As we previously reported, on January 20, the Ninth Circuit Court of Appeals issued a decision of first impression in Syed v. M-I, LLC, a putative class action, when it held that a prospective employer willfully violated the Fair Credit Reporting Act by including a liability waiver in its background check disclosure form. The Ninth Circuit found that M-I’s use of the disclosure form was a willful violation of the FCRA. In reversing the district court, the Ninth Circuit held that the language in Section 1681b(b)(2)(A) was unambiguous in its requirement that the disclosure and authorization be presented in a form that “consists solely of the disclosure.”
In its opinion, the Ninth Circuit explicitly rejected M-I’s argument that the statutory text was “less than pellucid” and noted that a “lack of guidance” does not render an interpretation reasonable. The Court also noted that M-I’s inclusion of the liability waiver in its disclosure form “comports with no reasonable interpretation of 15 U.S.C. § 1681b(b)(2)(A).” The Court also rejected the argument that the plaintiff lacked Article III standing to assert the violation.
M–I has now sought en banc rehearing of the panel’s decision, with a strong emphasis on the argument that the plaintiff lacks Article III standing to state his claim. M-I argues that this type of violation is precisely the type of “bare statutory violation” that the Supreme Court in Spokeo, Inc. v. Robins held was insufficient on which to base Article III standing. M-I also argues that the Ninth Circuit’s holding that the violation was “willful” was improper based on the ambiguity of the statutory test with respect to whether a liability waiver could be included in a disclosure form. The brief quotes a prior article written by Troutman Sanders, describing the “enormous” stakes for FCRA class actions.
The Ninth Circuit’s decision is the latest case to grapple with the implications of the Supreme Court’s Spokeo decision and its effect on Article III standing. We will continue to monitor this decision and other trends in FCRA class action litigation.