PLAINTIFF’S AMENDED RESPONSE IN OPPOSITION TO DEFENDANT’S [AMENDED] MOTION FOR JUDGMENT AS A MATTER OF LAW OR, IN THE ALTERNATIVE, FOR A NEW TRIAL or REMITTITUR
First Advantage Background Services Corp.’s (“Defendant”) [Amended] Motion for Judgment as a Matter of Law or, in the Alternative, Motion for a New Trial or Remittitur (ECF 207) (the “Motion”) seeks to contravene the Seventh Amendment to the Constitution and should be denied. In the face of known risks and to increase profitability, Defendant negligently and willfully failed to fulfill its duties to follow reasonable procedures to assure maximum possible accuracy whenever it prepared a background report as a result of the following conscious decisions: 1) it emphasized speed and volume, 2) failing to implement known industry standards and follow its procedures to seek more than two identifiers when preparing a background report on consumers with a common name, 3) failing to obtain an address history for Plaintiff (“Plaintiff” or “Williams”) or even make that an option for all adjudicators, and 4) failing to implement an industry-standard cross-blocking technique to prevent mismatches from reoccurring. As a result, Defendant twice matched Plaintiff with a violent criminal living hundreds of miles away – causing Williams to lose out on two employment opportunities – even after it knew, the second time, that it had already mismatched the two individuals. Unless Defendant is deterred, this harm could not only reoccur to Plaintiff but to anyone with a common name or who has previously been mismatched with a criminal. Even after the trial, Defendant still vigorously claims that it’s not even negligent. Punitive damages are necessary to change Defendant’s conduct, and the jury’s intent to adequately punish it should not be curtailed.
SUMMARY OF EVIDENCE
- Evidence of Negligent and Willful Violations of §1681e(b)
Defendant’s website touts its “[i]ndustry-leading turnaround times to accelerate your screening and selection processes and reduce costs related to hiring delays.” Tr. 256, 8-10; P. Exhs. 57 and 58. Its Public Research Retrieval Group (“Retrieval Group”) has a goal of 23 units of research per hour. Tr. 259, 2-12. Defendant’s Records Adjudication Team (“Adjudication Team”), which prepares the background report, has a benchmark of 30 touches or tasks per hour, or one every two minutes. Tr. 259, 14 – 260, 2.
A. The Lost Rent-A-Center Employment
In preparing the background report to Williams’ first prospective employer, Rent-A-Center, (the “Rent-A-Center Report”), the Adjudication Team made matches to public records based on Defendant’s National Criminal File. Tr. 260, 14 – 17. The Public Records Retrieval Team then electronically verified that those records existed and that the information was “complete and up to date” by obtaining an electronic report from the Palm Beach County Clerk of Court. Tr. 261, 5-25; Tr. 585, 24 – 587, 1. This report showed that, from 2001 through 2009, there were public records relating to six crimes in Palm Beach County which listed Ricky Williams as the defendant. Id. A physical public record search for criminal records for Williams conducted in Levy County, where Williams lived, was negative. Tr. 263, 17-18.
In the section of the Rent-A-Center Background Report where the criminal records relating to Ricky Williams and the charge for the sale of cocaine were summarized, Defendant placed Richard Williams’ social security number in error. Tr. 287, 10-17. The social security number should only have been placed there if there was a match of social security numbers between Williams and Ricky Williams, which was not the case here. Tr. 287, 18-24. After Williams disputed the erroneous match, the charge for the sale of cocaine in the Rent-A-Center Report, Defendant obtained the actual court records relating to this charge. Tr. 264, 4 – 265, 14. Williams’ dispute of the erroneous match of him to the charge of Ricky Williams for the sale of cocaine was resolved based on the difference between the 6’2” height in these court records and 5’10” height listed on Williams’ driver’s license. Id. and Tr. 265, 15-19. Deposition of Vera Budack, page 37, lines 8 – page 38, line 2.
B. Another Lost Employment Opportunity, This Time with Winn-Dixie
In preparing the background report to a second prospective employer, Winn-Dixie, (“Winn-Dixie Report”), the Adjudication Team obtained “corroboration of the Broward County records” and determined that the information was “complete and up to date” for a conviction of Ricky Williams for burglary and aggravated battery on a pregnant woman by reviewing the website of the Florida Department of Corrections. P. Exh. 33, page 3, ¶12; Tr. 289, 18-23; Tr. 585, 24 – 587, 1. This website, as it existed at the time of the preparation of the Winn-Dixie Report, indicated that Ricky Williams’ height is again 6’2” and that his address was the Broward County Jail in Ft. Lauderdale, Florida. P. Exh. 38; Tr. 289, 25 – 294, 15. The corporate representative for Defendant, Matthew O’Connor, acknowledged that it would be unlikely that someone sitting in jail would be applying for jobs. Tr. 295, 4 – 8. Mr. O’Connor also admitted that the failure to note that Ricky Williams was in jail was an error. Tr. 467, 24 – 468, 10. At the time of preparing the Winn-Dixie Report in 2013, a search of the Levy County court records again came back negative. Tr. 297, 22 – 298, 9.
C. Defendant’s Insufficient Procedures
Defendant had a National Criminal File procedure which contemplated matching persons with common names based on three identifiers. Tr. 314, 17-315, 3; P. Exh. 18. In preparing the two subject background reports, this procedure was overridden and Williams was matched with the records of Ricky Williams based on the use of two, not three, identifiers. Tr. 315, 9-12.
