consumer - FCRA - unauthorized disclosure of personal information - injury - standing

In re Horizon Healthcare Services – 3d Cir. – January 20, 2017

http://www2.ca3.uscourts.gov/opinarch/152309p.pdf

The dispute at the bottom of this putative class action began when two laptops, containing sensitive personal information, were stolen from health insurer Horizon Healthcare Services, Inc.

The four named Plaintiffs filed suit on behalf of themselves and other Horizon customers whose personal information was stored on those laptops. They allege willful and negligent violations of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681, et seq., as well as numerous violations of state law.    Essentially, they say that Horizon inadequately protected their personal information.

The District Court dismissed the suit under Federal Rule of Civil Procedure 12(b)(1) for lack of Article III standing. According to the Court, none of the Plaintiffs had claimed a cognizable injury because, although their personal information had been stolen, none of them had adequately alleged that the information was actually used to their detriment.  We will vacate and remand.

In light of the congressional decision to create a remedy for the unauthorized transfer of personal information, a violation of FCRA gives rise to an injury sufficient for Article III standing purposes. Even without evidence that the Plaintiffs’ information was in fact used improperly, the alleged disclosure of their personal information created a de facto injury. Accordingly, all of the Plaintiffs suffered a cognizable injury, and the Complaint should not have been dismissed under Rule 12(b)(1).

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UC - overpayment - fault v. non-fault - "honest mistake"

Fugh v. UCBR – Cmwlth. Court – January 18, 2017 – en banc

http://www.pacourts.us/assets/opinions/Commonwealth/out/129CD16_1-18-17.pdf?cb=1

Firmly rejecting the UCBR’s suggestions to change the law, the court held that an overpayment came under the non-fault provisions of 43 P.S. 874(b) and not the fault provisions of 43 P.S. 874(a), where

            - “honest mistake” - the Board made a finding that Claimant made an “honest mistake” in filling out her UC application online.   She said that her unemployment was caused by lack of work after she quit due to a reduction of hours that would not have constituted good cause to quit her job.  Claimant “construed ‘lack of work’ to refer to a reduction in work available to her, which described her situation.”

            - no intentional failure to disclose information, no false statement – the Board also made specific findings to this effect

The en banc court rejected the UCBR’s suggestions that it should overrule the long-standinbg (40 years) precedent of Cruz v. UCBR, 531 A.2d 1178 (Pa. Cmwlth. 1987) and Daniels v. UCBR , 309 A.2d 738, 741 (Pa. Cmwlth.), holding that “fault” is a “term that ‘connotes an act to which blame, censure, impropriety, shortcoming, or culpability attaches.”  It involves a “blameworthy act” that shows the actor’s wrongful state of mind.   The court said that the “commission of a mere voluntary act does not establish fault. . . .The Board cannot hold a claimant liable for a fault overpayment for a mere mistake or confusion.” 

The court also noted the legislature’s silence and inactivity in the face of the holdings in Daniels and Cruz.

The court said that “our long held construction of ‘fault’ is not in need of ‘correction.’  It is as sound today as it was 40 years ago.  The revision to the Section 804 paradign proposed by the Board is one for the General Assembly to make.

Congratulations and thanks to Kevin Burke of NWLS and Julia Simon-Mishel of PLA for their work on this case.

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UC - late registration for employment services is NOT an automatic disqualification

Jakubowicz v. UCBR – Cmwlth. Court – unreported* memorandum opinion – January 17, 2017

http://www.pacourts.us/assets/opinions/Commonwealth/out/618CD16_1-17-17.pdf?cb=1

Late registration for employment search services is “not a per se violation of” 43 P.S. 801(b)(1)(i) and 34 Pa. Code 65.11(c), which require registration within 30 days of initial application for benefits.

Footnote 10 –

In Department of Labor & Industry v. Unemployment Compensation Board of Review, 131 A.3d 597 (Pa. Cmwlth. 2016), this Court explained:

A failure of a claimant to register timely in accordance with Section 401(b)(1)(i) of the Law is not a per se violation that automatically disqualifies a claimant from unemployment compensation. Section 401(b)(6) of the Law provides that ‘[t]he [D]epartment may waive or alter the requirements of this subsection in cases or situations with respect to which the secretary finds that compliance with such requirements would be oppressive or which would be inconsistent with the purposes of this act.’ 43 P.S. § 801(b)(6). In Sharpe v. Unemployment Compensation Board of Review (Pa. Cmwlth.[] No. 431 C.D. 2014, . . . filed October 21, 2014), this Court addressed the Department’s ability to waive the registration requirement. We observed as follows:

