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U. S. District Court Sides with Murphy, Hesse, Toomey & Lehane Attorneys

 

In Kenn v. Eascare, the United States District Court for the District of Massachusetts sided with Murphy, Hesse, Toomey & Lehane, LLP attorneys, Sarah Spatafore and Paul King, in allowing the defendant employer’s motion to dismiss claims brought under the Fair Credit Reporting Act (the “FCRA”) as a purported class action. Their triumph had been featured on the front page of Lawyer’s Weekly (insert which edition??) The District Court’s decision addresses an issue of law on which multiple circuit courts of appeal have disagreed. That is, what constitutes an injury in fact necessary to confer standing for a plaintiff to establish a violation of the FCRA?

 

Generally, the FCRA requires employers to provide a disclosure, in stand-alone format, to any applicant for whom the employer may obtain and use credit reporting information in making a hiring decision. The disclosure must be “clear and conspicuous” and “in a document that consists solely of the disclosure.” However, the statute permits the necessary written authorization from the employee to be “on the same document.” As it stands, only the Ninth Circuit has held that a mere procedural violation of the technical requirements such as the stand-alone disclosure form does constitute an injury. But the Seventh and Eighth Circuits have disagreed, concluding instead that a more concrete and particularized harm resulting from the employer’s violation must be alleged. In this case, the employer’s disclosure form contained, among other things, a release of liability for all parties involved in obtaining and furnishing the credit report. The plaintiff alleged only this bare procedural violation, without identifying any particularized harm. She did not, for example, allege that she experienced any confusion that materially affected her understanding of what she was authorizing.

 

The plaintiff initially filed her FCRA claims in Massachusetts state court, along with other claims under the Massachusetts Wage Act. Recognizing the split on this issue at the federal level, Attorneys Spatafore and King made the strategic decision to remove the case to federal court, on the basis of federal question and supplemental jurisdiction, where they saw the opportunity for a more favorable result on a motion to dismiss. This strategy ultimately paid off, as the Court accepted MHTL’s argument on the standard of review under Fed. R. Civ. P. 12(b)(6), allowing Eascare’s motion and dismissing the FCRA claims for lack of standing.

 

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