In Lee v. Dollar Thrifty Auto. Group, Inc., the plaintiffs brought a class action lawsuit alleging multiple violations of the employment background check provisions of the Fair Credit Reporting Act ("FCRA"). Specifically, the plaintiffs claimed that the defendants failed to provide them with disclosures properly informing them that a background check would be obtained. They also claimed that the defendants took adverse action against them based on their background check without following the FCRA's adverse action protocol.
Recently, the defendants moved to stay the matter pending the Supreme Court's decision Spokeo, Inc. v. Robins, 135 S.Ct. 1892, 191 L.Ed.2d 762 (2015). In Spokeo, the Supreme Court is addressing whether Congress may confer Article III standing by authorizing a private right of action based on the violation of a federal statute alone, despite a plaintiff having suffered no concrete harm. The Supreme Court's decision could have profound effects on "no harm" consumer class actions, where the plaintiffs allege only a statutory violation with no accompanying tangible injury.
The Court in Lee found that a stay was appropriate because Spokeo could have a determinative effect on the case. Specifically, the Court held that if Spokeo goes the defendants' way, the decision "may have serious implications not only for Plaintiffs' own individual standing, but also for the predominance and superiority requirements necessary for Rule 23(b)(3) class certification." The Court also found that a stay of the case would cause little prejudice because the Spokeo decision is likely to come in the next several months – a wait that "is unlikely to cause material harm."
The decision to stay the Lee case pending the Supreme Court's decision in Spokeo is not an outlier. Over twenty-five federal district courts have recently stayed FCRA actions while the Supreme Court considers Spokeo. Although it is difficult to predict the outcome of Spokeo, there is little doubt that a decision for the defense in that case could significantly impact "no harm" consumer class actions.
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