114 F.4th 762
6th Cir.2024Background
- Thomas Merck applied for a job at Walmart but failed to disclose an old misdemeanor conviction in the application process.
- Walmart, using a third-party vendor, discovered the conviction during a background check and marked Merck as "Not Competitive" due to the nondisclosure, then revoked its conditional offer.
- Merck received an incomplete background report (missing a relevant "R3" code on the reason for the rejection) and was not given a chance to explain the omission before the offer was revoked.
- Merck sued Walmart, alleging a violation of the Fair Credit Reporting Act (FCRA) for failing to provide a full copy of the consumer report before taking adverse action.
- After intervening Supreme Court authority clarified Article III standing under federal consumer protection statutes, the district court granted summary judgment for Walmart, finding Merck lacked constitutional standing to bring the suit.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether denial of a full consumer report gives rise to Article III standing | Failure to provide the full report caused informational injury and concrete harm | No concrete harm or adverse effects from the omission | No standing; Merck failed to show adverse effects |
| Analogizing FCRA claim to deprivation of procedural due process | Statutory notice requirement parallels due process rights | Due process protections apply only to state action | No standing; private employment differs from due process claims |
| FCRA harm analogous to traditional tort and contract injuries | Denial of material information is a cognizable harm | FCRA duty is broader and not reliant on reliance or publication | No standing; no traditional harm closely analogous |
| Standing at summary judgment | Record shows he would have acted differently with full info | No evidence Merck could have changed the outcome | No standing; lack of evidence of concrete downstream effects |
Key Cases Cited
- TransUnion LLC v. Ramirez, 594 U.S. 413 (2021) (clarifies that statutory violations must result in concrete harm for Article III standing under the FCRA)
- Spokeo, Inc. v. Robins, 578 U.S. 330 (2016) (concrete injury is required for constitutional standing, even in the context of statutory violations)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (sets forth the requirements for an injury in fact under Article III)
- Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532 (1985) (procedural due process in public employment)
- Bd. of Regents of State Colls. v. Roth, 408 U.S. 564 (1972) (property interests for due process arise from state law)