Soman v. Alameda Health System

Background

Jas Soman brought a proposed class action against her former employer, Alameda Health System (AHS). She alleged that AHS obtained a background check into her work history using disclosure forms that violated the Fair Credit Reporting Act (FCRA) and California’s Investigative Consumer Reporting Agencies Act (ICRAA).

Soman applied for a surgical-technician position with AHS in 2016. She signed an application authorizing a background check and releasing AHS from liability for the investigation. AHS also gave her written disclosures about the background check and her rights under the FCRA and ICRAA. Soman alleged that the FCRA disclosure improperly included additional state-law language and did not adequately explain her right to receive a complete and accurate disclosure of the investigation’s nature and scope.

The court had previously dismissed Soman’s FCRA claims with prejudice. After a later Ninth Circuit decision involving similar disclosures, the case was reopened. The parties then reported a settlement, discussed returning the case to state court, and later sought preliminary approval of a proposed $1 million settlement. AHS opposed preliminary approval, arguing that Soman had not shown the concrete injury needed to establish standing in federal court.

Standing analysis

Article III standing is the constitutional requirement that a plaintiff show a concrete injury connected to the defendant’s conduct that a court can remedy. The court explained that standing must continue throughout the case and that Soman had the burden of establishing it at the settlement-approval stage.

The court concluded that the FCRA provisions at issue protect concrete interests, including control over who receives a consumer report and privacy and information rights. But Soman did not show that the alleged disclosure defects actually harmed those interests or created a material risk of harm. She did not allege that she was confused by the disclosures, would have acted differently, would have refused to authorize the background check, or that AHS used her information in an unexpected way. She also did not allege that AHS obtained her information based on the allegedly defective disclosure.

The court distinguished a Ninth Circuit decision in which the plaintiff had alleged confusion caused by an improper liability waiver and would not have signed the authorization with a proper disclosure. The court also concluded that another Ninth Circuit decision involving similar disclosures did not establish that standing existed, because that decision had not decided the standing question.

Disposition

The court held that Soman had not alleged a concrete and particularized injury and therefore lacked Article III standing. It remanded the case to the Alameda County Superior Court under 28 U.S.C. § 1447(c). The court expressed concern about the possible effect of the late remand on the proposed class and criticized counsel for both sides for delays, inadequate explanations, and conduct it characterized as detrimental to the fair and efficient handling of the litigation. The court did not approve the proposed settlement.