United States: Spokeo Gets Lyft Off

Last Updated: November 11 2016
Article by Amy Lane Hurwitz and Gary M. Pappas

The Northern District of California dismissed a Fair Credit Reporting Act case against Lyft upon finding that plaintiff lacked Article III standing based on the Supreme Court's decision in Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016). The court found that plaintiff did not suffer any actual injury, or a real threat of such injury, as a result of Lyft's alleged FCRA violations. The court's ruling was consistent with several recent district courts' decisions based on similar facts, and expressly rejected the Eleventh Circuit's broad reading of Spokeo on the issue of "informational" injury.

Plaintiff sued Lyft on behalf of himself and a putative class who signed an employment application that contained "extraneous information" embedded with certain FCRA disclosures and failed to advise the applicant of his right to request a summary of his FCRA rights. As a result, according to plaintiff, Lyft procured his credit and background report in violation of the FCRA requirement to provide clear and unambiguous disclosures in a standalone document. Plaintiff did not contend, however, that he was confused about his rights or that he would not have consented to the background checks had he understood them. Moreover, Lyft hired plaintiff and he continued to be employed at the time he filed suit.

Lyft moved to dismiss under Spokeo, which held that to satisfy the injury-in-fact requirement for Article III standing in the context of an alleged FCRA statutory violation, plaintiff must show an invasion of a legally protected interest that is both particularized and concrete. While Spokeo's violation of plaintiff's statutory rights under FCRA satisfied the "particularized" injury requirement, the Supreme Court remanded the case back to the Ninth Circuit to conduct further analysis whether such bare procedural FCRA violations caused a "concrete" injury. The Court gave several examples of FCRA violations that would not satisfy the concrete injury requirement, but implicitly recognized that certain types of statutory violations can be sufficient to confer Article III standing based solely on the "informational" injury.

The California district court evaluated Spokeo and several post-Spokeo district court opinions holding that the plaintiffs lacked Article III standing despite similar FCRA violations. In each of these cases, the background report did not contain any adverse information about the plaintiff and/or the plaintiff was ultimately hired despite the procedural FCRA violations. The court reasoned that even if Lyft obtained plaintiff's background information without complying with FCRA disclosure requirements, the fact that plaintiff was hired and continued to be employed demonstrated that he could not meet Article III's injury-in-fact requirement based on the examples in Spokeo.

The court also analyzed the Eleventh Circuit's July 6, 2016 opinion in Church v. Accretive Health, Inc., which held that the "informational injury" language in Spokeo conferred standing on a plaintiff who failed to received certain Fair Debt Collection Practices Act disclosures in a collection letter. The court reasoned that Church was inconsistent with Spokeo because the cases cited by the Supreme Court involved informational interests of broad public significance whereas the alleged failure to disclose in Church did not. As a result, the California court declined to follow Church and granted Lyft's motion to dismiss based on Spokeo.

Nokchan v. Lyft, Inc., Case No. 15-cv-03008-JCS (N.D. Ca. October 5, 2016).

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