Despite the Supreme Court’s holding in Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016), as revised (May 24, 2016), a federal court recently allowed a class action lawsuit to proceed against Amazon, as a prospective employer, for a technical violation of the Fair Credit Reporting Act (“FCRA”) and without any “actual harm.”
In Hargrett v. Amazon.com DEDC LLC, 235 F. Supp. 3d 1320 (M.D. Fla. 2017), job applicants filed a class action lawsuit against Amazon, alleging a statutory violation of § 1681b(b)(2)(A) of FCRA in connection with preemployment background checks. Section 1681b(b)(2)(A)(I)-(ii) requires that before conducting a background check on a prospective employee, the employer must clearly and conspicuously disclose in writing that a consumer background report is to be obtained for employment purposes. Per the statute, the disclosure is to be “in a document that consists solely of the disclosure.” The job applicants in Hargrett alleged that Amazon violated the FCRA because the disclosure was not a stand-alone document; it was part of the job application. The applicants did not contend that they suffered any actual damages, but instead sought an award for statutory damages only, asserting that the technical violation was “willful.”
Amazon moved to dismiss the lawsuit on the grounds that the job applicants lacked standing under Article III of the Constitution because they did not suffer a “concrete” injury. In Spokeo, the Supreme Court made clear that to have Article III standing, a plaintiff must establish that he suffered an “actual injury” that is both “particularized” and “concrete.” Spokeo, 136 S. Ct. at 1548. The Supreme Court explained that a “concrete” injury is an injury that is real. It is not abstract or based upon speculation. It must actually exist. Id.
The District Court in Hargrett, however, denied the motion to dismiss and concluded that the job applicants suffered a “concrete” injury and had standing. The District Court explained that Spokeo noted that “intangible” injuries and a “risk of harm” can be “concrete.” The District Court then relied on Eleventh Circuit decisions and a ruling from the Eastern District of Virginia, Clark v. Trans Union, LLC, 2016 WL 7197391 (E.D. Va., Dec. 9, 2016), to conclude that standing exists by the mere fact of a violation of a “statutorily-created right.” Indeed, this decision is in conflict with a number of post-Spokeo rulings. The District Court also ruled that the job applicants sufficiently alleged a willful violation of the FCRA because an employer’s disclosure must be separate and apart from the application and other terms.