The Ninth Circuit recently affirmed a Central District of California decision, denying a motion to remand and granting a motion to dismiss in Tailford, No. 20-56344, 2022 U.S. App. LEXIS 5357, at *11-12 (9th Cir. Mar. 1, 2022). Plaintiffs Theresa Tailford, Sanford Buckles, and Jeffrey Ruderman sued a national credit bureau for FCRA violations, alleging failure to disclose certain information in the file disclosures the credit bureau provided upon request.

After the national credit bureau removed the case to federal court, the plaintiffs moved to remand to state court, arguing that allegations regarding their ability to protect privacy interests in connection with the Section 1681g violations was insufficient to satisfy Article III’s concrete harm requirement. The Ninth Circuit disagreed, finding the Section 1681g claim at issue was distinguishable from the disclosure claims, which the Supreme Court in Ramirez found lacked standing. The court reasoned “because the plaintiffs here have alleged a sufficiently concrete injury — they alleged that without complete information in their § 1681g disclosures, they are unable to adequately opt out of certain disclosures to other parties and ensure fair and accurate reporting of their credit information.”

Finding the plaintiffs had standing, the Ninth Circuit then turned to the merits of the claim. The plaintiffs specifically claimed the national credit bureau’s disclosures violated 15 U.S.C. §1681g in several respects, including that the disclosures did not include several pieces of information required by the FCRA, such as behavioral data from the credit bureau’s ConsumerView database, inquiries from third parties and affiliates, the identity of parties who procured consumer reports, and the date on which employment data was reported.

The District Court rejected this argument finding the following:

  • The national credit bureau was not obligated to include “behavioral data” in its Section 1681g disclosure because it was not part of the consumer’s “file” under the FCRA and “was not information that was or might be furnished in a consumer report … .”
  • The national credit bureau was not obligated to include soft inquiries because “such inquiries were never included in consumer reports.”
  • The national credit bureau was not obligated to include the dates on which employment was reported to the credit bureau because that information “has nothing to do with a consumer’s eligibility for credit, insurance, or employment information and is not the kind of information that might be furnished in a consumer report.”

The District Court also held that while the FCRA required the national credit bureau to disclose entities that procured a consumer report, the plaintiffs failed to plausibly allege Alteryx (a data analytics company) was a procuring party. Finally, the District Court held that the credit bureau was not required to identify the particular end users omitted from the Section 1681g disclosure.

On appeal, the Ninth Circuit affirmed. It reviewed the FCRA’s definition of “file” and relied on its prior decision in Shaw, which held “[a] consumer’s file includes all information on the consumer that is recorded and retained by a [CRA] that might be furnished, or has been furnished, in a consumer report on that consumer.”

The court noted that while it agreed with the plaintiffs “that a consumer’s ‘file’ is not limited to information previously contained on a consumer report, the word ‘file’ cannot be given the expansive definition suggested at first glance by the phrase “might be furnished.” With that context, the court reasoned information that “might be furnished” is “instead more reasonably interpreted to mean information similar to that shown to have been included by the CRA in a consumer report in the past or planned to be included in the future. On this record, none of the information the plaintiffs contend [the national credit bureau] failed to disclose is of the type that has been included in a consumer report in the past or is planned to be included in such a report in the future.”

On the soft inquiry issue, the court held that Section 1681g(a)(1) was “inapposite because there is no dispute that the listed inquiries were ‘soft inquiries’ that by definition ‘cannot be viewed by third parties who request a consumer’s credit report’ and ‘”cannot be taken into consideration in the lending process.'” In short, soft inquiries are simply not part of a consumer file under Section 1681g.

On the third-party and affiliate-inquiry issue, the court also rejected the plaintiffs’ position that inquiries must be disclosed. Instead, the court instructed that CRAs must disclose “each person (including each end-user identified under section 1681e(e)(1) of this title) that procured a consumer report.” A prerequisite of a disclosure under that section is “the actual procurement of a consumer report by an identified party.” The court noted that the plaintiffs did not allege the national credit bureau actually sent the inquiring parties anything, or that whatever was sent was a consumer report.

This court’s opinion provides a detailed analysis of the components of a consumer’s file disclosures and provides guidance as to what CRAs should be disclosing and what information need not be disclosed as part of this process.