              IN THE UNITED STATES COURT OF APPEALS

                       FOR THE FIFTH CIRCUIT



                             No. 99-51018

                           Summary Calendar


LEA SECHLER; DAVID MURCHISON,
          Plaintiffs – Counter Defendants – Appellants,

                                  v.

RENT ROLL, INC.; ET AL.,
          Defendants,

REALPAGE, INC., doing business as Rent Roll, Inc.,
          Defendant – Appellee,

WALDEN RESIDENTIAL PROPERTIES, doing business as
Oak Ridge Apartments,
          Defendant – Counter Plaintiff – Appellee.


                           Case No. 99-51187

LEA SECHLER; DAVID MURCHISON,
          Plaintiffs – Counter Defendants – Appellants,

and

TIM MAHONEY,
          Appellant,

                                  v.

RENT ROLL, INC.; ET AL.,
          Defendants,

REALPAGE, INC., doing business as Rent Roll, Inc.,
          Defendant – Appellee,

WALDEN RESIDENTIAL PROPERTIES, doing business as
Oak Ridge Apartments,
          Defendant – Counter Plaintiff – Appellee.



          Appeals from the United States District Court
                For the Western District of Texas
                         (A-98-CV-790-JN)

                             May 22, 2000
Before HIGGINBOTHAM, DeMOSS, and STEWART, Circuit Judges.

PER CURIAM:*

      Plaintiffs sued defendants for violations of the Federal Fair

Credit Reporting Act and the Texas Deceptive Trade Practices Act.

The district court granted summary judgment to the defendants on

all claims and awarded attorney fees to the defendants for the DTPA

claims.    We AFFIRM the summary judgments but REVERSE the attorney

fee awards.

                                      I

      In 1997, the plaintiffs applied to rent an apartment from

Walden Residential Properties d.b.a. Oak Ridge Apartments.                  In

processing the application, Oak Ridge obtained a credit report from

Realpage,    Inc.,   d.b.a.    Rent   Roll,   Inc.      The    credit   report

contained, among other things, information regarding three credit

accounts    belonging     to   the    plaintiffs,     either     jointly    or

individually.     One of these accounts had been more than 60 days

late in the past.        As a result of this, Oak Ridge denied the

plaintiffs’ rental application.

      The plaintiffs protested to both Oak Ridge and Rent Roll that

the credit history relied upon was inaccurate because it only

included three credit accounts, whereas the plaintiffs’ complete

credit history included more than twenty credit accounts.                   In

response, Rent Roll did not update its credit report and Oak Ridge

did not change its decision to deny the plaintiffs’ application.



     *
       Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion
should not be published and is not precedent except under the limited
circumstances set forth in 5TH CIR. R. 47.5.4.

                                      2
          The plaintiffs sued Oak Ridge and Rent Roll in state court,

alleging violations of the Federal Fair Credit Reporting Act1 and

the Texas Deceptive Trade Practices Act.2          With regard to the FCRA,

the       plaintiffs   alleged    that   Rent   Roll’s   credit   report   was

inaccurate and that Oak Ridge failed to provide the plaintiffs with

the address of Rent Roll.         With regard to the DTPA, the plaintiffs

claimed that Rent Roll’s practices were misleading and that Oak

Ridge refused the plaintiffs’ application in violation of its own

stated criteria.

          The defendants removed to federal court.       The district court

granted summary judgment on all claims in favor of the defendants

and awarded attorney fees to the defendants for the DTPA claims,

holding that the plaintiffs’ claims were groundless.



                                         II

          The district court correctly held that the plaintiffs’ FCRA

claims had no legal basis.               Under the FCRA, credit reporting

agencies must follow “reasonable procedures to assure maximum

possible accuracy of the information” contained in credit reports.3

According to the FTC, this duty extends only to the accuracy of

information surrounding individual credit accounts on file with the

credit reporting agency. The agency has no duty to seek out

accounts whose information is only on file with other credit




      1
       15 U.S.C. § 1681 et seq.
      2
       Texas Bus. & Com. Code § 17.41 et seq.
      3
       15 U.S.C. § 1681e(b).

