Why it matters

Citing Spokeo, Inc. v. Robins, a California federal court tossed a background check suit against Home Depot. The plaintiff charged the employer with violating the Fair Credit Reporting Act by combining a waiver with a disclosure form, arguing the statute requires they be kept separate. Home Depot moved to dismiss, contending that the applicant failed to state an injury-in-fact as required by Spokeo. The court agreed, finding that the plaintiff’s mere allegation of a statutory violation was insufficient to establish concrete harm. “Because [the plaintiff] failed to allege a concrete injury, the court finds that [she] failed to sufficiently plead the requisite elements of standing in her complaint,” the court wrote, dismissing the suit.

Detailed discussion

Katherine Saltzberg sought employment with Lifetime Solutions, a Home Depot service provider, in March 2016. In addition to her employment application, Saltzberg completed Home Depot’s standard background check forms, which consisted of two pages. The first page, titled “Background Check Applicant/Employee Information,” contained blanks for an applicant’s personal contact information, provisions stating that information obtained would not be used for purposes that violate equal opportunity laws or regulations, a liability waiver, and a signature line.

The second, separate page was titled “Authorization” and included language disclosing Home Depot’s intent to conduct a background investigation, which would involve investigating the applicant’s work record, references and education, as well as a signature line.

Saltzberg was hired to work for Lifetime in May 2016. But earlier this year, she filed a putative class action against Home Depot, alleging that the company violated the Fair Credit Reporting Act (FCRA) by failing to make proper disclosures and neglecting to obtain proper authorization.

The combination of the two forms constituted one document, Saltzberg claimed, and ran afoul of the statutory requirement that each disclosure be provided in a separate document.

Home Depot responded with a motion to dismiss, arguing that Saltzberg failed to allege an injury-in-fact as required by the Supreme Court’s 2016 decision in Spokeo, Inc. v. Robins. In that case, the justices held that a “bare procedural violation” of a statute is insufficient to confer standing where there is no real harm and that a plaintiff must show a “concrete” injury-in-fact to satisfy Article III.

Applying this standard, U.S. District Judge R. Gary Klausner dismissed the case.

“Saltzberg failed to plead even general allegations of injury in her Complaint,” the court said. “Saltzberg alleges that Home Depot violated [the statute] by ‘obtain[ing] consumer reports without proper authorization.’ This is ultimately an allegation of a statutory violation, not an injury-in-fact. The injury-in-fact requirement is not ‘automatically satisfie[d] … whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right.’”

As the plaintiff failed to sufficiently plead the requisite elements of standing in her complaint, the court lacked subject matter jurisdiction to hear the dispute.

“The Supreme Court has made it clear that ‘Article III standing requires a concrete injury even in the context of a statutory violation,’” Judge Klausner wrote. “Merely asserting a violation of the FCRA is insufficient without connecting it to a concrete injury.”

To read the order in Saltzberg v. Home Depot, click here.