Opposition Brief — Washington v. CSC Credit Services, Inc.

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No. 99-1623.

rT AY CS) TNT

IN THE i

Supreme Court of the United States

BERNITA WASHINGTON, et al.,

Petitioners,

v

CSC CREDIT SERVICES, INC., EQUIFAX CREDIT

INFORMATION SERVICES, INC. and EQUIFAX, INC.,

Respondents.

On PETITION FOR A WRIT OF CERTIORARI TO THE

Unitep STATES Court OF APPEALS FOR THE FIFTH CIRCUIT

Saieienianenaenal

ees

BRIEF IN OPPOSITION

NAN EITEL KENT E. Mast

JEFFERSON R. TILLERY Counsel of Record

JONES, WALKER, WAECHTER, MarA MCRAE

POITEVENT, CARRERE

& Denecre, LLP

201 St. Charles Avenue

Suite 4700

New Orleans, LA 70170

(504) 582-8000

Attorneys for Respondent

CSC Credit Services, Inc.

Cinpy D. HANSON

KILPATRICK STOCKTON LLP

1100 Peachtree Street

Suite 2800

Atlanta, GA 30309-4530

(404) 815-6500

AMELIA WILLIAMS KOCH

ALEXANDER MCINTYRE, JR.

Locke LIDDELL & Sapp LLP

601 Poydras Street

Suite 2400

New Orleans, LA 70130

(504) 558-5100

Attorneys for Respondents

Equifax Credit Information

Services, Inc. and Equifax Inc.

159957 @J Counsel Press LLC

(800) 274-3321 + (800) 359-6859

Se eet te an ae ee ane

» Nea Re REY TL nT me

i

CORPORATE DISCLOSURE STATEMENT

CSC Credit Services, Inc. is a wholly-owned (directly

or indirectly) subsidiary of Computer Sciences Corporation,

which is a publicly held company.

Equifax Inc. is a publicly held company. There is no

parent or publicly held company owning 10% or more of the

stock of Equifax Inc.

Equifax Credit Information Services, Inc. is a

wholly-owned subsidiary of Equifax Inc.

il

TABLE OF CONTENTS

Page

Corporate Disclosure Statement ................ i

Fa SECON oi cv ddtnkdaweesandawasies li

Table of Cited Authorities .........cccc.ccece. ill

Semenary GF OCHO 2 ccnsacaeasseswiun ss coin ]

1. The Fifth Circuit followed precedent and

Congressional intent by holding that a

consumer must demonstrate an injury (i.e.,

the disclosure of his report for an

impermissible purpose) before challenging a

credit reporting agency’s procedures. ..... 5

2. The Fifth Circuit applied the correct legal

standard in holding that injunctive relief is

not available to private litigants under the

of Perr rrr TT re eo 8

3. The Fifth Circuit correctly concluded that

Petitioners could not maintain a Rule 23(b)(2)

class seeking declaratory relief. .......... 11

4. There are no other reasons for review. .... 15

COmORRGEON ... .ccétescenendadarele 17

iti

TABLE OF CITED AUTHORITIES

Page

Cases:

Allison v. Citgo Petroleum Corp., 151 F.3d 402 (Sth

err eer ey er rere ere 3, 13, 14, 15

Altmanshofer v. TRW, Inc., 95 B.R. 729 (C.D. Ca.

eee Sa sda aa wh doko ded does ee oe 7

Andrews v. Trans Union Corp., 7 F. Supp. 2d 1056

eee ere re reer rere 4, 6, 10

Austin v. BankAmerica Serv. Corp., 419 F. Supp.

PE POD shoo eds cde bee cee cadaees 7

Bates v. United States, 522 U.S. 23 (1997) ....... 9

Boggs v. Alto Trailer Sales, Inc., 511 F.2d 114 (Sth

| err ee tere rere eee 15

Boothe v. TRW Credit Data, 768 F. Supp. 434

i ee si a hea ss Keb acb eas meen ns 7

Bumgardner v. Lite Cellular, Inc., 996 F. Supp. 525

Es Cava y Gaeuewk ers eee’ om 10

Cahlin v. General Motors Acceptance Corp., 936

2 foe Fi) 08 Bs Peer rerr rer Terr rey 6,7

Califano v. Yamasaki, 442 U.S. 682 (1979) ...... 4,8

iv

Cited Authorities

Page

Castano v. American Tobacco Co., 84 F.3d 734 (Sth

er rere rer rer y rrr. 15

Ditty v. Checkrite, Ltd. 973 F. Supp. 1320 (D. Utah

Se pete rere rere pias Herth " 10

Grant v. TRW, Inc., 789 F. Supp. 690 (D. Md. 1992)

jive Sake edd aaeea hose ek eee eee 7

Grays v. Trans Union Credit Info. Co., 759 F. Supp.

po RR 8 error errr rT rere 7

Greenway v. Information Dynamics, Ltd., 399 F.