                                         3
reporting agencies.4      While the plaintiffs cite authority for the

proposition that liability attaches for technically accurate but

misleading     information,5    they   have   provided    no   authority      or

persuasive reasoning for the proposition that such a duty extends

beyond the information currently within the files of a credit

reporting agency.

         It should be noted that Rent Roll is not a typical credit

reporting agency, since it apparently does not maintain credit

histories on individuals, but instead simply resells such credit

histories that are obtainable from other credit reporting agencies

that do maintain files on individuals. Of course, by reselling the

information, Rent Roll becomes a credit reporting agency and must

comply with the associated duties.         We find no reason, however, to

impose a greater duty on Rent Roll than that of the credit agencies

whose data Rent Roll resells.

         Thus, we find no reason to require Rent Roll to report every

credit account in an individual’s credit history, even if Rent Roll

is responsible for the accuracy of the information on file with the

credit reporting agencies whose data Rent Roll resells and reports.

Of course, if Rent Roll chooses to only resell data from credit

reporting agencies that are meager sources of information, then


       4
         See 6 FTC Consumer Credit Guide 63,162, at ¶ 25,250 (1994 & Supp.).
According to the FTC, the FCRA
      does not require a consumer reporting agency to add new items of
      information to its file[,] . . . nor is it required to add new lines
      of information about new accounts not reflected in an existing file,
      because the [FCRA] permits the consumer to dispute only the
      completeness or accuracy of particular items of information in the
      file.
Id. (emphasis added). The FTC has the primary responsibility for administering,
enforcing, and interpreting the FCRA.     See 15 U.S.C. § 1681s(a)(1); 6 FTC
Consumer Credit Guide 63,231, at ¶ 25,400 (1994).
     5
      See, e.g., Pinner v. Schmidt, 805 F.2d 1258, 1262-63 (5th Cir. 1986).

                                       4
Rent Roll’s report may lack value to its customers.                 Nevertheless,

we do not find that the FCRA requires any credit reporting agency

to provide complete credit histories.               Because there has been no

allegation that Rent Roll’s report was inaccurate with respect to

the reported information, the plaintiffs’ FCRA claim against Rent

Roll fails.

           The plaintiffs also allege on appeal that Oak Ridge violated

the FCRA by failing to provide the plaintiffs with Rent Roll’s

address after denying the plaintiffs’ application.                      Oak Ridge

argues that Rent Roll failed to plead this claim.                 Regardless, the

claim is without merit, since Oak Ridge provided the plaintiffs

with       Rent   Roll’s   name   and   phone    number,   and    the   plaintiffs

successfully contacted Rent Roll within 24 hours of obtaining such

information.          Such    substantial       compliance   has    been    deemed

sufficient under the FCRA.6             For these reasons we AFFIRM summary

judgment in favor of the defendants with regard to the FCRA claims.

           With respect to the plaintiffs’ DTPA claim against Rent Roll,

the plaintiffs first must have been consumers with respect to Oak

Ridge’s purchase of Rent Roll’s credit report.                   The DTPA defines

consumer as one “who seeks or acquires by purchase or lease, any

goods or services.”7          Second, the complaint must arise from the

goods or services sought or acquired.8 Importantly, however, the

consumer need not have been a party to the transaction at issue,9


       6
        See Kiblen v. Pickle, 653 P.2d 1338, 1343 (Wash. App. 1982).
       7
        Tex. Bus. & Com. Code Ann. § 17.45(4) (Vernon Supp. 2000).
     8
       See Clardy Mfg. Co. v. Marine Midland Bus. Loans, 88 F.3d 347, 356 (5th
Cir. 1996).
       9
        See Kennedy v. Sale, 689 S.W.2d 890, 893 (Tex. 1985).

