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Moscato: Civil Procedure II, Final Exam 2012SP
Fact Pattern:
You are the judicial law clerk for the U.S. District Court judge assigned to the case described
below. Your judge has asked your advice on how she should rule on a series of motions raised by
the parties in the lawsuit. Here is the relevant summary of the proceedings:
In December 2008, Plaintiff Paul Packard discovered that fraudulent charges had been made to
one of his credit cards. He alleges that he immediately contacted and filed a statement of identity
theft with the San Francisco Police Department, where he lives. He also contacted
CreditReportCo (“CRC”), the nation’s primary consumer credit reporting agency, to report the
fraud and to request that CRC add a security alert to his file.
Shortly thereafter, Packard discovered that this identity theft problem apparently had resulted in
fraudulent activity on his mobile telephone account with Horizon Wireless. In January, 2009,
Packard contacted Horizon to inform them that two fraudulent accounts had been opened in his
name, and that fraudulent charges appeared on his legitimate account. Although Horizon
terminated the fraudulent accounts the next day, Packard alleges that it refused to credit him for
the fraudulent charges incurred on the legitimate account. After Packard failed to make payments
on those charges for several months, Horizon closed that account and on August 14, 2009, it
reported the unpaid charges to CRC, which negatively impacted Packard’s credit score. Packard
now alleges that Horizon’s false statements to CRC about his unpaid charges were defamatory.
Packard also alleges that after learning that his credit score had been negatively impacted, he
complained to CRC about the derogatory information in his credit report several times over the
next two years, but that CRC failed to conduct the type of investigation required by the federal
Fair Credit Reporting Act (FCRA), which provides in relevant part:
• § 1: Whenever a consumer reporting agency prepares a consumer report, it shall follow
reasonable procedures to ensure maximum possible accuracy of the information
concerning the individual about whom the report relates.
• § 2: If a consumer notifies a consumer reporting agency of a dispute concerning the
completeness or accuracy of information in the consumer’s file, the agency shall, within
30 days of receiving such notice, conduct a reasonable investigation to determine whether
the disputed information is inaccurate, in which case it shall delete the item from the
consumer’s file.
• § 3: A consumer is entitled to a statutory amount of $10,000 (or to actual damages if
greater) for an agency’s violation of its duties under this Act.
CRC concedes that it did not conduct any investigation into Packard’s dispute with Horizon
(indeed, it admitted as much in its Answer to Packard’s Complaint). Instead, as explained more
fully below, CRC asserts as an Affirmative Defense that Packard through his own actions waived
his right to any such investigation.
On April 20, 2011, Packard filed his Complaint in the U.S. District Court for the Northern
District of California (which was assigned to your judge). His complaint asserts a claim against
CRC for violation of the above provisions of the FCRA, seeking the $10,000 statutory penalty.