Supp. 1092 (D. Ariz. 1974), aff'd on other

grounds, 524 F.2d 1145 (9th Cir. 1975) ....... 10, 11

Guimond v. Trans Union Credit Info. Co., 45 F.3d

SB PU Gals OD, 6x hn stan bas cde vadixce 6

Henson v. CSC Credit Servs., 29 F.3d 280 (7th Cir.

| A rere err re rr re 6

Houston v. TRW Info. Servs., 707 F. Supp. 689

Ck | rer rrr re rrr re rr 7

In the Matter of Equifax Credit Info. Serv., Inc.,

Docket No. C-3611, (FTC Aug. 14, 1995) ..... 16

In the Matter of Trans Union Corp., Docket

No. 9255, (FTC Feb. 10, 2000) .............. 16

———— eT eT

—— a

Vv

Cited Authorities

Page

Kekich v. Travelers Indem. Co., 64 F.R.D. 660 (W.D.

eee Peres oe) ere rire tae tee 10

Koropoulos v. Credit Bureau, Inc., 734 F.2d 37 (D.C.

| PPT ee Oe Cee tee eee 7

LeBlanc v. Trans Union Corp., No. 98-2081

ot Vee Ee TET ee OPT CS Pe oe ree 15

LeCompte v. Credit Bureau of Baton Rouge, Inc.,

Civ. A. No. 95-2019, 1996 WL 255923 (E.D. La.

SE hae RO sn bc be akd nanny edekheeseae 7

Leven Metals Corp. v. Parr-Richard Terminal Co.,

ie Bw Brive, to | | reer 12

Lowry v. Credit Bureau, Inc., 444 F. Supp. 541 (N.D.

Rh SPE Kish ke udsssadendeeeeeae oe 7

Mangio v. Equifax, Inc., 887 F. Supp. 283 (S.D. Fla.

BOD. £4 0bs6nd bac auweien eel eee 10

McPhee v. Chilton Corp., 468 F. Supp. 494 (D. Conn.

i ey erro eres errr ey errr ery 7

Middlebrooks v. Retail Credit Co., 416 F. Supp. 1013

fk | rer eer pr ee ree 4, 6

Norris v. Experian Info. Solutions, Inc., No. 99-

pe OS Perr rrr ey err e e 15

vi

Cited Authorities

Page

Peller v. Retail Credit Co., Civ. A. No. 17900 (N.D.

Ga. Dec. 6, 1973), aff'd memo, 505 F.2d 733 (Sth

CO, ROPE 0.5.00 6s ead Hawes ase eee 7

Pendleton v. Trans Union Sys. Corp., 76 F.R.D. 192

CBee. PA SPF) oa ncvecdevesntoena ee 7

Roseman v. Retail Credit Co., 428 F. Supp. 643 (E.D.

PG. S97 EP 6s cccdssteedenenee 7

Spence v. TRW, Inc., 92 F.3d 380 (6th Cir. 1996) . 6

Steel Co. v. Citizens for a Better Environment, 523

U.S. SS. CGR 0s beiesceerieeiaaee 7

Todd v. Associated Credit Bureau Servs., Inc., 451

F. Supp. 447 (E.D. Pa. 1977), aff'd, 578 F.2d 1376

(56 Cle: SERED bo d-ccs hoses eee 7

United Food and Commercial Workers Local Union

137 v. Food Employers Council, Inc., 827 F.2d

$19 Ga Cis. TURE) os. 6ckceaseseeeeee iz, 32

United States v. Wong Kim Bo, 472 F.2d 720 (Sth

Cet: 8972) oo a scdcccadcaewessseeeeeee 10

Watson v. Credit Bureau, Inc., 660 F. Supp. 48 (S.D.

Dies. FOU sn cnnddeccccenesenaeeee 7

—

ee ee eee

Vii

Cited Authorities

Page

Whelan v. Trans Union Credit Reporting Agency,

862 F. Supp. 824 (E.D.N.Y. 1994) ........... 7

White v. Imperial Adjustment Corp., Imperial Fire 3

and Cas. Co., Equifax Credit Info. Serv., Inc. and

Equifax Inc., No. 99-3804 (E.D. La.) ......... 15

Statutes:

ee ee rrr ae eee 1

Be Ws I bo 8 4d sc kbc ee ce clesaceusks |

iP Gs Oe SE 6 6 646s 6 de edn ewee seh en 1

ge er re re Pee rr re 1

eg re re ee 1, 2,3

Sane PE 6.5 5544005 Skat a kde kee eens 6

oF ED 66 kbs ee ce keNis ees candi 9,10

oe SP I a oaks as utd neseuss chabaeve 9,10

Sie A Ek nae d anid debe ea ww es 9

Se re NON bhdeinwivacddccseedednes 9

I Si as es 9, 10

viii

Cited Authorities

Page

Ree To | Peerrererr cee rere err 9

RR AF ee I 5 oe Ch kes eda wde cade 15

BS ULBA. © OD os hake Sone ees Se 15

ps cih ie o>. 60) errr rer rrr errr eer 3

Se UR... Se a OO, 4 66 0558 KO es 12

Rules:

i ae Serer rr rr rT errs eee rrr re 8,11

i eae ee + errr errr rT a, 3,4, 21, 33

Ree es 8 rere errr er rrr re Ty 3,4

Other Authorities:

Federal Trade Commission Advice and Commentary

on the Fair Credit Reporting Act [16 C.F.R. Part

| PPR TV CE Pe rete ree errr er eT Tr err eT 2

10 Charles Alan Wright, et al., Federal Practice and

12

Procedure § 2751 (3d ed. 1998) .............

l

SUMMARY OF THE CASE

Petitioners seek to represent a nationwide class alleging

that Respondents, CSC Credit Information Services, Inc.

