Joining the Ninth Circuit on one side of a post-Spokeo circuit split, the Eighth Circuit recently held a plaintiff lacked standing to pursue her Fair Credit Reporting Act (FCRA) claims when she conceded her consumer report was accurate and alleged no concrete harm from three technical FCRA violations.

On April 4, in Schumacher v. SC Data Center, Inc., the Eighth Circuit held Schumacher lacked Article III standing to pursue her FCRA claims because she failed to demonstrate she was injured by the prospective employer’s FCRA violations when the consumer report prepared about her was accurate. Because one of the FCRA’s “primary goals” is to prevent the dissemination of inaccurate information, but Schumacher’s report was accurate, she lacked standing to pursue claims for bare FCRA statutory violations.

Schumacher’s Application Process

Schumacher applied for a job at SC Data, received a conditional job offer, and underwent a background check. In completing the background check, SC Data ordered a consumer report about her. The report stated Schumacher had been convicted of murder and armed robbery. SC Data rescinded its conditional job offer without giving Schumacher a copy of the report or discussing it with her. Schumacher did not dispute the accuracy of the report but sued SC Data for three technical FCRA violations.

SC Data moved to dismiss the complaint for lack of Article III standing under Rules 12(b)(1) and 12(h)(3). The district court denied the motion, and SC Data appealed. On appeal, the Eighth Circuit reversed and remanded with instructions to dismiss the complaint.

Schumacher’s FCRA Claims

The Eighth Circuit held Schumacher lacked standing to pursue each of her three technical FCRA claims.

Adverse Action Claim Under 15 U.S.C. § 1681b(b)(3)(A): Schumacher alleged SC Data violated the FCRA by taking adverse employment action against her based on the report without first providing her a copy of the report and giving her an opportunity to explain and contextualize the contents.

The Eighth Circuit acknowledged a circuit split on the post-Spokeo debate over what constitutes an “injury in fact” sufficient for standing in an adverse action claim. On one side of the split, the Third and Seventh circuits have concluded plaintiffs have standing for adverse action claims when they did not receive a copy of their consumer reports or have an opportunity to explain the context of the negative information to the report users. On the other side, the Ninth Circuit has held a plaintiff lacks standing for an adverse action claim when the report is accurate, and the employer’s adverse decision would not have changed even if the plaintiff had explained the report’s contents.

Joining the Ninth Circuit, the Eighth Circuit in Schumacher held although the plaintiff had an “unambiguous right” under the FCRA to receive a copy of her consumer report before the adverse action was taken,” she nevertheless lacked standing for an adverse action claim. The panel concluded the FCRA does not provide a consumer the right to explain “negative but accurate” information in a consumer report prior to an employer taking an adverse action. A plaintiff’s failure to receive a copy of a report, without more, is not an injury sufficient for standing.

Disclosure Claim Under 15 U.S.C. § 1681b(b)(2)(A)(i): Schumacher alleged SC Data’s consumer report disclosure language violated the FCRA because it appeared in small, unreadable text and was not contained a standalone document. The Eighth Circuit explained the FCRA’s disclosure provisions are intended to decrease the risk that a job applicant would unknowingly consent to allowing a prospective employer to procure a consumer report. Because Schumacher alleged no harm stemming from the alleged violation, either tangible or intangible, she lacked standing to pursue her disclosure claim.

Authorization Claim Under 15 U.S.C. § 1681b(b)(2)(A)(ii): Finally, Schumacher alleged SC Data exceeded the scope of her background check authorization because SC Data obtained a criminal background report about her. The panel concluded Schumacher had authorized the consumer report, but even if she had not, she failed to allege any concrete harm from the reporting of information from criminal and national sex offender databases. Her bare invasion of privacy allegation was insufficient injury to support an FCRA claim.

In the wake of Spokeo and Ramirez, standing arguments continue to be good fodder for defendants accused of statutory FCRA violations. The growing circuit split deepened in Schumacher reveals courts willing to grapple with standing precedent to ensure plaintiffs have met their constitutional requirements. It also suggests the Supreme Court may have to weigh in on the meaning of “concrete injury” once again.