Last year, the U.S. Supreme Court issued a decision in Spokeo Inc. v. Robins, holding that a plaintiff bears the burden of establishing Article III standing by alleging an injury in fact that is concrete, particularized, and actual or imminent.1 The Court stated that “Article III standing requires a concrete injury even in the context of a statutory violation,” and that a plaintiff cannot “allege a bare procedural violation, divorced from any concrete harm, and satisfy the injury in fact requirement of Article III.”2
Following Spokeo, courts across the nation have been grappling with how to interpret and apply the decision. In particular, a jurisdictional divide has arisen regarding courts’ interpretations of the standing issue in Fair Credit Reporting Act (FCRA) consumer protection class actions. Courts in the Seventh and Eighth Circuits, for example, have tended to find no standing in FCRA cases.3 Conversely, the Ninth Circuit has leaned toward plaintiff-friendly findings of standing in FCRA cases.4 Thus, the post-Spokeo FCRA class action jurisprudence demonstrates the criticality of forum in determining a defendant’s likelihood of success in challenging standing.
Generally, the purpose of the FCRA is to ensure fair and accurate credit reporting through the regulation of the creation and use of consumer reports by consumer reporting agencies. The FCRA imposes a number of requirements for the creation and use of a consumer report, including that whenever a consumer reporting agency prepares a report, it “shall follow reasonable procedures to assure maximum possible accuracy. . . .”5 The FCRA also requires that a consumer reporting agency, if requested by a consumer, provide clearly and accurately all information in that consumer’s file at the time of the request.6
Patel v. Trans Union, LLC illustrates a post-Spokeo interpretation of injury-in-fact in a FCRA class action. There, the plaintiff filed a complaint against TransUnion pre-Spokeo, in February 2014, alleging that TransUnion inaccurately reported to a prospective landlord that the plaintiff was on a terrorist watch list. The plaintiff also claimed that when he sought information about his consumer report, TransUnion withheld information, including TransUnion having flagged him as a potential terrorist. The plaintiff claimed that these practices were willful violations of the FCRA, which can result in statutory penalities of up to $1,000 per violation. The plaintiff successfully certified two national classes in connection with both of his claims.
Litigation was stayed pending the Spokeo decision, after which the parties resumed litigation. Subsequently, TransUnion moved to de-certify the classes, arguing there was no standing because the plaintiff had failed to show concrete harm. The court denied TransUnion’s motion to de-certify the class and rejected the lack of injury argument, stating, “[t]he court sees little difficulty in concluding that the alleged inaccuracies—being wrongly branded a potential terrorist, or wrongly ascribed a criminal record—are themselves concrete harms.”7
The court rejected the argument that the information was not widely disseminated, stating that it did not matter that the mistaken information was narrowly disclosed because “in this context, how widely the erroneous information was shared speaks in no obvious way to the threshold ‘concreteness’ of the harm that such information caused, or ‘risk[ed]’ causing.”8
The court also rejected TransUnion’s argument that there was no harm because the landlord did not use this information to make the determination of whether to rent to property to the plaintiff. The court explained, “[n]or does it matter to the question of standing that Mr. Patel’s prospective landlord did not use the incorrect information to deny Mr. Patel’s rental application. That may be a causation argument responsive to some aspect of Mr. Patel’s claim. Whatever use the landlord did or did not make of the erroneous information, again, the error itself, wrongly branding someone a terrorist and criminal, constitutes concrete injury to trigger standing.”9
After contentious litigation and a private mediation session (which did not result in settlement), the parties ultimately reached a settlement agreement in which TransUnion agreed to pay $8 million to the affected class of consumers, paying $400 to each class member.
This case highlights the murkiness of the FCRA class action litigation landscape following Spokeo. The case also demonstrates that a court may, under certain circumstances, find injury-in-fact for disclosure of misinformation, even if such information is not widely disseminated and not used for a negative action such as ineligibility for employment or denial of a rental application. Finally, this case demonstrates that credit reporting agencies should maintain and follow reasonable procedures to: (i) ensure the maximum possible accuracy of information; and (ii) upon the request of a consumer, provide complete information to that consumer.
1 Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016).
2 Id. at 1549.
3 Tyus v. United States Postal Serv., No. 15-CV-1467, 2017 WL 52609 (E.D. Wis. January 4, 2017) (finding standing does not exist); Vera v. Mondelez Global LLC, No. 16 C 8192, 2017 WL 1036509 (N.D. Ill. March 17, 2017) (same); Boergert v. Kelly Servs., Inc., No. 2:15-CV-04185-NKL, 2017 WL 440272 (W.D. Mo. Feb. 1, 2017) (same); Fields v. Beverly Health and Rehab. Servs., Inc., Civil No. 16–527 (DWF/LIB), 2017 WL 812104 (D. Minn. March 1, 2017) (same); Davis v. D-W Tool, Inc., No. 2:16-cv-04297-NKL, 2017 WL 1036132 (W.D. Mo. March 17, 2017) (same); Campbell v. Adecco USA, Inc., Civ. No. 2:16-cv-04059, 2017 U.S. Dist. LEXIS 61515 (W.D. Mo. April 24, 2017) (same).
4 Keller v. Experian Info. Sol., Inc., No. 16-CV-04643-LHK, 2017 WL 130285 (N.D. Cal. January 13, 2017) (finding standing does exist); Syed v. M-I, LLC, 853 F.3d 492 (9th Cir. 2017) (same); Artus v. Experian Info. Sols., Inc., No. 5:16-cv-03322-EJD, 2017 WL 346022 (N.D. Cal. January 24, 2017) (same); Benton v. Clarity Servs., Inc., No. 16-cv-6583-MMC, 2017 WL 345583 (N.D. Cal. January 24, 2017) (same); In re Ocwen Loan Servicing LLC Lit., No. 3:16-CV-00200-MMDWGC, 2017 WL 1289826 (D. Nev. March 3, 2017) (same); Terrell v. Costco Wholesale Corp., Case No. C16-1415JLR, 2017 WL 951053 (W.D. Wash. Mar. 10, 2017) (same); Mamisay v. Experian Info. Sols., Inc., No. 16-cv-05684-YGR, 2017 WL 1065170 (N.D. Cal. March 21, 2017) (same); Demmings v. KKW Trucking, Inc., No. 3:14–cv–494-SI, 2017 WL 1170856 (D. Or. March 29, 2017) (same); Bultemeyer v. CenturyLink, Inc., No. CV-14-02530-PHX-SPL, 2017 WL 634516, at *1 (D. Ariz. February 15, 2017) (same); Mitchell v. WinCo Foods, LLC, No. 1:16-cv-00076-BLW, 2017 WL 901093 (D. Idaho March 7, 2017) (same).
5 15 U.S.C. § 1681e.
6 15 U.S.C. § 1681g.
7 Patel v. Trans Union, LLC, No. 14-CV-00522-LB, 2016 WL 6143191, at *3 (N.D. Cal. October 21, 2016).
9 Id. at *4.