FRANK LONG; JOSEPH SHIPLEY; MICHAEL WHITE, Individually and on Behalf of All Others Similarly Situated v. SOUTHEASTERN PENNSYLVANIA TRANSPORTATION AUTHORITY
No. 17-1889
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
September 10, 2018
PRECEDENTIAL
Honorable Petrese B. Tucker
On Appeal from the United States District Court for the Eastern District of Pennsylvania (E. D. Pa. No. 2-16-cv-01991) District Judge: Honorable Petrese B. Tucker
Argued December 12, 2017
Before: CHAGARES, RESTREPO and FISHER, Circuit Judges.
(Filed: September 10, 2018)
Cheryl-Lyn D. Bentley
Adam T. Klein
Christopher M. McNerney
Ossai Miazad
Lewis M. Steel
Outten & Golden
685 Third Avenue, 25th Floor
New York, NY 10017
Benjamin D. Geffen
Public Interest Law Center of Philadelphia
1709 Benjamin Franklin Parkway
United Way Building, 2nd Floor
Philadelphia, PA 19103
Jon M. Greenbaum
Dariely Rodriguez
Lawyers’ Committee for Civil Rights Under Law
1500 K Street, Suite 900
Washington, DC 20005
Deepak Gupta [ARGUED]
Gupta Wessler
1900 L Street, .N.W., Suite 312
Washington, DC 20036
Ryan A. Hancock
Willig Williams & Davidson
1845 Walnut Street, 24th Floor
Philadelphia, PA 19103
Counsel for Appellants
Jamie M. Gullen
Community Legal Services
1424 Chestnut Street
Philadelphia, PA 19102
Counsel for Amicus Appellants Community Legal Services, National Employments Law Project and Service Employees International Union Local 668
James A. Francis
Francis & Mailman
100 South Broad Street
Land Title Building, 19th Floor
Philadelphia, PA 19110
Counsel for Amicus Appellant National Consumer Law Center
Michael A. Cognetti
Candidus K. Dougherty
Jeffrey B. McCarron
Swartz Campbell
50 South 16th Street
Two Liberty Place, 28th Floor
Philadelphia, PA 19102
Elizabeth A. Malloy [ARGUED]
Cozen O‘Connor
1650 Market Street
One Liberty Place, Suite 2800
Philadelphia, PA
Counsel for Appellee
OPINION OF THE COURT
FISHER, Circuit Judge.
This case raises again the frequently-litigated question of whether violation of a statute—here, the Fair Credit Reporting Act—is an injury in fact that satisfies the Constitution‘s “case or controversy” requirement. The District Court concluded that the plaintiffs did not allege a concrete injury in fact and therefore dismissed their complaint for lack of jurisdiction. We affirm in part and reverse in part.
I. Background
The complaint alleges the following facts. The three named plaintiffs were convicted of drug offenses in the relatively distant past: Michael White in 2006 and 2007, Joseph Shipley in 2001, and Frank Long in 1997. More recently, Plaintiffs applied to Southeastern Pennsylvania Transportation Authority (SEPTA) for jobs that
Ultimately, though, SEPTA denied employment to Plaintiffs. SEPTA told Long he was not hired because of “the information SEPTA had received from [the] background check.” App. 28 (Complaint ¶ 47). SEPTA told White and Shipley they were not hired because of their “criminal history.” App. 29, 31 (Complaint ¶¶ 57, 69). When Shipley requested more information, SEPTA sent a letter saying that for positions that “require the operation of ... vehicles,” SEPTA has a “categorical lifetime ban” on hiring anyone convicted of a crime “involving the possession, sale, distribution, manufacture and use of controlled substances.” App. 29-30 (Complaint ¶ 58).
SEPTA did not send Plaintiffs copies of their background checks before it decided not to hire them. Nor did it send them notices of their rights under the Fair Credit Reporting Act (FCRA). The FCRA, however, required SEPTA to send both before it denied them employment.
