Pennsylvania Federal Court Finds Lack of Article III Standing in Purely Procedural FCRA Violation and Dismisses Putative Class

Troutman Pepper

Troutman Pepper

On July 27, 2020, the Eastern District of Pennsylvania confirmed that a plaintiff lacks Article III standing to state a claim for violation of the Fair Credit Reporting Act (“FCRA”) premised solely on the failure to receive a copy of the background report and the statute’s procedurally-required summary of rights. In Davis v. C&D Sec. Mgmt., No. No. 2:20-cv-01758-MMB, 2020 U.S. Dist. LEXIS 132291 (E.D. Pa. July 27, 2020), Davis applied for employment as a security guard with defendant and was ultimately denied for the position twice. She brought suit on behalf of a putative class claiming that C&D Security failed to provide her with notice, a copy of her report, and a summary of her rights under the FCRA.

Following Third Circuit precedent in the context of Article III standing, see Finkelman v. Nat’l Football League, 810 F.3d 187, 193 (3d Cir. 2016), the Court held that Davis lacked an injury-in-fact since she ultimately became aware of her rights and timely brought suit against the employer. It confirmed the U.S. Supreme Court’s maxim in its landmark Spokeo decision that a bare procedural violation, divorced from any concrete harm, cannot satisfy the injury-in-fact requirement of Article III.

Further, the Court found that because Davis failed to establish her own standing, she may not seek relief on behalf of the putative class. Delaying the issue until class certification was held as futile given that additional facts or discovery would not cure the standing deficiencies.

This decision highlights the critical role of Article III standing in both the individual and class contexts – and reiterates that companies defending class actions should consider standing issues at the forefront of the matter rather than, in some situations, reserving them for the certification stage.

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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