(“CSC”), Equifax Inc., and Equifax Credit Information

Services, Inc. (“ECIS”),' violate the Fair Credit Reporting

Act, 15 U.S.C. §§ 1681-1681u (“FCRA”) when providing

credit reports to their insurance company subscribers.

In bringing this action, however, Petitioners attempt to

sidestep 30 years of case law interpreting the FCRA,

the Constitutional requirement of standing and Congressional

intent. The Fifth Circuit recognized these legitimate obstacles

to class certification and, in a carefully reasoned opinion,

vacated and reversed the class certification by the district

court.

ECIS and CSC are credit reporting agencies as defined

by the FCRA. 15 U.S.C. § 1681a (1994 & Supp. IV 1998).

As such, they assemble and provide consumer credit

information to third parties that they believe have a

permissible purpose to obtain the information. See 15 U.S.C.

§§ 1681a(f), 1681b (1994 & Supp. IV 1998). The FCRA

requires ECIS and CSC to implement “reasonable procedures

designed .. . to limit the furnishing of consumer reports to

the purposes listed under § 1681b.” 15 U.S.C. § 1681e(a)

(1994 & Supp. IV 1998). To that end, ECIS and CSC require

each of their subscribers, at the time the Subscriber Agreement

1. Equifax Inc. was the original defendant in the district court

and was the co-appellant with CSC in the appeal to the Fifth Circuit.

During the time this matter was pending before the Fifth Circuit,

the district court granted Petitioners’ motion to add ECIS as a co-

defendant. ECIS is a wholly-owned subsidiary of Equifax Inc. and

is a credit reporting agency as defined by the Fair Credit Reporting

Act, 15 U.S.C. §§ 1681-1681u. Equifax Inc. is simply a holding

company and is not a credit reporting agency.

2

is signed, to provide (among other things) an initial certification

(sometimes referred to as a “blanket certification’’), as provided

by FCRA § 1681le(a), in which the subscribers must “identify

themselves, certify the purpose for which the information is

sought, and certify that the information will be used for no other

purpose.” Nothing more is required under FCRA § 1681e(a).

Relying upon their interpretation of certain FTC

commentary, Petitiorers claim that ECIS and CSC’s reliance

upon an initial or “blanket” certification is unreasonable when

the subscriber requesting a credit report is an insurance

company. Federal Trade Commission Advice and Commentary

on the Fair Credit Reporting Act [16 C.F.R. Part 600]. They

argue instead that ECIS and CSC must obtain an individual

certification of permissible purpose each and every time an

insurance company seeks a report.

At its core, this case raises the above-described issue of

reasonable procedures. The only issues that can be raised by

Petitioners in their Petition, however, are the preliminary issues

of standing, the elements of a claim under the FCRA, and the

relief afforded to a private litigant under the FCRA.

The district court in its original decision and its decision

on Respondents’ motion for reconsideration certified a

nationwide class action. Washington v. CSC Credit Services,

Inc., 178 F.R.D. 95 (E.D. La.), modified on reconsideration,

180 F.R.D. 309 (E.D. La. 1998). In its first opinion, the court

certified a class under Fed. R. Civ. P. 23(b)(2) consisting of all

persons whose credit reports were provided to an insurance

company by ECIS or CSC in violation of 15 U.S.C. § 168 1e(a).

178 F.R.D. at 103. The court ruled, erroneously, that whether

or not the Petitioners’ (and the class members’) credit reports

actually had been obtained by an insurance company without a

permissible purpose was irrelevant for the purposes of

3

establishing liability. 178 F.R.D. at 100; 180 F.R.D. at 313.

The district court concluded that any consumer whose credit

report was obtained by an insurance company could state a

cause of action under the FCRA against a credit reporting

agency and claim that its procedures did not comply with

the FCRA, whether the insurance company had a permissible

purpose to obtain the credit report or not.

On the issue of standing, the district court stretched

beyond the boundaries of Article III and found an injury in

fact. 178 F.R.D. at 102. It found “the mere issuance of the

reports themselves under improper procedures constitutes

an invasion of privacy.” Jd. The court further found that

because Petitioners alleged, in prior actions against the

insurance companies, that the insurance companies used the

credit reports to embarrass and humiliate them and to induce

them to accept inadequate compensation for their claims, an

injury had occurred. Jd.