SEPTA moved to dismiss the complaint. The District Court granted the motion and dismissed for lack of standing. It concluded there was only a “bare procedural violation,” not a concrete injury in fact, because Plaintiffs alleged that SEPTA denied them jobs “based on their criminal history, which Plaintiffs disclosed prior to SEPTA procuring their background checks.” Long v. Se. Pa. Transp. Auth., No. CV 16-1991, 2017 WL 1332716, at *4 (E.D. Pa. Apr. 5, 2017). “Additionally,” the court noted, “Plaintiffs do not allege that their reports were inaccurate in any way.” Id. The court concluded that “SEPTA‘s purported FCRA violations did not cause the type of harm to Plaintiffs, or present any material risk of harm, that would give rise to a de facto injury.” Id. The court did not reach SEPTA‘s argument that Plaintiffs failed to state a claim under Rule 12(b)(6).
II. Jurisdiction and Standard of Review
The District Court had jurisdiction under
III. Analysis
Plaintiffs allege that SEPTA violated the FCRA by taking adverse employment action without providing copies of their background checks or notices of their rights under the FCRA. SEPTA argues that Plaintiffs lack standing because they were not harmed by what the District Court ruled were “bare procedural violations” of the statute. To determine whether the violations were “bare” and “procedural,” or whether they were concrete injuries in fact, we will first examine the statute to ascertain what rights it confers. Next, we will examine the factual allegations in the complaint. Finally, with the FCRA and the facts in hand, we will analyze whether Plaintiffs have standing.
A. The Statute
The FCRA provides that “before” a potential employer, like SEPTA, takes “any adverse action based in whole or in part” on a consumer report, it “shall provide”
Plaintiffs argue that the statute prohibits adverse employment actions based on consumer reports that an individual has not had the opportunity to review or discuss with the potential employer. SEPTA, on the other hand, argues that the statute protects only against adverse employment action that is based on inaccurate or misleading information. SEPTA‘s position is that Plaintiffs’ consumer reports were accurate and therefore they suffered no injury in fact. SEPTA is incorrect, however. As we now explain, the statute confers a broader right than simply to be free from adverse action based on inaccurate information.
Following the Supreme Court‘s directives, we “look to the text of the statute, rather than the legislative history, to interpret a statute or determine legislative intent as an aid to interpretation.” Thorpe v. Borough of Thorpe, 770 F.3d 255, 263 (3d Cir. 2014).2 The text of
Congress found that “[c]onsumer reporting agencies have assumed a vital role in assembling and evaluating ... information on consumers.”
The required pre-adverse-action copy of an individual‘s consumer report allows him to ensure that the report is true, and may also enable him to advocate for it to be used fairly—such as by explaining why true but negative information is irrelevant to his fitness for the job. The required pre-adverse-action notice of FCRA rights provides the individual with information about what the law requires with regard to consumer reports. The advance notice requirement, then, supports both accuracy and fairness. It helps ensure that reports are properly used and relevant for the purposes for which they are used.
SEPTA argues that
SEPTA also argues that Congress did not intend
In sum,
A district court entertaining a Rule 12(b)(1) motion to dismiss for lack of standing must first ascertain whether it “presents a ‘facial’ attack or a ‘factual’ attack on the claim at issue, because that distinction determines how the pleading must be reviewed.” Constitution Party of Pa. v. Aichele, 757 F.3d 347, 357 (3d Cir. 2014) (quoting Schering Plough, 678 F.3d at 243). “A facial attack considers a claim on its face and asserts that it is insufficient to invoke the subject matter jurisdiction of the court . . . .” Id. at 358. A court ruling on a facial attack considers only the complaint, viewing it in the light most favorable to the plaintiff. Id. A factual attack, in which the defendant contests the truth of the jurisdictional allegations, is a different matter: the court need not treat the allegations as true, and a plenary trial is held to resolve any material factual disputes. Id.; Schuchardt v. President of the U.S., 839 F.3d 336, 343 (3d Cir. 2016).
In passing, SEPTA invokes the standard for a factual attack, declaring without elaboration that Plaintiffs’ allegations are not entitled to the usual presumption of truth. Appellee‘s Br. 9. However, SEPTA never made a factual attack. It “filed the attack before it filed any answer to the Complaint or otherwise presented competing facts,” so its motion is, “by definition, a facial attack.” Constitution Party, 757 F.3d at 358; see also Long, 2017 WL 1332716, at *3 (“SEPTA . . . does not challenge the factual assertions in the Complaint.“). Therefore, we apply the familiar standard and assume the truth of Plaintiffs’ allegations. Schuchardt, 839 F.3d at 343.
