FCRA Provision Unconstitutional, Background Check Co. Says

October 3rd, 2012 by krista

A provision of the Fair Credit Reporting Act prohibiting the release of some job applicants’ criminal histories should be declared an unconstitutional violation of commercial speech, an attorney defending consumer reporting agency General Information Services Inc. against a putative class action told a Pennsylvania federal judge Tuesday.

During a hearing in Philadelphia, Richard Dietz, an attorney with Kilpatrick Townsend & Stockton LLP representing GIS, told U.S. District Judge Petrese Tucker that it was violation of the company’s First Amendment rights to keep it from sharing publicly available information about the criminal backgrounds sought by companies looking to screen job applicants.

“This court would be the first in the nation to say the government can punish private citizens for sharing information that’s contained in public documents,” Dietz said.

According to court documents, the plaintiff, Shamara T. King, sued GIS in Pennsylvania federal court in November 2010, claiming violations of the FCRA. King claimed that when she applied for a job at the U.S. Postal Service in 2010, GIS performed a background check that included details about her arrest for car theft in 2000, a violation of the FCRA’s seven-year limit on such information. GIS, raising its constitutional challenge, filed a motion for declaratory judgment in the case in September 2011.

Dietz said that the U.S. Supreme Court’s 2011 ruling in Sorrell v. IMS Health Inc. marked a substantial increase in the protection afforded to commercial speech, rendering unconstitutional many existing laws limiting the disclosure of truthful commercial information.

In Sorrell, the court struck down a Vermont law that prohibited pharmacies from selling doctors’ prescribing information to pharmaceutical marketers.

He said that FCRA would have to survive a strict scrutiny analysis by the court in order to prove there was a significant governmental interest in allowing the provision to stand.

Gerald Kell, an attorney for the U.S. government, which intervened in the case in November after GIS first raised its constitutional challenge to the law, told Judge Tucker that challenging the constitutionality of the law was an act of desperation on the part of GIS in its attempts to have the case against it thrown out.

“Suddenly, although the statute’s been on the books for more than 40 years, suddenly a light comes on above the defendant’s head and he asks the court to declare the statute unconstitutional,” Kell said, adding that the Sorrell case did not change the definition of or the level of protection afforded to the type of commercial speech at issue in the case.

While Dietz pointed out that the FCRA only forbade consumer reporting agencies from releasing criminal information and did not prevent employers from finding the information themselves and considering it as part of a prospective employee’s application, Kell noted that reporting agencies make it much easier for employers to access such information.

“It is the aggregate nature and the ease with which consumer reporting agencies can disseminate this information that so impacts the privacy that citizens expect,” he said.

Judge Tucker, who said she would issue a ruling on GIS’ motion as soon as possible, asked few questions during the hearing but said she wasn’t inclined to believe that Sorrell changed the case law related to protection of commercial speech.

“I don’t think it changed the law at all,” she said.

The case was argued on behalf of General Information Services Inc. by Richard Dietz of Kilpatrick Townsend & Stockton LLP.

The case was argued on behalf of the United States by Gerald Kell with the U.S. Department of Justice.

The case was argued on behalf of Shamara King by Jim Francis of Francis & Mailman PC.

The case is King v. General Information Services Inc., case number 2:10-cv-06850, in the U.S. District Court for the Eastern District of Pennsylvania.

– Additional reporting by Rachel Slajda. Editing by Jeremy Barker.


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