Appeals Court Affirms Ruling in FCRA Judgment Case

The Court of Appeals for the Second Circuit has upheld a lower court’s ruling in favor of a defendant that was sued for allegedly violating the Fair Credit Reporting Act for how it identified a default judgment that had been subsequently settled on the plaintiff’s credit report.

A copy of the ruling in the case of Shimon v. Equifax Information Services can be accessed by clicking here.

The plaintiff defaulted on a credit card debt and was sued by the creditor to whom the debt was owed. A default judgment was entered and the creditor began garnishing the plaintiff’s wages. The plaintiff then appeared in the case, moving to have the judgment vacated and asserting a counterclaim against the creditor. Before the court could act on motion to vacate, the plaintiff and the creditor filed a stipulation that resolved the action and discontinued all claims with prejudice.

Months later, the plaintiff noticed that the judgment was still appearing on his credit report. He sent the defendant a letter, informing it of the inaccuracy. Days after receiving the letter, the defendant updated its records to show that the tradeline was “Judgment Satisfied.” This did not satisfy the plaintiff, however. He sued the defendant, alleging that it violated the FCRA by publishing the information and failing to follow notification requirements. A District Court judge dismissed one count and granted summary judgment on behalf of the defendant on the other count.

The plaintiff claims that the stipulation that the creditor and he agreed to should require the defendant to report the judgment as vacated and not satisfied. But all the Appeals Court had to do was look up “satisfied” in the dictionary to be satisfied that the District Court was right to rule in favor of the defendant.

Similarly, the Appeals Court sided with the District Court in ruling how the defendant handled the source-disclosure and reinvestigation claims made by the plaintiff.

First, the plaintiff suffered no actual damages because of how the defendant obtained the information it relied on in furnishing the information on the plaintiff’s credit report, and that the defendant did not act in reckless disregard of the FCRA because it reasonably interpreted the statute.

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