Legal Memorandum: Compensatory Damages in FCRA Suits

Issue: What compensatory damages are available in Fair Credit Reporting Act suits in the Fifth Circuit?

           Section 1681o of the Fair Credit Reporting Act (“FCRA”) authorizes a consumer to recover actual damages sustained from the consumer reporting agency’s negligent violation of a requirement under the FCRA.  Actual damages include humiliation or mental distress, even if the consumer has suffered no out‑of‑pocket losses.  See Fischl v. General Motors Acceptance Corp., 708 F.2d 143, 151 (5th Cir. 1983).  Of course, such damages must be warranted by the evidence.  Pinner v. Schmidt, 805 F.2d 1258, 1265 (5th Cir. 1986).  See also Stevenson v. TRW Inc., 987 F.2d 288, 296 (5th Cir. 1993).

A wide range of compensatory damage verdicts has been reported.  Thus, in Thornton v. Equifax, Inc., 619 F.2d 700, 703 (8th Cir. 1980), the compensatory damages award was $5,000.  However, the plaintiff in that action spent minimal time establishing the falsity of the credit information that the agency subsequently used to damage him.  In other cases, such as Bryant v. TRW Inc., 487 F. Supp. 1234, 1242 (E.D. Mich. 1980) (jury awarded $8,000), aff’d, 689 F.2d 72 (6th Cir. 1982), and Millstone v. O’Hanlon Reports. Inc., 383 F. Supp. 269 (E.D. Mo. 1974) (jury awarded $2,500), aff’d, 528 F.2d 829, 834-35 (8th Cir. 1976), the jury awards were affirmed.  The reviewing court did not consider whether a larger amount would have been inappropriate.  See also Morris v. Credit Bureau of Cincinnati, Inc., 563 F. 5upp. 962 (S.D. Ohio 1983) ($10,000 award for compensatory damages for numerous credit denials, marital stress, anxiety, […]