In yet another appellate court decision signaling the strength of the United States Supreme Court’s 2016 Spokeo decision, the U.S. Court of Appeals for the Seventh Circuit affirmed the dismissal of a pair of putative class actions against Time Warner Cable, Inc. (“TWC”) and Great Lakes Higher Education Corporation (“Great Lakes”) alleging Fair Credit Reporting Act (“FCRA”) violations because plaintiff job applicant failed to plead an injury sufficient to establish Article III federal standing post-Spokeo.
Plaintiff Cory Groshek (“Plaintiff”) filed the pair of suits alleging that TWC and Great Lakes violated the FCRA by requesting consumer credit reports on him as part of the job application process without complying with 15 U.S.C. section 1681b(b)(2)(A). That provision bars prospective employers such as TWC and Great Lakes from obtaining consumer reports for employment purposes unless (a) 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 (commonly known as the “stand-alone disclosure requirement”); and (b) the job applicant has authorized in writing the procurement of the report. According to Plaintiff, TWC and Great Lakes did not provide clear and conspicuous disclosures, and as a result, the authorization he provided permitting the companies to obtain consumer reports was invalid.
The trial court agreed with TWC and Great Lakes’ arguments that Plaintiff had not suffered a concrete injury over Plaintiff’s claims that he suffered concrete informational and privacy harms. In light of Spokeo, the Seventh Circuit analyzed whether “the common law permitted suit in analogous circumstances,” and whether the alleged statutory violation presented an “appreciable risk of harm” to the concrete interest Congress sought to protect via statute. In a concise opinion, the Seventh Circuit found that Plaintiff’s claims did not confer Constitutional standing to bring suit in federal court based on either analysis.
Initially, the Seventh Circuit analyzed cases Plaintiff cited as examples of standing being offered in similar circumstances. However, the court found that the injuries alleged in those cases were dissimilar and that the harms Plaintiff claimed to have suffered did not rise to the level of concreteness. For example, the court pointed out, Plaintiff presented “no factual allegations plausibly suggesting that 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 [the FCRA].” Further, because Plaintiff “admits that he signed the disclosure and authorization form,” he could not rely on the conclusory allegation that the authorization was invalid and thus could not “maintain that he suffered a concrete privacy injury.”
The Seventh Circuit also looked to Congress’ intent in enacting the FCRA. The court recognized that the disclosure requirement in the statute was “clearly designed to decrease the risk of a job applicant unknowingly providing consent to the dissemination of his or her private information,” while the authorization requirement was intended to allow job applicants to prevent unwanted violations of privacy by withholding consent. However, Plaintiff’s allegations boiled down to the fact that TWC and Great Lakes’ disclosure forms “contained extraneous information,” and he did not claim that the information caused a misunderstanding, that the lack of the information would have caused him to withhold consent, or that he was unaware a consumer report would be obtained. Thus, Plaintiff “alleged a statutory violation completely removed from any concrete harm or appreciable risk of harm.”
Although there is no indication that the tide of privacy-based suits will ebb anytime soon, decisions such as the Seventh Circuit’s indicate that defendants may be able to obtain early dismissals, where plaintiffs allege nothing more than bare procedural violations. In addition, courts’ continuing adherence to a test analyzing prior common law remedies and Congressional intent means that defendants can make a more informed analysis of plaintiffs’ potential standing prior to engaging in motions practice.