In the wake of the Supreme Court’s decision in Spokeo, Inc. v. Robins, courts and litigants alike have been trying to determine the contours of constitutional standing when it comes to procedural violations of consumer protection statutes. This past week, the District Court for the Central District of California weighed in, finding in favor of consumer standing.
In Rodriguez v. El Toro Investors Ltd., the plaintiff alleged that that the defendant violated the Fair Credit Reporting Act by procuring a consumer report without presenting her with a background check disclosure form that complied with the statute. Specifically, Rodriguez claimed that El Toro Investors’ disclosure form included a liability waiver that ran afoul of the FCRA’s requirement that the disclosure “consist solely of the disclosure” that a consumer report may be obtained for employment purposes.
El Toro moved to dismiss the action under the theory that, even if Rodriguez had received an improper disclosure, she had not suffered any “concrete injury-in-fact” sufficient to confer constitutional standing. According to El Toro, “[t]he only ‘injury’ Plaintiff could have suffered is that her eyes had to read an extra 13-word [actually 15-word] sentence.” The court disagreed.
In the court’s view, “Defendants’ inclusion of an exculpatory clause poses a sufficiently concrete injury to confer on Plaintiff Article III standing.” Even if the clause is not enforceable, the court believed that the clause may “detract from the warnings that Congress found so vital” or mislead consumers as to their statutory rights. In fact, even if those maladies did not occur, the court found that there was a “substantial risk of harm” by the inclusion of the liability waiver. As a result, the court found that Rodriguez had Constitutional standing.
Troutman Sanders’ employment background check team counsels clients throughout the country on compliance with the FCRA’s background check requirements and in defense of employment background check class actions. We will continue to monitor the effect of Spokeo in the FCRA employment background check arena.