895 F.3d 1166 (9th Cir. 2018), 16-17216, Dutta v. State Farm Mutual Automobile Insurance Co.

Docket Nº:16-17216
Citation:895 F.3d 1166
Opinion Judge:VITALIANO, District Judge
Party Name:Bobby S. DUTTA, Plaintiff-Appellant, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant-Appellee.
Attorney:James A. Francis, David A. Searles, John Soumilas, and Jordan M. Sartell, Francis & Mailman P.C., Philadelphia, Pennsylvania; Deborah L. Raymond, Law Offices of Deborah L. Raymond, Del Mar, California; Robert S. Sola, Robert S. Sola P.C., Portland, Oregon; Micah S. Adkins, The Adkins Firm P.C., B...
Judge Panel:Before: Richard A. Paez and Sandra S. Ikuta, Circuit Judges, and Eric N. Vitaliano, District Judge.
Case Date:July 13, 2018
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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895 F.3d 1166 (9th Cir. 2018)

Bobby S. DUTTA, Plaintiff-Appellant,

v.

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant-Appellee.

No. 16-17216

United States Court of Appeals, Ninth Circuit

July 13, 2018

Submitted March 14, 2018 [*] San Francisco, California

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[Copyrighted Material Omitted]

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Appeal from the United States District Court for the Northern District of California, Charles R. Breyer, Senior District Judge, Presiding, D.C. No. 3:14-cv-04292-CRB

James A. Francis, David A. Searles, John Soumilas, and Jordan M. Sartell, Francis & Mailman P.C., Philadelphia, Pennsylvania; Deborah L. Raymond, Law Offices of Deborah L. Raymond, Del Mar, California; Robert S. Sola, Robert S. Sola P.C., Portland, Oregon; Micah S. Adkins, The Adkins Firm P.C., Birmingham, Alabama; for Plaintiff-Appellant.

Tiffany L. Powers, Lisa H. Cassilly, and Brooks A. Suttle, Alston & Bird LLP, Atlanta, Georgia; Douglas R. Hart and Jennifer B. Zargarof, Sidley Austin LLP, Los Angeles, California; for Defendant-Appellee.

Before: Richard A. Paez and Sandra S. Ikuta, Circuit Judges, and Eric N. Vitaliano,[**] District Judge.

SUMMARY [***]

Fair Credit Reporting Act / Standing

The panel affirmed the district court's summary judgment in favor of the defendant in an action under the Fair Credit Reporting Act.

The plaintiff alleged that the defendant violated the FCRA's procedural requirement that a prospective employer provide a job applicant with a copy of his consumer credit report, notice of his FCRA rights, and an opportunity to challenge inaccuracies in the report "before taking any adverse action based in whole or in part on the report."

The panel held that the district court did not err in considering a declaration filed with the defendant's summary judgment reply papers because the plaintiff failed to object and thus waived any challenge to the admissibility of the declaration.

Following Spokeo, Inc. v. Robins, 136 S.Ct. 1540 (2016), and Robins v. Spokeo, Inc., 867 F.3d 1108 (9th Cir. 2017), the panel held that the plaintiff lacked Article III standing. The plaintiff showed that the statutory provision was established to protect his concrete interests in ensuring that employment determinations are not affected by incorrect credit information. He did not, however, demonstrate how the specific violation of 15 U.S.C. § 1681b(b)(3)(A) alleged in the complaint actually harmed or presented a material risk of harm to him.

OPINION

VITALIANO, District Judge

Bobby S. Dutta appeals the district court’s grant of summary judgment to State Farm Mutual Automobile Insurance Company ("State Farm") on his claim that State Farm violated provisions of the Fair Credit Reporting Act of 1970 ("FCRA"). The relevant FCRA provisions require a prospective employer to provide a job applicant with a copy of his consumer credit report, notice of his FCRA rights, and an opportunity to challenge inaccuracies in the report "before taking any adverse action based in whole or in part on the report." 15 U.S.C. § 1681b(b)(3)(A). In granting State Farm’s motion for summary judgment, the district court did not reach the merits of Dutta’s claim because it determined that Dutta failed to establish an injury-in-fact, and, as a consequence, lacked Article III standing. Dutta argues that the district court erroneously applied relevant case law regarding Article III standing and also erred in relying upon facts set forth only in a declaration that State Farm submitted as an exhibit to its reply brief. We disagree with both arguments and affirm.

I.

FCRA was enacted in 1970 "to ensure fair and accurate credit reporting, promote efficiency in the banking system, and protect consumer privacy." Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 52, 127 S.Ct. 2201, 167 L.Ed.2d 1045 (2007). By 1996, though, Congress became concerned that FCRA had so enabled "employers to obtain consumer reports on current and prospective employees" that employees might be "unreasonably harm[ed] ... if there [were] errors in their reports." S. Rep. No. 104-185, at 35 (1995); see also S. Rep. No. 108-166, at 5-6 (2003) (noting that in 1996 Congress recognized "the significant amount of inaccurate information that was being reported by consumer reporting agencies and the difficulties that consumers faced getting such errors corrected"). Responding to these concerns,

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Congress adopted remedial amendments requiring employers to provide job applicants with a copy of their credit report and to afford job applicants the opportunity to respond to the report before taking any adverse action based on it.

See S. Rep. No. 104-185, at 35. The relevant amendment is codified at 15 U.S.C. § 1681b(b)(3)(A), and reads, in pertinent part: [I]n using a consumer report for employment purposes, before taking any adverse action based in whole or in part on the report, the person intending to take such adverse action shall provide to the consumer to whom the report relates—

(i) a copy of the report; and

(ii) a description in writing of the rights of the consumer under this subchapter, as prescribed by the Bureau [of Consumer Financial Protection] under section 1681g(c)(3) of this title.

FCRA provides, further, that "[a]ny person who willfully fails to comply with any requirement imposed under this subchapter with respect to any consumer is liable to that consumer." 15 U.S.C. § 1681n(a).

Dutta’s sole claim against State Farm falls squarely within the confines of the amendment. On March 3, 2014, Dutta applied for employment with State Farm through the company’s Agency Career Track ("ACT") hiring program. As a preliminary step on the ACT pathway to hiring, Dutta was required to, and did, sign an authorization permitting State Farm to obtain his consumer credit report. Consumer credit reports are a critical component in State Farm’s decision-making process when evaluating applications in the ACT program. State Farm examines the 24-month credit history of every ACT applicant, viewing it as an indicator of the applicant’s practical ability to market financial and insurance-related products and services. As relevant here, if the applicant’s credit report indicates a charged-off account greater than $1000 or three or more 90-day late payments, the applicant is disqualified from continuing in the ACT program.1

There is no dispute that Dutta was denied admission to the ACT program and that his poor credit history was the cause of his disqualification. Dutta’s grievance is that the credit report obtained by State Farm contained errors, which State Farm considered without providing him sufficient notice under FCRA. He claims that, on March 11, 2014, State Farm employee Roberta Thomas phoned him and told him that, because of a charged-off debt and two loan delinquencies, his employment application was rejected and that the decision was final.2 Three days later, on March 14, 2014, Dutta received a pre-adverse action notice, dated March 11, 2014 ("Statutory Notice"), which enclosed a copy of the credit report. The cover letter instructed Dutta to contact State Farm "within five days" if the report contained any inaccurate or incomplete information. Dutta followed those instructions by contacting State Farm on March 17, 2014, to dispute the reports accuracy. Specifically, he stated that although the charged-off debt listed in the report was dated February 28, 2014, which would be within State Farms 24-month look back period, he had...

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