• Ohio Court Grants Partial Motion to Dismiss Finding Plaintiff’s State Common Law Claims are Preempted by the FCRA
  • October 11, 2010 | Author: Jennifer Elizabeth Hawkinson
  • Law Firm: Strasburger & Price, LLP - Frisco Office
  • Brown, et al, v. Sterling Infosystems, Inc., et al., 2010 U.S. Dist. LEXIS 87873 (N.D. Ohio Aug. 2, 2010)

    Facts: Mr. Brown, one of the Plaintiffs, applied for and was offered a job at LabCorp subject to a satisfactory background check. Mr. Brown’s job offer was rescinded after LabCorp received an unsatisfactory background check from Defendant, a credit reporting agency (“CRA”). Mr. Brown then requested a copy of the report from Defendant. Mr. Brown alleged that the report contained many inaccuracies including name, date of birth, and criminal history. Plaintiffs filed suit for common law negligent misrepresentation, negligence, defamation, and tortious interference with a contract, and one claim under the Fair Credit Reporting Act (“FCRA”). Defendant filed a motion to dismiss the four common law claims as to Mr. Brown claiming that Plaintiffs’ common law claims were preempted by the FCRA, and all claims as to Mrs. Brown claiming she lacked standing. The court granted Defendant’s motion.

    &smbull; Preemption. Defendant moved to dismiss Plaintiffs’ claims of negligent misrepresentation, negligence, defamation, and tortious interference with a contract claiming § 1681h(e) preempted Plaintiffs’ claims. Plaintiffs argued that their Ohio common law claims were not preempted because § 1681t(a) controlled. The Court applied the statutory approach concluding that Congress intended the separate provisions of the FCRA to work concurrently to preempt different state laws. The courts that have applied the statutory approach to preemption arguments found that § 1681t(b) preempts state statutory laws and § 1681h(e) preempts state common law claims. Relying on this precedent and the fact that Plaintiff only pled state common law causes of action, the Court found that § 1681h(e) controlled Defendant’s preemption argument. The Court found that because Plaintiffs failed to allege the malice or willful intent to injure component required by § 1681h(e), Plaintiffs/ claims were preempted and Defendant’s motion was granted.

    &smbull; Negligent Misrepresentation. Under Ohio law, a plaintiff must establish that a defendant was in a special relationship under which a defendant supplied certain information to a plaintiff in order to give a plaintiff guidance for business decisions. Defendant supplied the information to Plaintiff’s potential employer; therefore, Plaintiff did not have a special relationship with Defendant. The Court refused to analyze whether Plaintiff met the third party exception to the special relationship rule since it had ruled this claim preempted by the FCRA.