Court Opinion

ID: 4191549
Source: CourtListenerOpinion
Date Created: 2017-08-01 18:01:17.189834+00
Date Added: 2024-06-11T07:47:25.787562
License: Public Domain

In the

    United States Court of Appeals
                For the Seventh Circuit
No. 16-3355

CORY GROSHEK,
                                                 Plaintiff-Appellant,
                                 v.

TIME WARNER CABLE, INC.,
                                                Defendant-Appellee.

        Appeal from the United States District Court for the
                   Eastern District of Wisconsin.
          No. 2:15-cv-00157-pp — Pamela Pepper, Judge.

No. 16-3711

CORY GROSHEK, and all others
similarly situated,

                                                 Plaintiff-Appellant,
                                 v.

GREAT LAKES HIGHER EDUCATION
CORPORATION,

                                                Defendant-Appellee.
2                                              Nos. 16-3355 & 16-3711

         Appeal from the United States District Court for the
                     Western District of Wisconsin.
        No. 3:15-cv-00143-jdp — James D. Peterson, Chief Judge.

    ARGUED FEBRUARY 22, 2017 — DECIDED AUGUST 1, 2017

   Before BAUER and WILLIAMS, Circuit Judges, and DEGUILIO,*
District Judge.
    BAUER, Circuit Judge. Over the course of a year and a half,
Appellant Cory Groshek submitted 562 job applications to
various employers, including Appellees Time Warner Cable,
Inc. and Great Lakes Higher Education Corporation (collec-
tively, “Appellees”).1 The job application, which Appellees
provided to Groshek, included a disclosure and authorization
form informing him that a consumer report may be procured
in making the employment decision; the form also contained
other information, such as a liability release. After Groshek
submitted the job application, along with the signed disclosure
and authorization form, Appellees requested and obtained a
consumer report on him from a third party.

*
   Of the United States District Court for the Northern District of Indiana,
sitting by designation.

1
  We consolidated Groshek’s appeals; and we need not discuss the specifics
for each individual case because the underlying facts are consistent, except
where noted.
Nos. 16-3355 & 16-3711                                                    3

     Shortly thereafter, Groshek filed a class-action suit against
Appellees under the Fair Credit Reporting Act, 15 U.S.C. § 1681
et seq., seeking statutory and punitive damages for alleged
violations of 15 U.S.C. § 1681b(b)(2)(A).2 This section prohibits
a prospective employer from procuring a consumer report for
employment purposes unless certain procedures are followed:
(i) a clear and conspicuous disclosure has been made in writing
to the job applicant at any time before the report is procured,
in a document that consists solely of the disclosure, that a
consumer report may be obtained for employment purposes
(commonly known as the “stand-alone disclosure require-
ment”); and, (ii) the job applicant has authorized in writing the
procurement of the report. See id. § 1681b(b)(2)(A)(i)-(ii).
    In his complaint, Groshek alleged that Appellees violated
§ 1681b(b)(2)(A)(i). As the predicate for his claimed statutory
and punitive damages, he alleged that this violation was
willful. See id. § 1681n. Additionally, he alleged that, as a result
of the violation of § 1681b(b)(2)(A)(i), Appellees failed to obtain
a valid authorization from him before procuring a consumer
report, in violation of § 1681b(b)(2)(A)(ii).

2
   We will note the timing of the events leading up to the filing of the
complaint: Groshek applied to Time Warner on September 22, 2014, worked
his first day as an employee on October 24, 2014, resigned voluntarily on
January 28, 2015, requested settlement negotiations on January 30, 2015, and
filed a class-action complaint on February 6, 2015. As for Great Lakes,
Groshek had an in-person interview on February 6, 2014, submitted the job
application before February 11, 2014, and filed a class-action complaint on
March 5, 2014.
4                                       Nos. 16-3355 & 16-3711

    Appellees moved to dismiss for lack of subject matter
jurisdiction, arguing that Groshek lacked Article III standing
because he did not suffer a concrete injury; Groshek responded
that he suffered concrete informational and privacy injuries.
The district court granted Appellees’ motion. This appeal
followed.
    Article III of the Constitution limits our review to actual
“Cases” and “Controversies” brought by litigants who demon-
strate standing. The “irreducible constitutional minimum of
standing” consists of three elements: injury in fact, causation,
and redressability. Lujan v. Defenders of Wildlife, 504 U.S. 555,
560–61 (1992). The plaintiff bears the burden of establishing
each element. Id. at 561. In order to survive a challenge to
standing, a plaintiff must plead sufficient factual allegations,
that “plausibly suggest” each of these elements. Silha v. ACT,
Inc., 807 F.3d 169, 174 (7th Cir. 2015).
    To establish injury in fact, Groshek must show that he
“suffered ‘an invasion of a legally protected interest’ that is
‘concrete and particularized’ and ‘actual or imminent, not
conjectural or hypothetical.’” Spokeo, Inc. v. Robins, 136 S. Ct.
1540, 1548 (2016) (quoting Lujan, 504 U.S. at 560). To be
“concrete,” an injury “must actually exist;” it must be “real,”
not “abstract,” but not necessarily tangible. Id. at 1548–49. In
determining whether an alleged intangible harm constitutes a
concrete injury in fact, both history and Congress’ judgment
are important. Id. at 1549.
    First, we consider whether the common law permitted suit
in analogous circumstances. Id. We also recognize that Con-
gress is well positioned to identify intangible harms that will
Nos. 16-3355 & 16-3711                                            5

