In the years following the Supreme Court’s decision in Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1549 (2016) — which held that “bare procedural violation[s], divorced from any concrete harm, [do not] satisfy the injury-in-fact requirement of Article III” — district courts have had to grapple with the question of standing under the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681, et seq., and in particular, what injuries resulting from an alleged violation of FCRA are sufficiently concrete to invoke Article III standing.
This blog post discusses claims arising under Section 1681b(b)(1)(A) of the FCRA. Under that section, a consumer reporting agency (CRA) may furnish a consumer report to an employer “only if” the employer first certifies that it: (1) “has complied” with the disclosure-to-consumer requirement under Section 1681b(b)(2); and (2) “will comply” with the notice-to-consumer requirement before taking adverse action as required by Section 1681b(b)(3).
Although no circuit court has yet weighed in on whether a claim arising under Section 1681b(b)(1)(A) can support Article III standing, several district courts have addressed the issue and reached different conclusions.
For instance, in Sanders v. Glob. Radar Acquisition, LLC, No. 2:18-CV-555-FTM-99CM, 2019 WL 118044, (M.D. Fla. Jan. 7, 2019), the plaintiff alleged that the CRA provided the consumer report without obtaining a Section 1681b(b)(1)(A) certification from the employer. The court denied the defendant’s motion to dismiss on Article III grounds, holding that the plaintiff’s injuries “are not mere ‘procedural’ statutory violations; rather, they are precisely a kind of harm the FCRA aims to prevent. Namely, the distribution of consumer reports without the proper, required disclosures.” Id. at *5. The district court found that this “distribution” constituted a concrete injury even though the plaintiff did not allege that the consumer reports contained inaccurate information. Id. at *1.
Likewise, in Gross v. Concorde, Inc., No. 818CV01755T02CPT, 2019 WL 354864, (M.D. Fla. Jan. 29, 2019), the plaintiff alleged that his prospective employer took adverse action against him based on the contents of his consumer report, which the CRA had furnished without obtaining certification. Id. at *1. The district court quoted Sanders with approval and held that the plaintiff adequately alleged a concrete harm. Id. at *4.
Other district courts have reached the opposite conclusion, finding that a Section 1681b(b)(1)(A) claim is not sufficient to invoke Article III standing. In Larroque v. First Advantage LNS Screening Sols., Inc., No. 15-CV-04684-JSC, 2016 WL 4577257, (N.D. Cal. Sept. 2, 2016), the court held that the plaintiff’s Section 1681b(b)(1)(A) allegations did not sufficiently allege a concrete harm, noting that the plaintiff had authorized the release of her consumer report. Id. at *5.
Similarly, in Disalvo v. Intellicorp Records, Inc., No. 1:16 CV 1697, 2016 WL 5405258, at *2 (N.D. Ohio Sept. 27, 2016) — an action involving a purported violation of Section 1681b(b)(1)(A) — the district court remanded the plaintiff’s complaint on the basis that the plaintiff lacked Article III standing. The court noted that the plaintiff had failed to allege “that the background report prepared by defendant was inaccurate, contained errors, or was otherwise improper. Nor does plaintiff allege that he did not receive the statutorily required information regarding [a prospective employer’s] intent to obtain a background report, that he did not provide [the employer] with his consent for the background check, or that the consent was invalid.” Id. at *3.
These cases reveal that a key factor in whether an alleged violation of Section 1681b(b)(1)(A) is sufficient to invoke Article III standing is whether the complaint links the claim to a disclosure or notice violation. However, linking a certification violation with a disclosure or notice violation runs into another Article III problem; namely, whether a plaintiff’s injuries are “fairly traceable” to the CRA’s alleged conduct.
In Frazier v. First Advantage Background Servs. Corp., No. 3:17CV30, 2018 WL 4568612, (E.D. Va. Sept. 24, 2018), the court addressed this issue and held that the plaintiffs’ injuries were “‘caused by decisions and actions of third parties not before this court,’ rather than by [the CRA]’s alleged FCRA violation.” Id. at *8. The district court dismissed that action on Article III standing grounds. See id. at *9.
In Sanders, by contrast, the district court “decline[d] defendant’s invitation to look [to Frazier],” holding that the plaintiffs’ allegations “that defendant provided the consumer reports without the required authorizations … satisfied [the fairly traceable] element of standing.” Sanders, 2019 WL 118044, at *6.
Until the circuit courts provide guidance, Article III standing for Section 1681b(b)(1)(A) claims will continue to be litigated in district courts.