Petition for Writ of Certiorari — Obabueki v. Choicepoint, Inc.

Supreme Geurt. U.S.

FILE®

03 15 @ JUL 282003

No. 03-

IN THE

Supreme Court of the United States

ABEL OBABUEKI,

Petitioner,

V.

CHOICEPOINT, INC. and CHOICEPOINT SERVICES, INC.,

Respondents.

‘On Petition for Writ of Certiorari

to the United States Court of Appeals for the Second Circuit

PETITION FOR WRIT OF CERTIORARI

GREGORY ANTOLLINO ERIK S. JAFFE

588 Broadway, Suite 904 Counsel of Record

New York, NY 10012 ERIK S. JAFFE, P.C.

(212) 334-7397 5101 34™ Street, N.W.

° Washington, D.C. 20008

(202) 237-8165

Counsel for Petitioner

Dated: July 28, 2003

QUESTIONS PRESENTED

The Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq.,

(“FCRA” or “the Act”), imposes limitations on the informa-

tion that a credit reporting agency may report about consum-

ers. Among these, where it reports public-record information

to potential employers, it must use procedures that ensure

such information will have the maximum possible accuracy

and be complete and up to date. Jd. §§ 1681le(b), 1681k(a).

A credit reporting agency’s failure to follow these require-

ments makes it liable to the consumer for “actual damages

sustained by the consumer as a result of” the wrungful con-

duct. Id. § 1681o(a). The questions presented by this petition

are:

1. Whether causation of damages sustained as a “re-

sult of’ the lack of procedures for ensuring maximum

accuracy and completeness of a credit report is a ques-

tion for the jury where there are potentially mixed mo-

tives for the adverse action taken by the recipient of a

report prepared without such procedures?

2. Whether the absence of damages from loss of em-

ployment precludes mental distress damages sustained

as a result of an inaccurate or incomplete report itself or

punitive damages based on a willful violation of the

FCRA?

3. Whether a report to an employer is “accurate”

when it reports misleading adverse information about a

potential employee that was not requested by the em-

ployer and that was specifically excluded from the in-

formation sought by the employer?

il

PARTIES TO THE PROCEEDINGS BELOW

Appellant in the court of appeals was Abel Obabueki, who

was also the plaintiff in the district court.

Appellees in the court of appeals were respondents Choic-

epoint, Inc. and Choicepoint Services, Inc., who were also

defendants in the District Court. IBM, Inc., was also an ap-

pellee in the court of appeals and a defendant in the district

court but is not named as a respondent in this petition. Choic-

epoint Business and Government Services, Inc., was a defen-

dant in the district court but was dismissed on consent of the

parties.

ili

TABLE OF CONTENTS

Pages

QUESTIONS PRESENTED............csccsssssesesseseeseennesnensensensnees i

PARTIES TO THE PROCEEDINGS BELOW. ..............:0000+: li

TABLE OF CONTENT. ...........::scccssssoscsssceecsesssreessssscsseeeeoes lil

TABLE OF AUTHORITIES ...............ssscssccsssesssersesessssssscsseees Vv

PETITION FOR WRIT OF CER TIOORARR wcccccescecesvseesssesse0es l

OPINIONS BELOW...........ccccsscsssccccssssssscsrerscsenssessssenessooesones l

JURISDICTION ....:1.+0+.000000 salauhdlinnaisesecontiasiniiiinheneteinnmmnnssetae 2

STATUTORY PROVISIONS INVOLVED ...........::ccsceseeeees 2

STATEMENT OF THE CASE............:::cccssseeeesseeeeseeeeeneneeeeees 4

REASONS FOR GRANTING THE WRIT.........::cseeeeeeeees 10

I. Whether Causation of Damages Should Be

Decided by a Jury Is an Important National

Question Subject to Conflicting Approaches in the

Federal Circuiits............scccsersssssersscecsocsssssovesesvevssnessoooeee 11

II. Overriding the Jury’s Determination of Causation

Disregarded this Court’s Holding in Reeves v.

Sanderson Products. ........0s.ssssssseseerssecccscsesssesssesnssesses 17

Ill. The Decision Below Erred In Holding that

Damages for Mental Distress and Punitive

Damages Are Dependent on Causation for

Economic Damages, Contrary to the Holdings in

a CRUE... sscessscsseescecsncsessssnconsonscsessoessnsesonesenenes 20

A. Damages for Mental Distress. ..............::ssssesseeee 20

B. Pumitive Damagee................scscccsccssesssessssseseceens 21

IV. The Legal Standard for Whether a Report Has the

“Maximum Possible Accuracy” Is an Important

National Question on Which the Circuits are

BI, csspiceesussnasignnenseoinnntionenhsuvninnsacetnitvonsennenenienssines 22

1V

V. This Case Raises Important and Recurring

National Issues that Should Be Resolved by this

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TABLE OF AUTHORITIES

Pages

Cases

Bakker v. McKinnon, 152 F.3d 1007 (CA8 1998).......... 21, 22

Bryant v. TRW, 689 F.2d 72 (CA6 1982) ..........ccccccseseseeeeees 24

Cassara v. DAC Services, Inc., 276 F.3d 1210

Ge aeO STD ~cosnschncneiintssisienieeniedniniahbiculiciancdimianaantaian 26

Cousin v. Trans Union Corp., 246 F.3d 359 (CAS),

cant. Manabe, SIG TLD. Foi Ce hi viccsvicarssniawisiabstatensaets 21

Cushman v. Trans Union Corp., 115 F.3d 220

| LE EN eNO NET 21

Dalton v. Capital Associated Industries, Inc.,

BIT We EP ce NE) cccessievniienlivsititanicrnnditiiarciuaiainesiicitnilen 21

Desert Palace, Inc. v. Costa, -- U.S. --,

ee es GR, Fr ntikserincictetiaiascsneiticintemaieuanies 16

Doe v. Webster, 606 F.2d 1226 (CADC 1979)................. 8, 25

Guimond v. Trans Union Credit Information Co..,

TP Fee EAA Cee Be cinicstinanscibaedmmaetateiiamane 20, 21

Millstone v. O'Hanlon Reports, Inc., 528 F.2d 829

Gate BF Fad viviessiensennianininionpeicleieaniamealiaialcinbaamentia 22

Mt. Healthy City School Dist. Bd. of Educe. v.

