Litigation Byte

Federal Court Finds Causation Lacking on Negligence Claim Under FCRA, But Leaves Door Open on Claim of Willful Violation

April 22, 2025

A federal Judge for the United States District Court for the District of Arizona recently granted in part and denied in part a consumer reporting agency’s motion for summary judgment, with respect to claims raised by the Plaintiff under the Fair Credit and Reporting Act (FCRA). Specifically, the Judge found that (1) Plaintiff could not prove that his alleged damages were caused by the agency’s negligent violation of the FCRA; but (2) material questions of fact remained regarding whether the agency willfully violated the FCRA, therefore precluding summary judgment.

Background

In Wright, Plaintiff applied for a job with a food takeout and delivery technology company (the Company) in or around December 2022. During his interview process, Plaintiff disclosed to the Company that he had a prior felony conviction in 2013. However, Plaintiff did not disclose that he was also convicted of a class six undesignated felony in 2015. Under Arizona law, an undesignated felony can be reduced to a misdemeanor if the offender successfully fulfills the conditions of probation and discharge by the court. In 2020, Plaintiff requested his 2015 conviction be reduced to a misdemeanor offense, and the court granted his request.

In January 2023, the Company asked the agency to prepare a background check on Plaintiff. In the report created by the agency, it mistakenly labeled Plaintiff’s 2015 conviction as a felony. The Plaintiff disputed the classification with the agency after reviewing the report and also submitted court documents to the Company to show that the 2015 conviction had been reduced to a misdemeanor. Nonetheless, the Company informed Plaintiff on January 27, 2023, that it would not hire him.

Court’s Analysis and Decision

The Wright Court first addressed Plaintiff’s claim of negligent violation of the FCRA. See 15 U.S.C. § 1681o. Focusing on the issue of causation, the Court found that Plaintiff could not link his claimed damages to mere knowledge of the false report, relying on Plaintiff’s own testimony that the loss of the job opportunity was the direct cause of Plaintiff’s economic and emotional damages. Further, in reviewing the record, the Court concluded that the false report was ultimately immaterial in the Company’s decision not to hire Plaintiff — it was his criminal record and failure to disclose the 2015 conviction in the first instance that informed the Company’s decision.

However, the Wright Court denied the agency’s motion for summary judgment with respect to Plaintiff’s claim for willful violation of the FCRA. See 15 U.S.C. § 1681n. The Court, in acknowledging that willfulness under the FCRA is typically a question of fact, highlighted several disputes of material fact that still needed to be resolved, centering on the reasonableness of the agency’s procedures for ensuring the accuracy of its reports.

Takeaway from Wright

Wright serves as a reminder that any party claiming negligent violation of the FCRA must tie their alleged damages to the violation itself. Here, though the agency admitted it made a mistake in misreporting Plaintiff’s prior criminal conviction, it was able to defeat Plaintiff’s negligence claim by showing that this did not factor into the Company’s ultimate decision not to hire Plaintiff.