Defendant had a procedure which provided that a member of the adjudication team should obtain an address history of the consumer from Experian where there is a match between a consumer and public records based on name and date of birth but no match of address. Tr. 315, 23 – 316, 5; Tr. 316, 25 – 319, 1; P. Exh. 22. Here, there were no address matches in either instance relating to Williams. Therefore, this procedure would have applied. However, both times the adjudicator did not “follow” this procedure to obtain an address history. Tr. 319, 2 – 320, line 321, 13. The number of adjudicators who were authorized to use the Experian service was limited. Tr. 482, 19 – 483, 18. Thus, it is likely that the adjudicators who were preparing the two background reports were not authorized to use the Experian service. Id. Two times Defendant made conscious decisions not to use the Experian service and twice reports came back with significant errors. Tr. 483, 19 – 484, 3. An Experian address history is similar to an Accurint address history, Tr. 321, 14 – 324, 5, and it would not be surprising if it showed similar results, namely, that Williams lived exclusively in Chiefland, Florida throughout his life. Id.
After Williams disputed the match in the Rent-A-Center Report, Defendant knew that the odds that there was another Richard or, more accurately, Ricky, Williams having the same date of birth as Williams was 100 percent. Tr. 298, 20 – 299, 1. Defendant possessed relevant information that was not used in preparing the Winn-Dixie Report. Tr. 299, 2 – 300, 9. Mr. O’Connor admitted that if, all the information Defendant possessed at the time the Winn-Dixie Report was prepared was available to a reasonable person, that person would know with a certainty or virtual certainty that the Ricky Williams who committed burglary and aggravated battery on a pregnant woman whose record Defendant matched with Williams was not Williams. Tr. 300, 12 – 18.
There is no way to flag the system to indicate that there is a criminal out there by the name of Ricky Williams that has the same date of birth as Williams and that, in the future, an adjudicator should not match these two again. Tr. 306, 25 – 309, 9. Accordingly, there are no procedures in place to prevent Williams from being re-matched with Ricky Williams. Tr. 309, 10 – 311, 10. The risk remains unchanged and the exact same harm suffered by Plaintiff could very well reoccur in the future. Id.
Between 2009 and 2013, 14,346 persons nationally and 1,746 persons in Florida had complaints that a background report prepared by Defendant contained public record information for another individual which resulted in a revised background report. Joint Pretrial Stipulation (ECF 171), Sec. F., ¶ 5-6. The error rate for these “not me” or “not mine” errors in Florida only were 0.61% in 2010, 0.50% in 2011, 0.64% in 2012, and 0.28% in 2013. Joint Pretrial Stipulation (ECF 171), Sec. F., ¶ 8. This equals an average error rate of 0.51% in Florida for 2010 to 2013.
D. Expert Testimony
Plaintiff’s expert, Evan Hendriks, has been retained in hundreds of Fair Credit Reporting Act cases. Tr. 337, 16-24. Because of his expert witness work, he has been allowed access to specialized information that persons outside of the consumer reporting industry do not have. Tr. 341, 17 – 342, 11.
1. Defendant Did Not Follow its Own Procedures or
Meet the Industry Standard of Seeking Full Identifiers
Although Defendant seeks to overturn the jury’s verdict based on its procedures, Mr. Hendricks testified that the Defendant did not follow its own procedures. Tr. 358, 9-13. This included failing to obtain an address history which Mr. Hendricks testified was necessary in this case given the presence of “red flags” as it would have confirmed that Williams always lived in Levy County, not 300 miles away where Ricky Williams lived and committed crimes. Tr. 377, 2 – 378, 9.
Mr. Hendricks testified that, albeit there is no requirement in the consumer reporting industry regarding the number of identifiers to use, the industry has recognized that the more identifiers used, the better chance of accuracy of records, and there is a movement towards the use of full identifying information. Tr. 345, 13 – 21. A jury could have found that, given the fact that Defendant twice overrode its own procedures requiring three identifiers to make a match, Defendant did not seriously attempt to follow the industry standard of endeavoring to obtain full identification information before making a match and that its procedure was a pretext. Tr. 365, L 9-11. Based on this analysis, Defendant did not comply with industry standards. Tr. 382, L 11-18.
2. Defendant Did Not Follow Industry Standards as to the
Suppression Function and Common Sense
Mr. Hendricks testified that Defendant did not meet industry standards by failing to enact the “suppression function” – the practice of making sure a person is not re-mismatched with the same criminal. Tr. 358, 14-22. He testified that other consumer reporting agencies have developed procedures known as the suppression function that they employ when they discover that “they have mixed the wrong people together.” Id. Mr. Hendricks testified specifically that Equifax, one of the “big three” credit reporting agencies, has a procedure which applies when “identifiers are dragging in the wrong information about consumer B and consumer A.” Tr. 358, 23 – 359, 1. He explained that Equifax “cross-block[s] or flag[s] those identifiers to make sure that anything – any information that’s with that other wrongful identifier, that’s not the subject of our consumer today, is blocked from him or his information from coming in.” Tr. 359, 2-5. He further testified that Experian has a similar procedure. Tr. 359, 6-11.
Mr. Hendricks stated that the Defendant has no such suppression or flagging procedures. Tr. 359, 12 – 360. There is no reason why Defendant has not already instituted these types of procedures. Tr. 372, 3-5. Mr. Hendricks opined that, based on his over 40 years of experience in the consumer reporting industry, reporting agencies can be motivated by the bottom line to emphasize speed and volume which will make them reluctant to take “a few extra steps.” Tr. 361, 3- 22.
It is also noteworthy that Defendant’s own expert, Mr. Marquis, acknowledged that Trans Union has a system which makes a logical decision as to consumer data provided to it, Tr. 515, 19-22, whereas Defendant’s policies prohibit the application of human logic. Alt Depo, 70, 10-14.
- Evidence of Damages
A. Compensatory Damages
The jury found that Defendant’s conduct was a substantial factor in causing Williams to lose out on employment opportunities. In addition to ample evidence of his actual lost wages from losing the Rent-A-Center and Winn-Dixie jobs, evidence regarding Williams’ emotional distress damages was introduced via his testimony and the testimony of his mother. Williams not only testified that he was “horrified,” (Tr. 141, 19) he also testified as to the following:
Had me feeling horrible. It’s, like, I’ll never get a job. Not knowing what other employers use this company, and this keeps coming up and, you know me having to sit and ask employers if the use this company. And then the employer may think that I’m hiding something when I’m asking out of total honesty, you know, just to enforce a safety net for myself, you know. Because from my understanding their system is not set up to block Ricky Williams’ criminal record. So that’s why I’m concerned.
