Christopher Marino v. Ocwen Loan Servicing LLC

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

CHRISTOPHER MARINO; JOSHUA E. No. 19-15530

HARDIN; KRISTEN J. HARDIN,

Plaintiffs-Appellants, D.C. No.

3:16-cv-00200-

v. MMD-WGC

OCWEN LOAN SERVICING LLC,

Defendant-Appellee. OPINION

Appeal from the United States District Court

for the District of Nevada

Miranda M. Du, Chief District Judge, Presiding

Argued and Submitted February 7, 2020

San Francisco, California

Filed October 20, 2020

Before: Richard A. Paez and Carlos T. Bea, Circuit Judges,

and Lynn S. Adelman, * District Judge.

Opinion by Judge Adelman;

Concurrence by Judge Bea

*

The Honorable Lynn S. Adelman, United States District Judge for

the Eastern District of Wisconsin, sitting by designation.

2 MARINO V. OCWEN LOAN SERVICING

SUMMARY **

Fair Credit Reporting Act

The panel affirmed the district court’s summary

judgment in favor of the defendant in an action alleging a

violation of the Fair Credit Reporting Act’s prohibition

against obtaining a consumer credit report without a

permissible purpose.

Plaintiffs alleged that defendant Ocwen Loan Servicing,

LLC, willfully violated the FCRA when it obtained credit

reports about consumers whose mortgage loans had been

discharged in bankruptcy. The district court did not consider

whether Ocwen’s conduct amounted to a violation of the

FCRA. Rather, it found that, as a matter of law, any

violation by Ocwen could not have been willful; thus,

plaintiffs could not recover statutory or punitive damages.

The panel held that, to show that a violation was willful,

a plaintiff must show that the defendant either knowingly

violated the FCRA or recklessly disregarded the Act’s

requirements. Ocwen argued that because the liens on the

plaintiffs’ homes survived their bankruptcies, and because

the plaintiffs continued to hold title to their homes, Ocwen

and the plaintiffs continued to have credit relationships that

justified Ocwen’s periodic review of their credit reports.

Among other FCRA provisions, Ocwen cited 15 U.S.C.

§ 1681b(a)(3)(A), which provides that a consumer report

may be obtained when the user “intends to use the

**

This summary constitutes no part of the opinion of the court. It

has been prepared by court staff for the convenience of the reader.

MARINO V. OCWEN LOAN SERVICING 3

information in connection with a credit transaction involving

the consumer on whom the report is to be furnished and

involving the extension of credit to, or review or collection

of an account of, the consumer.”

First, for the purpose of preventing the law in the area

from stagnating, the panel considered whether Ocwen

committed violations of the FCRA. Analogizing to the field

of qualified immunity, the panel stressed that courts should

be reluctant to skip the threshold question of whether a

defendant violated the FCRA. The panel concluded that

Ocwen was permitted under § 1681b(a)(3)(A) to review the

plaintiffs’ accounts and credit reports to determine whether

it could offer them alternatives to foreclosure, and it

therefore did not violate the Act.

Second, the panel agreed with the district court that

Ocwen did not willfully violate the FCRA.

Judge Bea concurred in the result and in the reasoning on

which that decision was based: to affirm the district court’s

grant of summary judgment because plaintiffs did not raise

a triable issue of fact as to whether Ocwen recklessly or

willfully violated the FCRA. Judge Bea wrote that he would

not include discussion of whether Ocwen’s conduct

constituted a statutory violation.

COUNSEL

Scott C. Borison (argued), Legg Law Firm LLP, San Mateo,

California; Peter A. Holland, Holland Law Firm P.C.,

Annapolis, Maryland; for Plaintiffs-Appellants.

4 MARINO V. OCWEN LOAN SERVICING

John Lynch (argued), Troutman Sanders LLP, Virginia

Beach, Virginia; Harrison S. Kelly and Michael E. Lacy,

Troutman Sanders LLP, Richmond, Virginia; Gary E.

