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UPDATE: Ohio’s Tenth District Follows Federal Precedent Finding No Standing for Technical Violations of the FCRA’s Disclosure Requirement

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By Jonathan H. Krol, Esq.

January 19, 2018

In December 2017, Ohio’s Tenth District Court of Appeals upheld a Court of Claims decision dismissing FCRA claims for lack of standing. See Smith v. Ohio State Univ., 10th Dist. Franklin No. 17AP-218, 2017-Ohio-8836. This is the first Ohio state appellate decision on the issue, and it confirms that Ohio courts tend to track federal law on the issue.  

As previously reported (see Ohio State and Federal Courts Find No Standing to Assert Technical Violations of the FCRA’s Background Check Disclosure Requirement), courts have joined in the hotly litigated debate over whether claimants have standing to pursue purely technical statutory violations, including violations of the Fair Credit Reporting Act’s (FCRA) “stand-alone” disclosure requirements.

The FCRA’s disclosure requirement is found at 15 U.S.C. § 1681b(b)(2)(A):

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; and

(ii)  the consumer has authorized in writing (which authorization may be made on the document referred to in clause (i)) the procurement of the report by that person.

The Smith case has a long procedural history. Filed in October 2015 in the Court of Claims, OSU removed the action to the United States District Court for the Southern District of Ohio. In June 2016, the federal court found that the plaintiffs failed to allege an injury-in-fact due to OSU’s alleged violations of the FCRA stand-alone disclosure requirement, and that they therefore lacked standing. The federal court remanded the matter to the Court of Claims (Case No. 2015-00919), which likewise found that mere technical violations of the stand-alone disclosure requirement are insufficient to confer standing in Ohio state courts.

On appeal, the Tenth District stated that although Ohio courts are not bound by federal standing principles derived from Article III of the United States Constitution, “Ohio courts generally adhere to the traditional principles of standing that require litigants to show, at a minimum, that they have suffered (1) an injury that is (2) fairly traceable to the defendant's allegedly unlawful conduct, and (3) likely to be redressed by the requested relief.” Smith, 2017-Ohio-8836, ¶ 10 (citations omitted).

Appellants argued that there is an exception to these traditional requirements where a statute—here, the FCRA—confers standing to sue and thereby obviates the need for an injury-in-fact. Smith, 2017-Ohio-8836, ¶ 12. Rejecting appellants’ argument, the court noted that “[f]or a statute to confer standing in the absence of a concrete injury, the statute must clearly express an intention to abrogate the common-law requirements for standing.” Id. ¶ 13 (internal quotations omitted). The court held:

To the extent the “statutory standing” doctrine constitutes an exception to the traditional principles of standing in Ohio, we decline to extend that exception to this circumstance involving the application of a federal statute. To find statutory standing here . . . , we would need to find that Congress intended to abrogate the Ohio common-law requirements to establish standing. However, there is no indication that Congress intended the pertinent FCRA statute to supplant the traditional requirements of standing in Ohio state court.

Id. ¶ 14.

Interestingly, the court did not stop there. It found that no federal statute could abrogate Ohio common law standing requirements because:

such a finding would be improper as it would permit Congress to affect the parameters of standing in Ohio courts, even though it is well-settled that Ohio law determines standing in Ohio courts. Expanding Ohio's statutory standing doctrine based on Congressional action would be particularly problematic considering determinations regarding the outer limits of standing implicate issues regarding the constitutional authority of Ohio’s judiciary and the separation of power between the branches of government.

Id. In other words, standing in Ohio courts is a matter of Ohio, not federal, law.

Importantly, the Court of Claims’ decision reaffirms Ohio standing requirements and the inability for claimants to avoid standing issues in federal court by simply filing in Ohio state court.

If you have any questions regarding Smith v. Ohio State University, if you wish a copy of the Court of Claims’ opinion, or if you have a question regarding standing issues or credit reporting laws in the employment context, please feel free to call any one of our Employment Practices Defense Group Members.

This has been prepared for informational purposes only. It does not contain legal advice or legal opinion and should not be relied upon for individual situations. Nothing herein creates an attorney-client relationship between the Reader and Reminger. The information in this document is subject to change and the Reader should not rely on the statements in this document without first consulting legal counsel.

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