Although the District Court articulated the correct standard, it did not actually “accept as true all of [Plaintiffs‘] plausible allegations, and draw all reasonable inferences in [their] favor.” Id. For example, the court stated that Plaintiffs alleged that SEPTA denied them jobs because of what they disclosed about their own criminal histories. 2017 WL 1332716, at *4. However, Plaintiffs clearly allege that SEPTA denied them jobs because of their background checks. App. 28 (Complaint ¶ 47, alleging that Long received a letter from SEPTA indicating that he was not hired because of “information SEPTA had received from [the] background check“); App. 29 (Complaint ¶ 56, alleging that Shipley was told “not to report to work, and that his background check had not been cleared“); App. 31 (Complaint ¶ 68, alleging that SEPTA did not begin training White because it was “waiting on the results of his background check“).
The District Court also failed to construe Plaintiffs’ allegations in the light most favorable to them. It adopted the view (espoused by SEPTA) that their drug convictions categorically barred them from the jobs for which they applied. Plaintiffs allege, however, that SEPTA might have changed its decision if they had the chance to respond to their background checks. The District Court was required to assume the truth of this allegation.
C. Standing
The law on standing is well developed, and several recent cases analyze standing in the context of alleged violations of federal privacy statutes. We begin by surveying Supreme Court and Third Circuit precedent to establish the relevant standing principles. We then apply the law to the facts of this case and conclude that the District Court erred, in part, in dismissing the complaint for lack of standing.
1. Spokeo
Under Article III of the United States Constitution, the power of the judiciary “extends only to ‘Cases’ and ‘Controversies.‘” Spokeo, 136 S. Ct. at 1547. The standing doctrine defines what
In Spokeo, the plaintiff alleged violations of the FCRA provision that requires consumer reporting agencies to “follow reasonable procedures to assure maximum possible accuracy.” 136 S. Ct. at 1545 (quoting
Therefore, it went on to explain what a concrete injury is and is not.
A concrete injury is “de facto;” it “actually exist[s],” though it need not be “tangible.” Id. at 1548-49. “In determining whether an intangible harm constitutes injury in fact, both history and the judgment of Congress play important roles.” Id. at 1549. The historical inquiry asks whether an intangible harm “has a close relationship” to one that historically has provided a basis for a lawsuit, and the congressional inquiry acknowledges that Congress‘s judgment is “instructive and important” because that body “is well positioned to identify intangible harms that meet minimum Article III requirements.” Id.
While Congress “may ‘elevat[e] to the status of legally cognizable injuries concrete, de facto injuries that were previously inadequate in law,” id. (quoting Lujan, 504 U.S. at 578), standing “requires a concrete injury even in the context of a statutory violation,” id. Therefore, a “bare procedural violation, divorced from any concrete harm,” cannot “satisfy the injury-in-fact requirement of Article III.” Id. The Court reaffirmed, however, that “the risk of real harm” can show concreteness. 136 S. Ct. at 1549. As examples, it cited common law causes of action for “harms [that] may be difficult to prove or measure,” such as slander per se. Id. It also reaffirmed that “the violation of a procedural right granted by statute can be sufficient in some circumstances to constitute injury in fact.” Id.
Having laid out principles of concreteness, the Court remanded to the Ninth Circuit for it to consider whether the plaintiff‘s particularized injury was also concrete, as required for standing. Id. at 1550.5
When discussing standing, we have noted that “the injury-in-fact element is not Mount Everest. The contours of the requirement, while not precisely defined, are very generous, requiring only that claimant allege some specific, identifiable trifle of injury.” In re Horizon Healthcare Servs. Inc. Data Breach Litig., 846 F.3d 625, 633 (3d Cir. 2017) (alterations omitted) (quoting Blunt, 767 F.3d at 278). Moreover, “[t]he Supreme Court has repeatedly affirmed the ability of Congress to ‘cast the standing net broadly’ and to grant individuals the ability to sue to enforce their statutory rights.” Id. at 635 (quoting Fed. Election Comm‘n v. Akins, 524 U.S. 11, 19 (1998)). It is perhaps unsurprising, then, that our four recent cases analyzing standing under privacy statutes “have been decidedly in favor of allowing individuals to sue to remedy violations of their statutory rights, even without additional injury.” Id. at 636.
