Discussion : Part I: Use of Credit Reports under the Fair Credit Reporting Act; Part II: Repossession and Breach of the Peace

Course Content Learning Objective: Demonstrate how the legal environment controls activities between businesses and private citizens; Describe and explain important legal concepts, demonstrate the ability to apply them to new situations and communicate solutions

Chapter 9 Learning Objective: How consumers enter into credit transactions and what protections they are afforded when the do.

Chapter 10 Learning Objective: Priorities for claims on the security interest

Part I:  Read the case study below Rodgers V. McCullough and answer the three questions at the end of the case study. Make certain to clearly indicate your answers to each of the three questions. Be complete in your answers.

Rodgers v. McCullough

296 F.Supp.2d 895 (W.D. Tenn. 2003)

This case concerns the Defendants’ receipt and use of Christine Rodgers’ consumer report. Ms. Rodgers gave birth to a daughter, Meghan, on May 4, 2001. Meghan’s father is Raymond Anthony. Barbara McCullough, an attorney, represented Mr. Anthony in a child custody suit against Ms. Rodgers in which Mr. Anthony sought to obtain custody and child support from Ms. Rodgers. Ms. McCullough received, reviewed, and used Ms. Rodgers’ consumer report in connection with the child custody case.

Ms. McCullough instructed her secretary, to obtain Ms. Rodgers’ consumer report. She reviewed the report in preparation for her examination of Ms. Rodgers during a hearing. She also used the report during the hearing, including attempting to move the document into evidence and possibly handing it to the presiding judge.

The dispute in this case centers around whether Ms. McCullough obtained and used Ms. Rodgers’ consumer report for a purpose permitted under the Fair Credit Reporting Act (the “FCRA”). Plaintiff contends that Ms. McCullough, as well as her law firm, Wilkes, McCullough & Wagner, a partnership, and her partners, Calvin J. McCullough and John C. Wagner, are liable for the unlawful receipt and use of Ms. Rodgers’ consumer report in violation 15 U.S.C. §§ 1681o (negligent failure to comply with the FCRA) and 1681n (willful failure to comply with the FCRA or obtaining a consumer report under false pretenses). Plaintiff has also sued Defendants for the state law tort of unlawful invasion of privacy.

Plaintiff has moved for summary judgment on the questions of whether Defendants failed to comply with the FCRA (i.e. whether Defendants had a permissible purpose to obtain Ms. Rodgers’ credit report), whether Defendants’ alleged failure to comply was willful, and whether Defendants’ actions constituted unlawful invasion of privacy.

The United States Court of Appeals,W.D. Tennessee GRANTED Plaintiff’s motion for partial summary judgment on the question of whether Defendants had a permissible purpose to obtain Ms. Rodger’s credit report. It DENIED Plaintiff’s motion for summary judgment on the question of willfulness under the act. It also DENIED Plaintiff’s motion for summary judgment on the question of whether Ms. McCullough obtained and used Ms. Rodger’s credit report under false pretenses or knowingly without a permissible purpose.

Case Questions

What “permissible purpose” did the defendants contend they had for obtaining the credit report? Why did the court determine that purpose was not permissible?