Thomas v. FTS USA, LLC
193 F. Supp. 3d 623
E.D. Va.2016Background
- Plaintiff Kelvin Thomas sued FTS USA, LLC (and parent UniTek) under the FCRA alleging: (1) employers procured consumer reports for employment without a clear, standalone written disclosure and written consent (15 U.S.C. § 1681b(b)(2)); and (2) defendants took adverse employment action without providing the pre-adverse-action report and FCRA summary (15 U.S.C. § 1681b(b)(3)).
- The court certified two classes: an "Impermissible Use Class" (failure to provide disclosure/authorization) and an "Adverse Action Sub-Class" (failure to provide pre-adverse-action report and summary before adverse action).
- Thomas signed UniTek’s standard Employment Release Statement in 2012; UniTek ordered a background check from Backgroundchecks.com that initially contained serious inaccuracies; Thomas was informed he was ineligible on March 12, 2012 and only then received an edited report.
- Defendants never provided class members the statutorily required standalone disclosure or FCRA summary; they claim they relied on vendors to provide notices (no contract provisions required that).
- Defendants moved for summary judgment on multiple grounds (including lack of Article III standing post-Spokeo, compliance of the release form with §1681b(b)(2), partial compliance for some adverse-action members, releases/accords, and judicial estoppel). The court struck evidence on the pre-adverse-action notice issue, defendants abandoned release/accord defenses, and denied summary judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Article III standing under Spokeo (injury-in-fact) | Statutory informational injury and statutory privacy invasion: deprivation of clear disclosure/consent and of pre-adverse-action information are concrete harms Congress intended to protect | Violations are merely technical/procedural and, absent actual damages, do not confer Article III standing per Spokeo | Court: Denied summary judgment — statutory informational and privacy injuries are concrete and particularized; Spokeo does not foreclose standing here |
| Compliance of Employment Release with §1681b(b)(2)(A) (clear, conspicuous, standalone disclosure and written authorization) | Release did not satisfy the statute’s standalone, clear-and-conspicuous disclosure requirement | Release was adequate (Defendants argued) | Court: Declined to grant defendant summary judgment; issued separate opinion finding the Employment Release did not satisfy §1681b(b)(2)(A) and Plaintiffs entitled to summary judgment on that issue |
| Pre-adverse-action notice requirement under §1681b(b)(3) for Adverse Action Sub-Class | No class member received the required copy of the consumer report and summary of rights before adverse action, denying the opportunity to respond | Defendants asserted some class members received proper pre-adverse-action notices | Court: Denied summary judgment; evidence supporting defendants’ claim was stricken and subclass claims for lack of standing were denied (i.e., standing exists) |
| Judicial estoppel based on bankruptcy nondisclosure | Thomas’s claims accrued post-petition or otherwise were not required to be disclosed; no bad-faith conversion — no inconsistent bankruptcy position | Defendants argued Thomas concealed the claim in bankruptcy and is judicially estopped | Court: Denied summary judgment — claim accrued after Chapter 13 filings and conversion to Chapter 7 was not shown to be in bad faith; judicial estoppel not available |
Key Cases Cited
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (standing requires injury-in-fact, traceability, redressability)
- Federal Election Comm’n v. Akins, 524 U.S. 11 (statutory right to information can confer concrete injury)
- Public Citizen v. Department of Justice, 491 U.S. 440 (denial of statutory information can give Article III standing)
- Havens Realty Corp. v. Coleman, 455 U.S. 363 (tester received concrete injury where statute guarantees truthful information)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (summary judgment standard; materiality and genuine issue)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (summary judgment standard on showing no genuine issue)
- Dalton v. Capital Associated Indus., Inc., 257 F.3d 409 (Fourth Circuit summary of FCRA purposes and history)
- Ryan Operations G.P. v. Santiam-Midwest Lumber Co., 81 F.3d 355 (judicial estoppel doctrine; equitable remedy)