Willie Smith v. Busch Entertainment Corporation

The new FCRA case styled Willie Smith v. Busch Entertainment Corporation was released on June 3, 2009 (i.e. Ode to Billy Joe day, but that's another story entirely) from the United States District Court for the Eastern District of Virginia, Richmond Division, District Judge Henry E. Hudson penning the decision.

This case arises from an employment application submitted by Willie Smith to Water Country USA, which was owned and operated by the Defendants Busch Entertainment Corporation and Anheuser-Busch Companies, Inc. The employment application asked whether Smith had any felony convictions and to list any such felony convictions within the last seven years. Smith indicated on the application that he had been convicted of a felony and listed an "assault charge" as the only such conviction within the last seven years. Despite his felonious background, Smith was conditionally hired subject to a background check, which the Defendants obtained from Central Criminal Records Exchange ("CCRE"). Based upon the background check, the Defendants withdrew their employment offer.

The Defendants moved to dismiss the claims against the CCRE for providing the background check, claiming that the CCRE is not a consumer reporting agency and thus not subject to the FCRA. Amazingly (and wrongly I might add), the Court agreed that CCRE is not a consumer reporting agency even though it clearly is.

The Court stated that the "Virginia General Assembly created the CCRE, a division of the Virginia State Police, to be the 'sole criminal record-keeping agency of the Commonwealth.'
Va.Code Ann. § 19.2-387. It is required to 'receive, classify, and file criminal history
record information' primarily for use by state agencies and other entities for law enforcement purposes. ... Along with the numerous agencies and entities to which it is authorized to
disseminate criminal history information, the CCRE may, upon written request, provide the conviction data of a person to an employer or prospective employer at the employer's cost, provided that the person on whom the data is being obtained consents to the request in writing."

A company is a consumer reporting agency if it assembles or evaluates information on consumers for the purpose of furnishing consumer reports to third parties. The Court decided that CCRE was not a consumer reporting agency since its primary function was not to furnish consumer reports to third parties. Apparently, the Court does not consider numerous state agencies and law enforcement entities to be third parties but that is exactly what they are. The sole purpose of the CCRE is to compile information about consumers (i.e. their criminal histories) and then provide that history to pretty much anyone (state agencies, law enforcement and even prospective employers) that asks for it. I must respectfully say that the Court sure got it wrong on this one. But, despite the clear language of the FCRA and the Court's own description of what the CCRE does, it decided it was not a consumer reporting agency and dismissed (wrongly) the Plaintiff's claims against the CCRE.

The Court did correctly deny the motions to dismiss filed by Anheuser-Busch Company and InBev Corporation, who claimed they were merely parent companies of Busch Entertainment and thus had nothing to do with the decision to hire or not to hire Smith. The Court correctly held that the Plaintiff's allegations that Anheuser-Busch and InBev did have a role in the decision not to hire Smith was enough to survive a motion to dismiss.