Tr. 148, 16 – 24. Williams testified how important his reputation was (Tr. 149, 15-16), that the demeanor of potential employers towards him changed, and that these prospective employers trusted the accuracy of Defendant’s reports and doubted him – causing them to refuse to hire him. Tr. 150, 14-22. Williams testified that he has trouble sleeping, how he worried and how “highly upset” he was about it. Tr. 154, 6-9. Williams testified he had to take medication because he was experiencing headaches. Tr. 154, 11-13. He testified how this still affected him at the time of the trial, that he also must worry about future job applications because the system is not setup to block an erroneous match with Ricky Williams’ criminal records from occurring in the future, and that he will always have this concern. Tr. 154, 14-23. Williams’ mother, Eddie Jean Williams, testified how rough it was for them both. Tr. 243, 21-22. She testified that Williams suffered physical effects such as not eating. Id. at 24-25. She also testified that he had trouble sleeping and would wake up during the night. Tr. 244, 15-16.
B. Alleged Fraud
Defendant claims that Plaintiff gave false testimony regarding whether he quit the Sheriff’s Office. However, Plaintiff’s testified at trial as follows:
A. Ms. Donna Capps is the communication supervisors at the Levy County Sheriff’s Office. And she was telling me that I wasn’t meeting requirements and that they had to let me go, so I just left the Academy.
Q. You quit?
A. Yes, sir.
Tr. 136, L 5-9. This is consistent with his deposition testimony, which also indicates that Ms. Capps prompted his decision to quit and reads as follows: “And I just – I tried to stay and just couldn’t do it. Because Ms. Capps had asked me did I want to continue, you know, because once I get in there and, you know, complete the Academy and I decide to quit, I would have to reimburse them all that training money. So I just told her, ‘Ms. Capps, I couldn’t do it.’”. Tr. 173, L 5-8. He also testified at his deposition that “because they didn’t have any other positions available then, like, corrections” he could not continue. Id. at 11-13. Thus, both his trial testimony and deposition are consistent that information Ms. Capps provided to Plaintiff about the job prompted him to quit, in conjunction with the lack of other available opportunities.
C. Mitigation Affirmative Defense
The jury rejected the Defendant’s defense that Williams failed to mitigate his damages – a burden of proof placed squarely on the Defendant. Ironically, by Defendant’s theory that quitting the Sheriff’s Office cuts off his damages, Williams would have been better off not seeking any employment than at least attempting to do the job that Ms. Capps later would tell him he could not perform. Moreover, to be considered for the purposes of mitigation, available employment must be comparable to the positons Williams applied for at Rent-A-Center and Winn-Dixie. See Jury Instructions (ECF 184), page 18. The jury certainly could have concluded that a position as a 911 dispatcher was not comparable to positions at Rent-A-Center and Winn-Dixie given that, with the former, one must deal with situations in which people’s lives hang in the balance.
D. Punitive Damage Evidence
Plaintiff presented ample evidence of Defendant’s net worth. See P. Exh. 51.
- Inferences Drawn in Favor of Williams Supports the Jury’s Verdict that Defendant Negligently and Willfully Violated the FCRA
15 U.S.C.A. § 1681e(b) provides that “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.” Williams proved that these errors resulted from Defendant recklessly ignoring risks that were, as evidenced by its creation of special, albeit illusory, procedures, known to Defendant. It is not at all surprising that two Richard (or Ricky) Williams were born on the same day and, when preparing the Winn-Dixie Report, Defendant already knew there was a Richard Williams and a Ricky Williams that were born on the same day. Viewed objectively, as it must be, the risk of an erroneous match between Williams and Ricky Williams became an almost certainty at the time the Winn-Dixie Report was prepared.
Under Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47 (2007), willful violations of the FCRA are assessed for “reckless disregard” of a CRA’s obligations under the FCRA. An action is considered reckless if, under an objective standard, it carries “an unjustifiably high risk of harm that is either known or so obvious that it should be known.” Id. at 68. “Willfulness is a question of fact for the jury” E.E.O.C. v. Massey Yardley Chrysler Plymouth, Inc., 117 F.3d 1244, 1250 (11th Cir.1997). The record amply shows that the jury’s determination that Defendant “acted willfully is supported by substantial evidence.” Fluor Daniel v. Occupational Safety and Health Review Com’n, 295 F.3d 1232, 1240 (11th Cir.2002); Lenox v. Equifax Info. Servs. LLC, 2007 WL 1406914, at *6 (D. Or. May 7, 2007) (reasoning “whether defendant’s action or inaction rises to the level of willfulness so as to violate the statutory obligations of the FCRA is also a question of fact”). The Eleventh Circuit explained in Cahlin v. Gen. Motors Acceptance Corp., 936 F.2d 1151, 1156 (11th Cir.1991) that whether a CRA followed reasonable procedures “will be a jury question in the overwhelming majority of cases.”
A. The Evidence More than Supports the Verdict
A defendant “may  willfully violate the FCRA by adopting a policy with reckless disregard of whether it contravenes a plaintiff’s rights under the FCRA.” Cortez v. Trans Union, LLC, 617 F.3d 688, 721 (3rd Cir.2010).
