Lyft obtains dismissal of FCRA class action

In another victory for employers under Spokeo, Lyft, the ride-sharing service, recently obtained dismissal of a putative class alleging that it violated the Fair Credit Reporting Act (“FCRA”) when obtaining background checks on its drivers. 

The plaintiff, Michael Nokchan, was a driver for Lyft. Nokchan alleged that Lyft violated the FCRA by failing to provide him a disclosure of his rights to request his credit and background report when he applied to become a driver. Lyft moved to dismiss the Complaint on the grounds that, even if there was a technical violation of the statute, Nokchan did not suffer any type of harm as required by the U.S. Supreme Court’s 2016 decision in Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016). The district court agreed based on the fact that Nokchan was hired by Lyft and continues to work for Lyft. Accordingly, there could be no real harm, or a threat of such harm, to give Nokchan to pursue his claims in federal court. The facts in this case were similar to those in Spokeo, where the Supreme Court ruled that failure to provide the required notice to users of consumer information under the FCRA, would not be sufficient harm to meet the “concrete harm” requirement by plaintiffs.

It is noteworthy that the district court rejected Nokchan’s claim that his privacy was invaded because the supposed FCRA disclosures were absent, and rejected the claim that Nokchan had suffered “informational injury” because Lyft had procured his credit and background information without providing the required FCRA disclosures. Accordingly, the district court concluded that, absent some “concrete injury”, it lacked jurisdiction over Nokchan’s claim and dismissed the case without prejudice (though allowing its refiling in state court).

Source: Nokchan v. Lyft, Inc., No. 15-cv-03008 (N.D. Cal. Oct. 5, 2016)

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