Dutta v. State Farm Mutual Automobile Insurance Co.Dutta v. State Farm Mutual Automobile Insurance Co.
- Reporters:
- ,
- Before:
- Richard A. Paez, Sandra S. Ikuta, Eric N. Vitaliano
Fair Credit Reporting Act / Standing
The panel affirmed the district court‘s summary judgment in favor of the defendant in an action under the Fair Credit Reporting Act.
The plaintiff alleged that the defendаnt violated the FCRA‘s procedural requirement that a prospective employer provide a job applicant with a copy of his consumer credit report, notice of his FCRA rights, and an opportunity to challenge inaccuracies in the report “before taking any adverse action based in whole or in part on the report.”
The panel held that the district court did not err in considering a declaration filed with the defendant‘s summary judgment reply papers because the plaintiff failed to object and thus waived any challenge to the admissibility of the declaration.
Following Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016), and Robins v. Spokeo, Inc., 867 F.3d 1108 (9th Cir. 2017), the panel held that the plaintiff lacked Article III standing. The plaintiff showed that the statutory provision was established to protect his concrete interests in ensuring that employment determinations are not affected by incorrect credit information. He did not, however, demonstrate how the specific violation of
OPINION
VITALIANO, District Judge:
Bobby S. Dutta appeals the district court‘s grant of summary judgment to State Farm Mutual Automobile Insurance Company (“State Farm“) on his claim that State Farm violated provisions of the Fair Credit Reporting Act of 1970 (“FCRA“). The relevant FCRA provisions require a prospective employer to provide a job applicant with a copy of his consumer credit report, notice of his FCRA rights, and an opportunity to challenge inaccuracies in the report “before taking any adverse action based in whole or in part on the report.”
I.
FCRA was enacted in 1970 “to ensure fair and accurate credit reporting, promote efficiency in the banking system, and prоtect consumer privacy.” Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 52 (2007). By 1996, though, Congress became concerned that FCRA had so enabled “employers to obtain consumer reports on current and prospective employees” that employees might be “unreasonably harm[ed] . . . if there [were] errors in their reports.” S. Rep. No. 104-185, at 35 (1995); see also S. Rep. No. 108-166, at 5–6 (2003) (noting that in 1996 Congress recognized “the significant amount of inaccurate information that was being reported by consumer reporting agencies and the difficulties that consumers faced getting such errors сorrected“). Responding to these concerns, Congress adopted remedial amendments requiring employers to provide job applicants with a copy of their credit report and to afford job applicants the opportunity to respond to the report before taking any adverse action based on it. See S. Rep. No. 104-185, at 35. The relevant amendment is codified at
[I]n using a consumer report for employment purposes, before taking any adverse action based in whole or in part on the rеport, the person intending to take such adverse action
shall provide to the consumer to whom the report relates— (i) a copy of the report; and
(ii) a description in writing of the rights of the consumer under this subchapter, as prescribed by the Bureau [of Consumer Financial Protection] under
section 1681g(c)(3) of this title.
FCRA provides, further, that “[a]ny person who willfully fails to comply with any requirement imposed under this subchapter with respect to any consumer is liable to that consumer.”
