A District Court judge in Arizona has allowed a consumer’s Fair Credit Reporting Act lawsuit to move forward in part, letting a negligence claim proceed while dismissing a companion claim that the violation was willful.
The background: The case started with a routine attempt to restart a lapsed life insurance policy.
- Early last year, the plaintiff asked the defendant for a quote to reinstate a lapsed policy, and the defendant sent back two authorization forms seeking access to his personal information and medical history.
- Unwilling to hand over everything, the plaintiff crossed out the language allowing access to any “consumer reporting agency” on both forms before returning them, so he never authorized the defendant to pull data from a credit reporting agency.
- The plaintiff alleged the defendant did so anyway, obtaining records from several outside sources, including underwriting codes from the MIB, prescription and medical claim records from Milliman, and digital health records routed through a vendor.
- After the plaintiff wrote to ask about the access, the defendant answered that it had only then noticed the altered forms and apologized for pulling his reports without authorization.
- The plaintiff sued last year, and after the court dismissed his first complaint for failing to state a claim, he filed an amended complaint accusing the defendant of negligently and willfully violating the FCRA.
- The plaintiff said the access left him with a spike in anxiety, migraines, nausea, insomnia, weight gain, and friction with his spouse of ten years, while the defendant argued those claims were too speculative and pointed to another possible cause, noting the plaintiff was preparing a run for Congress and later launched a campaign for justice of the peace.
The ruling: Judge James A. Teilborg of the District Court for the District of Arizona granted the defendant’s motion to dismiss in part and denied it in part.
- On the negligence claim, the judge found the plaintiff had finally alleged enough. He had earlier thrown out the original complaint because the distress allegations were too vague, but the amended version, with specific symptoms and a stated cause, cleared the low bar that applies when a judge must accept the allegations as true.
- Notably, the defendant did not dispute that it violated the FCRA by accessing the plaintiff’s medical information without consent. Its only argument was that the plaintiff had not suffered actual damages.
- The judge did not hide his doubts, writing that he “understands Defendant’s skepticism” that accessing reports “as part of the insurance underwriting process that Plaintiff himself requested” caused this kind of distress, “especially to the extent alleged here.” Even so, he was bound to treat the allegations as true at this stage.
- The defendant’s alternative theory did not carry the day. It argued the plaintiff’s stress more likely traced to his political campaigns, which it said “would cause an individual significant stress” and rendered his causation theory “untenable.”
- The judge dismissed the willfulness claim, finding the plaintiff added no new facts showing the defendant knowingly or recklessly disregarded the law and instead repeated a legal conclusion the judge had already rejected.
- The judge also declined to read a passing reference to invasion of privacy as a separate state-law claim, and reaffirmed that pulling the plaintiff’s motor vehicle report was permissible because it carried no medical information. He denied leave to amend the willfulness claim for now, faulting the plaintiff for not filing a proper proposed amended complaint, but left the door open to a future request.
