October 9, 2024
The U.S. Circuit Court of Appeals for the Eighth Circuit recently affirmed a lower court’s discovery ruling against a consumer reporting agency (CRA). This lawsuit concerned the Fair Credit Reporting Act (FCRA) and included a $93,243.50 award for attorney’s fees.
The court decided that the CRA had requested irrelevant information. According to the case, the CRA incorrectly listed an auto loan discharged via bankruptcy on an Indiana couple’s credit report. The couple filed a suit claiming that the CRA had violated the FCRA when it ignored their past disputes. Eventually, the case moved to a federal court.
Upon the removal to federal court, the CRA attempted several subpoenas against the plaintiff’s law firm. The court noted that “[t]he requests reached far and wide, from the assistance the firm had provided to the [plaintiffs] to how it structured its business. [The subpoenas] even asked about the assistance provided to other clients.”
However, the law firm refused to respond to these inquiries. The plaintiffs’ law firm felt the subpoenas were “not relevant” and requested the federal court to quash them. The court agreed with the law firm about the irrelevant requests and awarded $93,243.50 for costs and attorney fees.
In response, the defendant appealed. According to the appeals court, broad discoveries are typical in lawsuits. As such, the court reminded both parties of the importance of requesting documents and information probative of a defense or claim in the suit.
The defendant argued that their requests qualified as relevant. The defendant claimed that the plaintiffs neither directly nor indirectly to investigate or respond to the disputes. Instead, the plaintiffs sent the disputes through their law firm.
The CRA specifically argued that “it had no duty to investigate or respond because the [consumers] did not notify [it] directly, or indirectly through a reseller.” As such, they did not acknowledge the dispute received from the consumer. This reasoning led to the defendant’s decision that this case did not qualify for liability under the FCRA.
The Eighth Circuit decided that the CRA’s interpretation of the FCRA was unnatural. However, the Eighth Circuit found the CRA’s interpretation of the FCRA unnatural. When considering the FCRA’s language and conforming with “basic agency law,” receiving a letter from the plaintiff’s lawyer is sufficient. The Eighth Circuit also addressed the attempted subpoenas and found them irrelevant. As explained by the court, “the subpoenas posed an ‘undue burden’ precisely because much of the requested information was irrelevant.” As such, the court ruled in agreement with the lower court, including the award concerning the attorney’s fees.
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Information provided here is for educational and informational purposes only and should not constitute as legal advice. We recommend you contact your own legal counsel for any questions regarding your specific practices and compliance with applicable laws.