- Magistrate Recommends Defendant’s Motion for Summary Judgment be Granted as its Actions Were Not Governed by the FCRA
- May 14, 2010 | Author: Marc Kirkland
- Law Firm: Strasburger & Price, LLP - Frisco Office
Plaintiff sued Defendant DIRECTV alleging that a criminal background report obtained by DIRECTV as part of Plaintiff’s employment application was improperly disclosed to third parties, and improperly relied on criminal history beyond seven years in violation of the Colorado Consumer Credit Reporting Act (“CCRA”) and the FCRA. Defendant filed a motion for summary judgment claiming that Plaintiff’s CCRA claim was preempted by the FCRA and that DIRECTV is not subject to the FCRA’s restriction on disclosing background reports because it is not a consumer reporting agency (“CRA”). The Court agreed and the magistrate recommended that summary judgment be granted in the Defendant’s favor.
Preemption. The FCRA preempts state consumer reporting statutes when (1) the subject matter of the state statute concerns matters regulated under § 1681c; and (2) the state law took effect after September 30, 1996. The magistrate found that the § 12-14.3-105.3(1)(e) of the CCCRA and § 1681c(a)(2) of the FCRA concern the same subject matter and that the CCCRA went into effect in 2002, well after the FCRA’s cut-off date. Therefore, Plaintiff’s claims pursuant to the CCCRA were preempted.
Consumer Reporting Agency. The FCRA provision relied on by Plaintiff only apply to CRAs. To that end, CRAs must adopt reasonable procedures to protect the confidentiality of consumer credit information. Section 1681a(f) defines a CRA as “any person which, for monetary fees, dues or on a cooperative non-profit basis, regularly engage in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties¿.” The Magistrate held that because DIRECTV is not a CRA as defined by § 1681a(f), its conduct is not subject to the FCRA.