                                          5
so long as the transaction was not incidental to the goods or

services which the consumer sought or acquired.10

      The plaintiffs concede that they were seeking only to acquire

an apartment lease and not a rental application or credit report.

Thus, the question is whether the plaintiffs’ DTPA claim against

Rent Roll arises from a transaction that is only incidental to the

leases which Oak Ridge provides and which the plaintiffs sought.

      In their attempt to obtain a lease, the plaintiffs paid $30 to

Oak Ridge to have their application processed. Oak Ridge used this

money to purchase Rent Roll’s credit report, which was for Oak

Ridge’s benefit insofar as it enabled them to assess the risk of

renting to the plaintiffs.            Moreover, the credit check fee was

clearly only a small percentage of the total rent due on a year-

long lease.      In some cases, consumer status has been denied with

respect to a transaction when that transaction was not for the

benefit of the consumer and the costs associated with it are but a

small percentage of the transaction in which consumer was directly

involved.11      These cases may be distinguishable from the current

case because the plaintiffs in this case were required to pay for

their own credit check, even if it was primarily for Oak Ridge’s

benefit, and the credit check was an actual hurdle to obtaining the

lease     and   for   that   reason   does   not   seem   incidental    to   the




     10
        See Henry v. Cullum Cos., 891 S.W.2d 789, 795 (Tex. App. – Amarillo 1997,
writ denied).
     11
      See, e.g., Insurance Co. of N. Am. v. Morris, 981 S.W.2d 667, 676 (Tex.
1998); Clardy, 88 F.3d at 356.

                                        6
plaintiffs’ attempt to acquire a lease even if the application fee

was minimal.12

      Nevertheless, we express some doubt that Texas courts would

consider the plaintiffs to be consumers of Rent Roll’s credit

check.    We refrain from resolving the issue, however, because we

instead find that even if the plaintiffs were consumers under the

DTPA with respect to Oak Ridge’s purchase of Rent Roll’s report,

there would be no DTPA violation.

      While Texas might impose a greater duty on Rent Roll than that

imposed under the FCRA, the plaintiffs have not provided any

authority or cogent reasoning for such an extension.                 Moreover,

requiring every credit reporting agency to report all information

that is only available through the purchase of credit reports from

other credit reporting agencies is too onerous a burden to impose

casually.      The   market    may   shun    agencies    whose    reports    are

incomplete in this regard, but we find no basis to label the credit

reporting industry’s current practice of reporting only what is

internally available as deceptive or misleading under Texas law.13

      12
         In Morris, the consumers did not directly provide the funding for the
“pre-screening” services at issue, nor were those services any kind of hurdle to
obtaining the services which the consumers directly sought. See 981 S.W.2d at
676.
      In Clardy the incidental transaction admittedly was a hurdle to completing
the main transaction, since the main transaction was a loan and the incidental
transaction was the loan processing service. See 88 F.3d at 356. Consumer
status was denied, but that result is somewhat incomparable because as a matter
of law, loans (unlike leases) are not goods or services under the DTPA. For that
reason, the court held that loan processing services cannot be the basis for
consumer status when the loan was the consumer’s primary objective. See id.
Because of the unique status of loans under the DTPA, Clardy may provides less
guidance as to the circumstances in which leases or lease application processing
services support consumer status under the DTPA.
    13
       Cf. Robinson v. Preston Chrysler-Plymouth, Inc., 633 S.W.2d 500, 502 (Tex.
1982). In Robinson, the Texas Supreme Court held that a failure to disclose
claim under the DTPA could not be based on the failure to disclose facts that the
defendant himself did not know. Id. at 502. The court in Robinson specifically
limited its holding to failure to disclose claims, as opposed to claims based on
misrepresentation and other misleading or deceptive practices. See id. Thus,

                                       7
For these reasons, we AFFIRM summary judgment in favor of Rent Roll

on the plaintiffs’ DTPA claim.

