LINDSEY A. KIDD, Plaintiff-Appellant, v. THOMSON REUTERS CORPORATION, Defendant-Appellee.
No. 17-3550
United States Court of Appeals For the Second Circuit
MAY 30, 2019
August Term, 2018
Appeal from the United States District Court for the Southern District of New York.
No. 16-1668 — Jesse M. Furman, Judge.
ARGUED: FEBRUARY 4, 2019
DECIDED: MAY 30, 2019
Before: CALABRESI, DRONEY, Circuit Judges, and UNDERHILL, Chief District Judge.*
* Judge Stefan R. Underhill, of the United States District Court for the District of Connecticut, sitting by designation.
Appeal from a judgment of the United States District Court for the Southern District of New York following the grant of Defendant-Appellee Thomson Reuters’ motion for summary judgment. We hold that the district court was correct in concluding that Thomson Reuters is not a “consumer reporting agency,”
JAMES A. FRANCIS, Francis & Mailman, Philadelphia, PA, for Appellant.
KEVIN KING (Eric C. Bosset & Neil K. Roman, on the brief), Covington & Burling, Washington, D.C., for Appellee.
Plaintiff-Appellant Lindsey A. Kidd was the subject of a background check as part of an employment application process with the state of Georgia Department of Health (“Department“). The background check was performed using Defendant-Appellee Thomson Reuters’ subscription-based internet platform, “CLEAR.” The CLEAR report obtained by the Department falsely showed that Kidd had been previously convicted of thеft. Believing the report to be correct, the Department rejected Kidd‘s application. Kidd then filed this action in the Southern District of New York, alleging that Thomson Reuters is a “consumer reporting agency” subject to the Fair Credit Reporting Act and that it violated that act by providing the false report. After the conclusion of discovery, the district court (Furman, J.) granted Thomson Reuters’ motion for summary judgment, concluding that because Thomson Reuters is not a “consumer reporting agency,” it is not subject to the Act. For the reasons that follow, we AFFIRM the district court‘s judgment in favor of Thomson Reuters.
I.
The Fair Credit Reporting Act (“FCRA“) regulates, among other things, the circumstances in which a “consumer reporting agency” may furnish “consumer reports” to third parties, and the information contained in those reports.
A.1
Thomson Reuters oрerates an online research platform named “Consolidated Lead Evaluation and Reporting,” or “CLEAR,” that provides its subscribers summary reports of motor vehicle records, court records, aliases, the status of professional licenses, real property transactions, and similar information.2 CLEAR subscribers
Thomson Reuters prohibits its subscribers from utilizing CLEAR for any purpose covered by the FCRA, such as credit inquiries or background checks related to employment, and has established measures to prevent those uses of its reports. For example, the company markets CLEAR for law enforcement, fraud prevention, or identity verification purposes only. Emрloyees tasked with marketing CLEAR to potential subscribers are trained that CLEAR “may not be promoted or used for FCRA-regulated purposes.” App‘x at 141.
Thomson Reuters also screens potential subscribers before granting them access to CLEAR. They are required to indicate how they intend to use the platform on an “Account Validation and Credentialing” form, which Thomson Reuters employees then review to confirm that the use of CLEAR is not for an FCRA purpose. If an employee suspects an applicаnt intends to use the platform for an improper purpose, the applicant will be flagged for review by a “Credentialing Committee” that may reject the applicant or require the applicant to affirm she will not improperly use CLEAR. Once approved, the customer enters into a contract with Thomson Reuters in which she specifically represents that she will not use CLEAR for a purpose covered by the FCRA. Thomson Reuters “offers complimentary training to new CLEAR subscribers” to ensure compliаnce. App‘x at 145. Every two years, Thomson Reuters requires subscribers to reaffirm their commitment to using CLEAR for a non-FCRA purpose, and before a subscriber may enter an individual search request, she must verify that her search is for an approved purpose.