Schnitzer, Kravitz Schnitzer Sloane and Johnson, Las

Vegas, Nevada; for Defendant-Appellee.

OPINION

ADELMAN, District Judge:

The Fair Credit Reporting Act (“FCRA”) forbids a

person from obtaining a consumer credit report without a

permissible purpose. See 15 U.S.C. § 1681b(f)(1). But a

creditor who violates this provision is not necessarily liable

to the consumer. Under the FCRA, only negligent or willful

violations are actionable; a consumer may recover

compensatory damages for negligent violations and

statutory and punitive damages for willful violations. See

15 U.S.C. §§ 1681n, 1681o. In the present case, the plaintiffs

allege that defendant Ocwen Loan Servicing LLC willfully

violated the FCRA when it obtained credit reports about

consumers whose mortgage loans had been discharged in

bankruptcy. The district court granted summary judgment to

Ocwen, finding that, as a matter of law, any violation by

Ocwen could not have been willful. We affirm. However, we

also stress that, to prevent the law in this area from

stagnating, courts should be reluctant to skip to the

negligence or willfulness issue without answering the

threshold question of whether the defendant violated the

FCRA.

I.

Ocwen is a servicer of mortgage loans. Plaintiffs

Christopher Marino and Josh and Kristin Hardin owned

MARINO V. OCWEN LOAN SERVICING 5

homes subject to mortgages serviced by Ocwen. Each

plaintiff filed for bankruptcy and received a discharge of his

or her personal liability for the mortgage debt. However, the

liens on the plaintiffs’ homes survived their bankruptcies,

and the plaintiffs continued to hold title to the properties.

Following the discharges, Ocwen obtained the plaintiffs’

credit reports. In the district court, the plaintiffs alleged that,

in light of the discharges, Ocwen could not have had

permissible reasons to obtain their reports. The plaintiffs

further alleged that, by obtaining the reports without

permissible reasons, Ocwen willfully violated the FCRA and

therefore was liable for statutory and punitive damages.

Under the FCRA, to show that a violation was willful, a

plaintiff must show that the defendant either knowingly

violated the Act or recklessly disregarded the Act’s

requirements. See Safeco Ins. Co. of Am. v. Burr, 551 U.S.

47, 69 (2007). To show that a defendant recklessly

disregarded the Act’s requirements, a plaintiff must show

that the defendant “ran a risk of violating the law

substantially greater than the risk associated with a reading

[of the Act] that was merely careless.” Id.

Ocwen moved for summary judgment. It argued that

because the liens on the plaintiffs’ homes survived their

bankruptcies, and because the plaintiffs continued to hold

title to their homes, Ocwen and the plaintiffs continued to

have credit relationships that justified Ocwen’s periodic

review of their credit reports. Ocwen cited several provisions

of the FCRA in support of its claim that it had a permissible

purpose to obtain the reports. See 15 U.S.C.

§ 1681b(a)(3)(A), (E) & (F). For purposes of this appeal, we

will focus on only one of these provisions, which appears in

subsection (a)(3)(A). It provides that a consumer report may

be obtained when the user “intends to use the information in

6 MARINO V. OCWEN LOAN SERVICING

connection with a credit transaction involving the consumer

on whom the report is to be furnished and involving the

extension of credit to, or review or collection of an account

of, the consumer.” 15 U.S.C. § 1681b(a)(3)(A).

In deciding the motion for summary judgment, the

district court relied primarily on this court’s unpublished

opinion in Vanamann v. Nationstar Mortgage, LLC, 735 F.

