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Attorneys have obtained credit reports on opposing parties, witnesses, or jurors, prior to, or during, litigation.441 Some of the purposes were to challenge the credibility of the opposing party or counsel, to see whether suing the opposing party would be worthwhile, and to ascertain his or her ability to pay a judgment,442 or to locate a witness or juror.443

In addition to the preceding permissible purposes, court decisions reveal some purposes that are permissible even though not explicit in the FCRA. For example, a company may issue a report if needed in connection with litigation that involves debt collection.444 A company also may issue a report so that a party to the litigation can verify that negative information was removed from the report, as part of a settlement agreement.445 Courts also allow an attorney to obtain a credit report on a prospective client, and the attorney will represent the client in personal, family or household matters.446

If attorneys improperly obtain a credit report or misuse one, they may be liable for actual damages, statutory damages, punitive damages and reasonable attorney fees. The FCRA provides for such remedies in noncompliance cases.447 To establish non-compliance by an attorney, a plaintiff must plead and prove that: the attorney violated the FCRA knowingly and willfully, the attorney’s purpose for obtaining the report was impermissible, and the attorney failed to disclose to the CRA his or her actual purpose.448

An attorney may be sued for allegedly using a credit report in a way that violates the FCRA. Assuming the report is within the definition of the FCRA, the attorney risks liability if he does not use the credit report in accordance with the act. The FCRA does not provide a definition of “use”. Consequently, courts differ in defining the meaning of “use”. One approach by the courts says obtaining the credit report does not constitute a “use”,449 while another approach is retaining or obtaining the credit report is considered as a “use”.450 Another approach observes that the plain language of the FCRA maintains a distinction between “obtaining” and “using.” Thus, the courts take the position that “using” is different from merely obtaining.451 One commentator suggests that in accordance with the statutory objectives protecting consumer privacy, the language may be construed to mean “publicity” under the state common law invasion of privacy. Thus, using the credit report by an attorney within the litigation is permissible so long as the attorney does not disclose the credit information to persons outside the lawsuit. 452

Attorneys may defend their use of a credit report by saying it served professional or commercial purposes and therefore is outside the scope of the FCRA. Courts respond differently to such a defense and an attorney may be in risk in some jurisdictions. Another

441

T. Leigh Anenson, Attorney Liability Under The Fair Credit Reporting Act: The Limits of Zealous

Representation, 23 Ann. Rev. Banking & Fin. L. 431, 441 (2004).

442

L. Bryan Burns, Bakker v. McKinnon: Attorney Faces Punitive Damages for Obtaining Credit Reports on

Adverse Litigant, 53 Ark. L. Rev. 73, 81 (2000).

443 _{Matthew S. Criscimagna, Attorneys Beware: Obtaining Credit Reports On Opposing Party May Lead to}

Punitive Damages: Bakker v. McKinnon, 64 Mo. L. Rev. 1037, 1049 (1999).

444

Anenson, supra note 441, at 438; Criscimagna, supra note 443, at 1049. 445

Id. at 439.

446

Criscimagna, supra note 443, at 1049. 447 _{15 U.S.C. § 1681n; 15 U.S.C. § 1681o.} 448

Anenson, supra note 441, at 436. 449 Id. at 443. 450 Id. at 444. 451 Id. 452 Id. at 446.

defense is the use of a credit report as a legitimate business need as the FCRA allows. Courts take one of three approaches to such a defense. First, some courts limit the business need to a need related to the transactions enumerated. Thus, “legitimate business need” means any need related to the permissible purposes in the FCRA. Another approach extends the applicability of “legitimate business need” to similar transactions to those enumerated as long as they constitute legitimate business needs.453 The latter approach reasons that such liberal construction supports Congress’s intent not limiting the transactional scope of the FCRA. 454 Alternatively, the third approach opens the door to transactions widely and includes any type of transaction with a legitimate business need. This approach contradicts the plain language of the FCRA which provides limitations.455

As to what constitutes “use” under the FCRA, there are different approaches. One approach considers the ultimate use of the credit report. Accordingly, if the report is used ultimately for professional or commercial purposes, then it is not a credit report as defined in the FCRA and should be outside of the scope of the FCRA.456 This approach has been criticized because of its contradiction to the plain language of the FCRA. Ignoring the purpose of collecting this information leads to the exclusion of reports Congress intended to cover.457 Under this approach, a CRA can disseminate information for non-statutory purposes even though such information was collected for statutory purposes though disseminating information for non-statutory purposes is prohibited under FCRA. This approach leads to inconsistency within the FCRA sections. 458

