In Tierney v. Advocate Health & Hospitals Corp., the Seventh Circuit recently affirmed the dismissal of a Fair Credit Reporting Act (“FCRA“) complaint and found that a hospital was not a “credit reporting agency” under the FCRA. 

The Tierney case was filed by six plaintiffs who alleged FCRA claims against Advocate Health & Hospitals Corporation (“Advocate“) based on the theft of certain desktop computers from Advocate’s administrative offices.  According to the plaintiffs, Advocate was liable for those thefts because Advocate allegedly did too little to safeguard the plaintiffs’ information.

The district court dismissed the FCRA complaint for failure to state a claim and also found that the plaintiffs’ lacked standing.  The Seventh Circuit affirmed, finding in relevant part that Advocate did not meet the FCRA’s three-pronged definition of a “credit reporting agency.”  That three-pronged definition requires a plaintiff to show that a person: (1) for monetary fees, dues, or on a cooperative nonprofit basis, (2) regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers (3) for the purpose of furnishing consumer reports to third parties.  15 U.S.C. § 1681a(f).

While finding that Advocate arguably met the second prong because it regularly assembled patients’ personal and medical information, the Seventh Circuit found that Advocate did not meet the first and third prongs because it did not assemble information for monetary fees and did not assemble information for the purpose of furnishing consumer reports.  Rather, Advocate assembled patients’ personal and medical information for its own experiences with its own patients, and the only fees received by Advocate were those received for services actually rendered to Advocate patients.

Thus, the Seventh Circuit affirmed the dismissal of the plaintiffs’ FCRA claims because Advocate did not meet the definition of a “credit reporting agency” under the FCRA.

Tierney is a victory for health care providers, and provides key precedent for health care providers defending against future FCRA claims.