Landrum v. Harris County Emergency Corps
122 F. Supp. 3d 617
S.D. Tex.2015Background
- Plaintiff Jeffrey K. Landrum applied to HCEC and signed a one-page "Background Check Form" on Dec. 4, 2013, authorizing a background check and containing a broad liability release.
- HCEC used that form to procure a consumer report showing criminal convictions and denied Landrum employment on Dec. 16, 2013.
- Landrum sued HCEC as a putative class action under the FCRA, asserting three classes; Counts 2 and 3 challenge the one-page Background Check Form used to obtain reports.
- Count 2 alleges the form violated 15 U.S.C. § 1681b(b)(2)(A)(i) because the disclosure did not "consist solely" of the disclosure (it included a waiver). Count 3 alleges failure to obtain proper authorization under § 1681b(b)(2)(A)(ii).
- HCEC moved for summary judgment on Counts 2 and 3, arguing the waiver did not violate the statute and, alternatively, any violation was not willful.
- The court held the inclusion of the liability waiver violated § 1681b(b)(2)(A)(i) but concluded HCEC’s violation was not willful; summary judgment for HCEC granted on Counts 2 and 3.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a disclosure "consists solely of the disclosure" when it includes a liability waiver | The statute is plain: "solely" means only the disclosure; adding a waiver violates § 1681b(b)(2)(A)(i) | "Solely" should be read flexibly; clause (ii) allows authorization on same document and waiver does not defeat the disclosure's effectiveness | Inclusion of the waiver violates § 1681b(b)(2)(A)(i) (disclosure must stand alone) |
| Whether the authorization requirement of § 1681b(b)(2)(A)(ii) was satisfied when authorization appeared on the same form as the disclosure that included a waiver | Authorization on the form is insufficient if the disclosure does not "consist solely" of the disclosure | Authorization may be made on the same document and is therefore permissible on the one-page form | Authorization point is subsumed by the violation of the stand-alone disclosure requirement; form failed § 1681b(b)(2)(A)(i) |
| Whether HCEC’s statutory violation was willful (entitling plaintiff to statutory/punitive damages) | HCEC recklessly violated a clear statutory mandate; FTC staff letters and some authority warned against combining waivers with disclosures | HCEC’s interpretation was objectively reasonable given split district-court authority, FTC staff letters’ nonbinding status, and model forms; thus no willfulness | Violation was not willful: HCEC’s interpretation was objectively reasonable under Safeco; no reckless or intentional breach |
| Whether summary judgment was appropriate on Counts 2 and 3 for the Background Check Class | Landrum urged denial to let jury decide willfulness and contended statutory violation warranted damages | HCEC argued no material factual dispute and that law warranted judgment as a matter of law on lack of willfulness | Court granted summary judgment for HCEC on Counts 2 and 3 (statute violated but no willfulness; thus no statutory/punitive damages) |
Key Cases Cited
- Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47 (Sup. Ct. 2007) (willfulness requires objectively unreasonable interpretation; recklessness standard explained)
- BedRoc Ltd. v. United States, 541 U.S. 176 (Sup. Ct. 2004) (textualist canon: give effect to statutory words)
- Asadi v. G.E. Energy (USA), L.L.C., 720 F.3d 620 (5th Cir. 2013) (plainness/ambiguity rules for statutory interpretation)
- Celotex Corp. v. Catrett, 477 U.S. 317 (Sup. Ct. 1986) (summary judgment burden-shifting standard)
- Septimus v. Univ. of Hous., 399 F.3d 601 (5th Cir. 2005) (standard for determining genuine factual disputes on summary judgment)
- Burlington N. & Santa Fe Ry. Co. v. Poole Chem. Co., 419 F.3d 355 (5th Cir. 2005) (use of ordinary meaning and context in statutory construction)