In RIZWAN MAHMOOD, Plaintiff, v. NATIONAL CREDIT SYSTEMS, INC., Defendant., No. 24-CV-203-WQH-KSC, 2025 WL 1994780, at *19–20 (S.D. Cal. July 17, 2025), Judge Hayes denied summary judgment based on a trial issue of material fact on a CCRAA claim.
Essentially, the parties dispute whether the reasonableness of Defendant’s procedures should be assessed based upon (1) Defendant’s procedures to prevent errors when inputting account information and selecting work actions or (2) Defendant’s procedures (or lack thereof) for reviewing the inputted information or otherwise ensuring that the information reported to the CRAs is correct. The Court finds that, viewing the evidence in the light most favorable to Plaintiff and drawing all justifiable inferences in his favor, a genuine dispute of material fact exists as to the reasonableness of Defendant’s procedures. While a reasonable jury could find that the procedures described in Sapp’s declaration are reasonably adapted to prevent errors such as the error that occurred in this case—Cook’s selection of the incorrect work action for the Account—a reasonable jury could also find that Defendant’s failure to implement any procedures to double-check the inputted information to ensure that the appropriate work actions were selected demonstrates a lack of procedures reasonably adapted to prevent the error at issue. For instance, in Engelen v. Erin Cap. Mgmt., LLC, 544 F. App’x at 708–09, the Ninth Circuit reversed the district court’s grant of summary judgment in favor of the debt collector on the bona fide error defense under the FDCPA. The error arose when the defendant garnished the plaintiff’s wages—despite the plaintiff’s satisfaction of his debt—due to the defendant’s bookkeeper’s “fail[ure] to record [the plaintiff’s payment].” Id. at 708. The Ninth Circuit held that, viewing the evidence in the light most favorable to the plaintiff, the defendant’s procedures, “which consisted of legal compliance training, a written policy describing how payment notifications were to be handled, and periodic spot-checking of the bookkeeper’s work, were not, as a matter of law, ‘reasonable preventive procedures aimed at avoiding the errors.’ ” Id. at 708–09. The Ninth Circuit reached this conclusion because “[b]esides the periodic spot-checking, none of [the defendant’s] procedures were aimed at preventing wrongful wage garnishments caused by the bookkeeper’s failure to record payment information. And even the periodic spot-checking did not consistently reduce the likelihood of recording errors.” Id. at 709. In particular, the Ninth Circuit pointed out that the defendant had “presented no evidence of any regular redundancies designed to catch human recording errors.” Id. In this case, Defendant likewise offers no evidence of any procedures it has implemented “to catch human recording errors” in inputting account information and selecting the appropriate work actions. Id. Indeed, Defendant does not provide any evidence of procedures akin to the “spot-checking” that the Ninth Circuit held was still insufficient in Engelen to entitle the defendant to summary judgment on the bona fide error defense. Instead, Defendant’s evidence of procedures and work actions is exclusively related to the initial entry of the information. While Sapp reviews Defendant’s accounts when they are submitted to the CRAs, he confirmed that he is “ensuring accuracy, as far as transmission of the file,” which is “not a review to determine if the information included in each account is accurate.” (ECF No. 27 at 15–16.) Although Defendant contends that “it is more efficient and more prudent to prevent errors than to try to find them afterward” and “[a]n ounce of prevention is worth a pound of cure,” id. at 8, the Court must leave such conclusions regarding the reasonableness of Defendant’s procedures to the jury.17
In conclusion, because, construing the evidence in the light most favorable to Plaintiff, a reasonable jury could conclude that Defendant has not implemented procedures reasonably adapted to prevent the error at issue, a genuine dispute of material fact remains as to the reasonableness of Defendant’s procedures. Defendant is not entitled to summary judgment on its bona fide error defense.18
