Published on
NOTE
Lloyd v. FedLoan Servicing, 105 F.4th 1020 (8th Cir. 2024)
Elly M. Lang*
I. Introduction
Access to our nation’s economic opportunities largely depends on a consumer’s credit.[1] As a result, credit report accuracy is essential to a consumer’s ability to access those opportunities. How can consumers ensure the accuracy of this vital information, which impacts milestones such as buying a house, getting a new job, or starting a business?[2] The Fair Credit Reporting Act (“FCRA” or “Act”) provides an avenue for individuals to recover damages caused by inaccurate credit reporting.[3] However, the difficulty plaintiffs face in successfully litigating claims under the statute render this recourse insufficient.[4] To address this shortfall, courts should allow plaintiffs to invoke the doctrine of res ipsa loquitur when asserting negligence under the FCRA. As it stands, plaintiffs have a very difficult time pointing to a specific part of an organization’s internal credit reporting process where negligence occurred.[5] Res ipsa loquitur works around this issue by allowing plaintiffs to offer circumstantial evidence showing that because of the inaccuracy that resulted, the defendant was likely negligent.[6] This would give plaintiffs a more equitable shot at litigating their claims.
The case of Lloyd v. FedLoan Servicing demonstrates the practical issues faced by plaintiffs who bring suit under the statute.[7] Chiya Lloyd discovered inaccuracies in her credit report and submitted a customer dispute to resolve the issues.[8] Unfortunately for her and her husband, who were in the process of trying to buy a home, Lloyd had to submit two additional customer disputes, wait six months, and bring suit against the defendant organizations before the inaccuracies were removed from her credit reports.[9] Although Lloyd had plenty of circumstantial evidence showing the defendants were most likely negligent, her inability to point to direct evidence of the negligent acts was fatal to her claims.[10] In determining that neither Experian nor FedLoan were negligent in their investigations of Lloyd’s customer disputes, the Eighth Circuit expressly denied to apply the doctrine of res ipsa loquitur, briefly and dismissively labeling the doctrine “inapplicable under the facts and circumstances of this case.”[11]
Part II of this case note details the facts, arguments, and holding of Lloyd v. FedLoan Servicing. Part III provides an overview of the Fair Credit Reporting Act and explains the doctrine of res ipsa loquitur. Part IV describes the reasoning and conclusions of the Eighth Circuit in Lloyd, and Part V explains why the Eighth Circuit should have applied res ipsa loquitur and allowed Lloyd to avoid dismissal of her claims at the summary judgment stage.
II. Facts and Holding
In 2019, Chiya Lloyd had nine student loans serviced by FedLoan Servicing LLC (“FedLoan”).[12] As a federal student loan servicer for the U.S. Department of Education, FedLoan facilitates and processes monthly payments made by borrowers, and it furnishes consumer credit information to credit reporting agencies (“CRA”) like defendant Experian.[13] CRAs receive this information from “furnishers” and use it in issuing consumer reports.[14]
In August 2019, Lloyd received email alerts from various credit monitoring services informing her that she was delinquent on multiple student loan payments.[15] The delinquent payments included all nine of her student loan payments from January 2018, all nine payments from February 2018, and seven payments from June 2019.[16] In early September 2019, Lloyd submitted online disputes with Experian to contest the delinquencies listed on her credit reports.[17] Her dispute included a comment stating, “Any and all late remarks are factually inaccurate. See proof provided.”[18] She supported her dispute with screenshots of her transaction history with FedLoan as of August 16, 2019, and an administrative forbearance letter from FedLoan dated August 2, 2019.[19] Experian then sent an Automated Consumer Dispute Verification (“ACDV”) to FedLoan, requesting additional information regarding the inaccuracies.[20]
After investigating the disputed information, FedLoan responded to Experian’s ACDV by reporting that the January and February 2018 payments were not delinquent but confirmed the delinquent status of the June payments.[21] FedLoan reported that the payments due on June 26 were ninety days past due in August of that same year, a factual impossibility.[22] Experian communicated this updated information to Lloyd on September 24, 2019.[23]
Lloyd again contested the remaining delinquencies by submitting a second online dispute to Experian.[24] Experian sent a second ACDV to FedLoan, and FedLoan completed another investigation, reporting back to Experian that six of the seven June 2019 payments were not delinquent and that only one of Lloyd’s student loan accounts had an overdue payment from June of 2019.[25] Experian communicated this update to Lloyd on October 17, 2019.[26]
Continuing to maintain that none of her student account payments were delinquent, Lloyd submitted a third dispute to Experian to contest the one remaining inaccurate delinquency.[27] Experian sent a third ACDV to FedLoan, which completed another investigation, and finally reported to Experian that the remaining delinquent charge was not overdue.[28] Experian removed all delinquent marks from Lloyd’s credit report by February 2020, about six months after Lloyd submitted her first customer dispute.[29]
During the course of these customer disputes, Lloyd and her husband applied for four credit cards and sought prequalification for a home loan, hopeful lenders would look past the falsely reported delinquencies.[30] All were denied.[31]