Defendant’s policy excludes the use of a flagging system to prevent re-matching a consumer with a criminal so it could have used the information it had already obtained when Williams successfully disputed the first match with Ricky Williams to prevent future re-matching. Here, Defendant’s blocking system only addresses the issue of reinserting the exact same criminal records into a background report. While Defendant may thereby avoid violating 15 U.S.C. §1681i(a)(5)(B)(i), which bars reinsertion of certain information in consumer reports. It does nothing to assure maximum possible accuracy. By not including information it learned from Williams’ dispute of the Rent-A-Center application about Plaintiff to Winn-Dixie and again still reporting Plaintiff as a criminal, Defendant also acted willfully. See Saunders v. Branch Banking & Tr. Co. of VA, 526 F.3d 142, 151 (4th Cir.2008) (finding willfulness when defendant “intended” (emphasis in original) to not report an ongoing dispute with plaintiff over the debt).
Defendant misapprehends Williams’ position regarding the use of additional information. Williams is simply suggesting that Defendant follow its own procedures to obtain more information, particularly in a case like this where red-flags existed such as 1) a lack of criminal records where the consumer lived but numerous criminal records 300 miles away, 2) a lack of an exact name match, and, 3) in the case of the Winn-Dixie Report, a prior mismatch are present. Defendant also should make the procedure for obtaining an address history more than pretextual by paying for a license that would allow all adjudicators to follow it. Defendant effectively accepted risk to consumers of mismatches by not permitting all of its adjudicators the opportunity to obtain an address history. Although people can move, as illustrated by Williams’ situation, not everyone does, and that is why an address history is needed.
Defendant’s erroneous inclusion of Ricky Williams’ social security number in the Rent-A-Center Report was also reckless. Additionally, Defendant was reckless, or at least negligent, when reviewing the Department of Corrections website by failing to note that Ricky Williams was in the Broward County Jail while supposedly applying for a job.
It is noteworthy that Defendants attempts to electronically verify that the records were “complete and up to date” do not mean it was attempting to ensure that they were actually Williams’ records. Defendant believes that a record can be “complete and up to date,” even if it does not belong to the consumer. See Tr. 585, 24 – 587, 1; Defendant’s MOL in Support of its Motion for Summary Judgment (ECF 70) at page 21 (“Moreover, that Plaintiff’s reports may have contained inaccurate information is irrelevant to the Section 1681k(a)(2) inquiry.”)
B. Defendant’s Citations are Distinguishable
The cases cited by Defendant are readily distinguishable. In Singletery v. Equifax Info. Services, LLC, 2011 WL 9133115, (N.D. Ala. Sept. 22, 2011), a class action plaintiff asserted that a credit reporting agency willfully failed to provide credit reports as required under a different section of the FCRA than is at issue here. In that case, the failures were found by the court to be through inadvertence. There was no evidence, as there is here, that the defendant twice intentionally failed to follow its own procedures set up in recognition of a known risk or that there was a procedure that other consumer reporting agencies were following that the defendant wasn’t. Most importantly, there was no evidence that viewing the facts objectively, the defendant in Singletery knew, as Defendant knew or should have known with certainty when preparing the Winn-Dixie Report, that there would be an error.
It is noteworthy that, in Singletery, there were 852 complaints of failure to disclose a credit report. This represented “a mere .00213% of the 40 million requests for credit disclosure fulfilled and an even much smaller portion of the requests made.” Singletery, supra, n.13. Moreover, there was no telling how many of the complaints “actually involved a ‘proper’ request complying with all conditions for disclosure”. Id. at n.12. It is also unclear what damages these persons suffered, if any, by virtue of not receiving or not timely receiving a credit report.
The circumstances in Singletery can be contrasted with Defendant’s preparation of 3,554,163 background reports on a nationwide basis from 2010-13 containing public record information which resulted in 13,392 corrections to reports based on consumer disputes where the consumer complained that a public record contained in his/her background report belonged to another individual. This resulted in a “not me” error rate of 0.38%, Joint Pretrial Stipulation, §F., ¶7, which is 178 times the (at the least partially unjustified) error rate in Singletery and the Defendant’s error rate in Florida is significantly higher. Moreover, Defendant’s errors were particularly harmful as thousands of people either lost out on or were delayed in being employed because of Defendant.
Similarly, in Lagrassa v. Jack Gaughen, LLC, CIV.A. 1:09-0770, 2011 WL 1257384 (M.D. Pa. Mar. 11, 2011), report and recommendation adopted, 09-CV-0770, 2011 WL 1257371 (M.D. Pa. Mar. 30, 2011), Anderson v. Trans Union LLC, 367 F. Supp. 2d 1225, 1237 (D. Wis.2005), Smith v. LexisNexis Screening Sols., Inc., 837 F.3d 604 (6th Cir.2016), and Dalton v. Capital Associated Indus., Inc., 257 F.3d 409 (4th Cir.2001), all cited by Defendant, there were none of the conscious decisions leading to erroneous reports that occurred here. In Smith, the subject error rate for all types of errors, not just “not me” errors, was approximately half of what Defendant’s rate for “not me” errors are nationally and less than half of what Defendant’s “not me” error rate is in Florida.
Only three of the cases cited by Defendant, Anderson, Smith, and Dalton concern section 1681e(b) and, critically, none of them concern a consumer who was the subject of an erroneous background report after a successful dispute. The fact that Defendant had the information it gathered during Williams’ dispute of the Rent-A-Center Report undercuts Defendant’s argument that it didn’t have as much information as a credit reporting agency as it had all of the information it needed to avoid an error. It also means it had the ability to check a third identifier when it prepared the Winn-Dixie Report as it knew William’s height from his dispute of the Rent-A-Center Report and could easily have determined Ricky Williams’ height from the Department of Corrections website. Defendant’s attempts to treat the fact that it made the same error twice as two independent events should be unavailing and obviously not accepted by the jury.
Defendant’s corporate representative admitted that, if a reasonable person was aware of the information Defendant had at the time Defendant prepared the Winn-Dixie Report, he or she would know with a certainty that the Winn-Dixie Report was erroneous. The fact that an adjudicator did not actually have this information is irrelevant because Defendant’s conduct must viewed objectively – from the perspective of what its adjudicators should have known, not what they did know. Indeed, the fact that the adjudicator preparing the Winn-Dixie Report did not have this information is evidence Defendant has instituted unreasonable procedures.