App’x 260 (9th Cir. 2018). In Vanamann, the plaintiff

alleged that Nationstar, a mortgage servicer, willfully

violated the FCRA by obtaining credit reports about her after

her mortgage debt had been discharged in bankruptcy. For

purposes of the appeal, we “assum[ed] that Nationstar lacked

a permissible purpose for checking [the plaintiff’s] credit”

Id. at 262. But we concluded that the district court had

properly granted Nationstar’s motion for summary judgment

because the plaintiff could not show that any violation was

willful. Id. In this regard, we reasoned that Nationstar could

have reasonably believed that it had a permissible purpose

for obtaining the plaintiff’s credit report. We wrote:

The Act contains no provision addressing

bankruptcy discharges for Nationstar to

interpret, much less interpret recklessly. The

plain text of the Act does not prohibit a

mortgage servicer from obtaining a

consumer’s credit report after a bankruptcy

court’s discharge of the consumer’s mortgage

debt. Nor have we interpreted the Act to

prohibit that practice. And the Act does not

require that a consumer have personal

liability on a debt in order for a credit check

to be authorized. The provision authorizing

credit checks for “review . . . of an account”

“in connection with a credit transaction”—

MARINO V. OCWEN LOAN SERVICING 7

however broad or narrow that provision may

be—permits Nationstar’s interpretation.

Id. Based on Vanamann, the district court concluded that

Ocwen could not have willfully violated the FCRA.

On appeal, the plaintiffs contend that summary judgment

on the question of willfulness was improper as to them 1

because they “surrendered and vacated” the mortgaged

premises before Ocwen obtained their credit reports. They

contend that, because they no longer lived in the homes and

their personal liability for the mortgage debts had been

discharged, Ocwen couldn’t possibly have had legitimate

reasons to continue reviewing their credit reports. In

response to this argument, Ocwen points to several reasons

for continuing to review the plaintiffs’ credit, including to

determine whether the plaintiffs were eligible for

alternatives to foreclosure or other “loss mitigation

opportunities.” Ocwen also contends that, even if its belief

that it had permissible reasons to check the plaintiffs’ credit

was mistaken, it was not based on a reckless interpretation

of the statute or an intentional misreading of the statute.

Therefore, Ocwen contends, the district court properly

granted summary judgment on the issue of willfulness.

II.

We review the district court’s grant of summary

judgment de novo. See Carson Harbro Village Ltd. v.

1

In the district court, there were eight plaintiffs, and those eight

plaintiffs sought to represent a class of similarly situated mortgagors.

However, only three plaintiffs have appealed, and they no longer seek to

represent a class. Thus, the only issue on appeal is whether the district

court properly granted summary judgment on the claims of the three

plaintiffs-appellants.

8 MARINO V. OCWEN LOAN SERVICING

Unocal Corp., 270 F.3d 863, 870 (9th Cir. 2001). Summary

judgment is appropriate when, based on the evidence in the

record, no reasonable fact finder could return a verdict for

the nonmoving party. Fed. R. Civ. P. 56; Anderson v. Liberty

Lobby, Inc., 477 U.S. 242, 248–50 (1986).

Because the plaintiffs seek only statutory and punitive

damages, to avoid summary judgment, they must show that

their evidence permitted a reasonable fact finder to reach two

conclusions: (1) that Ocwen’s post-discharge credit inquiries

violated the FCRA, and (2) that Ocwen’s violations were

willful. The district court addressed only the willfulness

issue. It did not separately consider whether Ocwen’s

conduct amounted to a violation of the FCRA.

We agree with the district court that the plaintiffs cannot

show that a reasonable fact finder could conclude that

Ocwen’s alleged violations were willful. But before we turn

to the willfulness issue, we pause to consider whether Ocwen

committed violations of the FCRA in the first place. We do

this is to prevent the law in this area from stagnating. As we

noted above, a consumer may succeed on a claim under the

FCRA only if he or she shows that the defendant’s violation

was negligent or willful. See 15 U.S.C. §§ 1681n, 1681o. To

prove a negligent violation, a plaintiff must show that the

defendant acted pursuant to an objectively unreasonable

interpretation of the statute. See Syed v. M-I LLC, 853 F.3d

492, 505 (9th Cir. 2017). To prove a willful violation, a

plaintiff must show not only that the defendant’s

interpretation was objectively unreasonable, but also that the

defendant ran a risk of violating the statute that was

substantially greater than the risk associated with a reading

that was merely careless. Safeco, 551 U.S. at 69. Under

either the negligence or willfulness standard, when the

applicable language of the FCRA is “less than pellucid,” id.

