What’s at Stake
Standing is the legal principle that decides who gets to bring a lawsuit. Traditionally, a person who has experienced the violation of a statute has standing to bring a claim for that violation. For example, the federal Fair Credit Reporting Act (FCRA) says that people can bring claims when an employer or consumer reporting agency doesn’t give them clear enough notice about background and credit checks. However, in recent years the U.S. Supreme Court has held that in order to sue in federal court, the person alleging the violation must also show that they suffered a “concrete injury” caused by the violation in addition to the statutory violation itself. Meanwhile, a company that knowingly broke the law sees no consequences.
This case is about whether California state courts will continue to recognize that having a statutory claim is enough to sue in state court, or whether it will follow the federal courts and require concrete harm separate from the statutory violation to bring a lawsuit. If the California state courts follow the federal courts, strong consumer protection laws like the FCRA could become virtually unenforceable by individuals.
Summary
CRST employed Plaintiff Terry Askins as a truck driver. Both as part of the application process for the position and during his time working for CRST, CRST obtained multiple background checks—which constitute consumer reports under the FCRA—about Mr. Askins. While CRST did give Mr. Askins forms related to obtaining background checks, those documents did not exclusively relate to background checks. As one court explained, “the disclosure forms he received were lengthy and confusing and contained extraneous information, and he was not aware that CRST would conduct a background check. As a result, he was not placed in a position to meaningfully understand, object to, or decline the background check, or to take steps to verify or correct any information that might be obtained through it.”
Mr. Askins brought a class action suit against CRST in California state court, alleging that its background check documents do not meet the FCRA’s notice and authorization requirements. For purposes of the appeal, CRST did not dispute that its background check disclosures do not comply with the FCRA.
While Mr. Askins’ class certification motion was pending, a California court of appeals in another appellate district issued Limon v. Circle K Stores, Inc., which held that a plaintiff must demonstrate a concrete injury beyond a statutory violation to have standing in California court to sue for statutory damages under the FCRA, and that any informational injury suffered by the plaintiff as a result of not receiving the mandated disclosures was insufficient to meet that standard. CRST moved to decertify the class, contending that Limon meant that Mr. Askins lacked standing to proceed. The trial court granted the motion for decertification because it understood Limon to be binding authority.
Mr. Askins appealed the order decertifying the class, and the court of appeals reversed. That court expressly disagreed with Limon, holding that alleging a willful violation of the FCRA is sufficient for a plaintiff to have standing to bring that claim in California court. CRST has filed a petition for review in the California Supreme Court.
Core Legal Problem
Following Limon v. Circle K, California courts of appeals are divided as to what the default standing rule is in California: Is the default rule that plaintiffs must show a federal-style injury-in-fact, or do courts just look at the plain text of a statute to determine who can sue? And, following the decision in this case, courts of appeal are now also divided as to whether a plaintiff must show more than a statutory violation to have standing to sue under the FCRA.
These questions are now pending before the California Supreme Court in this case.