The second error made by the district court was its

conclusion that injunctive relief is available to a private

litigant under the FCRA. 180 F.R.D. at 312. In so finding,

the district court ignored Congressional intent and the well-

reasoned opinions of several district courts. Further, in its

decision on reconsideration, the district court failed to apply

the standard set forth in Allison v. Citgo Petroleum Corp.,

151 F.3d 402 (Sth Cir. 1998), for determining when

injunctive relief predominates over a request for monetary

relief. In the decision on reconsideration, the court reaffirmed

its decision to certify a class under Fed. R. Civ. P. 23(b)(2)

and, in the alternative, certified a class under Fed. R. Civ. P.

23(b)(3).

On an interlocutory appeal pursuant to 28 U.S.C.

§ 1292(b), the Fifth Circuit reversed and vacated the district

4

court’s decisions. Washington v. CSC Credit Services, Inc.,

199 F.3d 263 (Sth Cir. 2000). Following the two district

courts that previously reached the issue, the Fifth Circuit

held “a plaintiff bringing a claim that a reporting agency

violated the ‘reasonable procedures’ requirement of § 168le

must first show that the reporting agency released the report

in violation of § 1681b.” 199 F.3d at 267. Next, the Fifth

Circuit, applying the standard set forth in this Court’s

decision in Califano v. Yamasaki, 442 U.S. 682, 705 (1979),

found that injunctive relief is not available to private litigants.

199 F.3d at 268. The court based its holding upon the

language of the FCRA and the expression by Congress of its

intent. Thus, after correcting the errors made by the district

court, the Fifth Circuit reversed the class certification under

Rule 23(b)(2), and vacated the class certification under Rule

23(b)(3).

Petitioners have articulated no compelling issue that

merits review by this Court. The two previously reported

decisions on the interpretation of the FCRA and the threshold

showing necessary to challenge a reporting agency’s

procedures rejected Petitioners’ analysis.? On the issue of

injunctive and declaratory relief, Petitioners have offered no

support for their contention that the Fifth Circuit erred. The

Fifth Circuit adhered to this Court’s precedents and

Congressional intent. Lastly, Petitioners’ attempt to fabricate

a compelling need for the Court to address this issue is belied

by the lack of litigation on the issue and the Federal Trade

Commission’s jurisdiction over credit reporting agencies

under the FCRA.

2. The previous decisions are Andrews v. Trans Union Corp.,

7 F. Supp. 2d 1056 (C.D. Cal. 1998), and Middlebrooks v. Retail

Credit Co., 416 F. Supp. 1013 (N.D. Ga. 1976).

5

1. The Fifth Circuit followed precedent and

Congressional intent by holding that a consumer

must demonstrate an injury (i.c., the disclosure of

his report for an impermissible purpose) before

challenging a credit reporting agency’s procedures.

The FCRA requires credit reporting agencies to

“maintain reasonable procedures designed ... to limit the

furnishing of consumer reports to the purposes listed under

section 1681b.” 15 U.S.C. § 168le(a) (1994 & Supp. IV

1998). The Fifth Circuit correctly reasoned that “this purpose

is not furthered unless a plaintiff suffers the harm the

procedures are meant to prevent.” 199 F.3d at 266.

In reviewing the “harm” Congress intended to prevent,

the Fifth Circuit reviewed Congress’ statements on the

purpose for enacting the FCRA:

Similarly, Congress has stated that it adopted

the “reasonable procedures” requirement to

“meet[] the needs of commerce for consumer

credit . .. in a manner which is fair and equitable

to the consumer, with regard to the confidentiality,

accuracy, relevancy, and proper utilization of such

information.” 15 U.S.C. § 1681(b). Congress

identified actual injuries — including breaches

of “confidentiality” and “[im]proper utilization”

— which only occur if there is 2a improper

disclosure, suggesting that a general claim of

improper procedures is by itself inadequate. Jd.

In light of the purposes of the FCRA, we find

that the actionable harm the FCRA envisions is

improper disclosure, not the mere risk of improper

6

disclosure that arises when “reasonable

procedures” are not followed and disclosures are

made.

199 F.3d at 266-67 (alterations in original).

The Fifth Circuit’s interpretation is consistent with the

decisions of the only other courts to reach the issue. Andrews

v. Trans Union Corp., 7 F. Supp. 2d 1056, 1067 (C.D. Cal.

1998) (“it makes no sense for a consumer whose file was

disclosed only for permissible purposes to nevertheless be

able to challenge the reasonableness of the consumer

reporting agency’s procedures.”); Middlebrooks v. Retail

Credit Co., 416 F. Supp. 1013, 1016 (N.D. Ga. 1976) (“once

it is shown that the information was relevant and for a

permissible purpose, this court need not inquire into the

reasonableness of the underlying procedures adopted by the

agency to assure that the information will be furnished for

[permissible] purposes”).