During the promulgation of the Department’s regulations implementing Section 401(b) [of the Law], a commenter asked whether a ‘good cause’ standard should be incorporated into the [R]egulations. 43 Pa. B. 4730, 4735 (2013). The Department replied that in most cases where a ‘good cause’ standard is applied, it is because it is directed by statute and that it would not adopt one on its own initiative. Id. However, the Department noted that, ‘if a claimant’s ‘good cause’ for noncompliance with the regulation also constitutes a reason why compliance ‘would be oppressive or . . . inconsistent with the purposes of’ the law, the claimant’s circumstances could be addressed under the waiver provision in [S]ection 401(b)(6) of the [L]aw and [the Regulation Section 65.11(f)(6)].’ Id. [Sharpe, slip op.] at 6-7.

In short, where a claimant can show ‘good cause’ for not registering on time, the Department may waive the time requirement of Section 401(b)(1)(i) of the Law.

The Law does not define ‘good cause,’ and our Supreme Court has established that it ‘must be determined in each case from the facts of  that case.’ Barclay White Co. v. Unemployment Comp[.] B[d.] of Review, . . . 50 A.2d 336, 340 ([Pa.] 1947). In each case, ‘good cause’ must be ‘so interpreted that the fundamental purpose of the [Law] shall not be destroyed.’ Id. The central purpose of Section 401(b) of the Law is to require claimants to make ‘an active search for suitable employment’ while collecting benefits. 43 P.S. § 801(b).

. . . .

[T]he [UCBR] has abandoned the nunc pro tunc standard for evaluating a waiver of the on-line registration time requirement. Instead, it argues for a more relaxed standard, noting that not every claimant can be expected to be ‘computer savvy’ and that a single keystroke mistake can fail to effect a registration. Further, registration cannot be done by letter or by phone call. The [UCBR] rejects the argument of the Office of UC Benefits in favor of a strict liability standard. The [UCBR] believes, instead, that a case-by-case examination of ‘good cause’ is appropriate and consistent with the remedial and humanitarian objectives of the Law, which should not be frustrated ‘by slavish adherence to technical and artificial rules.’ Lehr v. Unemployment Comp[.] B[d.] of Review, . . . 625 A.2d 173, 175 ([Pa. Cmwlth.] 1993) (quoting Unemployment Comp[.] B[d.] of Review v. Jolliffe, . . . 379 A.2d 109, 110 ([Pa.] 1977)).

The [UCBR] explains that in on-line registration waiver cases, ‘good cause’ should be considered in the same way it is used to mitigate willful misconduct. . . .

. . . .

We agree with the [UCBR]’s case-by-case approach to evaluating whether a claimant had good cause for failing to timely register for employment search services under Section 401(b)(1)(i) of the Law, 43 P.S. § 801(b)(1)(i).

Dep’t of Labor & Indus., 131 A.3d at 600-02 (emphasis added; footnotes omitted).  

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*An unreported Commonwealth Court case may not be cited binding precedent but can be cited for its persuasive value.  See 210 Pa. Code § 69.414(b) and Pa. R.A.P.  3716

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age discrimination - disparate impact - class action - subgroup 50+

Karlo et al. v. Pittsburgh Glass Works – 3d Cir. – January 10, 2017

http://www2.ca3.uscourts.gov/opinarch/153435p.pdf

The Age Discrimination in Employment Act (“ADEA”) protects only those individuals who are at least forty years of age. The question in this case is whether a disparate-impact claim is cognizable where a “subgroup” of employees at the upper end of that range—in this case, employees aged fifty and older— were alleged to have been disfavored relative to younger employees. We answer in the affirmative.

Our decision is dictated by the plain text of the statute as interpreted by the Supreme Court. In particular, the ADEA prohibits disparate impacts based on age, not forty-and-older identity. A rule that disallowed subgroups would ignore genuine statistical disparities that could otherwise be actionable through application of the plain text of the statute.   Although several of our sister circuits have ruled to the contrary, their reasoning relies primarily on policy arguments that we do not find persuasive.

We will therefore reverse the judgment of the District Court based on its interpretation of the ADEA. We will also vacate the District Court’s order excluding the testimony of plaintiffs’ statistics expert and remand for further Daubert proceedings. We will affirm in all other respects.