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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.Continue Reading Seventh Circuit Affirms Dismissal of FCRA Class Claims Based on Job Application Credit Reports Due to Lack of Standing

Michaels escaped a potential class action alleging Fair Credit Reporting Act (“FCRA”) violations late last month when a federal judge found the United States Supreme Court’s recent decision in Spokeo, Inc. v. Robbins, 136 S. Ct. 1540 (2016) foreclosed the plaintiffs’ claim for a bare statutory violation not resulting in concrete damages.  The recent ruling in In re: Michaels Stores, Inc., Fair Credit Reporting Act (FCRA) Litigation confirms the significance of the Spokeo decision and also provides FCRA defendants with additional ammunition to use in fighting statutory violation claims where damages are lacking.

The Michaels suit was based upon the consolidation of three proposed class actions alleging the store failed to clearly and conspicuously announce its intent to obtain background checks in a separate document containing only that disclosure, which was in violation of the FCRA. Instead of providing a standalone document, Michaels did disclose that it would be obtaining such checks as part of its online employment application. The complaints in the class pointed to 15 U.S.C. § 1681b(b)(2)(A), which directs that an employer may not procure a consumer report for employment purposes without providing a “clear and conspicuous disclosure…in a document that consists solely of the disclosure….”
Continue Reading Bare Statutory Violation of FCRA Fails to Satisfy Standing Requirements Post-Spokeo, Says District of New Jersey in Suit Over Michaels Employment Disclosures

Just days after the Supreme Court’s ruling in Spokeo v. Robins, the highly anticipated decision is already impacting data breach class actions across the country. The defendant in the Spokeo case contended that the plaintiff had suffered no concrete injury, and that a mere statutory violation is not enough of an injury to…

The federal judiciary derives its power from Article III of the United States Constitution. That power is limited to deciding “Cases” and “Controversies,” Art. III, section 2. In the case of Spokeo v. Robins, the United States Supreme Court considered whether a plaintiff presents such a “case” or “controversy” where he only alleged a violation of a consumer protection statute, but did not allege any additional harm. The statute in question was the Fair Credit Reporting Act (“FCRA”). The Court found that plaintiff “cannot satisfy the demands of Article III by alleging a bare procedural violation. A violation of one of the FCRA’s procedural requirements may result in no harm.” Slip op. at 10. Even though Congress enacted the FCRA to avoid dissemination of inaccurate information, for example, “It is difficult to imagine how the dissemination of an incorrect zip code, without more, could work any concrete harm.” Id. at 11. The Supreme Court remanded this case for the Ninth Circuit Court of Appeals to further consider whether this plaintiff presented a “concrete injury” justifying the assertion of Article III jurisdiction.
Continue Reading In Spokeo v. Robins, The United States Supreme Court Articulates a Need for ‘Concrete’ Injury To Sue in Federal Court

On September 15, the Federal Trade Commission held a workshop entitled “Big Data: A Tool for Inclusion or Exclusion?” FTC Commissioner Julie Brill took the opportunity to discuss an industry that she has consistently maintained requires more regulation and scrutiny: data brokers.

Commissioner Brill stressed first that the FTC is very focused on entities regulated…

This post was written by Timothy J. Nagle and Christopher J. Fatherley.

In December 2011, the Consumer Financial Protection Bureau (CFPB) published a Federal Register (FR) notice [76 FR 75825] on “Streamlining Inherited Regulations.”  These regulations consist of federal consumer financial laws that were transferred to CFPB authority under the Dodd-Frank Wall Street…

A New Jersey federal court is allowing the FTC’s case against Wyndham Worldwide Corporation to go forward, denying Wyndham’s Motion to Dismiss on both the unfairness and deception counts.  In this closely watched case, the court emphasized that in denying Wyndham’s request for dismissal, it was not providing the FTC with a “blank check to…

On February 4, the Ninth Circuit ruled that a plaintiff need not show actual harm to have standing to sue under the Fair Credit Reporting Act (FCRA); a violation of the statutory right is a sufficient injury in fact to confer standing. The case, Robins v. Spokeo, Inc., may open the door for plaintiffs to…

Federal Trade Commissioner Julie Brill, in a speech Monday at the National Association of Attorneys General (NAAG) Presidential Initiative Summit, urged the states to take a more active role in investigating and holding accountable data brokers for violations of the Fair Credit Reporting Act (FCRA).

The FCRA regulates the use of credit report information for…