SPRAGUE, SEP EB. FOE CSOT Ti xncntneicuidivhieteseniiisanteinniabanea 15

Old Chief v. United States, 519 U.S. 172 (1997)........cccccee 18

Philbin v. Trans Union Corp., 101 F.3d 957

Cee FU ic cavisisusioesandeiteabsilaitenaiasenaiiadealabtanianaies 14, 21

Pinner v. Schmidt, 805 F.2d 1258 (CA5 1986),

cert. denied, 483 U.S. 1022 (1987)........cccccccsssesscssceseeeeees 22

Price Waterhouse v. Hopkins, 490 U.S. 228 (1989)............. 15

Reeves v. Sanderson Plumbing Products, Inc.,

RT ee BF Ge icishiniansioasenthssnciadbihaleliaianahanetbdnianal 19

ee

vi

Stevenson v. TRW, 987 F.2d 288 (CAS 1993) ........cccseeeeeeees 20

Stewart v. Credit Bureau, Inc., 734 F.2d 47

Chee SI Oihevinssnvsichvieinciesieicnabiabamasaueianaie 15, 24, 26

Thornton v. Equifax, Jnc., 619 F.2d 700 (CA8),

cert. denied, 449 U.S. 835 (1980)...........ccssscsssssessseeeessees 22

United States v. Doe, 36 F. Supp.2d 143

(HTN, ©. TW Risscrsivincansieshenistbaaneniniebiiinsiionetainmaieninadinies 26

Yohay v. City of Alexandria Employees Credit

Union, Inc., 827 F.2d 967 (CA4 1987)..........ccccseeeeesseeeees 22

Zamora Vv. Valley Fed. Savs. & Loan Ass'n,

SET FG EGS CA Fi i rciteeieieriemdimeanin 21

Statutes

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BS CBG... © Ba riiincaccisevtascsniccinststiaeeeiemaaias 3, 6, 7, 14

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BS UA, © SB iisseninesnsisncsnssensnsssccsaseuassesiasmmnanaieiaeinelanial 21

BS UAL. © BGO sicsescseersrstmiaresecaniianasiammain i, 3, 11, 18

OS ULBK. © Fee B cisencssistssscnsnisieuninenniscinldaeenmaamaae 8, 25

1S U.S.C. § SUZT (rapemded 1DG4) ..ccncceoresoressscessesecsesscseees 8, 25

Oe UDG. § BSS GEE } sisccsscicetanssapniininnaieamanaiiai sides

Other Authorities

H.R. Rep. No. 16340, 91st Cong., 2d Sess. (1970) .............. 16

S. Rep. No. 823, 91% Cong., 1% Sess. (1970).........:s0000 15, 28

IN THE

Supreme Court of the United States

ABEL OBABUEKI,

Petitioner,

V.

CHOICEPOINT, INC. and CHOICEPOINT SERVICES, INC.,

Respondents.

On Petition for Writ of Certiorari

to the United States Court of Appeals for the Second Circuit

Eee

PETITION FOR WRIT OF CERTIORARI

Petitioner respectfully petitions for a writ of certiorari to

review the judgment of the United States Court of Appeals for

the Second Circuit.

OPINIONS BELOW

The district court’s opinion and order addressing various

cross-motions for summary judgment is reported at 145

F. Supp.2d 371 and is reproduced herein as Appendix B

(pages B1-B52). The district court’s post-trial opinion and

order granting defendants judgment as a matter of law is re-

ported at 236 F. Supp.2d 278 (S.D.N.Y. 2002) and is repro-

duced herein as Appendix C (pages C1-C12). The Second

Circuit’s opinion, as amended, affirming and adopting the

reasoning of the district court’s prior opinion is published at

319 F.3d 87, and is reproduced herein as Appendix A (pages

2

Al-A2). The Second Circuit’s order denying rehearing and

rehearing en banc is unpublished, and is reproduced herein as

Appendix D (pages D1-D2).

JURISDICTION

The Second Circuit issued its it initial opinion on Febru-

ary 3, 2003, amended that opinion on February 24, 2003, and

denied rehearing and rehearing en banc on April 29, 2003.

This Court has jurisdiction to hear this petition pursuant to 28

U.S.C. § 1254(1).

STATUTORY PROVISIONS INVOLVED

This case involves the Fair Credit Reporting Act (FCRA),

codified at 15 U.S.C. § 1681 ef. seq.

Section 607(b) of the FCRA, codified at 15 U.S.C.

§ 1681e(b), provides:

Whenever a consumer reporting agency prepares a

consumer report it shall follow reasonable procedures to

assure maximum possible accuracy of the information

concerning the individual about whom the report relates.

Section 613(a) of the FCRA, codified at 15 U.S.C. §

1681k(a), provides:

A consumer reporting agency which furnishes a con-

sumer report for employment purposes and which for

that purpose compiles and reports items of information

on consumers which are matters of public record and are

likely to have an adverse effect upon a consumer’s abil-

ity to obtain employment shall —

(1) at the time such public record information is

reported to the user of such consumer report, notify

the consumer of the fact that public record informa-

tion is being reported by the consumer reporting

3

agency, together with the name and address of the

person to whom such information is being reported;

or

(2) maintain strict procedures designed to insure

that whenever public record information which is

likely to have an adverse effect on a consumer's abil-

ity to obtain employment is reported it is complete

and up to date. For purposes of this paragraph, items

of public record relating to arrests, indictments, con-

victions, suits, tax liens, and outstanding judgments

shall be considered up to date if the current public re-

cord status of the item at the time of the report is re-

ported.

Section 616a(a) of the FCRA, codified at 15 U.S.C. §

168 1lo(a), provides:

Any person who is negligent in failing to comply with

any requirement imposed under this title with respect to

any consumer is liable to that consumer in an amount

equal to the sum of —

(1) any actual damages sustained by the consumer

as a result of the failure;

(2) in the case of any successful action to enforce

any liability under this section, the costs of the action

together with reasonable attorney’s fees as deter-

mined by the court. ,

Section 604(b)(1) of the FCRA, codified at 15 U.S.C.

§ 1681b(b)(1), provides, in relevant part:

A consumer reporting agency may furnish a con-

sumer report for employment purposes only if —

(A) the person who obtains such report from the

agency certifies to the agency that —

4

(i) the person has complied with paragraph (2)

with respect to the consumer report, and the person

will comply with paragraph (3) with respect to the

consumer report if paragraph (3) becomes applica-

ble; and

(ii) information from the consumer report will

not be used in violation of any applicable Federal or

State equal employment opportunity law or regula-

tion[.]

STATEMENT OF THE CASE!

1. This case involves the standards for determining

liability and damages for an inaccurate credit report prepared

in violation of FCRA procedures designed to ensure that such

reports are accurate, complete, and current. After a trial, the

jury below returned a verdict awarding petitioner $450,000 in

damages sustained as a result of an inaccurate credit report

issued to a prospective employer that caused petitioner

significant emotional distress and the loss of a job offer. On

post-trial motions, however, the district court vacated the

verdict and dismissed the complaint by holding that the

inaccurate report had been “neutralized” by subsequent

information provided by petitioner, and thus supposedly could

not have caused the petitioner’s loss of the job offer. That

conclusion is both wrong and in conflict with decisions from

several circuits.

2. On September 27, 1999 petitioner Abel Obabueki was

offered an $85,000-a-year marketing position at IBM. The

offer was subject to a pre-employment screening process that

included a questionnaire instructing petitioner to reveal

criminal convictions, but to omit “arrests without convictions

' Unless otherwise noted, the facts are taken from the opinions below,

attached as Appendices A-C.

iia ascended: rai

5

[and] convictions or incarcerations for which a record has

been sealed or expunged.” App. C3. Although petitioner had

been arrested and pled nolo contendere to a misdemeanor

some years earlier, pursuant to his plea agreement that initial

plea was withdrawn following a successful period of proba-

tion, the charges were dismissed, and his record was cleared.

Accordingly, he correctly responded to the questionnaire that

he had no convictions.

