## Facts

- James C. Millstone, a journalist and assistant managing editor, obtained automobile insurance through Fireman’s Fund Insurance Company.
- Millstone received notice that a “personal investigation” would be conducted in connection with his insurance policy.
- Fireman’s Fund cancelled Millstone’s policy based on an investigative consumer report prepared by O’Hanlon Reports, Inc., an investigative consumer reporting agency used by insurers.
- The report included derogatory and serious allegations (e.g., that Millstone was a “hippie type,” used drugs, and was an undesirable neighbor), including disparaging remarks about his family.
- The court found the report materially false and misleading and not reasonably verified.
- O’Hanlon claimed the report was based on multiple neighbor interviews, but in fact relied primarily on a single brief interview and performed no meaningful corroboration.
- After learning of the cancellation, Millstone went to O’Hanlon’s local office to inspect his file; staff falsely stated the file was unavailable and then sent it out of the office after he left.
- Millstone incurred inconvenience and expense obtaining replacement coverage and faced risk to his personal and professional reputation.

## Issues

1. Whether O’Hanlon failed to follow reasonable procedures to assure maximum possible accuracy of an investigative consumer report, violating 15 U.S.C. § 1681e(b).
2. Whether O’Hanlon failed to provide proper file disclosure after Millstone’s request, violating 15 U.S.C. § 1681g.
3. Whether O’Hanlon’s noncompliance was negligent or willful under 15 U.S.C. §§ 1681o and 1681n, and what damages and fees were recoverable.

## Decision

- The court entered judgment for Millstone after a bench trial.
- O’Hanlon violated § 1681e(b) by using inadequate methods and failing to corroborate serious adverse allegations before reporting them to the insurer.
- O’Hanlon violated § 1681g by obstructing and misrepresenting disclosure when Millstone sought access to his file.
- The court found at least negligent noncompliance and also willful conduct as shown by evasive handling of the file and misleading statements about the investigation.
- The court awarded actual damages and additional damages reflecting willful noncompliance, plus reasonable attorneys’ fees and costs.

## Legal Principles

- Under 15 U.S.C. § 1681e(b), a consumer reporting agency must use reasonable procedures designed to assure the maximum possible accuracy of information; serious adverse accusations require more than uncorroborated statements from a single source.
- Inaccuracy coupled with insurer reliance can establish causation for resulting harm when the adverse action is traceable to the report.
- Under 15 U.S.C. § 1681g, agencies must provide meaningful disclosure of the nature and substance of information in the consumer’s file upon request; evasive conduct and misstatements may constitute noncompliance.
- Negligent noncompliance supports liability for actual damages under § 1681o; willful noncompliance (including reckless disregard) supports additional damages and fee shifting under § 1681n.

## Conclusion

The court held an investigative consumer reporting agency liable under the FCRA for issuing an unverified, materially inaccurate report that caused an insurer to cancel coverage and for obstructing disclosure when the consumer sought access to his file, awarding damages and attorneys’ fees based on negligent and willful noncompliance.


Millstone v. O’Hanlon Reps., Inc., 383 F. Supp. 269 (E.D. Mo. 1974)