Two consumers sued Experian after discovering the agency, was reporting an automobile loan as “discharged through bankruptcy,” when they had been making payments on the loan for years, and their attempts to correct the issue proved unsuccessful.
For some reason, Experian responded by issuing sweeping discovery requests — including broad subpoenas issued to the law firm that the consumers had hired, covering topics ranging from “the assistance the firm had provided to the [plaintiffs] to how it structured its business. They even asked about the assistance provided to other clients.”
The law firm moved to quash on relevance grounds, and the district court agreed–and awarded $93,243.50 in attorney fees and costs. Experian appealed, and the Eighth Circuit affirmed in all respects.
Experian argued that the information sought was relevant because it would show that the consumers’ correction requests did not actually trigger the agency’s duty to respond under the FCRA, because the requests were sent by their lawyers, not them personally. The Eighth Circuit rejected this reading of the statutory requirement that “the consumer notif[y] the agency directly,” finding it clear that the “[t]he word ‘directly’ describes who the letter must go to, not where the letter must come from,” and that, “[u]nder basic agency law, a letter from a lawyer is good enough.” Moreover, given the “sheer scope” of the discovery requests and the burden they imposed, the district court’s award of sanctions was within its discretion–even if, as Experian claimed, it was acting in good faith.
As such, by appealing the relatively modest award, Experian not only increased its costs, and create published Eighth Circuit precedent rejecting its novel FCRA theory.
