Judge Tossed Fair Credit Reporting Class Action Against Paramount

A California federal judge has dismissed a class action lawsuit against Paramount Pictures Corporation alleging that it violated the Fair Credit Reporting Act (FCRA) as it relates to consumer reports attained for the purpose of employment.

U.S. District Judge Vince Chhabria said in his March 25 ruling that Paramount did not act with “reckless disregard of the requirements” by the disclosure it did provide to applicants.

The relevant portion of the FCRA says that if employers want to “procure a consumer report . . . for employment purposes,” they must do two things.

First, they are required to provide the applicant with “a clear and conspicuous disclosure that has been made in writing to the consumer at any time before the report is procured.” This document is supposed to solely contain the disclosure. In addition, the potential employee is supposed to provide authorization in writing.

Paramount did provide a disclosure, but added at the end of that disclosure at statement saying, “I certify that the information contained on this Authorization form is true and correct and that my application may be terminated based on any false, omitted, or fraudulent information.”

Plaintiff Michael Peikoff alleged in his FCRA class action lawsuit filed in January that Paramount’s disclosure was not contained in document that solely included the disclosure “by including in its disclosure form a certification that the information provided by the plaintiff for the purpose of obtaining the consumer report was true and correct.”

Peikoff claimed in his class action lawsuit that “Paramount intentionally and/or recklessly acted consciously in breaking its known duties and depriving plaintiff and other class members their rights under the FCRA.”

Judge Chhabria cited the Supreme Court, which has found that the term “willfully” means that the plaintiffs must “show that the defendant’s conduct was intentional or reckless.”

The Supreme Court wrote that “a company subject to FCRA does not act in reckless disregard of it unless the action is not only a violation under a reasonable reading of the statute’s terms, but shows that the company ran a risk of violating the law substantially greater than the risk associated with a reading that was merely careless.”

The California federal judge explained that “the one-sentence certification Paramount included in its disclosure form, if not a part of the statutorily permitted authorization, was closely related to it, and would similarly serve ‘to focus the consumer’s attention on the disclosure.'”

Judge Chhabria concluded that “Therefore, even if inclusion of the certification in Paramount’s disclosure form did not comply with a strict reading of [the FCRA’s] requirement that the document consist solely of the disclosure and the authorization, it is not plausible that Paramount acted in reckless disregard of the requirements of the FCRA by using this language.”

The FCRA class action lawsuit filed against Paramount was dismissed by the judge with prejudice, which means that Peikoff may not refile the lawsuit. Judge Chhabria said that “any amendment would be futile.”

Peikoff is represented by Peter Roald Dion-Kindem of The Dion-Kindem Law Firm and Lonnie C. Blanchard III of The Blanchard Law Group APC.

Paramount is represented by Richard B. Kendall and Nicole S. Phillis of Kendall Brill & Klieger LLP.

The Paramount FCRA Class Action Lawsuit is Peikoff v. Paramount Pictures Corp., Case No. 3:15-cv-00068, in the U.S. District Court for the Northern District of California.