Source: https://www.fenwick.com/publications/Pages/The-Seventh-Circuit-Finds-No-Standing-In-FCRA-Case-Based-On-Job-Application-Credit-Reports.aspx
Timestamp: 2019-04-26 08:13:51+00:00

Document:
The U.S. Court of Appeals for the Seventh Circuit held that allegations that prospective employers obtained consumer reports in technical violation of the Fair Credit Reporting Act by themselves do not constitute a concrete injury sufficient to confer Article III standing. The Aug. 1 ruling in the case, Groshek v. Time Warner Cable, will make it more difficult for plaintiffs to bring statutory violation cases.
Congress enacted the FCRA to protect the privacy rights of job applicants and consumers seeking credit or insurance and to enable job applicants and consumers to correct any errors in their consumer reports by providing them with notice when the consumer reports would be used.
Accordingly, the FCRA places restrictions on when “consumer reports” can serve “as a factor in establishing the consumer’s eligibility for (A) credit or insurance to be used primarily for personal, family, or household purposes; (B) employment purposes; or (C) any other purpose authorized under [the statute].” 15 U.S.C. § 1681a(d). For example, the FCRA prohibits an employer from procuring a consumer report for a job applicant unless: “(i) a clear and conspicuous disclosure has been made in writing to the consumer at any time before the report is procured or caused to be procured, in a document that consists solely of the disclosure, . . . and (ii) the consumer has authorized in writing . . . the procurement of the report by that person.” 15 U.S.C. § 1681b(b)(2)(A).
The FCRA also provides a private right of action against users of consumer reports, including potential employers, for any willful or negligent failures to comply with its requirements. See 15 U.S.C. § 1681n(a) & 1681o(a). For willful violations, plaintiffs may recover statutory damages, punitive damages and attorneys’ fees and costs. See 15 U.S.C. § 1681n(a).
Plaintiff Cory Groshek submitted job applications to the defendants Time Warner Cable, Inc. and Great Lakes Higher Education Corp. Their job applications included a disclosure and authorization form notifying Groshek that the defendants may procure a consumer report in making their employment decision. The form also contained a liability release. After Groshek submitted his job application along with the signed disclosure and authorization form, the defendants obtained a consumer report for Groshek.
Shortly thereafter, Groshek filed a putative class action, alleging that the defendants willfully violated the FRCA by including extraneous language in the disclosure and authorization form, which prevented the disclosures from being clear and conspicuous and the authorization that he signed from being valid. The district court dismissed Groshek’s complaint for lack of Article III standing, finding that he had not alleged a concrete injury and rejecting his argument that he suffered both informational and privacy injuries.
The Seventh Circuit affirmed the dismissal, finding that Groshek had not alleged facts demonstrating a concrete harm in Groshek v. Time Warner Cable (7th Cir. Aug. 1, 2017).
Turning to the allegations in the complaint, the Seventh Circuit found that Groshek had “alleged a statutory violation completely removed from any concrete harm or appreciable risk of harm.” The Court noted that Groshek had only alleged that the defendant’s disclosure form contained extraneous information; but, that he had not alleged that the additional information had resulted in a misunderstanding or confusion, that he would not have provided consent but for the additional information, or that he was unaware that a consumer report would be obtained.

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