Duane Morris Class Action Review - 2023 - Report - Page 210
consumer report, and to correct any errors in the consumer report before the adverse
action is taken. 15 U.S.C. § 1681(g)(c)(1)(B). Finally, when an employer obtains a
consumer report from a third party entity, the third party must obtain a certification from
the employer that it has complied with all of the above authorization and notification
requirements. 15 U.S.C. § 1681(b)(b)(1).
In 2022, the class action plaintiff’s bar continued to look for any failure of an employer to
provide these disclosures or obtain proper authorization from an applicant. Although
these authorization and disclosure requirements may appear to be relatively
straightforward, case law has created additional requirements which may not be
obvious from a plaint reading of the FCRA. For example, in Walker, et al. v. Fred Meyer,
Inc., 953 F.3d 1082, 1088 (9th Cir. 2020), the Ninth Circuit interpreted the statutory
requirement that the above disclosures be contained in a document that “consists solely
of the disclosure,” 15 U.S.C. § 1681(b)(b)(2(A)(i), to mean that an employer cannot also
place required state background check disclosures in the same document as the FCRA
disclosures. The plaintiff’s bar has seized on this recent case law by brining class
actions against well-meaning employers who include required California background
check disclosures in the same document containing required FCRA disclosures.
While employers must be vigilant in their efforts to avoid running afoul of the FCRA
authorization and disclosure requirements, the third party agencies they obtain
consumer reports from must also take active steps to ensure that they provide accurate
reports. The FCRA requires Consumer Reporting Agencies (CRA’s) that furnish
consumer reports to “follow reasonable procedures to assure maximum possible
accuracy of the information concerning the individual about whom the report relates. 15
U.S.C. § 1681(e)(b). Additionally, when an individual makes a request, CRA’s must
provide “[t]he sources of the information” that the consumer reporting agency used to
generate a consumer report. 15 U.S.C. § 1681(g)(a)(1). The plaintiff’s bar is quick to
investigate violations of these provisions and bring Rule 23 class actions against CRA’s.
Although the amount of FCRA claims consumers can potentially bring against
employers and consumer reporting agencies may appear daunting, the recent U.S.
Supreme Court decision in TransUnion LLC v. Ramirez, et al., 141 S.Ct. 2190, 2199
(2021), substantially limits FCRA class actions by making it clear that only consumers
who have “been concretely harmed by a defendant's statutory violation may sue that
private defendant over that [FCRA] violation in federal court.” In TransUnion, the plaintiff
sued the defendant credit reporting agency TransUnion, in part, for the company’s
alleged failure to “follow reasonable procedures to ensure the accuracy of information in
his credit file.” Id. at 2202. Plaintiff specifically alleged that, on his credit report
disseminated to an auto dealership, TransUnion had incorrectly matched his name with
the name of another person who was on a State Department list of individuals who
threaten America's national security. Id. at 2201. Plaintiff sought to represent a class of
8,185 individuals. Id. at 2202. Of these 8,185 individuals, the Supreme Court held that
only 1,853, including the named plaintiff, could bring FCRA claims against TransUnion
because TransUnion had disseminated their potentially defamatory credit reports, which
incorrectly showed they were on the State Department’s national security watch list, to
third parties. Id. 2209. However, the remaining 6,332 class members could not bring
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Duane Morris Class Action Review – 2023
