Jason Dennis sued Experian Information Solutions Inc. in federal court after the company reported that his landlord had won a judgment against him for not paying his rent in 2002.
The 9th Circuit Court, however, found that Experian mistakenly relied on information given by a third party, which reported that a judgment for nearly $2,000 in unpaid rent was entered against Dennis in the downtown Los Angeles courthouse.
In fact, Dennis and his landlord had reached a settlement in which he paid his debt, according to the appeals court opinion, written by Judge Alex Kozinski.
A representative for Experian said the company had no comment on the decision.
Experian's error harmed Dennis' hopes to start a new business, as his credit record was spotless save for the erroneously reported "judgment," the court noted. Dennis' next landlord also charged him a higher security deposit based on the erroneous credit report, the court ruled.
Experian could have caught the error had it consulted the Civil Register, "which can be viewed free of charge on the Los Angeles Superior Court's excellent Web site," Kozinski wrote.
"Even accepting as true everything Experian has claimed, no rational jury could find that the company wasn't negligent," Kozinski wrote. Experian was also responsible for the negligence of Hogan Information Services -- the third party hired to investigate Dennis' legal history, the court ruled.
"This case illustrates how important it is for Experian, a company that traffics in the reputations of ordinary people, to train its employees to understand the legal significance of the documents they rely on," Kozinski wrote.
Louis Dell, Dennis' attorney, expressed satisfaction with today's outcome.
"Needless to say, everybody's happy about it," Dell said.
The case will be remanded to a lower court to determine damages and attorneys' fees unless Experian successfully appeals the ruling, Dell said.