MARINO V. OCWEN LOAN SERVICING 9

at 70, a defendant will nearly always avoid liability so long

as an appellate court has not already interpreted that

language. Thus, in nearly every case involving unclear

statutory language, an appellate court may dispose of the

appeal by concluding that the defendant did not negligently

or willfully violate the statute. But if the appellate court

addresses only the negligence or willfulness issue and leaves

the question of statutory interpretation undecided, then the

question of statutory interpretation will likely never be

answered.

The problem is analogous to the problem in the field of

qualified immunity that led the Supreme Court, for a time,

to require that courts first determine whether a plaintiff had

suffered a violation of a constitutional right before making

the oft-dispositive determination of whether that right was

clearly established at the time of the misconduct. See Saucier

v. Katz, 533 U.S. 194, 201 (2001). Although this two-step

sequence is no longer mandatory, see Pearson v. Callahan,

555 U.S. 223, 232 (2009), the Court continues to recognize

that it is often beneficial because it “promotes the

development of constitutional precedent and is especially

valuable with respect to questions that do not frequently

arise in cases in which a qualified immunity defense is

unavailable,” id. at 236. Similarly, here, addressing whether

the defendant violated the FCRA before turning to the issues

of negligence or willfulness promotes the development of

precedent on questions of statutory interpretation that do not

frequently arise in cases in which issues of negligence or

willfulness are absent. We note that the Supreme Court

implicitly endorsed this approach by following it in Safeco—

the case in which it interpreted the FCRA’s willfulness

standard. The Court first answered the “antecedent question”

of statutory interpretation that applied to the case. 551 U.S.

10 MARINO V. OCWEN LOAN SERVICING

at 60–67. Only then did it address whether the defendants’

alleged violations were willful. Id. at 67–70. 2

For these reasons, we encourage courts in this circuit to

determine whether the defendant committed a violation of

the FCRA before turning to questions of negligence and

willfulness. However, this is not an ironclad rule, and

circumstances may arise where the issues of negligence or

willfulness should be resolved first. For example, the factual

record might not be sufficiently developed to enable the

court to determine whether the defendant committed an

FCRA violation, but the court might still be able to

determine that any violation that occurred could not have

been negligent or willful. The important point is that, when

feasible, courts should resolve disputed issues of statutory

interpretation before disposing of the case for lack of a

negligent or willful violation.

A.

We thus turn to the antecedent question of whether the

plaintiffs have demonstrated that Ocwen lacked a

permissible purpose for obtaining their credit reports after

their mortgage debts had been discharged. The plaintiffs

contend that they have shown this (or at least demonstrated

the existence of a genuine factual dispute) because,

following their discharges, Ocwen could do nothing except

2

Technically, the Court did not determine whether one of the

defendants, Safeco, violated the FCRA, but instead disposed of the claim

against it on willfulness grounds. However, that was only because the

factual record did not permit the Court to determine whether, under the

Court’s interpretation of the disputed FCRA provision, Safeco

committed a violation. See Safeco, 551 U.S. at 68, 71. The Court still

answered the question of statutory interpretation that was antecedent to

the willfulness inquiry. See id. at 60–67.

MARINO V. OCWEN LOAN SERVICING 11

foreclose its liens, and therefore Ocwen had no legitimate

use for the plaintiffs’ credit reports, which were not relevant

to foreclosure.