That response was not only correct as a matter of the plea

agreement, whereby his record was cleared, but it was also

the correct answer according to IBM’s internal understanding

of its questionnaire. An IBM human resources director testi-

fied that where a job applicant like plaintiff has a deferred

adjudication, after a period of probation, the court “more or

less seals the records or voids the record so there is no record.

* * * If [the defendant] complete[s] [the period of probation]

satisfactorily * * * the person should not have to claim” a

conviction on the background check. Second Circuit Joint

Appendix (JA) 1347.

To verify petitioner’s screening information, IBM hired

respondent Choicepoint? to conduct a background search.

The agreement between IBM and Choicepoint required

Choicepoint to report only current and pending criminal

charges and, per Choicepoint’s internal rules, forbade the

transmission of deferred adjudications. JA 767 (Choice-

point’s internal regulations); JA 808 (IBM’s contract with

Choicepoint).

On October 5, 1999, Choicepoint incorrectly reported to

IBM that petitioner had a conviction. There is no dispute in

this case that Choicepoint failed to follow adequate proce-

dures to verify the information it obtained and reported, that it

failed to determine that the conviction had been vacated, and

? Respondents Choicepoint, Inc. and Choicepoint Services, Inc. were held

by the district court to be alter-egos and hereinafter will be referred to ~

together as “Choicepoint.”

6

that, had it followed its legal obligations and its agreement

with IBM, it would have accurately reported that petitioner

had no convictions.’

Following IBM’s receipt of Choicepoint’s inaccurate re-

port, IBM informed petitioner Obabueki of the discrepancy

between his answer and the report. Petitioner attempted to

convince IBM that he had accurately answered the question-

naire, and sent IBM a copy of the court order vacating his

previous plea and dismissing the charge against him. The or-

der, however, only confused IBM, App. B21-B23, B25, and

thus IBM chose to believe Choicepoint’s erroneous report,

concluded that petitioner had lied, and, on October 14, 1999,

withdrew the job offer. App. C4.

On October 21, 1999, Choicepoint acknowledged its error

and issued a revised report that correctly stated that peti-

tioner’s criminal record was “clear”; it failed, however, to ex-

plain the basis for its inconsistent reports. App. C5.

Notwithstanding the revised report, IBM did not re-offer

petitioner the job and gave petitioner no alternative reason for

its refusal to reinstate the earlier offer. Internally, however,

IBM looked for ways to cover up its reliance on the initial

incorrect report. See, e.g., JA 844 (“[W]e should also proba-

bly pitch the incorrect information from Choicepoint (as if-we

never received it)[.]”); JA 859 (decision maker at IBM asking

internally, in response to an e-mail query from petitioner,

whether she should “a) ignore this[;] b) tell him it is out of my

hands * * * [;] c) tell him that the vacancy no longer exists

* * * [:] d) all of the above[;] e) something else??”’).

3. Having reached a dead-end with IBM, petitioner sued

both IBM and Choicepoint for violations of the Fair Credit

Reporting Act and asserted several pendant state claims.

> There also is no dispute that Choicepoint had not obtained a required

certification of use from IBM, 15 U.S.C. § 1681b(b)(1), and hence should

not have sent the report to IBM at all. App. B41. —

Lad epee NOt RBA Sab

7

On cross-motions for summary judgment, the district

court, inter alia, dismissed IBM from the case, permitted the

FCRA and other claims against Choicepoint to proceed to

trial. The court held that Choicepoint had violated 15 U.S.C.

§ 1681b(b)(1)(A) by providing a consumer report to IBM

without obtaining required certifications from IBM, App.

B41, had provided a report that was “neither complete nor up

to date” under 15 U.S.C. § 1681k, App. B42-B43, and had

provided a report that “was not maximally accurate” under 15

U.S.C. § 1681e(b), App. B47. The case then proceeded to

trial against Choicepoint.

At trial, the evidence included testimony and documents

concerning Choicepoint’s lack of procedures designed to en-

sure the accuracy of its reports, the economic injury sustained

by plaintiff as a result of the loss of the IBM job, as well as

the mental distress that he suffered. On the issue of causa-

tion, the district court, without objection, permitted petitioner

to introduce Choicepoint’s responses to discovery requests for

admissions, including the express admission that “[a]s a result

of the information provided by Choicepoint, IBM withdrew

[plaintiffs] job offer.” App. C9. Part way through the trial

the district court struck out petitioner’s claim for punitive

damages, leaving only claims for lost wages and for mental

distress.

The jury returned a verdict for petitioner and awarded him

$450,000 for lost wages and mental distress. App. C2. The

jury reached that result through a special verdict form in

which it: (1) found that Choicepoint had not maintained strict

procedures designed to ensure that information reported about

consumers was complete and up to date; and (2) found that

Choicepoint had not maintained reasonable procedures de-

signed to assure maximum accuracy concerning information

about consumers; and (3) answered “Yes” to the question “Do

you find as a result of one or more of Choicepoint’s violation

of the Fair Credit Reporting Act that plaintiff sustained dam-

ages?” JA 1476-77, JA 1479-80.

8

Notwithstanding that jury verdict, the district court

granted Choicepoint’s subsequent motion for judgment as a

matter of law and dismissed the case in its entirety.

It reached that conclusion by accepting Choicepoint’s

claim that petitioner himself had “cured” the inaccuracy of

the initial report by sending IBM a copy of the order vacating

his conviction and by holding that “the inaccuracy was effec-

tively neutralized on October 5, 1999, when plaintiff faxed a

copy of the 1997 dismissal order provided by plaintiff.” App.

C10; id. (“IBM based its decision on information that was

complete and accurate.”). The court rejected petitioner’s

claim that he was entitled to a “clean” report from Choice-

point and that any additional information could not have

cured Choicepoint’s failures. App. C6-C7. The district court

likewise rejected the position of the D.C. Circuit in a related

context that vacated convictions should not be reported at all.

App. C7-C8; see Doe v. Webster, 606 F.2d 1226, 1239-40

(CADC 1979) (a vacated conviction obtained upon satisfac-

tion of a plea agreement entitles an individual to deny the ex-

istence of the former conviction and forbids the court to re-

port the conviction).* Indeed, despite the facts that under both

Choicepoint’s internal policies and the IBM-Choicepoint

agreement petitioner should have received a clean report with

no mention of his vacated plea, the district court substituted

its own judgment and determined that petitioner was not enti-

tled to a clean report because such a report would amount to

“judicially mandated prevarication.” App. C8.°

* Doe v. Webster involved the since-repealed Youth Corrections Act, 18

U.S.C. §§ 5005, 5021 (repealed 1984).