Other courts’ interpretation of a related subsection of

the FCRA, § 1681e(b), further supports the Fifth Circuit’s

decision. Section 1681e(b) requires credit reporting agencies

to maintain reasonable procedures to assure the maximum

possible accuracy of the information concerning the

individual about whom the report relates. Courts applying

§ 1681e(b) uniformly limit recovery to cases where the failure

to adopt procedures causes actual harm (i.e., the release of

an inaccurate report) to the consumer.’

3. See, e.g., Spence v. TRW, Inc., 92 F.3d 380, 382 (6th Cir.

1996); Guimond v. Trans Union Credit Info. Co., 45 F.3d 1329,

1333 (9th Cir. 1995); Henson v. CSC Credit Servs., 29 F.3d 280,

284 (7th Cir. 1994); Cahlin v. General Motors Acceptance Corp.,

(Cont’d)

7

Finding that Congress’ intent was to limit actions to.

those who had suffered actual harm, the Fifth Circuit did

not reach the issue of Constitutional standing. Petitioners’

attempt to expand the FCRA beyond this clear limit,

however, would result in expanding standing beyond the

limits imposed by Article III. Petitioners’ argument that a

consumer need not show an impermissible disclosure to bring

suit suffers from the infirmity that such a consumer has not

suffered an injury in fact. Steel Co. v. Citizens for a Better

Environment, 523 U.S. 83, 103-04 (1998) (“there must be

alleged (and ultimately proven) an injury in fact — a harm

suffered by the plaintiff that is concrete and actual or

imminent not conjectural or hypothetical”) (internal

(Cont'd)

936 F.2d 1151, 1156 (11th Cir. 1991); Koropoulos v. Credit Bureau,

Inc., 734 F.2d 37, 39 (D.C. Cir. 1984); Todd v. Associated Credit

Bureau Servs., Inc., 451 F. Supp. 447, 449 (E.D. Pa. 1977), aff'd,

578 F.2d 1376 (3d Cir. 1978); Peller v. Retail Credit Co., Civ. A.

No. 17900 (N.D. Ga. Dec. 6, 1973), aff'd memo, 505 F.2d 733

(Sth Cir. 1974); LeCompte v. Credit Bureau of Baton Rouge, Inc.,

Civ. A. No. 95-2019, 1996 WL 255923, *2 (E.D. La. May 13, 1996);

- Whelan v. Trans Union Credit Reporting Agency, 862 F. Supp. 824,

829 (E.D.N.Y. 1994); Grant v. TRW, Inc., 789 F. Supp. 690, 692

(D. Md. 1992); Boothe v. TRW Credit Data, 768 F. Supp. 434, 437

(S.D.N.Y. 1991); Grays v. Trans Union Credit Info. Co., 759

F. Supp. 390, 393 (N.D. Ohio 1990); Houston v. TRW Info. Servs.,

707 F. Supp. 689, 691 (S.D.N.Y. 1989); Altmanshofer v. TRW, Inc.,

95 B.R. 729, 730 (C.D. Ca. 1988); Watson v. Credit Bureau, Inc.,

660 F. Supp. 48, 50 (S.D. Miss. 1986); Lowry v. Credit Bureau,

Inc., 444 F. Supp. 541, 544 (N.D. Ga. 1978); McPhee v. Chilton

Corp., 468 F. Supp. 494, 497 (D. Conn. 1978); Roseman v. Retail

Credit Co., 428 F. Supp. 643, 646 (E.D. Pa. 1977); Pendleton v.

Trans Union Sys. Corp., 76 F.R.D. 192, 195 (E.D. Pa. 1977); Austin

v. BankAmerica Serv. Corp., 419 F. Supp. 730, 733 (N.D. Ga. 1974).

8

quotations omitted).* Article III, of course, requires such an

injury. Petitioners’ erroneous interpretation leaves out this

fundamental tenet of standing.

The Fifth Circuit’s interpretation properly balances the

purposes of the FCRA with the necessities of modern commerce.

Its interpretation does not in any way prevent an injured plaintiff

from suing a credit reporting agency. Moreover, despite

Petitioners’ rhetoric, a court cannot sacrifice the proper

interpretation of a statute to relax the rigorous demands of

Rule 23. Whether or not a class action can be certified under

the Fifth Circuit’s interpretation of the FCRA is irrelevant —

the only question that is relevant is whether the Fifth Circuit’s

interpretation is correct. And based upon this Court’s precedents,

Congressional intent, and prior consistent court opinions, the

Fifth Circuit’s holding is correct.

2. The Fifth Circuit applied the correct legal standard in

holding that injunctive relief is not available to private

litigants under the FCRA.

In addressing the issue of injunctive relief, the Fifth Circuit |

recognized and applied the standard established in this Court’s

seminal decision of Califano v. Yamasaki, 442 U.S. 682, 705

(1979) — “[a]bsent the clearest command to the contrary from

Congress, federal courts retain their equitable power to issue

injunctions in suits over which they have jurisdiction.” 199 F.3d

at 268. The Fifth Circuit then considered “whether Congress

‘clearly and unambiguously limited the court’s equity

jurisdiction’ under the FCRA.” 199 F.3d at 268.