We think the plaintiffs’ argument falters at the very first

step, for they have not shown that, at the time Ocwen

obtained their credit reports, Ocwen could do nothing except

foreclose its liens. Although the plaintiffs’ personal liability

for the mortgage debts had been discharged, Ocwen was not

prohibited from inquiring whether the plaintiffs wished to

explore alternatives to foreclosure, such as entering into a

new loan on different terms or a payment plan that might

allow the plaintiffs to keep their homes. Indeed, the

discharge provisions of the bankruptcy code state that the

discharge injunction does not apply to a secured creditor’s

efforts to seek “periodic payments associated with a valid

security interest in lieu of pursuit of in rem relief to enforce

the lien.” See 11 U.S.C. § 524(j)(3). Along with its motion

for summary judgment, Ocwen filed a declaration in which

it explained that one of the reasons it reviewed the plaintiffs’

credit reports was to determine whether the plaintiffs were

eligible for one of these alternatives to foreclosure. Ocwen

explained that it sought to evaluate the plaintiffs “for loss

mitigation options, such as loan modification, HAMP [i.e.,

the federal government’s Home Affordable Modification

Program], short sale, deed-in-lieu of foreclosure, second

mortgage, and cash-for keys.” Decl. of Derrick Raleigh ¶ 30.

The plaintiffs do not contend that evaluating a debtor for

alternatives to foreclosure is not a permissible reason for

obtaining a credit report under § 1681b(a)(3). And it seems

clear to us that using a credit report for this purpose fits

within the scope of § 1681b(a)(3)(A): it is using the

information “in connection with a credit transaction

involving the consumer . . . and involving the extension of

12 MARINO V. OCWEN LOAN SERVICING

credit to, or review or collection of an account of, the

consumer.” Obviously, mortgage debt is the product of a

credit transaction, and that debt survived the plaintiffs’

bankruptcies, at least to the extent of the value of the

collateral. Ocwen’s exploring alternatives to foreclosure

would have been part of a review of, or an attempt to collect,

the account associated with the surviving lien.

The plaintiffs seem to offer two responses to Ocwen’s

claim that it could permissibly use the information in the

credit reports to evaluate them for alternatives to foreclosure.

First, the plaintiffs assert that, following their discharges,

they never expressed interest in alternatives to foreclosure.

But we fail to see why this should matter. In evaluating the

plaintiffs for eligibility for alternatives to foreclosure,

Ocwen would have been reviewing the plaintiffs’

outstanding accounts and attempting to collect the value of

the collateral, which it was permitted to do even after the

plaintiffs received discharges. Thus, even if the plaintiffs did

not request alternatives to foreclosure, Ocwen could have

explored those options and, if the plaintiffs qualified for an

alternative, presented them with an offer in lieu of

foreclosure. Nothing in § 1681b(a)(3)(A) suggests that a

consumer must request an alternative to foreclosure before

the creditor may review the consumer’s account to determine

whether he or she is eligible.

Second, the plaintiffs claim that, by the time Ocwen

obtained their credit reports, they had “surrendered and

vacated” their properties. Here, however, we note that the

plaintiffs do not explain what they mean by “surrendered,”

and that they have pointed to no evidence in the record from

which a finder of fact could conclude that the plaintiffs

vacated their properties before Ocwen obtained their credit

reports. In any event, we will assume that the plaintiffs

MARINO V. OCWEN LOAN SERVICING 13

vacated their homes. We will also assume that, by

“surrendered,” the plaintiffs mean that they expressed no

interest in contesting or avoiding foreclosure. Still, it does

not follow that Ocwen did not have a reason to review their

accounts to determine if they qualified for alternatives to

foreclosure. Ocwen could have reasonably thought that even

a debtor that moved out of his or her home might be

interested in returning if Ocwen made a sufficiently

attractive offer. Thus, Ocwen was permitted to review the

plaintiffs’ accounts—and their credit reports—to determine

whether it could offer them alternatives to foreclosure.

