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7th Circuit Upholds FCRA Adverse Action Claim Under Spokeo

Link: Robertson v. Allied Solutions, LLC, (7th. Cir. 2018)

Plaintiff Shameca Robertson, through Matthew A. Dooley, filed a putative class action lawsuit against Allied Solutions, LLC for its failure to provide an adverse-action notice as required under § 1681b(b)(3)(A) of the Fair Credit Reporting Act.  Robertson applied for a job with Allied and was rejected based on adverse criminal history information. Allied allegedly failed to give Robertson the notice required in the statute or a copy of the background check it relied on in making its decision. Plaintiff filed an unopposed motion to approve a settlement, but the court raised the issue of Article III standing sua sponte and demanded briefing on whether the case of Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) required dismissal. The district court (William T. Lawrence of the S.D. Ind) found that the claim failed to allege a concrete injury and dismissed the case.

The Seventh Circuit reversed, finding that given the language and purpose of the Act, an employer’s duty to disclose is not linked with the inaccuracy of the underlying report. Instead, the section regulating users of reports (like prospective employers) deal primarily with disclosures.

The substantive interest behind a user’s disclosure obligation is the one at issue here: allow the consumer to review the reason for any adverse decision and to respond. These rights are independent of any underlying factual disputes. A consumer might, for example, wish to concede the facts presented in the report but to bring additional facts to the employer’s attention that put matters in a better light for the consumer. In other words, the consumer might wish to use the “confession and avoidance” option that existed at common law … Providing context may be more valuable than contesting accuracy. Some consumers may collect supporting documents quickly enough to corroborate an accuracy challenge before the employer makes its decision.

The Court relied on precedent that finds that Article III standing is met where a plaintiff alleges they were deprived of a chance to obtain a benefit; so it doesn’t matter whether they were actually deprived of that benefit. Czyzewski v. Jevic Holding Corp.,137 S. Ct. 973, 983 (2017). The Court also noted that an informational injury can be concrete when the plaintiff is entitled to receive and review substantive information. In sum:

What matters is that Robertson was denied information that could have helped her craft a response to Allied’s concerns.

 

Posted in FCRA

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  1. Pingback: Third Circuit Follows Seventh to Uphold FCRA b(b)(3) Claim | Seventh Circuit Consumer Law Digest

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