Robins v. Spokeo, Inc., 2011 U.S. Dist. LEXIS 54102 (C.D. Cal. May 11, 2011)
Facts:
On
January 27, 2011
, the Court dismissed Plaintiff's Complaint for lack of standing and gave Plaintiff twenty days to amend to meet the standing requirements. On
February 16, 2011
, Plaintiff filed an amended complaint and alleged that Defendant operated its website, Spokeo.com, in violation of the FCRA. Specifically, Plaintiff claimed that reports generated by Defendant contained inaccurate consumer information that was marketed to entities performing background checks. As a result of Defendant's FCRA violations, Plaintiff alleged that Defendant caused him actual and/or imminent harm by creating, displaying, and marketing inaccurate consumer reporting information about Plaintiff. In response to Plaintiff’s amended complaint, Defendant brought a second Motion to Dismiss pursuant to Fed. R. Civ. P. 12(b)(1) and (12(b)(6) arguing that it could not be sued for FCRA violations because it was not a consumer reporting agency (“
CRA
”). Defendant’s Motion to Dismiss was denied.
·
Subject Matter Jurisdiction.
Defendant argued that the Court did not have subject matter jurisdiction to consider Plaintiff's claims. The Court disagreed. A plaintiff has Article III standing to sue where the plaintiff alleges facts showing that (1) it has suffered an injury in fact; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely that the injury would be redressed by a favorable decision. In light of Plaintiff's amended complaint, the Court found that Plaintiff alleged sufficient facts to confer Article III standing. Specifically, Plaintiff alleged that Defendant marketed inaccurate consumer reporting information about Plaintiff in violation of the FCRA, which was likely to be redressed by a favorable decision from this Court. Thus, Plaintiff established the requisite standing to sue and the Court had subject matter jurisdiction over Plaintiff's claims.
·
Motion to Dismiss
.
Alternatively, Defendant moved to dismiss Plaintiff's amended complaint pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim, asserting, among other things, that Defendant was not a
CRA
under the FCRA.
·
Consumer Reporting Agency.
Defendant contended that it was not a
CRA
as defined by 15 U.S.C. § 1681a(f) because it did not regularly engage in providing consumer credit information for the purpose of furnishing consumer reports. Conversely, Plaintiff alleged that Defendant fell within the scope of FCRA because Defendant collected and created consumer information consisting of consumers’ economic wealth and creditworthiness for the purpose of furnishing it to paid subscribers who regularly provide monetary fees in exchange for Defendants s reports. The Court denied Defendant’s Motion to Dismiss Plaintiff’s FCRA claims holding that Plaintiff’s complaint needed only to contain sufficient factual matters that, if accepted as true, would state a claim to relief that was plausible on its face. Plaintiff did not need to prove that Defendant was in fact a
CRA
at the initial dismissal phase of the litigation. Thus, Plaintiff’s allegations that Defendant regularly accepted money in exchange for reports that contained data and evaluations regarding consumers’ economic wealth and creditworthiness were sufficient to support a plausible inference that Defendant’s conduct fell within the scope of the FCRA.
Attorneys from Strasburger & Price, LLP involved in FCRA litigation have been monitoring and analyzing the legislative and caselaw developments related to this area of the law. This group of lawyers will continue to follow these developments throughout the coming months to help you understand how it impacts your business as well as to help you make the necessary decisions to succeed under this ever changing area of credit reporting and employment screening/criminal and credit background check compliance.
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About Michael Klazema The author
Michael Klazema is the lead author and editor for Dallas-based backgroundchecks.com with a focus on human resource and employment screening developments
