In Schumacher v. SC Data Center, the plaintiff brought three class action claims against SC Data Center, Inc. under the Fair Credit Reporting Act related to its pre-employment background check process. Specifically, the plaintiff alleged that SC Data Center's background check process violated the disclosure and adverse action provisions of the FCRA. The substance of the plaintiff's claims, however, was not the most interesting part of a recent order from the court pertaining to SC Data Center's motion to dismiss.
In May of 2016, the parties attended a mediation, at which they reached a class action settlement. After reaching this settlement, the Supreme Court decided Spokeo v. Robins, 136 S.Ct. 1540 (2016), which addressed Article III standing within the context of FCRA claims. Based on Spokeo, SC Data Center subsequently moved to dismiss the case for a lack of standing. In response, the plaintiff moved to enforce the settlement agreement.
The court denied SC Data Center's motion to dismiss. According to the court, the relevant question was not whether the Court had subject matter jurisdiction over the plaintiff's FCRA claims. Instead, the court found that the pertinent question was whether it had the power to enforce the settlement agreement between the parties. On that point, the court concluded that the settlement agreement was binding and enforceable, and the court had no qualms about standing in that context. As a result, the court declined to dismiss the case and, instead, enforced the settlement agreement.
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