Houghton, Donna M. v. New Jersey Manufacturers Insurance Company

795 F.2d 1144, 1986 U.S. App. LEXIS 27234, 55 U.S.L.W. 2053
CourtCourt of Appeals for the Third Circuit
DecidedJuly 17, 1986
Docket85-1601
StatusPublished
Cited by35 cases

This text of 795 F.2d 1144 (Houghton, Donna M. v. New Jersey Manufacturers Insurance Company) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Houghton, Donna M. v. New Jersey Manufacturers Insurance Company, 795 F.2d 1144, 1986 U.S. App. LEXIS 27234, 55 U.S.L.W. 2053 (3d Cir. 1986).

Opinions

OPINION OF THE COURT

ALDISERT, Chief Judge.

This appeal requires us to decide whether the recipient of an investigative report prepared for the defense of a personal injury claim may be held liable for violating the notice and disclosure provisions of the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq. relating to “investigative consumer reports” when it did not request such a report and the report, on its face, did not appear to be an investigative consumer report as defined in the statute. The district court determined that the recipient violated the FCRA’s notice and disclosure requirements, and awarded damages 615 F.Supp. 299 (1985). We conclude that the district court erred, and will therefore reverse.

I.

On November 19, 1977, Donna M. Houghton was involved in an automobile collision with Bernice P. Rosenfeld, an insured of defendant, New Jersey Manufacturers Insurance Company (NJMI). On March 16, 1979, plaintiff filed suit against Rosenfeld for injuries resulting from the collision, including a claim for lost earnings.

On May 14, 1979, NJMI requested that Equifax Services, Inc., conduct an investigation of Houghton and prepare a written report. On a preprinted form provided by Equifax, NJMI specifically requested that the investigation include: (1) “Activities since date of accident”; (2) “Cover fully past health history (Illness, injuries, hospitalization, etc.)”; and (3) “General Financial Information (Income, property, etc.).” App. at 163a. Neither Equifax nor NJMI notified Houghton that NJMI had requested the report.

On May 22, 1979, Equifax submitted to NJMI a three-page report. App. at 164a. The report included information based on interviews with four of Houghton’s neighbors, a previous report regarding an insurance claim made by Houghton’s mother-in-law, Montgomery County Court records, a search for previous reports on Houghton, and an examination of existing “credit files.” The report stated: “We did check available credit files through a confidential source, and we are unable to come up with any financial irregularities.” App. at 164a. A copy was forwarded to NJMI’s counsel and in November, 1979, NJMI settled the case with Houghton.

Some four years later, on October 21, 1983, Houghton first learned of the existence of the 1979 Equifax report, and requested several times that NJMI disclose its substance to her, which NJMI repeatedly refused to do. A year later she filed this action against NJMI alleging inter alia that NJMI had violated the FCRA.1 On cross motions for summary judgment, the district court ruled that the Equifax report was an investigative consumer report as defined by the FCRA, app. at 407a-14a, and that NJMI’s failure to notify Houghton of its request and its subsequent refusal to disclose the report therefore violated FCRA §§ 1681d(a) and 1681d(b). Id. at 414a-17a.2 After a bench trial on damages, the court awarded Houghton $7,000.00 in compensatory and punitive damages, $7,770.00 in attorney’s fees, and [1147]*1147$1,284.66 in costs. Id. at 423a, 427a. NJMI now appeals.

II.

Before us NJMI challenges the district court’s holding that the Equifax report requested by NJMI was an investigative consumer report within the meaning of FCRA § 1681a(d). NJMI also challenges the determination that it violated the FCRA by not providing Houghton notice and disclosure as required by the FCRA. Because the liability was determined by summary judgment, we apply the same standard as the district court; we must determine whether “no genuine issue as to a material fact remain[ed] for trial, and that the moving party [was] entitled to judgment as a matter of law.” Goodman v. Mead Johnson & Co., 534 F.2d 566, 573 (3d Cir.1976), cert. denied, 429 U.S. 1038, 97 S.Ct. 732, 50 L.Ed.2d 748 (1977). Review of the district court’s resolution of questions of law is plenary. See id. at 574. We are satisfied that, distilled to its essence, this appeal presents questions of statutory construction.

III.

NJMI first contests the district court’s determination that NJMI violated the FCRA by not notifying Houghton that it had requested an investigative consumer report on her. It next argues that the district court erred in concluding that NJMI’s failure to disclose the report to Houghton upon her request violated the FCRA.

Determining that the report Equifax submitted to NJMI was an “investigative consumer report,” the court said that NJMI was liable for not notifying or disclosing the report to Houghton. We disagree. Because NJMI did not request an investigative consumer report from Equifax, and because the report, on its face, did not appear to be an investigative consumer report from Equifax, and because the report, on its face, did not appear to be an investigative consumer report as defined in the statute, we have decided that NJMI cannot be held liable for its failure to comply with the Act’s notice and disclosure provisions.

A.

The district court was persuaded that NJMI had violated § 1681d of the FCRA. This section covers only investigative consumer reports and requires all persons who “procure or cause to be prepared” investigative consumer reports to notify consumers to whom the reports pertain, and to disclose the reports to them upon request.3 Otherwise, unless adverse action pertaining to credit, insurance, or employment is taken, see § 1681m, recipients or users (here, NJMI) of the information obtained from a consumer reporting agency have no duty to notify, or disclose any information to, the consumer. In those instances, the Act affords consumers protection through § 1681g, which requires consumer reporting agencies (here, Equifax) to disclose information in their files to the consumer upon request.4

[1148]*1148B.

Because NJMI’s request, on its face, did not ask Equifax for an investigative consumer report, we conclude that NJMI cannot be held liable for violating § 1681d(a), the notice provision of the Act.

Not every report issued from Equifax or other consumer reporting agencies qualifies as an investigative consumer report under the statute. The statutory definition provides that a “consumer report” is a report:

[U]sed or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer’s eligibility for (1) credit or insurance to be used primarily for personal, family, or household purposes, or (2) employment purposes, or (3) other purposes authorized under section 1681b of this title.5

15 U.S.C. § 1681a(d). An investigative consumer report is a particular species of consumer report:

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Bluebook (online)
795 F.2d 1144, 1986 U.S. App. LEXIS 27234, 55 U.S.L.W. 2053, Counsel Stack Legal Research, https://law.counselstack.com/opinion/houghton-donna-m-v-new-jersey-manufacturers-insurance-company-ca3-1986.