Brown v. Direct Screening Inc.

• Court: District Court, N.D. Oklahoma
• Decided: August 25, 2025
• Docket: 4:24-cv-00589
• Status: Unknown

Opinion

Qnited States District Court for the sorthern District of Oklahoma

Case No. 24-cv-589-JDR-SH

JASON RAFAEL BROWN, Plaintiff, versus TURNING POINT DaTaA, INC., Defendant.

OPINION AND ORDER

Plaintiff Jason Rafael Brown sued Defendant Turning Point Data, Inc., which does business under the name Direct Screening, for violating two pro- visions of the Fair Credit Reporting Act: 15 U.S.C. §§ 1681e(b) and 16811. Mr. Brown alleges that Direct Screening failed to follow reasonable procedures to ensure the accuracy of a consumer credit report and failed to perform a rea- sonable investigation of the accuracy of information maintained in Mr. Brown’s consumer file. See Dkt. 29. Direct Screening has moved to dismiss count I of Mr. Brown’s amended complaint on the grounds that it never is- sued a “consumer report” for purposes of § 1681e(b). The Court disagrees. Direct Screening’s partial motion to dismiss is denied. In September 2024, Jason Brown applied for enrollment to Full Sail University. Dkt. 29 at 7.’ Full Sail instructed Mr. Brown to submit a National Background Report and gave him two options for doing so. /d. at 8. Mr. Brown

' All citations utilize CMECF pagination.

No. 24-cv-589

requested a “self-report” from Direct Screening. /d. Upon receiving the re- port, he transmitted it to the university without reviewing its contents. Jd. Mr. Brown later discovered that the report incorrectly included several refer- ences to criminal convictions in Illinois and Arizona. /d. at 8-12. Those of- fenses were committed by a different person with a different middle initial, a different driver’s license number, and a different social security number than Mr. Brown. Jd. Count I of Mr. Brown’s amended complaint alleges that Direct Screening had a statutory obligation to “follow reasonable procedures to as- sure maximum possible accuracy of the information” in that report. 15 U.S.C. § 1681e(b); see Dkt. 29 at 16. He claims that Direct Screening failed to perform reasonable procedures, such as consulting public records or investigating ob- vious discrepancies, that would have ensured the accuracy of the report’s contents. /d. at 11-16. As a result of that failure, Direct Screening issued an erroneous report that delayed Mr. Brown’s enrollment at the university. In this lawsuit, Mr. Brown seeks damages for losses allegedly caused by the in- correct report. Jd. at 15-16. I] In Direct Screening’s motion to dismiss count I, it argues that, even if the Court accepts the facts alleged by Mr. Brown as true (which it must at this stage of the proceedings),* Mr. Brown cannot prevail on his claim as a matter of law. Direct Screening acknowledges its obligation to “follow reasonable procedures to assure maximum possible accuracy of the information concern- ing the individual about whom the report relates” when it issues a “consumer report.” 15 U.S.C. § 1681e(b). But Direct Screening argues that the statutory obligation arises only when a “consumer report” is issued and that no

2 See Robbins v. Oklahoma, 519 F.3d 1242, 1247 (10th Cir. 2008) (recognizing “the bedrock principle that a judge ruling on a motion to dismiss must accept all allegations as true and may not dismiss on the ground that it appears unlikely that the allegations can be proven”).

