Groshek v. Time Warner Cable, Inc.

• Decision Date: 01 August 2017
• Docket Number: No. 16-3711,No. 16-3355,16-3355
• Citation: 865 F.3d 884
• Parties: Cory GROSHEK, Plaintiff-Appellant, v. TIME WARNER CABLE, INC., Defendant-Appellee. Cory Groshek, and all others similarly situated, Plaintiff-Appellant, v. Great Lakes Higher Education Corporation, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

865 F.3d 884

Cory GROSHEK, Plaintiff-Appellant,

v.TIME WARNER CABLE, INC., Defendant-Appellee.

Cory Groshek, and all others similarly situated, Plaintiff-Appellant,

v.Great Lakes Higher Education Corporation, Defendant-Appellee.

No. 16-3355

No. 16-3711

United States Court of Appeals, Seventh Circuit.

Argued February 22, 2017

Decided August 1, 2017

Robert J. Gingras, Attorney, GINGRAS, CATES & LUEBKE, S.C., Michael J. Modl, Attorney, AXLEY BRYNELSON LLP, Heath Paul Straka, Attorney, GINGRAS, CATES & LUEBKE, S.C., Madison, WI, for Plaintiff-Appellant.

Joseph W. Ozmer, II, Attorney, KABAT CHAPMAN & OZMER, LLP, Abigail Stecker Romero, Attorney, Atlanta, GA, for Defendant-Appellee Time Warner Cable.

Kevin St. John, Attorney, Roisin H. Bell, Attorney, John N. Giftos, Attorney, BELL GIFTOS ST. JOHN LLC, Madison, WI, for Defendant-Appellee Great Lakes Higher Education Corporation.

Before Bauer and Williams, Circuit Judges, and Deguilio,^* District Judge.

Bauer, Circuit Judge.

Over the course of a year and a half, Appellant Cory Groshek submitted 562 job applications to various employers, including Appellees Time Warner Cable, Inc. and Great Lakes Higher Education Corporation (collectively, "Appellees").¹ The job application, which Appellees provided to Groshek, included a disclosure and authorization form informing him that a consumer report may be procured in making the employment decision; the form also contained other information, such as a liability release. After Groshek submitted the job application, along with the signed disclosure and authorization form, Appellees requested and obtained a consumer report on him from a third party.

Shortly thereafter, Groshek filed a class-action suit against Appellees under the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq. , seeking statutory and punitive damages for alleged violations of 15 U.S.C. § 1681b(b)(2)(A).² This section prohibits a prospective employer from procuring a consumer report for employment purposes unless certain procedures are followed: (i) a clear and conspicuous disclosure has been made in writing to the job applicant at any time before the report is procured, in a document that consists solely of the disclosure, that a consumer report may be obtained for employment purposes (commonly known as the "stand-alone disclosure requirement"); and, (ii) the job applicant has authorized in writing the procurement of the report. See id. § 1681b(b)(2)(A)(i)-(ii).

In his complaint, Groshek alleged that Appellees violated § 1681b(b)(2)(A)(i). As the predicate for his claimed statutory and punitive damages, he alleged that this violation was willful. See id. § 1681n. Additionally, he alleged that, as a result of the violation of § 1681b(b)(2)(A)(i), Appellees failed to obtain a valid authorization from him before procuring a consumer report, in violation of § 1681b(b)(2)(A)(ii).

Appellees moved to dismiss for lack of subject matter jurisdiction, arguing that Groshek lacked Article III standing because he did not suffer a concrete injury; Groshek responded that he suffered concrete informational and privacy injuries. The district court granted Appellees' motion. This appeal followed.

Article III of the Constitution limits our review to actual "Cases" and "Controversies" brought by litigants who demonstrate standing. The "irreducible constitutional minimum of standing" consists of three elements: injury in fact, causation, and redressability. Lujan v. Defenders of Wildlife , 504 U.S. 555, 560–61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). The plaintiff bears the burden of establishing each element. Id. at 561, 112 S.Ct. 2130. In order to survive a challenge to standing, a plaintiff must plead sufficient factual allegations, that "plausibly suggest" each of these elements. Silha v. ACT, Inc. , 807 F.3d 169, 174 (7th Cir. 2015).

To establish injury in fact, Groshek must show that he "suffered ‘an invasion of a legally protected interest’ that is ‘concrete and particularized’ and ‘actual or imminent, not conjectural or hypothetical.’ " Spokeo , Inc. v. Robins , ––– U.S. ––––, 136 S.Ct. 1540, 1548, 194 L.Ed.2d 635 (2016) (quoting Lujan , 504 U.S. at 560, 112 S.Ct. 2130 ). To be "concrete," an injury "must actually exist;" it must be "real," not "abstract," but not necessarily tangible. Id. at 1548–49. In determining whether an alleged intangible harm constitutes a concrete injury in fact, both history and Congress' judgment are important. Id. at 1549.

