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Smith v. LexisNexis Screening Solutions, Inc.

United States District Court, E.D. Michigan, Southern Division

December 30, 2014


Page 652

For David Alan Smith, Plaintiff: Geoffrey H. Baskerville, John Soumilas, James A. Francis, Francis & Mailman, P.C., Philadelphia, PA; Ian B. Lyngklip, Lyngklip Assoc Consumer Law Center, PLC, Southfield, MI.

For LexisNexis Screening Solutions, Inc., Defendant: Jason A. Spak, Picadio Sneath Miller & Norton, P.C., Pittsburgh, PA; Jeremy David Lockhart, Nicholas B Gorga, Honigman, Miller, Detroit, MI.

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This is a case brought by Plaintiff David Alan Smith against Defendant LexisNexis Screening Solutions, Inc., pursuant to the Fair Credit Reporting Act (" FCRA" ), 15 U.S.C. § 1681, et seq.

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Plaintiff alleged that Defendant both negligently and willfully failed to comply with FCRA's mandate that consumer reporting agencies (" CRA" ) maintain " reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates." Id. § 1681e(b). The parties proceeded to a jury trial, which resulted in a $375,000 verdict in favor of Plaintiff.

At the close of Plaintiff's proofs, and then again prior to the submission of the case to the jury, counsel for Defendant orally moved for judgment as a matter of law, pursuant to Federal Rule of Civil Procedure 50(a). Defendant argued that Plaintiff had failed to present sufficient evidence that: (i) Defendant negligently failed to follow reasonable procedures; (ii) Defendant willfully failed to follow reasonable procedures; (iii) Defendant's conduct was a proximate cause of Plaintiff's injury; (iv) Plaintiff suffered damages in the form of lost wages; and (v) Plaintiff suffered emotional distress.

The Court took under advisement Defendant's Rule 50(a) motion, and submitted the case to the jury, subject to a later decision on the motion. After deliberating, the jury returned a $375,000 verdict for Plaintiff, finding that Defendant had negligently and willfully failed to follow reasonable procedures. After dismissing the jury, the Court solicited briefing on the parties' arguments regarding Defendant's Rule 50(a) motion. Having reviewed the parties' briefs and the evidence of record, the Court determines that there was sufficient evidence on all claims to submit the case to the jury.[2] Accordingly, the Court denies Defendant's oral Rule 50(a) motion.


Plaintiff David Alan Smith worked delivering alcoholic beverages in the Upper Peninsula for Tasson Distributing (" Tasson" ) for ten years. Tr. Vol. 2B 45:25-46:6, 46:15-46:17 (Dkt. 47). In 2012, Tasson was sold to Great Lakes Wine and Spirits (" GLWS" ). Id. 48:25-49:4. Tasson employees were not automatically rehired by GLWS; each worker had to reapply for a position. Id. 142:14-142:18. Plaintiff applied for a job with GLWS and requested the position of delivery driver, the same position he had held at Tasson. Id. 49:14-49:23, 50:16-50:20.

GLWS emailed Plaintiff an offer of employment for the position of merchandiser, not delivery driver, on December 12, 2012. See Email, Pl. Ex. 4 to Pl. Resp. (Dkt. 41-5); Offer of Employment, Pl. Ex. 5 to Pl. Resp. (Dkt. 41-6). The offer of employment indicated that " [c]ontinued employment, subsequent to this offer, is conditional based upon your satisfactory completion of a . . . criminal history check." Offer of Employment.

Vicki Lynn Strawsine, the human resources director for GLWS, testified that, as part of the standard hiring process at GLWS, prospective employees were required to undergo a background check. Tr. Vol. 2B 143:4-143:10. According to Ms. Strawsine, the background check occurred toward the end of the hiring process,

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after an applicant submitted an application, was interviewed for the position, and received an offer of employment. Id. 143:11-143:20. Plaintiff had authorized Defendant to prepare a background report and provided GLWS with his full name -- including middle name -- date of birth, address, and social security number. Id. 51:11-51:24. GLWS contracted with Defendant to compile the background criminal report and credit check. Id. 150:12-150:17. GLWS provided Defendant with Plaintiff's first name, last name, date of birth, and social security number. Id. 151:2-151:23. However, GLWS did not provide Defendant with Plaintiff's middle name -- a circumstance that turned out to be critical in this case. Id.

The method by which Defendant prepares a criminal background report for a client depends upon the background screening package requested by the client. Tr. Vol. 3 136:20-136:25 (Dkt. 48). For the criminal history check, GLWS requested that Defendant conduct a search for records using Defendant's proprietary national criminal database. Id. 137:1-137:5. Defendant's criminal database is composed in part from " bulk data files" containing raw criminal data that are received from various government agencies. Id. 31:12-32:19. The raw data contains any information regarding the crimes that the agency or other contributing source chooses to make available. Id. 32:20-32:23.