“consumer report” was issued in this case. According to Direct Screening, §1681a(d) defines “consumer report” to mean information used or collected Jor use by third parties and, consequently, the term only applies to reports sent to third parties. Dkt. 33 at 2, 3. It argues that Mr. Brown did not receive a “consumer report” when he requested a report on himself and that, conse- quently, it cannot be held liable for failing to comply with the requirements for ““prepar[ing] a consumer report” under the FCRA. See 15 U.S.C. §§ 1681n, 16810 (imposing civil liability for willful and negligent noncompliance with the requirements of the FCRA). Mr. Brown disagrees. He contends that nothing in the FCRA limits “consumer reports” to reports sent to third parties. According to Mr. Brown, any report can be a “consumer report” so long as it is intended for use by a third party. Dkt. 35 at 10-20. Mr. Brown argues that the report he requested satisfies all the express statutory requirements of a “consumer report” as that term is defined in § 1681a(d) and, as a result, Direct Screening had an obliga- tion to follow reasonable procedures to ensure the accuracy of that report. The parties’ dispute turns on a single question: Is a report that a con- sumer requests and receives about himself a “consumer report” for purposes of § 168le? The parties agree that there is no binding authority addressing this question.* In the absence of controlling precedent, it falls to this Court to determine the appropriate scope of the disputed statutory term. See N.L.R.B. vy. Hearst Publications, 322 U.S. 111, 130-31 (1944), superseded by statute as rec- ognized in N. L. R. B. vy. United Ins. Co. of Am., 390 U.S. 254, 256 (1968) (rec- ognizing that “questions of statutory interpretation ... are for the courts to resolve”). Cf Phelps v. Lynch, No. 15-cv-01405-NYW, 2016 WL 9735779, at

5 See Dkt. 33 (relying on authority from outside the Tenth Circuit); Dkt. 35 at 12 (recognizing that “the Tenth Circuit courts have not addressed this particular issue”); Dkt. 37 at 2 (relying on authority from outside the Tenth Circuit).

*6 (D. Colo. Sept. 12, 2016) (recognizing that a district court “is not at liberty to ignore binding authority interpreting [a] statutory provision”). We must begin with the language of the statute itself to determine the meaning of a disputed statutory term. See N. Arapaho Tribe v. Becerra, 61 ¥.4th 810, 814 (10th Cir. 2023). The court should consider not only the disputed provision, but also “the broader context of the statute as a whole... .” Ramah Navajo Chapter v. Salazar, 644 F.3d 1054, 1062 (10th Cir. 2011) (quoting Con- rad ». Phone Directories Co., 585 F.3d 1376, 1381 (10th Cir. 2009)). If the lan- guage of the statute is unambiguous, the Court should go no further; it must interpret the statute in accordance with its plain, unambiguous meaning. See Conn. Nat’! Bank v. Germain, 503 U.S. 249, 253-54 (1992) (“When the words of a statute are unambiguous, then, this first canon is also the last: judicial inquiry is complete.” (citation and quotation marks omitted)); United States ». Broadway, 1 F.4th 1206, 1211 (10th Cir. 2021). If, however, the statute is ambiguous, the Court may consider traditional canons of statutory interpre- tation to discern the provision’s meaning. Ramah, 644 F.3d at 1062. In some cases, legislative history can clarify an ambiguous provision, but the weight and value to be afforded legislative history is context-dependent. See Hadden yp. Bowen, 851 F.2d 1266, 1268 (10th Cir. 1988) (recognizing that legislative history “‘is entitled to consideration” but the “weight given an item of legis- lative history” depends on circumstances). The term “consumer report” is defined in the FCRA, 15 U.S.C. § 1681a(d)(1), as (1) “a communication,” written or oral, that (2) “bear[s] on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living,” (3) is made “by a consumer reporting agency,” and (4) “is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establish- ing the consumer’s eligibility for” credit, insurance, employment, or another authorized purpose.