give rise to concrete injuries, which were previously inade-
quate in law. Id. Nevertheless, “Congress’ judgment that there
should be a legal remedy for the violation of a statute does not
mean each statutory violation creates an Article III injury.”
Meyers v. Nicolet Rest. of De Pere, LLC, 843 F.3d 724, 727 (7th Cir.
2016). For instance, a plaintiff cannot satisfy the injury-in-fact
element by alleging a “bare procedural violation” that is
“divorced from any concrete harm.” Spokeo, 136 S. Ct. at 1549.
Instead, the plaintiff must show that the statutory violation
presented an “appreciable risk of harm” to the underlying
concrete interest that Congress sought to protect by enacting
the statute. Meyers, 843 F.3d at 727; see also Spokeo, 136 S. Ct. at
1549–50.
    In enacting the FCRA, Congress identified the need to
“ensure fair and accurate credit reporting,” and “protect
consumer privacy.” Safeco Ins. Co. v. Burr, 551 U.S. 47, 52 (2007).
“Congress plainly sought to curb the dissemination of false
information by adopting procedures designed to decrease
that risk.” Spokeo, 136 S. Ct. at 1550. The stand-alone disclosure
and authorization requirements are procedures closely tied
to FCRA’s overarching goals. Congress was concerned that
employers’ authority to obtain consumer reports on job
applicants “may create an improper invasion of privacy.”
S. Rep. No. 104-185 at 35 (1995). Section 1681b(b)(2)(A)(i),
the stand-alone disclosure requirement, is clearly designed
to decrease the risk of a job applicant unknowingly providing
consent to the dissemination of his or her private information.
Section 1681b(b)(2)(A)(ii), the authorization requirement,
further protects consumer privacy by providing the job
applicant the ability to prevent a prospective employer from
6                                         Nos. 16-3355 & 16-3711

procuring a consumer report, i.e., by withholding consent.
S. Rep. No. 104-185 at 35 (1995).
    Here, Groshek did not allege that Appellees failed to
provide him with a disclosure that informed him that a
consumer report may be obtained for employment purposes.
His complaint contained no allegation that any of the addi-
tional information caused him to not understand the consent
he was giving; no allegation that he would not have provided
consent but for the extraneous information on the form; no
allegation that additional information caused him to be
confused; and, no allegation that he was unaware that a
consumer report would be procured. Instead, he simply
alleged that Appellees’ disclosure form contained extraneous
information. We conclude that Groshek has alleged a statutory
violation completely removed from any concrete harm or
appreciable risk of harm.
    First, Groshek argues that he suffered a concrete informa-
tional injury as a result of Appellees’ failure to provide a
disclosure compliant with § 1681b(b)(2)(A)(i). As support, he
relies on the general rule arising out of Federal Election Commis-
sion v. Akins, 524 U.S. 11 (1998) and Public Citizen v. Department
of Justice, 491 U.S. 440 (1989), two cases that Spokeo referenced
as instances where a violation of a procedural right was
sufficient to constitute an injury in fact. See Spokeo, 136 S. Ct. at
1549.
   In both Akins and Public Citizen, the Supreme Court held
generally that “a plaintiff suffers an ‘injury in fact’ when the
plaintiff fails to obtain information which must be publicly
disclosed pursuant to a statute.” Akins, 524 U.S. at 22 (citing
Nos. 16-3355 & 16-3711                                           7

Pub. Citizen, 491 U.S. at 449). In Public Citizen, the plaintiff
specifically requested, and had been refused, information. 491
U.S. at 449. The plaintiff filed suit against the defendant under
the Federal Advisory Committee Act, in an attempt to compel
the defendant to publicly disclose information as required by
FACA. Id. The Supreme Court held that the inability to
scrutinize the withheld information to the extent FACA
allowed constituted an injury in fact. Id. The Supreme Court
reasoned that the plaintiff’s injury was akin to when “an
agency denies requests for information under the Freedom
of Information Act … .” Id. As the Supreme Court noted, the
plaintiff’s injury was not simply the inability to obtain informa-
tion, but also the inability to monitor and participate effectively
in the judicial selection process without such information.
See id.
    Similarly, the plaintiffs in Akins, after a failed request for
information, filed suit to compel the defendant to provide
information that was required to be disclosed under the
Federal Election Campaign Act of 1971. 524 U.S. at 19–20. The
Supreme Court held that the plaintiffs’ inability to procure
information under FECA qualified as a concrete injury. Id. The
Supreme Court noted that the plaintiffs’ harm was not simply
the inability to obtain information, but also mentioned their
inability to evaluate candidates for public office without such
information—an informational injury “directly related to
voting, the most basic of political rights … .” Id. at 24–25.
The Supreme Court determined that FECA sought to protect
the plaintiffs “from the kind of harm they say they have
suffered … .” Id. at 22.
8                                               Nos. 16-3355 & 16-3711