* While recognizing that under the law governing petitioner’s vacated

conviction any “requirement that a vacated conviction be disclosed in any

questionnaire appears to contradict the statute’s purpose in relieving an

ex-offender of penalties and disabilities associated with the conviction,”

App. B20, the court substituted its own view that it would be better not to

hold the reporting agency responsible for interpreting state laws. Rather,

9

Having concluded that “the inaccuracy of the initial report

lay in its omission of the 1997 dismissal order, not in its fail-

ure to report that plaintiff had no convictions whatsoever,”

App. C10, the court further found that IBM based its decision

to withdraw the job offer on “both the initial Choicepoint re-

port and the 1997 order” vacating petitioner’s conviction and

that the fact that the withdrawal of the offer “was based upon

IBM’s possibly erroneous interpretation of the legal effect of

the 1997 order is of no consequence to the issue of whether

Choicepoint caused plaintiff's injury.” App. c10.°

The court discounted the relevance of Choicepoint’s sub-

sequent issuance of a “clear” report on reinvestigation by

claiming that such a report did “not mean that the information

relied on by IBM in reaching its conclusion was incomplete

or inaccurate,” or that the “withdrawal of plaintiff's job offer

was caused by Choicepoint’s provision of incorrect informa-

tion.” App. C10-C1l n. 4. The court also rejected peti-

tioner’s contention that Choicepoint’s admission — that “[a]s a

result of the information provided by Choicepoint, IBM with-

drew [plaintiff's] job offer” — was alone enough for the jury

to find proximate cause. App. C9-C10.

The court thus granted Choicepoint’s motion for judgment

as a matter of law and dismissed the complaint. Apparently

recognizing the tenuousness of that conclusion, the court

ruled in the alternative that if its “judgment is subsequently

vacated or reversed on appeal, Choicepoint’s motion in the

alternative for a new trial is conditionally granted pursuant to

Rules 50(c)(1) and 59.” App. C12. The court offered no ex-

planation for why a new trial would be appropriate.

the court viewed that task as better performed by potentially inexperienced

human resources personnel.

6 The court similarly found no causal connection between petitioner's

damages and Choicepoint’s sending IBM its erroneous report despite not

having obtained a required certification from IBM regarding its intended

use of the report. App. C11.

10

Petitioner appealed to the Second Circuit, and the Second

Circuit affirmed for the reasons stated by the district court.

App. A2. The Second Circuit also held that it “need not con-

sider” the issue of punitive damages in the absence of causa-

tion for economic damages. Id.

Petitioner sough ‘ehearing and rehearing en banc, both of

which were denied. +.pp. D1.

This petition for certiorari followed.

REASONS FOR GRANTING THE WRIT

Certiorari should be granted because the decisions below

distort the standard of proof for causation of damages “sus-

tained as a result of the failure” to “comply with any require-

ment imposed under” the FCRA, in conflict with decisions

from other circuit courts of appeal and from this Court. The

decisions below also erroneously tied liability for emotional

distress and punitive damages to causation of economic injury

rather than to the issuance of the erroneous report itself, con-

trary to the holdings in other circuits. Finally the decisions

below apply an incorrect legal definition of what constitutes

“maximum possible accuracy” for 2 report under the FCRA,

in conflict with the interpretations of that concept by the Sixth

and D.C. Circuits.

The issues of accuracy and causation are present in virtu-

ally every FCRA case given that the victims of erroneous or

incomplete credit reporting typically will attempt to mitigate

any inaccuracies or omissions with accurate information once

the error is revealed. But if such attempts at mitigation are

deemed to render a credit report accurate in combination with

the victim-supplied information and such combined informa-

tion is deemed to break the causal chain for all categories of

damages, few claimants would be able to establish causation

and it would create a Catch-22 situation whereby unlawful

credit practices would be immunized from liability either by a

plaintiff's failure to mitigate or by a break of causation.

2) Sit RN Kes

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11

The correct approach is to leave causation to a jury. Be-

cause inaccurate adverse information results in injury by its

mere reporting and further creates a momentum of its own

that may continue to tilt the scales against a consumer even

after the report is corrected, the issue of causation should al-

ways be a question of fact for the jury whenever an inaccurate

report is issued to an employer. The Second Circuit’s failure

to recognize that false reports can result in harms regardless

of whether the report is subsequently corrected effectively

guts the FCRA.

I. WHETHER CAUSATION OF DAMAGES SHOULD BE

DECIDED BY A JURY IS AN IMPORTANT NATIONAL

QUESTION SUBJECT TO CONFLICTING APPROACHES IN

THE FEDERAL CIRCUITS.

The FCRA requires that an agency preparing a consumer

report “shall follow reasonable procedures to assure maxi-

mum possible accuracy of the information concerning the in-

dividual about whom the report relates.” 15 U.S.C. § 168le.

The statute further provides that a consumer may recover

from a person negligently “failing to comply with any re-

quirement imposed under” the FCRA “any actual damages

sustained by the consumer as a result of the failure.” U.S.C.

§ 16810(a)(1).

In this case there is no dispute that Choicepoint failed to

follow reasonable procedures and that such failure caused

Choicepoint to issue an inaccurate report to IBM. App. C10.

There also is no dispute that if Choicepoint had in fact fol-

lowed reasonable procedures, it would not have reported any

conviction whatsoever, but would have, as a matter of its own

agreement with IBM, reported that petitioner’s record was

12

clear. Indeed, upon reinvestigation of its report, Choicepoint

issued a new report that correctly listed his record as clear.’

Despite the fact that compliance with the terms of the

FCRA would have nipped the entire chain of events in the

bud and would have resulted in petitioner receiving his job,

the district court determined that because IBM ultimately re-

ceived supplemental information regarding the order vacating

the conviction, the inaccuracy of Choicepoint’s report was

“neutralized.” While recognizing that IBM’s decision to

withdraw the job offer was based upon “both the initial

Choicepoint report and the 1997 order” and its “possibly er-

roneous interpretation of the legal effect of the 1997 order,”

App. C10 (emphasis added), the court held that the final result

was not caused by the initial false report because it occurred

after the supposedly curative provision of the 1997 order.

The court rejected the argument that the inaccuracy was a

substantial factor in IBM’s decision to withdraw its offer by

claiming that, as a matter of law, “plaintiff's injury was

caused by only one factor — IBM’s conclusion that he had lied

on the SDS — and as set forth above, this conclusion did not

result from the inaccuracy contained in Choicepoint’s initial

report.” App. C11 n. 5.

First, even assuming, arguendo, that the provision of the

1997 order, in combination with the Choicepoint report, gave

IBM “accurate” information, but see infra Part IV, that does

not and cannot establish as a matter of law that Choicepoint’s

failure to follow procedures and provision of the inaccurate

initial report did not cause the resulting withdrawal of the job

offer. As a simple matter of but-for causation, there is no

question that the adverse information in the report would not

have bee.’ provided at all had Choicepoint complied with the

requirements of the FCRA. Had Choicepoint originally pro-

-

ee Lee Oe ee ene ee ee, eS

7 Furthermore, had Choicepoint obeyed the requirements of the FCRA it

would not have issued its report at all given that it lacked the required

certification of use from IBM.

13

vided the “clean” report that it later provided on reinvestiga-

tion, the entire confusion over the petitioner’s answers never

would have arisen. The notion that there is no causation be-

cause Choicepoint could have issued a supposedly accurate

report listing both the conviction and subsequent vacatur is

wholly nonresponsive to the factual issue of whether Choice-

point would have issued such a report rather than the clean

report it did issue when it finally conducted an adequate in-

vestigation.

