Holman v. Experian: Federal Court Certifies FCRA Class

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Judge Claudia Wilken, of California’s Northern District, has certified a class of consumers alleging that Experian, one of the leading credit-reporting agencies, improperly disclosed their credit reports to third parties.  See Holman v. Experian, Inc., No. 11-cv-00180 (N.D. Cal. Apr. 27, 2012) (Order Granting Plaintiffs Motion for Class Certification) (available here).  The plaintiffs contend that Experian disclosed class members’ credit reports to Finex Group, LLC (“Finex”), in violation of the Fair Credit Reporting Act (FCRA).  See Order at 1.  Plaintiffs’ claims arose from disparate experiences in which their cars were towed.  Finex, a company specializing in the collection of towing-related obligations, was then contracted to collect the resulting debts, and Experian provided Finex with the plaintiffs’ credit reports, allegedly without ascertaining whether Finex had a permissible purpose.  See id. at 2-3.

Experian attacked plaintiffs’ certification motion on several fronts, first arguing that the class definition, encompassing all consumers whose reports were provided to Finex, was overly broad, since some of those records would necessarily have been furnished in compliance with FCRA.  Id. at 15-16.  Although Judge Wilken agreed that the proposed class definition was overbroad, rather than denying certification on that ground, she followed the abundant precedent holding that modifications to class definitions are within a district court’s permissible discretion in ruling on a class certification motion, and modified the class definition accordingly.  See id. at 17-18.

Experian also argued that plaintiffs’ counsel should not be appointed counsel for the class, since they invaded class members’ privacy by not seeking the court’s intervention and authority before obtaining the class list from Finex (the records custodian).  The court rejected this argument, with reference to Pioneer Electronics, Inc. v. Super. Ct., 40 Cal. 4th 360 (2007), a leading California case concerning prospective class member contact information.  Order at 34-35.  Judge Wilken made it clear that Pioneer Electronics does not require plaintiffs’ counsel to affirmatively ask the court’s permission to receive the class records, since Finex provided the information voluntarily and without objection.  She went on to note, “Experian provides no case law that supports the proposition that a recipient of confidential information can be held liable for the supplier’s improper disclosure.”  Order at 35.

The numerosity, typicality, adequacy and superiority requirements were fairly easily satisfied by plaintiffs.  Id. at 24-32.  As to commonality, Experian offered the relatively weak argument that, having issued a sequence of several different directives during the class period, the inquiry into the reasonableness of its FCRA compliance procedures would be fragmented according to those different directives.  Id. at 19.  Thus, no determination could be made as to the class period as a whole.  Id.  However, during oral argument, Experian’s counsel conceded that this impediment could be overcome by dividing the class into subclasses according to time period.  Id.  As such, Judge Wilken found that the plaintiffs satisfied the commonality element, and the class was certified.  Id. at 24, 35.  The action now moves to the merits phase.