On April 16, the U.S. Court of Appeals for the Seventh Circuit ruled that the definition of “conviction” under the Fair Credit Reporting Act (FCRA), 15 U.S.C. 1681, et seq, should be interpreted under federal law, not the law of the state where the criminal record is generated. See Aldaco v. RentGrow, Inc., No. 18-1932 (7th Cir.). The appellate court affirmed the holding that a guilty plea resulting in a sentence of supervision qualified as a “conviction” under federal law, including the FCRA.


Rafaela Aldaco (“Aldaco”) pled guilty to battery in 1996 and was sentenced to six months’ supervision, a diversionary disposition under Illinois law. The court entered a finding of guilt then dismissed the charge after Aldaco served her sentence. The record was never expunged.

Years later, Aldaco applied to rent an apartment and the landlord outsourced a background check to the defendant, RentGrow d/b/a Yardi Resident Screening (“RentGrow”). The 1996 battery record was returned by RentGrow to the landlord who refused to rent to Aldaco specifically because of the record.

Denial of Summary Judgment by the District Court

Aldaco sued RentGrow in Illinois federal court, arguing that it violated the FCRA by disclosing the 1996 battery record, which was over seven years old. Notably, the FCRA limits disclosure of arrest records and other adverse items more than seven years old – but permits the reporting of convictions forever. See 15 U.S.C. § 1681c(a).

Before the district court, Aldaco argued that “conviction” under the FCRA meant “as defined by state law” and that her sentence of supervision was not a “conviction” under Illinois law. The district court held that RentGrow was entitled to summary judgment, concluding that “conviction” should be interpreted under federal law, and that definition encompassed Aldaco’s 1996 battery charge.

Seventh Circuit Affirmance

In a short opinion penned by Circuit Judge Easterbrook, the court looked to the U.S. Supreme Court’s opinion in Dickerson v. New Banner Institute, 450 U.S. 103 (1983), as well as various other federal laws – including 18 U.S.C. § 922; The Controlled Substances Act; 5 U.S.C. § 7371(b); and 29 U.S.C. § 504(a) – to rule that: (1) federal law, not state law, supplies the meaning of “conviction,” and (2) as a matter of federal law, a guilty plea without a formal judgment is a conviction.

According to the Seventh Circuit: “As far as we can tell, the word ‘conviction’ in federal statutes has been defined according to state law only with explicit direction from Congress.” No such direction could be found in the FCRA, and Aldaco did not persuade the court why the FCRA’s use of “conviction” should be interpreted differently. Thus, the Seventh Circuit held that RentGrow “did not violate § 1681c(a) by reporting [Aldaco’s battery record] to the landlord.”

Finally, the court considered Aldaco’s alternative claim that RentGrow violated the FCRA’s reasonable procedures requirement in § 1681e(b) by inaccurately reporting the sentence length and failing to tell the landlord that her battery charge was dismissed after the supervision period. Rejecting both arguments, the Seventh Circuit held that “[n]either factor caused the landlord to deny Aldaco’s apartment application” since any criminal record disqualified applicants under the landlord’s criteria. As a result, the court found that Aldaco could not have suffered any actual damages since there was no causal link between the alleged “inaccuracies” and Aldaco’s denial of her apartment application.

The Aldaco decision is a defendant-friendly ruling that makes it clear that federal law, not state law, should be used to interpret undefined terms in the FCRA, and reinforces the requirement that an FCRA plaintiff has actually suffered damages tied to the alleged violation in the case.