Summary
The Ninth Circuit affirmed the district court's grant of summary judgment in favor of ADP Screening and Selection Services, Inc., regarding a Fair Credit Reporting Act claim. Although the appellate panel concluded that ADP violated the FCRA by disclosing the revocation of the plaintiff's nursing license more than seven years prior, it upheld the lower court's decision because ADP's statutory interpretation was not objectively unreasonable, precluding negligent or willful liability. The court further held that reporting the plaintiff's ongoing exclusion from federal health care programs fell outside the FCRA's seven-year reporting limitation.
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Practice areas
Questions Presented
- Whether an individual's ongoing exclusion from participation in federal health care programs is an adverse item of information that may be reported under 15 U.S.C. § 1681c(a)(5) throughout the duration of the exclusion.
- Whether the reason for the ongoing exclusion—the revocation of Grijalva's nursing license more than seven years earlier—was a separate adverse item of information that ADP could not report under 15 U.S.C. § 1681c(a)(5).
- Whether ADP's interpretation of § 1681c(a)(5) was objectively unreasonable such that its violation was negligent or willful and actionable under the FCRA.
- Whether summary judgment for ADP was proper.
Holdings
- An ongoing exclusion from participation in federal health care programs is an ongoing adverse event that may be reported for the duration of the exclusion and for seven years after its termination. ADP therefore did not violate § 1681c(a)(5) by reporting Grijalva's ongoing exclusion.
- The revocation of Grijalva's nursing license was a separate, fixed adverse event from her ongoing exclusion. Because the revocation antedated the report by more than seven years, ADP violated § 1681c(a)(5) by reporting that the ongoing exclusion was based on the outdated license revocation.
- ADP's interpretation of § 1681c(a)(5) was not objectively unreasonable. Consequently, ADP did not negligently or willfully violate the FCRA and was not liable for its otherwise prohibited disclosure.
Key quotations
“Because Grijalva’s exclusion is ongoing, ADP did not violate 15 U.S.C. § 1681c(a)(5) by disclosing it in her background report.” (at 14)
“Reporting this piece of adverse information violated 15 U.S.C. § 1681c(a)(5).” (at 17)
“An interpretation of the FCRA that contradicts plain statutory text is objectively unreasonable, even if the case is a matter of first impression.” (at 19)
“On this record, no “reasonable fact finder” could conclude that ADP negligently or willfully violated the FCRA.” (at 20)
Factual background
The Arizona State Board of Nursing revoked Grijalva's certified nursing assistant license in 2011 after she accepted money from a client with dementia. The Department of Health and Human Services Office of Inspector General subsequently excluded her indefinitely from federally funded health care programs, and she remained listed on the applicable exclusion databases. In 2020, ADP reported both her ongoing exclusion and that it resulted from the 2011 license revocation during a background check for a prospective employer, after which the employer revoked her conditional job offer.
Procedural history
Grijalva sued ADP, alleging that its background report disclosed adverse information that was more than seven years old in violation of 15 U.S.C. § 1681c(a)(5). After discovery, both parties moved for summary judgment. The District of Arizona granted ADP's motion and denied Grijalva's motion, concluding that the disclosures did not violate the FCRA and alternatively that ADP was not negligent or willful. The Ninth Circuit affirmed, although it disagreed with the district court's conclusion that ADP had not violated the FCRA.