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Tag: Adverse Action

Third Circuit Follows Seventh to Uphold FCRA b(b)(3) Claim

Link: Long et al. v. Septa (3d. Cir. 2018)

I recently posted about the Seventh Circuit’s opinion in Robertson v. Allied Solutions, LLC.

In Long, The Third Circuit issued a similar opinion on standing where the plaintiff alleged that the Southeastern Pennsylvania Transportation Authority failed to (1) give job applicants a copy of the credit report they relied upon in taking an adverse action against them and (2) send them the appropriate notices required under § 1681b(b)(3) of the Fair Credit Reporting Act. The case was argued by Deepak Gupta and an amicus brief was filed by Francis & Mailman.

The court found that plaintiffs met Article III standing requirements espoused in Spokeo in regards to the credit reports, but not for the notices. The court applied the two-part test from Spokeo, asking whether Congress intended to grant redress for the particular injury alleged and whether the injury in question has a close relationship to a harm traditionally recognized under common law.

As to the claim for failing to give a copy of the report, the court pointed out the unambiguous language in the FCRA creating a right of action and said this about the historical analysis:

Common-law privacy rights were historically understood as being invaded by “(a) unreasonable intrusion upon the seclusion of another, . . . (b) appropriation of the other’s name or likeness, . . . (c) unreasonable publicity given to the other’s private life, . . . or (d) publicity that unreasonably places the other in a false light before the public . . . .” Restatement (Second) of Torts § 652A(2)(a)-(d) (1977). These latter three types of privacy torts represent interference with an individual’s ability to control his personal information. That is analogous to the injury here, which is the use of Plaintiffs’ personal information—their consumer reports—without Plaintiffs being able to see or respond to it.

The Third Circuit called out the Robertson case, saying “[t]he Seventh Circuit concluded, as do we, that a plaintiff has standing to sue based on allegations that she did not receive the pre-adverse action notice required by § 1681b(b)(3).”

As to the claim regarding the notice requirements, the court found it was a bare procedural violation, divorced from any concrete harm, that cannot satisfy the injury-in-fact requirement of Article III. “Plaintiffs became aware of their FCRA rights and were able to file this lawsuit within the prescribed limitations period, so they were not injured … Plaintiffs are similar to Groshek, and like him, they lack standing, because although they did not receive FCRA rights disclosures, they understood their rights sufficiently to be able to bring this lawsuit.”

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.