Dutta‘s sole claim against State Farm falls squarely within the confines of the amendment. On March 3, 2014, Dutta applied for employment with State Farm through the company‘s Agency Careеr Track (“ACT“) hiring program. As a preliminary step on the ACT pathway to hiring, Dutta was required to, and did, sign an authorization permitting State Farm to obtain his consumer credit report. Consumer credit reports are a critical component in State Farm‘s decision-making process when evaluating applications in the ACT program. State Farm examines the 24-month credit history of every ACT applicant, viewing it as an indicator of the applicant‘s practical ability to market financial and insurance-related products and serviсes. As relevant here, if the applicant‘s credit report indicates a charged-off account greater than $1000 or three or more 90-day late payments,
There is no dispute that Dutta was denied admission to the ACT program and that his poor credit history was the cause of his disqualification. Dutta‘s grievance is that the credit report obtained by State Farm contained errors, which State Farm considered without providing him sufficient notice under FCRA. He claims that, on March 11, 2014, Stаte Farm employee Roberta Thomas phoned him and told him that, because of a charged-off debt and two loan delinquencies, his employment application was rejected and that the decision was final.2 Three days later, on March 14, 2014, Dutta received a pre-adverse action notice, dated March 11, 2014 (“Statutory Notice“), which enclosed a copy of the credit report. The cover letter instructed Dutta to contact State Farm “within five days” if the report contained any inaccurate or incomplete information. Dutta followed those instructions by contacting State Farm on March 17, 2014, to dispute the report‘s accuracy. Specifically, he stated that although the charged-off debt listed in the report was dated February 28, 2014, which would be within State Farm‘s 24-month look back period, he had not made a payment on that debt since 2010—well outside the 24-month period. He also explained that the past delinquencies were modified mortgage loans and that he had made trial payments “much earlier than what was reported in the credit report.” The next day, on March 18, 2014, a State Farm
Dutta subsequently brought this action for damages, alleging that State Farm denied his employment application based on his credit report without providing him sufficient notice under FCRA. State Farm moved for summary judgment on July 25, 2016, and later attached the Declaration of Bridgette Beasley (“Beasley Declaration“), a State Farm employee, to its reply papers. Dutta did not object in the district court to the consideration of the Beasley Declaration nor did he request an opportunity to file a sur-reply to it. Relying on facts in the Beasley Declaration, the district court granted summary judgment to State Farm. The court concluded that, in the absence of “an injury in fact,” Dutta lacked standing to sue on the FCRA violation he had alleged. Dutta timely appealed.
II.
The district court had jurisdiction under
A. The Propriety of the Record
Dutta takes level aim at the district court‘s consideration of and reliance upon the Beasley Declaration, which was the only source of admissible proof as to why Dutta‘s credit report would have disqualified him from acceptance in the ACT program. Dutta contends that the district court‘s reliance on the Beasley Declaration was improper under Ninth Circuit precedent since the declaration was attached to State Farm‘s summary judgment reply papers and he was given no opportunity to respond to it. We disagree.
It is a basic principle that a party appearing bеfore a court is charged with the understanding of that court‘s rules of procedure. The district court‘s rules of practice permit the filing of affidavits and declarations in reply to opposition papers. N.D. Cal. Civ. L. R. 7-3(c). Where the opposing party believes he has been unfairly disadvantaged by a new factual matter included in a reply affidavit or declaration, the practice rules provide a mechanism to seek relief. The district court‘s Rule 7-3(d) provides the aggrieved party with the opportunity to object to the district court‘s consideration of the newly submitted evidence or to request leave to file a sur-reply opposition to it. N.D. Cal. Civ. L. R. 7-3(d).4
Ultimately, and dispositive of Dutta‘s objection to the district court‘s consideration of the Beasley Declaration,
As the record makes manifest, Dutta sat on his hands in the face of the new facts set forth in the Beasley Declaration. State Farm submitted the Beasley Declaration on September 22, 2016. At no time after that submission did Dutta object in the district court to the admissibility of the new matter nor did he request an opportunity to offer a sur-reply. It was not until his opening brief was filed in this appeal that Dutta objected. Consequently, there was no error in the district court‘s consideration of the Beasley Declaration; Dutta waived any challenge to its admissibility by not objeсting to it. See Getz, 654 F.3d at 868.
B. Article III Standing
This appeal is another installment in the development of the jurisprudence evolving from the Supreme Court‘s decision in Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) (Spokeo I). As relevant here, Spokeo I held that in order to satisfy Article III‘s standing requirement, a plaintiff seeking damages for the violation of a statutory right must not only plausibly allege the violation but must also plausibly allege a “concrete” injury causally connected to the violation. Id. at 1549. In the absence of a plausible concrete injury, Dutta cannot establish standing to sue.
Embedded in the Constitution‘s limitation on the exercise of judicial pоwer to “Cases” and “Controversies,”
The presence of an injury in fact is the “[f]irst and foremost” element a plaintiff must show to satisfy standing. Steel Co. v. Citizens for a Better Env‘t, 523 U.S. 83, 103 (1998). The pleaded injury must be both “concrete and particularized” and “actual or imminent, not conjectural or hypothetical.” Lujan, 504 U.S. at 560 (citations and quotations omitted). To be “particularized,” “the injury must affect the plaintiff in a personal and individual way.” Id. at 560 n.1. To be “concrete” the injury “must actually exist,“—that is, it must be “real” and “not аbstract” or purely “procedural“—but it need not be tangible. Spokeo I, 136 S. Ct. at 1548–49 (quotations and citations omitted).
