Legal Memorandum: Common Law Agency Principles in FCRA Claims

Issue: Whether common law agency principles should be utilized in Fair Credit Reporting Act (FCRA) claims.

In Jones v. Federated Financial Reserve Corp., 144 F.3d 961 (6th Cir. 1998), the court held that common law agency principles do apply to actions brought under the auspices of the FCRA.  But in Kodrick v. Ferguson, 54 F. Supp. 2d 788 (N.D. Ill. 1999), the court held that common law agency principles should not be utilized in FCRA claims.  See also Smith v. Sears, Roebuck & Co., 276 F. Supp. 2d 603 (S.D. Miss. 2003) (holding that the subscriber was not liable under the Fair Credit Reporting Act for its employee’s unauthorized willful violations thereof, where the employee of the subscriber obtained the credit report under false pretenses and for personal use without the express or implied approval of her supervisors).

Myers v. Bennett Law Offices, 238 F. Supp. 2d 1196 (D. Nev. 2002), contains a fairly detailed discussion of this issue.  The court in that case concluded that agency principles applied to the consumers’ action under 15 U.S.C. § 1681n against the employer-recipient of consumer credit reports, such that the recipient could be held liable for its employee’s violations of the FCRA disclosure provisions.  In that case, the recipient’s employee, rather than recipient, allegedly requested the reports under false pretenses or for an impermissible purpose.  Id. at 1202.  To prevail on their claim against the employer law offices, the plaintiffs were required to prove that (1) the employee requested the report, (2) using false pretenses or knowingly without a permissible purpose, and (3) that Bennett Law Offices […]