Bloomberg on FCRA Standing Issues

Bloomberg recently ran a story on a South Carolina Fair Credit Reporting Act claim (“FCRA”) and how the Court allowed the claim to continue over a standing challenge:

Latisha Burns brought an FCRA action against Warehouse after her credit report allegedly listed an erroneous outstanding debt. Burns filed her suit in 2018 after credit reporting agencies TransUnion LLC and Equifax Inc. found that Warehouse failed or refused to update the credit report to correct the alleged debt.

Plaintiffs in consumer privacy suits can raise a threat of bad credit to continue with their claims in federal court, the U.S. District Court for the District of South Carolina ruled Aug. 19 in tossing the motion to dismiss. The plaintiffs in this case “suffered harm which, although not tangible in nature, is nonetheless de facto and is more significant than the bare procedural violation,” the court ruled.

To establish injury in fact, a plaintiff must show that he or she suffered “an invasion of a legally protected interest” that is “concrete and particularized” and “actual or imminent, not conjectural or hypothetical.” Lujan v. Defs. of Wildlife, 504 U.S. 555, 112 S. Ct. 2130 (1992).

In the FCRA context, the Eleventh Circuit has found reporting inaccurate information was a concrete injury because it had “a close relationship to the harm caused by the publication of defamatory information, which has long provided the basis for a lawsuit in English and American courts.” Pedro v. Equifax, Inc., 868 F.3d 1275 (11th Cir. 2017).

It appears the Burns Court used similar reasoning:

The Court is satisfied with the contents of Burns’s pleading. Warehouse is correct in asserting “a plaintiff cannot automatically satisfy the injury in fact requirement just because ‘a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right.'” Dreher, 856 F.3d at 343 (citing Spokeo, 136 S.Ct. at 1547). However, Warehouse disregards the harm bad credit imposes on a consumer by an erroneous credit line, and similarly ignores one [*8] of the harms the FCRA is protecting consumers from. Therefore, the Court will deny Warehouse’s motion on this ground.

Burns v. Trans, Civil Action No. 4:18-03120-MGL, 2019 U.S. Dist. LEXIS 139613 (D.S.C. Aug. 19, 2019).