On the factual issue of causation, therefore, a jury was

fully entitled to conclude, and did conclude, that the initial

inaccurate report caused the ensuing events leading to the loss

of the job offer regardless of whether the offer might also

have been withdrawn under some hypothetical state of facts

that never occurred. Had Choicepoint used proper procedures

as required by the FCRA, it never would have reported the

vacated conviction and petitioner would have received his job

and been spared untold mental distress.

Second, the court’s conclusion that IBM’s decision was

based exclusively on the supposedly accurate combination of

evidence and its acceptance of Choicepoint’s claim that the

supplemental information broke “the chain of causation be-

tween Choicepoint’s negligent failure to comply with the

FCRA and plaintiffs injury,” App. C6, improperly discards

the weight a jury was entitled to give to the initial inaccurate

report and the lingering effect such inaccuracy could have

even after any supposed cure.

IBM was pointed towards a conclusion by the initial re-

port that petitioner was then obliged to overcome. Providing

the far-from-self-explanatory court order to human resources

personnel unfamiliar with such matters was bound to cause

some confusion and proved insufficient to overcome the pre-

sumption established by the erroneous report from Choice-

point. What IBM was left with, therefore, was the combina-

tion of an inaccurate report and an accurate court order that

had a confusing and potentially mixed impact on IBM. In

14

such circumstances where multiple factors may have influ-

enced a decision-maker, it is not for the court to decide that

the impact of the erroneous information was overcome by

other factors. The court should have left the causality ques-

tion with the jury who, in this case, in fact agreed with peti-

tioner that the erroneous report caused his injuries.

The court’s decision to remove from the jury the right to

determine such mixed-factor causation conflicts with the po-

sition of the Third and D.C. Circuits. The Third Circuit, for

example, has held that where an erroneous credit report exists

but there also are multiple potential causes for the ensuing

adverse action, “it is inappropriate to saddle a plaintiff with

the burden of proving that one of those factors was the cause

of the decision.” Philbin v. Trans Union Corp., 101 F.3d

957, 969 (CA3 1996). Instead, the Third Circuit leaves the

issue to the jury to determine causation.

Indeed, the Third Circuit allows a jury to decide the issue

even where the inaccurate credit report was not given as a

reason for the adverse action. /d. (“a trier of fact could rea-

sonably infer that the inaccurate adverse information included

on the inaccurate credit report was an additional, unstated rea-

son for the credit denials”). In this case, by contrast, the court

removed the question from the jury despite IBM’s express

reliance on the inaccurate report as a basis for withdrawing its

job offer and despite the admission by Choicepoint that its

report “resulted in” petitioner’s injury. App. B9, C6, C9. In

the Third Circuit, such an express reference to inaccurate in-

formation as one reason for a denial of credit is itself evi-

dence from which a jury could infer causation. Philbin, 101

F.3d at 968-69. That approach is consistent with the require-

ment in 15 U.S.C. § 1681b(b)(3)(A) that employers inform

applicants when adverse action is taken against them because

of credit reports so as to eliminate “the factual issue of

whether or not a particular refusal of employment was based

even in part on adverse information in a credit report.”

S. Rep. No. 823, 91% Cong., 1% Sess. (1970), at 99 (emphasis

OC VAT ae

tH! ]° =] =

wai

15

added); see also id. at 201 (discussing reason for proposed

requirement).

The D.C. Circuit likewise has held that where a decision-

maker “‘had before [him] a [credit] report” containing ad-

verse information and that such information is generally per-

tinent to the decision being made, “‘a trier of fact could rea-

sonably conclude that” the decision-maker took adverse ac-

tion “at least in part because of the adverse credit report, and

summary judgment [is] inappropriate.” Stewart v. Credit Bu-

reau, Inc., 734 F.2d 47, 54 (CADC 1984). The propriety of

leaving causation to a jury in such circumstances is further

highlighted where, as in this case, the decision-maker simply

asserts that the adverse decision was made based upon some

separate ground rather than based upon the inaccurate report

itself. Even if such assertions are “plausible,” a “factfinder

could choose not to believe [the decision-maker’s] self-

serving” assertions. Jd. The current case fits well within the

Stewart mold, and the courts below overstepped their author-

ity in taking back from the jury the choice accept a causal

chain in which the initial inaccurate report tainted petitioner’s

employment prospects notwithstanding the district court's

own belief that the decision would have been the same with-

out the initial inaccuracy.

The approach to causation applied in the Third and D.C.

Circuits is consistent with this Court’s heldings regarding

multi-factor causation in related contexts. See, e.g., Price

Waterhouse v. Hopkins, 490 U.S. 228, 247 (1989) (employ-

ment discrimination case declining to allow a defendant hav-

ing made “an adverse employment decision in which both

legitimate and illegitimate considerations played a part to pre-

tend that the decision, in fact, stemmed from a single source”

where the decision involved “both kinds of considerations’)

(emphasis added); Mt. Healthy City School Dist. Bd. of

Educe. v. Doyle, 429 U.S. 274, 287 (1977) (once an improper |

decision-making factor is established, burden shifts to defen-

dant to prove that decision-maker “would have reached the

16

same decision” even absent the impermissible factor); cf De-

sert Palace, Inc. v. Costa, -- U.S. --, 123 S. Ct. 2148, 2155

(2003) (“direct evidence of discrimination is not required” in

order to support “giving a mixed-motive instruction to the

jury”).

Regardless whether IBM received contrary information

from petitioner himself seeking to explain the seeming dis-

crepancy between the credit report and the answer to the

questionnaire is wholly beside the point. A jury was entitled

to conclude that the initial inaccurate report had so poisoned

the well that no subsequent explanation would have satisfied

IBM or caused them to maintain their offer. Cf H.R. Rep.

No. 16340, 91st Cong., 2d Sess. (1970) at 232-33 (“The risk

of harm to an individual from reliance by his creditors and

others upon out-of-date public record information cannot be

underestimated. * * * [C]lients of the consumer reporting

agency are more likely to believe assertions in the agency’s

report than the consumer’s denial[.]”). Trust and confidence

lost often is incapable of repair early in a relationship where

caution will generally outweigh equity.®

Even had the initial report provided more information

than IBM sought and listed bwth the conviction and its vaca-

tur, it is doubtful that IBM would have responded with the

skepticism and hostility generated by an initial conclusion

that plaintiff had lied. JA 1347 (testimony from senior IBM

human resources manager that when a person successfully

completes a deferred adjudication, it “voids the record so

there is no record. * * * If [a defendant] complete[s] [the

period of probation] satisfactorily and the court has now ruled

® Indeed, the irretrievable damage done by the initial inaccuracy can be

seen in IBM’s internal scramble to seek alternative, non-existent, explana-

tions for the withdrawal after receiving additional information. Supra at

6. IBM had no intention of changing its entrenched position and, unable

to justify its continuing view once its initial reason evaporated, it merely

refused to offer any explanation at all.

a

17

that [he] completed that satisfactorily, [he] should not have to

claim that” he has been convicted on the SDS). In any event,

a jury was certainly entitled to conclude as much, and the jury

in this case in fact did conclude that the initial false report re-

sulted in injury.

