Goode v. LexisNexis Risk & Information Analytics Group, Inc.
848 F. Supp. 2d 532
E.D. Pa.2012Background
- Plaintiffs allege LexisNexis Esteem background checks violate the FCRA by improper handling of consumer reports and adverse-action notices.
- Esteem uses incident reports with admission statements and adjudication scores; reports sent to employers exclude the admission statements.
- Pre-adverse action letters are sent on the employer’s letterhead after adjudication; the letter includes the report but not admission statements.
- Goode’s Fall 2008 Forman Mills incident led to a 2009 pre-adverse action letter to Family Dollar Stores; Goode disputed the report and sought her file.
- Goodman’s 2006–2009 Rite Aid investigation and admissions created disputes over access to the admission statement; multiple communications occurred, with contested information and delayed response.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| When does adverse action occur under §1681a(k)(1)(B)(ii)? | Goode and Goodman allege adjudication as noncompetitive constitutes adverse action. | Adverse action occurs only when the employer actually fires or rejects the applicant; adjudication by LexisNexis is not an adverse action. | Adverse action occurs at adjudication, before pre-adverse action notices. |
| Is LexisNexis a proper defendant under §1681b(b)(3)(A)? | CRA can be liable for failing to provide required notices. | Employer is primarily responsible; CRA liability is limited by agency/outsourcing considerations. | LexisNexis is a proper defendant; is liable under §1681b(b)(3)(A). |
| Was LexisNexis’ conduct willful under §1681n(a)(2) for Count I? | Willful violation due to improper interpretation of adverse action. | Reading of the statute was reasonable given case law; FTC guidance supports interpretation. | Plaintiffs failed to plead willfulness; damages awarded only actual under §1681o(a) for Count I. |
| Did LexisNexis willfully violate §1681g(a)(1) by denying access to admission statements? | Admission statement is part of the file and must be disclosed on request. | Dispute over whether the admission statement was required information; Gillespie guidance. | Plaintiffs stated a willful violation of §1681g(a)(1); admission statements must be disclosed. |
Key Cases Cited
- Adams v. National Engineering Serv. Corp., 620 F. Supp. 2d 319 (D. Conn. 2009) (adverse action can occur when furnishing the report to the employer)
- Obabueki v. IBM Corp., 145 F. Supp. 2d 371 (S.D.N.Y. 2001) (internal decision to rescind offer not per se adverse action; context matters)
- Gillespie v. Trans Union Corp., 482 F.3d 907 (7th Cir. 2007) (defines file scope; purge dates not controlling for willfulness in Gillespie)
- Cortez v. Trans Union, LLC, 617 F.3d 688 (3d Cir. 2010) (distinguishes Gillespie; willfulness can be found where reliance on Gillespie was unreasonable)
- Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47 (U.S. 2007) (willfulness requires more than mere negligence; recklessness standard)