No. 24-cy-589

The plain language of § 1681a(d)(1) expressly contemplates that “con- sumer reports” are communications that are or are intended to be used by third parties, but the statute does not expressly require that “consumer re- ports” be sent to third parties. The Court is reluctant to read this limitation into the statute when it cannot be found in the definition itself. See Jama v. Immigr. & Customs Enf?t, 543 U.S. 335, 341, (2005) (recognizing that courts “do not lightly assume that Congress has omitted from its adopted text re- quirements that it nonetheless intends to apply”). Congress elected to define what consumer reports are (communications bearing on consumers), who can create them (consumer reporting agencies), and their purpose (serving as a factor in establishing a consumer’s eligibility for credit, insurance, or employ- ment). It did not, however, define “consumer report” to exclude reports sent to the customers that are the subject of the report. See 15 U.S.C. § 1681a(d). This was not for lack of opportunity: Congress set forth a list of things that are excluded from the definition of “consumer report.” Among them are communications “among persons related by common ownership or affiliated by corporate control.” 15 U.S.C. § 1681a(d)(2)(A)(iii). By enacting this lan- guage, Congress excluded some communications from the definition of “‘con- sumer report” based on the identity of the recipient, even when those com- munications otherwise satisfy the requirements of § 1681a(d)(1). Congress knew it could exclude communications from the definition of “consumer re- port” based on the identity of the recipient —and it did so. The fact that Con- gress did not also exclude “communications sent to the consumer” from the statutory definition supports the conclusion that Congress did not intend to limit the term “consumer reports” to third-party communications. See Jama, 543 U.S. at 341 (stating that the Court’s reluctance to assume Congress has omitted intended limitations “is even greater when Congress has shown else- where in the same statute that it knows how to make such a requirement man- ifest”). Based on the foregoing, the Court concludes that the language of §

1681a is plain and unambiguous, and that the term “consumer report” is not limited to “reports sent to third parties” as suggested by Direct Screening. The broader context of the FCRA supports this conclusion. The Act recognizes that consumers can, in certain circumstances, be provided with consumer reports. For example, § 1681g calls for the creation of a method by which consumers can “contact, and obtain a consumer report from, a consumer reporting agency without charge.” 15 U.S.C. § 1681g(c)(1)(B)(v) (emphasis added). The Act also requires the “establishment of a streamlined process for consumers to request consumer reports” once during any 12-month period with- out charge 15 U.S.C. § 1681j(a)(1)(C)(a) (emphasis added).* The term “con- sumer report” is presumed to have the same meaning when it is used in § 1681g as it does when used in §§ 1681a and 1681e. See Sorenson v. Sec’y of the Treasury, 475 U.S. 851, 860 (1986) (recognizing the “normal rule of statutory construction” that “identical words used in different parts of the same act are intended to have the same meaning” (citation and quotation marks omitted)); Sierra Club v. Seaboard Farms Inc., 387 F.3d 1167, 1175 (10th Cir. 2004) (“When Congress uses a technical term in a statute, it is presumed that it has intended that the term have the same meaning in each of the sections or sub- sections.”). Thus, the term “consumer report” must encompass “reports sent to consumers.” To hold otherwise would run contrary to this court’s ob- ligation to “presume that Congress enacted sensible legislation that avoids unjust, impractical, or absurd outcomes.” BP America Prod. Co. v. Haaland, 87 F.4th 1226, 1234 (10th Cir. 2023). Direct Screening suggests that the third-party transmission require- ment can be found in § 1681a(f). Dkt. 33 at 3. That subsection defines the term “consumer reporting agency” to mean any person that regularly en- gages in “the practice of assembling or evaluating consumer credit infor- mation or other information on consumers for the purpose of furnishing

* See also 15 U.S.C. § 1681m(a)(4); 15 U.S.C. § 1681m(h)(5)(C).