Under the standards employed in the Third and D.C. Cir-

cuits, it was a question for the trier of fact to determine

whether Choicepoint’s initial report was a motivating factor

in causing IBM to withdraw the job, or whether the harm of

that initial report was fully mitigated by the subsequent dis-

closure of a confusing court order. The court in this case re-

moved that question from the jury by applying a much more

stringent standard of causation that relied exclusively on the

last factor in time — the 1997 court order — and ignored any

lingering effects on the decision-making process from the ini-

tial erroneous report.

This Court thus should grant certiorari in order to protect

the proper role of the jury in determining the factual issue of

causation in mixed-factor cases and to resolve the conflicting

approaches employed by the court below and by the Third

and D.C. Circuits.

Il. OVERRIDING THE JURY’S DETERMINATION OF

CAUSATION DISREGARDED THIS COURT’S HOLDING IN

REEVES V. SANDERSON PRODUCTS.

The decision to override the jury’s verdict and finding that

petitioner’s damages resulted from Choicepoint’s violations

of the FCRA is especially egregious given that the jury had

before it indisputably probative and sufficient evidence of

causation in the form of an admission from Choicepoint.

In this case, because it was in keeping with its failed strat-

egy in seeking summary judgment, Choicepoint admitted be-

fore trial that “/ajs a result of the information provided by

Choicepoint, IBM withdrew [plaintiff's] job offer.” App. C9

(emphasis added). Without objection from Choicepoint, peti-

tioner elicited this admission (along with others) to the jury at

ara aaa ii ei

18

trial. After reading the admission, the district judge, without

objection, instructed the jury that such statements were ad-

missions by Choicepoint under oath.” And the court correctly

instructed the jury that conduct “is considered to be a proxi-

mate cause of an event if the event is the natural and probable

result of the conduct.” JA 1477. ;

Given Choicepoint’s admission and its near perfect con-

sonance with the correct legal standard of causation, it was no

surprise that the jury’s special verdict found in favor of peti-

tioner as follows:

Do you find as a result of one or more of Choice-

point’s violations of the [FCRA] that plaintiff sustained

damages?

Answer: Yes

JA 1479-80 (emphasis added). And that finding, of course, is

virtually identical to the FCRA standard that recoverable

damages are those sustained “as a result of’ the violations of

the FCRA. 15 U.S.C. § 1681o(a). Indeed, the significance of

Choicepoint’s admission and the jury’s prerogative to base its

finding on that admission was all but conceded at oral argu-

ment in the Second Circuit. The court below posed the ques-

tion and received the answer as follows:

THE COURT: Your adversary makes much of the

admission in the 56.1 response, which you admitted that

as a result of the information provided by Choicepoint,

IBM withdrew the plaintiffs offer. And it does appear

that they argued that repeatedly to the jury as proof of

causation. And I don’t think I saw where you chal-

lenged them on that in arguing to the jury. So why

couldn’t the jury have adopted their argument?

DEFENSE COUNSEL: Your Honor, it is possible

that the jury could have.

° A “defendant’s admission is, of course, good evidence.” Old Chief v.

United States, 519 U.S. 172, 186 (1997).

19

Oral argument tape, January 24, 2003, counter no.1429.

Despite Choicepoint’s admission and the jury’s perfectly

sound factual finding based on that admission, the courts be-

low reexamined that finding and substituted their own factual

inferences regarding the causal chain of events that led to

IBM withdrawing its job offer.

By ignoring the jury’s factual finding and the self-evident

sufficiency of Choicepoint’s admission to support that find-

ing, the decision below conflicts with this Court’s admonition

in Reeves v. Sanderson Plumbing Products, Inc., 530 U.S.

133, 150 (2000), that “the court must draw all reasonable in-

ferences in favor of the nonmoving party, and it may not

make credibility determinations or weigh the evidence” on a

motion for judgment as a matter of law. As in Reeves, the

courts here improperly “disregarded critical evidence favor-

able to petitioner,” id. at 152 — namely the Choicepoint’s ad-

mission that its report resulted in IBM withdrawing its job

offer. And also as in Reeves, the courts below “failed to draw

all reasonable inferences in favor of petitioner,” id. — in par-

ticular, the inference that the inaccurate initial report contin-

ued to have a lingering adverse effect even after petitioner

provided IBM the 1997 order vacating his conviction, and

that the initial report contributed to IBM’s confusion over the

significance of that order.

In rejecting the jury’s obvious acceptance of Choice-

point’s admission, and the numerous possible inferences re-

garding how the initial inaccurate report altered IBM’s deci-

sion-making process even assuming the supplemental infor-

mation corrected the initial error, “the Court of Appeals

impermissibly substituted its judgment concerning the weight

of the evidence for the jury’s.” Reeves, 530 U.S. at 153. In-

deed, it blinks reality that any court following precedent

would ignore the evidentiary import of a party admission

whose language, literally construed, supported the verdict in

its entirety.

20

III. THE DECISION BELOW ERRED IN HOLDING THAT

DAMAGES FOR MENTAL DISTRESS AND PUNITIVE

DAMAGES ARE DEPENDENT ON CAUSATION FOR

ECONOMIC DAMAGES, CONTRARY TO THE HOLDINGS

IN OTHER CIRCUITS.

The decision below dismissed not only petitioner’s claims

for economic injury from lost wages but also his claims for

compensatory damages for mental distress and punitive dam-

ages based on Choicepoint’s flagrant disregard of petitioner’s

rights. The court of appeals addressed all of petitioner’s

claims as one and drew no distinction between the causation

requirements for those other forms of damages.

A. Damages for Mental Distress.

In addition to the loss of his job offer, petitioner in this

case claimed damages for mental distress from the issuance of

the inaccurate report. The decisions below, however, found

no causation for damages and dismissed the complaint in its

entirety based solely on the supposed lack of causation be-

tween the report and IBM’s withdrawal of its job offer. Even

assuming a lack of causation for economic injury, that should

not have been carried over to dispose of the actual damages

for mental distress.

In other circuits, compensatory damages for intangible in-

juries such as mental and emotional distress, humiliation, and

loss of reputation do not require additional proof of any sub-

stantive adverse reaction based upon the inaccurate report.

Rather, the fact that the report was issued to an employer and

caused petitioner embarrassment and distress while attempt-

ing to correct the error of the report is sufficient to support an

award of actual damages. See Guimond v. Trans Union

Credit Information Co., 45 F.3d 1329, 1333 (CA9 1995) (de-

nial of credit not necessary to make out a prima facie case for

damages; inaccuracies alone are sufficient to justify an award

of damages for the embarrassment stemming therefrom); Ste-

venson v. TRW, 987 F.2d 288, 296 (CA5 1993) (“Actual

21

damages include humiliation or mental distress, even if the

consumer has suffered no out-of-pocket losses.”); Dalton v.

Capital Associated Industries, Inc., 257 F.3d 409, 418 (CA4

2001) (“Even though [the] false report is not what prevented

[plaintiff] from getting a job * * *, [Plaintiff] need only show

that he suffered damages from the false report, regardless of

how Sumitomo reacted to the report. Specifically, Dalton al-

leges that he suffered emotional distress and loss of reputation

as a result of the false report. Damages for such injuries are

recoverable under FCRA.”) (citing Cousin v. Trans Union

Corp., 246 F.3d 359, 369 n. 15 (CAS), cert. denied, 534 U.S.

