Thursday, August 31, 2017

Spokeo Ruling is Important for Consumers, Employees in California

By Professor Lauren Willis

This op-ed originally appeared in the August 31, 2017, edition of the Los Angeles Daily Journal.

The 9th U.S. Circuit Court of Appeals recently decided Robins v. Spokeo, DJDAR 7859 (Aug. 16, 2017), a case remanded from the U.S. Supreme Court. This decision is important for consumers.

Today, whether you will be given a job interview or apartment, or how much you will pay for a loan or car insurance, often depends on information about you that companies called “consumer reporting agencies” collect and sell to employers, landlords, banks and insurance companies. These companies must design their operations carefully, or all sorts of unfair errors can happen. A consumer reporting agency’s database might catalog a person as Julie C. Jones when she is actually Juliet C. Jones — and Julie might have a criminal record or unpaid debts when you do not.

Even "positive" information, if it is false, can be damaging. For example, if a company sells an employer a report saying that someone has an advanced degree but his level of schooling was high school, the employer might assume he is overqualified for a position when he actually would be a perfect fit. Any mismatch between a person’s job application and the information in a report about them could raise the suspicion that the applicant is dishonest, and no employer wants a dishonest employee.

The law does protect people here; consumer reporting agencies are required to use "reasonable procedures to assure maximum possible accuracy" of the information they report about people. To bring a case in federal court, a plaintiff must show that he or she was injured by the company's failure to take reasonable steps to ensure accuracy.

Spokeo argued that people can sue only when they can identify, for example, a job interview lost due to false information Spokeo reported about them to employers. But because employers almost never tell people why they were not called in, people will not be able to pinpoint a lost job opportunity and, under Spokeo's theory, cannot sue. If no one can sue consumer reporting agencies like Spokeo for shoddy record-keeping, these companies have little reason to follow the law.

The 9th Circuit rejected Spokeo's argument. The court announced that you can sue a company when it does not take sufficient care to ensure accuracy and produces false reports about you, even if you cannot identify, for example, a particular job opportunity you lost or car loan for which you were overcharged. If the false information presents a real risk of harming you, you can sue to make the consumer reporting agency improve its operations so that its reports will be more accurate and for the anxiety, stress and other injuries the situation causes you.

Now that consumer reporting agencies know they will face liability, we can hope they will take better care to produce accurate information about all of us. The fairness of society depends on it.

Professor Willis co-authored the Information Privacy Law Scholars' Amicus Brief in Robins v. Spokeo when the case was before the U.S. Supreme Court.

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