USPS’ Motion to Dismiss Putative FCRA Class Action Denied by Wisconsin Magistrate Judge

A Wisconsin federal magistrate judge denied the United States Postal Services’ attempt to dismiss a Fair Credit Reporting Act putative class action, holding that the plaintiff’s complaint sufficiently alleged an injury-in-fact.

According to the complaint, plaintiff Rondo Tyus applied for a security clearance to work at the USPS. The USPS obtained a criminal background report, which allegedly contained several inaccuracies. The USPS provided Tyus with a copy of the report, telling him that any dispute should be submitted to the background check provider (GIS) within five days. However, only three days later, the USPS informed Tyus that based on the report, it had denied his security clearance so he was not eligible for the job. Tyus brought suit, claiming that “by failing to provide [him] with those five days, USPS failed to give Plaintiff Tyus a reasonable and real opportunity to dispute the results of the report, and therefore violated the FCRA’s pre-adverse action notice requirements.”

The USPS moved to dismiss the complaint under both Rule 12(b)(1) and 12(b)(6), arguing that the complaint only alleged a bare procedural violation of the FCRA. The magistrate judge ultimately denied the USPS’ motion, holding:

“The Second Amended Complaint alleges a number of inaccuracies in the GIS report which collectively portray Tyus in a negative light. It is fair to infer that those inaccuracies increased the chances that Tyus would be denied a security clearance. Had Tyus been give a reasonable opportunity to address those inaccuracies with GIS and USPS, it might have resulted in a different decision being reached by USPS as to whether to grant Tyus security clearance – or at least that is a reasonable inference from what is alleged in the Second Amended Complaint.”

We will continue to monitor the case for further developments.