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Williams v. Corelogic Rental Property Solutions, LLC

United States District Court, D. Maryland

October 26, 2016

JAMES L. WILLIAMS, et al., Plaintiffs,


          Paula Xinis United States District Judge

         Pending in this FCRA case is a motion to compel filed by Plaintiffs against Defendant CoreLogic Rental Property Solutions, LLC. ECF No. 47. The issues have been fully briefed and a hearing was held on October 18, 2016. For the following reasons, Plaintiffs' motion to compel is granted in part and denied in part.

         I. Background

         Plaintiffs bring this action against Defendant CoreLogic Rental Property Solutions, LLC (“CoreLogic, ” “RPS, ” or “Defendant”) for its alleged violation of the Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq. CoreLogic is a consumer reporting agency that compiles and maintains files on consumers. It then sells these consumer reports to management companies and landlords who use them to make decisions regarding tenants. The reports sometimes contain errors. A “false positive” error occurs when a consumer report contains an item, such as a criminal conviction, which is not attributable to the individual with whom the particular credit report relates. For example, CoreLogic's report on Plaintiff Hector Hernandez allegedly showed that he was convicted of marijuana possession when that crime was actually committed by a different individual named “Hector David Hernandez-Garcia.” A “false negative” error occurs when a negative item should have been attributed to a consumer but was not.

         The two named plaintiffs, on behalf of themselves and three potential classes, [1] allege that CoreLogic violated several FCRA provisions. They bring a claim under 15 U.S.C. § 1681e(b), which requires consumer reporting agencies to “follow reasonable procedures to assure maximum possible accuracy” of the information in a consumer report about whom the report relates. They also bring a claim under 15 U.S.C. § 1681g(a)(2), which requires consumer reporting agencies to “clearly and accurately disclose . . . the sources of information” in a consumer report. Additionally, Plaintiff Hernandez brings a claim under 15 U.S.C. § 1681i for CoreLogic's alleged failure to conduct a reasonable reinvestigation of his file. ECF No. 13 at 3.

         On August 15, 2016, Plaintiffs filed a Motion to Compel Discovery. ECF No. 47. Plaintiffs generally argue that CoreLogic has refused to produce “the evidence necessary to establish that Defendant willfully violated §§ 1681e(b) and 1681g and the evidence needed to establish that the class claims satisfy the requirements of Rule 23(a) and 23(b)(3).” ECF No. 47-1 at 4. At the time this motion was filed, the unresolved discovery disputes included (1) the production of CoreLogic's databases and algorithms; (2) evidence suggesting CoreLogic's prior notice of reporting inaccuracies and studies regarding matching procedures; (3) discovery related to whether Plaintiffs' § 1681g class satisfies Fed.R.Civ.P. 23's requirements; (4) discovery regarding CoreLogic's net worth; (5) Plaintiffs' contention interrogatory served upon CoreLogic regarding class certification; (6) CoreLogic's alleged failure to comply with this Court's Order regarding ESI; and (7) CoreLogic's alleged failure to comply with Fed.R.Civ.P. 34. On October 18, 2016, the parties filed a Consent Order resolving many of their outstanding discovery disputes. ECF No. 78. What remains are CoreLogic's undisclosed documents and communications related to CoreLogic's internal review of its matching process.[2]

         As early as 2012, CoreLogic began reviewing its matching logic and algorithms to help it identify issues related to potential consumer report inaccuracies, i.e., the prevalence of false positives or false negatives. In 2014, CoreLogic conducted a review of its matching processes, resulting in certain changes to its matching procedures in late October 2014 (internally referred to as “Phase I” of the review). It engaged in another review of its matching processes in 2015 and 2016. CoreLogic refuses to produce studies, communications, audits, or reports relating to its review of its matching process, arguing that such documents are irrelevant, or otherwise protected from being discovered by the attorney-client privilege and self-evaluative privilege. It provided Plaintiffs with a privilege log on August 10, 2016, and by Letter Order dated October 6, 2016, provided the Court with the undisclosed documents for an in camera review.