C. Other Cases, such as Smith and Adams Apply
In Smith v. E-Backgroundchecks.com, Inc., 81 F. Supp. 3d 1342 (N.D. Ga.2015), a background reporting agency named E-BackgroundChecks.com, Inc. (“BGC”) matched the plaintiff, Tony Smith, with criminal records for another Tony Smith in a background report it prepared about him. The background reporting agency “maintain[ed] that its procedures ‘will only return matching records where there is a first name, last name, and date of birth match, together [with] no middle name mismatch (i.e., the middle name record does not conflict with what the employer supplied).’” Id. at 1360. The agency further “argue[d] that ‘[r]eporting records that match complete names and dates of birth is a procedure reasonably designed to assure maximum possible accuracy, and is considered industry best-practice.’” Id. However, the E-Backgrounchecks.com court found that:
that is not what BGC did in this case. [Smith’s prospective employer] provided plaintiff’s complete name to BGC, but BGC returned records that only matched plaintiff’s first and last name, a widespread name at that. Despite having in its possession plaintiff’s complete name and social security number, BGC took no steps before issuing its initial report to confirm whether the “Tony Smith” criminal records it provided to [the employer] were associated with the full name and social security number of the plaintiff.
Accordingly, the court denied BGC’s motion for summary judgment regarding Smith’s claims of negligent and willful violations of Section 1681e(b). Likewise, this Defendant only matched Plaintiff’s “first and last name, a very common name at that, and despite having in its possession plaintiff’s complete name and social security number.”
Similarly, in Adams v. Nat’l Eng’g Serv. Corp., 620 F. Supp. 2d 319 (D. Conn.2009), where a CRA’s background report concerning “Deborah Adams” included criminal records belonging to “Debra Adams” and “Debra Jean Adams” in a different state but who had the same date of birth, the court denied summary judgment on the plaintiff’s claim that the CRA negligently and willfully violated Section 1681e(b). The court found that “a reasonable jury could find that [staffing agency] failed to follow reasonable procedures because, even though [the background] report linked Adams to convictions attributed to a person with a different name in a different state, the [staffing agency] furnished the report to [the Adams’ prospective employer].” Id. at 330. Matching Deborah Adams and Debra Adams with the same date of birth is akin to matching Richard Williams and Ricky Williams with the same date of birth. Williams’ case is even more compelling than either E-Backgroundscheck.com or Adams because this case involves two erroneous background reports, not one.
D. Defendant’s Procedures (or Lack Thereof)
At page 18 of its Memorandum of Law (“MOL”), Defendant states that “Plaintiff presented no evidence that Defendant’s procedures were not generally followed, nor did Plaintiff genuinely contend that the Company’s procedures are ineffective.” However, with respect to an action under the FCRA relating to a dispute of a credit report, the court in Lee v. Sec. Check, LLC, 3:09-CV-421-J-12TEM, 2010 WL 3075673 (M.D. Fla. Aug. 5, 2010) held that “[i]t is axiomatic that procedures must be reasonable with respect to the particular dispute presented. A credit reporting agency cannot rely on the fact that it established some procedures, but must prove by a preponderance of the evidence that such procedures are reasonable to address the specific dispute presented.” See also Farmer v. Phillips Agency, Inc., 285 F.R.D. 688, 696 (N.D. Ga.2012) (“’ Whenever’ [in 15 U.S.C. §1681k(a)(2)] means ‘at any time,’ The Random House College Dictionary, 1498 (rev. ed. 1982), or simply at every time”). Thus, whether a consumer reporting agency “generally” follows procedures cannot be controlled; otherwise Section 1681e(b)’s reference to “whenever” would be without meaning and would be replaced by a requirement to “generally” follow procedures to assure maximum policy accuracy.
Moreover, given that Plaintiff himself was a victim of Defendant on multiple occasions, a reasonable inference can be drawn that Defendant’s procedures are commonly disregarded. There was also evidence of widespread problems with Defendant’s procedures (and lack thereof), such as the prohibition from adjudicators using common sense or being able to see other information collected regarding a prior mismatch. Alt Depo, 70, 10-14, Tr. 299, 2 – 300, 9. Moreover, Defendant presented no evidence of whether it generally follows its procedures. Finally, there were 14,346 job applicants who, from 2009-2013 were delayed or denied employment because of background reports prepared by Defendant, which contained “not me” errors. From this evidence, a jury could infer the procedures were not generally followed, were not effective, or some combination of the two. At any rate, reasonable procedures were not followed here.
E. Defendant’s Error Rate
Defendant’s citation to its .38% “not me” error rate of erroneously matching consumers to public records of another, which is approximately .51% in Florida, is meaningless. It is abundantly clear that the problems occur in matching people with common names. Defendant cites no statistics as to what portion of consumers it prepared background reports about had common names or what its error rate is for persons with common names.
Defendant also claims that there is no standard in the industry requiring that a CRA run an Accurint/Experian Report. However, it disregards the fact that Defendant had such a procedure. Defendant also disregards the fact that, while Mr. Hendricks knows of no CRAs preparing background reports which are using cross-blocking, he knows of at least two credit reporting agencies doing so. There is no reason Defendant could not also do so.
Defendant’s attempts at distinguishing itself from credit reporting agencies because it is a background reporting agency is ironic given that Defendant sought to but was barred from, See ECF 102, comparing it’s “not me” error rate in background reports with a FTC study of all types of errors in credit reports. It also has no hesitation citing case decisions involving credit reporting agencies when it feels the decisions support its arguments.