Thomson Reuters also investigates reports of CLEAR misuse through its in-house compliance office. If the office determines misuse has occurred it will “remind[] the subscriber that FCRA use of CLEAR is prohibited and require[] the subscriber to provide a written ‘attestation’ of its authorized usеs of CLEAR and its intent to enforce the subscriber‘s contractual obligation not to use CLEAR for any FCRA purpose.” App‘x at 146. It is undisputed that reports of misuse are rare. Of the 144 million CLEAR searches conducted between 2012 and 2016, only 46 were alleged to be for an FCRA purpose.3 Thomson Reuters determined that 12 of the 46 reports did not involve misuse, required the users responsible for 24 of the searches to reaffirm their promise to perform non-FCRA searches, and terminated the accounts of the subscribers responsible for the remaining 10 improper searches.
B.
This case involves one of those 46 reports of misuse. In November 2014, Plaintiff-Appellant Lindsey Kidd was the leading candidate for a position as an “Immunization Program Consultant” with the Georgia Department of Public Health, a CLEAR subscriber. The Department received Kidd‘s authorization to obtain a background check during the application process. Using the CLEAR platform, the Department discovered that Kidd had a prior state conviction for theft. Although the Departmеnt regarded Kidd as the
Kidd subsequently filed a putative class action complaint in the Southern District of New York against Thomson Reuters in March 2016, alleging that operating the CLEAR platform renders Thomson Reuters a “consumer reporting agency” under the FCRA and that the company violated several provisions of the Act in providing false information to the Georgia agency.
After the conclusion of discovery, the district court granted summary judgment in favor of Thomson Reuters. Starting with the text of the FCRA, the district court determined that an entity is a “consumer reporting agency” under the Act if it “regularly assembles consumer information with a particular purpose or subjective intention—namely, of providing it to third parties for use (actual or expected) in conneсtion with an FCRA-regulated end, such as employment eligibility.” Kidd v. Thomson Reuters Corp., 299 F. Supp. 3d 400, 404 (S.D.N.Y. 2017). “That is because,” the court explained, “an entity qualifies as a [consumer reporting agency] only if it ‘regularly’ assembles information on consumers ‘for the purpose of furnishing consumer reports to third parties,’ and ‘purpose’ means ‘[t]he reason for which something is done or created or for which something exists’ or to ‘[h]ave as one‘s intention or objective.‘” Id. (quoting Purpose, OXFORD ENGLISH ONLINE DICTIONARY, https://en.oxforddictionaries.com/definition/purpose).
Applying that definition to Thomson Reuters, the district court determined that the company does not qualify as a “consumer reporting agency” because Thomson Reuters did not intend to furnish “consumer reports” through the CLEAR platform. The court explained that Thomson Reuters took “affirmative steps . . . at every stage of the customer acquisition, application, contracting, and support processes to ensure that subscribers are not using CLEAR for FCRA-regulated purposes,” thereby establishing that it did not intend to furnish reports for FCRA purposes. Thus, its reрorts would not constitute “consumer reports.” Id. at 407.
Kidd timely appealed from the district court‘s judgment.
II.
We review a “district court‘s grant of a motion for summary judgment de novo, construing the evidence in the light most favorable to the non-moving party.” Irby v. N.Y.C. Transit Auth., 262 F.3d 412, 413 (2d Cir. 2001) (internal quotation marks omitted).
Kidd‘s appeal presents a question of first impression for us: Whether, to qualify as a “consumer reporting agency” under the FCRA, an entity must specifically intend to furnish a “consumer report.” For the reasons that follow, we conclude that it must have such an intent, and we affirm the district court‘s order granting summary judgment in favor of Thomson Reuters.
A.
To answer quеstions of statutory interpretation, we “begin with the text.” Life Techs. Corp. v. Promega Corp., 137 S. Ct. 734, 741 (2017).
Under the Act, a “consumer reporting agency” is:
any person4 which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties, and which uses any means or facility of interstate commerce for the purpose of preparing or furnishing consumer reports.
any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer‘s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer‘s eligibility for—(A) credit or insurance to be used primarily for personal, family or household purposes; (B) employment purposes; or (C) any other purpose authorized under section 1681b of this title.
