Margaret Morrison; Charles Park; Mordechai Rabinowitz; Freda D. Hogue v. Bank of America Corporation, a/k/a Banc of America, d/b/a Bank of America Auto

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
 EARLE E. AUSHERMAN; STEPHANIE
BALL; WILLIAM CLOSE; RICARDO
COLON; FRANK COLLINS; KIRK
DECOSMO; JOHN ELDER; ANNA
HAMILTON; PAUL SIMONS; ARLEN
SLOBODOW; GUY THOMAS; LUDMILLA
WERBOS; PAUL WERBOS; RONNIE C.
HOGUE; SHAUNA HUNTER; RICHARD L.
LAMMONDS; BENJAMIN SALAZAR;
SHERWOOD SCHWARZ,
Plaintiffs-Appellants,
and
RHODA BROWN; PAMELA SCHWERDT;
DEBORAH STEELMAN; LESLIE JONES;
NEIL KRAMER; KENT LINDUFF; No. 03-1375 MARGARET MORRISON; CHARLES
PARK; MORDECHAI RABINOWITZ;
FREDA D. HOGUE,
Plaintiffs,
v.
BANK OF AMERICA CORPORATION,
a/k/a Banc of America, d/b/a Bank
of America Auto; JOHN DOE, I, a
currently unidentified employee of
defendant Bank of America; JOE
DOE, II, a currently unidentified co-
conspirator of defendant John Doe
Number 1; BANC OF AMERICA AUTO
FINANCE CORPORATION,
Defendants-Appellees. 

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Appeal from the United States District Court
for the District of Maryland, at Baltimore.
Marvin J. Garbis, Senior District Judge.
(CA-01-438-MJG)
Argued: October 28, 2003
Decided: December 19, 2003
Before MOTZ, TRAXLER, and KING, Circuit Judges.
Affirmed by published opinion. Judge Motz wrote the opinion, in
which Judge Traxler and Judge King joined.
COUNSEL
ARGUED: Rodney Ray Sweetland, III, Washington, D.C., for
Appellants. Ava Elaine Lias-Booker, Jennifer Brune Speargas, SAUL
EWING, L.L.P., Baltimore, Maryland, for Appellees. ON BRIEF:
David E. Ralph, SAUL EWING, L.L.P., Baltimore, Maryland, for
Appellees.
OPINION
DIANA GRIBBON MOTZ, Circuit Judge:
Earle E. Ausherman and other individual consumers ("Plaintiffs")
brought this action, alleging that Banc of America Auto Finance Cor-
poration ("BAAF"), willfully or negligently violated the Fair Credit
Reporting Act, 15 U.S.C. § 1681 et seq. (2000) (the "Act" or
"FCRA"), and the analogous Maryland Consumer Credit Reporting
Agencies Act, Md. Code Ann., Com. Law § 14-1201 et seq. (2000).
Because Plaintiffs presented no evidence that BAAF acted willfully
or negligently, we affirm the district court’s grant of summary judg-
ment to BAAF.
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I.
Plaintiffs are a number of unrelated individuals, whose credit
reports between November 1999 and July 2000 list "Banc of America
Auto" among the "companies [that] have received" their reports. None
of the Plaintiffs had a relationship with BAAF during this time frame
that would have justified or explained a BAAF credit inquiry.
BAAF itself is not a consumer reporting agency. Rather, BAAF is
a customer-subscriber of a consumer reporting agency, Trans Union
Corporation, which issued the credit reports in question in this case.
Trans Union assigns code numbers and passwords to its subscribers,
who use them to access Trans Union’s consumer credit report data
base. During the relevant time period, one of the codes that Trans
Union assigned to BAAF was Code 1702F0000292 ("the Code").
Trans Union bills its customers by subscriber code, and invoices gen-
erated by Trans Union between November 1999 and July 2000 show
that Trans Union billed the Code to BAAF for accessing Plaintiffs’
credit reports.
BAAF maintains that it did not authorize the acquisition of Plain-
tiffs’ credit reports. It asserts that Trans Union initially issued the
Code to Oxford Resources Corporation of Melville, N.Y., a company
that merged into BAAF in 1998. E-mail correspondence among
BAAF employees in the Spring of 1999 shows that some employees
questioned the Code’s continued validity and suggested its deactiva-
tion, but an employee from BAAF’s Melville office responded that
her office still needed to use the Code until that office switched to a
new integrated system.
