In Kidd v. Thomson Reuters, plaintiff Lindsay A. Kidd brought a Fair Credit Reporting Act putative class action claim against mass media and information firm Thomson Reuters after she was allegedly denied a job with the Georgia Department of Public Health based on criminal history information obtained by the Department from Thomson Reuters’ subscription-based online research platform Consolidated Lead Evaluation and Reporting, or “CLEAR.”

Thomson Reuters filed a motion for summary judgment in December 2016, arguing that it is not a consumer reporting agency (“CRA”) because it does not regularly engage in the assembly of information for the purpose of furnishing “consumer reports,” and thus cannot be held liable under the FCRA. On October 26, 2017, the United States District Court for the Southern District of New York issued its decision granting Thomson Reuters’ motion.

The Court held “that whether Thomson Reuters qualifies as a CRA turns in the first instance on whether its subjective purpose in assembling information concerning consumers is to furnish consumer reports to third parties.” In reaching this conclusion, the Court relied on the plain terms of the statute, which “applies only to a person or entity that regularly assembles consumer information with a particular purpose or subjective intention – namely, of providing it to third parties for use (actual or expected) in connection with an FCRA-regulated end, such as employment eligibility.” The Court further found that “Kidd’s construction would subject entities to coverage under the statute based solely on the intention of isolated users, thereby reading the phrase ‘for the purpose of’ out of the statute.” The Court noted, however, that an entity cannot “avoid being treated as a CRA merely by declaring that its purpose is not to provide the information for FCRA-regulated purposes. Put another way, disclaimers alone are not enough for an entity that otherwise qualifies as a CRA to avoid the reach of the statute.”

Here, Thomson Reuters took “affirmative steps – through both words and actions – at every stage of the customer acquisition, application, contracting, and support processes to ensure that subscribers are not using CLEAR for FCRA-regulated purposes.” The Court also found that the 46 instances of suspected subscriber misuse “is miniscule when compared to the number of CLEAR subscribers (more than 80,000) and searches (more than 100,000 per day),” and thus does not establish that Thomson Reuters “regularly” assembles information for purposes of being a CRA. Additionally, in every instance of suspected misuse, Thomson Reuters investigated the incident and took some form of remedial action.

Kidd filed a notice of appeal to the Second Circuit on October 27. We will continue to monitor the case.