951 (2001); Bakker v. McKinnon, 152 F.3d 1007, 1013 (CA8

1998); Guimond, 45 F.3d at 1333; Zamora v. Valley Fed.

Savs. & Loan Ass’n, 811 F.2d 1368, 1371 (CA10 1987)).

In the present case, petitioner presented substantial evi-

dence of emotional distress arising directly from the false re-

port. That he thereafter desperately sought to explain the

false report hardly cured the embarrassment and distress

caused by the report. Rather, those efforts to mitigate the

damage are all evidence of the obvious distress petitioner ex-

perienced and the great efforts he exerted in response to such

stress. Thus, even assuming plaintiff could not prove eco-

nomic loss, the Second Circuit erroneously dismissed his ad-

ditional claims for compensatory damages for mental distress.

Such damages would not only have compensated him for at

least some of the injury he suffered, they would also have

supported attorney’s fees and costs.

B. Punitive Damages.

A credit reporting agency is liable for punitive damages

where its violations of the Act are willful. 15 U.S.C. § 1681n.

The circuits agree that willfulness exists where the defendant

““knowingly and intentionally committed an act in conscious

disregard for the rights of others,’ but” does not depend on a

showing of “‘malice or evil motive.”” Cushman v. Trans Un-

ion Corp., 115 F.3d 220, 226 (CA3 1997) (citing Philbin v.

Trans Union Corp., 101 F.3d 957, 970 (CA3 1996); Pinner v.

22

Schmidt, 805 F.2d 1258, 1263 (CA5 1986), cert. denied, 483

U.S. 1022 (1987)); accord Thornton v. Equifax, Inc., 619

F.2d 700, 705 (CA8), cert. denied, 449 U.S. 835 (1980).

Where such disregard for the requirements of the FCRA is

demonstrated, both the Fourth and Eighth Circuits allow re-

covery of punitive damages regardless of whether there are

other actual damages. See, e.g., Bakker v. McKinnon, 152

F.3d at 1013 (CA8) (“Actual damages are not a statutory pre-

requisite to an award of punitive damages under the

[FCRA].’”) (quoting Yohay v. City of Alexandria Employees

Credit Union, Inc., 827 F.2d 967, 972 (CA4 1987); Millstone

v. O’Hanlon Reports, Inc., 528 F.2d 829, 834-35 (CA8 1976)

(per Associate Justice Tom C. Clark, sitting by designation)

(upholding recovery of damages for “mere mental pain and

anxiety,” and upholding award of punitive damages).

The Second Circuit in this case, by contrast, refused to

reach the issue of punitive damages solely because it affirmed

the judgment as to causation of actual damages. But one

should have nothing to do with the other, and the Second Cir-

cuit’s holding to the contrary is in conflict with the holdings

of the Fourth and Eight Circuits. This Court therefore should

grant certiorari to resolve this circuit split.

IV. THE LEGAL STANDARD FOR WHETHER A REPORT HAS

THE “MAXIMUM POSSIBLE ACCURACY” IS AN

IMPORTANT NATIONAL QUESTION ON WHICH THE

CIRCUITS ARE DIVIDED.

A final issue warranting this Court’s attention is the erro-

neous and destructive interpretation what constitutes “accu-

rate” information under the FCRA. By holding that peti-

tioner’s provision of the 1997 order to IBM “neutralized” the

inaccuracy of the initial credit report and that the resulting

combination of information was accurate, the courts below

adopted a distorted notion of accuracy and effectively immu-

nized Choicepoint from liability for its unequivocal violations

of the FCRA. Allowing FCRA violations to be fully immu-

23

nized by the efforts of the victim to mitigate the damage

caused by an inaccurate report would gut both the remedial

and deterrent purposes of the Act.

Consistent with the FCRA’s concern for privacy, and its

express distinction between an “accurate” report and a “com-

plete and up to date” report, an accurate report must contain

not only technically true information, but must be limited to

only such information as was requested by the company or

allowed by law, and must not be misleading. Accuracy thus

involves reporting what is asked for by an employer; no more,

no less. Additional information that is true in the abstract

nonetheless constitutes an inaccurate answer to a question not

calling for such information.

In this case, the courts below held that the sole error in

Choicepoint’s initial report was its omission of the subsequent

order vacating the plea and dismissing the charges. From that

incorrect premise, the courts concluded that the ultimate com-

bination of the inaccurate report of conviction and the subse-

quent vacatur order constituted accurate information

“(rjegardless of whether the 1997 Order legally expunged the

1995 conviction.” App. C8. That reasoning is in error for

several reasons.

First, because IBM did not request, and therefore Choice-

point’s procedures directed it not to provide, information

about vacated convictions, Choicepoint’s initial report was

not an accurate response to IBM’s request for a report regard-

less of whether it would have been technically true for Choic-

epoint to ha < reported both the conviction and the vacatur.

Indeed, as the courts below recognized, “when confronted

with the 1997 dismissal order, as well as plaintiff's assertions

about the legal effect of the order, Choicepoint concluded that

plaintiff's conviction had been legally expunged” and subse-

quently issued a “clear” report. App. C10-11 n. 4.

While the courts below asserted that the subsequent report

“does not alter the complete and accurate nature of the infor-

24

mation relied on by IBM in reaching its own conclusions,”

id., that claim conflates completeness and accuracy and hence

renders meaningless the different terms employed in the stat-

ute. Choicepoint’s own behavior regarding the second report

was sufficient evidence of its understanding of the request

made of it by IBM and the nature of an “accurate” response to

that request. Had Choicepoint followed the procedures man-

dated by the FCRA, a clear report would have been the “accu-

rate” response to IBM’s request. A report containing extra-

neous information regarding petitioner’s vacated conviction,

even as supplemented by the 1997 vacatur, was and remained

an inaccurate response to IBM’s request for information.

Second, the fact that the legal significance of the dismissal

order might be less than clear and hence could lead to varied

conclusions regarding petitioner’s conviction, App. C8, only

shows how reporting both the conviction and the 1997 Order

is misleading even if technically accurate. The D.C. Circuit

has recognized that “reports containing factually correct in-

formation that nonetheless mislead their readers are neither

maximally accurate nor fair to the consumer who is the sub-

ject of the reports” and hence may give rise to liability for

damages. Koropoulos, 734 F.2d at 40. And the Sixth Circuit

has recognized that the burden of evaluating such information

rests with the credit reporting agency, and cannot be dumped

in the lap of the recipient of the report at the expense of the

consumer or potential employee. See Bryant v. TRW, 689

F.2d 72, 78 (CA6 1982) (affirming finding that, in enacting

the FCRA, Congress has not intended consumer reporting

agencies to act merely as conduits of information, but to be

responsible for evaluating the correctness of the information

they impart). The suggestion by the courts below, App. C9,

that reporting agencies cannot be held liable for “their cus-

tomer’s inaccurate interpretations” of misleading raw data

given in a report thus conflicts both with the underlying pur-

poses of the FCRA and the interpretations of that Act by other

circuits.

