California Legal Brief

The Rule of Parsonage v. Wal-Mart Associates, Inc. is that ICRAA authorizes consumers to recover the statutory sum of $10,000 as a remedy for a violation of their statutory rights, without any further showing of concrete injury or adverse employment decision, under circumstances where an employer fails to comply with any requirement of ICRAA's disclosure and consent provisions.

Appeal from judgment after summary judgment in Superior Court, San Diego County.

Defendant Appellant was Wal-Mart Associates, Inc. et al. — the employer who provided a defective ICRAA disclosure form listing six agencies instead of identifying the specific agency conducting the investigation.

Plaintiff Respondent was Tina Parsonage — the job applicant who received a 14-page background check disclosure form that violated ICRAA's standalone disclosure requirements.

The suit sounded in violation of the Investigative Consumer Reporting Agencies Act (ICRAA). No cross-claims are mentioned.

The key substantive facts leading to the suit were that in June 2018, Parsonage applied for a job with Wal-Mart and accepted an employment offer conditioned on passing a background check. Wal-Mart provided a 14-page disclosure form that listed six consumer reporting agencies rather than solely identifying the specific agency that would conduct the investigation (which was actually First Advantage Background Services Corp). The disclosure also contained extraneous information beyond what ICRAA requires for a standalone document. Parsonage was ultimately hired despite these violations.

The procedural result leading to the Appeal: The trial court granted summary judgment in favor of Wal-Mart, ruling that Parsonage lacked standing to pursue her ICRAA claim because she suffered no concrete injury from the "technical violations" and was ultimately hired by Wal-Mart.

The key question(s) on Appeal: Whether a consumer must demonstrate concrete injury, such as an adverse employment decision, to establish standing under ICRAA, or whether showing a statutory violation is sufficient for standing.

The Appellate Court held that ICRAA, by its plain language, only requires a plaintiff to demonstrate a statutory violation to establish standing, and that California law does not impose Article III's case-or-controversy requirements, allowing the Legislature to grant standing absent concrete harm where a statute provides for statutory damages as an alternative to actual damages.

The case is inapplicable when the ICRAA violation results in a more favorable investigative consumer report than if there had been no violation (per Civil Code section 1786.50(c)), or when the case involves federal court jurisdiction where Article III standing requirements would apply, or when the statutory violation involves different consumer reporting statutes with different standing requirements.

The case leaves open questions regarding what constitutes adequate compliance with ICRAA's other disclosure requirements, the scope of "solely" in the standalone document requirement, whether class action standing under ICRAA has different requirements, and how courts should calculate the $10,000 statutory remedy in relation to actual damages when both are present.