7 Bank of Or. v. Indep. Ins. Agents of Am., Inc., 508 U.S. 439, 447, 113 S.Ct. 2173, 124 L.Ed.2d 402 (1993) (“[A] court may consider an issue ‘antecedent to ․ and ultimately dispositive of’ the dispute before it, even an issue the parties fail to identify and brief.” (quoting Arcadia v. Ohio Power Co., 498 U.S. 73, 77, 111 S.Ct. 415, 112 L.Ed.2d 374 (1990))). For that decision, we must consider the applicable law, which appears in § 1681i(a)(5). Thus, we must consider § 1681i(a)(5) if we are to assess whether the reinvestigation was reasonable as a matter of law. See Kamen v. Kemper Fin. Servs., Inc., 500 U.S. 90, 99, 111 S.Ct. 1711, 114 L.Ed.2d 152 (1991) (holding that a party did not waive reliance on state law because “[w]hen an issue or claim is properly before the court, the court is not limited to the particular legal theories advanced by the parties, but rather retains the independent power to identify and apply the proper construction of governing law”).
For both reasons, I would assess the defendants' argument on reinvestigation against the backdrop of the pertinent law: 15 U.S.C. § 1681i(a)(5).
Under this law, a fact finder could reasonably conclude that Trans Union and Experian were unable to verify from the notice that it included a lien against Mr. Wright. With this conclusion, the fact finder could reasonably determine that the reinvestigation should have led Trans Union and Experian to delete the personal lien from the credit reports. See Pinner v. Schmidt, 805 F.2d 1258, 1262 (5th Cir.1986) (stating that the consumer reporting agency should have deleted the reported information under § 1681i(a) if verification would have been possible only through an individual known to have past disagreements with the plaintiff).1
Notwithstanding the ambiguity in the notice, Experian said that LexisNexis had listed Mr. Wright as a “responsible taxpayer.” Appellees' Answering Br. at 12. But a fact finder could reasonably question Experian's reliance on LexisNexis' response. In responding to Experian's inquiry, LexisNexis identified where the county clerk had filed the lien and the lien release. Appellees' Suppl. App. at 161. But LexisNexis did not say whether it had reviewed the actual notice.
If LexisNexis, Experian, or Trans Union had looked at the actual notice (which Mr. Wright had sent), they would have seen that it was ambiguous. The district court recognized the ambiguity but mistakenly concluded that the ambiguity supported summary judgment for Trans Union and Experian. Appellant's App., vol. 4, at 1399–400. In doing so, the court reasoned that Trans Union and Experian could have justifiably inferred that the notice of tax lien applied to Mr. Wright in his personal capacity. Id. In drawing this inference, the court misunderstood the test to be applied to Trans Union and Experian's reinvestigation. If the notice remained ambiguous after the reinvestigations, as the district court concluded, the existence of a personal lien would have been impossible to verify. Thus, under federal law, a fact finder could rationally conclude that Trans Union and Experian should have deleted the entry as a personal debt of Mr. Wright. See 15 U.S.C. § 1681i(a)(5) (2012).
As a result, I respectfully dissent from the majority's conclusion in Part
MATHESON, Circuit Judge.