Alternatively, another approach considers the purpose of collecting credit information at the time of collection. Consequently, if the information at the time of collection is meant to be used for FCRA purposes, then it does not matter that the ultimate use is not one of the FCRA’s listed purposes.459 Under the latter approach, reaching a different conclusion and allowing users of credit reports to escape liability based on the ultimate use would frustrate the objectives of the FCRA. One court reasoned “because of the circular definition of ‘consumer report’ section 1681b’s limitations on dissemination of consumer reports are essentially rendered meaningless if the … determination of whether a report is a consumer report is made solely by looking at the reason for which the report is requested.”460 Another court reasoned that the FCRA could not be applied only to activities of a CRA when the consumer applies for credit, insurance, or employment. Otherwise, the CRA would be free to continue the very practice the act was designed to prohibit. 461

One commentator asserts that approaches, original collection purpose approach and ultimate use approach, apply, yet to different defendants. If the defendant is the CRA, the original collection purpose should apply to cover a wide variety of reports and to restrict dissemination of information. Moreover, original collection purpose should apply if the defendant is the user of the information and knows or should have known of the original collection purpose.462 If the defendant is the user of information who has no knowledge of

453 _{Griffith, supra note 354, at 57, Mary A. Bernard, Houghton v. New Jersey Manfacturers Insurance Co. : A}

Narrow Interpretation Of The Scope Provisions Of The Fair Credit Reporting Act Threatens Consumer Protection, 71 Minn. L. Rev. 1319, 1360 (1987).

454

Bernard, supra note 453, at 1360. 455

Id.

456 _{Anenson, supra note 441, at 448; Burns, supra note 442, at 78; Bernard, supra note 453, at 1335.} 457

Bernard, supra note 453, at 1345. 458

Id. at 1346. 459

Griffith, supra note 354, at 50. 460

Anenson, supra note 441, at 450 461

Id. at 450, Criscimagna, supra note 443, at 1046; Griffith, supra note 354, at 50.

462

the original collection purpose, then actual use should apply, as it is not fair to hold him liable for the motives of the CRA.463

The safe harbor for the attorney is to investigate the opposing parties, witnesses, or jurors without requesting a credit report,464 to disclose the impermissible purpose to the CRA,465 to request the credit report during the discovery stage,466 or to find a source of evidence other than a credit report.467

The other element of establishing the case is to prove that the attorney has violated the FCRA knowingly and willfully. Knowledge of the violation is essential. However, willfulness means something more than knowledge. Courts have taken different approaches in defining what constitute “willfulness”. One approach is to say that willfulness includes knowledge of the violation and motivation to harm the consumer.468 Alternatively, willfulness has been viewed as intentional conscious disregard of the rights of another. Under this approach, malice is not required to prove willfulness.469 The willfulness requirement was found to be satisfied in one case when a defendant requested the report from the CRA and certified false or incomplete reasons for requesting the credit report.470 The willfulness element is also debated, however, after the U.S. Supreme Court decision in Safeco Insurance Co. Of America v. Burr the definition is no longer disputed.

After proving the violation and willfulness, the consumer must prove a causal link between the violation and the damages.471 One easy way to prove these damages is intentional infliction of emotional distress. Unlike a state common law claim, intentional infliction of emotional distress can be proven easily as no expert testimony is required. Plaintiff’s testimony is sufficient. Attorney risk has increased as courts have ruled that actual damages are not a prerequisite to collect punitive damages.472 It is worth mentioning that injunctive relief is not available for consumers under FCRA. 473

One analyst of the FCRA concludes that the scope of punitive damages in the act is unsurpassed. Unlike similar acts, the FCRA does not impose a cap on damages nor provide guidance, standards or factors for determining the basis of imposition of punitive damages. For example, the FDCPA474 does not provide explicitly for punitive damages but rather uses ‘additional damages’ which are not to exceed $1000. The FDCPA spells out factors to be considered in awarding ‘additional damages’ such as intent, frequency of violation, nature of the violation, or number of affected people.475Another example is the ECOA. The ECOA provides for punitive damages explicitly, and factors to be considered such as actual damages, persistence of failure to comply, resources of the creditors, number of people affected, and the intention of the creditor. Moreover, the punitive damages under the ECOA cannot be greater than $10,000. 476

463

Id. at 1355. 464

Anenson, supra note 441, at 452. 465_{Id. at 441.} 466 Id. 467 Id. 468 Id. at 452. 469

Burns, supra note 442, at 82. 470 _{Anenson, supra note 441, at 453.} 471

Id. at 456; Worsley, supra note 359, at 70.

