Judge Finds FCRA Lawsuit against Background Check Firm May Proceed Under Supreme Court Spokeo Ruling


Written By ESR News Blog Editor Thomas Ahearn

In July of 2016, a federal judge in the Northern District of California certified a class of job applicants in a lawsuit claiming a background check firm violated the federal Fair Credit Reporting Act (FCRA) that may proceed under the “concreteness” test established by a U.S. Supreme Court ruling in the Spokeo case.

In the Order Certifying Class,  U.S. District Judge William Alsup wrote the alleged harm suffered by the plaintiff Regmon L. Hawkins “sufficiently establishes the concreteness requirement” needed to sue for technical violations of the FCRA established by the ruling in the case of Spokeo v. Robins on May 16, 2016.

Hawkins filed a lawsuit claiming he lost a job as a security guard in 2013 after his background check report listed “prior convictions as well as three charges that did not result in criminal convictions and were older than seven years.” His complaint asserted three claims against the background check firm:

  • (1) Violation of 15 U.S.C. 1681e(b) and 1681k(a) for failing to “use reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates” and failing to use “strict procedures” to ensure that the public-record information reported is complete and up to date;
  • (2) Violation of 15 U.S.C. 1681c(a)(2) and (5) for reporting old charges that were dismissed and older than seven years; and
  • (3) Violation of 15 U.S.C. 1681n for acting willfully.

The Order notes: Under the FCRA, consumer reports may not contain information regarding “[c]ivil suits, civil judgments, and records of arrest that, from date of entry, antedate the report by more than seven years or until the governing statute of limitations has expired, whichever is the longer period.”

The Order also noted deposition testimony by the President of the background check company who stated that exceptions to the FCRA standards were made for “approximately 16 or 17 clients who demonstrated either statutory, legal licensing requirements to be able to have or use that data.”

And so we processed them as exceptions under FCRA based on our belief at that time that their requirements, and based on what they were trying to accomplish on behalf of the consumer, licensed them, put the health home care worker into someone’s home, give them a right to that data.

The Court also certified that the lawsuit met the numerosity, commonality, typicality, and adequacy requirements in granting the plaintiff’s motion for class certification.  The ‘Order Certifying Class’ is for Case No. C 15-03502 WHA in United States District Court, N.D. California.

Spokeo, Inc. v. Robins involves a Virginia man who claimed Spokeo – an online “people search engine” that sells publicly available information about individuals – violated the FCRA by publishing inaccurate information about his age, education, marital status, and professional experience.

In the opinion, the Supreme Court stated that “Article III standing requires a concrete injury even in the context of a statutory violation. For that reason, Robins could not, for example, allege a bare procedural violation, divorced from any concrete harm, and satisfy the injury-in-fact requirement of Article III.”

Enacted by Congress in 1970, the FCRA promotes the accuracy, fairness, and privacy of consumer information contained in the files of consumer reporting agencies (CRAs) and regulates the collection, dissemination, and use of consumer information. The full text of the FCRA is available here.

More Information about the FCRA from ESR

Employment Screening Resources® (ESR) – a global provider of background checks and a strategic choice for businesses needing accurate and actionable information when hiring – offers more ESR News blogs about the federal Fair Credit Reporting Act (FCRA) at www.esrcheck.com/wordpress/tag/fcra/.

ESR reminds readers of the ESR News Blog that any allegations made in a class action lawsuit are not proof that a business or Consumer Reporting Agency (CRA) violated any law, rule, or regulation. There have been only allegations in the pleading stage and no factual adjudications at the current time.

NOTE: Employment Screening Resources® (ESR) does not provide or offer legal services or legal advice of any kind or nature. Any information on this website is for educational purposes only.

© 2016 Employment Screening Resources® (ESR) – Making copies or using of any part of the ESR News Blog or ESR website for any purpose other than your own personal use is prohibited unless written authorization is first obtained from ESR.