The ruling overturned an $11.7 million judgment in a 69,000-member class-action suit against Experian Information Solutions.

The lead plaintiff in the case claimed that Experian willfully violated the federal Fair Credit Reporting Act (FCRA) by not accurately disclosing the source of information, known as a tradeline, on the results of his credit report.

When procuring a credit report through Experian in an attempt to obtain a federal government security clearance, the plaintiff claimed that Experian reported information from a past-due account in the name of a defunct credit card company rather than the name of the current servicer as the tradeline on his credit report.

The suit, originally filed in the U.S. District Court for the Eastern District of Virginia, claimed that Experian violated FCRA § 1681g(a)(2) which requires consumer reporting agencies such as Experian, upon request, to “clearly and accurately disclose to the consumer … the sources of the information” in a consumer’s file at the time of the request.

The district court originally granted the plaintiff summary judgment and certified a class while rejecting claims from Experian that the plaintiff and class members lacked Article III standing.

Experian appealed the ruling and the Fourth Circuit reversed the district court’s decision, applying the 2016 Supreme Court decision in Spokeo Inc. v. Robins, to conclude that the plaintiff failed to allege a concrete injury sufficient enough to satisfy standing under Article III.

The ruling is the latest in a series of appellate court decisions to cite Spokeo and ultimately require plaintiffs to demonstrate concrete harm when attempting to bring these increasingly common FCRA class-action lawsuits against employers.

Source: Troutman Sanders LLP, 5/15/2017