In the first case, which preceded Spokeo, the plaintiffs sued under the Wiretap Act, the Stored Communications Act, and the Computer Fraud and Abuse Act, alleging that Google put cookies on their web browsers despite its statements to the contrary. In re Google Inc. Cookie Placement Consumer Privacy Litig., 806 F.3d 125, 130, 133 (3d Cir. 2015). The defendants argued there was no economic loss and hence no injury in fact. Id. at 134. We ruled that injury in fact does not require any “particular type of harm,” and “may exist solely by virtue of statutes creating legal rights.” Id. (quoting Havens Realty Corp. v. Coleman, 455 U.S. 363, 373 (1982)). The plaintiffs’ “specific” allegations of “concrete, particularized, and actual” injury were sufficient to confer standing. Id. at 134-35.
In the second case, which post-dated Spokeo, the plaintiffs sued under the Wiretap Act, the Stored Communications Act, and the Video Privacy Protection Act, alleging that the defendants unlawfully used cookies to track children‘s internet history. In re Nickelodeon Consumer Privacy Litig., 827 F.3d 262, 269-71 (3d Cir. 2016). This Court concluded that Spokeo did not “alter our prior analysis in Google” or “call[] into question whether the plaintiffs . . . have Article III standing.” Id. at 273-74. Plaintiffs’ harm was concrete because it “involve[d] a clear de facto injury, i.e., the unlawful disclosure of legally protected information.” Id. at 274.
The third appeal involved the theft of a computer containing the plaintiffs’ personal health information. Horizon, 846 F.3d at 629. The plaintiffs sued under the FCRA, arguing that the unauthorized disclosure was, “in and of itself, an injury in fact,” even absent any allegation that the information had been misused. Id. at 634. We noted that Google and Nickelodeon, which “provide welcome clarity” on standing, are “decidedly in favor of allowing individuals to sue to remedy violations of their statutory rights, even without additional injury.” Id. at 636. We also stated that Spokeo does not “redefin[e] the injury-in-fact requirement,” but “[i]nstead ... reemphasizes that Congress ‘has the power to define injuries that were previously inadequate in law.” Id. at 638 (citation omitted).
We applied Spokeo‘s “two tests for whether an intangible injury can ... be ‘concrete.” Id. at 637. We looked first to
In our fourth and final case, the plaintiff sued under the Telephone Consumer Protection Act (TCPA) after receiving a single unsolicited call on her cell phone. Susinno v. Work Out World Inc., 862 F.3d 346, 348 (3d Cir. 2017). We reemphasized that “[w]hen one sues under a statute alleging ‘the very injury the statute is intended to prevent,’ and the injury ‘has a close relationship to a harm traditionally providing a basis for a lawsuit in English or American courts,’ a concrete injury has been pleaded.” Id. at 351 (internal alterations omitted) (quoting Horizon, 846 F.3d at 639-40). The injury passed the congressional test because an unsolicited cell phone call was “the very harm that Congress sought to prevent,” and it passed the historical test because the TCPA “protect[s] essentially the same interests” as the common law tort of intrusion upon seclusion. Id. Therefore, the plaintiff “alleged a concrete, albeit intangible, harm under the Supreme Court‘s decision in Spokeo and our decision in Horizon.” Id. at 352.
3. Application
A plaintiff must “demonstrate standing for each claim he seeks to press.” Neale v. Volvo Cars of N. Am., LLC, 794 F.3d 353, 359 (3d Cir. 2015) (quoting DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 352 (2006)). Plaintiffs allege that SEPTA violated the FCRA by (i) taking adverse action without first providing copies of their consumer reports, and (ii) taking adverse action without first providing descriptions of their FCRA rights.
Plaintiffs have standing to assert their first claim—that SEPTA failed to provide copies of their consumer reports. Under Spokeo‘s congressional test, the FCRA clearly expresses Congress‘s “intent to make [the] injury redressable.” Horizon, 846 F.3d at 637. Congress granted the consumer a right to receive a copy of his report before adverse action is taken, and provided for statutory damages plus attorney‘s fees for willful noncompliance, which Plaintiffs allege here.
