Affirming the dismissal of a job applicant’s class action suit under the Fair Credit Reporting Act, in which he sought punitive and statutory damages for, among other things, alleged violations of the Act’s “stand-alone disclosure requirement,” the Seventh Circuit found that he failed to show he suffered a concrete injury and thus he lacked Article III standing (Groshek v. Time Warner Cable, Inc., August 1, 2017, Bauer, W.).
Over the course of 18 months, the plaintiff submitted 562 job applications to various employers, including Time Warner Cable, Inc., and Great Lakes Higher Education Corporation. The job application provided by the two companies included a disclosure and authorization form informing him that a consumer report might be procured in making the employment decision. It also contained other information, such as a liability release. After the plaintiff submitted the application, along with the signed disclosure and authorization form, the companies requested and obtained a consumer report on him from a third party.
Alleged violations. He then filed a class action against the companies under the FCRA seeking statutory and punitive damages for alleged violations of 15 U.S.C. § 1681b(b)(2)(A), which prohibits a prospective employer from procuring a consumer report for employment purposes unless certain procedures are followed: (i) a clear and conspicuous disclosure has been made in writing to the job applicant at any time before the report is procured, in a document that consists solely of the disclosure, that a consumer report may be obtained for employment purposes (the “stand-alone disclosure requirement”); and, (ii) the job applicant has authorized in writing the procurement of the report.
The plaintiff claimed the companies violated Section 1681b(b)(2)(A)(i), the violation was willful, and as a result of the violation, they failed to obtain a valid authorization from him before procuring a consumer report, in violation of Section 1681b(b)(2)(A)(ii). Arguing that the applicant lacked Article III standing because he did not suffer a concrete injury, the companies moved to dismiss for lack of subject matter jurisdiction and the district court granted the motion.
Concrete injury. On appeal, the Seventh Circuit, quoting the Supreme Court’s decision in Spokeo, Inc. v. Robins, noted that to establish injury in fact, the plaintiff had to show he “suffered ‘an invasion of a legally protected interest’ that is ‘concrete and particularized’ and ‘actual or imminent, not conjectural or hypothetical.’” In enacting the FCRA, Congress identified the need to ensure fair and accurate credit reporting and protect consumer privacy and plainly sought to curb the dissemination of false information by adopting procedures designed to decrease that risk and the stand-alone disclosure and authorization requirements are procedures closely tied to FCRA’s overarching goals, the court observed.
Here, the plaintiff did not allege that the companies failed to provide him with a disclosure that informed him that a consumer report may be obtained for employment purposes; that any of the additional information caused him to not understand the consent he was given; that he would not have provided consent but for the extraneous information on the form; that additional information caused him to be confused; or that he was unaware that a consumer report would be procured. Noting that he simply alleged the disclosure form contained extraneous information, the court found he alleged a statutory violation completely removed from any concrete or appreciable risk of harm.
In arguing that he suffered a concrete informational injury as a result of the companies’ failure to provide a disclosure compliant with Section 1681b(b)(2)(A)(i), he relied on the general rule arising out of Federal Election Commission v. Akins and Public Citizen v. Department of Justice, two cases that Spokeo referenced as instances where a violation of a procedural right was sufficient to constitute an injury in fact. But his reliance on those cases was misplaced, said the court here, pointing out that unlike the plaintiffs in those cases, he was not seeking to compel the companies to provide him with information. Further, unlike the statutes at issue in Akins and Public Citizen, the FCRA does not seek to protect him from the kind of harm he claimed he suffered—receipt of a noncompliant disclosure.
“Congress did not enact § 1681b(b)(2)(A)(i) to protect job applicants from disclosures that do not satisfy the requirements of that section; it did so to decrease the risk that a job applicant would unknowingly consent to allowing a prospective employer to procure a consumer report,” said the court, observing that under the circumstances here, Akins and Public Citizen were inapposite and the plaintiff failed to demonstrate that he suffered a concrete informational injury.
Privacy injury. As to his contention that he suffered a privacy injury as a result of the violation of Section 1681b(b)(2)(A), the court pointed out that Section 1681b(b)(2)(A)(ii)’s authorization requirement does implicate privacy interests. Discarding his conclusory allegation that as a result of the companies’ failure to provide him with a compliant disclosure, they failed to obtain a valid authorization from him to procure a consumer report, the court found that because he admitted he signed the disclosure and authorization form, he could not maintain that he suffered a concrete privacy injury.
Syed. Finally, the court addressed the Ninth Circuit’s recent opinion in Syed v. M-I, LLC, in which that court held a plaintiff’s allegation that he discovered, within the previous two years, that the defendant obtained a consumer report for employment purposes based on an illegal disclosure and authorization form was sufficient to confer standing because it inferred that the plaintiff was “deprived of the right to information and the right to privacy” under 15 U.S.C. §1681b(b)(2)(A)(i)-(ii). Finding Syed to be inapposite, the Seventh Circuit noted that unlike the plaintiff in Syed, the plaintiff here presented no factual allegations plausibly suggesting he was confused by the disclosure form or the form’s inclusion of a liability release, or that he would not have signed it had the disclosure complied with 15 U.S.C. § 1681b(b)(2)(A)(i). Thus, said the court, he failed to allege facts showing a real, concrete appreciable risk of harm.
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