Summary:
When Charles Brown applied for a long-haul truck driving job with a FedEx contractor, he did what every applicant expects—passed the interview and drug test—only to have his offer rescinded after a background check falsely claimed he had felony convictions. The root cause: Defendant Ashcott, LLC, hired by First Advantage to run criminal records searches, (Good Grief!) matched another “Charles Brown” from Philadelphia (with a different middle name and Social Security number) to him, and reported that the match was based on Brown’s *full* name and SSN—something that simply could not be true.
Brown sued both First Advantage and Ashcott under the Fair Credit Reporting Act (FCRA). After settling with First Advantage, he pursued a default judgment against Ashcott. The court found Ashcott properly served, that its conduct violated § 1681e(b) by failing to follow reasonable procedures to assure maximum possible accuracy, and that the error was a proximate cause of Brown’s lost job and emotional distress.
However, damages were another matter. Brown asked for $100,000 compensatory (for a year’s lost wages and distress) and $100,000 punitive damages. Evidence showed he had other employment until April 2023 and some income thereafter, so his lost wage calculation did not match reality. The court granted default judgment *as to liability*, denied punitive damages for lack of evidence of a willful violation, and set the matter for a damages hearing unless Brown supplements his proof to account for other income during the relevant period.
Commentary:
The opinion is a tidy reminder for consumer advocates that FCRA liability is not just about “false” reports—it’s about whether the background screener reasonably matched the data. Here, Ashcott claimed a perfect match on SSN when the middle name and SSN were actually different. That misstatement essentially doomed them once they defaulted.
From a practice standpoint, this case illustrates:
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The importance of damages proof: Even with liability conceded, a plaintiff must prove actual damages with specificity, especially if there was other income or mitigation. Bankruptcy attorneys are well familiar with similar challenges when proving lost wages in discharge injunction or stay violation actions.
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The uphill battle for punitive damages: Without facts showing reckless disregard or intentional misconduct, courts will not presume willfulness from mere negligence.
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Parallel lessons for bankruptcy cases: Consumer debtors wrongfully denied employment due to inaccurate credit or criminal background reports may have viable FCRA claims, but those claims must be backed by documentary proof of lost earnings and clear causation—especially if those damages will be property of the estate and subject to trustee oversight.
The factual irony here is that, had there been a Chapter 13 case, the false report’s economic harm (which would not be protected as under the personal injury exemption) could have impacted the debtor’s ability to fund a plan—yet the litigation and any recovery could also have been estate property. This makes a strong argument for debtor’s counsel to consider FCRA claims not just as side litigation, but as tools to protect the debtor’s fresh start and preserve plan feasibility.
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