This issue arose in Shamara King v. General Information
Services, Inc., a "consumer class action based upon
Defendant's willful violation of the Fair Credit Reporting Act,
15 U.S.C. §§ 1681-1681x. ("FCRA")." In her
complaint, Ms. King brought suit "on behalf of thousands
of employment applicants throughout the country who have been the
subject of prejudicial, misleading and illegal background reports
performed by the Defendant and sold to employers. Defendant has
adopted and maintained a policy and practice of knowingly,
intentionally, recklessly and willfully reporting outdated adverse
information that is required to be excluded from the consumer
reports that it sells."
The defendant GIS then moved to dismiss the case, claiming that
FCRA was unconstitutional:
In sum, [the Supreme Court's decision in]
Sorrell [v. IMS Health] marks a dramatic shift in the
protection afforded to content- and speaker-based restrictions on
truthful commercial information. As the dissent in Sorrell noted,
its holding has sweeping effects on many other laws restricting
disclosure of commercial information, including FCRA. Because a
prohibition on disclosure of truthful information regarding an
individual's criminal record falls squarely within
Sorrell's holding, [the FCRA] is unconstitutional. Accordingly,
the Court should enter judgment on the pleadings in favor of GIS on
Plaintiff's [FCRA] claim.
This is certainly a creative defense, although it may be asking
more than a federal district court is willing to do. It could be
very interesting to see this argument get to an appellate
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The 2010 theft of an unencrypted laptop containing confidential health care information made front-page news in 2013, not because a huge number of patients were affected, but for the exact opposite reason.
Any company that collects personal data from consumers should take proactive steps to have appropriate legal counsel review its data security practices, as well as its terms of service or privacy practices, to identify any potential problem areas.
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