A temporary staffing company has convinced a federal district court judge that a job applicant had not described a concrete injury from a claimed Fair Credit Reporting Act violation, but might not realize any benefit from the victory. The judge decided that the federal courts have no jurisdiction over the suit, but remanded it to the Illinois state court where it had originated. The state court has its own rules on who has standing to sue, the judge noted, and is not bound by Article III of the Constitution (Hopkins v. Staffing Network Holdings, LLC, Oct. 18, 2016).
The FCRA has specific requirements for disclosures that must be given when a prospective employer wants to run a background check on a job applicant. Among the requirements is that the disclosures must be given in a document that is restricted solely to that purpose, that the applicant must be told a consumer report may be obtained, and that the applicant must give written consent (15 U.S.C. §1681b(2)).
Claimed FCRA violation. The job applicant claimed the company violated the requirements by including additional information in the disclosure document and that the FCRA was violated when the company obtained a consumer report.
The judge noted, however, that the applicant had not described any harm from the alleged error. The applicant had not said that he was unaware a consumer report would be obtained, that the report was inaccurate, that he was confused by the extra information, or that he would not have given his consent if the extra information had not been included.
Standing to sue. Article III of the Constitution says that federal courts have jurisdiction only over cases and controversies. This has been interpreted to require plaintiffs to establish standing to sue, and one element of standing is a concrete, particularized, and actual injury. The company argued the applicant fell short, citing the Supreme Court decision in Spokeo, Inc. v. Robins. The judge agreed.
Spokeo also dealt with the FCRA. In the decision, the Supreme Court said that a concrete injury has to be an injury that actually exists. A “bare procedural violation” of a law that does not result in any actual harm will not confer standing to sue.
The violation described by the job applicant might cause actual harm, the judge said, but it might not. In such a case, the applicant needed to describe some harm, and he had not done so.
Remedy. The applicant had filed his suit in the Illinois state court. The company had removed the suit to federal court and then sought a dismissal based on a claim that the applicant did not have standing. Once the judge agreed that there was no standing, the next question was the appropriate remedy.
No standing to sue meant no federal court jurisdiction, the judge said, but it did not mean no state court jurisdiction. The case or controversy restriction applies only to federal courts. The case had to be remanded to the state court to determine whether state standing requirements were satisfied.
As a result, the suit will go back to the state court where it started.
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