consumer reports to third parties ....” 15 U.S.C. § 1681a(f) (emphasis added). The Court acknowledges the circular nature of §§ 1681a(d)(1) and 1681a(f),° but it does not conclude, as Direct Screening does, that the latter limits the former. The entirety of the Act demonstrates that not all ‘““consumer report- ing agencies” generate consumer reports on a continuing basis: Some simply collect and resell information that is used by other entities that produce con- sumer reports,° while others do not generate third-party reports on a “‘con- tinuing basis.”’ Taken as a whole, the Act demonstrates that the limiting terms in § 1681a(f) are designed to (1) capture those entities that assemble or evaluate information “for the purposes of furnishing consumer reports” for third parties, even if they do not produce the reports themselves, while (2) excluding from coverage those entities that do not regularly engage in those activities. The language of § 1681a(f) does not limit what a “consumer re- port” is. Instead, it recognizes that the statute is directed primarily at those entities that regularly engage in activities for the purposes of furnishing re- ports to third parties but may also engage in activities that pertain to the gen- eration of consumer reports for other purposes. This conclusion is consistent with the use of the “for third parties” limitation throughout the Act. For example, § 1681a(f) limits the term “con- sumer reporting agency” to mean any person that regularly engages in “the practice of assembling or evaluating consumer credit information... for the

° Compare 15 U.S.C. § 1681(a)(d)(1) (defining “consumer report” to mean a com- munication by a “consumer reporting agency”), wth 15 U.S.C. § 1681a(f) (defining ‘“‘con- sumer reporting agency” as any person that assembles or evaluates information “for the purpose of furnishing consumer reports to third parties”). ® See 15 U.S.C. § 1681a(u) (defining “reseller” to mean “a consumer reporting agency” that assembles information “contained in the database of another consumer re- porting agency or multiple consumer reporting agencies” but does not “maintain a database ... from which new consumer reports are produced”). ” See 15 U.S.C. § 1681j(a)(4) (excluding consumer reporting agencies “that ha[ve] not been furnishing consumer reports to third parties on a continuing basis” from the re- quirements of that subsection).

purpose of furnishing consumer reports fo third parties.” 15 U.S.C. § 1681a(f) (emphasis added). Section 1681j(a), which imposes requirements on some (but not all) consumer reporting agencies, uses the same descriptor. 15 U.S.C. § 1681j(a)(4) (excluding from coverage those consumer reporting agencies that have “not been furnishing consumer reports fo third parties on a contin- uing basis during the 12-month period” (emphasis added)). If, as Direct Screening claims, Congress intended to define “consumer report” to encom- pass only “reports sent to third parties,” there would be no need for Congress to specify that a “consumer reporting agency” is one that regularly assembles information “for the purpose of furnishing consumer reports to third parties.” 15 U.S.C. § 1681a(f) (emphasis added). Nor would there be a need for Con- gress to specify that agencies that had not “been furnishing consumer reports to third parties on a continuing basis” would be relieved of the obligations set forth in § 1681)(a) (emphasis added). The third-party limitation would be im- plied in the term “consumer report.” Direct Screening’s proposed construc- tion of “consumer report” would render the “to third parties” limitation in § 1681a(f) and § 1681j mere surplusage, and this Court should not “construe a statute in a way that renders words or phrases meaningless, redundant, or superfluous.” Bridger Coal Co./Pac. Mins., Inc. v. Dir., Off: of Workers’? Comp. Programs, U.S. Dep’t of Labor, 927 F.2d 1150, 1153 (10th Cir. 1991). To avoid rendering the Act’s use of the phrase “to third parties” meaningless, the Court must conclude that the term “consumer reports” is not, by definition, limited to third-party reports. Direct Screening argues that §§ 1681a(d) and 1681b broadly demon- strate that “Congress intended the FCRA to deal with reports provided to third parties.” Dkt. 37 at 4. But “[g]oing behind the plain language of a statute in search of a possibly contrary congressional intent is ‘a step to be taken cau- tiously’ even under the best of circumstances.” Am. Tobacco Co. ». Patterson, 456 US. 63, 75 (1982) (quoting Piper ». Chris-Craft Industries, Inc., 430 U.S. 1, 26 (1977)). The circumstances of this case do not warrant asking what

