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CFPB Urges SCOTUS: Hands Off That FCRA Holding

Posted in CFPB, Credit Reports

Time to dust off those federal jurisdiction hornbooks! The Consumer Financial Protection Bureau (CFPB) and Office of the Solicitor General (collectively, “the government”) submitted an amicus brief to the Supreme Court in response to a petition for a writ of certiorari in the closely-watched case Spokeo, Inc. v. Thomas Robins, No. 13-1339. The issue? Standing, with some Fair Credit Reporting Act (FCRA) flavor.

What Happened (Or Didn’t Happen) To Robins: The petitioner operates a website where users can find a range of information about individuals, varying from address and phone number to items like “economic health” and online purchases, which the petitioner collects from various public sources. It allegedly markets its services to employers evaluating possible hires. Robins alleges that it displayed a “consumer report” about him that inaccurately reported his age, wealth, employment, marital status, and education, which he claims harmed his employment prospects. Robins alleges that petitioner violated the FCRA because the information published about him qualified as a “consumer report” under the FCRA, and the petitioner is a “consumer reporting agency” that failed to follow the statute’s numerous accuracy and procedural requirements.

What Happened In The Courts: Spokeo moved to dismiss the case, arguing, among other things, that Robins failed to establish Article III standing because he failed to allege an actual injury. The district court denied the motion but then reconsidered and dismissed the complaint for lack of standing, holding that Robins’s alleged injury was too speculative and that a mere violation of the FCRA does not confer standing. The Ninth Circuit reversed, holding that the alleged violation of Robins’ rights under the FCRA, which provides for statutory damages, was injury enough. Spokeo petitioned the Supreme Court to review the holding.

What’s The Bureau Got To Do With It? The government filed an amicus brief recommending that the Court deny certiorari. It argues that the law is clear that the FCRA grants individual consumers a statutory entitlement to be free from a credit reporting agency’s dissemination of inaccurate information about him, when the agency fails to employ reasonable procedures to ensure accuracy. As far as the government is concerned, disseminating inaccurate information about Robins, in violation of his asserted FCRA rights, is a tangible harm, even if Robins was not actually injured in any concrete way.

The amicus brief offers a rare glimpse into the Bureau’s views on the FCRA. In the wake of the Dodd Frank Act, the authority to publish FCRA rules, regulations, and guidelines transferred from the Federal Trade Commission (FTC) to the CFPB, and the FTC rescinded its existing guidance interpreting the statute. The Bureau, for its part, has yet to issue interpretive guidance or regulations, leaving us to read the tea leaves in filings like this. (Spoiler alert: the Bureau’s views are consumer-friendly, at least on their face.)

Beyond The Bureau: The FCRA broadly governs the collection, assembly, and use of consumer report information, and provides the framework for the credit reporting system. As the Spokeo case demonstrates, though, plaintiffs are increasingly attempting to apply the FCRA outside the traditional realm of consumer reporting agencies because of its broad and, as the Supreme Court has put it, “less than pellucid language.” Moreover, the Court’s decision here could have implications for litigants’ Article III standing arguments under numerous other statutes, in addition to the FCRA. We’ll stay tuned and be sure to update the blog with what happens next.