The Sears Card cited “[h]istory of delinquent credit obligation(s)” on Lloyd’s Experian credit report. The Shop Your Way Mastercard used identical language. The Home Depot Consumer Credit Card cited “[n]umber of credit bureau inquiries” at Experian. And TD Bank cited Experian’s report as showing “[s]erious delinquency,” “[t]ime since delinquency is too recent or unknown,” “[n]umber of accounts with delinquency,” and “[r]atio of balance to limit on bank revolving or other rev accts [revolving accounts] too high.”[32]
Lloyd’s mortgage denial letter similarly stated that late student loan payments were part of the reason for the credit denial and referenced credit reports from Experian from September 9and 27 of 2019.[33]
Lloyd initiated a civil action against FedLoan, Experian, and a few other CRAs before receiving the results of her first dispute back from Experian, alleging violations of the Fair Credit Reporting Act.[34] Her amended complaint alleged that Experian failed to follow reasonable procedures or have proper procedures in place to discover FedLoan’s mistakes, in violation of § 1681e(b) of the Act, and that Experian failed to conduct a reasonable reinvestigation, in violation of § 1681i(a)(1).[35] She alleged FedLoan failed to reasonably investigate her dispute, in violation of § 1681s-2(b).[36]
Defendant FedLoan moved for summary judgment on several grounds, including that Lloyd did not have sufficient evidence that FedLoan failed to conduct a reasonable investigation of her disputes.[37] Lloyd also moved for summary judgment on the reasonable investigation issue.[38] The district court found that neither party established as a matter of law that the investigation either was or was not reasonable and denied both motions for summary judgment on that issue.[39]
Experian also moved for summary judgment on several grounds, including that Lloyd could not show that Experian failed to conduct a reasonable reinvestigation of Lloyd’s disputes.[40] The district court granted Experian’s motion because Lloyd failed to point to any evidence “other than her own say-so” that Experian’s investigation was unreasonable.[41] Unlike the Eighth Circuit’s later opinion, the district court did not expressly decline to apply the doctrine of res ipsa loquitur to Lloyd’s negligence, but it effectively did so by finding that Lloyd needed to present direct evidence of exactly how the defendants’ negligent acts occurred.[42]
III. Legal Background
All of Lloyd’s claims against the defendants fall under the FCRA.[43] Part A of this section will provide background about the FCRA and lay out its relevant provisions. Next, Part B defines the doctrine of res ipsa loquitur and explains how and when it applies.
A. The Fair Credit Reporting Act
Congress passed the Fair Credit Reporting Act in 1970 to “ensure fair and accurate credit reporting, promote efficiency in the banking system, and protect consumer privacy.”[44] The FCRA regulates the collection and compilation of consumer information by credit reporting agencies and the use of these consumer reports by others.[45] The information collected by these CRAs may include credit history, payment patterns, demographic and identifying information, and public records.[46] This information is then used by entities, such as employers, landlords, credit grantors, and insurance companies, to make eligibility decisions regarding things like the risk of nonpayment.[47] Credit reports play a substantial role in these decisions and can determine whether a person will be able to participate in important economic opportunities, such as purchasing a home, starting a small business, or getting a job.[48] Congress adopted the FCRA in recognition of the importance of accuracy in these reports.[49]
The statute imposes duties on both CRAs, like Experian, and entities that furnish information to CRAs, like FedLoan.[50] Section 1681i(a)(1)(A) imposes duties on CRAs that are triggered when a consumer disputes the information in her file.[51] CRAs must “conduct a reasonable reinvestigation to determine whether the disputed information is inaccurate.”[52] The statute then sets forth some general requirements the CRAs must fulfill when conducting a reinvestigation, including reviewing all relevant information for the consumer, promptly notifying the furnisher of the dispute, providing the furnisher with all relevant information, modifying or deleting inaccurate information, and notifying the consumer of the reinvestigation results.[53]
Under § 1681i(a)(1)(A), what actually constitutes a “reasonable reinvestigation” by CRAs and what is the required standard of proof?[54] This question is a major portion of the Eighth Circuit’s analysis in the case at hand.[55] Generally, CRAs may rely on the accuracy of information provided by furnishers through the ACDV process in conducting reinvestigations.[56] However, the Seventh Circuit has held that a CRA may have to verify the accuracy of information provided by furnishers, in certain circumstances.[57] This is conditioned upon whether the consumer has notified the CRA that the furnisher may be unreliable or the CRA itself knows the furnisher is unreliable.[58]
In addition to CRAs, the FCRA also imposes duties on furnishers of information to CRAs.[59] These duties are triggered when a furnisher receives notice of a consumer dispute.[60] Section 1681s-2(b) requires that a furnisher conduct an investigation of the disputed information, review all relevant information submitted by the consumer, report the investigation’s results to the CRA, report any findings of inaccurate information to all CRAs that received it, and modify, delete, or block inaccurate information in its report to CRAs.[61] Finally, § 1681o holds liable for actual damages suffered any defendant who negligently violates these provisions.[62]
