United States District Court, W.D. Kentucky, Paducah Division
THOMAS B. RUSSELL, Senior District Judge.
This matter comes before the Court upon competing Motions for Summary Judgment. Defendants Scott Lowery Law Office, P.C. (Lowery) and CACH, LLC (CACH) (collectively "Defendants") filed the first, (Docket No. 10), to which Plaintiff Michael Bowling responded, (Docket No. 11). Bowling then filed his own Motion for Summary Judgment. (Docket No. 13.) Lowery and CACH responded, (Docket No. 16), and Bowling replied, (Docket No. 17).
Fully briefed, this matter is ripe for adjudication. For the reasons explained below, the Court will GRANT Defendants' Motion, (Docket No. 10), and DENY Bowling's Motion, (Docket No. 13).
This Fair Credit Reporting Act (FCRA) lawsuit arises from Bowling's revolving credit account, originally held with U.S. Bank, N.A. (U.S. Bank). Bowling alleges that he applied for the credit account on behalf of Design Turf Technologies, Inc., a company that he owned and operated. (Docket No. 12 at 3; see Docket No. 10-3 at 1.) He served as an authorized signatory on the account and used it only for business purposes. (Docket No. 12-1.)
After Bowling defaulted on the account, U.S. Bank sold and assigned Bowling's account to CACH on July 18, 2012. (Docket No. 10-3 at 1.) On April 1, 2013, CACH assigned the account to Lowery for professional collection services. On April 1, 2013, Bowling learned that Lowery, acting on CACH's behalf, issued a "hard inquiry" into his credit history. A hard inquiry is essentially a credit check: a full credit inquiry conducted when an individual applies for a loan or line of credit. Each hard inquiry can result in a credit score's reduction by up to five points. See Harkins v. Diversified Collection Servs., Inc., 2012 WL 5928997, at *1 n.1 (D. Md. Nov. 26, 2012). ( See Docket No. 12-2.)
Bowling explains that hard inquiries are permitted only in connection with an application for either credit or insurance. Bowling claims that Defendants performed this unauthorized hard inquiry without a permissible purpose under the FCRA. According to Bowling, Defendants' hard inquiry remained on his credit report and was viewable to third-party users who requested a copy of it, ultimately reducing his credit score. (Docket No. 1 at 2-3.)
Summary judgment is appropriate where the pleadings, the discovery and disclosure materials on file, and any affidavits show "that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). In determining whether summary judgment is appropriate, a court must resolve all ambiguities and draw all reasonable inferences against the moving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
"[N]ot every issue of fact or conflicting inference presents a genuine issue of material fact." Street v. J.C. Bradford & Co., 886 F.2d 1472, 1477 (6th Cir. 1989). The test is whether the party bearing the burden of proof has presented a jury question as to each element in the case. Hartsel v. Keys, 87 F.3d 795, 799 (6th Cir. 1996). The plaintiff must present more than a mere scintilla of evidence in support of his position; he must present evidence on which the trier of fact could reasonably find for him. See id. (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986)). Mere speculation will not suffice to defeat a motion for summary judgment: "[T]he mere existence of a colorable factual dispute will not defeat a properly supported motion for summary judgment. A genuine dispute between the parties on an issue of material fact must exist to render summary judgment inappropriate." Monette v. Elec. Data Sys. Corp., 90 F.3d 1173, 1177 (6th Cir. 1996), abrogated on other grounds by Lewis v. Humboldt Acquisition Corp., 681 F.3d 312 (6th Cir. 2012).
Congress enacted the FCRA, 15 U.S.C. § 1681 et seq., in an effort to protect consumers from erroneous or arbitrary credit reporting. Among other safeguards, the law regulates the permissible uses of "consumer reports, " which summarize an individual's credit history and creditworthiness. The FCRA delineates the exclusive circumstances under which a credit reporting agency may furnish a credit report. Section 1581b(a)(3), in relevant part, explains that a consumer credit report is furnished for a "permissible purpose" when the party requesting the report "intends to use the information in connection with a credit transaction involving the consumer on whom the information is to be furnished and involving the extension of credit to, or review or collection of an account of, the consumer." 15 U.S.C. § 1681b(a)(3)(A).
Courts have held that a plaintiff must establish three elements to sustain a claim of improper use or acquisition of a credit report: that there was a "consumer report" within the meaning of the statute, that the defendant used or obtained it, and that the defendant did so without a permissible statutory purpose. McFarland v. Bob Saks Toyota, Inc., 466 F.Supp.2d 855, 867 (E.D. Mich. 2006) (citing Phillips v. Grendal, 312 F.3d 357, 364 (8th Cir. 2002); Gillom v. Ralph Thayer Auto. Livonia, Inc., 444 F.Supp.2d 763, 771 (E.D. Mich. 2006)). Section 1681b(a)(3)(A) authorizes consumer reporting agencies to furnish a consumer report to those that it has reason to believe "intend to use the information in connection with a credit transaction involving the consumer on whom the information is to be furnished and involving the extension of credit to, or review or collection of an account of, the consumer." The statute makes no distinction between hard and soft inquiries; either is permissible if made for an appropriate purpose.
At the heart of the dispute is the proper characterization of Bowling's debt. Crucial to Bowling's argument is the definition of "consumer report" ...