According to BAAF, its Melville office moved from the old
Oxford credit review system to the new integrated BAAF system
"some time in September 1999." The new system employed different
subscriber codes for each of the credit reporting agencies (including
Trans Union) and use of the Code was supposed to be discontinued
after an "allowance of a period of time for existing applications to
complete the underwriting process in the old system." Nonetheless,
additional e-mail correspondence reveals that BAAF employees dis-
covered in May 2000 that Trans Union had been and was continuing
to generate invoices in connection with the Code. After confirming
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that no legitimate use of the Code existed, BAAF instructed Trans
Union to deactivate the Code in July 2000.
Seven months later, in February 2001, Plaintiffs filed this action
against BAAF, seeking compensatory damages for "dissemination of
personal financial information; invasion of privacy; and impairment
of their ability to obtain credit," as well as punitive damages, costs,
and legal fees.1 Plaintiffs allege that because BAAF or one of its
employees "knowingly[,] willfully and intentionally" obtained Plain-
tiffs’ consumer reports without an authorized purpose, BAAF is liable
to them for actual and punitive damages under 15 U.S.C. § 1681n and
Md. Code Ann., Com. Law § 14-1213(a). Alternatively, Plaintiffs
allege that BAAF negligently breached a duty owed to them to imple-
ment and maintain procedures to prevent violations of the Act and
hence is liable for actual damages under 15 U.S.C. § 1681o and Md.
Code Ann., Com. Law § 14-1213(b).
After Plaintiffs filed suit, BAAF conducted a variety of tests,
including a forensic examination, all of which purportedly indicate
that the Code was not used on the new system or on the computers
in the Melville office. One of BAAF’s experts opined that, based on
his review of 277 hard drives in the Melville office, a forensic exami-
nation conducted by BAAF on these computers "would have to a rea-
sonable degree of certainty identified instances" of uses of the Code
on the target computers. BAAF also presented the affidavit of Trans
Union’s vice-president, stating that Trans Union did not know if
BAAF actually accessed or obtained the credit information for which
it was invoiced. Extensive discovery by Plaintiffs failed to yield any
information as to who actually used the Code to obtain the credit
reports or how the reports were obtained.
1Plaintiffs also sued Bank of America Corporation, even though Bank
of America’s name appears nowhere on Plaintiffs’ credit reports. Plain-
tiffs asserted that Bank of America was liable to them as BAAF’s corpo-
rate parent. Bank of America, however, offered sworn evidence that
BAAF is a wholly separate corporate entity from Bank of America and
Plaintiffs proffered no contrary evidence. For this reason, we affirm the
district court’s grant of summary judgment to Bank of America on all
claims asserted against it.
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The district court granted BAAF summary judgment and Plaintiffs
now appeal.2 We review the district court’s award of summary judg-
ment de novo, recognizing that a court should grant summary judg-
ment only if, taking the facts in the best light for the nonmoving
party, no material facts are disputed and the moving party is entitled
to judgment as a matter of law. See, e.g., Jakubiak v. Perry, 101 F.3d
23, 26 (4th Cir. 1996).
II.
The Fair Credit Reporting Act imposes civil liability on any "per-
son" (which includes any corporation or other entity, 15 U.S.C.
§ 1681a(b)) who willfully, § 1681n, or negligently, § 1681o, fails to
"comply with any requirement imposed" under the Act. See 15 U.S.C.
§§ 1681n, o. The Maryland Credit Reporting Agencies Act contains
virtually identical provisions. See Md. Code Ann., Com. Law §§ 14-
213(a), (b). Because relief under the state statute precisely parallels
that under FCRA, for ease of reference, we refer within only to the
FCRA.
2During the frequently contentious discovery in this case, Plaintiffs
learned that Bank of America, F.S.B. holds a mortgage on the principal
residence of the magistrate judge handling discovery matters. Plaintiffs
then moved to recuse the magistrate judge on this basis, asserting that 28
U.S.C. § 455(a)(2000) required his recusal. The district court affirmed
the magistrate judge’s denial of the recusal motion, and Plaintiffs also
appeal that order. Section 455(a) requires recusal when "the judge’s
impartiality might be questioned by a reasonable, well-informed observer
who assesses all the facts and circumstances." United States v. DeTem-
ple, 162 F.3d 279, 286 (4th Cir. 1998) (internal quotation marks and cita-
tion omitted). As the magistrate judge concluded, "a reasonable, well-
informed observer" could not legitimately question the judge’s impartial-
ity in the present case. Indeed, even if the mortgagee, Bank of America,
F.S.B., was a proper party, but see supra at 4 n.1, the litigation could in
no way affect a routine debt like a mortgage, which is fully secured by
appraised value in excess of the debt. Because the motion to recuse was
therefore completely without merit, we affirm its denial.
