Written By ESR News Blog Editor Thomas Ahearn
In March 2017, a federal judge in Minnesota dismissed a class action lawsuit where a woman claimed that her former employer and its related entities “willfully” violated the federal Fair Credit Reporting Act (FCRA) even though she said she did not suffer any “actual damages” but only “informational damages.”
Plaintiff Maxine Fields claimed the Defendants in the lawsuit – Beverly Health and Rehabilitation Services, Inc., operators of nursing/assisted living centers – violated the FCRA by failing to provide her with necessary disclosures when procuring her background check, also called a “consumer report.”
In 2014, Fields received a conditional offer to work full time with Golden LivingCenter-Hopkins in Hopkins, Minnesota. She completed a Background Check Authorization Form that required her to provide information such as name, social security number, date of birth, and current/past address.
In addition, Fields had to check “yes” or “no” boxes regarding whether she had a criminal record. She checked “no” for each box and an ensuing background check showed that she had no criminal history. Fields then worked at Golden LivingCenter-Hopkins for approximately fourteen months until June 2015.
The FCRA requires people who want to procure a consumer report to: (1) provide a clear and conspicuous document containing solely the disclosure that a consumer report may be obtained for employment purposes; and (2) obtain written authorization for the procurement of the report by that person.
Plaintiffs can recover statutory damages even if they have suffered no actual damages for willful violations of the FCRA. In March 2016, Fields filed a complaint alleging a willful violation of the FCRA for not providing a “clearly and conspicuous” stand-alone disclosure regarding the consumer report.
Plaintiff Fields claimed three “informational injuries”: (1) being deprived of information regarding who was running the background check, (2) being not informed Defendants would procure a criminal background check, and (3) being denied a clear and conspicuous stand-alone disclosure required by the FCRA.
The Defendants moved to dismiss “for lack of subject matter jurisdiction and for failure to state a claim.” In the MEMORANDUM OPINION AND ORDER, United States District Judge Donovan W. Frank granted the Defendants’ motion to dismiss for lack of subject matter jurisdiction.
Judge Frank cited a ruling by the Supreme Court of the United States (SCOTUS) in May 16, 2016, in the case of Spokeo, Inc. v. Robins over inaccurate data from an online “people search engine”: The Supreme Court in Spokeo explicitly noted that a violation of a notice provision of the FCRA might not constitute a concrete injury.
Judge Frank went on to explain: Thus, if the consumer’s only complaint is that the information was not provided clearly and conspicuously in a stand-alone document, then the consumer’s informational injury is really over the manner of the disclosure. This is not a sufficiently concrete injury to confer standing.
Judge Frank concluded that the “Plaintiff has failed to meet her burden of demonstrating that she suffered an injury in fact sufficient to confer this Court with subject matter jurisdiction. Thus, the Court grants Defendants’ Motion to Dismiss.” The Plaintiff’s second amended complaint was dismissed.
The MEMORANDUM OPINION AND ORDER in the FCRA lawsuit Maxine Fields v. Beverly Health and Rehabilitation Services, Inc., CASE 0:16-cv-00527-DWF-LIB, filed March 1, 2017 in the U.S. District Court, District of Minnesota, is available at www.esrcheck.com/file/Fields-v-Beverly-HR-Svcs.pdf.
As reported by ESR News in May 2016, the SCOTUS ruled in the case of Spokeo, Inc. v. Robins that consumers must prove “concrete injury” in class action lawsuits for alleged “bare” violations of a federal statute such as the FCRA to satisfy the injury-in-fact requirement of Article III of the U.S. Constitution.
ESR Helps Employers Avoid FCRA Lawsuits
To help employers avoid costly FCRA lawsuits, Employment Screening Resources® (ESR) offers two complimentary whitepapers: ‘Common Ways Consumer Reporting Agencies are Sued Under the FCRA’ and ‘Common Ways Prospective or Current Employees Sue Employers Under the FCRA.’
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