Foley v. IRBsearch, LLC

Background

Kathleen Foley alleged that she applied for a legal assistant position at Pomerantz, LLP, and that IRBsearch sold Pomerantz a report about her. According to the amended complaint, the report included inaccurate or outdated information about tax liens, judgments, and a 2004 Chapter 7 bankruptcy. Foley alleged that Pomerantz refused to hire her because of the report.

Foley also alleged that, after the job rejection, she asked IRBsearch for a complete disclosure of the information in its files, the sources of that information, and a list of companies that had received her report. She alleged that IRBsearch refused to provide those materials.

Foley asserted four claims under the Fair Credit Reporting Act (FCRA): failure to provide required file disclosures, failure to give notice when furnishing information that could adversely affect an employment decision, reporting information that was more than seven years old, and failure to use reasonable procedures to ensure maximum possible accuracy. She also asserted an individual claim for defamation based on statements in the report.

Defendant’s Motion

IRBsearch moved to dismiss under Federal Rules of Civil Procedure 12(b)(1), 12(b)(6), and 12(b)(7), and under Rule 19. It argued that it was not a consumer reporting agency covered by the FCRA, that Foley lacked standing to sue in federal court, and that On Point Investigations was a required party because, according to IRBsearch, On Point had obtained information from IRBsearch and provided the report to Pomerantz.

IRBsearch separately argued that Section 230 of the Communications Decency Act protected it from liability for Foley’s claims. Section 230 generally protects an interactive computer service from being treated as the publisher or speaker of information supplied by another party.

Subject-Matter Jurisdiction and Standing

The court rejected IRBsearch’s argument that whether it was a consumer reporting agency was a jurisdictional issue. The court held that this question was an element of Foley’s FCRA claims, not a question of the court’s power to hear the case. Therefore, the issue could not be used to dismiss the claims under Rule 12(b)(1).

The court also held that Foley had adequately pleaded Article III standing. Her alleged loss of a job opportunity was a concrete and particularized injury, and she plausibly alleged that the injury resulted from IRBsearch’s report and could be remedied by damages.

FCRA Claims

The court held that Foley had adequately alleged that IRBsearch was a consumer reporting agency. At the motion-to-dismiss stage, Foley sufficiently alleged that IRBsearch acted for compensation, regularly assembled consumer information, intended to furnish consumer reports to third parties, and used interstate commerce to prepare or provide those reports.

The court noted that IRBsearch’s status as a consumer reporting agency could fail at the summary-judgment stage after the parties developed a fuller factual record. But accepting the well-pleaded allegations as true and drawing reasonable inferences in Foley’s favor, the court held that the FCRA claims were adequately pleaded.

Failure to Join On Point

The court denied IRBsearch’s request to dismiss the case for failure to join On Point Investigations. It held that IRBsearch could not assert an absent party’s interests on that party’s behalf. It also held that On Point’s possible contractual duty to defend or indemnify IRBsearch did not make On Point a required party, and that On Point was not the entity allegedly subject to the FCRA duties at issue.

Section 230 and Defamation

The court held that IRBsearch’s website qualified as an interactive computer service and that the report consisted essentially of information obtained from third parties. IRBsearch’s summarizing, organizing, and rearranging of that information did not, on the allegations and materials considered, amount to materially contributing to the unlawful content.

The court distinguished Foley’s claims based on the nature of the duty allegedly violated. Foley’s defamation claim treated IRBsearch as the publisher of allegedly false third-party information, so Section 230 immunity applied. The court therefore dismissed the defamation claim.

The FCRA claims were different. They alleged that IRBsearch violated statutory duties concerning file disclosures, notice, obsolete information, and accuracy. Even the claim concerning obsolete information did not depend on treating IRBsearch as the publisher of third-party content; it concerned IRBsearch’s conduct as an alleged consumer reporting agency. The court therefore held that Section 230 did not immunize IRBsearch from the FCRA claims. The court did not decide whether the defamation claim was also preempted by the FCRA.

Disposition

The court granted in part and denied in part IRBsearch’s motion to dismiss. It dismissed Foley’s defamation claim and left her FCRA claims standing. The court directed the parties to meet and confer and submit a revised case-management plan by April 29, 2025.