F. Industry Standards are Not Controlling
Even if assuming arguendo Defendant complied with industry standards, industry standards should not be controlling as commentators have suggested that the consumer reporting industry as a whole has failed to comply with the FCRA. See Misleading Credit Reports: Alternatives for Recovery, 15 U. Tol. L. Rev. 877, n. 80 (1983-1984) (“It is possible to conclude that the passage of the FCRA did little to change the habits and techniques of the reporting industry.”). Looking to industry standards to absolve Defendant is inappropriate if the industry is not complying with the FCRA. See Ins. Co. of the West v. Island Dream Homes, Inc., 679 F.3d 1295, 1299 (11th Cir.2012) (“Because a custom itself may be substandard, the fact that a defendant acted according to custom is just ‘some evidence’ of due care.”); Hoemke v. New York Blood Ctr., 912 F.2d 550, 552 (2d Cir.1990) (“Of course, if a given industry lags behind in adopting procedures that reasonable prudence would dictate be instituted, then we are free to hold a given defendant to a higher standard of care than that adopted by the industry.”). Finally, nothing will change in the industry if it is permitted to only look within itself and ignore messages for change, such as the one sent by this jury.
- The Evidence Supports the Compensatory Damage Award
- Emotional Distress Damages
Defendant speculates the award of emotional distress damages to Plaintiff was “more than $170,000.” However, damages were awarded to compensate Plaintiff for all his compensatory damages – including loss of reputation, lost wages, emotional distress, etc. While Williams’ counsel suggested that the jury award Williams $78,272 in lost wages through the time of trial, Tr. 556, 23 – 557, 2, nothing was stopping the jury from awarding more in lost wages, given that Williams continues to earn less than he would have at Rent-A-Center.
Moreover, even if the jury’s award of compensation for Williams’ emotional distress was in excess of $170,000, it is justified. The Eleventh Circuit has recognized “that a claim for actual or compensatory damages under FCRA may include compensation for emotional distress in the absence of physical injury or out-of-pocket expenses.” Levine v. World Financial Network Nat. Bank, 437 F.3d 1118, 1124 (11th Cir.2006) (Levine I). “[G]eneral compensatory damages, as opposed to special damages, need not be proved with a high degree of specificity and may be inferred from the circumstances.” Bogle v. McClure, 332 F.3d 1347 (11th Cir.2003). Awards of compensatory damages for intangible, emotional harm is deferential to the fact finder because the harm is subjective and evaluating it depends considerably on the demeanor of the witnesses. Id. See also, Muñoz v. Oceanside Resorts, Inc., 223 F.3d 1340, 1348-49 (11th Cir. 2000); Griffin v. City of Opa-Locka, 261 F.3d 1295, 1315 (11th Cir. 2001); Johnson v. Clark, 484 F. Supp.2d 1242, (M.D. Fla.2007) (reducing damages for loss of professional reputation and mental pain and suffering to $500,000.00); Forsberg v. Pefanis, No. 1:07-cv-03116, 2009 WL 4798124, at *8 (N.D.Ga. Dec.8, 2009) (rejecting the contention that there is a limit for damages on emotional distress at $150,000.00 and awarding $1,500,000.00 for emotional damages in a sexual harassment case); Fabe v. Floyd, 199 Ga.App. 322, 330, 405 S.E.2d 265 (1991) (upholding $450,000.00 award even though sole evidence of mental distress was businessman’s testimony).
Similarly, “[i]n FCRA cases, a plaintiff is not required to produce evidence of emotional distress beyond his testimony.” King v. Asset Acceptance, LLC, 452 F. Supp. 2d 1272, 1281 (N.D. Ga.2006); See also E-Backgroundchecks.com, Inc., supra at 1346 (plaintiff withstood summary judgment where prospective employer’s recruiter called a job applicant/consumer who was the subject of an erroneous background report “dishonest and a liar,” and the incident caused consumer “emotional distress resulting ‘in physical symptoms, including loss of sleep, weight loss, and anxiety’”); see also Bogle, supra at 1347; Akouri v. State of Florida Dept. of Transp., 408 F.3d 1338, 1345 (11th Cir. 2005).
Here, in addition to distress and humiliation, Williams did suffer physical harm, including stomach distress, headaches, and sleeplessness. See Tucker v. Hous. Auth. of Birmingham Dist., 229 Fed. Appx. 820, 827 (11th Cir. 2007) (digestive problems, an inability to sleep, embarrassment, and humiliation justified an award of $100,000 to the plaintiff for mental anguish).
It is also noteworthy that Defendant never suggested that a particular amount for Williams’ non-economic damages was appropriate and shouldn’t be able to complain now that a lesser amount would have been appropriate.
B. Plaintiff Did Not Provide False Testimony
Only an “unconscionable scheme to subvert the judicial process” would warrant dismissal for fraud – and such a scheme must be proven by clear and convincing evidence. Iglesias v. J.C. Penny Corporation, Inc., Case No. 8:09-cv-1608-T-33TGW (M.D.Fla. Nov. 20, 2010). Based on the jury’s verdict, it is safe to say they found no such scheme. Even assuming arguendo that Williams provided incorrect testimony at trial, it would be a “potent topic for cross-examination and fertile ground for impeachment,” but not grounds for, in effect, a dismissal. Id. at *5 (citing Bologna v. Schlanger, 995 So.2d 526, 538 (Fla. 5th DCA 2008) (“[P]oor recollection, dissemblance, even lying, can be well managed through cross-examination.”).
C. Defendant Failed to Move Under Rule 50(a) Regarding Certain Issues
“A post-trial motion for judgment can be granted only on grounds advanced in the pre-verdict motion.” Rule 50’s Notes of Advisory Committee (1991 Amendment). The defendant did not move under Rule 50(a) regarding either emotional distress or economic damages. It only moved as to Plaintiff’s reputation damages. Tr. 420, 18-20. Thus, Defendant’s Rule 50(b) motion as to all compensatory damages is improper.