Two years ago, the Supreme Court had occasion to clarify the nature of an injury that will satisfy standing‘s “concrete” injury requirement in the context of a different
Accordingly, the plausible pleading of a flat out violation of a statutory provision will not necessarily support a civil law suit in federal court since “a bare procedural violation [of a law creating that right], divorced from any concrete harm” will not constitute an injury-in-fact as demanded by Article III. Id.; see also Summers v. Earth Island Inst., 555 U.S. 488, 496 (2009) (“[D]eprivation of a procedural
[f]or example, even if a consumer reporting agency fails to provide the required notice to a user of the agency‘s consumer information, that information regardless may be entirely accurate. In addition, not all inaccuracies cause harm or present any material risk of harm. An example that comes readily to mind is an incorrect zip code. It is difficult to imaginе how the dissemination of an incorrect zip code, without more, could work any concrete harm.
Spokeo I, 136 S. Ct. at 1550 (emphasis added). At the same time, courts must remain alert that, “the risk of real harm” caused by the violation of a procedural right may be sufficient to establish an injury in fact. Id. at 1549. “[A] plaintiff in such a case need not allege any additional harm beyond the one Congress has identified.” Id.
On remand from the Supreme Court, in Spokeo II, we considered how courts should evaluate whether a concrete harm based on the procedural violation of a statute exists. We concluded that courts must “ask: (1) whether the statutory provisions at issue were established to protect [the
As to the first stеp of the inquiry, Congress enacted FCRA to ensure “fair and accurate credit reporting.” Spokeo I, 136 S. Ct. at 1545 (quoting
This interest in ensuring that employmеnt determinations are not affected by incorrect credit information is real and not “purely procedural.” Spokeo II, 867 F.3d at 1113. Given Congress‘s “concern[] that the ability of employers to obtain consumer reports on current and prospective employees may unreasonably harm employees if there are errors in their reports,” S. Rep. No. 104-185, at 35, it is reasonable to infer that Congress intended by its enactment of
On the other side of the ledger, though just as violative оf an FCRA provision affording an important procedural protection, in Bassett v. ABM Parking Services, Inc., we held that the issuance of an unredacted receipt did not create a material risk of harm in the form of identity theft or the invasion of privacy sufficient to confer standing where the consumer retained possession of the receipt and no one else had viewed it. 883 F.3d 776, 782–83 (9th Cir. 2018). Building upon this logic in a recent case, we concluded that the plausibly alleged violation of that same provision, by printing the expiration date of plaintiff‘s debit card on a receipt, could demonstrate a concrete harm when the plaintiff alleged that she had subsequently suffered from identity theft. Daniel v. Nat‘l Park Serv., 891 F.3d 762, 766 (9th Cir. 2018). The plaintiff, nevertheless, lacked standing because she did not plausibly allege that the harm was fairly traceable to the defendant‘s violation, rendering her allegations nothing more than a “bare procedural violation.” Id. at 767.
At bottom, the Beasley Declaration dashed any hope Dutta might have had to assert more than a bare procedural violation of his FCRA statutory right, that is, to assert a concrete injury that would have established his Article III standing to sue State Farm for redress. The Beasley Declaration makes clear that the existence of the charge off within the 24-month ACT look back period alone disqualified Dutta from continuing in the ACT program. That fact made all of the inaccuracies or explanations Dutta wanted to present to State Farm immaterial. None alone or collectively would establish a concrete injury. Consequently, although Dutta mаde a plausible showing of State Farm‘s procedural violation of FCRA, he failed to establish facts showing he suffered actual harm or a material risk of harm. Thus, Dutta failed to establish a concrete injury for purposes of the injury-in-fact element of standing. On these facts, the district court correctly determined that Article III standing was wanting.
AFFIRMED.
Notes
If new evidence has been submitted in the reply, the opposing party may file and serve an Objection to Reply Evidence, which may not exceed 5 pages of text, stating its objections to the new evidence, which may not include further argument on the motion. The Objection to Reply Evidence must be filed and served not more than 7 days after the reply was filed.
Fed. R. Civ. P. 6(d) , which extends deadlines that are tied to service (as opposed to filing), does not apply and thus does not extend this deadline.