After prospective employees Joshua Corozzo and Arthor
Ruff were given a consumer report disclosure form from Walmart[1], they filed suit against
Walmart for violating the Fair Credit Reporting Act’s (“FCRA”) provision
requiring the form not contain extraneous information.[2] The Missouri Court of
Appeals, Western District, held that neither Corozzo nor Ruff had standing to
challenge the FCRA violation because the Supreme Court of the United States, in
Spokeo v. Robins, Inc., held that an
alleged FCRA violation alone was not an injury, and therefore, the plaintiffs
did not have standing to sue.[3] Although the Court’s
holding is clear, it failed to meaningfully distinguish federal, Article III
standing and Missouri’s state-specific standing doctrine, effectively making
them one in the same in terms of statutory violations.
I.
Facts and Holding
Plaintiffs
Ruff and Corozzo applied for work at Wal-Mart in 2014 and 2015 respectively.[4] During that time, Wal-Mart’s
FCRA disclosure form was a seven-page document titled “Background Check
Disclosure and Authorization Form Fair Credit Reporting Act Authorization.”[5] Both Ruff and Corozzo were
given this form, authorizing Wal-Mart to obtain their consumer reports.[6] The FCRA is a federal
statute which establishes requirements for procuring and using consumer reports
for employment purposes.[7] 15 U.S.C. § 1681b(b)(2)(A)
requires employers to give consumers “(i)
a clear and conspicuous disclosure…made in writing to the consumer at
any time before the report is procured or caused to be procured, in a document
that consists solely of the disclosure.”[8] A violation of the FCRA gives
private consumers the right to actual or statutory damages.[9]
Plaintiffs
argued that the existence of extraneous information on Walmart’s disclosure form,
including a summary of their rights and outdated state-specific information,
violated the FCRA’s “solely” mandate and deprived them of the opportunity to
meaningfully authorize a credit check and receive required information in the
manner prescribed by the statute.[10] Plaintiffs filed suit
against Wal-Mart in the Circuit Court of Cole County, Missouri, on July 21,
2015, and sought class action certification on a national scale.[11] Walmart denied any
wrongdoing and filed a motion to dismiss the case for lack of standing because
there was not an “actual or threatened injury” citing the recent Supreme Court of
the United States case Spokeo Inc. v.
Robins.[12]
The trial court dismissed the case with prejudice and Plaintiffs timely
appealed to the Missouri Court of Appeals, Western District.[13]
II.
Legal Background
Justiciability is a prudential doctrine which exists when
“[1] the
plaintiff has a legally protectable interest at stake, [2] a substantial
controversy exists between parties with genuinely adverse interests, and [3] that
controversy is ripe for judicial determination.”[14] The first and second
justiciability elements are required to prove standing.[15] Federal and state courts
bear similar, but distinct, burdens when it comes to proving standing. “Standing
to sue in any Article III court is, of course, a federal question which does
not depend on the party's ... standing in state court.”[16] Missouri law allows
plaintiffs to bring a suit when they have been directly and adversely affected
by a defendant’s actions or when their rights are conferred by statute.[17] Missouri courts have previously
found statutory violations enough to confer standing.[18] Plaintiffs in Missouri have
a legally protectable interest when they are within the class of persons
intended to be protected by a statute and they have suffered injury from a
violation of that statute.[19] Missouri courts also look
to a statute’s legislative history and the legislature’s concerns when enacting
statutes in order to determine whether a cognizable injury has been conferred.[20]
The Supreme Court of the United States decided Spokeo v. Robins in 2016.[21] In Spokeo, the plaintiff alleged that a consumer reporting agency violated
the FCRA’s mandate by spreading incorrect and misleading information about him.[22] The federal district
court dismissed the case for lack of standing, holding that the plaintiff did
not plead an injury in fact, as required by Article III of the United States
Constitution.[23]
The U.S. Court of Appeals for the Ninth Circuit reversed, holding the plaintiff’s
statutory rights under the FCRA did satisfy the injury element of standing.[24] The Supreme Court of the
United States remanded the case back to the Ninth Circuit for further analysis
on the issue of injury concreteness without stating whether the court’s
ultimate conclusion, that the plaintiffs had standing, was correct.[25] The Court discussed the
issue of Article III standing when a plaintiff suffers “no concrete harm, and
who therefore could not otherwise invoke the jurisdiction of a federal court, by
authorizing a private right of action based on a bare violation of a federal
statute.”[26]
Spokeo directly addressed standing in
the context of an FCRA violation and held that “a plaintiff must show that he
or she suffered an invasion of a legally protected interest that is concrete
and particularized and actual or imminent, not conjectural or hypothetical.”[27]
III.
Instant Decision
In the instant case, the Missouri Court of Appeals,
Western District, affirmed the trial court’s decision dismissing the action
with prejudice.[28]
The court held that plaintiffs failed to plead an injury in fact, and therefore
did not have standing to sue for Walmart’s alleged violation of their statutory
right.[29] The court held that the
plaintiff’s allegation was a “bare procedural violation,” which was not enough
to confer standing in either federal or state court.[30] The court reiterated that
the federal standing doctrine arises from Article III of the United States
Constitution while the Missouri standing doctrine arises from the Missouri
Constitution.[31]
The court held it is not bound by federal precedent, but that here,[32] consistency in “the legal
standards to be applied by our state courts and the Eighth Circuit” should be
favored.[33]
Since Corozzo, like Spokeo, involved a federal statutory
remedy and could have been brought in state or federal court, the court
reasoned that the federal interpretation of Spokeo
was persuasive and affirmed the dismissal of the action against Walmart.[34]
IV.
