The Court of Appeals for the Ninth Circuit has partially remanded a Fair Credit Reporting Act case back to the District Court, ruling that class members can use direct or circumstantial evidence to demonstrate standing and did not show that a jury would find in their favor at the summary judgment stage of the proceedings. In doing so, the Ninth Circuit clarified how standing must be evaluated in certified class actions seeking money damages under the FCRA and corrected what it viewed as an overly demanding application of the summary judgment standard by the lower court.
The background: The case was filed after the plaintiff alleged that the defendant, a consumer reporting agency that provides reports used by insurers, prepared and sold consumer reports that contained inaccurate medical information.
- According to the allegations, the reports included health records that did not belong to the consumer who was the subject of the report, in part because the defendant relied on matching methods that could associate records with similar identifiers rather than exact matches.
- Those reports were then provided to third parties and used in underwriting decisions, allegedly resulting in adverse outcomes for consumers.
- The plaintiff brought the case as a class action, asserting that the defendant failed to follow reasonable procedures to assure maximum possible accuracy as required by the FCRA.
- The District Court certified an inaccuracy class but later granted partial summary judgment for the defendant, concluding that the plaintiff failed to provide direct evidence showing that unnamed class members suffered a concrete injury. The District Court reasoned that mismatched identifiers alone did not necessarily prove that the reports contained inaccurate information.
The ruling: The Ninth Circuit agreed that, after class certification, both named and unnamed class members in a damages class must present evidence of standing at the summary judgment stage. However, it held that the District Court went too far in requiring direct evidence and in effectively demanding proof that the class would prevail at trial. The court emphasized that summary judgment applies ordinary standards, explaining that plaintiffs need only show a genuine dispute of material fact.
- As the panel put it, plaintiffs “need not establish that they in fact have standing, but only that there is a genuine question of material fact as to the standing elements.”
- The court also underscored that circumstantial evidence is sufficient, noting that evidence “indicative of a misattributed or erroneous health record” can allow a reasonable jury to infer injury. Importantly, the court rejected the idea that plaintiffs must show a jury necessarily would find in their favor, stressing instead that the question is whether a rational trier of fact could do so.
Healy v. Milliman 24-3327