         II. Standard of Review

         Rule 26(b)(1) of the Federal Rules of Civil Procedure provides that:

Parties may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action, whether it relates to the claim or defense of the party seeking discovery or to the claim or defense of any other party, including the existence, description, nature, custody, condition, and location of any books, documents, or other tangible things and the identity and location of persons having knowledge of any discoverable matter. The information sought need not be admissible at the trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence.

         “The burden is on the party resisting discovery to explain specifically why its objections, including those based on irrelevance, are proper given the broad and liberal construction of federal discovery rules.” Desrosiers v. MAG Indus. Automation Sys., LLC, 675 F.Supp.2d 598, 601 (D. Md. 2009). Whether to grant or deny a motion to compel is generally left within a district court's broad discretion. See Lone Star Steakhouse & Saloon, Inc. v. Alpha of Va., Inc., 43 F.3d 922, 929 (4th Cir. 1995) (denial of motions to compel reviewed on appeal for abuse of discretion); Erdmann v. Preferred Research Inc., 852 F.2d 788, 792 (4th Cir. 1988) (“The scope and conduct of discovery . . . are within the sound discretion of the district court.”).

         III. Analysis

         A. Purportedly Irrelevant Documents

         As a general rule, parties may obtain discovery regarding any non-privileged matter that is relevant to a claim or defense. See Fed. R. Civ. P. 26(b)(1). Relevant information need not be admissible at trial to be discoverable so long as it is proportional to the needs of the case. See Id. CoreLogic refuses to produce the documents listed on its privilege log because it argues the documents are not relevant to Plaintiffs' individual claims under § 1681e(b). ECF No. 54 at 24- 26. Specifically, it states that “an objective standard is used to assess whether a credit reporting agency has in place and followed reasonable procedures to assure that its credit reports achieve maximum possible accuracy.” Id. at 24 (quoting Villaflor v. Equifax Info., No. C-09-00329 MMC, 2010 WL 2891627, at *1 (N.D. Cal. July 22, 2010) (internal quotation marks omitted). Accordingly, the reasonableness of the procedures used by CoreLogic must be assessed by reference to the procedures themselves, which are what define the relevant inquiry, and not any internal commentary on those procedures. CoreLogic also argues that the documents in question relate to changes to its matching procedure implemented both before and after the named Plaintiffs' reports were generated, and thus do not directly relate to the particular consumer reports in question. ECF No. 54 at 22-26.

         The Court disagrees. Plaintiffs have alleged, inter alia, that CoreLogic failed to maintain reasonable procedures in compliance with § 1681(e). “The determination regarding the reasonableness of a credit reporting agency's procedure is normally a question for trial unless the reasonableness or unreasonableness of the procedure is beyond question.” Jones v. Equifax, Inc., No. 3:14CV678, 2015 WL 5092514, at *4 (E.D. Va. Aug. 27, 2015) (quoting Cortez v. Trans Union, LLC, 617 F.3d 688, 709 (3d Cir. 2010) (quoting Sarver v. Experian Info. Solutions, 390 F.3d 969, 971 (7th Cir. 2004))) (internal quotation marks omitted). Internal commentary regarding CoreLogic's knowledge of a matching problem, the steps it took to fix that problem, and the solutions it considered is relevant to whether CoreLogic's chosen procedures were, or are, objectively reasonable. In other words, the objective standard requires courts to evaluate reasonableness by analyzing what a reasonably prudent person would do under the circumstances, and by weighing the burden of further action against the potential harm of creating misleading information. Cain v. Trans Union LLC, No. C04-1779L, 2006 WL 328409, at *3 (W.D. Wash. Feb. 9, 2006) (cited by Villaflor, 2010 WL 2891627, at *1). To apply this standard, the Court is guided by evidence of the circumstances presented to CoreLogic and the decisions it made under those circumstances.

         Additionally, Plaintiffs are required to prove CoreLogic violated the FCRA either negligently under 15 U.S.C. § 1681o or willfully under § 1681n. Willfulness under the FCRA encompasses both knowing and reckless conduct. Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 57-61 (2007). Documents demonstrating the information CoreLogic had at the time it considered alternate procedures to limit the number of consumer report errors, as well as the feasibility of ...

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