B. Res Ipsa Loquitur
Res ipsa loquitur is a legal doctrine which translates from Latin to mean “the thing speaks for itself.”[63] It applies when, because of the nature of the injury, the defendant was probably negligent.[64] The doctrine affects a plaintiff’s burden of proof by allowing the plaintiff to establish an inference or presumption of negligence when it would be otherwise difficult to prove negligence.[65] Res ipsa loquitur originates from the 1863 case Byrne v. Boadle, in which a barrel of flour fell from a window of a warehouse and landed on a passerby, causing serious injuries.[66] The plaintiff could not prove that any specific act of negligence occurred; however, the plaintiff prevailed by pointing out that heavy items do not normally fall from windows without some negligence.[67] Res ipsa loquitur implies that the court does not know exactly how the negligence occurred, so its finding of negligence is instead based on knowledge that the type of accident is most often caused by a negligent defendant.[68]
To invoke res ipsa loquitur, many courts require a plaintiff to prove three requirements: “(1) that the harm is one that would typically not occur without someone’s negligence; (2) that the harm was caused by an instrumentality that was within the defendant’s exclusive control; and (3) that the harm was not due to any voluntary action or contribution on the part of the plaintiff.”[69] The court will determine whether the plaintiff’s evidence on these elements is sufficient for a reasonable jury to find that res ipsa loquitur applies.[70] If the doctrine applies, most jurisdictions employ it as a permissive inference of negligence, meaning the jury may infer negligence but is not required to do so.[71] In some jurisdictions, the doctrine creates a rebuttable presumption of negligence, requiring the defendants to provide exculpatory evidence to avoid liability.[72] In either jurisdiction, a defendant may successfully defend against res ipsa loquitur by proving he was not negligent or not the cause of the negligence.[73]
The doctrine has traditionally been justified in situations where evidence of the defendant’s negligence, or lack thereof, is practically accessible to the defendant, but not the plaintiff.[74] Res ipsa loquitur alleviates this issue by encouraging the defendant to bring forth such evidence to prove his lack of liability.[75] As the rules of evidence have evolved, making it easier for plaintiffs to access elusive evidence, the weight given to this traditional res ipsa loquitur justification has diminished; however, courts might still consider it sometimes, especially in borderline cases.[76] Res ipsa loquitur relieves plaintiffs’ burden to point to specific acts of negligence in situations where it may be practically difficult to do so, and some federal judges have pointed out the doctrine may be a helpful solution for plaintiffs bringing negligence claims under the FCRA who face this issue.[77]
IV. Instant Decision
The Eighth Circuit affirmed the district court’s grant of summary judgment to both Experian and FedLoan, concluding that both defendants’ investigations of the inaccurate information were reasonable.[78] On appeal, Lloyd challenged the district court’s order granting summary judgment for Experian on the unreasonable reinvestigation claim, under § 1681i(a)(1)(A).[79] She also challenged the district court’s grant of summary judgment in favor of FedLoan on the adequacy of investigation claim, under § 1681s-2(b), and on other grounds.[80]
Looking first to the claim against Experian, the court affirmed the district court’s dismissal.[81] Lloyd asserted a reasonable jury could have found Experian’s investigation was not reasonable.[82] The court found that Experian followed the steps provided by the FCRA for conducting a reinvestigation: reviewing the documents provided by Lloyd in her dispute, sending this information to FedLoan and requesting additional information, and modifying Lloyd’s dispute to reflect the information it received from FedLoan.[83] Lloyd failed to point to any part of this process that was unreasonable.[84] This failure on Lloyd’s part effectively shut down her negligence claim because the court expressly denied to apply the doctrine of res ipsa loquitur, finding it was “inapplicable under the facts and circumstances of this case.”[85] This brief comment was the only mention of res ipsa loquitur, and the court did not explain why it was inapplicable.[86]
Lloyd also argued that Experian should have looked beyond the information provided by FedLoan in order to resolve the inaccuracies.[87] In Lloyd’s view, because Experian was on notice that FedLoan was not a reliable source of information, Experian needed to do more than simply “parrot[]” to her the incorrect information it received back from FedLoan.[88] The court acknowledged Seventh Circuit precedent holding that a CRA may be required to verify the accuracy of the information it receives from furnishers if the consumer alerted the CRA that the furnisher may be unreliable.[89] However, the court found the precedent inapplicable here because the documentation provided by Lloyd did not allege some type of widespread inaccuracy and because nothing in the record indicated that Experian should have been on notice that FedLoan was unreliable.[90] Therefore, the court found that Experian did not have to investigate beyond the information provided to it by FedLoan.[91]