In the course of preparing the criminal background report, Plaintiff's information, i.e. his first name, last name, and date of birth, matched with criminal records received in bulk by Defendant from two Florida agencies. Id. 32:12-32:16, 139:15-139:21; Tr. Vol. 2B 62:8-62:12; see also Bulk Data File, Pl. Ex. 16 to Pl. Resp. (Dkt. 41-17). The criminal records evidenced Florida convictions for fraud committed by an Alabama resident with the name David Oscar Smith. Bulk Data File; see also Tr. Vol. 2B 62:8-62:12. The bulk file reflecting these convictions did not contain social security number information. See Bulk Data File. It is undisputed that these crimes were not committed by Plaintiff David Alan Smith, a Michigan resident.

On December 17, 2012, after returning from vacation, Plaintiff went to GLWS to inquire about his employment status.[3] Tr. Vol. 2B 53:7-53:24. Plaintiff located a member of GLWS management, who told Plaintiff to return home to await a letter informing him of his status. Id. 53:14-53:24. Plaintiff subsequently received a letter attaching the background report and stating that, based on a background investigation, GLWS found it necessary to reject his employment application. Id. 58:5-59:4. Included within the background report were the records of fraud convictions associated with David Oscar Smith. Id. 62:3-62:12; see also Background Report, Pl. Ex. 6 to Pl. Resp. (Dkt. 41-7).

Plaintiff disputed the criminal record on his report with Defendant and faxed Defendant a copy of his driver's license as proof of identification. Tr. Vol. 2B 65:8-66:11. On January 11, 2013, Plaintiff received a letter from Defendant indicating that he had a clean report. Id. 69:6-69:20. After being out of work for approximately six weeks, Plaintiff began working for GLWS on January 31, 2013 as a delivery driver. Id. 70:14-70:22.

This suit followed, with Plaintiff claiming lost wages, non-economic damages, punitive damages, and attorney fees. The jury's verdict included $75,000 in compensatory

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damages and $300,000 in punitive damages. Jury Verdict at 2 (cm/ecf page) (Dkt. 35).


Under Rule 50(a), judgment as a matter of law is appropriate only where " a reasonable jury would not have a legally sufficient evidentiary basis to find for the [non-moving] party on that issue." Fed.R.Civ.P. 50(a)(1). The Sixth Circuit has explained how a court should address such motions:

The evidence should not be weighed, and the credibility of the witnesses should not be questioned. The judgment of this court should not be substituted for that of the jury; instead, the evidence should be viewed in the light most favorable to the party against whom the motion is made, and that party given the benefit of all reasonable inferences.

Parker v. Gen. Extrusions, Inc., 491 F.3d 596, 602 (6th Cir. 2007) (quoting Tisdale v. Fed. Express Corp., 415 F.3d 516, 531 (6th Cir. 2005)) (internal quotation marks omitted). Ultimately, the Court must find that " reasonable minds could come to but one conclusion, in favor of the moving party." Gray v. Toshiba Am. Consumer Prods., 263 F.3d 595, 598 (6th Cir. 2001).

For the reasons that follow, the Court concludes that the record contains legally sufficient evidence for a reasonable jury to find for Plaintiff on each of the grounds cited by Defendant in its Rule 50(a) motion.

A. Negligence

1. Standard

FCRA was enacted " to ensure fair and accurate credit reporting, promote efficiency in the banking system, and protect consumer privacy." Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 52, 127 S.Ct. 2201, 167 L.Ed.2d 1045 (2007). Courts read its provisions in harmony with the Congressional intent to create effective remedies for the dissemination of inaccurate consumer information. Cortez v. Trans Union, LLC, 617 F.3d 688, 721-722 (3d Cir. 2010) (" [T]he breadth and scope of the FCRA is both evident and extraordinary. . . . [I]t is undeniably a remedial statute that must be read in a liberal manner in order to effectuate the congressional intent underlying it." ).

FCRA creates a private cause of action when CRAs fail to " follow reasonable procedures to assure maximum possible accuracy" in preparing a consumer report. 15 U.S.C. § 1681e(b). The inclusion of erroneous information on a consumer's report does not automatically trigger liability; instead, " [l]iability flows only from a 'failure to follow (1) reasonable procedures (2) to assure maximum possible accuracy of the information (3) concerning the individual about whom the information relates.'" Nelski v. Trans Union, LLC, 86 F.App'x 840, 844 (6th Cir. 2004) (quoting Bryant v. TRW, Inc., 689 F.2d 72, 78 (6th Cir. 1982)).

To succeed on his claim, Plaintiff was required to show that " (1) the defendant reported inaccurate information about the plaintiff; (2) the defendant either negligently or willfully failed to follow reasonable procedures to assure maximum possible accuracy of the information about the plaintiff; (3) the plaintiff was injured; and (4) the defendant's conduct was the proximate cause of the plaintiff's injury." Id. " Reasonableness" is defined in " reference to what a reasonably prudent person would do under the circumstances." Id. In demonstrating that Defendant behaved unreasonably, Plaintiff " need not point to specific deficiencies in an agency's practices or procedures." Id. at 845.

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2. The evidence at trial

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