25

In this case, Choicepoint would not have provided and

IBM would not have expected information about the vacated

conviction. Even had Choicepoint itself provided information

on both the conviction and the vacatur, therefore, such infor-

mation would not have been an “accurate” response to IBM’s

query of it. Giving more information than requested, even if

true, is an inaccurate and misleading response to the request.’°

Third, in addition to being an inaccurate response to the

request for information made by IBM, the disclosure of both

the conviction and vacatur also is an inaccurate legal re-

sponse. As the D.C. Circuit has recognized in the context of

the Youth Corrections Act, 18 U.S.C. §§ 5005, 5021 (re-

pealed 1984),

unless the * * * ex-offender whose conviction was set

aside may legally deny the existence of that previous

conviction, he will almost inevitably and forever bear its

stigma in terms of both social relationships and eco-

nomic opportunities. Anything less leaves him at best

only slightly better off than if his conviction had never

been “set aside” at all.

Doe v. Webster, 606 F.2d at 1239-40.

The courts below explicitly parted company with the D.C.

Circuit’s Webster opinion. While recognizing that the statute

under which plaintiff's conviction was vacated appears to al-

low the ex-offender to deny the existence of the conviction to

a private employer, App. B20, it relieved a credit reporting

company of making any such determination in favor of sim-

ply providing raw data to a prospective employer regardless

of how confusing or misleading such data might be.

'° Indeed, the very fact that IBM did not want information about expunged

convictions, rather than requesting all information about such convictions,

suggests that it recognizes that there is a negative to giving its human re-

sources managers such information.

26

The suggestion that it would be “‘judicially mandated

prevarication,”” App. C8 (quoting United States v. Doe, 36

F. Supp.2d 143, 144 (S.D.N.Y. 1999)), to hold a reporting

agency responsible for providing only the information sought

by the employer and require it to exclude extraneous and mis-

leading information that was not requested is a distortion of

the statute and of the salutary purposes of the Act and of in-

formational privacy in genera]. Denying the existence of a

vacated conviction is not a lie; it is a true description of af-

fairs and the very point of having the conviction vacated in

the first place.

Fourth, at a minimum, the issue of accuracy should have

been left to a jury. There was no dispute that Choicepoint’s

initial report was inaccurate, and the courts below took it

upon themselves to conclude that petitioner’s supplemental

information “neutralized” that inaccuracy. Put if even the

supposedly neutralized information was a potentially inaccu-

rate response under the agreement between Choicepoint and

IBM, or was potentially misleading despite its supposed tech-

nical accuracy, the question should have gone to a jury to de-

cide whether the report was inconsistent with the Choice-

point-IBM agreement or whether it remained misleading.

Such an approach to determining accuracy has been applied

in both the Tenth and D.C. Circuits. See, e.g., Cassara v.

DAC Services, Inc., 276 F.3d 1210, 1218, 1225 (CA10 2002)

(even where the “events as events are not in dispute,” where

there is a “dispute concern[ing] the manner in which these

events have been characterized — whether each event has been

placed in the proper category” — it raises a jury question

“whether the reporting was in fact accurate in light of what-

ever definitions or criteria do apply” for categorization pur-

poses and thus whether a disputed categorization of particular

events is “in fact ‘accurate’ within the meaning of the Fair

Credit Reporting Act”) (emphasis in original); Koropoulos,

734 F.2d at 39 (whether a credit report is maximally accurate

27

or merely technically accurate but misleading is a question for

the trier of fact).

The conflation of “accuracy” with technical completeness

in the decisions below severely undermines the purposes of

the FCRA and those laws allowing convictions to be vacated.

Granting a writ of certiorari is necessary to preserve the effec-

tiveness of the Act and to reconcile the conflicting approaches

among the circuits in determining “accuracy.”

V. THis CASE RAISES IMPORTANT AND RECURRING

NATIONAL ISSUES THAT SHOULD BE RESOLVED BY

THIS COURT.

The questions presented by this petition are of national

importance both because of the frequency of their occurrence

in litigation under the FCRA and because they involve impor-

tant questions regarding personal privacy and the rehabilita-

tive purposes of laws that expunge convictions. The issues of

accuracy and causation can be expected to arise in the vast

majority uf cases alleging inadequaie procedures to ensure

accuracy under the FCRA because victims of inaccurate re-

ports will invariably take steps to dispute any inaccuracies

once they are discovered. Indeed, plaintiffs are effectively

required to take such steps or subject themselves to a defense

that they failed to mitigate their damages. But if such steps

attempting mitigation — ie., providing potential employers

with supplemental information disputing the erroneous report

— are deemed to render the initial report accurate in combina-

tion and hence to break the causal chain to damages, credit

reporting agencies will rarely, if ever, be liable for even the

most egregious violations of the Act. No case in which a

plaintiff acted responsibly would be free from such a defense

and hence the requirements of the FCRA would become

toothless and litigation to enforce the FCRA impractical.

The questions presented herein are also important as a re-

sult of their interaction with various federal and state laws

regarding the treatment of vacated or expunged convictions.

28

Such laws are designed to facilitate the rehabilitation and pro-

tect the privacy of offenders who have successfully taken the

required steps to clear their record. It is a cruel and counte1-

productive hoax to allow such individuals lawfully to deny

the existence of expunged convictions yet to immunize the

reporting of those convictions as an “accurate” description of

a person’s record. As one witness who testified during Senate

Hearings noted, reporting criminal proceedings that were ul-

timately dismissed can have a severe and adverse impact on

the accused:

The fact that a person has been arrested will often op-

erate to deny him * * * employment * * * [and] goes

against a feeling in our society that individuals should

have an opportunity to remake their lives and their ca-

reers without this being something that so dominates

them later on that they can never really reform them-

selves. * * * As such, the credit reporting system dis-

plays serious flaws in obtaining and recording informa-

tion about arrests that lead to dismissed charges[.]

S. Rep. No. 823, 91st Cong., Ist Sess. (1970), at 81, 93.

Finally, in the last several years, in part due to the devel-

opmert of the Internet, the public has become more con-

cerned about personal privacy. See, e.g., Electronic Privacy

Information Center web site, http://www.epic.org (visited

July 24, 2003) (addressing numerous issues involving privacy

in the electronic age). It should come as no surprise then that

more and more FCRA suits are being brought. In an elec-

tronic age where records can persist even after they have

technically been vacated, the only way to give effect to stat-

utes encouraging rehabilitation and protecting privacy is to

place the onus of “maximum accuracy” on the reporting

agencies themselves.

The decision below, if allowed to stand, will have far-

reaching effects on consumers seeking damages under the

FCRA. If this plaintiff, with substantial evidence of causa-

29

tion, three violations of the FCRA, and a jury verdict in his

favor cannot obtain a single- dollar of damages under the

FCRA, then it is hard to imagine who can.

CONCLUSION

For the foregoing reasons, the petition for a writ of certio-

rari should be granted.

Respectfully submitted,

ERIK S. JAFFE

Counsel of record

ERIK S. JAFFE, P.C.

5101 34” Street, N.W.

Washington, D.C. 20008

(202) 237-8165

GREGORY ANTOLLINO

588 Broadway, Suite 904

New York, NY 10012

(212) 334-7397

Counsel for Petitioner

Dated: July 28, 2003