Walker v. Fred Meyer, Inc., 032020 FED9, 18-35592

Docket Nº:18-35592
Opinion Judge:TASHIMA, CIRCUIT JUDGE
Party Name:Daniel Walker, individually and on behalf of all others similarly situated, Plaintiff-Appellant, v. Fred Meyer, Inc., a Delaware corporation, Defendant-Appellee.
Attorney:Steven L. Woodrow (argued) and Patrick H. Peluso, Woodrow & Peluso LLC, Denver, Colorado; Neal Weingart, Jones & Swartz PLLC, Portland, Oregon; for Plaintiff-Appellant. Faith C. Whittaker (argued) and Michael B. Mattingly, Dinsmore & Shohl LLP, Cincinnati, Ohio; Michael Porter and Taylor D. Richm...
Judge Panel:Before: A. Wallace Tashima, William A. Fletcher, and Marsha S. Berzon, Circuit Judges.
Case Date:March 20, 2020
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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Daniel Walker, individually and on behalf of all others similarly situated, Plaintiff-Appellant,

v.

Fred Meyer, Inc., a Delaware corporation, Defendant-Appellee.

No. 18-35592

United States Court of Appeals, Ninth Circuit

March 20, 2020

Argued and Submitted June 11, 2019

Appeal from the United States District Court for the District No. CV 17-1791 YY of Oregon Michael H. Simon, District Judge, Presiding

Steven L. Woodrow (argued) and Patrick H. Peluso, Woodrow & Peluso LLC, Denver, Colorado; Neal Weingart, Jones & Swartz PLLC, Portland, Oregon; for Plaintiff-Appellant.

Faith C. Whittaker (argued) and Michael B. Mattingly, Dinsmore & Shohl LLP, Cincinnati, Ohio; Michael Porter and Taylor D. Richman, Miller Nash Graham & Dunn LLP, Portland, Oregon; for Defendant-Appellee.

Before: A. Wallace Tashima, William A. Fletcher, and Marsha S. Berzon, Circuit Judges.

SUMMARY[*]

Fair Credit Reporting Act

The panel affirmed in part and reversed in part the district court's dismissal of an action under the Fair Credit Reporting Act, which requires employers who obtain a consumer report on a job applicant to first provide the applicant with a "clear and conspicuous disclosure" that the employer may obtain such a report, and to provide this disclosure "in a document that consists solely of the disclosure."

Reversing the dismissal, for failure to state a claim, of plaintiff's claim under 15 U.S.C. § 1681b(b)(2)(A), the panel held that the disclosure provided by defendant violated the FCRA's standalone disclosure requirement, which does not allow for the inclusion of any extraneous information in the consumer report disclosure. Addressing what qualifies as part of the disclosure, the panel held that, beyond a plain statement disclosing "that a consumer report may be obtained for employment purposes," some concise explanation of what the phrase means may be included. The panel remanded, leaving it for the district court to decide in the first instance whether the remaining language in defendant's disclosure satisfied the "clear and conspicuous" requirement.

Affirming the dismissal of plaintiff's claim under § 1681b(b)(3)(A), the FCRA's pre-adverse action notice requirement, the panel held that the right provided by the FCRA to dispute inaccurate information in a consumer report does not require employers to provide job applicants or employees with an opportunity to discuss their consumer reports directly with the employer. Instead, the FCRA requires that an employer provide, in a pre-adverse action notice to the consumer, a description of the consumer's right to dispute with a consumer reporting agency the completeness or accuracy of any item of information contained in the consumer's file at the consumer reporting agency.

OPINION

TASHIMA, CIRCUIT JUDGE

The Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq. ("FCRA"), protects consumers' privacy rights by requiring employers who obtain a consumer report on a job applicant to first provide the applicant with a "clear and conspicuous disclosure" that the employer may obtain such a report. 15 U.S.C. § 1681b(b)(2)(A)(i). That disclosure must be provided "in a document that consists solely of the disclosure." Id. We recently held that because of this "clear statutory language that the disclosure document must consist 'solely' of the disclosure," Syed v. M-I, LLC, 853 F.3d 492, 496 (9th Cir. 2017), the FCRA's disclosure requirements do not allow for the inclusion of any extraneous information in the consumer report disclosure, even if such information is related to the disclosure. See Gilberg v. Cal. Check Cashing Stores, LLC, 913 F.3d 1169, 1175-76 (9th Cir. 2019). Given that the disclosure document may contain only the § 1681b(b)(2)(A)(i) disclosure, we now address as a matter of first impression what qualifies as part of that "disclosure . . . that a consumer report may be obtained for employment purposes." 15 U.S.C. § 1681b(b)(2)(A)(i).

