Standing to bring suit is an issue that is never waived and never goes away, regardless of the parties’ arguments. Recently, the Ninth Circuit reviewed an appeal of an FCRA claim that had gone through discovery, summary judgment, and a fully briefed appeal. It determined that the parties and the lower court had focused on the wrong issue—and spent time, effort, and money on litigation that was ultimately undone—because the plaintiff didn’t have standing and shouldn’t have been able to bring suit in the first place.
In Hogue v. Silver State Schs. Credit Union, 2020 U.S. App. LEXIS 15963, the Ninth Circuit affirmed a district court’s grant of summary judgment on an FCRA claim in favor of a credit furnisher…but not on the grounds the district court granted it. Instead, the Ninth Circuit determined—independently of the parties and the district court—that the consumer never had standing to bring suit in the first place.
The plaintiff sued the defendant furnisher, claiming that it erroneously reported an auto loan as past due to a credit reporting agency, then failed to investigate the dispute once the plaintiff raised it. The district court granted summary judgment to the furnisher after discovery, holding that the furnisher met its obligations under the FCRA. On appeal, the Ninth Circuit reviewed the allegations the plaintiff made and determined that he had never alleged a concrete injury sufficient to give him constitutional standing to sue.
Not only had no third party ever made an adverse credit decision based on the disputed information, the disputed information had fallen off of the plaintiff’s account by the time he sued, meaning it would never be reported at all. In fact, the plaintiff couldn’t even show that there was a risk the disputed information would be disseminated. The district court’s dismissal was affirmed, but purely on standing grounds, without ever reaching the issues addressed by the district court.
The lesson for FCRA defendants: always keep an eye out for standing issues. A successful standing challenge could save you a lot of time and energy spent on unnecessary discovery.