Regarding FedLoan’s alleged negligence, the court laid out § 1681s-2(b)(1)(A)-(E), which details the steps furnishers must take once a consumer has submitted a dispute.[92] The court found that Lloyd was unable to identify any one of these duties that FedLoan failed to fulfill and she had therefore failed to show how a jury could have concluded FedLoan’s investigation was unreasonable.[93] Just like the negligence claim against Experian, the court declined to apply res ipsa loquitur, which would have allowed Lloyd to establish an inference of negligence even though she could not specify which exact step FedLoan violated.[94] Because Lloyd failed to show how either Experian or FedLoan negligently violated the statute, the Eighth Circuit affirmed the district court’s grant of summary judgment for both defendants and dismissed the claims.[95]
V. Comment
Part A of this section reviews previous FCRA cases suggesting that res ipsa loquitur might be applied in the FCRA context. Part B details circumstantial evidence that would have allowed Lloyd to prevail on a res ipsa loquitur theory. Finally, Part C discusses why the doctrine is appropriate in the FCRA context and why it should have been applied by the Eight Circuit in Lloyd.
A. Res Ipsa Loquitur in FCRA Precedent
Res ipsa loquitur has not yet been applied in the FCRA context; however, both the Third and Fourth Circuits have suggested that it may be used if an appropriate situation arose.[96] In Philbin v. Trans Union Corp., the court asked whether a plaintiff must prove anything more than the fact an inaccuracy existed in order for the jury to find a negligent FCRA violation.[97] Res ipsa loquitur in this context would mean the jury may infer or presume negligence based just on the fact that an inaccuracy occurred. In other words, the inaccuracy “speaks for itself.”[98] The plaintiff in Philbin alleged that a CRA negligently violated the statute by using unreasonable procedures.[99] Due to conflicting decisions among other circuit courts on what a plaintiff must prove to establish a negligent FCRA violation, the Third Circuit in Philbin outlined and defined three potential standards of proof drawn from those cases.[100] First, the District of Columbia Circuit found that in certain circumstances, an inaccuracy alone may be sufficient evidence of negligence, although the court did not specify what these circumstances might be.[101] Second, the Ninth and Eleventh Circuits suggested that a plaintiff may establish a rebuttable presumption of negligence by showing some inaccuracy in her credit report.[102] The burden would then shift to the defendant to affirmatively prove it was not negligent.[103] Third, these same cases from the Ninth and Eleventh Circuits could be read more narrowly to mean that if a plaintiff proves some inaccuracy, the jury may infer that a negligent violation occurred.[104]
The court points out that this final proof standard is akin to res ipsa loquitur, which generally allows, but does not require, the jury to infer negligence from the facts.[105] The Third Circuit in Philbin reasoned that the doctrine is justified in the FCRA context because inaccuracies are caused by an instrumentality exclusively under the control of the defendant, and therefore the defendant is in a better position to prove it was not negligent—in the case of Philbin, that it followed reasonable procedures.[106] Ultimately the Philbin court chose not to decide between these possible burdens of proof because the plaintiff had provided evidence sufficient to satisfy each of them.[107]
In Ausherman v. Bank of America Corp., a 2003 Fourth Circuit case, the plaintiffs attempted to use res ipsa loquitur to prove a negligent FCRA violation occurred.[108] The court acknowledged that the Third Circuit had previously suggested res ipsa loquitur may be used in this context.[109] However, in Ausherman, defendant was found not to be a CRA, but a “user” or “subscriber” of the information reported by a CRA, and therefore it was not bound by any duties or requirements under the FCRA.[110] The negligence claim consequently failed, and the court did not make a finding on whether res ipsa loquitur may otherwise be used to prove negligence under the FCRA when appropriate.[111] In fact, by not making that finding, and by acknowledging that the Third Circuit had previously suggested the doctrine may sometimes be appropriate, the circuit left the door open for future plaintiffs.[112]
The Eighth Circuit is not bound by either of those cases; however, they are persuasive. Two circuit courts have now suggested that when an appropriate situation came along, res ipsa loquitur might be used in the FCRA context.[113] The Eighth Circuit should have applied the doctrine of res ipsa loquitur to Lloyd’s negligence claims, at the very least to surpass summary judgment.[114]
B. Circumstantial Evidence Supporting Lloyd’s Negligence Claims
The circumstantial evidence supporting Lloyd’s claims would have allowed her to be successful in establishing negligence, had the court permitted the use of res ipsa loquitur. Circumstantial evidence regarding Experian’s reinvestigation of Lloyd’s disputes could reasonably lead a jury to infer that negligence occurred, in violation of § 1681(a)(1)(A), even though she was unable to specify which exact statutory duty Experian violated. It is very unlikely that a CRA conducted a reasonable investigation of a consumer dispute if it reports a factual impossibility, such as Lloyd being ninety days late in August on a June 26 payment.[115] A reasonable jury could infer that no reasonable reinvestigation procedure could possibly result in the confirmation of this factually impossible information. Jurors may also infer that Experian acted negligently because it took three separate customer disputes and subsequent reinvestigations to resolve the inaccuracies in Lloyd’s account. Even if Experian followed the investigation guidelines provided in the statute and followed a typical ACDV procedure each time it investigated her disputes, negligence likely occurred at some point during the reinvestigations.