III. The Punitive Damage Award does not Violate Defendant’s Due Process Rights
The Supreme Court has held that “[o]nly when an award can fairly be categorized as ‘grossly excessive’ … does it enter the zone of arbitrariness that violates the Due Process Clause of the Fourteenth Amendment.” BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 568 (1996). Nevertheless, the Court has pointed to three guideposts discussed below in determining whether a punitive damages award violates Due Process. State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (2003).
A. The Defendant’s Actions Were Reprehensible
When considering an award of punitive damages, the reprehensibility of the defendant’s actions is “the most important indicium.” State Farm Mut., supra at 419, (2003); See also Goldsmith v. Bagby Elevator Co. Inc., 513 F.3d 1261, 1283 (11th Cir.2008). To determine reprehensibility, a court must consider the five factors discussed below:
- Physical v. Economic Harm. As to the first factor, the Eleventh Circuit has found that “[o]ne factor that suggests that the misconduct of [the defendant] was reprehensible is that [the plaintiff] suffered both economic harm and emotional and psychological harm” even where the physical injury was absent. Id. See also Brim, discussed infra, 795 F. Supp. 2d at 1263 (applying Goldsmith to FCRA case). There was significant evidence of the economic, emotional, psychological, and even physical harm to Williams. It is worth noting that, without trivializing other FCRA cases, this case is more compelling than FCRA cases involving only a loss of credit because it meant the loss of Williams’ ability to earn a living, not just damage to his credit.
- Indifference or Reckless Disregard. As to the second factor, it bears repeating that, as discussed, the jury correctly found that Defendant acted with reckless disregard of its duties under the FCRA. In this case, it is easy to see that the Defendant’s behavior is reprehensible. Defendant’s violations of the FCRA were not the result of mere carelessness but, instead, were based on intentional choices such as the decision not to obtain a license from Experian, which would provide every adjudicator with the ability to get an address history when the procedure called for it. There was ample evidence from which the jury could have found that these choices were designed to maximize profits at the expense of consumers.
- Victim’s Financial Vulnerability. As to the third factor, although “targeted” might be the wrong word to describe the situation, Williams does fall squarely within the class of consumers, those with common names, which Defendant knowingly puts at risk when it fails to comply with its own procedures and industry standards. Moreover, persons, including Williams, seeking employment, many of whom may be unemployed, clearly fit the definition of “financially vulnerable.”
- Repeated Action v. Isolated Incident. An application of the fourth factor strongly favors an award of punitive damages because the conduct relating to Williams was repeated. It also occurred in over 14,000 cases nationwide during a five (5) year period.
- Intentional Malice, Trickery, or Deceit v. Accident. As to the fifth factor, Defendant’s actions were not the result of mere mistake or an isolated human error. It was the foreseeable and direct result of Defendant’s decisions to turn a blind eye to anyone with common names or who have been previously mismatched. Therefore, this factor also favors an award of punitive damages, as this was not a mere “accident.”
As illustrated by the fact that the jury awarded the very highest end of the range of punitive damages suggested to it by William’s counsel, all these factors strongly support the fact that Defendant’s conduct was reprehensible.
B. There is not a Sufficient Disparity Between the Actual or Potential Harm Suffered and the Punitive Damage Award to Reduce the Punitive Damages
“The Court has repeatedly declined to impose a bright-line ratio which a punitive damages award cannot exceed.” Saunders v. Equifax Information Services, LLC, 469 F. Supp. 2d 343 (E.D. Va.2007) (permitting a ratio of 80:1 in an FCRA case) affirmed 526 F.3d 142 (4th Cir, 2008). “Moreover, neither the Supreme Court nor Congress has found it appropriate or necessary to impose a limit on punitive damages awards in the FCRA context, including claims based on willful violations of the Act. . .” Id. Congress knew how to but intentionally did not set a limit to such damages, as it did with other similar statutes. Id. (citing 15 U.S.C. § 1692k(a)(2)(B)(ii) (FDCPA); 15 U.S.C. § 1640(a)(2)(B) (TILA)).
Williams request for attorney’s fees and costs pursuant to 15 U.S.C. §§ 1681n and o is expected to exceed $400,000 well and should be included in any ratio calculation. See Willow Inn, Inc. v. Pub. Serv. Mut. Ins. Co., 399 F.3d 224, 236 (3d Cir.2005) (including attorney’s fees and costs when calculating ratio of punitive damages to compensatory damages where [as under FCRA] attorney’s fees award are meant to incentivize attorneys). Factoring fees and costs in as part of the compensatory damages, the ratio of punitive damages to compensatory damages in this case is approximately 5 to 1. Otherwise, it is 13.2:1. In either event, Brim v. Midland Credit Mgmt., Inc., 795 F. Supp. 2d 1255, 1264 (N.D. Ala.2011) is instructive.
The Brim court approved a ratio of compensatory to punitive damages of 6.23:1 in a FCRA case where a consumer’s attempts at disputing errors on his credit report were unsuccessful. The Brim court explained that the Supreme Court has “’consistently rejected the notion that the constitutional line is marked by a simple mathematical formula, even one that compares actual and potential damages to the punitive award.’” Id. at 1264. The court noted that “Eleventh Circuit has approved numerous punitive awards where the ratio was similar or higher.” Brim supra at 1264 (citing Johansen v. Combustion Eng’g, Inc., 170 F.3d 1320, 1339 (11th Cir.1999)(ratio of 100:1 in nuisance and trespass case against present owner of former mine site, alleging that acidic water had escaped from site); Goldsmith, supra at 1285 (ratio of 9.2:1 in employment discrimination case); U.S.E.E.O.C. v. W & O, INC., 213 F.3d 600, 616–17 (ratio of 8.3:1 in employment discrimination case); Action Marine, Inc. v. Cont’l Carbon, Inc., 481 F.3d 1302, 1321, 1323 (11th Cir.2007) (ratio of 5.5:1 in action against manufacturer for discoloration of properties). The Brim court noted that “the one occasion where the Eleventh Circuit struck down a punitive award for constitutional excess, it reduced an award with a ratio of 8,692:1 to an award with a ratio of 2,173:1. Brim supra at 1264 (citing Kemp v. Am. Tel. & Tel. Co., 393 F.3d 1354, 1357 & 1365 (11th Cir.2004) (reducing the punitive award from $1,000,000 to $250,000 when compensatory damages amounted to $115.05, noting “a single digit multiplier would not have effectively deterred AT&T from future misconduct)). See also Electro Services, Inc. v. Exide Corp., 847 F2d 1524, 1525, 1530 (11th Cir.1998) (affirming punitive damages award of $3.5 million; compensatory damages award of $750,000, for an action against automotive battery manufacturer for deceptive trade practices). In Williams v. Equifax Information Solutions, LLC: Circuit Ct. or 9th Judicial Circuit, Orange County, Florida – No. 48-2003-CA-9035-O; order dated Nov. 17, 2007; jury verdict, Nov. 30, 2007, a Florida State court sustained an award of $2.7 million in punitive damages in an FCRA case where there were $219,000 in compensatory damages.
