On April 4, the U.S. Court of Appeals for the Eighth Circuit vacated a district court’s approval of a class action settlement agreement in an FCRA action after determining that the plaintiff lacked Article III standing in light of the U.S. Supreme Court’s decision in Spokeo, Inc. v. Robins. According to the opinion, after the plaintiff applied for employment with the defendant, the defendant made a conditional offer of employment to the plaintiff and also asked her to sign an authorization for release of information so that it could conduct a background investigation of the plaintiff, including a criminal background search. The plaintiff contended that, after the defendant reviewed the background screening report, it withdrew the conditional offer of employment and did not provide her an opportunity before the offer was withdrawn to correct or explain the results in the report. A follow-up letter, which included a copy of the report and a description of her rights under the FCRA, was sent to the plaintiff stating that if she planned to dispute the information she had to do so within seven days from receipt of the letter. The plaintiff commenced the action in February 2016, alleging the defendant violated the FCRA by: (i) “taking adverse employment action based on a consumer report without first providing the report to the applicant”; (ii) “obtaining a consumer report without providing a disclosure form that complied with the FCRA”; and (iii) “exceeding the scope of the authorization by obtaining more information than the disclosed in the authorization.” In May 2016, the parties reached a tentative settlement agreement, but four days later the Supreme Court issued its decision in Spokeo, which requires plaintiffs to show that they have suffered a concrete injury in fact that is fairly traceable to the challenged conduct of the defendant, and not just allege a statutory violation. Following Spokeo, the defendant moved to dismiss for lack of standing, but the district court approved the settlement.

On appeal, the 8th Circuit concluded that the plaintiff lacked Article III standing to bring her FCRA claims, determining, among other things, that “the right to pre-action explanation to the employer is not unambiguously stated in the text of the statute,” and that “[n]either the text of the FCRA nor the legislative history provide support for [plaintiff’s] claim that she has a right under the FCRA to not only receive a copy of her consumer report, but also discuss directly with the employer accurate but negative information within the report prior to the employer taking adverse action.” The plaintiff “may have demonstrated an injury in law, but not an injury in fact,” the appellate court wrote. With respect to the plaintiff’s other two claims, the appellate court noted that she failed to show any claim of harm—tangible or intangible.