The Sixth Circuit Court of Appeals released two opinions of import to financial institutions in late August 2019.
In the first case, Karla Brintley v. Aeroquip Credit Union; Belle River Community Credit Union, Karla Brintley, who is blind, sued the two credit unions under Article III of the Americans with Disabilities Act and Michigan state law for failure to make their respective websites accessible to blind individuals.
Thus far, all of the cases filed against credit union for ADA noncompliance have been dismissed for a lack of standing due to the fact the plaintiffs have all been non-members of each credit union defendant.
The credit unions at the district court level had filed motions to dismiss because, as a non-member, Brintley did not have standing to sue under Title III. The District Court rejected the credit unions’ motions to dismiss the case, but the Sixth Circuit overturned this ruling and dismissed both suits.
Though the decision represented a victory for the credit union industry in the Sixth Circuit Court states of Kentucky, Michigan, Ohio and Tennessee, it was a narrow one and represents a shift in the way these cases have been decided. According to the Court, “...if she had claimed an interest in joining one of the credit unions, she would have been on the same footing as a sighted individual engaged in the same [membership] inquiry. But no, that is not her position. She has not conveyed any intent to join either credit union.” Relying on Griffin v. Dep’t of Labor Fed. Credit Union, 912 F.3d 649, 653 (4th Cir. 2019), without “a connection between the plaintiff and the defendant,” Brintley lacked the requisite standing to sue. Had Brintley merely expressed an interest in becoming a member and taken steps to become eligible for membership, the credit unions would have lost these cases.
Additionally, the concurring opinion is both instructive and concerning regarding the membership issue. The concurring judge wrote separately “to make clear that my concurrence is based only on Brintley’s failure to sufficiently allege that the websites contained information or services that she could use, and not on the proposition that a non-member or non-eligible person is per se unable to challenge the accessibility of a credit union’s website.”
What does this mean? Standing in future ADA-related website lawsuits could be met by membership-eligible non-members who merely allege an interest in joining the credit union. It may be more expensive to keep fighting these cases than it would be to make the credit union websites ADA compliant.
In the second case, Michael L. Scott; Linda A. Larkin v. First Southern National Bank, the plaintiffs sued the bank for, among other things, violating the Fair Credit Reporting Act (FCRA) by willfully and/or negligently failing to fully and timely investigate plaintiffs’ complaints of inaccurate reporting of credit information to credit reporting agencies, as well as tortiously interfering with plaintiff’s business relationships by deliberately reporting false credit information. The District Court granted the bank’s motion for summary judgment, which the Sixth Circuit affirmed.
The plaintiffs had a number of loans with the bank, including a construction loan and a line of credit. The plaintiffs’ credit line with the bank was set to mature while their request to renew itwas pending, so the bank agreed to accept interest-only payments. However, the bank failed to extend the maturity date, and after the plaintiffs failed to make the interest payments for two months, the bank’s computer system generated automated delinquency notices. The plaintiffs obtained financing elsewhere for their construction project, and used some of the proceeds to completely pay off the bank.
Plaintiffs obtained an attorney who submitted a letter to the bank that their credit report continued to show a delinquency even though no money was owed to the bank, and a second letter five months later that the issue was not resolved. The bank submitted an additional correction to the credit reporting agencies, and the plaintiffs filed their lawsuit.
The Sixth Circuit ruled the district court properly dismissed this claim because the plaintiffs never notified a consumer reporting agency regarding their dispute, which is “a prerequisite for prevailing on their FCRA claims.” The bank’s duty to investigate the dispute was never triggered because the furnisher (i.e., the bank) must have received a notice from a credit reporting agency – not the plaintiffs – that the credit information was disputed.
The district court was also ruled to have correctly dismissed the tortious interference claim because it arose from the bank’s reporting incorrect information to the credit reporting agencies, and the FCRA preempts state law that relates to a furnisher’s submission of credit information to these agencies. The Court held the FCRA preempts both state statutory and state common law (i.e., lawsuit) claims.
The moral of this story is important for all financial institutions: Filing successful FCRA claims, as well as successfully getting such lawsuits dismissed, requires in-depth knowledge of the FCRA and how it protects both consumers and furnishers of credit information.
PLEASE NOTE: The information and opinions provided on this blog are not intended to be legal advice. No attorney-client relationship is formed, nor should any such relationship be implied. Nothing on this blog is intended to substitute for the advice of an attorney that is licensed in your jurisdiction. No article may be republished without the express written permission of ESTEE Compliance, LLC. © 2019