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Tyus v. United States Postal Service

United States District Court, E.D. Wisconsin

October 19, 2016

RONDO TYUS, DAVID GEBHARDT, and TIMOTHY PLETSCHER, individually and as representatives of the Classes, Plaintiffs,


          WILLIAM E. DUFFIN U.S. Magistrate Judge

         On October 28, 2015, plaintiff Rondo Tyus filed a complaint in Wisconsin state court alleging that defendant United States Postal Service (“USPS”) violated several provisions of the Fair Credit Reporting Act (“FCRA”). (ECF No. 1.) After USPS removed the case to federal court on December 9, 2015, all parties consented to proceed before a magistrate judge. (ECF Nos. 2 and 4.) On February 15, 2016, an amended complaint was filed, adding plaintiffs David Gebhardt and Timothy Pletscher as parties. (ECF No. 12.) The new plaintiffs also consented to proceed before a magistrate judge. (ECF No. 13.)

         On April 1, 2016, the parties filed a joint motion to stay the case pending the Supreme Court's decision in Spokeo, Inc. v. Robins, 742 F.3d 409 (9th Cir. 2014), cert. granted, 135 S.Ct. 1892 (2015). After the Supreme Court issued its decision, Spokeo v. Robins, 136 S.Ct. 1540 (2016), USPS filed a motion to dismiss on June 13, 2016. (ECF No. 21.) The motion is fully briefed and ready for resolution.

         The FCRA

         In 1970 Congress enacted the FCRA upon the recognition of the increasingly important role played by consumer reporting agencies in the economy. Congress found “a need to insure that consumer reporting agencies exercise their grave responsibilities with fairness, impartiality, and a respect for the consumer's right to privacy.” 15 U.S.C. § 1681(a)(4). The stated purpose of the FCRA was to “require that consumer reporting agencies adopt reasonable procedures” to ensure “the confidentiality, accuracy, relevancy, and proper utilization of consumer reports.” 15 U.S.C. § 1681(b).

         In furtherance of these goals, Congress enacted a variety of mandates regarding the creation and use of consumer reports. Of particular importance to Congress were those consumer reports used for employment purposes. See 15 U.S.C. § 1681b(b). At issue here are two FCRA provisions that impose procedures to be followed by any person who procures a consumer report for employment purposes. The first, referred to by the parties as the “stand-alone disclosure” provision, provides:

(2) Disclosure to consumer. (A) In general. Except as provided in subparagraph
(B), a person may not procure a consumer report, or cause a consumer report to be procured, for employment purposes with respect to any consumer, unless-
(i) A clear and conspicuous disclosure has been made in writing to the consumer at any time before the report is procured or caused to be procured, in a document that consists solely of the disclosure, that a consumer report may be obtained for employment purposes;

15 U.S.C. § 1681b(b)(2)(A)(i). The second provision, the “pre-adverse action notice requirements, ” provides:

(3) Conditions on use for adverse actions. (A) In general. Except as provided in subparagraph (B), in using a consumer report for employment purposes, before taking any adverse action based in whole or in part on the report, the person intending to take such adverse action shall provide to the consumer to whom the report relates-
(i) a copy of the report; and
(ii) a description in writing of the right of the consumer under this title as prescribed by the Federal Trade Commission under section 609(c)(3).

15 U.S.C. § 1681b(b).

         Amended Complaint

         Plaintiffs' amended complaint contains two counts of alleged FCRA violations. Count I is asserted on behalf of all three plaintiffs and concerns the “stand alone disclosure” provision of the FCRA. 15 U.S.C. § 1681b(b)(2)(A)(i). Count II is asserted only on behalf of Tyus and concerns the “pre-adverse action notice requirements” of the FCRA. 15 U.S.C. § 1681b(b)(3).


         According to the amended complaint, Tyus was an employee of the security firm ABM in September 2014. (ECF No. 12, ¶¶ 24-25.) USPS contracted with ABM to provide security guard services, and Tyus applied for a security clearance to work as a security guard at USPS. (Id.) USPS contracted with General Information Services, Inc. (“GIS”) to perform criminal background checks on “job seekers.” (ECF No. 12, ¶ 27.) In October 2014 USPS procured a criminal background report from GIS regarding Tyus. (ECF No. 12, ¶ 30.) Before procuring Tyus's GIS report, USPS had Tyus execute Form 2181-C, titled, “Authorization and Release-Background Investigation.” (ECF No. 12, ¶ 33, Ex. A.)

         Tyus's first claim contends that Form 2181-C is not a stand-alone disclosure as required by the FCRA because it contains extraneous information, including: a) a liability release clause; b) a “Privacy Act Statement” that sets forth all of the entities to whom and for which purposes the personal identifying information in the form may be disclosed; and c) a provision acknowledging that USPS would take measures to protect Tyus's information against unauthorized disclosures. (ECF No. 12, ¶¶ 35-37.) The amended complaint does not allege that 2181-C's extraneous provisions undermined Tyus's consent or authorization for GIS to release his criminal background report to USPS. Nor does the amended complaint allege that the presence of the additional information confused Tyus or adversely affected his understanding of the authorization and release.

         On October 27, 2014, Tyus received a copy of his criminal background report in a letter from USPS stating, if “you believe the report to be inaccurate or incomplete, please fax the completed disclosure/ dispute from [sic] to GIS within five (5) business days from the date of this letter.” (ECF No. 12, ¶ 38.)[1] Only three days later, in a letter dated October 30, 2014, USPS informed Tyus that his request for a security clearance had been denied based on the criminal background report, resulting in Tyus not being eligible for the job as a security guard at USPS. (ECF No. 12, ¶ 39.)

         Tyus's second claim asserts that, by failing to provide him with the promised five days to dispute his criminal background report, USPS failed to give him “a reasonable and real opportunity to dispute the results of the report, and therefore violated the FCRA's pre-adverse action notice requirements[ ]” under 15 U.S.C. § 1681b(b)(3). (ECF No. 12, ¶ 43.) Tyus further alleges that, “[a]s a result of USPS's violations of the FCRA, [he] has suffered emotional distress, financial loss, and has been deprived of information to which he is entitled under the FCRA.” (ECF No. 12, ¶ 44.)

         Gebhardt ...

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