In Smith v. LexisNexis Screening Solutions, Inc., the Sixth Circuit reversed a $150,000 punitive award in a suit under the Fair Credit Reporting Act. The case arose when LexisNexis was conducting a criminal background check for a potential employee named David Smith. The check returned a fraud conviction for a different David Smith, but not the applicant. The aggrieved applicant sued, largely challenging LexisNexis’s alleged negligence in the course of conducting the background check.
Although LexisNexis offered evidence of a 99.8 percent accuracy rate for its background reports, the Sixth Circuit concluded that the evidence introduced at trial, viewed in the light most favorable to the plaintiff, sufficed to establish negligence, although it noted that the issue was a “close call.” But when it turned to the punitive award, the Sixth Circuit had no hesitation in reversing. Although a jury could find LexisNexis negligent, according to the Court, “that is a far cry from being willful.” In light of the evidence produced by LexisNexis regarding its efforts to combat inaccuracies, the Court simply could not find a willful of the FCRA necessary to support a punitive damages award. This was particularly true in light of the fact that LexisNexis corrected the mistake not long after the Plaintiff raised the issue.