In reaching this conclusion, we do not mean to suggest

that there is never a point at which a mortgage servicer or

lender will lack a permissible purpose to review the credit

report of a consumer whose mortgage debt has been

discharged. We imagine that if a consumer clearly informs

the servicer or lender that he or she has no interest in

avoiding foreclosure, then the servicer or lender might lack

a permissible purpose for continuing to review the

consumer’s credit. But to resolve this case, we do not need

to identify the precise point at which review of the

consumer’s credit must stop. All we hold is that, based on

the evidence in the summary judgment record, a reasonable

finder of fact could not conclude that Ocwen lacked a

permissible purpose for obtaining the plaintiff’s credit

reports.

B.

Because we conclude that the plaintiffs have not shown

that Ocwen violated the FCRA, the issue of willfulness is

essentially moot. However, for the sake of completeness,

and at the risk of stating the obvious, we note our agreement

with the district court that Ocwen did not willfully violate

the FCRA. Because we have interpreted the FCRA to mean

14 MARINO V. OCWEN LOAN SERVICING

what Ocwen thought it means, Ocwen could not have

intentionally or recklessly misinterpreted the Act.

III.

The district court’s grant of summary judgment to

Ocwen is AFFIRMED.

BEA, Circuit Judge, concurring:

I concur in the result and in the reasoning on which that

decision is based: to affirm the district court’s grant of

summary judgment because Plaintiffs, who seek statutory

and punitive, but not compensatory, damages, did not

adduce evidence sufficient to raise a triable issue of fact as

to the material issue—whether Ocwen recklessly or willfully

violated the FCRA.

I concur separately because I would not include

discussion of two matters not essential to the determination

of this case. First, the majority decides that under two set of

facts Plaintiffs—one supported by the record and one

Plaintiffs argued but did not prove—Ocwen’s conduct did

not constitute a statutory violation of the FCRA, a question

which is not relevant to the decision of the case before us. 1

1

The majority discusses Plaintiffs’ two arguments: that Ocwen was

not permitted to pull their credit reports because it had no need to

evaluate their credit since (i) Plaintiffs never expressed interest in

alternatives to foreclosure; and (ii) Plaintiffs “surrendered and vacated”

their properties before Ocwen obtained their credit reports, though

Plaintiffs did not provide any record evidence to support this argument.

Op. at 12–13. The majority decides “Ocwen was permitted to review the

MARINO V. OCWEN LOAN SERVICING 15

Second, the majority imagines a hypothetical, which

Plaintiffs did not plead nor prove, that the majority states

may constitute a statutory violation of the FCRA. 2

First, the issue of whether there may have been a

statutory violation of the FCRA is not necessary or relevant

to the decision of the case before us. So, none of the

scenarios, neither the two argued by Plaintiffs nor the one

imagined by the majority, are related to the basis on which

this case was decided, whether Ocwen’s conduct constituted

a reckless or willful violation of the FCRA.

Second, the majority states that “when the applicable

language of the FCRA is less than pellucid, a defendant will

nearly always avoid liability so long as an appellate court has

not already interpreted that language.” Op. at 8–9 (internal

quotation marks and citation omitted). However, the

majority has not identified what precise language of the

FCRA is not “pellucid” but needs an appellate court’s

statutory interpretation. Neither has the majority explained

how the language could be made “pellucid.” Further, when

the majority describes a hypothetical scenario and suggests

a possible conclusion about whether the conduct in that

hypothetical would violate the FCRA, it is not an exercise in

statutory interpretation in this case. It seems a roadmap for

plaintiff counsel in a hoped-for future lawsuit. It is the

application of the statute in the present case to a hypothetical

case. Ironically, the majority’s confidence in suggesting a

plaintiffs’ accounts—and their credit reports—to determine whether it

could offer them alternatives to foreclosure.” Op. at 13.

2

“We imagine that if a consumer clearly informs the servicer or

lender that he or she has no interest in avoiding foreclosure, then the

servicer or lender might lack a permissible purpose for continuing to

review the consumer’s credit.” Op. at 13.

