Supreme Court Declines to Review Fair Credit Reporting Act


The United States Supreme Court declined to grant certiorari to decide whether the Fair Credit Reporting Act preempts private rights of action under New Jersey state law for defamation. FCRA’s furnisher rule imposes special obligations on furnisher’s of information to consumer reporting agencies, including, among other things, a duty to provide accurate information and a duty to correct and update information. After the respondent reported a disputed account to the CRAs, the petitioner, a consumer, filed suit in state court alleging defamation, among other allegations. The respondent moved to dismiss the action arguing that the FCRA barred states from providing any private right of action against persons who furnish false information to CRAs. Both the lower and appellate state courts agreed and dismissed the action. The New Jersey Supreme Court declined to review the state appellate court’s decision. The petitioner subsequently filed a writ of certiorari asking the Supreme Court to decide whether the FCRA bars enforcement of all state private rights of action against persons who furnish false information to CRAs. The petitioner noted that there was a circuit split on the issue. In particular, the Ninth Circuit held in Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147 (9th Cir. 2009) that the FCRA did not bar private rights of action under state law, whereas the Second and Seventh Circuits have held the opposite (see MacPherson v. JPMorgan Chase, 665 F.3d 45 (2d Cir. 2011) and Purcell v. Bank of America, 659 F.4d 622 (7th Cir. 2011), respectively). The respondent argued that the petitioner was attempting to “circumvent the preemption provisions” of the FCRA, noting that Congress crafted a unified system that gave exclusive enforcement of the reporting requirements to certain federal and state officials.

IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this informational piece (including any attachments) is not intended or written to be used, and may not be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

Topics:  Consumer Reporting Act, Credit Reports, Defamation, FCRA, Preemption, SCOTUS

Published In: Civil Procedure Updates, Consumer Protection Updates, Finance & Banking Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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