Case: 12-50007 Document: 00512090477 Page: 1 Date Filed: 12/20/2012
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
December 20, 2012
No. 12-50007 Lyle W. Cayce
Clerk
JEFFREY SMITH,
Plaintiff-Appellee
v.
SANTANDER CONSUMER USA, INCORPORATED
Defendant-Appellant
Appeal from the United States District Court
for the Western District of Texas
Before JOLLY, JONES, and GRAVES, Circuit Judges.
PER CURIAM:
In this FCRA case (Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq.),
the jury found that Santander Consumer USA, Inc. (“Santander”), a consumer
finance company, negligently failed to comply with the law by failing promptly
to investigate Jeffrey Smith’s (“Smith”) credit dispute with Santander and to
correct the information Santander misreported to a credit agency. The jury
awarded Smith $20,437.50 in actual damages. Santander does not challenge the
judgment of liability, but instead contends that Smith did not offer legally
sufficient evidence of his various claimed items of damage; Smith failed to
Case: 12-50007 Document: 00512090477 Page: 2 Date Filed: 12/20/2012
No. 12-50007
mitigate his damages; and the district court improperly admitted letters from
third parties to Smith. Finding no reversible error, we affirm.
Most pertinent to Santander are the elements of Smith’s damage claim.
FCRA allows a plaintiff injured by a negligent reporting violation to prove and
recover any actual damages he suffers. 15 U.S.C. § 1681o. (The jury rejected
Smith’s claim for additional damages for a willful violation, 15 U.S.C. § 1681n.)
Smith asserted, first, that because his credit rating by one agency was reduced
from 778 in October 2009 to 652 in late 2009, his available line of credit on
several cards was reduced by $37,500, leaving him with “only” $22,000 in
available credit for a number of months until the reporting error’s effects
resolved. We concur with Santander that the reduction in available credit, by
itself, furnishes no basis for actual damages. A credit line, by itself, has no
monetary impact on a consumer who doesn’t borrow money. Thus, whether the
credit line is $100,000 or $10,000 may impair the amount he could borrow on a
credit line, but unless he takes the actual step of using the credit or showing a
need for the higher amount, the consumer is unaffected. The real damage from
an erroneously reduced credit rating, which causes lower available borrowing
limits, occurs if the consumer’s cost of actual borrowing increases or if he is
refused credit altogether. See, e.g., Sloane v. Equifax Info. Servs., LLC, 510 F.3d
495, 501-02 (4th Cir. 2007). To the extent Smith tried to show that the
diminution of his credit line alone constituted measurable damage, he is wrong;
that abstraction did not injure his pocketbook. We have found no case
authorizing damages on this basis.
Smith did not rest with just the abstract reduction in his credit line,
however. He also testified as to how much the decreased credit line affected his
business performance and eligibility for bonuses (because he individually paid
costs on behalf of his employer in order to expedite projects). He refinanced his
home mortgage during this period and suffered an increased interest rate
2
Case: 12-50007 Document: 00512090477 Page: 3 Date Filed: 12/20/2012
No. 12-50007
because of his erroneous credit rating. He deferred personal expenditures, which
he itemized for the jury, as a cautionary measure until his rating was restored.
And he suffered compensable mental pain and anguish, embarrassment, and
difficult professional and family relations. Cousin v. Trans Union Corp.,
246 F.3d 359 (5th Cir. 2001) is not controlling here, because in the absence of a
special verdict, the amount of any recovery for Smith’s non-economic damages,
and therefore its sustainability, is purely speculative. Santander challenged all
of these damage contentions at trial. The jury verdict, which is general and
un-itemized, reflects considerably less than Smith sought. Because the evidence
is sufficient for “reasonable and fair-minded men in the exercise of impartial
judgment” to support the ultimate award, whether or not this court would have
reached the same result, the Boeing standard requires this court to affirm the
jury verdict.1
As with damages, the issue of mitigation was thoroughly vetted before the
jury. It is possible that the jury, in declining to award the full amount of Smith’s
claimed damages, adjusted for his alleged failure to mitigate his damages, e.g.,
by delaying the mortgage refinance until interest rates declined. We may not
speculate on the makeup of the general verdict. This issue cannot be resolved
as a matter of law in favor of Santander.
Finally, the court’s admission of letters from Bank of America, Sears and
Trans Union that purported to reflect the impact of the erroneous credit score
on Smith’s lines of credit and Smith’s dispute with Trans Union (the credit
reporting agency) was harmless error, if error at all, whether viewed for their
relevance to Santander’s liability (which the company does not dispute) or
compensable damages.
1
Boeing Co. v Shipman, 411 F.2d 365, 374 (5th Cir. 1969) (en banc), overruled in part
on other grounds, Gautreaux v. Scurlock Marine, Inc., 107 F.3d 331 (5th Cir. 1997) (en banc).
3
Case: 12-50007 Document: 00512090477 Page: 4 Date Filed: 12/20/2012
No. 12-50007
For these reasons, Santander’s challenges to the verdict lack merit. The
judgment is AFFIRMED.
4