16 MARINO V. OCWEN LOAN SERVICING

conclusion to a hypothetical illustrates quite plainly that it

does find the statute’s language “pellucid”; clear enough that

a court would be able to determine whether a plaintiff may

recover in that different factual scenario.

Third, the majority notes that the statute does not give

plaintiffs many opportunities to recover, so defendants “will

nearly always avoid liability”. This is not an indication of a

“stagnant” statute, but rather one with clear requirements

that may be difficult for a plaintiff to meet and establish by

proof. The majority may think the drafters of the statute did

an incomplete job or should state a better policy, but courts

should resist the temptation to publish unrequested advice to

Congress. I do not think it is the task of the court to give

guidance to the industry or the Bar or to ensure the law does

not “stagnate” by way of dicta. Nor is it a particularly good

idea. Congress is elected to do so. We are appointed to

decide “Cases” or “Controversies.” U.S. Const. art. III, § 2,

cl. 1. “[I]f it is not necessary to decide more, it is necessary

not to decide more.” PDK Labs., Inc. v. Drug Enforcement

Admin., 362 F.3d 786, 799 (C.A.D.C. 2004) (Roberts, J.,

concurring in part and concurring in judgment).

Fourth, the majority cites Vanamann v. Nationstar

Mortgage, LLC, 735 F. App’x 260 (9th Cir. 2018), and

decides this case with similar reasoning, but it does not

follow Vanamann’s short, direct path from issue to statute to

application to conclusion. Instead, the majority discusses

and decides what it terms “the antecedent question” of

statutory violation for award of compensable damages—a

question not necessary to decide in this case because

Plaintiffs sought only statutory and punitive damages—and

it encourages other courts in this circuit to do the same. Op.

at 9–10. It cites the Supreme Court’s decisions in Saucier v.

MARINO V. OCWEN LOAN SERVICING 17

Katz, 533 U.S. 194 (2001) and Safeco Ins. Co. of Am. v. Burr,

551 U.S. 47 (2007) to support this approach. Op. at 9–10.

In Saucier, the Court employed a two-step approach to

decide the qualified immunity issue, first deciding whether

an official’s conduct violated a constitutional right and then

whether that right was clearly established. Saucier, 533 U.S.

at 201. The Court’s approach in Saucier does not provide

support for the majority’s approach in this case for two

reasons: analysis of the first question may have assisted the

Court in deciding the second question; and the Court

analyzed provisions of the Constitution, not statutory

language such as the FCRA.

The Court stated one reason for its approach in Saucier

is that analysis of the first question may inform the analysis

of the second question. Saucier, 533 U.S. at 201 (“In the

course of determining whether a constitutional right was

violated on the premises alleged, a court might find it

necessary to set forth principles which will become the basis

for a holding that a right is clearly established.”). The

majority here does not contend that analysis of statutory

violation of the FCRA will ever inform analysis of whether

the violation was done recklessly or willfully. Vanamann

provides a useful model and assumes the conduct violated

the FCRA and then decides the case, as we have here, based

on lack of evidence of recklessness or willfulness.

The majority notes the Court applied a similar approach

interpreting the FCRA in Safeco. The text of the statute the

Court found “less-than-pellucid” in Safeco was quite

different from the text involved here. In Safeco, the text

involved whether a customer must be notified when the rate

an insurance company quoted the customer was adversely

affected by the contents of the customer’s credit report.

Safeco, 551 U.S. at 53 (discussing 15 U.S.C. § 1681m (a),

18 MARINO V. OCWEN LOAN SERVICING

which requires notice of an adverse action based on

information in a credit report; and 15 U.S.C.

§ 1681a(k)(1)(B)(i), which defines “adverse action”). In

contrast, here the issue is whether Ocwen is permitted to

obtain a customer’s credit report pursuant to 15 U.S.C.

