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Feb. 18 — A job applicant in Michigan is time-barred from pursuing claims under the Fair Credit Reporting Act asserting that a home remodeling company improperly obtained a background report and a third-party screening provider wrongfully disseminated it, the U.S. Court of Appeals for the Sixth Circuit ruled Feb. 18.
Richard Rocheleau didn't dispute that the alleged FCRA violations occurred and were discovered in September 2011. Therefore, his November 2013 lawsuit was untimely under the FCRA's two-year statute of limitations, Judge Eugene E. Siler said in affirming summary judgment to Elder Living Construction LLC and First Advantage LSN Screening Solutions Inc.
The court rejected Rocheleau's argument that the companies' alleged failure to follow a mandatory three-step resolution process tolled the limitations period. The resolution process applies only to disputes about the accuracy and completeness of the information provided to a consumer reporting agency, and Rocheleau didn't contest the accuracy of his credit report, the court said.
This is the first time the Sixth Circuit has been confronted with this issue. The court found instructive the decision in Mack v. Equable Ascent Fin., LLC, 748 F.3d 663 (5th Cir. 2014), in which the Fifth Circuit found that “a limitations period begins to run when a claimant discovers the facts that give rise to a claim and not when a claimant discovers that those facts constitute a legal violation.”
The FCRA aims to promote “the accuracy, fairness, and privacy of information in the files of consumer reporting agencies” and provides consumers with rights related to the way their information can be obtained and used.
Among other things, the act requires written consent from the consumer before a report may be shared with an employer or potential employer. And employers must provide certain notices to job applicants prior to making adverse employment decisions based to any degree on information obtained from a consumer reporting agency.
On Sept. 15, 2011, Elder Living ordered a background report on Rocheleau in conjunction with an employment application. First Advantage's predecessor conducted a search that revealed four criminal convictions associated with his name and date of birth.
During September, Rocheleau received three notices from the screening provider supplying him with a copy of the report, notifying him that information was obtained in the report that may adversely affect his employment status and informing him that he was not selected for employment based at least in part on the information obtained in the report.
The notices included required documents about how to dispute information contained in the report.
Rocheleau called the screening provider several times in September 2011 and complained that he had not authorized the release of his information. But he did not dispute the accuracy of the report.
He filed his initial complaint in November 2013, asserting that the way Elder Living and First Advantage obtained and distributed his background report violated the FCRA.
The U.S. District Court for the Eastern District of Michigan granted summary judgment to the companies, finding that Rocheleau's claims were time-barred.
Affirming the district court's ruling, the Sixth Circuit said the “statute of limitations requires claims to be commenced no later than two years after the date of discovery of the violation that is the basis of liability, or five years after the date on which the violation occurs—whichever date falls earlier.”
Rocheleau didn't dispute that the alleged violations occurred in September 2011 or that he discovered them upon receiving notices during the same month.
He argued that the limitations period was tolled because a mandatory three-step dispute resolution process wasn't followed after he complained to the service provider.
But the appeals court rejected this argument.
The dispute resolution process starts with a consumer's request to the credit bureau for the deletion or alteration of a disputed credit report item.
This process exclusively applies to disputes about the completeness or accuracy of information provided to a consumer reporting agency, the appeals court said.
Because Rocheleau didn't dispute the accuracy of his credit report, the dispute resolution process is irrelevant and his claims are barred by the FCRA's statute of limitations, the appeals court said.
Judges Karen Nelson Moore and Julia Smith Gibbons joined the opinion.
Richard A. Meier represented Rocheleau. Mark R. Richard represented Elder Living Construction. Seyfarth Shaw LLP represented First Advantage.
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Text of the opinion is available at http://www.bloomberglaw.com/public/document/RICHARD_ROCHELEAU_PlaintiffAppellant_v_ELDER_LIVING_CONSTRUCTION_.
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