We hold that beyond a plain statement disclosing "that a consumer report may be obtained for employment purposes," some concise explanation of what that phrase means may be included as part of the "disclosure" required by § 1681b(b)(2)(A)(i). For example, a company could briefly describe what a "consumer report" entails, how it will be "obtained," and for which type of "employment purposes" it may be used. See id.

We also hold that the right provided by the FCRA to dispute inaccurate information in a consumer report does not require employers to provide job applicants or employees with an opportunity to discuss their consumer reports directly with the employer. See id. § 1681b(b)(3)(A). Instead, the FCRA requires that an employer provide, in a pre-adverse action notice to the consumer, a description of the consumer's right to dispute with a consumer reporting agency the completeness or accuracy of any item of information contained in the consumer's file at the consumer reporting agency. See id. §§ 1681g(c)(1)(B)(iii), 1681i.

Accordingly, we affirm in part, reverse in part and remand.

I.

In March 2017, Plaintiff-Appellant Daniel Walker ("Walker") applied for a job at one of Defendant-Appellee Fred Meyer Inc.'s ("Fred Meyer") supermarkets. Shortly after submitting his application, Walker was hired-contingent upon satisfactory results on a background check-as an associate at a Fred Meyer store in Portland, Oregon.

As part of the hiring process, Walker was presented with several disclosure and acknowledgment forms, including two documents concerning an investigation of his background. One of these documents was a Disclosure Regarding Consumer Reports and Investigative Consumer Reports (the "Disclosure"), which informs new hires that Fred Meyer will investigate their background using an employment background reporting company, General Information Services, Inc. ("GIS"). Specifically, this Disclosure, which is the subject of this litigation, consisted of the following paragraphs, followed by a signature line to acknowledge receipt: We ([t]he Kroger family of companies) will obtain one or more consumer reports or investigative consumer reports (or both) about you for employment purposes. These purposes may include hiring, contract, assignment, promotion, reassignment, and termination. The reports will include information about your character, general reputation, personal characteristics, and mode of living.

We will obtain these reports through a consumer reporting agency. The consumer reporting agency is General Information Services, Inc. GIS's address is P.O. Box 353, Chapin, SC 29036. GIS's telephone number is (866) 265-4917. GIS's website is at www.geninfo.com.

To prepare the reports, GIS may investigate your education, work history, professional licenses and credentials, references, address history, social security number validity, right to work, criminal record, lawsuits, driving record and any other information with public or private information sources.

You may inspect GIS's files about you (in person, by mail, or by phone) by providing identification to GIS. If you do, GIS will provide you help to understand the files, including communication with trained personnel and an explanation of any codes. Another person may accompany you by providing identification.

If GIS obtains any information by interview, you have the right to obtain a complete and accurate disclosure of the scope and nature of the investigation performed.1

Second, Walker was also presented with an Authorization Regarding Consumer Reports and Investigative Consumer Reports (the "Authorization"), which seeks a new hire's authorization for GIS to conduct such an investigation through a variety of means, including "any public or private information source." Walker signed both these documents in order to proceed with this employment opportunity, but he allegedly found the documents confusing and was therefore unable meaningfully to evaluate and understand the nature of the report that Fred Meyer intended to obtain about him.

Several weeks later, GIS sent Walker a letter (the "pre-adverse action notice"), dated April 3, 2017. The letter provided Walker with a copy of the consumer report that GIS had procured about him, explained that Fred Meyer uses such reports "in evaluating individuals for employment as Fred Meyer team members," and notified Walker that Fred Meyer "has or will be completing their review of your application within the next few days, and may take action based on the enclosed report." The letter then informed Walker that he could dispute the accuracy or completeness of the consumer report with GIS directly by filling out a request form within five business days. However, the letter provided no option for or information about discussing the...

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