First, we consider whether the common law permitted suit in analogous circumstances. Id. We also recognize that Congress is well positioned to identify intangible harms that will give rise to concrete injuries, which were previously inadequate in law. Id. Nevertheless, "Congress' judgment that there should be a legal remedy for the violation of a statute does not mean each statutory violation creates an Article III injury." Meyers v. Nicolet Rest. of De Pere , LLC , 843 F.3d 724, 727 (7th Cir. 2016). For instance, a plaintiff cannot satisfy the injury-in-fact element by alleging a "bare procedural violation" that is "divorced from any concrete harm." Spokeo , 136 S.Ct. at 1549. Instead, the plaintiff must show that the statutory violation presented an "appreciable risk of harm" to the underlying concrete interest that Congress sought to protect by enacting the statute. Meyers , 843 F.3d at 727 ; see also Spokeo , 136 S.Ct. at 1549–50.

In enacting the FCRA, Congress identified the need to "ensure fair and accurate credit reporting," and "protect consumer privacy." Safeco Ins. Co. v. Burr , 551 U.S. 47, 52, 127 S.Ct. 2201, 167 L.Ed.2d 1045 (2007). "Congress plainly sought to curb the dissemination of false information by adopting procedures designed to decrease that risk." Spokeo , 136 S.Ct. at 1550. The stand-alone disclosure and authorization requirements are procedures closely tied to FCRA's overarching goals. Congress was concerned that employers' authority to obtain consumer reports on job applicants "may create an improper invasion of privacy." S. Rep. No. 104-185 at 35 (1995). Section 1681b(b)(2)(A)(i), the stand-alone disclosure requirement, is clearly designed to decrease the risk of a job applicant unknowingly providing consent to the dissemination of his or her private information. Section 1681b(b)(2)(A)(ii), the authorization requirement, further protects consumer privacy by providing the job applicant the ability to prevent a prospective employer from procuring a consumer report, i.e. , by withholding consent. S. Rep. No. 104-185 at 35 (1995).

Here, Groshek did not allege that Appellees failed to provide him with a disclosure that informed him that a consumer report may be obtained for employment purposes. His complaint contained no allegation that any of the additional information caused him to not understand the consent he was giving; no allegation that he would not have provided consent but for the extraneous information on the form; no allegation that additional information caused him to be confused; and, no allegation that he was unaware that a consumer report would be procured. Instead, he simply alleged that Appellees' disclosure form contained extraneous information. We conclude that Groshek has alleged a statutory violation completely removed from any concrete harm or appreciable risk of harm.

First, Groshek argues that he suffered a concrete informational injury as a result of Appellees' failure to provide a disclosure compliant with § 1681b(b)(2)(A)(i). As support, he relies on the general rule arising out of Federal Election Commission v. Akins , 524 U.S. 11, 118 S.Ct. 1777, 141 L.Ed.2d 10 (1998) and Public Citizen v. Department of Justice , 491 U.S. 440, 109 S.Ct. 2558, 105 L.Ed.2d 377 (1989), two cases that Spokeo referenced as instances where a violation of a procedural right was sufficient to constitute an injury in fact. See Spokeo , 136 S.Ct. at 1549.

In both Akins and Public Citizen , the Supreme Court held generally that "a plaintiff suffers an ‘injury in fact’ when the plaintiff fails to obtain information which must be publicly disclosed pursuant to a statute." Akins , 524 U.S. at 22, 118 S.Ct. 1777 (citing Pub. Citizen , 491 U.S. at 449, 109 S.Ct. 2558 ). In Public Citizen , the plaintiff specifically requested, and had been refused, information.

491 U.S. at 449, 109 S.Ct. 2558. The plaintiff filed suit against the defendant under the Federal Advisory Committee Act, in an attempt to compel the defendant to publicly disclose information as required by FACA. Id. The Supreme Court held that the inability to scrutinize the withheld information to the extent FACA allowed constituted an injury in fact. Id. The Supreme Court reasoned that the plaintiff's injury was akin to when "an agency denies requests for information under the Freedom of Information Act...." Id . As the Supreme Court noted, the plaintiff's injury was not simply the inability to obtain information, but also the inability to monitor and participate effectively in the judicial selection process without such information. See id.

Similarly, the plaintiffs in Akins , after a failed request for information, filed suit to compel the defendant to provide information that was required to be disclosed under the Federal Election Campaign Act of 1971. 524 U.S. at 19–20, 118 S.Ct. 1777. The Supreme Court held that the plaintiffs' inability to procure information under FECA qualified as a concrete injury. Id. The Supreme Court noted that the plaintiffs' harm was not simply the inability to obtain information, but also mentioned their inability to evaluate candidates for public office without such information—an informational injury "directly related to voting, the most basic of political rights...." Id. at 24–25, 118 S.Ct. 1777. The Supreme Court determined that FECA sought to protect the plaintiffs "from the kind of harm they say they have suffered...." Id. at 22, 118 S.Ct. 1777.

Groshek's reliance on Akins and Public Citizen is misplaced for two...