Sarmad Syed v. M-I, LLC, 853 F.3d 492

Background

Syed applied to M-I in 2011 and was given a "Pre-employment Disclosure Release" that (1) disclosed that a consumer report might be procured, (2) included an authorization to procure the report, and (3) included a broad liability-waiver/release in the same document.
Syed alleged the form violated 15 U.S.C. § 1681b(b)(2)(A)(i) because the statute requires the disclosure be in "a document that consists solely of the disclosure."
M-I procured Syed’s consumer report after obtaining the signed form; Syed later discovered the report had been obtained and filed a putative class action within two years of discovery seeking statutory and punitive damages under § 1681n (no actual damages claimed).
The district court dismissed Syed’s complaint for failure to plead willfulness; Syed appealed.
The Ninth Circuit considered (1) whether including a liability waiver on the disclosure document violated the FCRA, (2) whether that violation was willful, and (3) whether Syed’s claim was time-barred.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a disclosure that contains a liability waiver on the same document violates § 1681b(b)(2)(A)(i)’s requirement that the disclosure be in a document that "consists solely of the disclosure"	Syed: inclusion of the waiver means the document does not "consist solely" of the disclosure, violating the statute	M-I: the statute permits an authorization on the same document, so "solely" is ambiguous and should not preclude other terms like a waiver	Held: Inclusion of a liability waiver on the disclosure document violates § 1681b(b)(2)(A)(i); the statute unambiguously bars such additions (authorization is the sole implied exception)
Whether the authorization clause permits other terms (implicit or explicit exceptions) like a liability waiver	Syed: statute only allows authorization on same document; no implicit or broader exception permitting waivers	M-I: authorization is broad and can be read to permit a waiver; also argued clarity of disclosure should control	Held: Authorization is expressly limited to procurement of the report; expressio unius and statutory purpose foreclose implied or expansive exceptions such as liability waivers
Whether M-I’s violation was "willful" under § 1681n (i.e., reckless or knowing)	Syed: inclusion of waiver and procurement after that constituted an objectively unreasonable and reckless violation, supporting statutory/punitive damages	M-I: its reading was not objectively unreasonable given limited appellate/administrative guidance; therefore not willful under Safeco	Held: Violation was willful as a matter of law—statute is unambiguous, M-I’s interpretation was objectively unreasonable and created an unjustifiably high risk of violating the statute (reckless)
Whether Syed’s claim is time-barred under § 1681p (2-year discovery rule)	Syed: he discovered the procurement only when he reviewed his personnel file within two years and thus timely sued	M-I: Syed discovered the violation when he signed the form in 2011, so time barred	Held: Claim timely at pleading stage—violation occurs when employer actually procures the report; treating the allegation that discovery occurred within two years as true, the complaint was not time-barred

Key Cases Cited

Safeco Ins. Co. v. Burr, 551 U.S. 47 (2007) (FCRA willfulness includes reckless disregard; objective-reasonableness standard governs willfulness analysis)
Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) (procedural statutory violations require concrete injury for Article III standing)
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading standard for failure to state a claim)
Griffin v. Oceanic Contractors, Inc., 458 U.S. 564 (1982) (plain statutory language controls if reasonably plain)
Russello v. United States, 464 U.S. 16 (1983) (avoid reading statute to create conflicts or surplusage)
Cortez v. Trans Union, 617 F.3d 688 (3d Cir. 2010) (lack of direct authority does not automatically shield parties from willful FCRA liability)