Does the FCRA require proof of emotional distress at summary judgment? Second Circuit Summary.

This week, we continue our series on how the various federal judicial circuits handle emotional distress claims in FCRA cases – specifically, whether the courts are willing to grant summary judgment to defendants on the grounds that the plaintiff’s evidence of emotional distress was lacking.  This week’s focus is the Second Circuit.

The Second Circuit Court of Appeals has issued one appellate decision related to this issue:  Casella v. Equifax Credit Info. Servs., 56 F.3d 469 (2d Cir. 1995).  A trial court had granted summary judgment for Equifax and Trans Union and against Casella for a number of reasons, one of which was lack of evidence of emotional distress damages.  The Court of Appeals focused on that issue, affirmed the trial court’s analysis, and therefore upheld the resulting judgment.

Casella claimed that Equifax and Trans Union had violated the FCRA by reporting and then failing to correct a series of allegedly inaccurate statements by a San Diego court that he was past-due on child support.  He didn’t claim that the error on his report caused him to miss out on any credit opportunities; he just alleged that it made him scared to apply for credit and caused him general emotional distress.  The Court of Appeals said that his evidence was insufficient because:  1) it was unwilling to approve emotional distress damages where there was no evidence that anyone other than Casello and the bureaus ever saw the reports; and 2) it could not be sure that the emotional distress was caused by the bureaus; it could just as well have been caused by the San Diego court.

In short, the Second Circuit held that plaintiffs who seek emotional distress damages in FCRA cases must show, at a minimum, that the defendant and not some other party caused the distress, and it suggested that plaintiffs should also show that someone else saw the report that caused the emotional distress.

A series of district court decisions have also addressed the concept of proof of emotional distress, sometimes citing Casella and sometimes not.

In Dinoto v. Rockland Fin. Mtg. Co., LLC, No. 3:06cv1132, 2007 U.S. Dist. LEXIS 62571 (D. Conn. Aug. 2, 2007) , a magistrate judge recommended that default judgment be granted against two defendants and in favor of the plaintiffs, but the judge awarded only modest damages and did not fully vindicate the plaintiffs’ claims.  Specifically, the magistrate judge cited Casella and then stated, without additional analysis, that “the Court finds Ms. DiNoto’s claim of emotional distress is too speculative and unsubstantiated to support  an award of actual damages.”

In Caltabiano v. BSB Bank & Trust Co., 387 F. Supp. 2d 135 (EDNY 2005), the district court refused to award emotional distress damages to the plaintiff, but did not follow Casella in doing so.  The defendant argued that under Casella, a plaintiff could only obtain emotional distress damages if he or she had been denied credit; the district court stated (correctly) that Casella did not go that far.  The district court then stated that the issue of whether the plaintiff was denied credit or would likely have been denied credit was irrelevant to the case before it, because – it stated – FCRA plaintiffs must provide some third-party evidence of emotional distress (i.e., more than their own testimony), and plaintiff had not done this.  The district court cited a racial discrimination case – Patrolmen’s Benevolent Ass’n of New York v. City of New York, 310 F.3d 43, 55 (2d Cir. 2002) – in support of this proposition.

In Spector v. Equifax Info. Servs., 338 F. Supp. 2d 378 (D. Conn. 2004), the district court stated that Casella stood for the proposition that one cannot discover emotional distress damages for fear of what one’s credit report might have on one’s relationships with creditors.  The plaintiff before the court claimed to have suffered emotional distress because he asked the credit bureaus for copies of his credit report (so that he could correct possible errors before they were seen by creditors) and was never given one.  The court declined to award emotional distress damages, because while the plaintiff had shown that he didn’t get copies of his credit report, he hadn’t shown (on a series of very case-specific facts) that this precluded him from actually doing what he wanted to do (correcting any errors that were unique to those reports).

In Podell v. Citicorp Diners Club, 914 F. Supp. 1025 (SDNY 1996), the district court dealt with emotional distress in dicta.  The plaintiff claimed that defendant TRW violated the FCRA by making him jump through a series of bureaucratic hoops and then not making the changes to his credit report that he requested, and that this caused him emotional distress.  The court dismissed the claim because it found that the bureaucratic hoops were all part of the process of disputing a report under the FCRA, and that TRW’s response to the dispute complied with the law at every step.  However, the court then noted that if TRW HAD violated the FCRA (which it hadn’t), then the court would have awarded emotional distress damages due to the distress associated with spending time and energy on a dispute process only to find that the bureau isn’t complying with the law.

Finally, in Houston v. TRW Information Services, Inc., No. 88 Civ. 0186, 1989 U.S. Dist. LEXIS 4437 (SDNY May 2, 1989), the court – without citing any authority – denied a request for emotional distress damages and stated that “Houston’s claim of emotional distress is not supported by any evidence or testimony other than his own. Moreover he has not shown that any emotional distress that he may have suffered was proximately caused by TRW’s negligent violation of the FCRA.”

In summary, courts in the Second Circuit have shown some willingness to grant defense motions for summary judgment due to alleged deficiencies in the evidence for plaintiff’s emotional distress.  Houston and Caltabiano both flatly refused to allow emotional distress damages when they were only supported by the plaintiff’s own testimony.  Dinoto seems to have done the same.  Casella and Spector suggest that a plaintiff will have a difficult time obtaining emotional distress absent evidence that, due to an FCRA violation, some third party saw inaccurate information in the plaintiff’s credit report.  While the court in Podell indicated a willingness to grant emotional distress to plaintiffs who spend time and energy on ultimately fruitless disputes with credit bureaus, it did so in dicta and not in a holding.