Parsonage v. Walmart
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 California Investigative Consumer Reporting Agencies Act (ICRAA) says that people can bring claims when an employer or consumer reporting agency misuses their personal information. 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,” apart from the statutory violation. Following this holding, people who had their rights violated also have to prove they suffered concrete harm beyond the statutory violation (say, an erroneous background check kept them from getting a job) before they can go to court. Meanwhile, a company that knowingly broke the law sees no consequences.
This case is about whether a state court (specifically the Fourth Appellate District of the California Court of Appeals) will continue to recognize that having statutory claims 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 Fourth Appellate District follows the federal courts, strong consumer protection laws like California’s ICRAA could be significantly weakened, or even become virtually unenforceable.
Summary
Tina Parsonage applied for a job with Walmart. Walmart ordered a background check on Tina, but Tina alleges the background check and Walmart’s disclosure to her about the background check violated ICRAA. ICRAA requires employers conducting background checks to provide very clear disclosures to applicants, in a standalone document without unnecessary additional information mixed in. Tina alleges Wal-Mart did not disclose required information to her, nor was it in a standalone document.
Tina filed a class suit against Walmart alleging a violation of ICRAA. Walmart does not dispute that it violated ICRAA; it argues only that Tina was not injured by the violation. The superior court agreed and dismissed the case, concluding that Tina lacked standing because she had not suffered a concrete injury other than the statutory violation. That decision is being appealed in a California state appeals court. Together with our colleagues at the UC Berkeley Center for Consumer Law & Economic Justice, we filed an amicus brief with the appeals court to explain that the state’s lower court should not have applied heightened federal injury requirements to this scase.
Core Legal Problem
The lower court relied in part on Limon v. Circle K, where California’s Fifth Appellate District held that the plaintiff lacked standing to sue for violations of the Fair Credit Reporting Act because he had not shown a “concrete injury.”
Our amicus brief argues that Limon v. Circle K was wrongly decided by the Fifth Appellate District and that California courts should not import the harsh injury requirements from federal law, particularly from the U.S. Supreme Court’s TransUnion v. Ramirez decision. It also explained the importance of allowing people to recover statutory damages when companies break the law even when there were not demonstrable harms separate from the statutory violation.