116 F.4th 288
4th Cir.2024Background
- Marco Fernandez applied to rent an apartment; the property owner received a tenant screening report from RentGrow, Inc.
- The report inaccurately stated that Fernandez had a "possible match" in an OFAC (Office of Foreign Assets Control) name search.
- The property manager reviewing the report was unfamiliar with OFAC and did not read or consider the OFAC information in her decision-making.
- Fernandez sued RentGrow under the Fair Credit Reporting Act (FCRA) for inclusion of misleading OFAC information and sought class certification.
- The district court certified a class and found that simply furnishing misleading reports to third parties established a concrete injury for standing.
- The Fourth Circuit reviewed—via interlocutory appeal—the class certification, specifically focusing on Article III standing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether dissemination of an inaccurate OFAC alert in a tenant screening report alone establishes Article III standing. | Dissemination to a third party is sufficient for concrete injury; it causes reputational harm analogous to defamation. | There is no concrete injury unless a third party actually read and understood the OFAC information. | Dissemination alone is insufficient; there must be evidence a third party read and understood the defamatory information. |
| Necessity of showing that the misleading information was actually read and perceived by the recipient for Article III standing. | Not necessary—standing exists upon dissemination regardless of recipient’s comprehension. | Requires proof the recipient read and understood the significance—mere dissemination is not enough. | There must be evidence the third party read and understood its defamatory nature for standing. |
| Impact of the standing determination on class certification. | All class members have standing if reports were furnished to third parties. | Individualized inquiry is required, undermining Rule 23 criteria. | Class certification vacated; district court must reconsider in light of the need for showing actual reputational harm. |
| Analogousness to common law defamation/tort for intangible injuries under Article III. | FCRA violation here is closely analogous to defamation; thus, reputational harm should suffice. | Only if the information is published and understood (as in defamation) does intangible harm arise. | Court finds defamation analogy apt, but reiterates traditional requirement: publication plus comprehension. |
Key Cases Cited
- TransUnion LLC v. Ramirez, 594 U.S. 413 (2021) (misleading OFAC alerts in reports only confer standing if published to and understood by a third party)
- Spokeo, Inc. v. Robins, 578 U.S. 330 (2016) (Article III requires concrete injury, even for statutory violations)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (requirements for standing in federal court)
- Milkovich v. Lorain Journal Co., 497 U.S. 1 (1990) (defamation requires publication to a third party)
- Gertz v. Robert Welch, Inc., 418 U.S. 323 (1974) (publication is essential for actionable injury in defamation)