The circumstantial evidence could similarly lead a reasonable juror to find that FedLoan was negligent in its investigation, in violation of § 1681s-2(b). FedLoan argued, and the court agreed, that it was not negligent because Lloyd was unable to point to any part of its investigation procedure that was unreasonable.[116] However, FedLoan reported that Lloyd was ninety days delinquent on payments due less than thirty days prior and confirmed the accuracy of this information every time it conducted an investigation.[117] Again, the fact Lloyd had to submit three customer disputes and wait six months in order to resolve the falsely reported delinquencies could also lead a reasonable jury to infer that FedLoan’s investigation procedures were unreasonable. It is perfectly reasonable to assume that any investigation procedure that fails to discover inaccuracies in its reporting multiple times in a row is unreasonable. At the very least, this determination should have been left to the jury.
C. The Applicability of Res Ipsa Loquitur in the FCRA Context
The justifications for res ipsa loquitur fit harmoniously with negligent FCRA violations, and Lloyd was an appropriate avenue to establish the doctrine’s use under the statute. First, CRAs generally have better access to this critical information needed by plaintiffs due to their role as information gatherers.[118] In nearly all cases, the information needed by a plaintiff to prove her case is in the sole possession of a CRA.[119] Courts should recognize this difficulty in gathering evidence as well as the fact that most consumers bringing suit under the statute cannot afford the cost of extensive discovery necessary to prove a company was systematically negligent.[120] Although the development of extensive discovery rules has weakened this justification for the doctrine, it is still relevant here because the discovery requires a deep dive into the defendants’ internal systems, resulting in a very high bill for individual consumers. This high bill often prevents individuals from bringing suit in the first place, especially when, like Lloyd, the individual already faces significant loans.[121] Many consumers determine that the time, cost, and effort required to recover damages outweigh the benefit of bringing a lawsuit.[122] Additionally, even if consumers do bring suit, it is very difficult for them to win these negligence cases because courts have generally protected CRAs’ ability to rely on the information given to them by furnishers.[123] Courts should allow plaintiffs to move forward if they can point to a true inaccuracy.[124] The CRAs will then have a much easier time rebutting this prima facie showing of negligence.
Allowing the use of res ipsa loquitur to establish negligence would also lead to more accountability for CRAs and furnishers, which is necessary in light of the prevalence of inaccuracies in credit reports and the severe effects these mistakes may have. One survey shows that almost half of credit reports contain inaccurate information and nearly twenty percent contain an inaccuracy significant enough that it may negatively affect a consumer’s eligibility for credit.[125] The Public Interest Research Group has similarly concluded that around twenty-five percent of credit reports contain an inaccuracy serious enough to affect credit eligibility.[126] A 2012 FTC report showed that sixty-three percent of those who submitted consumer disputes still felt their credit reports were inaccurate after the dispute resolution process ended.[127] If a majority of consumer disputes are going unresolved, it’s even more critical for courts to establish a way for plaintiffs to recover the resulting harm.