The ordinary meaning of “‘purpose’ corresponds loosely with the common-law concept of specific intent.”6 United States v. Bailey, 444 U.S. 394, 405 (1980); cf. United States v. Technodyne LLC, 753 F.3d 368, 383 (2d Cir. 2014) (finding, in the civil context, that the phrase “in order to” constitutes a specific intent requirement). Specific intent may be fоund where a person acts with “[t]he intent to accomplish the precise . . . act.” Specific Intent, BLACK‘S LAW DICTIONARY (10th ed. 2014).7 Thus, “a person who causes a particular result is said to act purpose[ly] if ‘he consciously desires that result, whatever the likelihood of that result happening from his conduct.‘” Bailey, 444 U.S. at 404 (quoting United States v. U.S. Gypsum Co., 438 U.S. 422, 445 (1978)). This understanding comports with the common dictionary definition of “purpose” as “something set up as an object or end to be attained.” Purpose, MERRIAM-WEBSTER ONLINE DICTIONARY, https://www.merriam-webster.com/dictionary/purpose (last visited March 21, 2019).
The meaning of “for the purpose of” in
We have interpreted the same phrase in other statutes to describe a specific intent requirement.
Other circuits have also concluded that the FCRA includes a specific intent requirement in its definition of a “consumer reporting agency.” In Zabriskie v. Fed. Nat‘l Mortg. Assoc., 912 F.3d 1192 (9th Cir. 2019), for example, lenders providing mortgage refinancing used a Fannie Mae computer program called “Desktop Underwriter” — a platform used to determine a loan‘s eligibility for purchase by Fannie Mae—to evaluate the plaintiffs’ loan application. Id. at 1195-96. The program, however, incorrectly reported that the plaintiffs had been the subject of a recent foreclosure, and the lenders rejected the plaintiffs’ application as a result. Id. at 1196. The plaintiffs then sued Fannie Mae under the FCRA. Id. Fannie Mae argued that it was not a “consumer reporting agency,” and therefore not liable under the Act, because it did not provide Desktop Underwriter for the purpose of furnishing a consumer report about prospective borrowers to lenders, but rather for the purpose of facilitating “a transaction between the lender and Fannie Mae.” Id. at 1199 (internal quotation marks omitted). The Ninth Circuit agreed, explaining that “‘[p]urpose’ means ‘something set up as an object or end to be attained‘” and accordingly, “[b]y its plain meaning, . . . the FCRA applies only to an entity that assembles or evaluates with the intent of providing a consumer report to third parties.” Id. (internal quotation marks and citation omitted).
The Seventh Circuit has reached a similar conclusion. In Tierney v. Advocate Health & Hosps. Corp., 797 F.3d 449 (7th Cir. 2015), a number of computers containing unencrypted patient data were stolen from the defendant-hospital‘s administrative offices. Id. at 450. Severаl patients sued the defendant, claiming that the release of their records violated the FCRA, which requires that “consumer reporting agencies” employ procedures to prevent disclosures of consumer information to unauthorized third parties. Id. at 451. The Seventh Circuit concluded, however, that the plaintiffs failed to state a claim under the FCRA because the patients’ information was collected to obtain payments from medical insurers and government agencies and not assembled for the рurpose of furnishing consumer reports. Id. at 452. Therefore, the court explained, the defendant-hospital was not a “consumer reporting agency” under the Act. Id. at 453.
Finally, our interpretation of the FCRA accords with 2010 guidance provided
In sum, “[t]he statute says what it says,” Cyan, Inc. v. Beaver Cnty. Emps. Ret. Fund, 138 S. Ct. 1061, 1069 (2018)—a “consumer reporting agency” is an entity that assembles consumer information “for the purpose of furnishing consumer reports to third parties.”
B.
Kidd‘s arguments to the contrary are unavailing. Starting with the text, she argues that an entity qualifies as a “consumer reporting agency” if it “assembles consumer information in order to sell reports which satisfy the statutory definition of ‘consumer report,‘” whether or not the entity actually intended to furnish a “consumer report.” Appellant‘s Br. at 13. Kidd suggests section 1681a(f) imposes something akin to a general intent requirement—an entity need not specifically intend to furnish a “consumer report” to be a “consumer reporting agency.” Rather, in Kidd‘s view, the Act merely requires that an entity intend to furnish a report (consumer or otherwise) that ultimately constitutes a “consumer report.”
