The Truth Brings Relief Under FCRA
- Filter By Consumer Finance Litigation
In Ratliff v. A&R Logistics, Inc., the plaintiff claimed A&R denied him a job based on a background check without the appropriate adverse action process. Under the Fair Credit Reporting Act (FCRA), notice pre- and post-adverse action must occur under prescribed timelines and must contain specific information outlined under the statute in order to avoid liability. Ratliff alleged A&R failed to properly provide these notices by, in part, omitting a copy of the background check used in making the decision to deny employment. A&R moved to dismiss, arguing that Ratliff lacked Constitutional standing, in part because no inaccuracies existed. Looking to U.S. Supreme Court’s decision in Spokeo, Inc. v. Robbins, the Northern District of Illinois agreed.
The Court first considered whether an “informational injury” occurred, stating that an “informational injury” may lie if a third party had made public inaccurate information that could cause concrete harm. However, Ratliff failed to allege any inaccuracies. As such, no “informational injury” existed. Second, the Court considered whether the failure to provide a copy of the background check constituted a sufficient “invasion of privacy” to constitute an injury-in-fact. However, the Court found that Congress did not design the FCRA’s adverse action provision to protect privacy, meaning no injury-in-fact occurred by the simple use of a background check without disclosure.
Ultimately, the Court found that Ratliff did lack standing to bring suit and its decision applied a common-sense approach to injury-in-fact analysis under Spokeo. Here, bare procedural violations—like those presented in Spokeo itself—simply did not give rise to Constitutional standing. However, litigants can still pull another key takeaway from the decision outside of the fact that Spokeo maintains its greatest pull in FCRA suits. Not for nothing did the Court focus on the fact that the at-issue background check contained truthful information (or lacked inaccuracies). It cannot be overstated how important it is to determine in credit reporting cases whether the at-issue reporting or action was truthful. Under Ratliff and other decisions like it, such truthful reporting can provide relief, even at the pleading stage, providing an opening to resolve litigation prior to discovery.