Smith v. E-BackgroundChecks.com, Inc.
81 F. Supp. 3d 1342
N.D. Ga.2015Background
- Tony Smith applied to Dart Transit; Dart ordered an instant U.S. OneSEARCH background check from E-Back-groundChecks.com (BGC) on Sept. 12, 2012.
- BGC returned criminal records matching first and last name + DOB but not verified to Smith’s full name or SSN; the report contained convictions that were not Smith’s.
- BGC mailed a § 1681k notice dated Sept. 12, 2012; Smith disputes the timing and claims he received the notice after he had already been notified by Dart and after he contacted BGC.
- Smith disputed the report on Sept. 17; BGC corrected the report on Sept. 19 and Dart ultimately admitted Smith to training (he completed training and was paid), though Smith alleges reputational and emotional harm and a hiring delay.
- Smith sued under the FCRA alleging negligent and willful violations of § 1681e(b), § 1681k, and § 1681i; the magistrate recommended partial denial of summary judgment, and the district court adopted that R&R with limited modifications.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 1681e(b) negligent accuracy claim survives summary judgment | Smith: BGC reported inaccurate criminal records and had identifiers (full name, SSN) available; procedures were unreasonable. | BGC: Its automated matching (first/last/DOB) is reasonable industry practice; SSNs not in public indexes. | Denied summary judgment — factual dispute on reasonableness for jury. |
| Whether § 1681e(b) willful (reckless) liability exists under Safeco standard | Smith: Recklessness can be found; BGC ran high-risk automated matches and placed burden on employer. | BGC: Its interpretation of § 1681e(b) was objectively reasonable under Safeco; no willfulness. | Denied summary judgment — disputed facts permit jury to find reckless/willful conduct. |
| Whether § 1681k notice requirement (“at the time”) was violated willfully or negligently | Smith: Notice must be contemporaneous; here notice was delayed and possibly mailed after Smith contacted BGC. | BGC: “At the time” does not require simultaneous delivery; mailing upon report transmission is reasonable and supported by FTC guidance. | Willful § 1681k claim: granted for BGC (no objective unreasonable interpretation). Negligent § 1681k claim: denied — timing dispute for jury. |
| Whether Smith proved actual damages (lost wages, reputation, emotional distress) | Smith: Lost start-time wages, reputational harm (recruiter called him dishonest), emotional distress and physical symptoms. | BGC: No lost wages shown (Smith ultimately paid for training); emotional harm unsupported (no medical treatment). | Lost wages: granted for BGC (no evidence of wage loss). Reputation/emotional distress: denied — plaintiff’s testimony suffices for jury. |
Key Cases Cited
- Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47 (2007) (willfulness under FCRA includes recklessness; applies objective "reasonable interpretation" test)
- Cahlin v. Gen. Motors Acceptance Corp., 936 F.2d 1151 (11th Cir. 1991) (reasonableness of CRA procedures generally a jury question; defendant can win only if report is accurate as a matter of law)
- Equifax Inc. v. Federal Trade Commission, 678 F.2d 1047 (11th Cir. 1982) (purpose of FCRA: prevent consumer harm from inaccurate reports)
- Philbin v. Trans Union Corp., 101 F.3d 957 (3d Cir. 1996) (discusses alternative burdens of proof standards for § 1681e(b) claims)
- King v. Asset Acceptance, LLC, 452 F. Supp. 2d 1272 (N.D. Ga. 2006) (a plaintiff’s own testimony may suffice to demonstrate emotional distress under FCRA)