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A.
Plaintiffs principally assert that BAAF is liable under § 1681n,
which provides "any consumer" a cause of action against "[a]ny per-
son who willfully fails to comply with any requirement imposed
under this subchapter." 15 U.S.C. § 1681n(a). Plaintiffs maintain that
BAAF willfully failed to comply with the FCRA "requirement" that
"[a] person . . . not use or obtain a consumer report for any purpose"
not authorized under the Act. 15 U.S.C. § 1681b(f).3
To prove willfulness under the Act, Plaintiffs must "show that the
defendant knowingly and intentionally committed an act in conscious
disregard for the rights of the consumer." Dalton v. Capital Associ-
ated Indus., Inc., 257 F.3d 409, 418 (4th Cir. 2001) (internal quotation
marks and citation omitted). Plaintiffs maintain that the e-mail corre-
spondence among BAAF employees evidences such a knowing or
intentional FCRA violation. Brief of Appellants at 18. However,
examination of these e-mails reveals only that BAAF employees in
May 2000 had "no idea why or who" was still using the Code (or
whether it was still being used "for valid business") and suggested
deactivation of the Code immediately upon learning of a possible
impermissible use. These e-mails do not show that anyone at BAAF
"knowingly and intentionally" obtained Plaintiffs’ credit reports "in
conscious disregard for the rights of the consumer." Dalton, 257 F.3d
at 418. Accordingly, as the district court held, the Plaintiffs have
3In the district court, Plaintiffs brought their § 1681n claim in conjunc-
tion with the FCRA criminal provision, § 1681q, which we and other
courts, prior to 1997, used to impose civil liability for using and obtain-
ing a credit report without a permissible purpose. See Yohay v. City of
Alexandria Employees Credit Union, Inc., 827 F.2d 967, 971-72 (4th Cir.
1987). In 1997, however, Congress added § 1681b(f), rendering the use
of § 1681q to impose civil liability for improperly using and obtaining
credit reports largely unnecessary. Consumer Credit Reporting Reform
Act of 1996, Pub. L. No. 104-208, 110 Stat. 3009-426, -433 (Sept. 30,
1996). Plaintiffs note the addition of § 1681b(f) on appeal, Brief of
Appellants at 15 n.4, and we analyze Plaintiffs’ § 1681n claim within ref-
erencing § 1681b(f), rather than § 1681q. We note, however, that an
analysis under § 1681q would yield an identical result.
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failed "to produce any evidence whatsoever of knowing, intentional,
or willful" FCRA violations by either BAAF or any of its employees.4
B.
Alternatively, Plaintiffs contend that BAAF is liable under § 1681o
for negligently failing to implement and maintain procedures to pre-
vent violations of the Act. Section 1681o provides a cause of action
to "any consumer" against "[a]ny person who is negligent in failing
to comply with any requirement imposed under this subchapter."
Thus § 1681o, like § 1681n, merely provides a consumer with a rem-
edy for violations of a "requirement" of the FCRA; it does not itself
set forth any "requirement." A consumer can use the remedy provided
in § 1681o only to enforce a requirement mandated elsewhere in the
FCRA.
Before the district court, Plaintiffs apparently recognized the limits
of § 1681o and based their § 1681o negligence claim on a require-
ment found in § 1681e — to maintain reasonable procedures that limit
the furnishing of consumer credit reports for permissible purposes.
However, § 1681e imposes no requirements on users or subscribers
of credit reports like BAAF. Rather, § 1681e only imposes require-
ments on consumer reporting agencies. See 15 U.S.C. § 1681e
(requiring "[e]very consumer reporting agency" to "maintain reason-
able procedures . . . to limit the furnishing of consumer reports" to
permissible purposes (emphasis added)). On appeal, Plaintiffs do not
contend that the district court erred in finding that BAAF is not a con-
sumer reporting agency, nor do they argue that § 1681e provides them
with a basis for recovery on their § 1681o negligence claim.
