FCRA Personal Jurisdiction: U.S. District Court Holds that Personal Jurisdiction is Broader Than You Think

The doctrine of “personal jurisdiction” in federal courts generally asks whether the court is empowered with jurisdiction to issue rulings against a party and enforce those rulings against the party. We typically think of personal jurisdiction in terms of the state(s) in which the plaintiff and defendant reside, where the complained-of activity occurred, and where the harm was felt. The U.S. District Court for the Eastern District of Pennsylvania added a new category for Fair Credit Reporting Act (FCRA) cases—the residence of a third-party consumer reporting agency (CRA).

Rogers v. Smith Volkswagen, Ltd., is a putative class action filed in the E.D. Pennsylvania by a Pennsylvania consumer against a Delaware-resident single-store car dealership. Rogers alleges she visited the dealership to inquire about a car, but did not sign any agreement or otherwise agree to buy a car or submit an application for financing or consent to the dealership’s procurement of a consumer report. Rogers alleges the dealer nonetheless directly accessed her credit report through Trans Union, LLC (a resident of Pennsylvania) and submitted loan applications to six lenders who each pulled her credit report (also through Trans Union). Rogers sued for violation of the FCRA. The dealership moved to dismiss for lack of personal jurisdiction, among other reasons, noting it was a Delaware resident and Rogers visited the dealership in Delaware.

The Court denied the motion. First, the court dispatched Rogers’s argument that the court had general personal jurisdiction over the dealership—general jurisdiction only exists in the defendant’s “home” forum and, here, that was Delaware. But the court concluded it did have specific personal jurisdiction over the dealership for two reasons. First, the dealership knew Rogers was a Pennsylvania resident when it caused the credit reports to be pulled. The court noted that, because the offending activity amounts to an invasion of privacy which is felt in the consumer’s residence, the dealership directed tortious activity into Pennsylvania, thus creating specific personal jurisdiction. However, the court also concluded specific jurisdiction existed for the independent reason that the dealership purposefully availed itself of Pennsylvania laws by purchasing credit reports from a Pennsylvania CRA—Trans Union. In other words, Trans Union’s residence became the dealership’s residence in the specific personal jurisdiction analysis. On that score, the holding does not depend on the fact that the plaintiff is a Pennsylvania resident; it appears the court would reach the same conclusion if Rogers resided in California (or any other state). The court additionally denied the alternative motion to transfer venue to Delaware, based on the court’s conclusion that the dealership is subject to personal jurisdiction in Pennsylvania.

The court’s decision expands our traditional notions of specific jurisdiction. As there are relatively few national CRAs, users of consumer reports must be wary that they may become subject to personal jurisdiction in the states in which CRAs are residents. The case is Rogers v. Smith Volkswagen, Ltd., No. 19-2567 (E.D. Pa. April 6, 2020).

If you have any questions, please contact Ice Miller’s Financial Services Litigation team.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.