§ 1681b(a)(3)(A), not what the entity must do if the credit

report adversely affects the rate it quotes the customer. The

Safeco Court did not find this language regarding obtaining

a credit report to be “less than pellucid” and in need of any

type of interpretation, simply because the statutory language

involved here was not involved in Safeco.

The majority cites Safeco for the proposition that the

Court first answered the “antecedent question” of violation

of the Act before it went to the issue of whether there was

willfulness. In Safeco, the Court found that GEICO had not

violated the FCRA because it had not taken adverse action

and so had not been required to give notice. Safeco, 551 U.S.

at 67–68. The Court found that SAFECO had probably

violated the FCRA by a mistaken reading of the Act, but that

this mistaken reading was at worst careless, and certainly not

willful, as those concepts were developed at common law

and incorporated in the FCRA. Id. In neither case, did the

Court concern itself with whether the law was “stagnating”,

as the Opinion puts it, if plaintiffs’ claims were denied, as

does the Opinion. Op. at 9 (“Thus, in nearly every case

involving unclear statutory language, an appellate court may

dispose of the appeal by concluding the defendant did not

negligently or willfully violate the statute.”). In neither case

did the Court lay out a hypothetical, through an effort of

“development of precedent”, (Op. at 9), to provide a

roadmap to potential plaintiffs.

The citation of Saucier v. Katz is inapposite as a basis for

the “development of precedent” on questions of statutory

MARINO V. OCWEN LOAN SERVICING 19

interpretation. Saucier was dealing with what constitutional

rights existed and were clearly established enough to deprive

state actors of Qualified Immunity as a defense. Saucier,

533 U.S. at 197. What are constitutional rights in concrete

situations, based on such indeterminate concepts as Due

Process and Equal Protection, are apt for development by

precedent. What are statutory rights should be determined

by Congress.

But Saucier v. Katz is inapposite for a different reason:

it has been modified by Pearson v. Callaghan so that most,

if not all, claims of violations of constitutional rights are

these days determined by application of Qualified Immunity,

inhibiting somewhat the creation of novel constitutional

rights.

The majority states its purpose in employing this

approach is to “promote[] the development of precedent on

questions of statutory interpretation.” Op. at 9. There are

two reasons to reject the majority’s approach. First, I fail to

see how the majority opinion develops precedent on how to

accomplish statutory interpretation. Beside no citation to the

language of the statute which is claimed to be “less than

pellucid” there is no mention of which, if any, canons of

statutory interpretation are to be used. Chevron, U.S.A., Inc.

v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 843 n.9, 104 S.

Ct. 2778, 2782 n.9, 81 L. Ed. 2d 694 (1984) (“If a court,

employing traditional tools of statutory construction,

ascertains that Congress had an intention on the precise

question at issue, that intention is the law and must be given

effect.”). Second, laying out a roadmap of how plaintiffs

might prevail in a hypothetical case, not yet decided, is not

precedent on how the FRCA should be interpreted.

It is particularly inadvisable to decide an unrelated issue

or a hypothetical case not presently before the court in the

20 MARINO V. OCWEN LOAN SERVICING

Ninth Circuit, where dicta in panel opinions may become the

binding law of the circuit. See United States v. Johnson,

256 F.3d 895, 914 (9th Cir. 2001) (“We hold, instead, that

where a panel confronts an issue germane to the eventual

resolution of the case, and resolves it after reasoned

consideration in a published opinion, that ruling becomes the

law of the circuit, regardless of whether doing so is

necessary in some strict logical sense.”). Perhaps the

Johnson rule as to adoption of dicta as precedent given

“reasoned consideration” does not apply to the hypothetical

suggested by the majority as a possible occasion of plaintiff

recovery, because the majority was not “confront[ing] an

issue germane to the eventual resolution of the case.” But

rather than foment claims and arguments as to whether the

majority’s dicta gave “reasoned consideration” to an issue,

or whether the posited hypothetical was “germane” to

eventual resolution of this case, it would be better to edit out

that hypothetical.

Reticence to expatiate in dicta is always advisable.