SAN JOSE –
A U.S. district court in California recently granted a motion to dismiss a
Fair Credit Reporting Act class action against Hertz, with the case moving
back to San Francisco.
Concerning the case of Lee v. Hertz
Corp., the order from the U.S. District Court for the Northern
District of California, San Jose Division, stated that the
plaintiffs — Peter Lee and Latonya Campbell — lacked Article III
standing. The presiding judge remanded the case to San Francisco
“This is something that we have seen
in numerous similar decisions in the past few months,” Ross Andre
of Troutman Sanders LLP told the Northern California Record.
Increasingly this year, FCRA cases are
being filed in the first instance in state court, while a defendant
has the right to remove the case to federal court. If the court lacks
jurisdiction, the case automatically goes back to state court, rather
than being tossed out.
“There are a number of variations
that can mandate a different result, but as a general matter it is
not too surprising that in this case, the court chose to remand the
action,” Andre said.
This case is the latest in a string of
decisions in the wake of the Supreme Court’s 2016 decision in
Spokeo, Inc. v. Robin.
“In [Spokeo, Inc. v. Robin], the
plaintiff is suing a company that he alleges is a consumer reporting
agency—i.e., a company that provides consumer reports to
third-parties. [Lee v. Hertz Corp.], on the other hand is a case
against an employer — i.e., the user of a consumer report,” Andre
said. “While both have obligations under the Fair Credit Reporting
Act, the particular requirements for each vary substantially, as do
In Lee v. Hertz Corp., Lee and Campbell
are suing for alleged violations of the FCRA. The plaintiffs applied
to work at a rental-car location in California owned by Hertz. As
part of the hiring process, Hertz ran a background check on the
applicants after providing a disclosure of its intent and permission
to move forward.
The plaintiffs allege the disclosure
that Hertz gave them was not “clear and conspicuous” as the
statute requires. They also claim Hertz denied their applications
without first providing notice of its intent to do so.
After the Supreme Court decided Spokeo
earlier this year, Hertz moved to dismiss the case. The company
argued that neither Lee nor Campbell had alleged Article III
“Article III standing is the
constitutional minimum required to bring a case in federal court,”
According to Andre, the Supreme Court
had defined and redefined the elements of constitutional standing
over the years, but it generally requires that the person bringing
the lawsuit has suffered an injury that was caused by the conduct
complained about and will likely be redressed by a favorable judicial
“Article III standing is what
prevents parties with no stake in a controversy from bringing a
lawsuit related to that controversy,” Andre said.
The court noted that both Lee and
Campbell had been able to converse with Hertz about their background
reports, and concluded that the sum of the claim was a belief that
Hertz shouldn’t have considered the information.
The plaintiffs opposed the motion,
arguing that if the court found that jurisdiction was lacking, it
should be remanded to San Francisco, not dismissed. The court agreed.
“The case will continue immediately,”
Andre said. “The parties will pick up where they left off, and it
will be up to the state court to set a schedule and determine the