Last week, a TroutmanPepper post highlighted a decision from October 2022 in the California Fifth Appellate District holding that the FCRA does not confer standing on plaintiffs to sue in California state court, absent any allegation of concrete injury. /1/  Earlier this year, in January 2023, the California Supreme Court denied both the plaintiff’s petition for review and several requests for depublication of the opinion, meaning that the court of appeal’s opinion stands. /2/ The Troutman blog observes that, for now,

this interpretation of legal standing in California will drastically limit FCRA plaintiffs’ ability to bring lawsuits alleging technical, no-harm violations in any forum.

Undoubtedly, the Limon decision will bolster FCRA defendants’ ability to assert lack of standing as a defense in FCRA cases filed in California state court, where plaintiffs have not suffered any concrete harm.

And, for now, this opinion will likely drive down settlement values for these kinds of technical FCRA cases, given the risk that the litigation stands to be dismissed based on lack of standing, perhaps even at the pleading stage.

Ultimately, however, plaintiffs will surely look for ways to fight and/or distinguish this decision. Also, given the lack of horizontal stare decisis among sister appellate districts in California, plaintiffs attorneys will likely work to have other California appellate courts examine the standing issue under FCRA.

Accordingly, while this decision will offer a short-term boost to defendants, the long-term impact of Limon remains to be determined.

As noted by a Proskauer Rose post

Plaintiff Ernesto Limon was employed by Circle K (which operates gas stations and convenience stores in California) for just one month before filing this putative class action lawsuit against his former employer, alleging violation of the [FCRA].  Limon alleged that Circle K’s standard form in which it seeks a job applicant’s consent to conduct a background check violated FCRA’s “standalone disclosure” requirement because it contained “extraneous provisions” and, further, that he was “confused regarding the nature of his rights under the FCRA.”  After suing Circle K in federal court (and losing), Limon initiated this action in state court.  The trial court also dismissed Limon’s action based on Limon’s inability to establish he had suffered a concrete injury as a result of Circle K’s actions.  The Court of Appeal affirmed on the ground that Limon had not suffered a sufficient concrete or particularized injury to have standing to sue Circle K.

The Troutman post provides a nice summary of how the “Fifth Appellate District decision provided a detailed analysis of the framework for standing in California.” Next, the Troutman post reports how the appellate court “explained the FCRA does not eliminate the requirement that a plaintiff be beneficially interested — suffer an injury-in-fact — to have standing because the FCRA’s statutory damages provision is intended to compensate a plaintiff for actual injury. It is designed to provide redress where damages are ‘difficult or impossible to quantify or prove.'”

/1/ Limon v. Circle K Stores, 84 Cal. App. 5th 671, 300 Cal. Rptr. 3d 572 (5th Div., Oct. 25, 2022)

/2/ Calif. S.Ct., No. S277435, 2023 Cal. LEXIS 320 (Jan. 25, 2023)

The posting was written by three TroutmanPepper attorneys, Jessica LohrCindy D. Hanson, and Susan N. Nikdel, with an assist from Troutman counsel, Elizabeth Holt Andrews. Troutman filed an amicus curiae letter on behalf of the Professional Background Screening Association opposing the plaintiff’s petition for the California Supreme Court to review Limon v. Circle K Stores.