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Emotional Distress and Rule 35

February 25, 2011 Leave a comment

As I mentioned last week, FCRA plaintiffs nearly always allege that an inaccurate report about them caused them emotional distress, and they seek damages based on that distress.  The courts generally allow such damages without specific proof of treatment, drugs, et cetera.

If the plaintiff has seen a therapist about the emotional distress, the federal patient-psychiatrist privilege may limit a defendant’s ability to take discovery from the therapist.  But there’s another way to get relevant discovery:  move to compel the plaintiff to submit to a mental examination per Rule 35.  To do this, you will need to show that the plaintiff’s mental state is “at issue” and that there is “good cause” for an exam.  If the complaint alleges emotional distress damages, both of these conditions are probably met.  Schlagenhauf v. Holder, 379 U.S. 104, 119 (1964).

Once you have received a report from an examination, the playing field is level between plaintiff and defendant.  Under Rule 35(b), the plaintiff can ask the defendant to provide a copy of the examiner’s report.  But once the report is provided, the plaintiff is obliged to turn over all reports regarding any conditions discussed in the report and has waived any privilege regarding therapy concerning those issues.

Sometimes plaintiffs will describe their “emotional distress” in deposition in a clearly unbelievable way.  In those cases, it may not make sense to seek an exam or additional discovery – the jury won’t buy the claim if there’s a trial.  But if a plaintiff credibly testifies as to emotional distress, Rule 35 is the FCRA defendant’s friend.

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Credit reports and emotional distress

February 18, 2011 Leave a comment

It’s almost standard practice for an FCRA plaintiff to claim that an inaccurate credit report caused him or her severe emotional distress.  And even though I’m a defense lawyer, I don’t blame plaintiffs for claiming this.  The FCRA allows plaintiffs to recover their “actual damages,” and most circuits have interpreted that to include emotional distress – even if there’s no specific proof (e.g., therapist bills, sleeping pill prescriptions, etc.).  See, e.g., Guimond v. Trans Union Credit Information Co., 45 F.3d 1329, 1333 (9th Cir. 1995).

The question arises:  how does a defendant discover evidence (if there is any) of the plaintiff’s emotional distress?  If the plaintiff is seeing a therapist, can the defendant depose the therapist?  The answer appears to be “maybe.”

The FCRA conveys federal question jurisdiction, so federal law on the patient-therapist privilege applies.  And federal law has given pretty broad protection to this privilege since Jaffe v. Redmond, 518 U.S. 1 (1996).  But Jaffee didn’t say the privilege was absolute:  the plaintiff can waive it by putting communications with a therapist at issue.  There appear to be three schools of thought among the lower courts as to how to decide whether to allow discovery of such communications:

1.  Under the “broad view,” if a plaintiff alleges emotional distress damages, communications with a therapist have been placed at issue and are discoverable.  See, e.g., Sarko v. Penn-Del Directory Co., 170 F.R.D. 127 (E.D. Penn. 1997).

2.  Under the “narrow view,” such communications are not discoverable unless a plaintiff explicitly relies on them as evidence of damages or as other proof of a claim.  See, e.g., Hucko v. City of Oak Forest, 185 F.R.D. 526 (N.D. Ill. 1999).

3.  Under the “middle view,” such communications are protected if the plaintiff only makes “garden variety” emotional distress claims, like alleging “I was angry” or “I had trouble sleeping.”  But if the plaintiff makes more specific claims, like alleging “I was clinically depressed,” then the communications with a therapist are discoverable.  See, e.g., Ruhlmann v. Ulster County Dep’t of Soc. Servs., 194 F.R.D. 445 (N.D. N.Y. 2000).

Sometimes different judges within the same circuit or even the same court will adopt different views.  So check your local case law before taking a plaintiff’s deposition and before trying to subpoena a therapist.

Note that it may be possible to avoid controversy about which “view” applies by asking for a medical examination of the plaintiff under Rule 35(a)(1) and, if there is a specific diagnosis, then asking the plaintiff to produce any reports on the same diagnosis per Rule 35(b)(3).  I will look into that next week.

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The FCRA does not impose strict liability. So what are “strict procedures?”

February 11, 2011 Leave a comment

One of the interesting aspects of the FCRA is how much it relies on “reasonable procedures.”  Probably the most common claims against a consumer reporting agency are that it did not apply “reasonable procedures” in creating a credit report or reinvestigating a consumer’s diuspute.  See 15 USC Secs. 1681e(b) and 1681i.  In both cases, Congress intentionally did not define what an agency had to do to avoid liability – the statutes simply require the agency to act reasonably.  What that means is for the courts to decide.  And there are lots and lots of cases in which the courts have decided what “reasonable” means in particular situations.

But there is an exception to this general focus on reasonableness.  15 USC 1681k says that if an agency prepares a background report that contains adverse information about a consumer (say a criminal record), the agency must either:  1) send a copy of the report to the consumer; or 2) follow “strict procedures” to make sure that the information in the report is current.

This “strict procedures” provision is unique in that it’s a departure from the normal FCRA focus on reasonableness.  It’s also unique in that the phrase has – as far as I can tell – only been defined by one court, in Poore v. Sterling Testing Sys., 410 F. Supp. 2d 557, 572 (E.D. Ky. 2006).  The court there held that an agency follows “strict procedures” if a record in its report matches a record on file with a public court or other entity in every respect.

Time will tell if the Poore interpretation of “strict procedures” is followed by other courts.  My guess is that it will be.  Lots of other cases hold that the FCRA does not make agencies strictly liable for errors in their reports.  And that general view is not in conflict with Poore.  Under Poore, if a public record is wrong, the agency can repeat the error and still escape liability.     

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FCRA recidivism – continued

February 4, 2011 Leave a comment

Last week, I noted that lots of FCRA cases – perhaps close to half – are filed by repeating plaintiffs, or people who’ve filed similar lawsuits before.  There’s nothing obviously wrong with that; as I noted, perhaps these repeat plaintiffs, however cynical they may be, are keeping the defendants honest.

As a follow-up, I should note a recent case in my own backyard:  Schweitzer v. Equifax Info. Servs. LLC, No. 08-478, 2010 U.S. Dist. LEXIS 99143 (Sept. 21, 2010).  In Schweitzer, a woman sued Equifax in state court, settled, and then she and her husband filed a second lawsuit that ended up in federal court here in Pittsburgh.

Long story short, the second lawsuit was thrown out because it was barred by Mrs. Schweitzer’s settlement agreement in the first suit.  Message to FCRA defense attorneys:  draft your settlement agreements to make this outcome more likely!  Message to FCRA plaintiffs and plaintiffs’ attorneys:  read your settlement agreements carefully, so that you aren’t waiving future lawsuits!

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