Some additionally argue that we should hold CRAs accountable for errors because technological advances since the 1970s, when the statute was enacted, have enabled CRAs to maintain much more accurate reporting processes.[128] Courts have failed to recognize these technological advances and continue to insulate CRAs from liability for computer errors in the same way it did back when these computer systems were in their infancy.[129] A reasonable reinvestigation today, given how far we have advanced in credit reporting accuracy, should not look the same as a reasonable reinvestigation in the 1970s. Because of the prevalent and unresolved inaccuracies in credit reports and the inadequacy of the current avenue of recourse for consumers, courts should apply the statute liberally here in order to give consumers a fair shot at litigating their claims.[130]
If the Eighth Circuit had applied the three common res ipsa loquitur elements in the case at hand, Lloyd likely would have succeeded in establishing an inference of negligence.[131] Looking to the first element, Lloyd’s incident would not normally have occurred without negligence. Although one inaccuracy in a consumer report generally does not lead to liability under the FCRA,[132] FedLoan and Experian published factually impossible information.[133] This is unlikely to happen without some negligence because a very simple review of the information would have revealed the inaccuracy. They continued to confirm that information after multiple investigations.[134] It took six months and three customer disputes to correct all the inaccurate information in her account.[135] Next, the mistake was caused by an instrumentality within the defendant’s exclusive control. No other company or outside influence, including Lloyd herself, could have caused the mistake because it resulted from some internal error in the defendants’ record keeping systems. Finally, the traditional justification for the doctrine that the defendant is in a better position to prove whether negligence occurred applies here. Experian and FedLoan have superior knowledge about the cause of the incident. Familiar with how consumer reports are generated, as well as the specific processes used by their companies, FedLoan and Experian are in a better position to figure out where exactly these internal information gathering and reporting processes went wrong. Additionally, making the defendants come forth with this evidence is fair in this context because of the cost burden on individual consumers associated with this type of extensive discovery. Had Lloyd been permitted to assert negligence using res ipsa loquitur, the court likely would have found the three elements were satisfied.
VI. Conclusion
By refusing to apply res ipsa loquitur to the facts of Lloyd v. FedLoan Servicing, the Eighth Circuit failed to take an opportunity to establish the use of res ipsa loquitur under the FCRA. This is contrary to both the Third and Fourth Circuits’ suggestions that res ipsa loquitur may be used in this context if an appropriate case came along.[136] Lloyd v. FedLoan Servicing was an appropriate case to establish the doctrine, and the Eighth Circuit should have done so.
Plaintiffs bringing suit under the FCRA have a hard time accessing the internal record-keeping evidence they need to prove a defendant’s negligence, even with the development of modern discovery rules. The high costs of conducting this type of extensive discovery prevents many consumers from bringing suit in the first place.[137] Without such evidence, plaintiffs are unable to point to a specific step in the statute that a defendant failed to satisfy, and their negligence claims are shut down. Because of this practical difficulty, res ipsa loquitur can help make the FCRA a more equitable avenue for recovery.
In addition, allowing res ipsa loquitur to establish an inference of negligence under the statute would lead to more accountability for CRAs and furnishers, who are notorious for allowing errors to appear in consumer reports and for failing to correct these errors through consumer disputes.[138] The prevalence of these errors is not something we should let fly in light of the vast technological advances since the enactment of the statute and the potentially severe impacts these mistakes have on consumers’ credit eligibility. Res ipsa loquitur would help reduce some of these errors where the circumstantial evidence shows the error likely would not have occurred in the absence of negligence.
If the court had applied res ipsa loquitur in the case at hand, the circumstantial evidence in Lloyd’s favor would have satisfied each of the three common res ipsa loquitur elements.[139] Lloyd’s claims would have survived summary judgment unless the defendants subsequently proved their lack of negligence. This is a fair burden to place on defendants given their better access to the evidence, more expansive resources, and the difficulty plaintiffs face in litigating this kind of claim.[140] In order to give plaintiffs a fair shot at litigating their claims and help the FCRA achieve its purpose of improving the accuracy and integrity of consumer reports, the Eighth Circuit should have allowed the use of res ipsa loquitur in Lloyd v. FedLoan Servicing and established the doctrine as appropriate in the FCRA context.
* B.A., Kansas State University, 2022; J.D. Candidate, University of Missouri School of Law, 2026; Associate Member, Missouri Law Review, 2024–2025. I am incredibly grateful to Professor Sandra Sperino for her insight and mentorship throughout the writing of this Note. I also wish to thank the entire Editorial Board for their guidance and thoughtful feedback. Finally, thank you so very much to my family and friends, whose unwavering love and encouragement during law school have been a source of strength through every challenge.
[1] Lloyd v. FedLoan Servicing,105 F.4th 1020, 1031 (8th Cir. 2024) (Smith, J., concurring) [hereinafter Lloyd II].
[2] Id.
[3] See 15 U.S.C. §§ 1681o, 1681n (2018).
