Andrews v. TRW Inc.

No. 00-1045 (U.S. Nov. 13, 2001) ; Clearinghouse Number: 53340

Description

Fair Credit Reporting Act Is Not Governed by the General Discovery Rule

Abstract

The Supreme Court held that the Fair Credit Reporting Act, 15 U.S.C. § 1681p, was not governed by the general discovery rule. The Act requires credit reporting agencies to maintain “reasonable procedures” to avoid improper disclosures of consumer credit information. An impostor stole plaintiff’s social security number and other information and attempted to open credit accounts using plaintiff’s name. Defendant credit reporting agency furnished copies of plaintiff’s credit report to the companies from which the impostor sought credit. Over two years later, plaintiff learned of these disclosures when she sought to refinance her home and received a copy of her credit report reflecting the impostor’s activity. Plaintiff alleged that defendant violated the Act by failing to verify, before disclosing her credit report to third parties, that the impostor initiated the credit applications or was otherwise involved in the underlying transactions. Defendant argued that the statute of limitations had expired on two of plaintiff’s claims because the disclosures had been made more than two years before she brought suit. Section 1681p of the Act provides that the limitations period generally runs from the date “liability arises,” subject to a single exception for cases involving a defendant’s willful misrepresentation of material information. The district court held that the two claims were time-barred; section 1681p precluded judicial attribution of a broader discovery rule to the Act. Reversing the district court, the Ninth Circuit applied the “general federal rule” that a statute of limitations began to run, unless Congress expressly legislated otherwise, when a party knew or had reason to know that she had been injured. Reversing the Ninth Circuit, the Court held that the Act explicitly delineated the exceptional case in which discovery triggered the two-year limitation and that plaintiff’s case did not fall within the exceptional category. The Court found that section 1681p’s text and structure evinced Congress’ intent to preclude judicial implication of a discovery rule; converting the exception into the rule would distort section 1681p’s text. Indeed, the Court held, reading a general discovery rule into section 1681p would in practical effect render the express exception superfluous in all but the most unusual circumstances.

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Docket Date
2001-11-13 00:00:00+00:00

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