4. Petitioners’ reliance on a threat of imminent harm is

completely unsupported by the Record and not alleged by the

Petitioners in their Complaint. Further, neither the District Court

nor the Fifth Circuit made any finding of imminent harm.

9

The Fifth Circuit began by examining the language and

framework of the FCRA. Section 1681p of the FCRA gives

courts jurisdiction over “[a]n action to enforce any liability

created under this subchapter.” The term liability is discussed

in the FCRA’s civil liability provisions (§§ 1681n-16810),

both of which expressly refer to damages and attorneys fees

without mentioning injunctive relief. The court considered

this omission significant “because the Act elsewhere

expressly grants the power to obtain injunctive relief to the

FTC.” 199 F.3d at 268 (citing FCRA, 15 U.S.C.A. § 1681s(a)

(West 1998 & Supp. IV 1999)).

While finding the affirmative grant of power to the FTC

to pursue injunctive relief coupled with the absence of a

similar grant to private litigants dispositive of the issue, the

Fifth Circuit cited further evidence to support its holding.

As part of the 1996 amendments to the FCRA, Congress

enacted § 168lu, which requires reporting agencies to

disclose consumer information to the FBI “for

counterintelligence purposes.” This section provides

consumers not only with a damages remedy, it specifies,

“{iJn addition to any other remedy contained in this section,

injunctive relief shall be available to require compliance

with the procedures of this section.” 15 U.S.C. § 1681u(m)

(1994 & Supp. IV 1998). Thus, the Fifth Circuit continued,

“where Congress intended to allow private injunctive relief

under the FCRA, it expressly stated that the relief was

available[; t}his language would be unnecessary if injunctive

relief were otherwise available.” 199 F.3d at 269.

To read the statute as requested by Petitioners would

fail to give effect to the specific grant of the right to injunctive

relief in § 168lu. See Bates v. United States, 522 U.S. 23,

29 (1997) (“[w]here Congress includes particular language

10

in one section of a statute but omits it in another section of

the same Act, it is generally presumed that Congress acts

intentionally and purposely in the disparate inclusion or

exclusion”); United States v. Wong Kim Bo, 472 F.2d 720,

722 (Sth Cir. 1972) (“words in statutes should not be

discarded as ‘meaningless’ and ‘surplusage’ when Congress

specifically and expressly included them, particularly where

the words are excluded in other sections of the same act”).

The only way to give meaning to all of the words of § 1681u

is to find, as did the Fifth Circuit, that injunctive relief is not

available to private litigants bringing actions under §§ 1681n

and 168 1o. Petitioners offer no explanation for the difference

in language between § 1681n and § 16810 as compared to

§ 1681u, nor can they.

The Fifth Circuit did note the split in authority at the

district court level on this issue.’ The circuit court conflict

alluded to by Petitioners, however, is illusory. In Greenway

v. Information Dynamics, Ltd., 399 F. Supp. 1092 (D. Ariz.

1974), aff'd on other grounds, 524 F.2d 1145 (9th Cir. 1975),

the district court granted plaintiff's request for an injunction.

There is no discussion by the district court of the availability

5. Compare Bumgardner v. Lite Cellular, Inc., 996 F. Supp.

525, 526-27 (E.D. Va. 1998) (holding that it lacked the power to

grant a private litigant’s request for injunctive relief under the

FCRA); Ditty v. Checkrite, Ltd. 973 F. Supp. 1320, 1338 (D. Utah

1997) (same); Mangio v. Equifax, Inc., 887 F. Supp. 283, 284-85

(S.D. Fla. 1995) (same); Kekich v. Travelers Indem. Co., 64 F.R.D.

660, 668 (W.D. Pa. 1974) (same) with Andrews, 7 F. Supp. 2d at

1084 & n.33 (concluding that the FCRA “does allow injunctive relief

on the plaintiff's own behalf”); Greenway v. Information Dynamics,

Ltd., 399 F. Supp. 1092, 1096-97 (D. Ariz. 1974) (certifying a class

action on a claim for injunctive relief under the FCRA and granting

preliminary injunctive relief), aff'd on other grounds, 524 F.2d 1145

(9th Cir. 1975).

11

of an injunction under the FCRA, nor does it appear that the

issue was contested by the defendants. The Ninth Circuit,

likewise, did not discuss the issue because the only issue raised

by the appellant was whether it was a credit reporting agency.

524 F.2d 1145, 1146 (9th Cir. 1975). Thus, the “conflict” relied

on by Petitioners does not exist. The Fifth Circuit is the first

circuit to review this issue.

3. The Fifth Circuit correctly concluded that Petitioners

could not maintain a Rule 23(b)(2) class seeking

declaratory relief.

In reversing the Rule 23(b)(2) class with respect to

Petitioners’ request for declaratory relief, the Fifth Circuit

identified two fatal flaws in Petitioners’ analysis.

