June 13, 2017

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Clear as Mud? FCRA’s “Concrete” Requirement Again Proves to be Slippery

The Ninth Circuit Court of Appeals recently considered the United States Supreme Court’s landmark 2016 decision in Spokeo, Inc. v. Robins. Spokeo provided employers some hope in the area of litigation of background checks when it hinted that “harmless” technical violations of the Fair Credit Report Act’s (FCRA) procedures might not satisfy Article III of the Constitution’s requirement that a plaintiff suffers a “concrete” injury. Spokeo and its aftereffects, covered at length in a May 2016 blog post and a November update, remains in front of the Ninth Circuit on remand. The Ninth Circuit must now determine whether Thomas Robins suffered a “concrete” injury or a mere “bare procedural violation” when Spokeo disseminated incorrect information about him on the internet. 

Plaintiffs’ attorneys are no doubt hoping that the Ninth Circuit tipped its hand with a series of rulings in another FCRA case, Syed v. M-I, LLC. The Syed decision, discussed here, appeared to hold that the defendant employer M-I engaged in a “willful” FCRA violation by including a release of liability in its pre-employment “disclosure and authorization” form. As to a “concrete injury,” Syed merely alleged that he was harmed when “he “discovered Defendant M-I’s violation(s)…[i.e. that] M-I had procured…a ‘consumer report’ regarding him for employment purposes based on the illegal disclosure and authorization form.”

Weeks after the opinion was rendered, M-I filed a Petition for Rehearing, arguing that Syed “pled no real-world injury aside from a technical violation of the act,” and claiming that“[t]he panel repeated the mistake this Court made in Spokeo, dispensing with one of the irreducible requirements of Article III standing” (i.e., a “concrete injury”).

In response, the Court denied the Petition for Rehearing and instead proffered an Order and Amended Opinion. The Court’s Order and Amended Opinion seemed to agree with Plaintiff’s Petition for Rehearing. Indeed, the most prominent addition to the Order and Amended Opinion was a new paragraph analyzing the “concrete injury.” Nonetheless, the Order and Amended Opinion reached the same conclusion as the original: Syed had Article III standing to move forward with his lawsuit based merely on being “deprived of the right to information and the right to privacy” when he signed the noncompliant form. If the tone of recent filings in Spokeo and Syed are any indication, the Supreme Court may soon be asked to clarify the analysis it delivered in Spokeo the first time around.

© Polsinelli PC, Polsinelli LLP in California

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About this Author

Kelly J. Muensterman, Polsinelli PC, Client Development Strategies Attorney, Employee Relations Lawyer,
Associate

Kelly Muensterman firmly believes that no two client issues are exactly alike, which drives his approach to tailoring advice and counsel that fits a business’s specific needs. He also knows that in the dynamic world of employment law, it is critical to understand and meet the numerous challenges that clients face. Kelly works with both private and public companies on a variety of employment law matters and supports the firm’s efforts to develop client strategies that enable them to effectively navigate challenges with regulatory, employee relations and workplace issues...

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