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Ninth Circuit Again Addresses FCRA’s ‘Standalone’ Disclosure Requirement

In Luna v. Hansen and Adkins Auto Transport, Inc., the Ninth Circuit heard a “more novel” theory regarding FCRA’s standalone disclosure requirement, but affirmed the trial court’s grant of summary judgment in favor of the defendant-employer because Plaintiff’s theories were “thwarted by the statute itself.”

Plaintiff was a former employee of Hansen & Adkins.  During the application process, Plaintiff signed two documents related to consumer reports.  The “disclosure” was presented on a standalone document.  The “authorization” appeared at the end of the application and was included with other notices, waivers, and agreements not related to obtaining a consumer report.  Plaintiff filed a class action complaint alleging that Hansen & Adkins’s hiring practices violated FRCA’s disclosure and authorization requirements.

The disclosure and authorization requirement under FCRA have been the subject of several previous posts.  As a refresher, FCRA provides that an employer may obtain a consumer report about a job applicant if it provides a “clear and conspicuous disclosure . . . in a document that consists solely of the disclosure, that a consumer report may be obtained for employment purposes” and obtains the applicant’s authorization in writing.

Plaintiff’s primary argument was that Hansen & Adkins violated FRCA by presenting the disclosure form along with other application materials.  The Ninth Circuit swiftly rejected that argument and held that “no authority suggests that a disclosure must be distinct in time” and was further foreclosed by the Ninth Circuit’s decision in Gilberg v. California Check Cashing Stores, LLC.

Plaintiff then argued the disclosure form was not “clear and conspicuous” because it was presented along with the authorization form.  The “clear and conspicuous” standard under FCRA requires that the form be “reasonably understandable” that is “readily noticeable to the consumer.”  Noting that the disclosure form at issue contained a bolded, underlined, and capital-letter heading, the Ninth Circuit concluded that “applicants, such as big-rig truckers” would have noticed the document.  The Ninth Circuit included a full copy of the disclosure form at issue in the body of the opinion.

Plaintiff’s final argument was that Hansen & Adkins violated FCRA by not placing the authorization in a clear and conspicuous, standalone document.  Relying solely on language of FCRA, the Ninth Circuit concluded that “the authorization subsection of FCRA lacks the disclosure subsection’s standalone requirement.”  Accordingly, the Ninth Circuit held that the authorization must only be in writing and does not need to be presented in a standalone document.

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About this Author

Jason Wyman Consumer Finance Attorney Womble Bond Law Firm
Counsel

Jason concentrates his practice in litigation, with particular emphasis on contested foreclosure and consumer finance litigation.  In addition, Jason has significant experience representing creditors in bankruptcy cases.

Admitted to practice in South Carolina and Georgia, Jason is a graduate of Clemson University and a magna cum laude graduate of the Charleston School of Law. While in law school, Jason worked as a Legal Writing Teaching Fellow and served as the Senior Articles Editor of the Charleston Law Review. He received the ABA-ALI Scholarship Award and CALI awards in...

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