Plaintiffs do, however, continue to advance, albeit very summarily,
their claim that BAAF violated § 1681o by acting negligently. Tell-
4The same lack of evidence as to willfulness defeats the claim, alleged
in Plaintiffs’ complaint and stated, but not otherwise pursued, on appeal,
that BAAF violated the Consumer Fraud and Abuse Act by "intention-
ally access[ing] a computer without authorization or exeed[ing] autho-
rized access and thereby obtain[ing] . . . information contained in a file
of a consumer reporting agency on a consumer." See 18 U.S.C.
§ 1030(a)(2) (2000).
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ingly, they do not point to any alleged "requirement" under the Act
that BAAF negligently failed to meet.5 Instead, Plaintiffs argue that
they can rely on the doctrine of res ipsa loquitur, i.e. the "thing
speaks for itself." Plaintiffs seem to believe that this doctrine elimi-
nates their need to prove that the FCRA imposes a requirement or
duty on users and subscribers that BAAF can be said to have
breached. The doctrine of res ipsa loquitur, however, simply permits
a jury to infer, in certain circumstances, "both negligence and causa-
tion from the mere occurrence of the event and the defendant’s rela-
tion to it"; it does not eliminate a plaintiff’s obligation to prove that
the defendant owed a duty to the plaintiff in the first place. Restate-
ment (Second) of Torts § 328D cmt. b (1965). Indeed, the American
Law Institute’s classic statement of the res ipsa loquitur doctrine
clearly explains that a plaintiff can rely on res ipsa loquitur to prove
causation only if "the indicated negligence is within the scope of the
defendant’s duty to the plaintiff." Id. § 328D(1)(c) (emphasis added).
Thus, the doctrine of res ipsa loquitur does not assist Plaintiffs here.
Philbin v. Trans Union Corp., 101 F.3d 957 (3d Cir. 1996), on
which Plaintiffs heavily rely, does not hold to the contrary. In that
case, the plaintiffs did not sue a subscriber or user of credit reports
like BAAF, but instead sued Trans Union, a consumer reporting
agency. As noted above, § 1681e of the Act does impose require-
ments or statutory duties on consumer reporting agencies, and in Phil-
bin, unlike the case at hand, the plaintiffs proffered evidence, which
the credit reporting agency itself conceded sufficed to preclude sum-
5Plaintiffs do not assert that BAAF negligently used or obtained their
credit reports for an impermissible purpose in violation of the "require-
ment" in § 1681b(f); that claim would, in any event, be futile in this case.
To prevail on it, Plaintiffs would have to show that BAAF can be held
vicariously liable for the action of the unknown person who used the
Code to obtain the reports; the only potentially plausible ground for
vicarious liability in this case is apparent authority. However, Plaintiffs
have cited no case or treatise suggesting that apparent authority can be
extended to an instance where, as here, no specific employee or group
of employees is identified as having exercised that authority. To extend
the reach of apparent authority in this case would effectively render a
subscriber strictly liable any time a code supplied to it by a credit report-
ing service is used. In the absence of any precedent compelling this dra-
matic result, we decline to reach it.
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mary judgment in its favor, that the agency failed to comply with
those requirements or duties. Id. at 963. The consumer reporting
agency maintained, however, that the plaintiffs had not forecast evi-
dence that the agency’s breach of its statutory duties caused the plain-
tiffs’ damages. Id. In that context, the Third Circuit suggested that the
plaintiffs might be able to rely on the res ipsa loquitur doctrine to
prove causation. Id. at 965. Thus, Philbin nowhere suggests that the
doctrine could be used to prove a duty, as Plaintiffs here seek to use
it.
Accordingly, we affirm the district court’s order granting summary
judgment to BAAF on Plaintiffs’ FCRA and analogous state law claims.6
III.
For all of these reasons, judgment of the district court is in all
respects
AFFIRMED.
6We also affirm the district court’s denial of Plaintiffs’ motion to
amend their complaint to add class action allegations. Because BAAF is
entitled to summary judgment on Plaintiffs’ claims and because the
claims of the putative class are identical to those of Plaintiffs, their
motion to amend was futile. See Shealy v. Winston, 929 F.2d 1009, 1013-
14 (4th Cir. 1991) (affirming denial of motion to amend where amend-
ment would not have cured deficiencies in plaintiff’s case entitling
defendant to summary judgment, on grounds of futility). Similarly, the
district court did not err in failing to address Plaintiffs’ request to remove
various references to "John Doe" defendants because such removal
would have had no meaningful effect on the analysis or result.
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