Comment
The
Supreme Court of Missouri’s decision in Corozzo
makes it clear that alleging a bare procedural or statutory violation divorced
from a concrete and particularized harm is no longer enough to confer standing
in Missouri courts.[35] The court respectfully
followed the analysis of federal precedent; however, the decision decreased consumers’
ability to vindicate violations of federal law in Missouri courts.[36] In Spokeo, the Supreme Court of the United States stated the injury in
fact requirements at issue were mandated by Article III of the federal
Constitution.[37]
The Court also explained the doctrine of separation of powers and discussed the
limited nature of the federal judiciary, while Missouri courts are those of
general jurisdiction.[38] This supports the notion
that state and federal court standing requirements are justifiably different, otherwise
federal limits would prevent many of the cases Missouri courts hear on a daily
basis. For example, Missouri courts allow taxpayer standing, unlike federal courts
that have found taxpayer status alone insufficient to confer standing under
Article III.[39]
Unlike the taxpayer standing doctrine, the Missouri Court of Appeals, Western
District, did not distinguish itself from the limited nature of the federal judiciary
and limited Missouri courts regarding what cases they may hear when federal statutory
rights are at play.
Although
the court in Corozzo briefly
discussed that it was not bound by the Ninth Circuit’s interpretation of Spokeo, it still chose to follow federal
precedent based on Article III standing, not based on state law or state
constitutional grounds.
In
Missouri, a plaintiff must have a “legally cognizable interest and a threatened
or real injury,” in order to maintain a lawsuit.[40] Yet, Missouri courts have
not adopted the “particularized and concrete” requirement discussed in Spokeo.[41] Even if Missouri adopts
the concreteness interpretation set out in Spokeo,
the Supreme Court did not definitively determine this issue because the case
was remanded for further analysis.[42] Because the decision in Corozzo could lead to the dismissal of
other statutorily based claims in Missouri, another look at Missouri precedent
by the Supreme Court of Missouri may be warranted if an appeal should follow.
-Alana
Caruso
[1] This form allegedly “contained
extraneous information [and] inaccurate and misleading statements.” Corozzo v.
Wal-Mart Stores, Inc., No. WD 80121, 2017 WL 3136386, at *1 (Mo. Ct. App. July
25, 2017).
[2] 15 U.S.C. § 1681b (b) (West).
[3] 136 S.Ct. 1540, 1549 (2016).
[4] Corozzo, 2017 WL 3136386, at *2.
[5] Id.
[6] Id. at *2.
[7] 15 U.S.C. § 1681b (West).
[8] § 1681b(b)(2)(A)
[9] § 1681n(a)
[10] App. Brief, p. 4.
[11] Corozzo, 2017 WL 3136386, at *2.
[12] Id. at *3 (citing Spokeo Inc.
v. Robins, 136 S.Ct. 1540, 1540 (2016)).
[13] Id.
[14] Schweich v. Nixon, 408 S.W.3d 769,
773 (Mo. banc 2013).
[15] Id. at 774.
[16] Miller v. Redwood Toxicology Lab.,
Inc., 688 F.3d 928, 933 (8th Cir. 2012) (internal citations omitted).
[17] See City of Slater v. State, 494 S.W.3d 580, 590 (Mo. Ct. App.
2016).
[18] Margulis v. P & M Consulting
Inc., 121 S.W.3d 246, 250 (Mo. Ct. App. 2003).
[19] All Am. Painting LLC v. Fin. Sols.
& Ass., Inc., 315 S.W.3d 719, 724 (Mo. banc 2010).
[20] Id.
[21] Spokeo v. Robins, 136 S.Ct. 1540,
1549 (2016).
[22] Corozzo, 2017 WL 3136386, at *9.
[23] Id.
[24] Id.
[25] Id.
[26] Id.
[27] Spokeo, 136 S.Ct. at 1547-48.
[28] Corozzo, 2017 WL 3136386, at *8.
[29] Id. at *10.
[30] Id.
[31] Mo.
Const. art. V, § 14(a).
[32] Corozzo and Ruff’s case could have
been brought in federal or state court. Id.
at *11.
[33] Corozzo. 2017 WL 3136386, at *12.
[34] Id. at *13.
[35] Id. at *11.
[36] Id.
[37] Spokeo v. Robins, 136 S.Ct. 1540,
1546 (2016).
[38] Id. at 1547.
[39] See Eastern Missouri Laborers Dist. Council v. St. Louis County,
781 S.W.2d 43, 47 (1989) (“Public policy demands a system of checks and
balances whereby taxpayers can hold public officials accountable for their
acts…Taxpayers must have some mechanism of enforcing the law. Today’s decision
provides the door through which taxpayers may enter the courts to seek
enforcement.”); but see Hein v.
Freedom From Religion Foundation, Inc., 551 U.S. 587, 593 (2007) (recognizing
there is only one narrow exception to the general prohibition against federal
taxpayer standing: violations of the Establishment Clause).
[40] Lee's Summit License, LLC v.
Office of Admin., 486 S.W.3d 409, 416 (Mo. Ct. App. 2016).
[41] See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992).
[42] Spokeo v. Robins, 136 S.Ct. 1540
(2016).