472

Anenson, supra note 441, at 458, Burns, supra note 442, at 83. 473

Worsley, supra note 359, at 72. 474

Fair Debt Collection Practices Act (FDCPA). 15 U.S.C. §1692 475 _{Worsley, supra note 359, at 88.}

Attorneys cannot avoid liability by simply directing another person to obtain the credit report.477 Courts have held that attorneys may be held liable on one of two bases: agency principles, or construction of the FCRA itself. The first approach determines the liability based on the agency principles of, apparent,478 express or implied authority, or respondeat superior.479 The policy behind such a decision is to prevent any delegation of authority to another person to avoid liability.480 Other courts relied on legislative text, structure, and purposes of the FCRA to hold the attorney liable. They contemplated the spirit of the FCRA trying to find causes of action within the act, rather than importing causes of action from state laws or any other legal theories not mentioned explicitly in the FCRA.481

Even after a consumer meets his burden of proof, the attorney may have defenses. Commentators state three defenses that may help the attorney. The first defense is the statute of limitations. The FCRA provides that action shall be brought “not later than the earlier of (1) 2 years after the date of discovery by the plaintiff of the violation that is the basis for such liability; or (2) 5 years after the date on which the violation that is the basis for such liability occurs”.482 Courts differ as to when the time for the statute of limitations begins to run. One approach is to find that the statute of limitations runs from the issuance of the credit report that related to the violation. Another approach is to find that the statute of limitations runs from the existence of damages, as the damages are the basis of the liability. The third approach is that the statute of limitations runs from the day of the attorney’s negligent or willful failure to comply with the FCRA.483 One court held the statute of limitations runs from the date of the consumer’s knowledge of the violation.484

As a second defense, an attorney may plead absolute immunity under state common law. The attorney must prove obtaining the credit report had a reasonable relation to the litigation.485 For federal law, absolute immunity is granted to the attorney who represents the government if the representation is related to a judicial or quasi-judicial proceeding.486

For the third defense, qualified immunity may be granted if the attorney obtained a credit report in the course of representing his client in good faith and without malice.487 For federal law, the same immunity is granted to public attorneys unless the attorney knows or ought to know he is violating a person’s clearly established statutory or constitutional rights.. For instance, if the public attorney is acting with malice, he is likely to have violated statutory rights, which the public attorney knows or ought to know. 488

One possible obstacle to the assertion of immunity defenses is preemption. The FCRA declares that it preempts inconsistent state law. As a result, some courts hold that there is an inherent inconsistency with the FCRA as immunity frustrates the FCRA’s objectives and prevents consumers from enjoying the rights granted to them.489 On the other hand, one commentator suggests that the FCRA preempts state common law claims but not state common law defenses that may be pleaded if not inconsistent with the FCRA. He concluded

477

Anenson, supra note 441, at 458; Griffith, supra note 354, at 81. 478 _{Worsley, supra note 359, at 75.}

479 _{Anenson, supra note 441, at 441.} 480 Id. at 459. 481 Id. at 462. 482 15 U.S.C. § 1681p.

483 _{Anenson, supra note 441, at 464-66.} 484

Worsley, supra note 359, at 70. 485

Anenson, supra note 441, at 466. 486 Id. at 470. 487 Id. at 475. 488 Id. at 476. 489 Id. at 478.

that if the court is more likely to consider the policy and standards of immunities to be consistent with the FCRA, immunities will be granted even if there is a violation of the FCRA. However, if the court is more likely to consider claims against attorneys on a case- by-case basis, courts will grant the immunity if there is no violation, and reject it if there is a violation.490

All the articles reviewed show that attorneys are at risk for all types of damages in FCRA violations. Even though there are some defenses, attorneys must be cautious and consider that courts are unpredictable in imposing liability. Such risks may not substantially affect the performance of attorneys, and the articles reviewed indicate there are several ways to achieve their goals and avoid liability other than obtaining credit report.491