      With regard to the plaintiffs’ DTPA claim against Oak Ridge,

it is clear that the plaintiffs were consumers with respect to an

Oak   Ridge   lease,     since    they   sought   to   acquire   a   lease.   The

plaintiffs allege that Oak Ridge denied their application in

violation of criteria stated on Oak Ridge’s lease application

addendum.     While Oak Ridge’s purchase of a credit report from Rent

Roll may have been incidental to the plaintiffs’ attempt to obtain

a lease, Oak Ridge’s denial of the plaintiff’s application was not.

      Oak Ridge’s rental criteria stated that “[t]he credit history

will be reviewed and no more than 25% of the total accounts

reported can be over 60 days past due, or charged to collection in

the past two (2) years.”            (Emphasis in original.)          The credit

history   which    Oak    Ridge    obtained   included    only   three   credit

accounts, one of which was over 60 days past due, although the

credit report does not say when that past due status existed.

Thus, more than 25% of the accounts had been 60 days past due at

some time.

      The plaintiffs argue that Oak Ridge’s rental criteria only

allowed denials based on past due accounts when such status existed

in the past two years.       Oak Ridge argues that the time limitation

only modifies the phrase “charged to collection,” thus allowing Oak

Ridge to base denials on past due accounts regardless of when the



the strict applicability of Robinson is debatable where, as here, Rent Roll has
undertaken the duty to provide credit histories and either has, or was given,
reason to know that the histories it provides are often incomplete. In such
circumstances, the plaintiffs’ claim that the practice is deceptive or misleading
has some basis, albeit not for a failure to disclose claim.

                                         8
past due status existed.           The plaintiffs counter that at best, the

language is ambiguous and should be construed against Oak Ridge,

the drafter.

      Even if the criteria were ambiguous, we find that such an

ambiguity does not rise to the level of a misrepresentation that is

actionable under the DTPA.14          Furthermore, we do not find that Oak

Ridge’s use of Rent Roll’s credit report as a “credit history”

violates the DTPA because it was incomplete, since that would

impose a greater duty on consumers of credit reporting agencies

than on the agencies themselves.             Thus, we AFFIRM summary judgment

in favor of Oak Ridge on the plaintiffs’ DTPA claims.



                                        III

      The district court awarded attorney fees to the defendants

based   on    a   finding    that     the     plaintiffs’   DTPA    claims   were

groundless.15      We find, however, that the plaintiffs presented

arguable DTPA claims against both defendants. With respect to Rent

Roll, the consumer status of the plaintiffs is at least a debatable

question even if the weight of authority is against such a finding,

and with respect to Oak Ridge, the application criteria were not

clearly      defined.       More    importantly,     with   respect     to   both

defendants, the scope of a duty to provide or consider a complete

credit history under the DTPA was uncertain. Thus, the plaintiffs’

claims were not groundless even if weak and in the end failing.


     14
        Cf. Quitta v. Fossati, 808 S.W.2d 636, 644-45 (Tex.App. –   Corpus Christi
1991, writ denied).
      15
         See Tex. Bus. & Com. Code Ann. § 17.50(c) (allowing attorney fees for
defendants for claims that are groundless, in bad faith, or brought for the
purposes of harassment).

                                         9
     We also find no evidence that these claims were brought in bad

faith or for the purposes of harassment.        Indeed, it is clear why

these claims were brought: Oak Ridge relied on an incomplete credit

history in choosing to deny an apartment to the plaintiffs, and Oak

Ridge persisted   in   its   denial   despite   being   informed   by   the

plaintiff that the credit report was incomplete.           Such business

practices may be arbitrary and are undeniably frustrating, even if

ultimately they create no liability under the DTPA.         We therefore

hold that the attorney fee awards under the DTPA were an abuse of

discretion.

     We therefore AFFIRM summary judgment on all claims for the

defendants and REVERSE the attorney fee awards.         We also DENY Oak

Ridge’s request for attorney fees on appeal.

     AFFIRMED in part, REVERSED in part, and fee request DENIED.




                                  10