[4] Austin H. Krist, Note, Large-Scale Enforcement of the Fair Credit Reporting Act and the Role of State Attorneys General, 115 Colum. L. Rev. 2311, 2311–12 (2016), https://www.columbialawreview.org/content/large-scale-enforcement-of-the-fair-credit-reporting-act-and-the-role-of-state-attorneys-general/.
[5] Id. at 2322.
[6] Restatement (Third) of Torts § 17 (A. L. I. 2010).
[7] Lloyd II, supra note 1.
[8] Id. at 1023.
[9] Id. at 1023–24.
[10] Id. at 1025–26.
[11] Id. at 1027.
[12] Id. at 1023.
[13] Id. at 1023, 1023 n.2.
[14] Id. at 1024; see 15 U.S.C. § 1681s-2 (2018) (describing the role of furnishers under the Fair Credit Reporting Act).
[15] Lloyd v. FedLoan Servicing LLC, No. 4:19-cv-00762-FJG, 2021 WL 3730167 (W.D. Mo. Aug. 2, 2021) at *2 [hereinafter Lloyd I].
[16] Lloyd II, supra note 1, at 1023.
[17] Id.
[18] Id.
[19] Id. An administrative forbearance letter from a loan servicer informs a borrower that his or her loan has been temporarily suspended or reduced due to circumstances outside the borrower’s control. Ashley Kilroy, What is Administrative Forbearance for Student Loans?, SoFi (Apr. 7, 2025), https://www.sofi.com/learn/content/what-is-administrative-forbearance/.
[20] Lloyd II, supra note 1, at 1023.
[21] Id.
[22] Id.
[23] Id.
[24] Id.
[25] Id.
[26] Id.
[27] Id.
[28] Id.
[29] Id. at 1023–24.
[30] Id. at 1030–31 (Smith, J., concurring).
[31] Id.
[32] Id. (citations to record omitted).
[33] Id. (“I have reviewed your application. At this time, we cannot offer you a home loan based on reported lates on your credit report.”).
[34] Id. at 1024 (majority opinion).
[35] Id.
[36] Id.
[37] Lloyd I, supra note 15 at *5.
[38] Id.
[39] Id.
[40] Id. at *3.
[41] Id. at *4.
[42] Id.
[43] Lloyd II, supra note 1, at 1024.
[44] Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 52 (2007).
[45] Fed. Trade Comm’n, 40 Years of Experience with the Fair Credit Reporting Act 1 (2011), https://www.ftc.gov/sites/default/files/documents/reports/40-years-experience-fair-credit-reporting-act-ftc-staff-report-summary-interpretations/110720fcrareport.pdf.
[46] Id.
[47] Id.
[48] Lloyd II, supra note 1, at 1031 (Smith, J., concurring).
[49] Id.
[50] Federal Trade Commission, supra note 45, at 2–3.
[51] 15 U.S.C. § 1681i(a)(1)(A) (2018).
[52] Id.
[53] Lloyd II, supra note 1,at 1024.
[54] § 1681i(a)(1)(A).
[55] See Lloyd II, supra note 1.
[56] Henson v. CSC Credit Servs., 29 F.3d 280, 286 (7th Cir. 1994).
[57] Id. at 286–87.
[58] Lloyd II, supra note 1, at 1026 (citing Henson v. CSC Credit Servs., 29 F.3d 280, 287 (7th Cir. 1994)).
[59] 15 U.S.C. § 1681s-2(b) (2018).
[60] Id.
[61] Id.
[62] 15 U.S.C. § 1681o (2018).
[63] Res ipsa loquitur, Legal Info. Inst., https://www.law.cornell.edu/wex/res_ipsa_loquitur (last visited Nov. 19, 2025).
[64] Reza Torkzadeh, Res Ipsa Loquitur: How presumptuous!, Daily Journal, Apr. 21, 2023,
[65] Restatement (Third) of Torts § 17 (A. L. I. 2010).
[66] Torkzadeh, supra note 64; Byrne v. Boadle, 159 Eng. Rep. 299 (1863).
[67] Id.
[68] Restatement (Third) of Torts § 17 (A. L. I. 2010).
[69] Litigation Overview – Res Ipsa Loquitur, Bloomberg Law, https://www.bloomberglaw.com/document/X94RNLIO000000 (last visited Nov. 19, 2025).
[70] Restatement (Third) of Torts § 17 (A. L. I. 2010).
[71] Id.
[72] Id.
[73] Torkzadeh, supra note 64.
[74] Id.
[75] Id.
[76] Restatement (Third) of Torts § 17 (A. L. I. 2010).
[77] See Philbin v. Trans Union Corp., 101 F.3d 957, 965 (3d Cir. 1996); Ausherman v. Bank of Am. Corp., 352 F.3d 896 (4th Cir. 2003) (acknowledging that Philbin suggested the doctrine may sometimes be appropriate and leaving the door open for future plaintiffs, but finding the doctrine inapplicable to the specific circumstances of Ausherman); infra Part V.A.