Defendant’s Motion incorrectly ignores the potential harm Defendant’s conduct will have on future persons subject to its background checks. The Court’s approval of a 526:1 ratio in TXO Prod. Co. v. Alliance Res. Corp., 509 U.S. 442 (1993) suggests that where the defendant’s egregious action resulted in little actual harm but a high level of potential harm, the numerator represents the potential harm the defendant’s wrongful conduct could cause if not corrected. See also Browning-Ferris Indus. of Vt., Inc. v. Kelco Disposal, Inc., 492 U.S. 257, 260-62 (1989) (upholding 118:1).
Here, the chances that Defendant repeats its error are 100 percent should Defendant not change its behavior and adopt industry standards designed to block future matches of persons already proven to be different persons. There was no evidence that it intends to do this. Rather, as evidenced by its Motion, it has convinced itself that over 14,000 plus consumers losing out on or being delayed in obtaining employment is an acceptable cost.
The award here comports with the purposes of punitive damages, which is to deter future conduct and prevent the same harm from occurring to other consumers and the Plaintiff himself. See Stockett v. Tolin, 791 F.Supp. 1536, 1556-57 (S.D.Fla.1992) (considering the harm defendant’s pattern of conduct had on others when assessing punitive damages, stating that “in many of these cases, the plaintiff was not the defendant’s only victim.”). Defendant is a very large entity and only a large punitive damage award would be effective to force a change in its practices. See P. Exh. 51.
C. The Third Guidepost (Civil Penalties) is Inapplicable
“[T]he Third, Fourth, and Sixth Circuits have held [that the third guidepost] is not particularly useful to the due process analysis in a FCRA case.” Brim supra at 1265 (citing Cortez, 617 F.3d at 724) (“there is no ‘truly comparable’ civil penalty to a FCRA punitive damages award”); Saunders, 526 F.3d at 152; Bach v. First Union Nat’l Bank, 486 F.3d 150, 154 n. 1 (6th Cir.2007).
Consideration of all the evidence presented at trial, and the inferences drawn therefrom, vigorously supports the jury’s thoroughly deliberated verdict in this cause. See Advanced Bodycare Solutions, LLC v. Thione Intern, Inc., 615 F.3d 1352, 1360 (11th Cir.2010). Accordingly, Williams respectfully requests that the Motion be denied.
By: /s/ Barry S. Balmuth BARRY S. BALMUTH, B.C.S. Florida Bar No. 868991 Barry S. Balmuth, P.A.
Counsel for the Plaintiff 2505 Burns Road Palm Beach Gardens, Florida 33410 (561) 242-9400 Telephone firstname.lastname@example.org
/s/ Michael Massey
MICHAEL MASSEY, ESQUIRE
Fla. Bar No. 153680
Massey & Duffy, PLLC
Co-Counsel for the Plaintiff
855 E. Univ. Ave.
Gainesville, FL 32601
(352) 505-8900 Telephone
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing was served by filing same with the CM/ECF filing system on this 10th day of December, 2016 which will cause a copy to be served on Frederick T. Smith, Esquire and Megan Poonolly, Esquire, Seyfarth Shaw, LLP, 1027 Peachtree Street, NE, Suite 2500, Atlanta, GA 30309-3962; Joseph S. Turner, Esquire and Jason Torres, Esquire, Seyfarth Shaw, LLP , 131 South Dearborn Street, Suite 2400, Chicago, Illinois 60603; Leonard Dietzen, Rumberger, Kirk & Caldwell, P.O. Box 10507, Tallahassee, Florida 32302-2507; and Michael Massey, Esquire, Massey & Duffy, 855 E. Univ. Ave, Gainesville, FL 32601.
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/s/ Barry S. Balmuth
BARRY S. BALMUTH, B.C.S.
- Citations to the trial record are as follows: Tr. Page, Line – Line or Page, Line – Page, Line. “P. Exh.” means Plaintiff’s admitted exhibits and “D. Exh.” means Defendant’s admitted exhibits. ↑
- It is noteworthy that Defendant never printed a screenshot of the web page. The jury was free to disbelieve Defendant even reviewed it. See Brim, discussed infra, at 1259 (“It is within the province of the jury to pick which evidence to believe.”) ↑
- Name (although the first name was not an exact match) and date of birth. ↑
- Which Defendant did obtain when Williams disputed the Winn-Dixie Report. ↑
- These were stipulated facts that were read to the jury. ↑
- Particularly when it possessed a third identifier – height – the second time. ↑
- It is thereby complying with 15 U.S.C. §1681k. ↑
- Dalton also applied a subjective rather than an objective standard. See Dalton, supra at 418 (considering the defendant’s “state of mind”). ↑
- It is noteworthy that the Defendant’s expert witness, Oscar Marquis, “did not remember” his deposition testimony on several occasions. See Tr. 498 – 499, Tr. 504 – 505, and Tr. 507. ↑