    Groshek’s reliance on Akins and Public Citizen is misplaced
for two reasons. First, unlike the plaintiffs in Akins and Public
Citizen, Groshek is not seeking to compel Appellees to provide
him with information. Groshek has not alleged that, after
realizing he was provided with a non-compliant disclosure,
he requested that Appellees provide him with a compliant
disclosure and was denied. Because Groshek has not “fail[ed]”
to obtain information, he has not suffered an informational
injury as illustrated in Akins and Public Citizen.
    The second reason is that, unlike the statutes at issue in
Akins and Public Citizen, the statute here does not seek to
protect Groshek from the kind of harm he claims he has
suffered, i.e., receipt of a non-compliant disclosure. See Akins,
524 U.S. at 21–25.3 Congress did not enact § 1681b(b)(2)(A)(i)
to protect job applicants from disclosures that do not satisfy
the requirements of that section; it did so to decrease the risk
that a job applicant would unknowingly consent to allowing
a prospective employer to procure a consumer report. Under
the circumstances here, Akins and Public Citizen are inapposite.
Groshek has failed to demonstrate that he has suffered a
concrete informational injury.

3
   For this same reason, Groshek’s reliance stemming from Havens Realty
Corp. v. Coleman, 455 U.S. 363 (1982), a case that was cited in Spokeo’s
concurring and dissenting opinions, is also misplaced. See Spokeo, 136 S. Ct.
at 1553 (Thomas, J. concurring); id. at 1555 (Ginsburg, J. dissenting). Havens
Realty also demonstrates that, in order to have an informational-based
injury, the injury must be “precisely the form the statute was intended to
guard against … .” 455 U.S. at 373.
Nos. 16-3355 & 16-3711                                           9

     Next, Groshek contends that he suffered a privacy injury
as a result of the violation of § 1681b(b)(2)(A). Sec-
tion 1681b(b)(2)(A)(ii)’s authorization requirement does
implicate privacy interests. S. Rep. No. 104-185 at 35 (1995).
It is also well established that “[v]iolations of rights of privacy
are actionable … .” Gubala v. Time Warner Cable, Inc., 846 F.3d
909, 912 (7th Cir. 2017).
   As mentioned above, Groshek alleged that, as a result of
Appellees’ failure to provide him with a compliant disclosure,
Appellees failed to obtain a valid authorization from him to
procure a consumer report, in violation of § 1681b(b)(2)(A)(ii).
But, this is a conclusory allegation which we discard when
considering well-pleaded factual allegations. See Diedrich v.
Ocwen Loan Servicing, LLC, 839 F.3d 583, 589 (7th Cir. 2016).
Because Groshek admits that he signed the disclosure and
authorization form, he cannot maintain that he suffered a
concrete privacy injury.
    Lastly, we briefly highlight the Ninth Circuit’s opinion in
Syed v. M-I, LLC, 853 F.3d 492 (9th Cir. 2017), which was
decided after briefing but was a topic of discussion at oral
argument and in supplemental briefing. There, the plaintiff
alleged in his complaint that he discovered, within the previ-
ous two years, that the defendant obtained a consumer report
for employment purposes based on an illegal disclosure and
authorization form. Id. at 499. The court held that this allega-
tion was sufficient to confer standing because it inferred that
the plaintiff was “deprived of the right to information and the
right to privacy” under 15 U.S.C. §1681b(b)(2)(A)(i)-(ii). Id. The
court, drawing all reasonable inferences in plaintiff’s favor
10                                      Nos. 16-3355 & 16-3711

determined that the plaintiff was “confused by the inclusion of
the liability waiver with the disclosure and would not have
signed it had it contained a sufficiently clear disclosure, as
required by the statute.” Id. at 499–500.
    Syed is inapposite. The Ninth Circuit had factual allegations
from which it could infer harm, whereas Groshek alleges none.
Unlike the plaintiff in Syed, Groshek presents no factual
allegations plausibly suggesting that he was confused by the
disclosure form or the form’s inclusion of a liability release, or
that he would not have signed it had the disclosure complied
with 15 U.S.C. § 1681b(b)(2)(A)(i).
    We conclude that Groshek has not alleged facts demonstrat-
ing a real, concrete appreciable risk of harm. Because he has
failed to demonstrate that he suffered a concrete injury, he
lacks Article III standing. Accordingly, the judgments of the
district courts are AFFIRMED.