Huff v. Telecheck Servs., Inc.

Decision Date03 May 2019
Docket NumberNo. 18-5438,18-5438
Citation923 F.3d 458
Parties James HUFF, individually and on behalf of all others similarly situated, Plaintiff-Appellant, v. TELECHECK SERVICES, INC.; TeleCheck International, Inc.; First Data Corporation, Defendants-Appellees.
CourtU.S. Court of Appeals — Sixth Circuit

SUTTON, Circuit Judge.

This case deals with a fading technology (checks) and an evergreen imperative (Article III standing). When a customer buys something with a check, merchants often consult a check verification company to determine whether to accept the check. Invoking his rights under the Fair Credit Reporting Act, James Huff requested a copy of his file from a check verification company called TeleCheck. The report omitted that his driver’s license was linked to six different bank accounts and omitted two transactions that occurred on those accounts. Huff filed this lawsuit under the Act. Because Huff has not shown that the incomplete report injured him in any way, we affirm the district court’s dismissal of his case for lack of standing.


When a retail consumer offers a check to a merchant, the customer usually provides a form of identification such as a driver’s license. The merchant often takes the bank account number on the check and the driver’s license number, called identifiers, and sends them to companies like TeleCheck. TeleCheck runs each identifier through its system. If one of the identifiers has a debt on file, TeleCheck sends the merchant a "Code 4"—what the industry calls a negative decline. If there is not a debt on file, TeleCheck examines the customer’s check-writing history to determine whether to send a "Code 3"—what the industry calls a risk-based decline. If TeleCheck recommends a decline, the merchant refuses the customer’s check. If there are no debts on file and the customer presents a low risk, TeleCheck approves the transaction, and the merchant accepts the check.

When a customer presents two identifiers in a transaction, TeleCheck records a link between the identifiers in its system. If in a later transaction a customer uses only one of those identifiers, TeleCheck recommends a Code 4 decline if there is a debt associated with the presented identifier or the linked identifier. Say a customer presents his driver’s license along with a check to buy milk. That links his license number and the account number on the check in TeleCheck’s system. Then the customer bounces a check on the same account. Now, when the customer tries to buy eggs with a check from a different account and presents his license, TeleCheck will see that an identifier linked to the license—the bad bank account—shows a debt, and it will issue a Code 4 decline. By contrast, linked identifiers play no role in TeleCheck’s Code 3 decline recommendations.

James Huff often pays by check. Inspired by a legal services advertisement, Huff requested a copy of his file from TeleCheck under the Fair Credit Reporting Act. 15 U.S.C. § 1681g(a)(1). Huff provided TeleCheck with only a copy of his driver’s license. As a result, the report contained only the 23 transactions in which he presented his license during the past year. But the report also told Huff that TeleCheck had more information. A bolded disclaimer at the bottom of the report read: "Linked Data: Your record is linked to information not included in this report, subject to identity verification prior to disclosure. Please contact TeleCheck at 1-800-366-1435 to verify Monday-Friday 830am-430pm CST." R. 78-6 at 3.

Huff did not call. He sued.

Huff’s driver’s license as it happens contains links to six different bank accounts: his own account, his wife’s account, and four accounts that haven’t been used for years. The accounts were linked because Huff had presented his license in transactions alongside checks from each of the accounts. In addition to leaving off the linked accounts, the report did not reveal two checks from those accounts over the past year that were not presented with Huff’s license. One of the checks was from Huff’s own account, and one was from his wife’s.

TeleCheck has never told a merchant to decline one of Huff’s checks due to his linked information.

After discovery, Huff moved for class certification, and TeleCheck moved for summary judgment based on lack of standing. The district court dismissed the case because Huff lacked standing to bring it.


Article III of the United States Constitution limits the "judicial Power" of the federal courts to deciding "Cases" and "Controversies." U.S. Const. art. III, § 2. That limitation checks the power of the judicial branch by confining it to resolving concrete disputes, Spokeo, Inc. v. Robins , ––– U.S. ––––, 136 S.Ct. 1540, 1547, 194 L.Ed.2d 635 (2016), and checks the power of the legislative branch by prohibiting it from using the Judiciary as an adjunct to its own powers, see Hagy v. Demers & Adams , 882 F.3d 616, 623 (6th Cir. 2018). To protect the vital, but limited all the same, role of the Judiciary in our system of government, the Constitution makes standing an indispensable ingredient of a judicial dispute.

