California District Court Joins Growing List Of Courts Staying FCRA Class Action Lawsuits Pending Spokeo

In Lee v. Dollar Thrifty Auto. Group, Inc., the plaintiffs brought a class action lawsuit alleging multiple violations of the employment background check provisions of the Fair Credit Reporting Act ("FCRA"). Specifically, the plaintiffs claimed that the defendants failed to provide them with disclosures properly informing them that a background check would be obtained. They also claimed that the defendants took adverse action against them based on their background check without following the FCRA's adverse action protocol.

Recently, the defendants moved to stay the matter pending the Supreme Court's decision Spokeo, Inc. v. Robins, 135 S.Ct. 1892, 191 L.Ed.2d 762 (2015). In Spokeo, the Supreme Court is addressing whether Congress may confer Article III standing by authorizing a private right of action based on the violation of a federal statute alone, despite a plaintiff having suffered no concrete harm. The Supreme Court's decision could have profound effects on "no harm" consumer class actions, where the plaintiffs allege only a statutory violation with no accompanying tangible injury.

The Court in Lee found that a stay was appropriate because Spokeo could have a determinative effect on the case. Specifically, the Court held that if Spokeo goes the defendants' way, the decision "may have serious implications not only for Plaintiffs' own individual standing, but also for the predominance and superiority requirements necessary for Rule...