“This is an important decision that helps preserve the positive aspects of the recent U.S. Supreme Court decisions on adverse action notices and willfulness,” said David Snyder, vice president and assistant general counsel, AIA. “If allowed to stand, the lower court’s ruling would have potentially led to a multiplicity of cases that would allege that any interpretation of the FCRA later decided to be incorrect would allow a claim to go to the jury for 'willful' damages that include extensive monetary penalties and attorney's fees.”
AIA, along with other groups, submitted an amicus brief in support of a petition to the Supreme Court by a mortgage insurance company to vacate a Third Circuit Court of Appeals ruling in Radian Guaranty, Inc. v. Whitfield. In the part most relevant to insurers, the Third Circuit ruling included the determination that whether a "willful" violation of the FCRA has occurred is a matter of fact, not a question of law. This finding conflicted with a key part of the Safeco Insurance Co. v. Burr decision handed down last year.
In its decision issued Tuesday, the U.S. Supreme Court vacated the Third Circuit's ruling, including the language making the willfulness determination a factual question, and remanded the case back to the Third Circuit with instructions to dismiss the case as moot.
“This decision is important in that it continues the balance the courts have struck under the FCRA to encourage the appropriate use of credit information by businesses, including insurers, thereby allowing them to offer more products priced more fairly while assuring that consumers are protected at the same time," said Snyder.