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Why settlements should include a correct credit report

March 11, 2011

Judge Ambrose here in the W.D. Pa. recently issued a lengthy and thorough opinion that granted summary judgment to Equifax on claims filed by a pro se plaintiff.  Gagliardi v. Equifax Info. Servs., LLC, No. 09-1612, 2011 U.S. Dist. LEXIS 10634 (W.D. Pa. Feb. 3, 2011).  One point in it struck home immediately:  the value of having a plaintiff state that his or her current credit report is correct as a condition to settling litigation.

In this case, Mr. Gagliardi sued Equifax in June 2008 and settled in February 2009.  As part of the settlement, he stated that his Equifax credit report was accurate as of February 2009.

Mr. Gagliardi sued Equifax again in November 2009, after Columbia Gas terminated gas service to his house in April 2009 on the basis of:  1) missed payments; and 2) an Equifax credit score.  Equifax used the prior settlement to demonstrate that Mr. Gagliardi’s report was accurate in February 2009, and he stated in his deposition that aside from the Columbia Gas letter, he hadn’t had any credit declined or any other reason to think that his credit report was inaccurate.  For this reason, Judge Ambrose found that “Gagliardi cannot demonstrate that Equifax prepared a consumer report containing inaccurate information about him” and dismissed his claim for a violation of the “reasonable procedures” duty at 15 U.S.C. Sec. 1681e(b).  Id. at **27-28.

As I’ve mentioned before, courts will generally send “reasonable procedures” claims to the jury, on the basis that only a jury can say what is “reasonable” in a given situation.  Here, Equifax was able to get summary judgment on such a claim.  Equifax’s decision to have Mr. Gagliardi state that his credit report was accurate in his February 2009 settlement was a crucial component of Equifax’s success in the second lawsuit.

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