Spokeo‘s second test, the historical test, assesses whether the injury in question has a close relationship to a harm traditionally recognized under common law. Horizon, 846 F.3d at 639. A perfect common-law analog is not required. Id. We ask whether the “newly established causes of action protect essentially the same interests” as “traditional causes of action.” Susinno, 862 F.3d at 351.
Common-law privacy rights were historically understood as being invaded by “(a) unreasonable intrusion upon the seclusion of another, ... (b) appropriation of the other‘s name or likeness, . . . (c) unreasonable publicity given to the other‘s private life, . . . or (d) publicity that unreasonably places the other in a false light before the public ....” Restatement (Second) of Torts § 652A(2)(a)-(d) (1977). These latter three types of privacy torts represent interference with an individual‘s ability to control his personal information. That is analogous to the injury here, which is the use of Plaintiffs’ personal information—their consumer reports—without Plaintiffs being able to see or respond to it. Therefore, the second Spokeo test, the historical test, is also met. Because the statute meets both tests, and because Plaintiffs have alleged sufficient concrete harm, they have standing to bring their claim that SEPTA did not provide them with the required copies of their consumer reports.8
SEPTA points to hypotheticals in Spokeo to argue that Plaintiffs’ injury is bare and procedural, and thus not a concrete injury-in-fact. In Spokeo, the Court said that certain FCRA violations would “result in no harm,” such as where a consumer report contains an immaterial inaccuracy like an incorrect zip code, or where the report is “entirely accurate” but its use is not disclosed. Id. at 1550. SEPTA contends that—as in the second hypo—Plaintiffs’ consumer reports were accurate, even if they did not receive the required notice. SEPTA‘s argument, however, depends on its view that the sole purpose of the
We turn next to SEPTA‘s alleged failure to notify Plaintiffs of their FCRA rights. Plaintiffs argue that this was a concrete harm because it “increased the risk that individuals would not know of their FCRA rights and have their claims lapse before they could bring suit.” Appellants’ Br. 29. Under the principles outlined above, this is a “bare procedural violation, divorced from any concrete harm,” that cannot “satisfy the injury-in-fact requirement of Article III.” Spokeo, 136 S. Ct. at 1549. Plaintiffs became aware of their FCRA rights and were able to file this lawsuit within the prescribed limitations period, so they were not injured.9
Other federal appeals courts have deployed reasoning similar to ours, and have arrived at results consistent with this one—albeit in decisions regarding a different FCRA requirement. See Groshek v. Time Warner Cable, Inc., 865 F.3d 884, 887 (7th Cir. 2017) (cited with approval in Robertson, 2018 WL 4113815); Syed v. M-I, LLC, 853 F.3d 492, 499-500 (9th Cir. 2017). In both Groshek and Syed, the defendants disclosed that they would be obtaining consumer reports, but the disclosures were not in the format the FCRA requires. Groshek lacked standing because he did not allege that he failed to understand the disclosure. Groshek, 865 F.3d at 887. Syed had standing because he alleged he failed to understand the disclosure, and that if he had understood it, he would not have signed a liability waiver. Syed, 853 F.3d at 499-500. Plaintiffs are similar to Groshek, and like him, they lack standing, because although they did not receive FCRA rights disclosures, they understood their rights sufficiently to be able to bring this lawsuit.
Plaintiffs also argue that the lack of an FCRA notice “increased the risk of harm to... the putative class.” Appellants’ Br. 29 (internal quotation marks omitted).
Plaintiffs thus imply that unnamed class members remained unaware of their FCRA rights. However, “[n]amed plaintiffs who represent a class must allege . . . that they personally have been injured, not that injury has been suffered by other, unidentified members of the class .” Horizon, 846 F.3d at 634 (quoting Lewis v. Casey, 518 U.S. 343, 357 (1996)). Therefore, any harm to unnamed class members cannot constitute injury in fact.
IV. Conclusion
For these reasons, we affirm the dismissal of Plaintiffs’ claim based on SEPTA‘s failure to provide them with notice of their FCRA rights as required by