To establish standing, Huff had to show three things: (1) that he suffered an injury, (2) caused by TeleCheck, (3) that a judicial decision could redress. Lujan v. Defs. of Wildlife , 504 U.S. 555, 560–61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). The burden of establishing standing rests with Huff, and he must provide the allegations or evidence required at each stage of the litigation. Id. at 561, 112 S.Ct. 2130. At summary judgment, the current stage of this litigation, Huff cannot rely on allegations alone but must set forth evidence demonstrating his standing.

This case turns on the "[f]irst and foremost" prong of that inquiry, injury in fact. Steel Co. v. Citizens for a Better Env’t , 523 U.S. 83, 103, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998). An injury in fact must be real, not abstract, actual, not theoretical, concrete, not amorphous. Spokeo , 136 S.Ct. at 1548.

Before turning to Huff’s efforts to satisfy this requirement, it is well to keep in mind a distinction that’s easy to miss in this area. There is a difference between failing to establish the elements of a cause of action and failing to show an Article III injury. One is a failure of proof. The other is a failure of jurisdiction. Yes, there can be overlap between the two inquiries. But they are not one and the same.

Consider the distinction from this vantage point. The Fair Credit Reporting Act creates a cause of action that has three elements: (1) duty—a consumer agency must disclose "[a]ll information in the consumer’s file" upon request; (2) breach of duty—any consumer agency that fails to meet this requirement is liable to the affected individual; and (3) damages—the affected individual may recover $ 100 to $ 1000 for each willful violation. 15 U.S.C. § 1681g(a)(1) ; see id. § 1681n(a)(1)(A).

In one way, Huff does not have a problem in establishing injury. In answering TeleCheck’s motion for summary judgment, Huff went beyond mere allegations and tried to provide proof of each required element—including proof of a breach of duty that creates a statutory injury—of the cause of action. If he provided evidence checking each of these boxes, that indeed satisfies the requirements under the statute and indeed satisfies his burden of proof at this stage of the case when it comes to the elements of the cause of action.

But that leaves a different question: Does Congress have authority to label this violation of the statutory duty an Article III injury when it comes to Huff? After Spokeo , we know there is no such thing as an "anything-hurts-so-long-as-Congress-says-it-hurts theory of Article III injury." Hagy , 882 F.3d at 622. That requires us to assess whether enforcement of this cause of action, as invoked by Huff and as applied to Huff, exceeds Congress’s power.

We see three ways in which Huff potentially could satisfy Article III with this cause of action. One, the statutory violation created an injury in fact as applied to him because it actually injured him when the violation led, say, to a check decline. Two, the statutory violation did not injure him in any traditional way, but the risk of injury was so imminent that it satisfies Article III. Three, the statutory violation did not create an injury in any traditional sense, but Congress had authority to establish the injury in view of its identification of meaningful risks of harm in this area. Each possibility deserves its turn.

1. Actual injury as applied to Huff? Huff’s lawsuit does not satisfy the first option. He does not allege, much less prove, harm in the flesh-and-blood or dollars-and-cents sense of the term. By way of examples: He does not claim that TeleCheck’s conduct caused a declined check or a denied rental application. He does not suggest that he wasted time or suffered emotional distress while looking for his linked information. He does not contend that he would have done anything with the missing information had he received it—say, by adjusting his spending habits. All in all, Huff acknowledges that TeleCheck’s incomplete report did not "have any effect on [him] whatsoever." R. 78-2 at 25.

2. Risk of imminent injury as applied to Huff? The second option does not work either. The record evidence does not show that TeleCheck created a risk that Huff would suffer a check decline—or any other harm covered by the statute—based on the checking activities of the linked accounts. Quite the opposite on this record.

A material risk of harm, it is true, may establish standing. Spokeo , 136 S.Ct. at 1549. But the "threatened injury must be certainly impending to constitute injury in fact." Clapper v. Amnesty Int’l USA , 568 U.S. 398, 409, 133 S.Ct. 1138, 185 L.Ed.2d 264 (2013) (quotation omitted); see Soehnlen v. Fleet Owners Ins. Fund , 844 F.3d 576, 585 (6th Cir. 2017).

The risk that TeleCheck’s incomplete disclosure...

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