On April 11, nothing happened to Beverly Hills physician Jonathan C. Ellis.
But another local doctor — Jonathon H. Ellis of Long Beach — was arrested that day by the Los Angeles Police Department’s Human Trafficking Unit, which said he had sent a lewd photograph to an undercover officer posing as a 16-year-old girl.
That wouldn’t have been a problem for Jonathan C. Ellis, except that business credit reporting firm Dun & Bradstreet appears to have conflated the two men, leading to a federal lawsuit this month.
The company added the following note to the credit report of Doheny Endosurgical Center, the Beverly Hills medical clinic where Jonathan C. Ellis is chief executive and part owner:
“According to a published report dated Apr 12, 2018, Jonathon Ellis was arrested and charged with four felony counts of distributing or showing pornography to a minor and one misdemeanor count of arranging a meeting with a minor for lewd purpose.” The Los Angeles Times published an article about the arrest that day.
Dun & Bradstreet referenced that note in sections of the credit report that categorized Jonathan C. Ellis’ company as a business at high risk for financial stress.
Afterward, a medical supply company stopped doing business with the clinic and fewer patients sought Jonathan C. Ellis’ services, said attorney Erik Syverson, who is representing the Beverly Hills doctor in a libel lawsuit filed Dec. 3 against Dun & Bradstreet in federal court in Los Angeles. He’s seeking damages of at least $22.5 million.
Syverson said he hopes a jury will award tens of millions of dollars more in punitive damages — enough to push Dun & Bradstreet, a major supplier of credit information about small businesses, to do more to verify the information it publishes.
“Dun & Bradstreet has a real checkered past,” he said.
A company spokeswoman did not return calls or emails seeking comment.
Allegations of inaccurate credit reports have dogged the company for decades, long before the digital age and modern concerns about consumer data accuracy and privacy.
Dun & Bradstreet, based in a suburb of Newark, N.J., traces its roots to the 1840s and boasts that it employed future presidents Abraham Lincoln, Ulysses S. Grant, Grover Cleveland and William McKinley. It sells credit reports and other information about millions of companies, which might be consulted by banks and other lenders, as well as any company looking to do business with another company. An auto parts supplier, for instance, might check the Dun & Bradstreet report of an auto repair shop to see if it has a history of paying invoices on time.
Dun & Bradstreet’s website says it became a leader in the 1960s and 1970s of using large databases to identify, track and analyze businesses. It is the creator of the widely used DUNS number, a nine-digit figure that uniquely identifies businesses and that’s a requirement for bidding on federal contracts. Last year, the company reported its revenue grew 2% to $1.74 billion.
Dun & Bradstreet gathers data from some 30,000 public and private sources, the website says. That appears to include news publications and, according to securities filings, social media sites.
But Ellis and others who have sued the company — it has faced more than two dozen libel suits in federal courts alone since the 1970s — allege the company does a poor job of ensuring all that information is accurate and in some cases is slow to remove inaccuracies.
In a 1976 case that went all the way to the U.S. Supreme Court, a construction contractor in Vermont sued for defamation after Dun & Bradstreet incorrectly reported it had filed for bankruptcy. In fact, one of the contractor’s former employees had filed for bankruptcy. A trial court, siding with the contractor, chalked up the mistake to a 17-year-old Dun & Bradstreet employee.
More recently, companies have alleged that Dun & Bradstreet includes or fails to remove inaccurate information as a way to get small businesses to pay for Dun & Bradstreet’s own credit-monitoring services. The company charges as much as $199 a month for its CreditBuilder service.
Last year, Melway Inc., a property repair and restoration company in North Carolina, sued Dun & Bradstreet, saying the company included inaccurate information in its report, leading to a poor credit score. Melway found out about the problems only after an insurance claims management firm — one that was the source of much of Melway’s business — said it planned to stop working with Melway because of its Dun & Bradstreet report, according to the lawsuit.
The repair company signed up for a free Dun & Bradstreet account so it could see the information in its report and found much of the information was inaccurate or vague, according to the lawsuit, which was filed in federal District Court in Charlotte, N.C. When the company called and tried to correct the inaccuracies, a Dun & Bradstreet representative allegedly suggested that the best way for Melway to fix its report was to pay for CreditBuilder, according to Melway’s complaint.
The representative “stated that unless Melway Inc. purchased defendant D&B’s credit building service, the process of attempting to dispute information contained in Melway Inc.’s credit worthiness rating would be slow and ineffective,” according to the complaint. Melway worked with Dun & Bradstreet for months trying to correct problems but ultimately went out of business, according to the lawsuit.
“Anyone can make a mistake, but when they make it so difficult to correct mistakes … that’s wrong,” said Richard Pinto, Melway’s lawyer. “The standards ought to be high when the result of your actions is that people go bankrupt and businesses go out of business.”
Dun & Bradstreet has issued a blanket denial of Melway’s allegations in its answer to the lawsuit.
In 2012, a construction contractor in Oak Harbor, Wash., tried to file a class-action case against the firm, alleging it commonly manipulated business credit information to sell CreditBuilder subscriptions. That case targeted Dun & Bradstreet as well as Dun & Bradstreet Credibility Corp., a Malibu firm that was spun off from the larger company in 2010 and was reacquired in 2015.
Dun & Bradstreet denied wrongdoing but agreed to a class-action settlement that would have provided payments to tens of thousands of businesses. A judge rejected the deal, though, saying the class was poorly defined. The contractor and other plaintiffs ended up reaching a settlement on their own.
Brian Pifer, who oversees entrepreneurship training and education for advocacy group Small Business Majority, said many small-business owners don’t realize that Dun & Bradstreet has probably collected information about their businesses.
“A lot of them aren’t aware D&B even exists,” he said. “The whole notion of a business credit score is foreign to a lot of folks.”
He recommends that small-business owners check their Dun & Bradstreet profiles to make sure information is accurate. If businesses don’t do so proactively, he said, they might not find out there are problems until they are turned down for a loan or run into other problems.
Dun & Bradstreet has until Dec. 27 to respond to Jonathan C. Ellis’ suit and has yet to do so.
Though the firm has dealt with plenty of libel lawsuits, Jonathan C. Ellis’ case is different from most in that the information published by Dun & Bradstreet was ostensibly about him personally rather than about his company. What’s more, the nature of the inaccurate information — suggesting Ellis sent lewd pictures to a 16-year-old — is scandalous.
The Long Beach doctor who in fact was arrested later pleaded no contest to one felony count of distributing pornography to a minor and was ordered to register for life as a sex offender.
Ellis’ suit alleges not only that Dun & Bradstreet printed false and damaging information but also that it did so with “reckless disregard for the truth” and “extreme indifference to the plaintiff’s rights, at a level which decent citizens should not have to tolerate.”
Syverson, Ellis’ lawyer, said he’ll need to show that Dun & Bradstreet was reckless in order to seek punitive damages. He believes the fact that Dun & Bradstreet included a note about the wrong doctor — despite the slightly different names — will be enough.