Written By ESR News Blog Editor Thomas Ahearn
A U.S. District Judge has granted the defendant’s motion to dismiss in the class action lawsuit that claimed Paramount violated the federal Fair Credit Reporting Act (FCRA) requirement for disclosure of consumer reports. A copy of the ‘Order Granting Defendant’s Motion to Dismiss’ is available at http://www.esrcheck.com/file/Peikoff-v-Paramount-Pictures_Order-Granting-Defendant-Motion-to-Dismiss.pdf.
In his ruling in the case of Peikoff v. Paramount Pictures Corporation on March 25, 2015, Judge Vince Chhabria noted that the plaintiff alleged Paramount violated the FCRA 15 U.S.C. § 1681b which provides:
- [A] person may not procure a consumer report, or cause a consumer report to be procured, for employment purposes with respect to any consumer, unless–(i) a clear and conspicuous disclosure has been made in writing to the consumer at any time before the report is procured or caused to be procured, in a document that consists solely of the disclosure, that a consumer report may be obtained for employment purposes; and (ii) the consumer has authorized in writing (which authorization may be made on the document referred to in clause (i)) the procurement of the report by that person. 15 U.S.C. § 1681b(b)(2)(A) (emphasis added).
Judge Chhabria wrote that the “plaintiff alleges that Paramount violated the above provision of the FCRA by including in its disclosure form a certification that the information provided by the plaintiff for the purpose of obtaining the consumer report was true and correct.” This disclosure from Paramount provided:
- I understand that I am entitled to a complete and accurate disclosure of the nature and scope of any investigative consumer report of which I am the subject upon my written request to Kroll, if such is made within a reasonable time after the date hereof. I also understand that I may receive a written summary of my rights under 15 U.S.C. § 1681 et. seq. I agree that this authorization shall remain valid for the duration of my employment with Company. I certify that the information contained on this Authorization form is true and correct and that my application may be terminated based on any false, omitted, or fraudulent information. FAC ¶ 15 & Ex. 1 (emphasis added).
Judge Chhabria noted that the plaintiff sought statutory and punitive damages, which requires the defendants to “willfully” fail to comply with the requirements of FCRA. In Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47 (2007), the Supreme Court held that the use of the term “willfully” in the FCRA required a plaintiff to show that the defendant’s conduct was intentional or reckless. However, Judge Chhabria found:
- A number of district courts have found that the inclusion of a liability waiver provision in an FCRA disclosure to violate § 1681b(b)’s requirement that the document “consists solely of the disclosure,” 15 U.S.C. § 1681b(b)(2)(A)(i)… However, the liability waivers at issue in those cases were independent from the disclosure and authorization. The one-sentence certification Paramount included in its disclosure form, if not a part of the statutorily permitted authorization, was closely related to it, and would similarly serve to “focus the consumer’s attention on the disclosure.”… Therefore, even if inclusion of the certification in Paramount’s disclosure form did not comply with a strict reading of § 1681b(b)(2)(A)’s requirement that the document consist solely of the disclosure and the authorization, it is not plausible that Paramount acted in reckless disregard of the requirements of the FCRA by using this language.
As reported earlier on the ESR News Blog, a class action lawsuit was filed in January 2015 claiming Paramount Pictures Corporation improperly performed consumer reports for employment purposes in alleged violation of the federal FCRA, which regulates the collection, dissemination, and use of consumer information. The case is MICHAEL PEIKOFF, Plaintiff, v. PARAMOUNT PICTURES CORPORATION, Defendant, Case No. 15-cv-00068-VC in the UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA.
FCRA Class Action Lawsuits
Employment Screening Resources® (ESR) – ‘The Background Check Authority®’ – has identified the explosive growth of FCRA class action lawsuits as one the ESR Top Ten Background Check Trends for 2015. ESR founder and CEO Attorney Lester Rosen wrote the blog “FCRA Class Action Lawsuits will Continue to Increase Even if No One is Actually Harmed in 2015.” Rosen will also present a complimentary webinar titled ‘Common Ways Consumer Reporting Agencies are Sued Under the FCRA’ on Tuesday, May 12, 2015. To register for the webinar, click here.
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