Kidd‘s interpretation, however, finds no support in the text. As explаined above, the long-standing meaning of “for the purpose of,” which we presume Congress understood when it drafted the FCRA, see Williams, 345 F.3d at 133, requires specific intent to provide a statutorily-defined “consumer report,” Bailey, 444 U.S. at 405. Most naturally read, then, “for the purpose of furnishing consumer reports to third parties” means an entity must act with the specific intent to supply such a report.9
Next, Kidd warns that if we adopt Thomson Reuters’ interpretation we “would permit a company to purpose[ly] gather consumer information аnd intentionally sell person-specific reports to third parties, which in all ways meet the statutory definition of ‘consumer report,’ yet avoid the reach of the FCRA by making a strategic decision to include disclaimers in its contractual and promotional language.” Appellant‘s Br. at 14. However, an entity may not escape regulation as a “consumer
Finally, Kidd argues that our analysis renders part of the Act‘s definition of “consumer report” — specifically its focus on the use of the report by the subscriber to make credit, insurance, and employment decisions—irrelevant. Not so. Even if a court were to conclude that an entity is a “consumer reporting agency” becаuse it specifically intended to furnish a “consumer report,” a court must still consider whether the report qualifies as such a “consumer report.”10 In doing so, the court must give meaning to each of section 1681a(f)‘s terms, including its focus on the conduct of the end-user.
Nor is
Accordingly, we are not persuaded by Kidd‘s proposed interpretation of the FCRA‘s definition of “consumer reporting agency.”
II.
Having concluded that to qualify as a “consumer reporting agency” an entity must intend to furnish a “consumer report” under the FCRA, we must now determine whether the district court was cоrrect in concluding at summary judgment that Thomson Reuters did not intend that information provided by its CLEAR platform would constitute “consumer reports.” Like the district court, we conclude that because it is undisputed that Thomson Reuters took numerous—and effective—measures to prevent CLEAR reports from being utilized as “consumer reports,” no reasonable juror could conclude that Thomson Reuters intended to furnish such reports, and therefore it is not a “consumer reporting agency” under the FCRA.
A.
At each gateway to the CLEAR platform, Thomson Reuters instructed users
In the event these controls fail, Thomson Reuters also employs additional measures to prevent further misuse of the CLEAR platform. If its compliance office determines a user has used CLEAR for an FCRA purpose it will “remind[] the subscriber that FCRA use of CLEAR is prohibited and requires the subscriber to provide a written ‘attestation’ of its authorized uses of CLEAR and its intent to enforce the subscriber‘s contractual obligation not to use CLEAR for any FCRA purpose.” App‘x at 146.
These numerous, undisputed controls are sufficient to establish at summary judgment that Thomson Reuters aimed to prevent users from putting CLEAR reports to uses covered by the FCRA. This negates any inferences that Thomson Reuters intended to provide reports for FCRA purposes. Hence, the reports it provided do not qualify as “consumer reports.”
B.
Kidd does not dispute any of the foregoing facts. Instead, she argues that we can infer Thomson Reuters’ intent to furnish “consumer reports” because it was aware that its controls did not prevent all misuse of CLEAR by its subscribers.
To be sure, the record shows that Thomson Reuters was aware of some instances of misuse of its CLEAR platform. But, it is undisputed that the number of reports misused by subscribers was miniscule in comparison to the number of reports generated. No doubt in some cases such knowledge may at least raise a genuine dispute as to whether the entity furnishing the consumer information intended to furnish “consumer reports.” That is not the case here, however. Thomson Reuters’ extensive efforts to prevent misuse, and to investigate and eliminate it when it occurs, shows that even in the few instances where CLEAR was misused for FCRA purposes, Thomson Reuters did not intend that result.12
Conclusion
For the foregoing reasons, we AFFIRM the district court‘s judgment in favor of Thomson Reuters.