First, Rule 23(b)(2) specifically provides that a class action

can be certified where “the party opposing the class has acted

or refused to act on grounds generally applicable to the class,

thereby making appropriate final injunctive relief or

corresponding declaratory relief with respect to the class as a

whole.” (Emphasis added.) The Advisory Committee Notes

state that “[d]eclaratory relief ‘corresponds’ to injunctive relief

when as a practical matter it affords injunctive relief or serves

as a basis for later injunctive relief.” Advisory Committee Notes

to 1966 Amendment to Fed. R. Civ. P. 23.

The Fifth Circuit correctly concluded that certifying a class

pursuant to Rule 23(b)(2) “would frustrate the FCRA’s

limitation of injunctive relief to the FTC.” 199 F.3d at 269.

“Unable to obtain injunctive relief directly, consumers could

attempt to obtain it indirectly by obtaining declaratory relief

solely for the purpose of later prompting the FTC to move for

injunctive relief.” Jd.

12

Petitioners’ reliance on the Declaratory Judgment Act,

28 U.S.C. §§ 2201, et seq., is misplaced.* The Declaratory

Judgment Act “was enacted to afford an added remedy to

one who is uncertain [of] his rights and who deserves an

early adjudication without having to wait until he is sued by

his adversary.” Leven Metals Corp. v. Parr-Richard Terminal

Co., 799 F.2d 1312, 1315 (9th Cir. 1986) (citations omitted).

The remedy available under the Act “is intended to minimize

the danger of avoidable loss and the unnecessary accrual of

damages and to afford one threatened with liability an early

adjudication without waiting until his adversary should

see fit to begin an action after the damage has accrued.”

10 Charles Alan Wright, et al., Federal Practice and

Procedure § 2751, at 456-57 (3d ed. 1998) (footnotes

omitted).’

6. As a preliminary matter, Petitioners raise the Declaratory

Judgment Act for the first time in their Petition. This issue was not

briefed before the District Court or the Fifth Circuit. It did not serve

as the basis of either court’s decision. Thus, this issue cannot be

raised for the first time on appeal.

7. United Food and Commercial Workers Local Union 137 v.

Food Employers Council, Inc., 827 F.2d 519 (9th Cir. 1987), is

inapplicable. In United Food, the plaintiff union sought an injunction

and declaratory judgment under the Clayton Act declaring a “most-

favored nations” clause in a collective-bargaining agreement void.

The court determined that the plaintiff union lacked standing to seek

an injunction under the Clayton Act. Jd. at 522. Moving to the issue

of declaratory relief, the court found that the plaintiff union was in

a position of uncertainty with respect to the clause and risked suits

from other employers given its inability to determine its rights under

the agreement at issue. Jd. at 523-24. The court further held that

allowing the plaintiff union to seek such a declaration did not conflict

with the reasons for limiting injunctive relief under the Clayton Act.

(Cont'd)

13

Here, neither Petitioners nor the putative class members

are in danger of being sued or require an early adjudication

of their rights. Further, their request for declaratory relief

conflicts with the FCRA’s limitation on injunctive relief.

Thus, declaratory relief in this case would serve none of the

purposes of the Declaratory Judgment Act. Petitioners’

request was properly denied.

The second flaw identified by the Fifth Circuit with

respect to declaratory relief is the district court’s conclusion

that such relief was the predominant form of relief requested.

Petitioners’ attempt to identify error in the Fifth Circuit’s

analysis fails.

The Fifth Circuit in reviewing this issue relied upon its

decision in Allison, 151 F.3d 402. This decision, as

Petitioners concede, follows the majority of circuit courts,

which have adopted the Advisory Committee’s position and

allowed monetary relief to be obtained in a Rule 23(b)(2)

class action so long as the predominant relief sought by the

class is injunctive or declaratory. See Petition, p. 20, and

cases cited therein. Petitioner did not identify any contrary

law. There is no issue of unsettled law.

Petitioners’ real argument is that the Fifth Circuit’s

application of its own precedent was erroneous. Petitioners

are incorrect.

(Cont’d)

Id. at 524-25. In essence, the court held that a party to a contract

should be able to seek a declaration with respect to its rights under

the contract. Jd. at 525. Here, we have no contract between the parties

to be interpreted. Further, as found by the Fifth Circuit, the limitation

placed on injunctive relief by the FCRA would conflict with and be

frustrated by a private suit for declaratory relief. 199 F.2d at 269.

14

In Allison, the Fifth Circuit held “monetary relief

predominates in (b)(2) class actions unless it is incidental to

requested injunctive or declaratory relief.” 151 F.3d at 415.

This means that monetary damages must “flow directly from

liability to the class as a whole on the claims forming the

basis of the injunctive or declaratory relief’ and must not

depend “on the intangible subjective differences of each class

member’s circumstances” or “require additional hearings to

resolve the disparate merits of each individual’s case.” Jd.

