The Consumer Data Industry Association (CDIA) and the Professional Background Screening Association (PBSA) jointly filed an amicus brief last week in the U.S. Court of Appeals for the Third Circuit in a case that presents important issues regarding the scope of a consumer reporting agency’s obligations under the Fair Credit Reporting Act (“FCRA”) and a plaintiff’s ability to bring an FCRA suit without showing any real-world harm resulting from the alleged FCRA violation. The case is Kelly v. RealPage, Inc.
The plaintiffs brought suit on behalf of themselves and a putative class of consumers, alleging that RealPage violated the FCRA by not disclosing the “source” of the public records included in their consumer “file,” as required by 15 U.S.C. § 1681g(a)(2). RealPage had disclosed the actual repository of the public records in their files—for example, the court that held the records—but the plaintiffs argued that this disclosure was insufficient. In their view, the “source” of the public records is the private third-party vendor that retrieved the records from that repository, and thus RealPage violated the FCRA by not disclosing the vendors’ names. The plaintiffs did not allege that they suffered any actual harm from not knowing the identity of the vendors or that they would have done anything differently if they had that information. Instead, they seek only statutory damages up to $1,000, attorney’s fees, and punitive damages, but they do so on behalf of the more than two million consumers who received reports from RealPage during the class period.
The district court held that the plaintiffs had standing to pursue individual FCRA claims. The court reasoned that, if the FCRA required disclosure of the identities of third-party vendors, then the plaintiffs were necessarily harmed by not receiving that information. But the court declined to certify a class action because the plaintiffs could not show that common issues predominate over individualized ones—a necessary showing for their proposed classes. The Third Circuit then granted a petition to permit an immediate appeal of the order denying class certification.
In its amicus brief, CDIA argues that the entire case should be dismissed on the ground that the plaintiffs lack Article III standing because they suffered no concrete harm. Relying on the Supreme Court’s recent decision in TransUnion v. Ramirez, CDIA appropriately argues that the allegations that RealPage failed to include source information in disclosures made to consumers amounts to nothing more than an allegation of a bare procedural violation, which is insufficient to confer Article III standing. Unfortunately, the district court reached the contrary result by improperly conflating the merits question (whether the FCRA requires disclosure of the identity of vendors) with the standing question (whether Plaintiffs suffered concrete harm as a result of the alleged statutory violation).
CDIA also argues that the district court correctly held that class certification is inappropriate because individual inquiries predominate over common ones. Central to this determination was the court’s recognition that many consumers included in the proposed classes may have requested from RealPage a “consumer report”—not a consumer “file”—and that many putative class members did not request any information from RealPage. The district court correctly construed the FCRA as imposing an obligation on consumer reporting agencies to disclose a consumer’s file only to those consumers who actually made a request for their file.
The briefing for this appeal is expected to be completed by the end of August 2021, and a decision will likely issue in 2022. CDIA and PBSA are represented in the amicus by Mark W. Mosier of Covington.
Eric J. Ellman is Senior Vice President for Public Policy and Legal Affairs at the Consumer Data Industry Association (CDIA) in Washington, DC. He also served for eight months as Interim President and CEO of the Association. More