In recommending that the district court grant the defendant’s motion to dismiss, a magistrate judge in the United States District Court for the Northern District of Georgia recently addressed the contours of 15 U.S.C. § 1681k(a) of the Fair Credit Reporting Act in a way that affirms the disjunctive nature of that statutory provision, and which provides further guidance as to the “strict procedures” that a consumer reporting agency (CRA) can maintain to avoid liability under the statute.  Henderson v. Infomart, Inc., No. 1:14-cv-01609, ECF 59 at 16 (N.D. Ga. Aug. 8, 2014).

§ 1681k(a) of the FCRA provides as follows:

A consumer reporting agency which furnishes a consumer report for employment purposes and which for that purpose compiles and reports items of information on consumers which are matters of public record and are likely to have an adverse effect upon a consumer’s ability to obtain employment shall—

(1) at the time such public record information is reported to the user of such consumer report, notify the consumer of the fact that public record information is being reported by the consumer reporting agency, together with the name and address of the person to whom such information is being reported; or

(2) maintain strict procedures designed to insure that whenever public record information which is likely to have an adverse effect on a consumer’s ability to obtain employment is reported it is complete and up to date …. .

Thus, as the court held, and consistent with the majority position nationwide, under the disjunctive language of the statute, a CRA can satisfy any obligation under § 1681k(a) by complying with either subsection (a)(1) or (a)(2).  Put another way, the notification requirement of subsection (a)(1) is only triggered if the CRA does not meet the requirements of subsection (a)(2).

Pursuant to that framework, the court then addressed the plaintiff’s claimed basis for allegations that the defendant failed to comply with § 1681k(a)(2) – namely, that the defendant could not claim to have strict procedures because it “did not attempt for any consumer to follow the option available at 15 U.S.C. § 1681k(a)(2), which requires a consumer reporting agency to actually contact the original source of public records information (e.g. the Court clerk) immediately before furnishing a report which includes such information.”  Relying on multiple sources, including previous district court decisions and guidance from the Federal Trade Commission, the court concluded that the complaint did not state a claim for a violation of § 1681k(a) because the plaintiff failed to allege a lack of compliance with § 1681k(a)(2).  Specifically, the court held that § 1681k(a)(2) “does not require that a consumer reporting agency contact the ‘original source’ of public records information immediately before furnishing a report, as Plaintiffs suggest.”

Because of the potential for large class sizes, claims challenging a company’s failure to timely provide the form of notice contemplated under § 1681k(a)(1) are the frequent subject of putative FCRA class actions.  Troutman Sanders LLP frequently litigates such claims, and it will continue to monitor this and similar proceedings addressing the structure and requirements of § 1681k(a).