Congress meant because it is clear what Congress sazd—and did not say. Con- gress did not add a third-party disclosure limitation to the definition of “con- sumer report,” even though it knew how to do so. See 15 U.S.C. § 1681a(f). Congress did not exclude “self-reports” from the definition of “consumer re- port,” even though it excluded other communications from this definition based on the identity of the recipient. See 15 U.S.C. § 1681a(d)(2)(A)(ii1). And Congress used “consumer reports” to refer to the reports sent to consumers, even though it could have chosen a different phrase to refer to those commu- nications. See 15 U.S.C. § 1681a(g) (defining consumer “file” to mean “all information recorded and retained by a consumer reporting agency”’); 15 U.S.C. § 1681c-1(a)(2)(A) (permitting consumers to request copies of their files). If Congress intended to limit “consumer reports” to “reports to third parties,” it could have, and should have. It did not. The statutory language does not support the construction proposed by Direct Screening, and the Court will not adopt it here. Direct Screening points to several cases to support its position. None of those opinions are binding on this Court, and, in any event, the Court finds them unpersuasive. Most of the cases cited by Direct Screening do not in- volve a rigorous statutory analysis and, instead, rely on other courts’ conclu- sions that “consumer reports” are limited to “third-party reports.” Others suggest that a report must be published to a third party before a cognizable injury can be redressed, but they do not consider whether that disclosure

® See Peeples v. Nat?l Data Rsch., Inc., No. 1:22-cv-1764-SCJ-CMS, 2024 WL 671628, at *5 (N.D. Ga. Jan. 4, 2024), report and recommendation adopted, No. 1:22-cv- 01764-SCJ, 2024 WL 1476201 (N.D. Ga. Feb. 27, 2024) (relying on other authority for the proposition that documents provided to consumers cannot constitute consumer reports); Barreto v. Equifax Info. Servs. LLC, No. 1:22-cv-04941-VMC-RDC, 2023 WL 4047693, at *3 (N.D. Ga. May 25, 2023), report and recommendation adopted, No. 1:22-cv-04941-VMC- RDC, 2023 WL 4996555 (N.D. Ga. July 19, 2023) (same); Seckinger v. Equifax Info. Servs., LLC, No. CV 415-304, 2018 WL 1511170, at *7 (S.D. Ga. Mar. 27, 2018) (same).

must take place directly.” These cases do nothing to counter the overwhelm- ing statutory evidence that Congress did not limit “consumer reports” to “third-party reports.” The statutory language controls here, and that lan- guage does not foreclose Mr. Brown’s claim as a matter of law. III The Court is sympathetic to Direct Screening’s concerns about the fairness of this result. After all, why should Mr. Brown be permitted to receive an inaccurate report, send it on to a university without looking at it, and then receive damages for the injury that he could have prevented? And it may be that Direct Screening will be able to assert successful defenses akin to those available in defamation cases. F.g., Losch ». Nationstar Mrog. LLC, 995 F.3d 937 (11th Cir. 2021) (analogizing FCRA claims to traditional defamation claims). But that is not the question before the Court. The only question that Direct Screening’s motion presents is whether, as a matter of law, a report must be disclosed directly to a third party to qualify as a “consumer report” for purposes of the FCRA. The Court answers that question in the negative. Accordingly, Direct Screening’s partial motion to dismiss is denied. DATED this 25th day of August 2025.

JOHN D. RUSSELL United States District Judge

° E.g.,. Wantz v. Experian Info. Sols., 386 F.3d 829, 832 (7th Cir. 2004), as amended (Nov. 16, 2004), abrogated by Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47 (2007) (affirming grant of summary judgment when the plaintiff had presented no evidence that the defend- ant, “as opposed to another consumer reporting agency, ever disclosed any damaging in- formation” about him); Dwyer »v. Contemp. Info. Corp., No. 2:24-cv-00199-GSL-APR, 2025 WL 1635053, at *2 (N.D. Ind. June 5, 2025) (holding that plaintiff class lacked standing where they had alleged only that reports contained defamatory content but did not allege how members of the class were injured).