[78] Lloyd II, supra note 1, at 1030.
[79] Id. at 1024.
[80] Id.
[81] Id. at 1026.
[82] Id. at 1024.
[83] Id.
[84] Id. at 1026.
[85] Id. at 1027.
[86] Id.
[87] Appellants’ Opening Brief and Addendum at 29, Lloyd v. FedLoan Servicing,105 F.4th 1020 (8th Cir. 2024) (No. 19-cv-762), 2022 WL 17184498 at *28–29.
[88] Id. at *29.
[89] See Henson v. CSC Credit Servs., 29 F.3d 280 (7th Cir. 1994).
[90] Lloyd II, supra note 1, at 1026.
[91] Id.
[92] Id. at 1027.
[93] Id.
[94] Id.
[95] Id. at 1030.
[96] Id. at 1030–31 (8th Cir. 2024) (Smith, J., concurring); see Philbin v. Trans Union Corp., 101 F.3d 957 (3d Cir. 1996); Ausherman v. Bank of Am. Corp., 352 F.3d 896 (4th Cir. 2003).
[97] Philbin, 101 F.3d at 960.
[98] Res ipsa loquitur, supra note 63.
[99] Philbin, 101 F.3d at 963.
[100] Id. at 963–66.
[101] Id. at 964; Stewart v. Credit Bureau, Inc., 734 F.2d 47, 51 (D.C.Cir.1984).
[102] Philbin, 101 F.3d at 165. See Guimond v. Trans Union Credit Information Co., 45 F.3d 1329, 1333 (9th Cir.1995); Cahlin v. General Motors Acceptance Corp., 936 F.2d 1151, 1156 & n. 4 (11th Cir.1991).
[103] Philbin, 101 F.3d at 165.
[104] Id. See Guimond, 45 F.3d at 1333; Cahlin, 936 F.2d at 1156, 1156 n. 4.
[105] Philbin, 101 F.3d at 165.
[106] Id.
[107] Id. at 965–66.
[108] Ausherman v. Bank of Am. Corp., 352 F.3d 896 (4th Cir. 2003).
[109] Id. at 902.
[110] Id. at 901.
[111] Id. at 901–902.
[112] Id. at 902 (citing Philbin v. Trans Union Corp., 101 F.3d 957 (3d Cir. 1996)) (“In that context, the Third Circuit suggested that the plaintiffs might be able to rely on the res ipsa loquitur doctrine to prove causation.”).
[113] See Philbin v. Trans Union Corp., 101 F.3d 957 (3d Cir. 1996); Ausherman, 352 F.3d 896.
[114] See generally Westra v. Credit Control of Pinellas, 409 F.3d 825 (7th Cir. 2005) (“Whether a defendant’s investigation is reasonable is a factual question normally reserved for trial; however, summary judgment is proper if the reasonableness of the defendant’s procedures is beyond question.”).
[115] Lloyd II, supra note 1, at 1030–31 (Smith, J., concurring).
[116] Id.
[117] Id. at 1027 (majority opinion).
[118] Jennifer Cuculich, Who Bears the Burden of Proof Under the Fair Credit Reporting Act, 15 U.S.C. s1681e(b) – Consumers May Bear the Biggest Burden in This Climate of Heightened National Security, 14 Loy. Consumer L. Rev. 305, 319 (2002), https://lawecommons.luc.edu/cgi/viewcontent.cgi?referer=&httpsredir=1&article=1309&context=lclr.
[119] Krist, supra note 4, at 2322.
[120] Id. at 2321–22.
[121] Id.
[122] Id.
[123] Id. at 2319.
[124] Cuculich, supra note 118, at 323.
[125] Id. at 304.
[126] Krist, supra note 4, at 2327.
[127] Id. at 2319.
[128] Id. at 2333.
[129] Id.
[130] Cuculich, supra note 118, at 323.
[131] See Res Ipsa Loquitur, supra note 63.
[132] Federal Trade Commission, supra note 45.
[133] Lloyd II, supra note 1, at 1031 (Smith, J., concurring).
[134] Id. at 1024–24 (majority opinion).
[135] Id.
[136] See Philbin v. Trans Union Corp., 101 F.3d 957 (3d Cir. 1996); Ausherman v. Bank of Am. Corp., 352 F.3d 896 (4th Cir. 2003).
[137] Krist, supra note 4, at 2321–22.
[138] Cuculich, supra note 118, at 304.
[139] See supra Part V.C. pp. 18–19.
[140] See generally Krist, supra note 4.