Here, separate trials would be required to determine the

individual class member’s damages because the

circumstances surrounding each class member’s situation

would have to be reviewed to establish actual damages. “The

money damages in this case do not flow from declaratory

relief but require separate adjudication.” 199 F.3d at 269.°

Therefore, under Allison, declaratory relief is not the

predominant relief sought. The Fifth Circuit’s analysis of

this issue is correct.

Petitioners’ continued reliance on the district court’s

opinions is misplaced. The district court in deciding this issue

failed to apply the standard enunciated in Allison. Moreover,

the district court specifically found that should a finding be

made that ECIS and CSC had negligently failed to comply

with the FCRA, separate trials would be required to

determine actual damages. 180 F.R.D. at 314. If the alleged

noncompliance were found to be willful, some class members

would pursue actual damages, while others would pursue

8. Further, the Fifth Circuit found that “[i]t is counterintuitive

to say that in their [Petitioners’] case, declaratory relief, which might

hypothetically be used as the basis for future action by the FTC,

‘predominates’ over monetary relief, which will directly and

immediately benefit them.” 199 F.3d at 269.

15

statutory damages. This would also require separate trials, as a

review of each class member’s circumstances would be required

for a determination of statutory, actual and punitive damages. °

4. There are no other reasons for review.

Petitioners’ continued insistence upon the importance of

these issues is belied by the paucity of litigation regarding the

procedures at issue. No overwhelming number of cases on the

issue have been commenced. Three cases have been filed against

credit reporting agencies on this issue, all in the Eastern District

of Louisiana — interestingly all were filed by the Petitioner’s

co-counsel.'° :

Congress has been vigilant in its efforts to regulate the credit

reporting agencies. The FCRA, enacted in 1970, has been

amended on several occasions to keep pace with the changes

and advancements in technology. In 1996, the FCRA was

significantly amended to further protect the interests of

consumers.

9. Unlike the Fair Debt Collection Practices Act, 15 U.S.C.

§§ 1692-16920 which specifically provides for class damages

(§ 1692k(a)(2){B)), the FCRA does not specify “class” damages.

10. LeBlanc v. Trans Union Corp., No. 98-2081 (E.D. La.); Norris

v. Experian Info. Solutions, Inc., No. 99-2580 (E.D. La.); White v.

Imperial Adjustment Corp., Imperial Fire and Cas. Co., Equifax Credit

Info. Serv., Inc. and Equifax Inc., No. 99-3804 (E.D. La.). Any attempt

by Petitioners to characterize this as a “negative value suit” is not well-

founded. Even if the claim is small, the FCRA provides for recovery of

reasonable attorneys’ fees in the case of a successful action, which

eliminates a financial barrier that make individual lawisuts unlikely or

unfeasible. See Allison, 151 F.3d at 420; Castano v. American Tobacco

Co., 84 F.3d 734, 748 (5th Cir. 1996) (citing Boggs v. Alto Trailer

Sales, Inc., 511 F.2d 114, 118 (Sth Cir. 1975) (acknowledging that the

availability of attorneys’ fees is a common basis for finding non-

superiority of a class action)).

16

Moreover, Congress gave the FTC enforcement

authority to ensure compliance with the FCRA. The FTC

has been an aggressive enforcer of the FCRA, bringing

various proceedings against credit reporting agencies.

See, e.g., In the Matter of Trans Union Corp., Docket

No. 9255, (FTC Feb. 10, 2000); Jn the Matter of Equifax

Credit Info. Serv., Inc., Docket No. C-3611, (FTC Aug. 14,

1995).

Petitioners would have this Court believe that the Fifth

Circuit’s decision leaves consumers with no remedy. That

simply is not true. All consumers maintain their rights to

seek redress for actual injuries. Moreover, the FTC has

fulfilled and continues to fulfill its mission to enforce the

FCRA. The Fifth Circuit’s decision leaves both mechanisms

in place.

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CONCLUSION

For the foregoing reasons, review by this Court is

unnecessary, and the Petition for a Writ of Certiorari to

review the decision of the United States Court of Appeals

for the Fifth Circuit should be denied.

NAN EITEL

JEFFERSON R. TILLERY

JONES, WALKER, WAECHTER,

POITEVENT, CARRERE

& DENEGRE, LLP

201 St. Charles Avenue

Suite 4700

New Orleans, LA 70170

(504) 582-8000

Attorneys for Respondent

CSC Credit Services, Inc.

Respectfully submitted,

KENT E. Mast

Counsel of Record

Mara McRAE

Cinpy D. HANSON

KILPATRICK STOCKTON LLP

1100 Peachtree Street

Suite 2800

Atlanta, GA 30309-4530

(404) 815-6500

AMELIA WILLIAMS KOCH

ALEXANDER MCINTYRE, JR.

Locke LIDDELL & Sapp LLP

601 Poydras Street

Suite 2400

New Orleans, LA 70130

(504) 558-5100

Attorneys for Respondents

Equifax Credit Informetion

Services, Inc. and Eqwifax Inc.